American International Group, Inc. (NYSE:AIG) is very close to naming its new CEO, if we are to go by sources. The company had to look out for a new head after the company kept on incurring losses in four of the last six quarters under its current CEO Peter Hancock. This raised questions about his proficiency.
The company has been on the lookout for a new CEO since March. The company’s share price has gained 3.55% since April when the company was mulling over appointing industry veteran Brian Duperreault as its head. The Zacks categorized Insurance multiline industry has returned 3.2% over the same time frame. The stock’s in-line performance with the industry reflects the optimism of the company going into experienced hands, partly offset by investors’ concern on whether the new management will be able to do justice.
Duperreault has to his credit an impressive career spanning 40 years. He was president and chief executive officer of Marsh & McLennan Companies (NYSE:MMC) from 2008 to 2012. Before joining Marsh, he worked at ACE Limited for 10 years. Duperreault was also involved with AIG at executive levels in the 1990s under the leadership of Hank Greenberg.
This will be the seventh change at the company’s help over a span of 12 years.
Will Brian Help AIG?
Even after numerous divestures in recent years, the company is still so large and plagued with problems that only an industry veteran leader can steer it toward the right direction.
Going by his experience, Duperreault seems to be the perfect fit for AIG. He has been successful in diversifying the operations of ACE where he worked for almost 10 years. ACE which has now been renamed as Chubb Limited (NYSE:CB) catapulted into a global insurance player under his leadership.
Duperreault is considered one of the most successful Bermudian insurance executives and has been credited by the Insurance Hall of Fame for helping to transform Bermuda from an island nation with a small, reinsurance-focused market into a global insurance centre. He is also quite stable in his posts, evident by only four jobs in 40 years. The contributions made during his career make him an ideal leader for the beleaguered insurer, which has been struggling to regain its lost glory.
It remains to be seen what turnaround strategies, Duperreault will take, if appointed. Some of the initiatives undertaken by the present CEO include returning $25 billion to its shareholders by 2017, selling off non-core businesses, increasing share buyback, hiking dividend, personnel changes, cost control, reinsurance deals, and lowering of hedge fund investment.
It would be, however, an overstatement to mention that Hancock failed totally to perform since the company’s capital return (already nearly $17 billion returned to shareholders) and expense reduction programs are tracking ahead of schedule.
AIG carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the space are Cigna Corp. (NYSE:CI) and Prudential Financial Inc. (NYSE:PRU) . Both the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Cigna surpassed earnings estimates in three out of the last four quarters with an average positive surprise of 1.35%. Prudential (LON:PRU) beat estimates by 5.7% in the last reported quarter.
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American International Group, Inc. (AIG): Free Stock Analysis Report
Cigna Corporation (CI): Free Stock Analysis Report
Prudential Financial, Inc. (PRU): Free Stock Analysis Report
D/B/A Chubb Limited New (CB): Free Stock Analysis Report
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