The life and retirement business of the insurer American International Group Inc (AIG) will be separated from the rest of the company, the board of the company decided on Monday while also naming the company’s President Peter Zaffino as the new chief executive officer, effective next year.
Zaffino, 53, will replace the 73-year-old Brian Duperreault and will be taking charge of the post in March. Zaffino will be AIG’s seventh CEO since 2005.
A decision on how to carry out the separation is yet to be made by the company apart for completing the voting in the board of the company for the creation of two independent and market-leading companies, said the insurer which is among the top 10 US carriers by market value.
According to reports quoting sources, it could take “a couple of years” for the company to separate the business and the separation may also be completed in phases through sales of minority stakes.
AIG said that a single sale has not been ruled out by the company board and any proposed transactions will have to go through the board.
AIG said in September that about 34 per cent of the company’s adjusted revenue for 2019 was accounted for by its life and retirement business while its general insurance business accounted for 64 per cent.
The company is currently undergoing a phase of turnaround in a strategy that as launched by Duperreault who had implemented it after taking charge of AIG in 2017. The strategy developed by Duperreault includes the company concentrating more on sharpening underwriting, doing more with worthwhile customers, making more investments in technology, retaining talent and cutting down costs.
The point man to execute those goals has been Zaffino which attempted to achieve them partially by reducing losses in the commercial property and casualty businesses and depending more on reinsurance while also using better technologies and modernizing processes. A number of executives had also been recruited by him.
In 2008, the company had to accept a $182 billion US taxpayer bailout to save it from collapse and it has since struggled to right itself. In order to repay the debt plus a $22.7 billion return, the company has since sold off big chunks of its business.
It was also hit financially because of claims occurring in prior years which resulted in unexpected reserve increases of more than $11.2 billion since 2015. Most of those claims had occurred under the previous leaderships in the company.
Its first general insurance underwriting profit since the 2008 financial crisis was reported by AIG in May 2019 which was a key point for the company.
(Source:www.tv18.com)
Zaffino, 53, will replace the 73-year-old Brian Duperreault and will be taking charge of the post in March. Zaffino will be AIG’s seventh CEO since 2005.
A decision on how to carry out the separation is yet to be made by the company apart for completing the voting in the board of the company for the creation of two independent and market-leading companies, said the insurer which is among the top 10 US carriers by market value.
According to reports quoting sources, it could take “a couple of years” for the company to separate the business and the separation may also be completed in phases through sales of minority stakes.
AIG said that a single sale has not been ruled out by the company board and any proposed transactions will have to go through the board.
AIG said in September that about 34 per cent of the company’s adjusted revenue for 2019 was accounted for by its life and retirement business while its general insurance business accounted for 64 per cent.
The company is currently undergoing a phase of turnaround in a strategy that as launched by Duperreault who had implemented it after taking charge of AIG in 2017. The strategy developed by Duperreault includes the company concentrating more on sharpening underwriting, doing more with worthwhile customers, making more investments in technology, retaining talent and cutting down costs.
The point man to execute those goals has been Zaffino which attempted to achieve them partially by reducing losses in the commercial property and casualty businesses and depending more on reinsurance while also using better technologies and modernizing processes. A number of executives had also been recruited by him.
In 2008, the company had to accept a $182 billion US taxpayer bailout to save it from collapse and it has since struggled to right itself. In order to repay the debt plus a $22.7 billion return, the company has since sold off big chunks of its business.
It was also hit financially because of claims occurring in prior years which resulted in unexpected reserve increases of more than $11.2 billion since 2015. Most of those claims had occurred under the previous leaderships in the company.
Its first general insurance underwriting profit since the 2008 financial crisis was reported by AIG in May 2019 which was a key point for the company.
(Source:www.tv18.com)
