Global insurer AIG announced a multi-part shake up on Monday, naming a new CEO and splitting its business in two.
Once the world’s largest insurer, which needed a US government bailout to survive the 2008 global financial crisis, named Peter S. Zaffino to lead AIG starting March 1, 2021, in addition to his current role as the company’s president.
Current CEO Brian Duperreault will become executive chairman of the board, the company said in a statement.
“Peter has been instrumental in the significant turnaround and transformation at AIG and his vision, determination and pursuit of excellence will help ensure the company’s future success,” Duperreault said.
AIG also announced plan to separate the Life & Retirement business from the General Insurance unit, simplifying the corporate structure to allow each to become more profitable.
Zaffino said the decision came after a long review.
“Our businesses can be further strengthened by separating Life & Retirement from AIG, which we believe will enable each entity to achieve a more appropriate and sustainable valuation,” Zaffino said.
Once the world’s largest insurer, AIG was teetering on the verge of collapse under tens of billions of dollars of souring, unhedged derivatives contracts in September 2008 when it sought liquidity from the New York Fed.
The government saved AIG with a controversial $182 billion bailout that was later repaid in full by the insurer, which shed numerous units in years after the crisis.
The group also said Monday that it expects a third quarter pre-tax loss of $790 million in its catastrophe division, $185 million of which is related to Covid-19, including travel and event cancellations.
Another $605 million of losses come from storms in the Americas and Japan, as well as fires in the western United States.
The company is set to releases its quarterly results on November 5.