AIG to acquire Hamilton USA, increase data investment

AIG will acquire Hamilton USA, the U.S. operations of Bermuda-based Hamilton Insurance Group, with the goal of increasing data-driven expertise, according to a memorandum of understanding released today by the companies.

The news came the same day that Brian Duperreault was named CEO of AIG after several years at Hamilton. At issue is the ownership and strategy around Attune, a digital underwriting platform that Hamilton, AIG and Two Sigma Insurance Quantified (a unit of Two Sigma Investments) developed last year.

Attune, which uses extensive third-party data to speed the underwriting process for small business insurance, will see its target market expanded to companies making as much as $35 million in yearly revenue. Previously, the target customer was a business making $10 million or less. [Read more about Attune].

DI-aig-front-030617
A security guard stands inside the American International Group Inc. (AIG) headquarters office in New York, U.S., on Tuesday, Jan. 29, 2016. American International Group Inc., the insurer being pressured by activist investor Carl Icahn to divest assets, had the outlook on its credit rating changed to negative from stable by Standard & Poor's after announcing plans to sell a stake in mortgage insurer United Guaranty Corp. Photographer: Victor J. Blue/Bloomberg

According to the memorandum, AIG will acquire Hamilton USA, but transfer the division's one-third ownership stake in Attune to the parent company Hamilton Group. Terms of the deal were not disclosed. There will be no changes to staffing or leadership in Hamilton divisions, or at Hamilton USA. However, after full transfer to AIG ownership, Hamilton USA will be converted to "a stand-alone unit of AIG that will be used to develop a state of the art technology platform applying data science and analytics to transform underwriting," according to a document provided by Hamilton.

In addition to the movement around Attune, AIG and Duperreault announced an increased focus on data science and analytics in underwriting, supported by a technology partnership between AIG and Two Sigma and a reinsurance agreement with Hamilton Group

"Putting data science and technology to work in our industry has been on my agenda for some time,” said Duperreault in a statement. “It was the genesis of Hamilton Insurance Group’s formation and will be a primary agenda item at AIG. Through Attune, I’ve learned that cross-industry partnerships – what’s now called insurtech - are the way to go. I can’t think of better partners to have than Hamilton and Two Sigma as we work together to transform our industry.”

“Data science and technology open a world of opportunity for this industry, from more practical protection and smarter processes to a better understanding of risk," adds David Siegel, co-founder and co-chairman of Two Sigma Investments. "This can be done while also lowering costs and more efficiently utilizing resources. We are excited that TSIQ will be working with both AIG and Hamilton to further capitalize on these benefits.”

For reprint and licensing requests for this article, click here.