The divesture will allow the New York insurer to refocus on its P&C business
Following a comprehensive review of the insurer’s current composite structure, the global insurer, American International Group, better known by its marketing name as AIG, has announced that it pursue a separation of its Life & Retirement business from its Property & Casualty business in order to create “two independent, market-leading companies.”
Douglas M. Steenland, speaking on behalf of the AIG Board of Directors, stated in an official release, “The Board worked closely with executive management as they conducted a comprehensive review of AIG’s composite structure, and AIG’s Directors are confident that a separation of Life & Retirement from AIG will create value for shareholders and benefit all stakeholders.”
As part of this new effort, the Board also announced that AIG’s President & Global Chief Operating Officer, Peter S. Zaffino will take over the helm from Brian Duperreault, AIG’s current Chief Executive Officer come March 1st. Mr. Duperreault will remain on with the New York-based insurer as Executive Chairman.
Mr. Zaffino will replace Brian Duperreault, AIG’s current Chief Executive Officer
According to the Wall Street Journal, Mr. Zaffino, 53, has long been considered the “heir apparent” of Mr. Duperreault, both inside and outside of the insurer with both gentlemen working together on a turn-around of AIG’s P&C business. AIG’s executive management and Board believes that a more simplified corporate structure will benefit the divested company while unlocking “significant value for shareholders and other stakeholders”.
“Over the last three years, we have taken significant action to de-risk AIG and position the company for profitable growth, including fortifying General Insurance, diversifying Life & Retirement, significantly strengthening AIG’s capital and liquidity position, and building a world-class team,” remarked Brian Duperreault, AIG’s current Chief Executive Officer. “This foundational work has positioned AIG to pursue a separation of Life & Retirement enabling both companies to prosper as stand-alone entities.”
Peter S. Zaffino, AIG’s President & Global Chief Operating Officer, and CEO-elect, added, “Across AIG, we have made significant progress executing on our strategy to deliver value for our clients, distribution partners, shareholders and other stakeholders. Our businesses can be further strengthened by separating Life & Retirement from AIG, which we believe will enable each entity to achieve a more appropriate and sustainable valuation.”
The separation of the two businesses is still subject to the customary approvals by both the AIG Board of Directors and appropriate regulatory agencies.