Is AIG a Once-In-A-Generation Opportunity?

American International Group (NYSE:AIG) has become a “once-in-a-generation opportunity,” Sanford C. Bernstein analysts wrote in a recent research note seen by Jags Report. They predicted that shares of AIG, which are currently “about half of book value,” will outperform the sector and the price-to-book multiple will improve this year.

The analysts compared the changes undergone by post-bailout AIG to another company that has just completed demutualization, a process by which an insurer transitions from a mutual to a public company. “The clearest analogue of course, is Metlife,” wrote Bernstein’s analysts. “MET’s then-CEO Robert Benmosche, dramatically outperformed expectations at MET after it demutualized. And now, of course, he runs AIG.”

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MetLife (NYSE:MET) made its initial public offering in 2000. Under Benmosche’s  guidance, the company transitioned from a mutual insurance company, owned by the individuals and corporations that held its policies, to one owned by stockholders. In the last years of the twentieth century, MetLife was left behind as many other insurance companies were able to reap proceeds from securities. But with the restructuring changes implemented by Benmosche, the insurer saw its lagging profits recover.

In the research note, Bernstein raised its rating on shares of AIG to outperform and increased the price target to $45…