RICHMOND, Va.--(BUSINESS WIRE)--June 25, 2003--GE Insurance today announced it has reached a definitive agreement to sell its Tokyo-based GE Edison Life Insurance Company and U.S. Auto & Home business to American International Group for approximately $2.15 billion, and take a special pre-closing dividend of approximately $440 million. The transaction is subject to normal regulatory approvals and the parties expect to complete it in 90 days.
The deal allows growth opportunities for both acquired businesses, and ensures a high level of security for policy owners. The transaction is consistent with GE Insurance's strategy to focus its global operations on key segments in which it has the greatest advantage and sees the most attractive growth and return prospects.
In addition, it will allow GE to selectively re-deploy capital in new business lines it intends to grow rapidly.
GE Insurance, which has premiums of $13.6 billion and assets of $188 billion, was created in July 2002 when GE Financial, GE Mortgage Insurance, Employers Reinsurance Corporation, and Financial Guaranty Insurance Company were brought together into one group. Since its formation, GE Insurance has closely examined its business lines and operating units to create a set of businesses that is smaller overall, with higher returns and less volatility.
Insurance is a significant part of GE, and this is a great step in redefining GE's insurance business for the future, said GE Chairman and CEO Jeffrey R. Immelt. The people of GE Edison have built an outstanding business, and I wish them continued success with AIG.
At the same time, our commitment to Japan is unabated. With 7,000 talented employees in Japan working in all of GE's businesses, we look forward to serving customers and competing for years to come.
Given our desire to sharpen our focus and the likelihood of a consolidating market in Japan, we determined that the proposed sale of GE Edison Life is the best path for continuing its growth, said Michael D. Fraizer, President and CEO of GE Insurance.
Both GE Edison and GE Auto & Home are successful and well run businesses with outstanding people. They will fit well inside a world-class company like AIG.
At the same time, we're excited about the future of GE Insurance. Our transition remains in process, and we're guided by a clear vision that's strongly focused on targeted consumer retirement income and protection markets; selected commercial and reinsurance segments; and providing credit enhancements such as mortgage insurance -- in other words, those areas where we possess the greatest competitive advantage and can produce consistent performance.
GE Edison Life and GE Auto & Home are units of GE Financial, the consumer insurance and investment arm of GE Insurance, a global family of insurance and reinsurance businesses. GE Insurance provides life insurance, retirement income products, property and casualty insurance, risk prevention services, mortgage insurance, and selective financial guarantee insurance. GE Insurance is part of General Electric Company, a diversified services, technology and manufacturing company with operations worldwide.
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CONTACT: GE Insurance, Richmond
Mike Kachel, 804/662-2534
Jeff Wilson
GE Capital Corporate Finance
Jeffrey.Wilson@ge.com
1-203-749-6340