New York, May 23, (dpa/GNA) – The American multinational finance and insurance company American International Group (AIG) said on Monday it agreed to sell Validus Re, including AlphaCat and the Talbot Treaty reinsurance business, to Bermuda-based insurer RenaissanceRe for $2.985 billion.
The transaction value consists of $2.735 billion in cash and $250 million in RenaissanceRe common shares. In addition, AIG will receive all capital in excess of $2.1 billion of shareholders’ equity of Validus Re and achieve future capital synergies of around $400 million from the recapture of reserves as a result of transferring the Validus Re balance sheet to RenaissanceRe, which together, as of December 31, 2022, was over $1.5 billion.
AIG said the total estimated transaction value is expected to exceed $4.5 billion. AIG will retain Talbot Underwriting and Western World, which were purchased as part of its 2018 acquisition of Validus Holdings Ltd. and which currently represent around $1.6 billion of AIG’s total gross premiums written.
The sale of Validus Re is expected to close in the fourth quarter of 2023. Peter Zaffino, chairman and chief executive of AIG, said, “today’s announcement represents another key milestone for AIG and is strategically significant for both AIG and Validus Re. For AIG, it further simplifies our business model and reduces volatility in our portfolio, while generating significant cash liquidity and capital efficiencies that enable us to accelerate our capital management strategy.”
GNA