NEW YORK (Bloomberg) — American International Group Inc., the insurer rescued by the US government, halted preparations for an initial public offering of its Chartis property-casualty unit, people familiar with the matter said.

Robert Benmosche, who started as AIG's chief executive officer in August, told employees that he considers the business a core holding, according to two people who declined to be identified because an announcement hasn't been made. New York- based AIG said in April it was accelerating the separation of the unit from the parent firm to prepare for a sale or public offering of a minority stake.

"He's looking at Chartis and thinking that could be more of an ongoing insurer than people previously thought," said Robert Haines, an analyst at CreditSights Inc. in New York. "He's more inclined to try to build up the company than quickly selling a chunk to investors."

Benmosche, 65, is slowing the pace of divestitures to boost the value of assets needed to repay loans in the $182.3 billion bailout. He halted at least two auctions, including that of Japanese life insurers and a US investment advisory unit, saying the businesses were important to AIG and higher prices will be gained by waiting for markets to recover.

Chartis executives including CEO Kristian Moor met in the first half of the year with financial advisers and lawyers about a public offering, and preparations stopped after Benmosche took charge, the people said. The unit assembled its own senior management team and hired a separate public-relations staff.

Chartis, which combines the US and overseas property-casualty operations of AIG, has 34,000 employees and more than 40 million clients in over 160 countries and jurisdictions. Coverage offered by the New York-based insurer includes commercial buildings, corporate boards, airplanes and homes.

"Public valuations for property-casualty companies are very low by historic standards, so anybody thinking about doing a public offering right now would really have to think twice about that," said Paul Newsome, an insurance analyst at Sandler O'Neill Partners LP.

The unit was renamed twice this year to distance itself from AIG. It was called AIU Holdings in March and Chartis in July. Benmosche told staff he didn't see the appeal of the Chartis name, derived from the Greek word for "map," and they shouldn't be ashamed to be linked to AIG, the people said.

Chartis heralded its new brand as an "important milestone in our progress toward ensuring a strong and independent future," according to letters sent to customers.

Mark Herr, a spokesman for AIG and John Jones of Chartis declined to comment.

AIG, rescued last year after losses tied to housing markets, secured agreements to sell more than $12 billion in holdings, including an auto insurer and an equipment guarantor, both of which were part of property-casualty operations.

AIG's property-casualty premiums dropped 13 percent to about $8.1 billion in the third quarter from a year earlier as clients scaled back coverage amid the recession and competitors poached AIG's staff and customers.