Insurance industry

AIG Sells Majority of Life Insurance Premium Finance Business

Strategic Insights

Jul 27, 2009 — 1 min read

American International Group Inc. has finalized the sale of a significant portion of its life insurance premium finance business to First Insurance Funding Corp. for approximately $679.5 million in cash. The transaction includes the majority of the U.S. life insurance premium finance assets from AIG Credit Corp. and A.I. Credit Consumer Discount Co. The deal marks another step in AIG's efforts to repay loans from the federal bailout plan that has grown to up to $182.5 billion.

Key Takeaways:

AIG has sold the majority of its life insurance premium finance business to First Insurance Funding Corp. for $679.5 million in cash.
The sale includes the majority of the U.S. life insurance premium finance assets from AIG Credit Corp. and A.I. Credit Consumer Discount Co.
FIFC, a subsidiary of Wintrust Financial Corp., may acquire an additional $61.2 million of insurance premium finance assets.
AIG is seeking to sell assets to repay loans from the federal bailout plan, which has reached up to $182.5 billion since its implementation in September 2008.
AIG's property/casualty premium finance business is not included in the transaction.
Shares of AIG were trading at $13.34 on July 28, down 2.1% from the previous close.
The majority of AIG's insurance companies have a Best's Financial Strength Rating of A (Excellent) with a negative outlook.

Statistics:

$679.5 million: The amount paid by First Insurance Funding Corp. for the majority of AIG's life insurance premium finance business.
$61.2 million: The potential additional amount that FIFC may acquire in insurance premium finance assets.
$182.5 billion: The total value of the federal bailout plan implemented to save AIG from bankruptcy as of July 20, 2009.
$13.34: The trading price of AIG shares on July 28, down 2.1% from the previous close.
2.1%: The decline in AIG's share price from the previous close on July 28.

Sources:

A. M. Best Company, Inc.
BestWire, July 20, 2009
Comtex News Network, Inc.
A. M. Best, American International Group Inc. Sells Major Block of Life Insurance Premium Finance Business, (NYSE: AIG)

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