American International Group Inc. (AIG), the largest commercial insurer in the U.S. and Canada, promoted Peter Hancock to be the next chief executive officer, replacing Robert Benmosche, who repaid a U.S. bailout.
Mr. Hancock, 55, who oversaw property-casualty insurance, will be CEO and president as of Sept. 1, the New York-based insurer said Tuesday in a statement. He previously spent 20 years at a predecessor to JPMorgan Chase & Co., where he established the derivatives group. Mr. Benmosche, 70, stayed on longer than he'd previously planned, and the company has been focusing on succession since 2010 when it announced that he was being treated for cancer.
“This is a very constructive sign, it means the company is on the right track,” Josh Stirling, an analyst at Sanford C. Bernstein & Co., said. “They have demonstrated they've come a long way in terms of delivering financial results.”
Mr. Hancock takes over a company that has shrunk in half since 2008 as Mr. Benmosche sold assets and cut jobs to simplify the insurer and repay a government rescue that swelled to $182.3 billion. The firm is now focused on global property-casualty coverage and U.S. life insurance and retirement products. Jay Wintrob heads the life unit and intends to stay with AIG, though he is disappointed he wasn't selected as the company's CEO, Chairman Steve Miller told reporters.
AIG shares slipped 0.3% to $54.85 in extended trading in New York after falling 0.1% in regular trading. That compares with about $11.39 on Aug. 3, 2009, the day AIG announced Mr. Benmosche's hiring.
Mr. Hancock joined AIG in 2010 to oversee finance and risk. In 2011, he was promoted to run the property-casualty business, an operation that became increasingly important to AIG as the company sold non-U.S. life insurers and a plane-leasing unit.
“Property and casualty is not only our largest business, but it's our most complex business and it's the one that can most effect the future success of AIG,” Mr. Miller said. “He's the one who has dealt with the thorniest issues here.”
Mr. Hancock sought to expand in less capital-intensive lines of insurance after his predecessors were burned by higher-than-expected costs in commercial segments including workers' compensation, where claims can emerge years after policies are sold. He targeted emerging markets and sales to consumers.
Mr. Hancock plans to “focus the company on the customer segments and the products where we get properly rewarded for the risks we assume,” he said. “And to do that we are investing in research and development to really understand emerging risks better and to use that expertise to help our customers manage the cost of that risk intelligently.”
Mr. Benmosche is expected to resign from the board and take an advisory role with the company, AIG said. The former leader of MetLife Inc., the largest U.S. life insurer, he came out of retirement in 2009 to become AIG's fifth CEO since 2005.
The insurer said in 2010 that he was undergoing chemotherapy for cancer, increasing the urgency for succession planning. The company said Feb. 20 that he intended to stay on until the first quarter of 2015, after he'd postponed prior plans to step down.
“Bob had told us previously that he was prepared to stay until February, but he encouraged us to get on with succession planning,” Mr. Miller said. “It's better to just get on with it than have people standing around the water cooler wondering about it.”
Jon Diat, a spokesman for AIG, said it is too early to comment on who would be the next leader of the property-casualty operation.