Ernst & Young and insurance giant American International Group have signed a global tax compliance and technology operating agreement that includes a combination of managed tax services with the transfer of some AIG employees to the Big Four firm.
As part of the deal, members of AIG’s global tax compliance and tax technology teams are being integrated into EY’s tax technology and direct and indirect tax compliance practices at the U.S. federal, state, local and global levels. That will enable AIG to make use of EY’s managed tax services and technology, while concentrating its internal tax team on more strategic initiatives. The collaborative managed services agreement is expected to help both organizations navigate changes in the tax field more efficiently.
The five-year agreement took effect as of Feb. 5, 2018, and employees of AIG’s global tax compliance and tax technology teams transitioned to EY effective March 31, 2018.
The deal is reminiscent of one that PricewaterhouseCoopers and General Electric announced in January 2017, under which PwC brought aboard more than 600 tax professionals from GE and acquired GE’s tax technologies (see PwC to hire GE tax team). However, EY and AIG did not say in their announcement Thursday how many AIG employees would be transferred to EY.
“The arrangement with AIG is an example of our innovative approach to client service, and is another example of EY’s well-established history of offering comprehensive tax services, including outsourcing, co-sourcing and other managed services assignments,” said EY Americas vice chair of tax services Kate Barton in a statement. “It gives AIG direct access to our leading-edge tax platform, as well as our knowledge and experience in tax and technology transformation.”
AIG re-emerged from the 2008 financial crisis after nearly going out of business. The company continues to provide property casualty insurance, life insurance, retirement products, and other financial services in more than 80 countries.
“As global tax compliance obligations become increasingly complex, we welcome the opportunity to partner with EY,” said AIG head of global tax Angela Bekker in a statement. “This collaboration reflects our strategy to focus our team internally on impactful strategic initiatives, while providing us the ability to gain efficiencies and access leading technology solutions for our business.”