AIG is to close its insurance business in Sri Lanka as part of a global streamlining process.
The American insurer was one of 19 general insurers in the Sri Lankan market, although it held a relatively insignificant market share of 0.3% by the end of 2012.
This has prompted industry analysts to declare that AIG’s withdrawal with have little effect on the market.
“As AIG continues to streamline and simplify as an organization, we have been closely examining those business segments within those countries in which products and services are not meeting the needs of our customers or are not a current focus of AIG and may no longer fit into our strategic growth plans,” said AIG. “After careful consideration and an in-depth review, we have decided to withdraw from the Sri Lanka market.”
Sri Lanka’s insurance regulator the Insurance Board of Sri Lanka (IBSL) has asked AIG to present written exit plans explaining its action regarding employees and policy holders.
Insurance penetration in Sri Lanka is relatively low when compared to other Asian countries, with the country’s level of insurance standing at 1.14% of GDP.
AIG has significantly streamlined its business since the 2008 financial crisis and announced in May that it would be moving a number of jobs away from its New York office to locations around the US and offshore in order to save costs.
The company also recently announced that it would undergo a change in leadership with Peter Hancock replacing chief executive Bob Benmosche in September.
As the company continues to streamline and reorganise we could see AIG changing its global business portfolio even further in the months ahead.