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September 19, 2014 at 07:06 AM
(Bloomberg) — American International Group Inc. named Kevin Hogan to lead its main life-insurance business, putting him in charge of offerings for individuals, as new Chief Executive Officer Peter Hancock shakes up management.
Hogan takes on the duties from life unit CEO Jay Wintrob, who worked at AIG for about 15 years and is departing after being passed over for the top job at the insurer. The change puts all of AIG’s consumer businesses, such as car, home, travel and lifeinsurance, under one executive for the first time.
“They’re consolidating the leadership team,” Josh Stirling, an analyst at Sanford C. Bernstein & Co., said by phone. “It’s a logical step forward.”
Hancock, 56, is reshaping management at AIG after replacing Robert Benmosche as CEO at the start of this month. Benmosche, 70, had led the company since 2009, divesting units and properties to repay the firm’s U.S. bailout.
John Doyle, CEO of the commercial insurance operation, also gained responsibilities. Donna DeMaio, who runs AIG’s mortgage insurer, will now report to him, as does Jonathan Novak, who oversees the institutional-life business, Hancock said in a memo to employees.
Stephen Maginn, who manages life unit distribution, now reports to Rob Schimek, head of operations in the Americas.
John Nadel, an analyst at Sterne Agee & Leach Inc., said it’s disappointing that AIG failed to retain Wintrob, and pointed out that life insurance rivals MetLife Inc. and Prudential Financial Inc. have managed to convince executives to stick around after they were passed over for CEO roles.
‘Significant Blow’
“We view Mr. Wintrob as one of the finest executives in the life insurance sector, and thus view his departure as a significant blow,” Nadel wrote in a research note today. “His contribution to the company was significant, and thus his retention somewhat critical.”
AIG dropped 0.8 percent to $55.91 at 10:06 a.m. in New York, the biggest decline in the 84-company Standard and Poor’s 500 Financials Index. The stock advanced 10 percent this year through yesterday.
After its rescue, AIG, once the world’s largest insurer, retreated from sales of lifeinsurance outside the U.S., selling businesses including Hong Kong-based AIA Group Ltd. and American Life Insurance Co.
Expanding Abroad
The company has been rebuilding international operations while also boosting sales of retirement products in its home country. Benmosche announced a deal last month to buy a unit from Ageas Group for about $305 million to expand in U.K. life products. Pretax operating income at Wintrob’s unit more than doubled from 2011 to $6.51 billion last year, fueled by investment gains. The business generated $20.6 billion in revenue in 2013, about a third of AIG’s total from insurance operations, with the property-casualty division, then led by Hancock, contributing about $40 billion.
