The leadership transition at insurer American International Group Inc. (AIG:US) is like switching generals after winning a war, Chairman Steve Miller said today.
“We’re changing generals as we move from wartime to peacetime,” Miller, 72, said today in an interview with Bloomberg Television’s Betty Liu.
Peter Hancock, 56, yesterday replaced Robert Benmosche, who departed after five years as chief executive officer of New York-based AIG. Benmosche, 70, started at the insurer less than a year after the firm’s 2008 taxpayer bailout, which swelled to $182.3 billion. AIG finished repaying the rescue in 2012.
Miller said today that he learned from Benmosche “the power of great leadership, even in the most disastrous of circumstances.”
AIG in June announced Benmosche’s plans to depart. Around that time, the prognosis for the CEO’s cancer had worsened, hastening his decision to step down, Benmosche told Liu on Aug. 24. As CEO, Benmosche oversaw divestitures of foreign insurance units and AIG’s plane-leasing business, helping focus the firm on sales of property-casualty coverage globally and life and retirement products in the U.S.
In a memo today, Hancock said AIG is sticking with that strategy, while making some changes to how it evaluates employee performance. Hancock most recently led AIG’s property-casualty unit, where he emphasized profitability over growth, scaling back from some less-lucrative coverage such as workers’ compensation. He’s pushing to expand in consumer lines such as car insurance and travel and health policies.
Among AIG’s priorities are a “focus on customers, sustainable growth and profitability,” and making the company more efficient, Hancock wrote in the memo. “We are staying the course with the direction and strategy we have pursued for the past several years.”
Hancock joined AIG in 2010 as a top aide to Benmosche after a stint at Cleveland-based KeyCorp. Earlier in his career, Hancock spent two decades at J.P. Morgan & Co., rising to chief financial officer. At the lender, he played a key role in the creation of credit derivatives and developed a reputation as a student of risk. He left the bank in 2000, shortly before it was acquired by Chase Manhattan Corp.
Hancock said in the memo that he plans to make “modest changes” to AIG’s performance-ratings process to make it more flexible. He said he’s working to do a better job of incorporating team results into performance reviews.
“Like many large companies, we suffer from a culture where operating within a silo is the norm,” Hancock wrote. “We need to do more to reward high-performing teams and team dynamics.”
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