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Closer Ties Initiated between Hamilton Insurance Group and AIG

Handshake on Data-SF
May 17, 2017

American International Group, Inc. (AIG), Hamilton Insurance Group, Ltd. (Hamilton), and Two Sigma Insurance Quantified, LP (TSIQ), an independent affiliate of Two Sigma Investments, LP (Two Sigma), announced they have entered into a memorandum of understanding (MOU) designed to expand their existing partnership with a view to the data-driven underwriting evolution.

The MOU underscores AIG's, Hamilton's, and TSIQ's commitment to transforming commercial insurance through data science and technology. It follows the three companies' investment in Attune, the data-enabled technology platform launched in September 2016 to serve the US small-to-medium-sized commercial insurance market.

This article summarizes the terms of the MOU.

Attune's target market will be expanded to include companies with annual revenues of up to $35 million, a target market segment of up to $150 billion in annual gross written premiums. Hamilton will retain its one-third ownership of Attune. AIG has agreed in principle it will acquire Hamilton USA, the US platform of Hamilton Insurance Group, to continue accelerating its application of data science and analytics to transform underwriting. AIG and TSIQ will enter into a partnership to leverage TSIQ's insurance-focused data science and technology expertise for a broad spectrum of commercial insurance underwritten globally by AIG.

Hamilton Re and AIG will enter into a reinsurance strategic partnership in which Hamilton Re will be provided with the opportunity to participate on market terms in an increased volume of AIG's ceded reinsurance. The relationship could result in material premium growth for Hamilton Re and provides AIG an alternative source of reinsurance capital.

"Putting data science and technology to work in our industry has been on my agenda for some time," said Brian Duperreault. It was announced this week that Mr. Duperreault was departing as chairman and CEO of Hamilton Insurance Group to become AIG president and CEO. (See "AIG Names Brian Duperreault President and CEO.")

"It was the genesis of Hamilton Insurance Group's formation and will be a primary agenda item at AIG," he continued.

"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," Mr. Duperreault said. 

"Insurance is intrinsic to economic growth," said David Siegel, cofounder and cochairman of Two Sigma Investments, LP. "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. 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."

"Since our founding, Hamilton and its strategic partner, Two Sigma, have been committed to data-driven underwriting and risk management using automated systems, algorithms and data analytics," said Hamilton Chairman William Freda. "We are excited by the transformative potential the MOU represents for Hamilton through the expansion of Attune's target market and as new reinsurance opportunities of mutual benefit to AIG and Hamilton Re are explored."

Completion of the proposed transactions among AIG, Hamilton, and TSIQ is subject to negotiation of definitive agreements and obtaining required regulatory approvals.

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