Former American International Group Inc. CEO, Maurice “Hank” Greenberg, is speaking up about the insurer’s recent business moves.

Greenberg told Bloomberg Television’s “InBusiness With Margaret Brennan” that AIG is making itself weaker through its recent sales, such as its agreement yesterday to sell Nan Shan Life Insurance Co. Ltd. to Ruen Chen Investment Holding Co. Ltd. The $2.16 billion sale of Taipei-based Nan Shan wasn’t “a great thing to do,” he said.

Greenberg, who led AIG for nearly four decades until 2005, said the insurer’s current strategy may backfire when prices for property/casualty insurance decline, Bloomberg reports. “AIG will have a more volatile business going forward,” he said.

Last week, as part of its recapitalization plan, AIG announced 75 million warrants to purchase shares of AIG common stock at $45 per share were to be distributed on Jan. 19, 2011, to AIG's common shareholders of record as of Jan. 13, 2011.

Current AIG President and CEO Robert Benmosche said the warrants were a necessary step to ensure repayment of the $182 billion in assistance the company received from the U.S. Treasury and Federal Reserve Bank of New York during the financial crisis.

Bloomberg reports that Mark Herr, a spokesman for AIG, declined to comment.

AIG’s recapitalization has had an effect on its ratings. Moody’s downgraded by one notch the insurance financial strength (IFS) ratings of AIG’s core operations as well as the senior unsecured debt rating of the parent company.

The IFS ratings of Chartis U.S. were downgraded to A1 from Aa3; the IFS ratings of SunAmerica Financial Group (SAFG) were downgraded to A2 from A1; and the senior unsecured debt rating of AIG was downgraded to Baa1 from A3. The rating outlook for AIG and its core operations has been revised to stable from negative, reflecting the lower rating levels as well as the stabilization of core businesses, declining exposure to noncore businesses, and a pro forma capital structure that is consistent with the new ratings.

Moody's says the action follows AIG's announcement that it expects to complete its recapitalization—a critical step toward independence from government support—on Jan. 14, 2011 (assuming no material change in the relevant facts, circumstances and conditions).

The downgrades reflect Moody's view that while the core insurance operations have stabilized over the past year, they have not yet improved sufficiently to justify the previous ratings in the absence of continued government support. Moody's also believes that the incremental risk associated with noncore businesses, while reduced, remains a negative credit consideration that will no longer be mitigated by government support.

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