NU Online News Service, June 26, 2003, 6:05 p.m. EDT – GE Insurance, Richmond, Va., has agreed to sell GE Edison Life Insurance Company, Tokyo, to American International Group Inc., New York.
GE Insurance, a unit of General Electric Company, Fairfield, Conn., will also sell AIG its U.S. automobile and homeowners insurance businesses.
GE Insurance will get about $2.1 billion from AIG, and it will take $440 million in cash out of the businesses before handing them over to AIG, GE Insurance says.
GE Insurance and AIG hope to complete the deal by Dec. 31.
AIG already owns two other life insurance companies in Japan, AIG Star Life Insurance Company Ltd. and ALICO Japan.
Acquiring GE Edison would make AIG the leading foreign life insurer in Japan, AIG says.
Analysts at Standard & Poor’s, New York, estimate in a discussion of the deal that AIG would end up with about 4% of the Japanese life market, based on statutory premiums.
S&P might increase GE Edison’s current AA minus rating if AIG completes the deal and shows an interest in supporting GE Edison, but S&P might lower GE Edison’s rating if the deal falls through, S&P says.
GE formed GE Edison by acquiring the business operations of Toho Mutual Life Insurance Company, Tokyo, a struggling Japanese life insurer, in 1998.