Toronto, ON (Aug. 17, 2016) – Bermuda-based global insurer Arch Capital Group has agreed to acquire the mortgage-insurance business of industry giant AIG for US$3.4 billion.
The two companies announced on Monday that Arch Capital will buy AIG’s 100% interest in United Guaranty Corporation for the said amount, which will be paid in a combination of cash and securities.
Arch Global said the transaction is expected to be closed in late fourth quarter of 2016 or early first quarter next year, subject to regulatory approvals.
The company, which has operations in the US, Europe, Hong Kong and Australia, said it will become the largest private mortgage insurer in the world with the acquisition of the AIG unit.
“We are extremely pleased to be able to expand our private mortgage insurance business through the acquisition of United Guaranty,” said Arch CEO and chairman Constatine Iordanou.
“Our mortgage insurance segment expands and complements our strengths in the specialty insurance and reinsurance businesses, which continue to be central to our global, diversified operations,” he added.
Iordanou said Arch and United Guaranty “have led the market in innovation through their risk based pricing models and focus on data analytics.”
“We believe that the companies’ complementary risk management cultures will further accelerate innovation and sound risk management and help us to maximize our best-in-class processes in the specialty insurance space,” Iordanou said.
For AIG, the deal streamlines the company into a “more focused insurer” while enhancing its capital position, according to president and CEO Peter Hancock.
“The transaction also maintains AIG’s presence in a profitable market through a stake in a market leader that shares our focus on risk-based pricing and analytics as the foundation for our industry’s future,” the insurer’s boss said.
American International Group, Inc. (NYSE:AIG) is a leading global insurance organization. Founded in 1919, today we provide a wide range of property casualty insurance, life insurance, retirement products, mortgage insurance and other financial services to customers in more than 100 countries and jurisdictions. Our diverse offerings include products and services that help businesses and individuals protect their assets, manage risks and provide for retirement security. AIG common stock is listed on the New York Stock Exchange and the Tokyo Stock Exchange.
AIG is the marketing name for the worldwide property-casualty, life and retirement, and general insurance operations of American International Group, Inc. For additional information, please visit our website at www.aig.com.
About AIG Canada
AIG Insurance Company of Canada is the licensed underwriter of AIG Commercial and Consumer insurance products in Canada. Coverage may not be available in all provinces and territories and is subject to actual policy language. Non-insurance products and services may be provided by independent third parties. The AIG logo and AIG are trademarks of American International Group, Inc., used under license by AIG Insurance Company of Canada. Additional information about AIG Canada can be found at www.aig.ca.