American International Group (AIG) has struck a deal to sell its global personal travel insurance and assistance business to Zurich Insurance Group, in a strategic move to reposition itself as a core global property and casualty player. Zurich expects the acquisition to result in combined annual gross written premiums of approximately $2 billion for an enlarged travel brand.
Zurich will pay $600 million in cash, plus additional earn-out consideration, to AIG for the business. The definitive deal includes AIG’s Travel Guard business and its servicing capabilities, excluding Japan and AIG joint venture arrangement in India.
Upon completion, the business will be combined with Zurich’s travel insurance provider Cover-More Group and will expand its footprint in the US. The acquisition gives Zurich access to a new global retail customer base and makes it a leading travel insurer globally.
Zurich expects the acquisition to result in combined annual gross written premiums of approximately $2 billion for the enlarged Cover-More Group. The transaction is expected to result in a reduction of approximately 4ppts in the Swiss Solvency Test (SST) ratio.
The sale is expected to close by the end of 2024, subject to closing conditions and regulatory approvals. AIG has excluded travel coverages offered through its accident & health business from this agreement.
Peter Zaffino, chairman and chief executive officer of AIG, said: “Today’s announcement is another important strategic step in positioning AIG for the future. I am proud of the work our team has done to establish Travel Guard as a premier provider of personal travel insurance globally, bolstered by strong relationships with some of the world’s largest airlines, online travel agencies and credit card providers. I am confident that Travel Guard will continue its growth and success being part of Zurich Insurance Group. Our AIG colleagues will work closely with Zurich to ensure a seamless transition for employees, customers and our global distribution partners.”
Cara Morton, CEO of Zurich Global Ventures, said: “Travel insurance is a priority for us. This transaction is a great strategic fit, which enhances Zurich’s existing capabilities and makes us a leading travel insurance provider across all regions. The acquisition expands our retail customer base and aligns with our ambition to continuously enhance our offerings, while providing world-class protection during every step of our customers’ travels.”
Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.