Nov. 14 (Bloomberg) -- Aflac Inc. Chief Executive Officer Dan Amos said he lost interest in purchasing insurance units from American International Group Inc. because of declines in his company's share price and higher borrowing costs.

``Right now, I think cash is king and liquidity is more important than acquisitions,'' Amos said today in an interview. ``You don't want to borrow in this environment.'' Columbus, Georgia-based Aflac, the world's largest seller of supplemental health insurance, previously expressed interest in purchasing AIG units in Japan.

Amos is hoarding cash as investment losses deplete capital, and access to credit wanes across the industry amid the worst financial crisis in 75 years. AIG, based in New York, is selling units to repay a $60 billion U.S. loan after almost collapsing from bad bets on the U.S. housing market.

``I'm interested in protecting our liquidity because what people are asking is, `Do you need money, do you need to borrow,''' Amos said.

Aflac declined $2.67, or 6 percent, to $41.77 in New York Stock Exchange composite trading at 4:15 p.m. The company, which gets most of its revenue in Japan, has dropped 33 percent this year, making it the seventh-best performer in the 24-stock KBW Insurance Index.

Amos, 57, said in October he might bid for AIG's Alico Japan, that country's fifth-largest life insurer. The unit sells products that are similar to Aflac's, he said in an interview with Bloomberg Television in Tokyo on Oct. 10.

AIG CEO Edward Liddy has been struggling to sell units as potential bidders have been hobbled by their own investment losses and higher borrowing costs.

`Boring Company'

Aflac was one of nine companies in the insurance index to post a third-quarter profit. Net income declined 76 percent to $100 million on losses from investments in companies including bankrupt securities firm Lehman Brothers Holdings Inc. and failed lender Washington Mutual Inc. Amos outperformed competitors by avoiding securities backed by subprime loans.

``We haven't been a trendy company; some people considered us boring'' for passing on investments in Japanese real estate and the Internet, Amos said in the telephone interview today. ``We didn't feel like it was worth taking the risk.''

Amos made the comments after the company announced he would eliminate the portion of his contract that provided for a $13 million ``golden parachute'' payment.

``I just think that in these uncertain times, it's good to show the shareholders that you won't necessarily take advantage of something when times are difficult,'' Amos said in the interview. Allowing himself to be paid more if he was let go for poor performance wouldn't be ``in the spirit of what I believe should be happening at our company.''

To contact the reporter on this story: Linda Shen in New York at Lshen21@bloomberg.net

Last Updated: November 14, 2008 17:19 EST