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AIG’s head of life insurance quits

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Jay S. Wintrob, president and CEO of American International Group Life & Retirement, is leaving the company after missing out on becoming CEO.

AIG also announced that Michael R. Cowan, executive vice president and chief administrative officer, will retire from the company after nearly five years of service.

Wintrob apparently left after his rival to get the job, Peter Hancock, decided to end the independent status of the AIG life group, which is based in the Los Angeles area. 

“We are steadfastly working toward the goal of one AIG,” Hancock said. “We have learned that a federated business model exposes us to the weakest link in the chain.”

As part of that effort, Hancock has established an operating committee and hired Philip Fasano from Kaiser Permanente, where he was executive vice president and chief information officer. According to a number of sources, he has extensive experience, is a proven leader in the information technology field, and has served as chief information officer at several high-profile financial services firms over the course of his 30-year career.

AIG also announced that David Herzog, its chief financial officer, will serve on the newly-established operating committee.

“Hancock has made clear his belief that investments in technology will yield a big payoff for the company,” sources said.

Wintrob, 57, has been with AIG since 1999, when the then-expanding insurer acquired SunAmerica Inc. SunAmerica a few years earlier had been spun off from Kaufman & Broad, a Los Angeles-based homebuilder.

Wintrob gave no hint of his plans until the announcement after the stock market closed Thursday. Moreover, he recently even recently defended the company when asked by someone to comment on the recent sworn statement by former Federal Reserve Chairman Ben Bernanke, “AIG’s demise would be a catastrophe” and “could have resulted in a 1930s-style global financial and economic meltdown, with catastrophic implications for production, income, and jobs.” Bernanke’s comments came to light in a filing made by Maurice “Hank” Greenberg, former chairman and CEO of AIG, in a lawsuit filed in Federal Claims Court in Washington.

According to a source, Wintrob’s reply was, “It was a very bad period for sure. I’m still not sure we have all of the facts. The good news is that we have re-paid the U.S. taxpayers, with a large profit, and restored AIG to a strong company with good growth potential. It was a remarkable team effort.”

During the crisis period, a number of distributors and product wholesalers dropped AIG life products from their offerings. But Wintrob gradually coaxed them back, partly through the relationships he had built with these firms during his many years with the company.

Besides variable annuities, AIG Life sells life insurance, investments and fixed annuities.

Ironically, Wintrob’s unit has been the success story at AIG as the property and casualty unit headed by Hancock before his promotion has struggled to deal with the difficulty of projecting catastrophic losses as well as decisions to reduce the risk of the P&C portfolio of companies.

The Life & Retirement unit of AIG Wintrob heads last year contributed just over half of AIG’s pretax operating income from its insurance businesses.The life and retirement unit has posted record earnings each of the past two quarters despite the fact the life insurance business is struggling to cope with intense competition and a zero interest-rate environment.  

Indeed, at the company’s last earnings call with analysts in early August, retiring CEO Robert Benmosche said that, “Life and Retirement continues its excellent run, as we’re becoming a stronger and stronger competitor in that space.”