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American International Group Inc AIG

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Morningstar’s Analysis

Valuation
Currency in USD
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

AIG Announces Life Insurance Deal With Blackstone

Brett Horn, CFA Senior Equity Analyst

Analyst Note

| Brett Horn, CFA |

No-moat AIG announced a deal with Blackstone that looks like a further step in spinning off its life insurance operations. Blackstone will purchase a 9.9% stake in the life insurance business for $2.2 billion. This price implies a valuation slightly above book value, which seems reasonable to us. Additionally, Blackstone will manage $50 billion of the existing life insurance investment portfolio, with this figure to almost double to $92.5 billion over the next six years. Finally, Blackstone will acquire AIG’s affordable housing investment portfolio for about $5.1 billion. We like AIG’s decision to separate its P&C and life operations and are pleased to see the company making progress. We will maintain our $60 fair value estimate.

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Company Profile

Business Description

American International Group is one of the largest insurance and financial services firms in the world and has a global footprint. It operates through a wide range of subsidiaries that provide property, casualty, and life insurance. Its revenue is split roughly evenly between commercial and consumer lines.

Contact
175 Water Street
New York, NY, 10038
T +1 212 770-7000
Sector Financial Services
Industry Insurance - Diversified
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2020
Stock Type Slow Growth
Employees 45,000

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