AIG sets tentative September date for delayed life unit IPO

Insurer American International Group (AIG) said September is the next window for an initial public offering (IPO) of life and retirement business Corebridge Financial after deferring the listing due to market volatility.

“While completing the IPO is a significant priority for us and something we are laser-focused on, we believe this is an attractive business and did not want to execute a transaction that would be detrimental to stakeholders in the long run, AIG chief executive Peter Zaffino said on a conference call with analysts and investors on Tuesday.

The Corebridge IPO delay was disclosed as AIG posted second-quarter earnings that beat Wall Street expectations amid strength in underwriting. Second-quarter adjusted profit fell to $1.19 a share from $1.52 a year earlier, the New York-based insurer said. That exceeded the average estimate of $1.09 from 11 analysts in a Bloomberg survey.

AIG improved a key metric that tracks underwriting in North America and internationally. Its combined ratio improved by 5.1 points from a year earlier to 87.4 per cent. That means the firm spent 87.4 cents on claims and expenses for every premium dollar received. It’s the first time the metric has clocked in below 90 per cent in more than 15 years.

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The insurer’s shares rose 2 per cent at 9:50am in New York, and are down 6.4 per cent this year.

The Corebridge IPO was initially planned for the second quarter, but equity-market volatility in May and June prompted the deferral, the firm said. The offering is the culmination of a years-long effort by the sprawling insurer to focus on its core businesses and simplify operations.

In preparation for the listing, AIG struck an agreement last year that gave Blackstone a 9.9 per cent equity stake in the life and retirement unit and sparked a “long-term strategic asset-management relationship” between the insurer and the alternative-assets giant.

Then, in March, the underwriter announced a similar pact with BlackRock that would give the investment manager oversight of $150 billion in AIG’s assets, including $90 billion from the life and retirement investment portfolio. AIG announced the planned IPO that same day.

Other insurers have taken similar steps to refine their focus. Life insurer MetLife completed the sale of its property and casualty business to Zurich Insurance in April 2021. Prudential Financial agreed last year to sell its full-service retirement arm amid a broader overhaul effort. – Bloomberg