The world's largest insurer AIG has announced its biggest dividend increase in 25 years.

From 18 March the company will payout 12.5cents a share rather than 7.5cents.

Reports today said the increase was a sign that the company is failing to find ways to maintain growth as prices soften across the market.

But AIG chief executive Hank Greenberg said the move was taken in “recognition of AIG's superior financial position and our confidence in our strategic plans for future growth."

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