AIG Closes $5.6B Validus Acquisition; Q2 Earnings Out on Aug. 2

When American International Group reports its 2018 second-quarter financial results on Aug. 2, it will be the proud new owner of Validus Holdings.

AIG disclosed on July 18 that it has closed a $5.6 billion all-cash acquisition of Validus it first announced in January 2018.

But while Validus gives AIG’s product roster a big injection of diversity, the acquisition comes after Validus lost $4.1 million during its 2018 first quarter due, in part, to more expenses, an insurance segment underwriting loss and a drop in income from its reinsurance arm.

Peter Zaffino, AIG’s CEO, General Insurance, explained in prepared remarks that the Validus businesses, now that the M&A deal is done, would be immediately accretive to AIG’s performance in General Insurance.

With the M&A deal complete, AIG gains control over a number of Validus divisions:

• Validus Re, a treaty reinsurer focused on property-catastrophe, marine and specialty business.
• AlphaCat, an asset manager overseeing $3.2 billion for clients through investment in insurance-linked securities products.
• Talbot, a Lloyd’s syndicate.
• Western World, a specialist insurer focused on U.S. small commercial excess and surplus underwriting.
• Crop Risk Services, a division that provides access to the American crop insurance market.

“Validus’ experienced team and complementary businesses will help us deliver sustainable, profitable growth as we continue to build value for our shareholders,” AIG President and CEO Brian Duperreault said in prepared remarks.

Source: AIG