A.I.G.’s Chief Executive to Resign After Turnaround Setback

2017-03-09 10:32:05

 

A.I.G.’s Chief Executive to Resign After Turnaround Setback

A little over a year after staving off calls by activist investors to break up the American International Group, Peter D. Hancock, the insurance giant’s chief executive, said on Thursday that he would resign after investors had lost faith in his efforts to turn around the company.

Last month, A.I.G. reported a loss of $3.04 billion for the fourth quarter, a major setback in his efforts to reshape the company.

In a bid to thwart the calls by Carl C. Icahn and other investors for a breakup, Mr. Hancock had unveiled a plan last year to simplify the insurer and reduce its costs and risks. The insurer also gave two seats on its board to Mr. Icahn and John Paulson, the hedge fund billionaire.

In a message on Twitter on Thursday, Mr. Icahn said, “We fully support the actions taken today by the board of $AIG.”

Shares of A.I.G. were up nearly 2 percent in early trading on Thursday.

As part of a transition plan, A.I.G. said on Thursday that Mr. Hancock would remain as chief executive until a successor was chosen after a “comprehensive” search by its board.

“I believe this is the right decision to make for the company and all its stakeholders,” Mr. Hancock said in a news release. “Without wholehearted shareholder support for my continued leadership, a protracted period of uncertainty could undermine the progress we have made and damage the interests of our policyholders, employees, regulators, debtholders, and shareholders.”

Mr. Hancock, a former top JPMorgan Chase executive, was named chief executive of A.I.G. in September 2014 after previously heading the company’s property-casualty arm. He joined the insurance company in 2010 as executive vice president for finance, risk and investments.

He is the fifth chief executive to head the insurer since Maurice R. Greenberg resigned from the company in 2005 amid an investigation into its accounting by the New York attorney general at the time, Eliot Spitzer, and the Securities and Exchange Commission. After a 12-year court battle with the attorney general’s office, Mr. Greenberg and the insurer’s former chief financial officer, Howard I. Smith, agreed to a $9.9 million settlement last month.

Mr. Greenberg, who is known as Hank, had built the company into a global insurance goliath over four decades.

But at the height of the 2008 financial crisis, A.I.G. teetered on the brink of collapse and had to be rescued in a $185 billion bailout by the federal government.

Mr. Hancock replaced Robert H. Benmosche, a former MetLife chairman who came out of retirement in 2009 to head the insurer. Mr. Benmosche died two years ago.

“Peter’s accomplishments at A.I.G., including his role in the company’s turnaround and in driving shareholder value, are immeasurable,” Douglas M. Steenland, the company’s chairman, said. “He tackled the company’s most complex issues, including the repayment of A.I.G.’s obligations to the U.S. Treasury in full and with a profit, and is leaving A.I.G. as a strong, focused and profitable insurance company.”

Despite Mr. Hancock’s impending departure, Mr. Steenland said the board believed that his two-year strategic plan announced last year was “the right plan” for the company and that it remained committed to financial targets and objectives previously announced.

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