AIG lines up IPO for retirement division as it inks $150bn deal with BlackRock

US insurance giant AIG is lining up an IPO for its life insurance and retirements business which is expected to fetch a valuation of more than $20bn.

The long-expected spin-off will be by far the largest US firm to float in the US this year and comes amid an IPO slowdown brought on by inflation and the war in Ukraine.

In a filing on Monday, the insurer said the business was one of the largest providers of retirement solutions and insurance products” with $411bn in clients assets under management, and will now be rebadged as Corebridge Financial Inc.

“As Corebridge, we will continue to proudly partner with financial and retirement professionals to help their clients feel confident and motivated today, and in control of their tomorrow,” said Kevin Hogan, boss of AIG’s life and retirement business.

AIG has been looking to simplify its sprawling business since a $185bn taxpayer bailout during the financial crisis, with management fighting off pressure from activist investors Carl Icahn and John Paulson to spin off the life insurance business between 2015 and 2017.

The announcement came just hours after AIG also handed over the control of $150bn of assets to asset management giant BlackRock.

BlackRock will now control around $90bn of its assets that will sit within the Corbridge portfolio, as well as $60bn within AIG’s core business.

BlackRock president Rob Kapito said the firm was honored to be selected as a strategic partner.

“BlackRock is honored to have been selected to serve AIG as a strategic partner. We look forward to leveraging our investment expertise, scale, and technology capabilities for the benefit of all of AIG’s stakeholders,” Rob Kapito, BlackRock president, said in the deal announcement.

AIG previously agreed to hand off management of up to $92bn in life and retirement assets to investment giant Blackstone last year, along with a 9.9 per cent stake in the division.