AIG Shares Plummet On Analyst's Charge Of Insufficient Reserves

New York, NY (AHN) - Shares of American International Group Inc. fell more than 12 percent in afternoon trading after an analyst charged that the company had insufficient reserves.

Bernstein Research slashed the target price for the insurer to $12, a 40 percent decrease, after its analysis found that AIG had underpriced its workers' compensation and professional liability policies and reduced its use of reinsurance. Bernstein said AIG was deficient in its reserves by about $11 billion.

In a March report, the Government Accountability Office said it had not found any evidence of underpricing on the part of AIG.

The federal government rescued the insurer with a $182.3 billion bailout after the collapse of Lehman Brothers last winter. U.S. taxpayers now own about 8 percent of AIG.

AIG (AIG) was down 15.26 percent at 2:32 p.m. to $28.22.