AIG is deferring the initial public offering (IPO) of its life and retirement business that would see it sold off as a separate entity.
This would include the UK operation which provides individual, business and group protection products through the AIG Life UK arm. AIG UK also offers general insurance and other related financial services.
The deferment was revealed in the group’s results for the first half of 2022.
In October 2020, AIG announced plans to separate its life and retirement operation from the business. And in March of this year, AIG announced that it plans to rebrand SAFG Retirement Services, the parent company of its life and retirement business, as Corebridge Financial.
Providing an update on the IPO, Peter Zaffino, chairman and chief executive officer at AIG, said it had been deferred due to the high degree of equity market volatility in May and June.
He said deferring the IPO provided AIG with an opportunity to further accelerate progress on numerous separation initiatives and to solidify the capital structure of the business as a standalone company.
But Zaffino also made clear that completing the IPO was a “significant” priority for the group and it remained ready to execute, subject to regulatory approvals and market conditions.
The group added: “While we currently believe the IPO is the next step in the separation of the life and retirement business from AIG, no assurance can be given regarding the form that future separation transactions may take or the specific terms or timing thereof, or that a separation will in fact occur.
“Any separation transaction will be subject to the satisfaction of various conditions and approvals, including approval by the AIG board of directors, receipt of insurance and other required regulatory approvals, and satisfaction of any applicable requirements of the Securities and Exchange Commission.”
The results showed the group posted overall pre-tax income from continuing operations of $4.3bn, up from $147 million in the same period last year.
Its life and retirement division reported adjusted pre-tax income of $563m, down from $1,124bn in Q2 2021. The group attributed this primarily to the impact of higher interest rates, lower equity markets, and net investment income.
The group also reported adjusted pre-tax income in its life insurance segment of $117m in Q2 2022, up from $20m in Q2 2021, with adjusted pre-tax income for life insurance premiums and fees of $931m, up from $877m over the same period.
Zaffino added that the life and retirement business had once again delivered a “solid” performance considering the significant market headwinds in the second quarter of the year.