AIG Names Brian Duperreault as CEO
May 15 2017 - 8:02AM
Dow Jones News
By Joann S. Lublin and Leslie Scism
American International Group Inc. on Monday named Brian
Duperreault -- a onetime lieutenant to former CEO Maurice R. "Hank"
Greenberg -- as the firm's new chief executive.
Mr. Duperreault, 70 years old, is the founder and CEO of
Bermuda-based Hamilton Insurance Group Ltd. Mr. Duperreault spent
just over two decades at AIG before leaving to run three other
companies. His résumé includes a widely praised turnaround of
consulting and insurance-brokerage firm Marsh & McLennan
Cos.
News of Mr. Duperreault's hiring was first reported Wednesday by
The Wall Street Journal.
In returning to AIG, Mr. Duperreault will face the challenge of
improving its financial results amid fierce industry competition.
The insurance conglomerate has paid off a nearly $185 billion U.S.
government bailout extended during the global markets meltdown of
2008, but it had to sell many businesses to repay taxpayers. AIG's
profit margins have notably lagged behind many of the insurer's
rivals since its near collapse.
The past six months have been particularly tumultuous. Just a
few weeks after the firm posted disappointing fourth-quarter
results, CEO Peter Hancock in March said he would resign from the
insurance giant after less than three years at the helm. Many board
members were unhappy about setbacks in the company's plan for
boosting profitability, while several also feared a potential fight
with AIG shareholder and activist investor Carl Icahn.
Mr. Hancock agreed to stay until a successor was found.
AIG executives are carrying out a two-year strategic plan
unveiled in January 2016 -- in response to pressure from Mr. Icahn.
Many goals are on track to be achieved, such as cutting costs and
returning $25 billion to investors through dividends and share
buybacks, analysts have said.
AIG board members don't expect their new leader to change the
current strategic direction at the giant insurer, the people
familiar said.
While not involved in the just-completed CEO search, Mr. Icahn
previously contacted Mr. Duperreault about running AIG, people
familiar said. The outreach occurred around the time of Mr. Icahn's
initial AIG investment, disclosed in fall 2015.
Mr. Duperreault was at AIG in the years when Mr. Greenberg was
transforming it from a mediocre property-casualty insurer into a
powerhouse with financial-services operations that spanned the
globe.
The hiring of Mr. Duperreault will mark the second time AIG has
recruited a chief executive past normal retirement age. Robert
Benmosche was 65 when he left retirement to run the insurer in
2009.
The Bermuda-born Mr. Duperreault, a mathematics major at St.
Joseph's University in Philadelphia, had joined AIG's actuarial
department in the early 1970s and rose through the ranks to become
one of its most senior executives.
As Mr. Duperreault gained authority in running operations, many
industry colleagues and Wall Street analysts said he was a
potential successor to his boss -- though at the time Mr. Greenberg
had no intention of stepping aside. Instead, Mr. Duperreault became
one of many AIG executives to depart for leadership roles
elsewhere.
He left in 1994 to run ACE Ltd., a then-Bermuda-based specialty
insurer with large corporate clients.
Mr. Duperreault expanded the niche company into a diversified
insurer with the 1999 acquisition of Cigna Corp.'s U.S. and
international property-casualty operations. The company since has
acquired Chubb and is known as Chubb Ltd.
Mr. Duperreault retired from ACE in 2004 but then was recruited
in 2008 to become CEO of Marsh & McLennan.
The New York firm was under pressure to consider a breakup by
shareholders who were frustrated with its performance. Mr.
Duperreault cut costs, strengthened the management team and
acquired smaller firms to bolster growth, including to better serve
smaller U.S. companies, among other moves.
He left Marsh in 2012, and the following year, back in Bermuda,
he established Hamilton with principals of hedge fund Two Sigma
Investments. Last year, Hamilton teamed with AIG and Two Sigma on a
joint venture to sell insurance online to small businesses, using
advanced data analytics.
Many potential outside candidates for leading AIG had ties to
AIG and Mr. Greenberg, because the company's huge size before the
postcrisis divestitures provided ample opportunities for managers
to shine, executive recruiters and industry executives say.
After nearly four decades at the helm, Mr. Greenberg left as CEO
of AIG in 2005, and his relationship with the company worsened over
the next few years as he unsuccessfully sought its support in suing
the government over allegedly unlawful terms of the 2008 bailout.
But Mr. Greenberg and Mr. Benmosche ultimately made amends with a
comprehensive settlement of litigation against Mr. Greenberg tied
to accounting matters that had led to his 2005 resignation.
After winning an initial round in a federal court over the AIG
bailout, a federal appellate court this week reversed that victory
and said Mr. Greenberg's Starr International Co., which had been
one of AIG's biggest shareholders, didn't have standing to sue.
--David Benoit contributed to this article.
Write to Joann S. Lublin at joann.lublin@wsj.com and Leslie
Scism at leslie.scism@wsj.com
(END) Dow Jones Newswires
May 15, 2017 07:47 ET (11:47 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
American (NYSE:AIG)
Historical Stock Chart
From Aug 2024 to Sep 2024
American (NYSE:AIG)
Historical Stock Chart
From Sep 2023 to Sep 2024