AIG and Swiss Re agree two-year reinsurance arrangement
Global insurance firm American International Group (AIG) has entered into a two-year reinsurance arrangement with Swiss Re, under which a share of AIG’s new and renewal US casualty portfolio will be ceded to the reinsurer.
The agreement is consistent with the plans announced by AIG in its January 26, 2016 strategic update to investors.
AIG said the reinsurance arrangement is an important step in its strategy to improve its commercial insurance diversification and return on equity (ROE), and it highlights AIG’s focus on capital efficiency.
“Swiss Re and AIG have had a strategic relationship for a number of years, and the trust and knowledge-sharing between the two companies facilitated this mutually attractive economic transaction,” said Rob Schimek, chief executive officer (CEO) of AIG.
He added: “We have been very clear about our desire to partner with our reinsurers to help achieve our strategic objectives, and this agreement with Swiss Re is an example of what is achievable with longstanding counterparties.”
Christian Mumenthaler, CEO reinsurance Swiss Re, commented: "We are delighted to continue our long term partnership with AIG, providing solutions across their business. We know this portfolio, the leaders, and the underwriters very well and believe in AIG's plans.
“As a result, we are happy to accompany them on this journey by taking a significant position in this business. It's a transaction that allows both AIG and Swiss Re to improve their diversification."
