AIG to sell shares of Bermuda reinsurer IPC

AIG intends to sell up to 15.4 million of the common shares (24.2% of outstanding shares) it owns of reinsurer IPC Holdings in a public offering, subject to market conditions.
AIG was the sponsoring shareholder of Bermuda-based reinsurer IPC in 1993. IPC was established after Hurricane Andrew touched down in 1992.
Since 1993, AIG has provided IPC with investment management, administrative and other services since then. “These aspects of AIG’s business relationship with IPC are intended to continue following the sale,” according to AIG president and CEO George Cubbon.
In a press release, Cubbon said he plans to remain on IPC’s board of directors.
“AIG does not provide financial support to IPC, and the sale of AIG’s share ownership will not affect IPC’s capital structure, financial condition or policyholders,” IPC said in its release. “The sale of AIG’s ownership should provide more flexibility to IPC in managing its capital, including potentially through share repurchases.
“IPC’s by-laws prohibit share repurchases that would result in AIG having 25% ownership of common shares and, with certain exceptions, other shareholders having 10%.”
Future share repurchases (if any), IPC announced, would be subject to the prior approval of IPC’s board of directors based on market conditions and IPC’s financial condition at that time. No repurchases are currently contemplated or authorized, IPC noted.
“Our financial condition remains healthy and our balance sheet, through our recent capital raising efforts, is strong,” IPC president and CEO Jim Bryce said. “AIG was our sponsoring shareholder and all of us at IPC would like to thank AIG for its support over the years. We are on excellent footing to capitalize on the favorable market conditions.”