AIG to Sell Lloyd's Insurance Operations to Canada Pension Fund
September 16 2016 - 10:00AM
Dow Jones News
American International Group Inc. agreed to sell insurance
operations connected with Lloyd's of London to Canada's biggest
pension fund, receiving about $240 million in cash.
The Canada Pension Plan Investment Board will acquire AIG's 20%
stake in specialty insurance underwriter Ascot Underwriting
Holdings Ltd., which manages a Lloyd's syndicate for which AIG
provides the capital, and a related reinsurance company based in
Bermuda. Ascot focuses on property insurance, marine insurance, and
reinsurance.
The Wall Street Journal had reported the groups were in talks in
August.
AIG valued the deal at $1.1 billion when factoring in CPPIB's
recapitalization of Syndicate 1414's Funds at Lloyd's capital
requirements. The syndicate provides insurance to cover marine
hulls and cargo, and fine art; and protects against shipping
liabilities, political risks, and terrorism, among other
specialties.
The deal is part of the New York insurer's efforts to improve
its results by narrowing its focus and returning more than $25
billion in capital to shareholders. It also marks the Canadian
fund's latest move to establish itself as a significant player in
the global insurance industry.
AIG will maintain a partnership with Ascot Underwriting Bermuda
Ltd., a wholly-owned subsidiary of Ascot. AIG, CPPIB, and Ascot
plan to "expand a collective commercial relationship in Bermuda,
and for AIG to be a preferred reinsurer to Syndicate 1414."
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
September 16, 2016 09:45 ET (13:45 GMT)
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