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Hancock's job at AIG very different than predecessors

  • AIG's decades-long run of well-known CEOs up until now are responsible for building, nearly destroying, and then reviving the company's franchise, writes SNL's Adam Cancryn, but this should not be the case for incoming chief Peter Hancock.
  • "At this point in time, I don't think the story for AIG, at least on the P&C side, is one of massive growth," says BMO's Charles Sebaski. "What I think AIG needs to do, given its size, is not be pushing for growth but continuing to restructure and reallocate the portfolio."
  • Hancock - a lifelong banking man hired from KeyCorp in 2010 - seems to fit the bill then. Since coming to the insurer, he's led the effort to turn around P&C using technology and data analytics, and appointed a chief science officer in 2012 with an eye towards cutting costs, reducing losses, and improving prices. The effort seems to be working, but early on at least, the heavy upfront costs of the investment are keeping the improvement from flowing through to the bottom line..
  • Also complicating things: Hancock beat out Life and Retirement CE Jay Wintrob for the top slot, and while Wintrob's unit is smaller than P&C, its equally profitable, making him a target hire for other companies.
Comments (4)
  • speedofov
    , contributor
    Comments (91) | Send Message
     
    Would have preferred an experienced insurance professional to a banker. It has taken Wells Fargo decades to understand the insurance business, at least from the brokerage side. Banking and insurance are not the same, so I'm neutral on this promotion.
    23 Jun, 03:16 PM Reply Like
  • CapVandal
    , contributor
    Comments (219) | Send Message
     
    AIG has some very profitable businesses and some average businesses. The excellent businesses are ones where AIG is #1, #2, or#3 in the industry and have a solid history of profitability. Even better are the businesses that have few competitors.

     

    The challenge is to grow the great ones and manage the average ones well. I would prefer to see the company split into these two categories.

     

    Makes it easier to grow the best, since they are hived off from the average.

     

    It would potentially get AIG out from under their designation as a SIFI.

     

    @speed ... I don't see a problem with a banker running the holding company as long as he hires insurance people to run the subs. And doesn't try to micromanage the insurance subs. Big ifs, I know. And, this *new* focus on metrics -- it isn't like competitors haven't done or tried to do the same thing for years.
    23 Jun, 04:42 PM Reply Like
  • Far Horizon
    , contributor
    Comments (60) | Send Message
     
    I agree, that using data in the insurance industry is hardly new, however the game in analytics has taken a quantum leap.....more data, better tools, faster response times. Cutting edge analytic capability is the starting point - the real trick is the control systems and management discipline to use the data to underwrite a higher quality portfolio. When you see each line of business generating lower loss ratios than peers, you will know the investment has paid off.
    24 Jun, 06:41 AM Reply Like
  • heyo
    , contributor
    Comments (54) | Send Message
     
    Buffett: insurance is the best business
    23 Jun, 07:43 PM Reply Like
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