AIG purchases BI&I for $1.2 billion

With the recent announcement that HSB Group Inc., parent company of the Boiler Inspection and Insurance Company (BI&I), will sell its stakeholding to American International Group Inc. (AIG), staff at BI&I are predicting “business as usual”.

Both the management and name of the company will remain, says Gary Young, BI&I vice president. He expects the company will continue to operate its specialty lines and reinsurance business much as before. “It’s important to us that we be able to continue to service our customers as an independent organization.”

The biggest change will be the chance for HSB to expand into the global market, given AIG’s worldwide presence. “Our parent company has been trying to grow internationally”, but has had modest success so far, Young notes. AIG has plans to put HSB on the global map, agrees K.K. Leong, director of commercial marketing for AIG. “AIG will grow this company, because they aren’t international.”

The deal, which is valued at $1.2 billion, will see HSB shareholders’ stock converted to AIG stock, at $41 a share. Regulatory and shareholder approval is necessary for finalization, which Leong predicts will be the end of the year.