Sources told Reuters that American International Group has plans to sell a $2 billion life portfolio, with private equity giant Apollo Global Management being among prospective buyers.
Investment bankers at Goldman Sachs Group are allegedly helping AIG unload the life settlement assets, which trigger when sick or elderly customers pass away.
Similar life insurance asset purchases have been made by Blackstone Group LP in the past, according to Reuters sources.
Additionally, major reinsurance firms are keen to acquire such closed life portfolios and manage them to run-off.
Representatives for Goldman, Apollo, Blackstone, and AIG declined to comment on the transaction, however, AIG spokesman Kenneth Juarez told Reuters the company is committed to its core life insurance business.
Reuters said that since 2007 AIG has cut its balance sheet by more than half through a divestment spree of selling businesses around the globe.
However, with the appointment of new AIG CEO Brian Duperreault the break-up of its assets was expected to end, as Duperreault said he was keen to grow the firm rather than shrink it.
The firm has been transitioning from “legacy” assets, which are being sold off or reduced, to a focus on growing core commercial and consumer businesses, according to Reuters.
This sale of a portfolio of life settlements or death benefit contracts is more likely a sign of where AIG wants to focus its business, rather than an attempt to downsize it. This area has not been core to AIG for some time and freeing up assets through the sale or reinsurance of this book could provide capital for more targeted growth in lines that are now core to its underwriting business.
