American International Group announced $3.6 billion in new costs to fill a reserve shortfall and said it will hold an initial public offering for its mortgage insurer and sell an adviser network as Chief Executive Peter Hancock seeks to boost returns and protect his job after criticism from activist investor Carl Icahn.

Hancock will have an IPO of a 19.9% stake in the mortgage guarantor United Guaranty as a first step toward a complete exit of that business, AIG said Tuesday in a statement ahead of the CEO's presentation to Wall Street. The insurer also is reorganizing into "modular" business segments to give the company flexibility to sell or take public additional units if they underperform. The insurer didn't provide timetables for most of the initiatives.

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