New CEO Hancock Puts Stamp on AIG Management in Shake-Up
September 19, 2014 by Zachary Tracer
American International Group Inc. named Kevin Hogan to lead its main life insurance business, putting him in charge of offerings for individuals, as new Chief Executive Officer Peter Hancock shakes up management.
Hogan takes on the duties from life-unit CEO Jay Wintrob, who worked at AIG for about 15 years and is departing after being passed over for the top job at the insurer. The change puts all of AIG’s consumer businesses, such as car, home, travel and life insurance, under one executive for the first time.
“They’re consolidating the leadership team,” Josh Stirling, an analyst at Sanford C. Bernstein & Co., said by phone. “It’s a logical step forward.”
Peter Hancock AIG CEO
Hancock, 56, is reshaping management at AIG after replacing Robert Benmosche as CEO at the start of this month. Benmosche, 70, had led the company since 2009, divesting units and properties to repay the firm’s U.S. bailout.John Doyle, CEO of the commercial insurance operation, also gained responsibilities. Donna DeMaio, who runs AIG’s mortgage insurer, will now report to him, as does Jonathan Novak, who oversees the institutional-life business, Hancock said in a memo to employees.
Stephen Maginn, who manages life-unit distribution, now reports to Rob Schimek, head of operations in the Americas.
After its rescue, AIG, once the world’s largest insurer, retreated from sales of life insurance outside the U.S., selling businesses including Hong Kong-based AIA Group Ltd. and American Life Insurance Co.
Expanding Abroad
The company has been rebuilding international operations while also boosting sales of retirement products in its home country. Benmosche announced a deal last month to buy a unit from Ageas Group for about $305 million to expand in U.K. life products.
John Doyle AIG
Pretax operating income at Wintrob’s unit more than doubled from 2011 to $6.51 billion last year, fueled by investment gains. The business generated $20.6 billion in revenue in 2013, about a third of AIG’s total from insurance operations, with the property/casualty division, then led by Hancock, contributing about $40 billion.
Wintrob boosted sales of retirement products such as annuities in recent years as rivals including MetLife Inc. retreated. AIG said in January that it was working to expand its career agent sales force to 2,000 from about 1,400.
“Jay leaves behind a strong leadership team and businesses that are well-positioned for the future,” Hancock said yesterday in a statement.
Pay Package
The departure is being treated as a “covered termination” for pay purposes, a regulatory filing shows. Wintrob was entitled to a package including stock awards, an incentive payment and severance of about $14.5 million if fired without cause, according to a separate filing earlier this year with data as of Dec. 31.
AIG also said that Chief Administrative Officer Michael Cowan is retiring. Some of his duties will be assumed by Jeffrey Hurd, who oversees human resources, communications and administration, according to Hancock’s memo.
Philip Fasano, who was hired this week from Kaiser Permanente as chief information officer, will take on technology duties.
Kevin Hogan
Hogan, 51, was rehired last year from Zurich Insurance Group AG to run global consumer insurance. He had joined AIG in 1984, then moved to Zurich in 2008 to head the Americas life business. He became CEO of Zurich’s global life business in 2010.
Consumer Strategy
Hogan was the first of four AIG executives to make presentations at an event for investors this week in Tokyo. He said the consumer unit is following the example of AIG’s commercial operations, which acted on Hancock’s mandate to rely more on technology when setting prices while accounting for the expense of setting aside funds in reserve for years.
“We emphasized the use of data in all of our decisions, whether in terms of product development, in marketing, in pricing, in customer selection, in behavior analysis and overall optimization of our portfolios,” Hogan said.
Before becoming CEO, Hancock had overseen P&C operations while Wintrob, 57, ran the main life and retirement operation out of Los Angeles.
Seraina Maag
Wintrob, who came to AIG as part of its 1999 purchase of SunAmerica, will “pursue other opportunities,” AIG said. He’s not planning to join a rival insurer, according to a person familiar with his plans, who asked not to be identified.
Hancock’s Line-Up
“There is one business and it’s AIG,” Hancock said. “We need to focus as a leadership team on fundamental priorities and ensure that we execute against those priorities in the most disciplined way possible. While we have made enormous strides in improving the way we balance growth, profitability, and risk, we have more to do.
“Stated simply, we are steadfastly working toward the goal of One AIG. We are committed to having the strongest balance sheet in the industry, recognizing that we have learned that a federated business model exposes us to the weakest link in the chain. As a unified, global business, I firmly believe that this ensures we apply a comprehensive enterprise set of standards that keeps our risk appetite well within the capacity of our $100 billion capital base.”
Under the new management line-up, the following executives will be reporting to Hancock and serving on the newly established Operating Committee:
- Murli Buluswar, Chief Science Officer
- William Dooley, Investments
- John Doyle, Commercial, including global capabilities such as property; casualty; financial lines; specialty lines; institutional markets; and mortgage guaranty
- Philip Fasano, Chief Information Officer
- Jose Hernandez, Asia Pacific, representing 16 countries and jurisdictions
- David Herzog, Chief Financial Officer
- Kevin Hogan, Consumer, including accident and health; personal lines; life insurance; retirement income solutions, including variable, fixed, and indexed annuities; group benefits; group retirement; and retail mutual funds
- Jeffrey Hurd, Human Resources, Communications, and Administration
- Seraina Maag, Europe, Middle East, and Africa, representing 47 countries
- Eric Martinez, Claims and Operations
- Thomas Russo, General Counsel
- Sid Sankaran, Chief Risk Officer
- Robert Schimek, Americas, representing 29 countries and jurisdictions
