AIG shares in freefall

Shares in insurance giant American International Group (AIG) fell another 63% on Wall Street today amid concerns of a deepening cash crisis at the firm.

AIG suffered a further day of stock market pain after credit ratings agencies downgraded the firm, making it even more difficult for the group to raise money.

The insurer, which is the main sponsor for Premier League champions Manchester United, was yesterday granted a 20bn (€14.1bn) lifeline to shore-up its finances.

But concerns were growing today that it would need more money to survive the fall-out from the demise of Lehman Brothers.

AIG employs around 116,000 people globally.

It signed a £56.5m (€70.9m) sponsorship agreement with Manchester United in 2006 - the biggest shirt sponsorship deal in English football.

AIG is now under pressure on a number of fronts, with the firm thought to be heavily exposed to failing firms such as Lehman Brothers.

It has already suffered hefty losses from the collapse of the US sub-prime mortgage market and it is feared the credit ratings downgrades will see it struggle to pay out on claims.

Reports suggested that worried customers of one of its subsidiaries in Singapore were queuing outside the branch to check policies.

It also effectively acts as insurer to the US financial system, which means a collapse of the group would have far-reaching consequences.

AIG is thought to be in talks with regulators about plans to save its battered balance sheet.

The group confirmed yesterday that it was reviewing its operations and looking at options with outside parties after shares fell dramatically last week.

AIG needs cash to repair its finances and its chief executive, Robert Willumstad, who took the reins of the world's largest insurer in June, was said to be preparing to announce the sale of businesses, such as its aircraft-leasing business.

AIG saw its former boss, British-born Martin Sullivan, stand down in the summer after facing calls to quit from shareholders.

Mr Sullivan, who was raised in Essex and joined AIG as a 17-year-old clerk in the company's London office, had overseen write-downs and losses of more than $30bn (€21.2bn), leading his predecessor and AIG's largest shareholder, Maurice Greenberg, to speak out against Mr Sullivan.