Incoming American International Group (AIG) CEO Peter Hancock indicated, as he took the helm, that he is confident that long-time AIG executives passed over for the CEO will decide to remain with the company. “Do you have commitments from other leadership of AIG to remain at the company?” Hancock was asked by Jay Gelb, a managing director and property-casualty analyst for Barclays Capital.
“As far as the commitment of the senior leadership of the company, I think we’ve all been through a lot together over the last five years, there were plenty of reasons for anybody to further tile-in,” Hancock said. “I’m very hopeful that everybody who went through the challenges over the last five years looks forward to the next five years with as much enthusiasm as I do.”
The question was obviously asked against the background of the AIG board’s decision to appoint him instead of Jay Wintrob as CEO. Hancock and Wintrob were the final candidates for becoming the CEO that would replace Robert H. Benmosche, which the AIG board had acknowledged some time ago.
Wintrob has been with AIG’s life unit since 2001. He headed SunAmerica, which was acquired at that time by AIG. Wintrob is 57 and Hancock is 54, but he has been in charge of AIG’s life business as CEO and president of AIG Life & Retirement at AIG since 2009, at a time when the company was controlled by the U.S. government.
And, as noted by retiring CEO Benmosche during the AIG conference call, “Life and Retirement continues its excellent run, as we’re becoming a stronger competitor in that space.”
Hancock joined the company in 2010 from J.P. Morgan as chief risk officer at a time when the company was controlled by the government, specifically the Federal Reserve. He worked at Morgan for 20 years, establishing its derivatives group before becoming CFO. Hancock was promoted to the property-casualty post in 2011, after joining a year earlier to manage the credit-default swaps unit, AIG Financial Products, whose activities forced the company to seek a government bailout.
As far as the property-casualty unit, Hancock did not respond directly to Gelb’s question of whether retaining control of it directly will be “a temporary situation or perhaps permanent.”
“Given the size of AIG, it feels like that’s a pretty big load for one person to carry running more than – essentially being CEO, plus being responsible for the largest single unit of the company?” Gelb asked. And Hancock responded by saying that, “Increasingly, John Q. Doyle (CEO of global commercial insurance) and Kevin Hogan (CEO of global consumer insurance) have assumed the broader strategic leadership that those two very large segments deserve.”
Hancock added that AIG is “very focused on making the whole company flatter in the hierarchy” and is, therefore, minimizing the layers of management between the CEO and the trenches “to improve our responsiveness to the customers and markets. So, in my view, it is redundant to think about the property-casualty lag going forward. The leadership that John has on the commercial side and Kevin has on the consumer side provides the absolutely right amount of strategic leadership that’s needed. I don’t see any challenges there,” Hancock said.