American International Group Inc., the insurer that’s shrinking to free up capital for shareholder buybacks, said it expects to book a loss of about $430 million on the previously disclosed deal to sell Fuji Life Insurance Co. in Japan.
That loss will be partly cushioned by a gain of $300 million on the deal completed Thursday to sell the International Finance Centre Seoul in South Korea, the New York-based company said in a regulatory filing. AIG hasn’t disclosed sale prices for either transaction.
CEO Peter Hancock is on track for its plan to return $25 billion to shareholders in the two years through the end of 2017, according to the document. The figure is $11.6 billion for this year through Thursday, and AIG has another $3.6 billion remaining on a buyback authorization. Beyond that, the insurer could free up at least $4 billion by the end of next year through asset sales and additional funds through life reinsurance transactions and intra-company payments.
“We’ve sold major life insurance companies in Asia over the last few years,” Hancock said in an interview last week following the announcement that an arm of Richard Li’s Pacific Century Group agreed to buy the Fuji operation. “It really allows us to focus” on segments like property-casualty coverage.
Also part of the plan was the agreement in September to sell Ascot Underwriting Holdings Ltd. to the Canada Pension Plan Investment Board as part of a $1.1 billion deal. AIG said Friday that it will book a gain of about $120 million on that transaction.
Hancock is seeking to highlight the growth potential of the main portfolio of units that he sees as the core of the company. AIG said Friday that the operating return on equity for those businesses will be about 10 percent next year. That compares with a projection of 10.3 percent to 10.7 percent in January.
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