(Bloomberg) — American International Group Inc.'s plan to spin off a portion of its mortgage insurance unit is "almost pointless" given the challenges that Chief Executive Officer Peter Hancock faces to fix the much larger property-casualty business, an analyst at Keefe, Bruyette & Woods said.

"AIG's fundamental problem is very poor P&C profitability, and absent really fantastic price tags, we really don't see the point of selling better-performing businesses so it can buy back more shares of the remaining underperforming businesses," KBW's Meyer Shields said in a note to investors dated Sunday. "Mortgage insurer valuations have compressed significantly over the past two years, so the timing of this planned spinoff is also very far from ideal."

Hancock has scheduled a presentation for Tuesday to outline his vision for New York-based AIG after rebuffing calls from activist investor Carl Icahn to break up the company. The CEO's plan includes a partial spinoff of the mortgage insurer, United Guaranty Corp., a person familiar with the matter said Friday. Icahn has said AIG needs to shrink to exit its status as a systemically important financial institution, or SIFI, a tag that can bring tighter Federal Reserve oversight.