AIG mulls spinning off mortgage insurance: Report

Why Carl Icahn is targeting an AIG breakup

American International Group is considering spinning off or selling its mortgage insurance segment amid shareholder pressure to split, The Wall Street Journal reported Thursday, citing sources.

The insurance giant's directors have discussed plans for the business for "a while" but have not made a final decision, according to the report. The unit, which sells coverage protecting mortgage lenders and investors, accounted for only about 5 percent of AIG's pretax profit in the second quarter.

AIG headquarters in New York City.
Adam Jeffery | CNBC

AIG has recently received pressure from key shareholders such as Carl Icahn and John Paulson to break up the company and reduce regulatory risks. Icahn, an activist investor, said this week he took a "large stake" in AIG, calling the company "too big to succeed."

Read MoreIcahn targets AIG: 'Too big to succeed'

AIG reports quarterly earnings Monday. Shares rose more than 1 percent in extended trading Thursday.

AIG declined to comment to CNBC.

Read the full Journal report here.