AIG has said that it will sell its entire reinsurance business to RenaissanceRe Holdings for about $2.99bn. AIG will receive $2.74bn in cash and $250mn in common stock for its Validus Re, AlphaCat and Talbot Treaty reinsurance businesses. The offloading of its reinsurance business will help free its capital of up to $400mn as per AIG, adding that the move will simplify its business model and reduce overall portfolio volatility. BT reports that AIG will however continue holding onto its Talbot Underwriting and Western World businesses.
AIG’s bonds were trading slightly lower with its 3.875% 2035s down 0.5 points to 86.4, yielding 5.47%.
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