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American International Group Inc. (AIG), the insurer that counts the U.S. as its largest shareholder, promoted Donna DeMaio to run the mortgage guaranty business as the company expands bets on a housing rebound.
Kim Garland, 47, who had been running the United Guaranty unit, will become chief underwriting officer for global consumer insurance, said Peter Hancock, chief executive officer of New York-based AIG’s property-casualty business, in a memo to employees today.
AIG is seeking to boost returns as the insurer works to attract private investors to replace government capital. The United Guaranty mortgage insurer has been winning market share from hobbled rivals and can help investment managers pick which home loans to buy, AIG CEO Robert Benmosche has said. Hancock is focusing on emerging markets and sales to consumers as he retreats from types of coverage that require more capital.
“Global consumer insurance will continue to advance its pricing, risk selection (AIG), and segmentation strategies and processes, and drive consistent underwriting best practices,” Hancock said in the memo.
AIG advanced 0.6 percent to $33.32 at 4 p.m. in New York. The insurer has rallied 44 percent this year, beating the 13 percent gain in the 24-company KBW Insurance Index.
Garland joined Greensboro, North Carolina-based United Guaranty in 2009 after previously working for Safeco Corp. and Geico Corp. In his new post, he succeeds Leonard Bellafiore, who was named president of consumer insurance for Asia Pacific earlier this year. Garland will report to Jeff Hayman, CEO of global consumer insurance.
DeMaio, 53, joined United Guaranty as chief operating officer this year after previously leading the bank unit at insurer MetLife Inc. (MET) She’s the fourth CEO of United Guaranty since 2009 and reports to Hancock.
The unit, acquired by AIG in 1981, is rebounding after losses from backing residential debt during the financial crisis. Mortgage insurance covers losses on home loans when borrowers default and foreclosures fail to recoup costs.
United Guaranty reported pretax operating profit of $54 million in the first nine months of this year, compared with a loss of $72 million in the same period of 2011.
AIG considered halting sales of new coverage at United Guaranty before Benmosche took over. Benmosche has since praised the unit for providing insights into the mortgage market, improving AIG’s ability to invest in the loans.
“It’s running very well and it’s enhancing whatever we do here,” Benmosche said last year. “We see it as a keeper.”
To contact the reporter on this story: Zachary Tracer in New York at Ztracer1@bloomberg.net
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