NEW YORK (Bloomberg) — American International Group, the world's largest insurer, called its investments linked to the US housing market "manageable." The shares rose four percent.

Chief Executive Officer Martin Sullivan said at an investor presentation he's "comfortable" with the New York-based company's holdings amid what the company called "extreme" market conditions of the past two months.

AIG may have to write down as much of $600 million of assets, said Joseph Cassano, president and CEO of AIG's Financial Products unit.

Sullivan is trying to blunt efforts by former CEO Maurice "Hank" Greenberg to organise investors dissatisfied by AIG's 22 percent decline in New York trading this year.

AIG recorded $864 million in losses on investments in the third quarter and marked down other holdings by $3.39 billion. Sullivan told investors the company's risk has been tempered because it steered away from investments tied to US home loans for the past two years.

"AIG's exposure levels are manageable given our size," Sullivan said. "The effectiveness of our risk-management efforts will show through in our results."

AIG rose $2.20 to $57.85 in New York Stock Exchange trading yesterday morning and changed hands for as much as $59.39. Before yesterday, the stock was the third-worst performer this year in the Dow Jones Industrial Average after Citigroup and Home Depot.

AIG has relatively little capital tied up in investments such as collateralised debt obligations and structured investment vehicles, the company said.

The company has units that originate, insure, and invest in home loans. Sullivan made his comments in a presentation for investors initially scheduled to discuss life insurance. He said the agenda was changed in response to investor demand for more information about the company's mortgage holdings as the worst US housing slump in 16 years deepens.

"During 2005, AIG began to see mounting evidence that lending standards and pricing in the US residential housing market were deteriorating at a significant pace," Sullivan said. "In some cases we pulled out of the market. We moved to higher quality."