“In addition, a $1 billion intercompany loan from Validus Re to AIG will be settled through internal dividends, and we expect AIG to benefit from a $400 million reduction in risk-based capital requirements following the closing.”

In context

“. And for EMEA, all PMLs will decrease by 85% at the 1-250 return period and 75% at the 1-100 return period. In addition to the strategic repositioning of our portfolio, there were several additional components that made the sale of Validus Re appealing for AIG. The required tangible equity that AIG will deliver to RenRe upon closing, which is $2.1 billion, is substantially below what Validus Re would have required if the business remained at AIG. We will receive $900 million above the book value of Validus Re, which reflects the improved quality of the portfolio since AIG's purchase of the business in 2018. We also expect to receive, through a pre-closing dividend, excess capital in the legal entities being transferred to RenRe, which we estimate will be approximately $200 million. In addition, a $1 billion intercompany loan from Validus Re to AIG will be settled through internal dividends, and we expect AIG to benefit from a $400 million reduction in risk-based capital requirements following the closing. As part of the transaction, AIG will retain 95% of future reserve changes in the portfolio delivered at closing. We will receive the benefit of future reserve releases as the portfolio matures, and we will likely purchase an adverse development cover prior to the closing to minimize potential future reserve exposure. In the second quarter, we also announced and closed the sale of Crop Risk Services to American Financial Group for $240 million in cash. Crop Risk Services was part of the Validus acquisition in 2018. Over the remainder of the 2023 crop season, AIG will continue to benefit from earned premium for crop business booked since the start of the year. But as we enter 2024, this business will no longer have an impact on AIG's financial results. Next, I want to provide more detai”