American International Group, Inc. (NYSE: AIG) today announced that it has entered into 10-year bancassurance agreements with HSBC Group companies under which AIG will become the exclusive provider of non-life insurance products to HSBC Group customers in Turkey and France, as well as in other countries in Continental Europe as may be agreed. AIG expects to pay a total consideration of approximately US$55 million for the exclusive distribution access in Turkey and France, and expects to launch the partnerships in the first half of 2013.
Turkey represents one of AIG’s strategic business expansion countries. The distribution arrangement will allow for the significant advancement of this strategy through a bancassurance relationship providing enhanced access into the country’s consumer and commercial SME non-life insurance lines.
Dan Doherty, President of Consumer Insurance for AIG’s EMEA region, said, “We are pleased that this long-term collaboration will allow us to expand our existing distribution arrangement and operations platforms with HSBC in Turkey, while offering the opportunity to develop new capabilities over the life of the relationship. We are particularly excited about our increased access to offer Accident & Health products to this key market.”
The relationship also includes the acquisition of HSBC’s French non-life subsidiary, HSBC Assurances IARD (HAI), for total consideration of US$14.5 million, consisting of a completion purchase price of US$13.3 million and a contingent deferred payment of up to US$1.2 million based upon written premiums in 2013.
Mr. Doherty continued: “Our strategic partnership with HSBC in France will allow us to deliver value added insurance solutions to HSBC’s customer base. We are delighted with the enhanced capacity to further the growth of our core consumer platform in France.”
The partnership is conditional upon the parties agreeing country-specific agreements in France and Turkey and the completion of the HAI acquisition is conditional on receipt of customary regulatory approvals.