Schimek to leave AIG as insurer restructuresReprints
(Reuters) — American International Group Inc. said on Monday it will reorganize into three new business units and will no longer have separate commercial and consumer units, marking the first significant move by new CEO Brian Duperreault.
Under the new structure, AIG will have a general insurance unit, a life and retirement unit and a standalone technology unit. Two of those businesses will be led by longtime Duperreault colleagues whom he recruited to AIG in July.
In addition, Rob Schimek, CEO of AIG’s commercial unit, will leave the company at the end of October, AIG said.
The shakeup marks Mr. Duperreault’s first major action after taking the helm of the company in May after former CEO Peter Hancock stepped down, citing a lack of confidence from the board and investors.
Widely seen as a turnaround expert, 70-year-old Mr. Duperreault has said he wants to grow AIG’s businesses. AIG’s stock has underperformed rivals and the broader market for nearly a decade.
Peter Zaffino, former head of Marsh & McLennan Cos. Inc.’s brokerage business, whom Mr. Duperreault previously named as AIG’s chief operating officer, will be CEO of AIG's general insurance unit.
The new life and retirement unit will be headed by Kevin Hogan, who has a long AIG history and most recently ran the insurer’s consumer insurance unit.
Seraina Macia, former head of Hamilton USA, the North American arm of Mr. Duperreault’s former company, Hamilton Insurance Group Ltd., will be CEO of the technology unit, AIG said.
AIG agreed to buy Hamilton USA for $110 million in May.
The restructuring “better aligns with how investors actually prefer to analyze AIG,” said Keefe, Bruyette & Woods analyst Meyer Shields.
Mr. Duperreault's changes place a greater focus on product underwriting rather than on AIG's relationships to clients, said Credit Suisse analyst Ryan Tunis in a note. AIG still needs more hires with commercial underwriting expertise, Tunis said.
AIG said it expects its year-end financial reporting to reflect the new structure, which will also be aligned with its incentive and performance management plans.
The reorganization comes as the insurer is trying to convince U.S. regulators to shed its “systemically important financial institution” label, which triggers stricter oversight and greater capital requirements.
AIG received the label after it received $182 billion in a government bailout during the financial crisis.
Since the crisis, AIG has sold dozens of businesses, including two Asian life insurance operations and one of the world’s biggest aircraft leasing businesses.
It recently sold a mortgage-insurance unit. It remains the largest commercial insurer in the United States and Canada.
Mr. Schimek, who worked closely with Mr. Hancock, has held various executive roles at AIG over the past decade. An accountant by training, prior to joining AIG he spent 18 years at Deloitte.