American International Group is expanding its presence in the pension risk transfer market, spurred in part by the Trump tax cuts.
“We are seeing significant opportunity in this market, driven by tax reform, repatriation of assets from international operations and improved funded status,” Ali Vaseghi, AIG’s managing director and chief operating officer – Institutional Markets, said in prepared remarks.
AIG’s expansion into the pension risk transfer market comes via agreement on the two largest plan termination transactions of 2017. Both were entered into by American General Life Insurance Company (part of AIG’s Life & Retirement business) and involved more than $1.5 billion in pension plan obligations for more than 24,000 retirees, beneficiaries, deferred and active members.
Vaseghi, who is also leader of the insurer’s Pension Risk Transfer business, said he sees AIG’s “investment expertise” plus its “strong operational capabilities, prudent risk management, disciplined pricing and strong balance sheet” as positioning it to excel in the market sector.
In 2017, AIG member companies provided commitments regarding more than $2.1 billion of pension risk transfer business, serving more than 35,000 retirees, beneficiaries, deferred and active members, AIG said.
Earlier this month, S&P Global Ratings affirmed its “A+” insurer financial strength rating for AIG and continued its negative outlook for the insurer, reflecting continued pressure on the insurer to deliver “sustainable improvements in its operating fundamentals while retaining its competitive resilience.”