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FINANCIALS: Zurich Buying AIG Travel Insurance: Sensible But Small

FINANCIALS

Zurich Insurance (ZURNVX A2 pos/A+) is buying AIG’s personal travel insurance and assistance business. Appears sensible but a <1% deal so shouldn’t be a spread mover, in our view.

  • Zurich is buying AIG’s “Global Personal Travel insurance and Assistance” business which will be merged with Zurich’s “Cover-More” business. The price is USD600m plus an undisclosed earn-out payment. Swiss solvency (SST) is set to drop 4pp on this deal (was 232% at Mar-24).
  • This is a sub-1% deal for Zurich, so this shouldn’t have a meaningful spread impact but worth noting that the SST consensus (of 238%) was missed at 1Q24 stage though both spreads and equity have performed well since.
  • Zurich’s EUR spreads have outperformed in the last month (+4bp vs. €IG insurers: +18bp) but have lagged marginally YTD. The equity has broadly tracked SXIP this year.
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