AIG Set To Pick Brian Duperreault As Its Incoming CEO

Reports indicate that the American International Group is planning to appoint Brian Duperreault as its new chief executive officer. Duperreault formerly worked with previous chief executive officer of AIG, Maurice Greenberg. According to sources, the final details of the employment contract are being worked out. The 70-year old Duperreault is the founder and currently the CEO of Hamilton Insurance Group which is based in Bermuda.

Tumultuous period

The last six months have been tumultuous for AIG. Only a couple of weeks following the release of the insurance company’s dismal fourth-quarter results, chief executive officer Peter Hancock announced that he would be resigning after being at the helm for a period of under three years. Many members of the board were disappointed with the setbacks the company had suffered in its efforts to boost profitability. A number of the board members were also worried about a potential fight with Carl Icahn, the renowned activist investor who is also a shareholder of the insurance giant.

In appointing Duperreault, AIG will be picking a company veteran who had spent more than two decades at the insurance group prior to leaving to pursue opportunities at three other firms. Among his major achievements in his long management career includes a successful turnaround effort of Marsh & McLennan, an insurance brokerage and consulting firm.

Unimpressive profit margins

Duperreault will be rejoining AIG at a time when the insurance giant is trying to improve its financials as it faces fierce competition in the sector. After the $185 billion government bailout following the global financial crisis in 2008, AIG has repaid almost the whole amount. However, this has come at a cost as it had to sell off many of its business units. The profit margins of the insurance firm have also been lagging behind that of its peers since the time of the bailout when it nearly collapsed.

Currently, executives at AIG have been implementing a strategic plan that was unveiled early last year after pressure from Icahn. Some of the goals in the 2-year strategic plan such as reducing cost and reimbursing approximately $25 billion to investors in the form of share buybacks and dividends look set to be achieved.

At 70, Duperreault will not be the first chief executive who has exceeded the traditional retirement age to be hired by AIG. In 2009, Robert Benmosche had already turned 65 when he came out of retirement to take up the position of CEO.