AIG sells Canadian life insurance unit for $263m

by David Masters

Story link: AIG sells Canadian life insurance unit for $263m

American International Group (AIG) announced Thursday that it has completed the sale of AIG Life of Canada to BMO Financial Group for $263 million.

BMO Financial said it expects the acquisition to strengthen the competitive position of its life insurance business.

AIG Life of Canada sells life and health insurance, including universal life and term life plans, critical illness plans, permanent plans, and immediate annuities. It also offers wealth products.

The acquisition gives BMO Financial 300 new employees and 400,000 new customers.

Bill Downe, BMO Financial’s president and chief executive officer, said: “Acquiring AIG Life of Canada will strengthen BMO’s overall financial planning, wealth and retirement offering, giving us the ability to expand our client relationships through a comprehensive line up of products.”

AIG’s sale of its Canadian life insurance unit – first announced in January – is part of AIG’s restructuring plan and will enable the company to pay back part of the $182.5 billion bailout it received from the US government.

Last week AIG also announced the sale of Hartford Steam Boiler to Munich Re for $739 million.

Edward Liddy, AIG’s chairman and chief executive, commented on the sales: “Despite highly adverse market conditions, AIG is working tirelessly to execute an orderly and effective asset disposition plan to repay the US government.

“Several other transactions are under discussion, and we continue to evaluate how best to assure the continued strength and success of all of AIG’s businesses for the benefit of all AIG stakeholders.”