DOW JONES NEWSWIRES

American International Group Inc. (AIG) confirmed Chief Investment Officer Win Neuger will step down from that post and named Monika M. Machon to succeed him, following large losses in the company's investment operation.

The announcement came after The Wall Street Journal reported early Tuesday morning that Neuger would step down but continue to oversee AIG's business of managing assets for external clients such as pension funds, which the firm is putting up for sale.

AIG said in a statement Tuesday that Neuger would keep his titles as chief executive and chairman of AIG Investments.

AIG Chairman and Chief Executive Edward J. Liddy said the changes would allow AIG to "proceed quickly and thoughtfully with the sale of the external client asset management and life insurance businesses."

Machon, who first joined AIG in 1998, has more than 27 years of broad fixed income experience in the U.S. and abroad.

Additionally, AIG Investments senior managing director Jeffry J. Hurd, who also joined AIG in 1998, has been named senior vice president and the head of asset management restructuring, which is responsible for the sale of AIG's external asset management business and restructuring of AIG's asset management function.

AIG is selling off assets, including the third-party management business, to repay a loan of as much as $60 billion from the federal government. The company was rescued by the government last year as it faced a possible bankruptcy filing.

Many of the company's problems stem from its financial-products unit, which sold protection to other firms against losses on securities they held. That unit was run separately.

AIG also has logged significant losses in the investment operations that Neuger oversaw. AIG Investments last year incurred billions of dollars in losses for the parent company after a securities-lending business it ran was stuck holding large quantities of subprime residential-mortgage securities that lost value.

Shares were down 1.4% to $1.40 in recent trading.

-By John Kell, Dow Jones Newswires; 201-938-5285; john.kell@dowjones.com

(Serena Ng of The Wall Street Journal contributed to this report.)

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary. You can use this link on the day this article is published and the following day.