AIG acquires majority renewal rights for Everest Group’s global retail insurance portfolio in $2 billion deal

The agreement with Everest, one of the world’s largest reinsurance and insurance solutions companies, is part of AIG’s CEO Peter ZaffinoTransformation efforts at the century-old insurance company. It will also ease Everest’s loss reserve management issues after it underestimated claims costs in its US casualty insurance business, leaving the company short of capital.

Insiders say AIG expects to start writing policies for existing Everest clients in North America by the beginning of 2026. As for clients in the European Union, AIG is positioned to begin work on that portfolio during the first quarter of 2026, depending on regulatory approvals.

AIG, a $44 billion insurance company, already serves more than 88 million business and personal customers worldwide, operating in more than 200 countries and jurisdictions. Everest also serves millions of policyholders, but is much smaller, at about $14.5 billion.

Meanwhile, Everest has hired several senior executives from AIG in recent years Included The company’s former chief legal officer, Anthony Vidovic, was named executive vice president and general counsel of Everest on October 16.

The Everest deal did not require AIG to seek outside capital or take on debt, insiders say. While AIG will acquire the portfolio and client relationships as part of the deal, all existing liabilities and prior exposure will remain with Everest. These specifications will allow AIG to access future customers and business without inheriting liability for claims and liabilities from policies written before the deal closes.

The move will significantly boost AIG’s portfolio growth in general insurance, an aspect that has shown consistent growth under Zaffino’s leadership. In 2024 the company books $23.9 billion in premiums, up 6% year over year on a comparable basis. New business in 2024 reached $4.5 billion, an increase of 9%. Company Q1 and Q2 Profits displays More potential promise. New premiums written were in the first quarter up to 8% On a similar basis, it brought in $4.5 billion, with second-quarter premiums generating $6.9 billion.

The potential for growth and avoiding additional financial risks are particularly important to Zaffino’s vision and AIG’s turnaround. The company faced an uphill battle after its involvement in the 2008 global financial crisis. Before 2008, AIG entered into Huge amounts of largely unhedged credit default swaps, insuring more than $440 billion of assets, including $57.8 billion backed by subprime mortgages.

When the mortgage market collapsed, AIG faced off Huge losses They had to pay on credit default contracts. As investors and counterparties demanded collateral, the company’s liquidity evaporated. require A $182 billion government bailout, in exchange for an equity stake.

In the decade that followed, the insurer lost more than $30 billion in underwriting—an indicator of excess capital, weak risk controls, and a lack of accountability for underwriting results—and endured numerous CEO changes.

When Zaffino became CEO in 2021, AIG had undergone significant downsizing, asset sales, and management turnover, but persistent operational inefficiencies and poor profitability, especially in underwriting, remained.

Since taking office, Zaffino has led Aggressive transformation strategy It focused on disciplined underwriting, process simplification, and technology modernization. At AIG It was stripped non-core units, reduced their risk exposure by more than $1 trillion, and invested in artificial intelligence capabilities. These include partnerships with Anthropic and Palantir to build AI-based risk assessment and operational tools aimed at improving underwriting accuracy and claims efficiency.

AIG’s financial performance has improved significantly, analysts say a description As a “different company” compared to previous years. In the second quarter of 2025, the company announced profits of $1.1 billion, compared to $4 billion. loss The previous year, which primarily reflects the breakup of Corebridge Financial, a provider of life insurance and retirement solutions, and other portfolio changes. Adjusted after-tax income rose 56% year over year, as did AIG’s income Profits EPS of $1.81 beat expectations of $1.60, while revenue of $6.88 billion beat expectations of $6.78 billion.