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AIG CEO Peter Hancock To Depart Amid Mounting Losses

10 March, 2017, 00:17 | Author: Paula Vaughn
  • AIG President and CEO Peter Hancock is interviewed on the floor of the New York Stock Exchange. Weeks after reporting a massive loss at AIG the person selected to turn things around at the insurance

The CEO's two-year turnaround plan appears to be faltering after AIG reported a unexpectedly large quarterly loss for the fourth quarter of last year, mainly due to a $5.6 billion reserve charge to cover possible future claims.

AIG shares climbed 1.6 percent in early NY trading as investors reacted positively to the resignation of CEO Peter Hancock.

"I believe this is the right decision to make for the company and all its stakeholders", Hancock said of his resignation.

In a statement on Thursday, the New York-based company said that Hancock had informed the board of his intention to resign.

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"We fully support the actions taken today by the board", said Icahn, who appointed a designee to serve as director in his stead. Activist investors Carl Icahn and John Paulson, who secured seats on the board previous year, have also piled pressure on AIG's executives. "Of course, there aren't too many candidates with the skills needed to turn around this troubled global company, but several successful turn-arounds" have occurred in the industry, Shields wrote in a note. But even so, its shares are trading at 83 percent of book value and the company's net loss widened to $3.04 billion in the fourth quarter from $1.84 billion a year earlier.

Hancock is AIG's fifth chief executive since Maurice "Hank" Greenberg was ousted in 2005. AIG is one of the few insurers labeled by the US government as being a significantly important financial institution (SIFI), which makes it subject to tougher capital requirements and supervision.

In January, AIG agreed to a reinsurance deal with National Indemnity, a subsidiary of investor Warren Buffett's Berkshire Hathaway, for $9.8 billion. Before that, he was the CEO of AIG Property Casualty.

"Peter tackled the company's most complex issues, including the repayment of AIG's obligations to the US Treasury in full and with a profit, and is leaving AIG as a strong, focused and profitable insurance company", chairman Doug Steenland said in a statement.



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