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Zaffino’s move to AIG gives Duperreault a familiar right hand: Analysts

Posted On: Jul. 6, 2017 3:05 PM CST

Peter Zaffino’s appointment to help run American International Group Inc. with Brian Duperreault gives Mr. Duperreault a familiar lieutenant in his campaign to rebuild the insurer, observers say.

The move, which had been rumored for months, reunites the two executives who previously worked together at Marsh & McLennan Cos. Inc. after Mr. Duperreault was brought in to revive the broking and consulting firm following the broker commission and bid-rigging scandals of the mid-2000s.

“I think it makes a lot of sense that Brian Duperreault has someone who has both his trust and experience managing global insurance operations,” said Meyer Shields, managing director at Keefe, Bruyette & Woods Inc. in Baltimore. “I cannot imagine anyone was surprised by this announcement.”

It's not the first time Mr. Duperreault has appointed Mr. Zaffino to a senior role.

“When Brian Duperreault was hired to be CEO of (Marsh & McLennan Cos. Inc.) in early 2008, his first executive appointment was to promote Peter Zaffino to CEO of Guy Carpenter,” said Tracy Dolin-Benguigui, director and sector lead with S&P Global Ratings in New York.

Mr. Zaffino was later appointed to run Marsh & McLennan’s main brokerage unit.

She added that Mr. Duperreault may tinker further with AIG’s executive structure.

“Peter Hancock reduced his direct reports from 15 to nine, and it will be interesting to see, given the complexity of the organization, if under Mr. Duperreault’s leadership how reporting lines may change or expand,” Ms. Dolin-Benguigui, said.

“I think Brian Duperreault is still formulating his plans for AIG; we’ve seen some of it,” said Jim Auden, managing director with Fitch Ratings Inc. in Chicago. “Now he’s bringing in Peter to try to execute on that new vision, to get back to a growth mode. In commercial, AIG has shrunk considerably over the last few years.”

More recruiting ahead?

The move is typical of the revolving door between the insurer and brokerage communities, the analysts said.

“I think you’ve seen that going both ways in the past, with executives at insurers going to brokers and those at brokers going to insurers,” said Mr. Auden.

“There is not an enormous pool of talent which has experience in insurance businesses of this scale,” said Mr. Shields, adding that Marsh and AIG are “both very important companies in the global insurance network.

Analysts suggested Mr. Duperreault may not be finished choosing senior executives for AIG.

“I think there will be additional appointments,” from both within and outside the company, said Mr. Shields, raising the possibility of further recruiting. “I recall Brian Duperreault speaking about how he really liked the process of assembling a team.”

“In a way, this is Brian Duperreault making his mark on the way he is going to lead the organization and trying to execute on his growth initiative,” Ms. Dolin-Benguigui said. “There may be a need for more manpower there.”