Mazars will only audit the UK subsidiary, while incumbent PwC US will continue to handle the global audit business for AIG, including AIG Europe SA. The insurer restructured its European business after the Brexit vote, creating a standalone UK entity in December 2018 and a new European subsidiary in Luxembourg.

PwC has been auditor of AIG for nearly 40 years and was first hired in 1980, the firm earned $53m (£40m) in audit fees, and a further $20.6m in audit-related fees for the global audit for year end 2018.

Audit fees include fees for the audit of AIG’s consolidated financial statements, as well as subsidiary and statutory audits directly related to the performance of the AIG consolidated audit.

US auditors are not affected by the tough EU rules on audit tenure, so they can remain in place for an unlimited number of years, but subsidiaries based in EU member states need to comply with tougher local mandatory audit tender rules, introduced in 2016.

Shareholders at the last AIG AGM voted for PwC to remain as statutory auditor, and at the time, the audit committee and the board of directors said that the ‘continued retention of PricewaterhouseCoopers LLP as AIG’s independent registered public accounting firm is in the best interests of AIG and its shareholders’.

Subsequently, there followed moves to tender discrete elements of the audit business.

The AIG audit committee, chaired by William G Jurgensen, annually evaluated the qualifications, performance and independence of the independent auditor, including the lead partner. As a result of this evaluation, the Audit Committee and Board believe the continued retention of PricewaterhouseCoopers LLP is in the best interests of AIG and its shareholders.

The lead audit partner rotated at the end of 2018, with a new PwC partner assuming the role for the audit of AIG’s 31 December 2019 financial statements.

Mazars would not comment directly on the audit win, but it is understood that the audit business has been confirmed. This means that the mid-tier firm would audit the UK element of the business, while the wider global audit would continue to be handled by PwC for the time being.

This is the second substantive audit win for the mid-tier firm, after it picked up the audit for the European arm of Goldman Sachs International last May. It will be responsible for the audit for financial year end 2021 for bank’s European business. Again, in this case, PwC US retained the global audit account for Goldman Sachs Group.

Strict rules over auditor tenders and rotation in the UK as a result of the Audit Regulation and Directive mean that listed companies need to review their audit contracts at a minimum every 20 years, with best practice recommending a review once every 10 years.

As a result, the majority of the largest UK companies listed on the FTSE 100 have now swapped auditors with 60% of FTSE 100 companies having appointed a new auditor since 2009.

The Accountancy Daily FTSE 100 Auditors Survey showed that 60 companies had their current auditor in place for less than 10 years while a further 27 have had their auditors for between 10 and 20 years. The average length of appointment is now nine years, falling from 14 years in 2018 and 21 years in 2017.