This is what happened as far as I know:
When hiring BD as CEO in May 2017, AIG entered into a “reinsurance strategic partnership” in which Hamilton was provided with the opportunity to participate in at least $150 million of reinsurance premium per year with annual increase of 7% for six years. While Hamilton’s total annual net premiums written were only $350 million by that time. Disregarding if Hamilton had capital adequacy and solvency to support the volume, AIG was provided with the opportunity to transfer more profits to BD’s tax heaven hometown.
The same day AIG also agreed to acquire Hamilton USA at book value plus $30 million. Then Hamilton USA managed to increase its book value by 22% in less than five months, i.e. from $80 million in May 2017 to $97.3 million in early October 2017, before the completion of the transaction.
AIG placed Blackboard (the renamed Hamilton USA) into run-off exactly one day short of 30 months after the acquisition. The run-off started by end of March 2020 but the announcement came late in May. It came as a huge surprise to all stakeholders of Blackboad: the company was still hiring new executives in April 2020 (technically after run-off of the business) and submitting new state and regulatory filing in May 2020 (by the exact date of the run-off announcement).
The Blackboard transaction brought AIG a pre-tax loss of $210 million, and $165 million after-tax charge. It meant Blackboard lost as much as 165% (before tax) or 130% (after tax) of its original purchase price in 2.5 years, and recorded 7 times (before tax) or 5.5 times (after tax) of good will as impairment loss. AIG further increased prior-year legacy loss reserves by a net $87 million ($65 million in Q2’2021 alone) and higher catastrophe activity of $44 million in 2021 driven mostly by Blackboard exposures.
Bottom line is, AIG’s former Executive Chairman and CEO co-founded and served as CEO of a company in his tax heaven hometown, then he left to join AIG while simultaneously help significantly boosting that company’s business through “strategic partnership” with AIG, and selling its U.S. subsidiary to AIG at a ridiculously high price, then shutting down the same business to record a huge loss right before his retirement at AIG.
We all know there’s a big story behind this, but my question is: Who’s the big boss? Isn’t BD supposed to have no personal interest in Hamilton when he joined AIG? If he didn’t get anything from this, why he did it? If he did get something, what and how?