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AIG ousts Sullivan, names Willumstad CEO

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NEW YORK--American International Group Inc. Sunday named Chairman Robert B. Willumstad as its chief executive officer, replacing embattled CEO Martin J. Sullivan, whose leadership has come under increasing pressure in recent weeks.

"Martin successfully led AIG through the crisis it faced when he became CEO in 2005, and he has made significant contributions over the past three years in executing AIG's strategy and building on its global franchise," George L. Miles Jr., chairman of the nominating and corporate governance committee of AIG's board, said in a statement.

"On behalf of the Board and the entire organization, I want to thank Martin Sullivan for his extraordinary dedication and service to AIG for over 35 years. We all wish him well in his future endeavors," Mr. Miles said in the statement.

AIG also named board member Stephen F. Bollenbach as its lead independent director.

Mr. Willumstad has been chairman of the New York-based insurer since November 2006. Before joining AIG, he served as president and chief operating officer of Citigroup Inc.

AIG reportedly has faced growing pressure from certain large shareholders to make management changes, following large losses in the past two quarters related to mortgage-linked credit default swaps.

AIG last month reported that it lost $7.81 billion in 2008's first quarter compared with profits of $4.13 billion during the year-earlier period. The loss reflected a $9.11 billion pretax charge for a net unrealized market valuation loss related to AIG Financial Products Corp.'s super senior credit default swap portfolio. That loss followed a fourth-quarter 2007 loss of 5.29 billion.

In the statement, Mr. Willumstad said: "I am honored by the opportunity to lead AIG at this important time. Although conditions in the credit markets continue to create significant challenges in several areas of the business, AIG has great people throughout the organization and an unrivaled global franchise with tremendous long-term growth potential. In the coming months, we will conduct a thorough strategic and operational review of AIG's businesses and their performance. The Board and I recognize that results over the past two quarters have been unacceptable, but we are confident in AIG's future. We are determined to get the organization back on track as quickly as possible and ensure it's well positioned for future success."