AIG chairman says insurer is 'on the right strategic path'Reprints
(Reuters) -- American International Group Inc.’s board of directors is “actively engaged in the process of identifying the right individual to serve” as the insurance company’s chief executive, its chairman wrote in a letter to shareholders on Monday.
AIG’s board and management “believe strongly that we are on the right strategic path” and expect to “gain the benefit” of actions the insurer took in 2016 with a “significantly improved risk profile and more efficient cost base,” wrote Douglas Steenland, AIG’s non-executive chairman of the board, in a letter that accompanied the insurer's 2016 annual report.
Meanwhile, a morale crisis at the insurer could prevent it from keeping and hiring the talent it needs to propel it through its financial turnaround, UBS said in an analysis on Monday.
AIG ranked last through March 21 among 10 insurers rated by their own employees in categories ranging from career opportunities to business outlook, according to a UBS analysis of data from Glassdoor Inc., which runs a careers website and database of millions of company reviews.
An AIG spokesman declined to comment.
Last year, AIG ranked last in seven of 10 categories rated by Glassdoor users, including employees and agents. Factors also include compensation, senior management and cultural values.
AIG, which announced on March 9 that its chief executive, Peter Hancock, would be stepping down, has ranked at or near the bottom of the group in all categories since 2012, wrote UBS analyst Brian Meredith in a report to UBS customers.
The morale slump could threaten a two-year turnaround plan put in place at AIG after billionaire activist investor Carl Icahn became AIG’s fourth-largest investor in 2015, Mr. Meredith said.
AIG is midway through the plan, which involves divesting businesses, cutting costs and ultimately returning $25 billion to shareholders.
A $5.6 billion addition to reserves to cover future claims led AIG to report an unexpectedly large fourth-quarter loss on Feb. 14, jolting investors and leading to Mr. Hancock’s planned departure.
Dim views of AIG among employees and agents signal “the challenges that AIG continues to face in retaining and hiring talent it needs” to boost and maintain its commercial property and casualty insurance businesses, said Mr. Meredith.
The UBS analysis involved about 6,300 reviews posted on Glassdoor that UBS identified as being from employees of large property and casualty insurers, including Travelers Cos. Inc. and Hartford Financial Services Inc. More than 1,400 of the 6,300 reviews were from AIG employees.
CNA Insurance has scored the highest ratings so far in 2017, while Travelers ranked the highest last year, according to UBS.