AIG has pulled out of the Australian and New Zealand aviation market, citing a strategic review of market conditions and an underperforming portfolio.

Six months ago insuranceNEWS.com.au asked AIG if it was exiting the market, and the global insurer said this was not on the agenda.

The move, effective from May 9, follows Allianz ceasing to write general aviation insurance in Australia this year after a global review of the business.

AIG says the withdrawal follows an extensive review of its aviation portfolio since it began operating in Australia.

“Given the aggressive level of price reductions and breadth of coverage being offered by our competitors, AIG Australia is simply unable to achieve long-term scale and sustainable profitability across the full suite of aviation products being offered in the Australia marketplace,” the company says.

“As a result of these considerations, we have made the difficult decision to exit this line of business locally.

“However, we reiterate that the AIG group remains committed to aviation as a core line of business globally and, subject always to regulatory requirements, the group is still looking to support certain components of the portfolio out of the AIG aviation hub in Singapore.” 

These components will generally include airports and service providers such as catering, ground service, refuelling, airside liability and industrial aid aircraft.