American International Group Inc. is at a point in its recovery where the insurer's next chief executive will be able to focus on running day-to-day operations rather than crisis management, observers said.
The issue arose Oct. 25 when
AIG disclosed that Robert H. Benmosche, its president and chief executive, is suffering from an undisclosed form of cancer and is undergoing “aggressive chemotherapy.”
In a statement, he said that he feels fine and continues to follow his normal schedule.
AIG's board later said that company chairman Steve Miller would step in as interim chief executive should Mr. Benmosche step down.
That leaves the question of who a permanent replacement would be should Mr. Benmosche leave. Although there are several likely internal candidates,
AIG could seek an outsider with extensive capital management experience, some said.
Mr. Benmosche, the fourth chief executive to succeed former chairman and chief executive Maurice R. Greenberg since 2005, is widely credited with doing an effective job of reorganizing the insurer and readying it for independence from the federal government, which bailed out
AIG in September 2008.
Mr. Benmosche's success means that
AIG may no longer need a crisis manager, many observers said.
“The task might be easier today given the excellent job that [Mr. Benmosche] has done,” said John Wicher, principal with John Wicher & Associates Inc.
“You still need a great leader,” he said. But “I don't think you necessarily need someone who has crisis management in his or her resume.”
However, Cathy Seifert, an equity analyst with Standard & Poor's Corp., said that a successor still would need to be able to develop a savvy capital market strategy to deal with the federal government's plans to monetize its
AIG stake eventually. The individual would also have to be deeply knowledgeable about the business in order to “rebuild the insurance franchise.”
Possible internal candidates cited by analysts include Peter D. Hancock, executive vice president of finance, risk and investments; Kristian P. Moor, president and chief executive of property/casualty unit Chartis Inc.; Thomas Russo, the company's general counsel and executive vice president of legal compliance, regulatory affairs and government affairs; and Jay Wintrob, executive vice president of
AIG's U.S. life and retirement services.
“Someone who knows the company well” and has been through its stabilization period might be a better candidate than an outsider, said Mark Purowitz, a partner with Diamond Management and Technology Consultants Inc.
An outsider needs international and insurance experience, as well as good relationships with regulators, said Stewart Johnson, a portfolio manager with Philo Smith & Co.
“That kind of sums up why I think there's pretty big shoes to fill. There aren't a lot of people” who can fill them, Mr. Johnson said.
“You need someone of [former General Electric Co. leader Jack Welch's] caliber,” he said.
Judy Greenwald is a reporter at sister publication Business Insurance.
