May 24, 2017 – Egon Zehnder has recruited Brian Duperreault as the new CEO for American International Group (AIG). He replaces Peter D. Hancock, who recently informed the board of directors of his intention to resign, and becomes the company’s sixth CEO since 2005. AIG shares were up 1.7 percent at $62.01 upon release of the news.
AIG is nearly three quarters of the way through a turnaround plan developed by Mr. Hancock, who intended to slim the New York-based insurer through divestitures, improve its financial performance and return $25 billion worth of capital to shareholders.
Still feeling the aftermath of the 2008 financial crisis, in which AIG was rescued from ruin by a $185 billion government bailout, the company faces serious challenges. Analysts say it is important for the new CEO to have a firm grasp on AIG’s troubles in property and casualty insurance, which have weighed heavily on its results. “We’ve seen a few examples in the insurance world of similarly large organizations that were similarly distressed that were able to turn themselves around,” said Meyer Shields, who covers AIG shares at Keefe, Bruyette & Woods.
Douglas M. Steenland, AIG’s chairman of the board, said Mr. Duperreault is uniquely qualified for the job. “Brian has spent his entire career in insurance,” he said. Indeed, Mr. Duperreault worked for AIG for 21 years at the start of his career, so he knows this company well. He also served as CEO of ACE, an AIG direct competitor, and he ran Marsh & McLennan Companies, one of AIG’s largest broker partners.
“At Hamilton, he introduced cutting edge data science and analytics into the insurance business,” Mr. Steenland said. “He is a hands-on leader who has consistently delivered strong bottom-line results. He has demonstrated a passion for deploying new and innovative ways to serve clients. All of this will enable Brian to help AIG achieve its full potential to be the leading insurance company.”
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Long-Time Insurance Veteran
Mr. Duperreault previously served as CEO of Hamilton Insurance Group, a Bermuda-based holding company, with property and casualty insurance and reinsurance operations in Bermuda, the U.S. and the UK. Previously, he was president and CEO of Marsh & McLennan Companies, a global professional services firm offering clients advice and solutions in risk, strategy and people, from 2008 to 2012. Before joining Marsh, he served for two years as non-executive chairman of ACE Limited, an insurance and reinsurance company, and CEO of ACE Limited, from 1994 through 2004. Prior to joining ACE, Mr. Duperreault served in various senior executive capacities with AIG and its affiliates.
Mr. Duperreault is chairman of Attune, a data-enabled company established by Hamilton Insurance Group, AIG and Two Sigma, and chairman of the board of directors of Blue Marble Microinsurance. He is the former chairman of overseers of the School of Risk Management of St. John’s University. Mr. Duperreault is a member of the boards of the International Insurance Society, the Insurance Information Institute and the Bermuda Institute of Ocean Studies, and is a former member of the Association of The Metropolitan Opera, New York. He also serves on the board of directors for Johnson Controls.
“Let me be clear, I am here to grow AIG,” Mr. Duperreault, said at the company’s consumer insurance investor day last week. “I recognize the value of the company’s multiline structure. I didn’t come here to break the company up. I came here to grow it.”
AIG is one of the world’s largest and best branded insurance organizations. Founded in 1919, its member companies provide a wide range of property casualty insurance, life insurance, retirement products and other financial services in more than 80 countries. These include products and services to help businesses and individuals protect assets, manage risks and provide for retirement.
Since the economic crisis, insurance companies have been challenged by leadership and top management defections. According to reports from Egon Zehnder, to stay competitive insurers will need to ensure they have access to the most highly skilled talent available, both in the C-suite and at the executive board level as well as in areas like financial risk management, innovative product development, underwriting and technical risk assessment/ modeling and multi-channel distribution strategy. The search firm has over 50 consultants worldwide who serve clients in the sector.
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The insurance business, like all industries, is experiencing meaningful disruption and transformation of its business models. Technology and data transformation is changing the insurance sector, “but at its core, the insurance industry is still driven by focused and disciplined underwriting,” said Craig Lapham, managing partner and CEO of The Lapham Group, a C-suite leadership provider specializing in recruiting top talent for the global insurance and diversified financial services sector.
“What happened at AIG over the past several years was that too much focus was put on radical transformation,” he said. “This caused AIG to take their eye off the ball,” particularly in terms of core underwriting discipline.
Contributed by Dale M. Zupsansky, Managing Editor – Hunt Scanlon Media