American International Group Inc. on Wednesday said it reached an agreement with United Airlines to offer travel insurance to the airline's customers.
The arrangement in part reflects AIG Chief Executive Brian Duperreault's plan to put his stamp on the company with expansion through growth of existing businesses and acquisitions.
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While AIG is known as one of the world's biggest sellers of property-casualty insurance to businesses, Mr. Duperreault has identified the company's global Personal Insurance business as an area where growth opportunities exist, as well as its life-insurance and retirement-services business.
The agreement with United is a multiyear deal to offer travel insurance to the airline's customers in the U.S. and 15 other countries. The New York-based insurer has had arrangements with smaller airline carriers in the U.S. for years, and some big ones in Europe, Asia and the Middle East.
Financial terms weren't disclosed.
From 2009 through 2012, AIG divested tens of billions of dollars of businesses and assets to repay its nearly $185 billion bailout during the financial crisis. More recently, it has been shrinking the business-insurance unit as a way to shed poorly performing accounts and improve profit margins.
Industrywide, insurers have been struggling for a few years to raise rates on many business-insurance product lines amid a glut in capital. Analysts believe the recent spate of hurricanes will usher in rate increases for certain product lines, because some of the excess capital will be used for claims payments. But few are predicting broad-based increases.
Jeff Rutledge, CEO at AIG Travel, said the United arrangement springs from technology investments that AIG made in recent years that would allow "the use of predictive analytics to enable AIG to bring robust data insight directly to the traveler's insurance offer."
AIG will provide coverage for trip cancellation, baggage loss and emergency medical services.
The company's travel insurance business dates from 1939, when a unit began offering simple automotive and personal-effects coverage for tourists and business travelers.
AIG's Personal Insurance business includes auto, property and accident insurance, and its Private Client Group serves wealthy clients. AIG also is one of the largest U.S. warranty providers for consumer electronics and appliances.
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(END) Dow Jones Newswires
October 18, 2017 08:53 ET (12:53 GMT)