Zurich early Wednesday said it is purchasing the global personal travel insurance business of American International Group (AIG) for $600 million.

The deal, according to Zurich, may include an additional payment if specific targets are met after the sale, which is expected to close by the end of 2024. .

Zurich called travel insurance a “priority” and said AIG’s Travel Guard business will expand its U.S. footprint as a part of Zurich’s travel insurance provider, Cover-More Group, making it a leader in the line.

“This transaction is a great strategic fit, which enhances Zurich’s existing capabilities and makes us a leading travel insurance provider across all regions,” said Cara Morton, CEO of Zurich Global Ventures. “The acquisition expands our retail customer base and aligns with our ambition to continuously enhance our offerings, while providing world-class protection during every step of our customers’ travels.”

Cover-More’s capabilities will be enhanced by AIG’s global IT platform. The deal also includes AIG’s global service centers. AIG said the transaction excludes travel coverages offered through AIG’s A&H business.

AIG CEO Peter Zaffino said the sale is “another important strategic step in positioning AIG for the future.” He said AIG will work closely with Zurich “to ensure a seamless transition for employees, customers and our global distribution partners.”

Zurich said the bolt-on should result in annual gross written premiums of about $2 billion for the new Cover-More Group.

Bank of America analysts said Zurich looks to have made a “sensible acquisition” that could increase earnings per share 1-2% after integration.

Topics
Mergers & Acquisitions
AIG