Back in June, I wrote here on LinkedIn that “I am here to grow the company.”
I went on to say that by combining underwriting discipline, diversification and growth, we would build a more balanced and profitable business.
And we’re making progress on that goal as yesterday we announced that AIG has entered into an agreement to acquire Validus, a diversified insurance company, for $5.56 billion. Included in the Validus portfolio is a highly regarded operation at Lloyd’s and an insurance-linked securities asset manager, which together with their reinsurance franchise bring key additional capabilities to our company.
After years of divesting businesses, some may ask why this makes strategic sense for the company now.
I believe this acquisition is a perfect fit with AIG’s strategy for profitable growth. It brings a diverse and complementary set of franchises across specialized products and regions to our General Insurance business. And it also strengthens our management team while deepening our underwriting expertise.
In short, it brings capabilities we don’t have and aligns well with our strategy of balancing and growing the business. We will also benefit from the addition of well-respected senior leadership and a strong team of underwriting professionals, all of whom have a proven track record.
In fact, it’s a win for both sides. The proposed transaction will also provide Validus customers and brokers with access to AIG’s broader capabilities, all powered by the strength of our global scale and balance sheet.
Many of you will be familiar with Validus and its businesses, but here’s what we’re adding:
- Validus Re, a leading, treaty reinsurer with a focus on property catastrophe, marine and specialty;
- AlphaCat, which manages in excess of $3.0 billion on behalf of clients, investing in insurance-linked securities products;
- Talbot, a Lloyd’s of London syndicate focused on short-tail specialty lines, which will broaden AIG’s technical underwriting expertise and provide access to distribution in the largest specialty insurance market in the world;
- And Western World, a U.S. specialty property and casualty underwriter focused on the small commercial excess & surplus lines.
I am very excited about bringing Validus into the AIG family once the deal is completed. Along with delivering compelling value for Validus shareholders, employees at Validus will benefit from becoming part of a larger, more diversified group. Together, we will be able to better serve clients and brokers in new and exciting ways.
You’ve heard me say that we want to grow AIG by investing our capital in ways that make sense, and deliver value to our clients, our colleagues and our shareholders. I believe this transaction is a great step in making our company better than it has ever been, and I am confident that together we can deliver a long and successful future.