Reinsurance News

AIG welcomes being taken off SIFI list, will benefit from lower expenses

2nd October 2017 - Author: Steve Evans

Insurance giant American International Group, Inc. (AIG) has welcomed regulators decision to take the company off the list of financial organisations deemed as a Systemically Important Financial Institution (SIFI).

AIG flagAIG had been deemed an organisation of systemic importance due to the insurers market position during the 2008 financial crisis.

Since then the company has downsized and adjusted its strategy considerably, with market commentators having expected it would eventually be removed from the SIFI list.

The news of AIG’s removal from the SIFI list by the Financial Stability Oversight Council’s was welcomed by the company.

AIG President and Chief Executive Officer Brian Duperreault commented; “I welcome the decision by the Financial Stability Oversight Council to rescind AIG’s SIFI designation. The Council’s decision reflects the substantial and successful de-risking that AIG’s employees have achieved since 2008. The company is committed to continued vigilant risk management and to working closely with our numerous regulators to enable a strong AIG to continue to serve our clients.”

There are benefits to the removal as well, given it’s estimated that AIG would have been spending up to $150 million a year just to stay compliant with the SIFI designation.

Lower expenses for SIFI-related compliance is seen as a positive by analyst firms, as to is the removal of potential SIFI-related regulatory friction, according to Keefe, Bruyette & Woods (KBW).

The removal from the systemically risky list comes at a time when AIG is focused once again on growth, under its new CEO Brian Duperreault. However, having shed the business that actually put it in the centre of the global financial crisis some years ago now, the insurer is back to focusing on its core business of insurance, rather than exotic financial products.

Print Friendly, PDF & Email

Recent Reinsurance News

Getting your daily reinsurance news from Reinsurance News is a simple way to receive only the reinsurance industry news that matters, delivered directly to your email inbox.

  • Only email is mandatory, but the more you tell us about yourself the better we can serve you in future!
  • This field is for validation purposes and should be left unchanged.

By submitting the form you are giving your consent to be emailed by us.

Read previous post:
Recent hurricanes could spark disputes over reinsurance hours clauses, warns Locke Lord

Global law firm, Locke Lord, has underlined the potential for reinsurance contract disputes surrounding hours clauses, in light of the...