According to Fortune, insurance giant AIG is acquiring renewal rights for the majority of Everest Group’s global retail insurance portfolio worth $2 billion in premiums. The deal allows AIG to gain access to customers and future business without inheriting responsibility for claims from policies written before the transaction closed, with North American policy transitions expected by early 2026. This strategic move advances CEO Peter Zaffino’s transformation effort while helping Everest manage loss reserve issues in its U.S. casualty business.
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The Art of Portfolio Transfer Deals
What makes this transaction particularly sophisticated is the structure focusing on renewal rights rather than a traditional acquisition. In insurance portfolio transfers, renewal rights deals allow the acquiring company to inherit future business opportunities without taking on historical liabilities. This structure is especially valuable when the selling company has experienced underwriting challenges, as Everest has with its U.S. casualty business. The arrangement essentially lets AIG cherry-pick the valuable customer relationships while Everest retains responsibility for any past underwriting mistakes – a crucial risk management consideration given AIG’s own troubled history with risk assessment.
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Strategic Implications Beyond Premium Growth
While the $2 billion in premium volume represents meaningful growth, the real strategic value lies in AIG’s ability to scale its transformed operations without additional risk. Under Zaffino’s leadership, AIG has undergone what analysts describe as a fundamental restructuring, having reduced its risk exposure by over $1 trillion while divesting non-core units. This deal perfectly aligns with that disciplined approach – gaining market share and distribution channels without the baggage that contributed to AIG’s near-collapse during the 2008 financial crisis when the company faced massive losses from credit default swaps and required a $182 billion government bailout.
Industry-Wide Shift Toward Capital Efficiency
This transaction signals a broader trend in the insurance industry toward capital-light growth strategies. Rather than pursuing traditional mergers and acquisitions that come with integration risks and legacy liabilities, carriers are increasingly favoring renewal rights deals and strategic partnerships. Everest’s motivation here is equally telling – the company needs to address reserve deficiencies in its casualty business, and this deal provides capital relief without a complete business sale. The movement of senior executives between these firms, including Everest’s recent hiring of AIG’s former legal chief Anthony Vidovich as reported by Law360, suggests deeper strategic alignment beyond this single transaction.
The Zaffino Transformation Accelerates
Looking forward, this deal represents another milestone in Peter Zaffino’s comprehensive turnaround of AIG. Since taking over in 2021, Zaffino has emphasized technological modernization and underwriting discipline, including partnerships with AI companies to improve risk assessment capabilities. The financial results speak to this strategy’s effectiveness – AIG’s Q1 2025 results showed strong premium growth, and the company’s 2024 annual report demonstrated consistent improvement in core metrics. If AIG can successfully integrate these new customer relationships while maintaining underwriting discipline, the Everest deal could become a case study in post-crisis insurance company rehabilitation.
