AIG CEO to step down, be replaced by P&C head

American International Group Inc. announced Tuesday that its executive vice president, Peter Hancock, will replace Robert Benmosche as president and chief executive officer, effective Sept. 1.

On Sept. 1, Benmosche “is expected to resign from the AIG Board of Directors and will assume an advisory role at AIG,” the New York City-based insurance carrier and annuity provider stated in a release. In his new capacity, Benmosche will “continue to be involved in AIG’s internal leadership development programs, as well as mentor and coach AIG managers.”

Hancock (pictured), 55, was raised in Hong Kong and “spent his entire career in financial services, including 20 years at J.P. Morgan,” AIG stated, adding that he joined AIG in 2010 after being vice chairman at KeyCorp.

He was named CEO of AIG property casualty in March 2011, after being AIG’s executive vice president of finance, risk and investments. At J.P. Morgan, Hancock’s roles included chief financial officer and chief risk officer. Hancock is a William Pitt Fellow of Pembroke College, Cambridge. He earned a bachelor of arts in politics, philosophy and economics from Oxford University.

Benmosche, 69, is originally from Brooklyn, New York. He has an undergraduate degree from Alfred University and at one time was an officer in the United States Army Signal Corps. He joined AIG as CEO in August 2009. At MetLife, Benmosche was executive vice president from 1995 until1997, president and CEO from 1997 until 1998 and then chairman and CEO from 1998 until 2006.

Before joining MetLife, Benmosche worked for 13 years at PaineWebber Group Inc. He has also worked for Chase Manhattan Bank and Arthur D. Little and was a member of Credit Suisse Group’s board of directors from 2002 until 2013.

Benmosche “worked tirelessly to transform AIG and position it for this next chapter: fully repaying the $182 billion of government support AIG received in 2008, plus a profit of $22.7 billion, the largest turnaround in the history of corporate America; divesting non-core assets; streamlining global operations under clear reporting lines; and finding smart opportunities to grow AIG’s business,” AIG chairman Robert Miller stated in a release.

Last month, AIG reported net income of $1.6 billion on revenues of $16.1 billion for the three months ending March 31, 2014, down from net income of $2.158 billion on revenues of $17 billion in the same period in 2013. All figures are in U.S. currency.

In p&c, AIG had reported an underwriting loss of $97 million Q1 2014, compared to underwriting income in p&c of $232 million in Q1 2013.

Of its $16.1 billion in revenues in the most recent quarter, $9.67 billion was in p&c, $4.35 billion was in life and retirement and $2.26 billion was in other operations.

AIG reported in February an underwriting loss, in 2013, of $455 million. The underwriting loss in 2012 was $2.98 billion.

AIG was using Chartis as its brand for property & casualty insurance until November, 2012.

During the financial crisis of September 2008, AIG had encountered losses on its mortgage-related investments and collateral calls on credit default swaps, which AIG could not meet. The Federal Reserve Bank of New York was initially authorized to provide up to $85 billion in bailout funds for AIG. At that time, AIG had six million retirement clients in the U.S. and was the nation’s largest issuer of life and health insurance and fixed annuities.

After the crisis, the U.S. government owned the majority of AIG but has since sold its stake. The U.S. government had “committed a total of $182.3 billion in connection with stabilizing AIG during the financial crisis,” AIG stated in December, 2012, noting all of that money has been paid back.

The Federal Reserve Bank of New York’s assistance to AIG was terminated in January, 2011. By the end of 2012, the U.S. government announced the sale of the remainder of its interest in the firm.