NEW YORK (Bloomberg) - American International Group Inc. (AIG), the world's largest insurer, had its worst one-day decline since the market crash of October 1987 after the International Monetary Fund (IMF) aid there is no end in sight to the housing slump.

AIG, based in New York, fell $3.28, or 12 percent, to $23.96 in New York Stock Exchange composite trading at 4.15pm. The company posted two record quarterly losses totalling $13 billion on larger-than-expected write-downs tied to the housing market.