American International Group, the largest commercial insurer in the U.S. and Canada, agreed to join with Hamilton Insurance Group and the Two Sigma Investments hedge fund firm to start a business focusing on coverage for small- to medium-sized enterprises.
“The joint venture will combine Two Sigma’s proprietary data science and technology platform, Hamilton’s technology and underwriting expertise” and AIG’s scale, the companies said Tuesday in a statement, without disclosing terms.
The deal reunites AIG with Brian Duperreault, a former executive at the New York-based company who went on to lead Ace Ltd. and insurance broker Marsh & McLennan Cos. before starting Hamilton with Two Sigma more than two years ago. The hedge fund firm, founded by David Siegel and John Overdeck in 2001, relies on computer models to bet on securities markets. Two Sigma has also sought to bring increased data analysis to insurance underwriting, a strategy that AIG Chief Executive Officer Peter Hancock has sought to emphasize at his company.
Two Sigma will also assist AIG with its investment portfolio, according to the statement. AIG oversees more than $300 billion, and last year brought on Doug Dachille, a former JP Morgan & Co. colleague of Hancock’s, to manage the assets, which include private equity and hedge fund bets.
“Two Sigma will partner with both AIG and the joint venture to develop specialized asset-allocation solutions for the unique characteristics of insurance investment portfolios,” the firms said in the statement.
Duperreault will be the chairman of the new entity, and Richard Friesenhahn, the executive vice president of U.S. casualty lines at AIG, will be CEO. The companies said the market in North America for small- and medium-sized enterprises is a $76 billion industry.
AIG has a 20,000 square foot data center in Fort Worth.