AIG has announced its intention to separate its Life and Retirement business from the wider group.
The company’s executive management team, alongside independent financial and legal advisors and oversight from the AIG board of directors, conducted a comprehensive review of the groups current composite structure, including strategic, operational, capital and tax implications.
Following the review, the board has decided to pursue a separation of the Life & Retirement business, as recommended by its executive management team.
AIG’s executive management and board said they believe a “simplified corporate structure will unlock significant value for shareholders and other stakeholders”.
Although no decisions have been made as to how to achieve a full separation, the board stated that its intent is to accomplish it in a way that “maximizes shareholder value” and establishes two independent, market leading companies.
Brian Duperreault, AIG’s CEO, said: “Over the last three years, we have taken significant action to de-risk AIG and position the company for profitable growth, including fortifying General Insurance, diversifying Life & Retirement, significantly strengthening AIG’s capital and liquidity position, and building a world-class team.
“This foundational work has positioned AIG to pursue a separation of Life and Retirement enabling both companies to prosper as stand-alone entities.”
Peter S. Zaffino, AIG’s president and global chief operating officer, and CEO-elect, said: “Across AIG, we have made significant progress executing on our strategy to deliver value for our clients, distribution partners, shareholders and other stakeholders.
“Our businesses can be further strengthened by separating Life and Retirement from AIG, which we believe will enable each entity to achieve a more appropriate and sustainable valuation.”
Douglas M. Steenland, speaking on behalf of the AIG board of directors, added: “The board worked closely with executive management as they conducted a comprehensive review of AIG’s composite structure, and AIG’s Directors are confident that a separation of Life and Retirement from AIG will create value for shareholders and benefit all stakeholders.”
Since 2017, the group’s General Insurance business has been executing foundational work to reposition its portfolio and reduce volatility through disciplined underwriting and expense control within a “clearly defined” risk appetite and comprehensive reinsurance strategy.