AIG SET TO INCREASE 20TH CENTURY STAKE.

Byline: Ben Sullivan Daily News Staff Writer

The nation's largest publicly held insurer announced late Monday it will take a majority position in 20th Century Industries.

American International Group has applied to exercise 16 million warrants for 20th Century common stock and to convert its preferred stock to common stock. Together with its existing holdings, the new shares would bring AIG's stake in the Woodland Hills insurer to 50.27 percent.

AIG will pay $9.10 apiece to convert the warrants, adding $145.6 million to 20th Century's coffers.

It was AIG that came to 20th Century's rescue after the 1994 Northridge Earthquake pushed the smaller insurer to the brink of insolvency. Nearly two-thirds of 20th Century's capital was consumed by homeowner claims resulting from the quake. In exchange for a life-sustaining cash infusion, AIG was granted millions of warrants in 20th Century stock and the ability to buy more in the open market.

AIG has steadily bought 20th Century shares in the years since. ``Eventually, I think (AIG) is going to want 100 percent of it,'' analyst Ira Zuckerman at Nutmeg Securities Ltd. said in an interview last week.

20th Century spokesman Rick Hill said Monday that once the warrants are converted, AIG will look to increase its presence on the company's 10-member board.

``But that's something that has to be worked out,'' Hill said. ``We're still a publicly owned company and we still have to have an independent board that would stand for election.''

AIG received two board spots for its earlier investment in 20th Century.

Since bottoming out after the 1994 earthquake, 20th Century has rebuilt itself into a profitable company. The insurer now concentrates on auto insurance, recently expanded into the Arizona market, and hopes to enter the Oregon, Washington and Nevada markets later this year.