We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
American International Recalibrates, Sells Taiwan Business
Read MoreHide Full Article
American International Group, Inc. (AIG - Free Report) announced the completion of the sale of AIG Taiwan Insurance Co. Ltd's consumer and small and mid-sized (SME) enterprise business to Nan Shan Life Insurance Co., Ltd. The transaction, which was announced last June, has been closed within the scheduled time.
The sold off unit has been renamed Nan Shan General Insurance and is fully owned by Nan Shan Life Insurance.
Taiwan-based Nan Shan Life was once part of AIG but was sold off in 2011 to a Taiwanese conglomerate. This was done to generate funds in order to help the U.S. financial corporation pay back a government bailout.
Though the company has sold off its Taiwanese unit, it intends to strengthen its commercial insurance footprint in the region. To this effect, it opened a branch office recently in Taipei named AIG Asia Pacific Insurance Pte. Ltd. The branch will focus on its commercial insurance operations, which include property, casualty, financial lines, marine and trade credit.
The AIG Taiwan divestiture reflects the company’s attempt to streamline its core insurance operations and restructuring businesses, which would enhance its capital allocation and operating leverage. The company is also optimistic about retaining customer confidence in its stock. This is because Nan Shan Life is one of the leading insurers in Taiwan and a deal with it ensures that AIG’s existing customers will not be affected.
This selloff is part of AIG’s restructuring initiatives that are ongoing over the past few years to focus on core assets. The company’s restructuring initiatives have gathered steam in recent months after its CEO, Peter Hancock, received a letter from investor Carl Icahn last November, urging him to trim the massive company’s operations by dividing it into three parts – property and casualty, life and mortgage insurance. According to Icahn, these three businesses are so diverse that they together provided little or no synergistic effect. Also, the company’s mammoth size acted as a hindrance in its own path to progress as evident by its underperformance over the past several years.
Though the company has taken numerous divestures since 2008, these could not generate the anticipated returns. The company has therefore taken a series of steps since Nov 2015 after Peter Hancock received threats of being replaced from his role. In the beginning of 2016, the company announced that it will return $25 billion to its shareholders over two years. In view of this, last month, the company announced that it will sell its mortgage insurance unit United Guaranty Corporation to Arch Capital Group Ltd. (ACGL - Free Report) for $3.4 billion.
Other steps taken recently to drive up the returns from the company include a new share buyback plan announced last month to authorize the repurchase of additional shares with an aggregate purchase price of up to $3.0 billion. Prior to this, in Feb 2016, it authorized an additional $5 billion in share repurchases. The company also raised its quarterly dividend by 14%.
Moreover, the company also formed an Executive Leadership Team structure comprising 10 heads – all veterans in their respective fields – to work toward attaining its strategic priorities. Several jobs were slashed, including those at senior positions in the company in order save cost. In May, the company also completed the sale of Advisor Group to investment funds affiliated with Lightyear Capital LLC.
Currently, AIG carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the insurance space are National Interstate Corporation (NATL - Free Report) and James River Group Holdings, Ltd. (JRVR - Free Report) . While National Interstate sports a Zacks Rank # 1 (Strong Buy), the other stock holds a Zacks Rank # 2 (Buy).
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
American International Recalibrates, Sells Taiwan Business
American International Group, Inc. (AIG - Free Report) announced the completion of the sale of AIG Taiwan Insurance Co. Ltd's consumer and small and mid-sized (SME) enterprise business to Nan Shan Life Insurance Co., Ltd. The transaction, which was announced last June, has been closed within the scheduled time.
The sold off unit has been renamed Nan Shan General Insurance and is fully owned by Nan Shan Life Insurance.
Taiwan-based Nan Shan Life was once part of AIG but was sold off in 2011 to a Taiwanese conglomerate. This was done to generate funds in order to help the U.S. financial corporation pay back a government bailout.
Though the company has sold off its Taiwanese unit, it intends to strengthen its commercial insurance footprint in the region. To this effect, it opened a branch office recently in Taipei named AIG Asia Pacific Insurance Pte. Ltd. The branch will focus on its commercial insurance operations, which include property, casualty, financial lines, marine and trade credit.
The AIG Taiwan divestiture reflects the company’s attempt to streamline its core insurance operations and restructuring businesses, which would enhance its capital allocation and operating leverage. The company is also optimistic about retaining customer confidence in its stock. This is because Nan Shan Life is one of the leading insurers in Taiwan and a deal with it ensures that AIG’s existing customers will not be affected.
This selloff is part of AIG’s restructuring initiatives that are ongoing over the past few years to focus on core assets. The company’s restructuring initiatives have gathered steam in recent months after its CEO, Peter Hancock, received a letter from investor Carl Icahn last November, urging him to trim the massive company’s operations by dividing it into three parts – property and casualty, life and mortgage insurance. According to Icahn, these three businesses are so diverse that they together provided little or no synergistic effect. Also, the company’s mammoth size acted as a hindrance in its own path to progress as evident by its underperformance over the past several years.
Though the company has taken numerous divestures since 2008, these could not generate the anticipated returns. The company has therefore taken a series of steps since Nov 2015 after Peter Hancock received threats of being replaced from his role. In the beginning of 2016, the company announced that it will return $25 billion to its shareholders over two years. In view of this, last month, the company announced that it will sell its mortgage insurance unit United Guaranty Corporation to Arch Capital Group Ltd. (ACGL - Free Report) for $3.4 billion.
AMER INTL GRP Price
AMER INTL GRP Price | AMER INTL GRP Quote
Other steps taken recently to drive up the returns from the company include a new share buyback plan announced last month to authorize the repurchase of additional shares with an aggregate purchase price of up to $3.0 billion. Prior to this, in Feb 2016, it authorized an additional $5 billion in share repurchases. The company also raised its quarterly dividend by 14%.
Moreover, the company also formed an Executive Leadership Team structure comprising 10 heads – all veterans in their respective fields – to work toward attaining its strategic priorities. Several jobs were slashed, including those at senior positions in the company in order save cost. In May, the company also completed the sale of Advisor Group to investment funds affiliated with Lightyear Capital LLC.
Currently, AIG carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the insurance space are National Interstate Corporation (NATL - Free Report) and James River Group Holdings, Ltd. (JRVR - Free Report) . While National Interstate sports a Zacks Rank # 1 (Strong Buy), the other stock holds a Zacks Rank # 2 (Buy).
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>