American International Group (AIG) has agreed to divest its Japanese life insurance business to Pacific Century Group's insurance unit FWD Group.

Terms of the deal were not disclosed and the transaction is subject to regulatory approvals.

The sale of AIG Fuji Life Insurance Company (AFLI) will not affect AIG’s non-life insurance business in Japan.

Upon completion of the deal, AIG will continue to focus on the property and casualty market in Japan through its local subsidiaries Fuji Fire & Marine, American Home Assurance Company and AIU Insurance Company.

AIG president and CEO Peter Hancock said that the sale transforms the company into a leaner insurer besides channelizing its focus on the geographies and sectors where it has critical mass as well as expertise to offer tremendous value to clients.

Hancock  added : “In this core market for AIG, we are committed to growing both our commercial and consumer personal insurance lines. At the same time, our AFLI clients and colleagues will benefit from FWD’s commitment to growing the life business in Japan.

“Beyond the deal’s close, we look forward to partnering with FWD on life distribution in support of its goals, and in exploring other future opportunities.”

The acquisition extend FWD’s regional footprint and is claimed to be in line with its vision of becoming a leading insurer throughout Asia.

FWD Group CEO Huynh Thanh Phong said: “AIG Fuji Life is a strong foundation for FWD’s entry to Japan and our partnership with AIG will give FWD access to an extensive distribution network with an established customer base. We aim to develop and grow AFLI through investment in the long-term and our customer-led, technology-driven approach.”

FWD Group operates across Indonesia, Thailand, the Philippines, Vietnam and Singapore.

Post acquisition, FWD Group will run AFLI’s current life insurance distribution agreements with AIG Japan. In-force policies on the other hand will remain intact after the transfer of ownership.

Image: AIG has agreed to sell AIG Fuji Life Insurance Company to FWD Group. Photo : courtesy of HanSangYoon and Wikipedia.