AIG is selling off its Central American insurance operations to Panama’s ASSA, though both companies will form a regional partnership once the sale goes through.

Neither side is disclosing financial terms. But ASSA (ASSA Compañía Tenedora, S.A.and ASSA Compañía de Seguros) will be taking over AIG’s operations in El Salvador, Guatemala, Honduras and Panama, subject to each country’s regulatory approvals. The sale will be in the form of a share purchase agreement.

As part of the deal, AIG and ASSA plan to form an ongoing partnership focused on marketing both existing and new products and services to the Central American market.

In sealing the deal, each side touted gains. James Dwane, AIG president and CEO for Latin America, said in prepared remarks that partnering with ASSA brings to the table a carrier with a “deep understanding of the Central American insurance market.”

In turn, ASSA gets closer to a goal of being a major Central American insurer, ASSA CEO Eduardo Fábrega said in a prepared statement.

“ASSA will strengthen its ability to offer insurance products, serve a broad clientele and will become the only locally owned insurance group with a presence in all Central American countries,” he said.

Until now, ASSA has sold insurance products in Costa Rica, El Salvador, Nicaragua and Panama.

Pending regulatory approval, each company and its respective operations and branches will operate as usual.

Source: AIG