Freshfields advises AIG Europe on its Brexit restructuring

Freshfields Bruckhaus Deringer LLP (‘Freshfields’) has advised the AIG group (‘AIG’) on the restructuring of its entire European operations to ensure AIG’s readiness for Brexit.

The transaction is one of the largest insurance business transfers ever undertaken and is the first time that a UK insurance business transfer scheme has incorporated an outbound EU cross-border merger. It is also the first of the major insurance-related Brexit restructurings and therefore sets an important precedent for the market.

On October 25, 2018, AIG received approval from the High Court of England and Wales for the transfer of its UK business to a new UK subsidiary and its European business to a new Luxembourg subsidiary. As part of the transaction, AIG are transferring over 6 million policies representing gross written premiums (‘GWP’) of approximately £5bn. The two-entity structure enables AIG to continue to service all of its European policyholders and gives contract certainty regardless of the future relationship between the UK and the EU. The High Court approval represents the culmination of over two years planning and work.

The transaction has been structured as a combined insurance business transfer under Part VII of the Financial Services and Markets Act 2000 and a cross-border merger under the EU cross-border merger regime. The transaction, which will complete on 1 December, remains subject to approval from Luxembourg’s competent authority.

The Freshfields team is led by partner George Swan with support from associates Carl Hotton and Ganesh Vaheisvaran. The Freshfields team worked closely with the AIG legal team on the transaction led by EMEA general counsel Chris Newby, principally assisted by James Middleton, Frances Wills and Karine Guerin.