AIG picks veteran Eric Andersen as CEO after rocky succession process – Financial Times
AIG has appointed insurance veteran Eric Andersen as its next chief executive as it prepares to take on more risk to fuel growth after dramatically paring back its operations since its near-collapse in the 2008 financial crisis.
Andersen, previously president of the world’s second-largest insurance broker Aon, will replace Peter Zaffino, who has steered AIG through a turnaround from years of low profits.
Andersen will join as president and CEO-elect next month and is expected to assume the role in June, while Zaffino will retire from the position by the middle of the year and become executive chair, AIG said on Tuesday.
Shares in AIG, which has a market capitalisation of about $46bn, fell 7.5 per cent in New York on Tuesday to $78.07.
The announcement comes after the company said in November that it would cancel the appointment of John Neal, the former chief executive of Lloyd’s of London, as president of AIG’s US group.
Neal, who had been widely viewed as Zaffino’s likely successor, faced a Lloyd’s investigation into possible governance failings concerning the appointment of a former executive at the insurance market. In a filing with the US Securities and Exchange Commission filing, AIG cited “personal circumstances” as the reason for scrapping Neal’s appointment.
That added to churn in AIG’s executive ranks. Another senior executive left in 2024 after allegations of sexual assault at a company retreat.
AIG was once the largest insurance provider in the world, according to the US Treasury, with more than $1tn in assets globally. But the group, led for nearly four decades by insurance veteran Maurice “Hank” Greenberg until 2005, has pared down to a leaner business with a $46bn market capitalisation, including by spinning off its life and retirement division into a standalone company, Corebridge.
AIG’s insurance underwriting incurred large losses for more than a decade to 2018.
The company was struggling with “poor management that was taking enormous risk”, said Meyer Shields, an analyst at investment bank KBW. AIG took on too much risk in individual accounts and mispriced policies, he said.
But under Zaffino, who took over as CEO in March 2021, the company has delivered an underwriting profit every year and has returned more than $19bn to shareholders with stock buybacks and dividends over the past three years.
Shields called the announcement that Zaffino would step down as CEO surprising and “disappointing”.
“You have somebody with a track record of execution . . . you’d want to see them carry out the plan,” he said, adding that Zaffino had been expected to help AIG grow its total premiums, which he called the “last item on the checklist” in the company’s turnaround.
A person familiar with Zaffino’s thinking said he planned to remain at AIG indefinitely as chair.
Zaffino has lately emphasised dialling up risk-taking across AIG. That includes a more aggressive strategy within the company’s insurance operations, which offer coverage against risks such as lawsuits, cyber attacks and property damage, as well as within its investment portfolio.
In September he said that AIG had previously cut exposure to alternative investments and hedge fund strategies as part of its effort to restore profitability. The insurer now planned to grow its allocation to alternative investments, he added.
Zaffino said AIG also planned to use artificial intelligence in its insurance operations, including its financial lines insurance. He claimed that AI would “enhance our ability to expand risk appetite”.
