19 September 2016News

AIG maintains Bermuda links after Ascot sale

American International Group (AIG) has said that despite its sale of Ascot Underwriting Holdings (AUH) it will maintain its strategic partnership with AUH subsidiary Ascot Underwriting Bermuda (AUB).

AIG is selling its interest in AUH and related syndicate-funding subsidiary Ascot Corporate Name to the Canada Pension Plan Investment Board (CPPIB).

However, AIG said that AUB will continue to serve as the managing general agent for AIG-Ascot Re, which writes assumed treaty reinsurance business on behalf of AIG’s wholly owned subsidiary American International Reinsurance Company in Bermuda.

As part of the agreement, AIG, CPPIB, and Ascot intend to expand a collective commercial relationship in Bermuda, and for AIG to be a preferred reinsurer to Syndicate 1414.

“This deal successfully repositions our strategic focus and underwriting capacity to our relationship with Ascot in Bermuda, while monetising our position in the syndicate at an attractive value and retaining exposure to the syndicate as a reinsurer,” said Robert Schimek, chief executive officer, commercial insurance at AIG.

“We are also pleased to start a collaborative relationship with CPPIB who we see as an ideal partner for Ascot’s outstanding management team.”

The deal is worth around $1.1 billion inclusive of CPPIB’s recapitalisation of Syndicate 1414’s Funds at Lloyd’s (FAL) capital requirements.

AIG will receive approximately $240 million in net cash proceeds from the transaction after the FAL recapitalisation and release of the AIG-guaranteed Letter of Credit currently supporting the syndicate’s FAL. Proceeds reflect AIG’s 20 percent stake in Ascot Underwriting and ownership of Ascot Corporate.

Ascot and AIG founded the managing agency and the syndicate in 2001.