Big shake-up at AIG as it breaks up insurance business, replaces CEO

American International Group (AIG) has named Peter Zaffino as new chief executive officer (CEO), effective March next year, with Brian Duperreault set to become executive chairman, as the insurer reveals its plans to separate its life & retirement business following a "comprehensive review" of its structure.

AIG said the move is aimed at simplifying its corporate structure that it hopes will unlock "significant value" for shareholders and other stakeholders. The company's executive management and board believe that the separation will enable both life & retirement businesses to prosper as stand-alone entities.

As part of the leadership transitions, Zaffino will take up the top position at AIG, in addition to his role as president of the company. He will also serve as a director with immediate effect.

Meanwhile, the current CEO Duperreault will take up the position of executive chairman, with Douglas Steenland, currently independent chairman of the board, becoming lead independent director, effective March 1, 2021.

The insurance giant conducted a comprehensive review of the company’s current composite structure, including strategic, operational, capital and tax implications.

As a result of that, its executive management has recommended, and the board has decided to pursue a separation of the life & retirement business, intended to maximize shareholder value and establish two independent market leading companies.

Duperreault said: “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. This foundational work has positioned AIG to pursue a separation of Life & Retirement enabling both companies to prosper as stand-alone entities."

“I want to thank the AIG Directors for their continued support and congratulate Peter on his well-deserved election as the next Chief Executive Officer of AIG," he added. "Peter has been instrumental in the significant turnaround and transformation at AIG and his vision, determination and pursuit of excellence will help ensure the company’s future success.”

Zaffino stated: “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.”

He added: “I am honored to succeed Brian as Chief Executive Officer of AIG and want to thank him and the AIG Board of Directors for this opportunity. I look forward to leading AIG’s next phase on our journey to becoming a top performing company.”

Steenland, speaking on behalf of the AIG board of directors, said: “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.

“We are grateful to Brian for his leadership and expertise in guiding the strategic repositioning of AIG’s businesses as market leaders and we look forward to his ongoing contributions as Executive Chairman. We are extremely fortunate to have an executive of Peter’s caliber and have great confidence about the future of the company under his leadership.”