American International Group (AIG) is selling its global personal travel insurance business to Zurich Insurance Group. The transaction, valued at least US $600-million, was announced on June 26 and is expected to close by the end of 2024, pending regulatory approval. 

The deal includes the Travel Guard platform and its affiliated services worldwide, except in Japan and India. The program covers trip cancellations, medical assistance, and evacuation to the insured’s home country. 

The Travel Guard brand will enable Zurich to expand its presence in the United States through its travel insurance subsidiary, Cover-More, which operates in about 15 countries, including Canada. 

Zurich stated that gross written premiums from this insurer should approach US $2-billion. Cover-More, headquartered in Australia, was acquired by Zurich in 2017. 

Impact in Canada 

Upon request from the Insurance Portal, AIG detailed the transaction’s impact on the company and its presence in the North American market. “AIG is a leading global P&C insurer in the North America market and our presence remains unchanged. Travel Guard represents a very small percentage of AIG Canada's Gross Written Premiums,” the company said in a message from a spokesperson. 

Travel coverages offered through AIG’s Accident & Health business are excluded from the agreement to sell Travel Guard to Zurich and will remain a part of AIG, the company clarified. 

AIG continues to offer a broad range of risk services in Canada for Accident & Health, Alternative Risk, Energy & Construction, Management Liability, Marine, Multinational, Property, Professional Liability, Political Risk, Environmental, Mergers & Acquisitions, Trade Credit, Cyber Insurance, Aerospace, Casualty, and Crisis Management, the company emphasized. 

“In 2023, AIG Canada reported gross premiums of CA $1.59-billion, assets of CA $3.83-billion, and policyholder surplus of CA $870-million. The insurer served over 22,200 policyholders, handled approximately 10,600 claims, and incurred gross claims and adjustment expenses of CA $487-million,” the company concluded. 

Financial results 

AIG’s CEO, Peter Zaffino, continues to streamline the company’s portfolio, having exited several segments in recent years, including life insurance and retirement protection, reinsurance, and agricultural risk management. 

According to a report by rating agency AM Best, the company has refocused on property and casualty insurance for businesses, including extended coverage and specialized risks. 

In its 2023 financial results, released last February, AIG reported a net income attributable to common shareholders of US $3.6-billion, down 62 per cent from US 10.2-billion in 2022. 

However, AIG’s annual report noted a 15 per cent increase in 2023 in its general insurance underwriting results compared to the previous year, reaching US $2.3-billion. More than half of this result came from the North American market. 

Net written premiums increased by 5 per cent in 2023 to US $26.7-billion, with US $13.5-billion from the North American market. 

However, the first-quarter 2024 results show a slowdown in activity, according to data released on May 1. Gross written premiums fell by 24 per cent for the entire group in the first quarter, amounting to US $9.2-billion. 

In general insurance, net written premiums decreased by 35 per cent in the first quarter of 2024 compared to the previous year, with a 64 per cent drop in the North American market. The company attributes this result to the exit from several lines of business announced in 2023. For the remaining business lines in corporate insurance, net written premiums grew by 4 per cent. 

For the retained activities, general insurance underwriting results reached US $596-million in the first quarter of 2024, compared to US $357-million in the same period in 2023. 

In 2023, AIG Canada reported CA $1.6-billion in property and casualty insurance revenue and a net profit of CA $127-million.