American International Group is looking to sell $2 billion worth of life insurance policies that would pay out when elderly or sick customers die, sources say.
AIG is working with investment bankers at Goldman Sachs to sell the portfolio. Apollo Global Management is considering buying some of the policies, according to sources quoted by Reuters. Companies like Blackstone Group have bought similar “death benefits” in the past.
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Death benefits are usually sold be elderly or terminally ill customers who need ready money. Investors buy the policies out at a price smaller than the payout they will receive when the customers die.
But AIG has identified death benefits as “non-strategic.” It’s already sold a death-benefits portfolio worth $1.4 billion at an $89 million loss,
Reuters reported. The company has spent the past several years divesting itself of various businesses and assets, cutting its balance sheet by more than half over the last decade. And new CEO Brian Duperreault wants to steer the company toward a focus on core consumer and commercial businesses.
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