In a memo to the employees of AIG, Benmosche wrote that the company is not yet at the finish line. After the U.S. declaring that it would achieve a $22.7 billion profit on rescuing from AIG on $182.3 million, the CEO stated to the employees of this New York-based firm that they have to perpetually surpass the expectations of the clients, regulators, investors, and other stakeholders around the world. Benmosche took over AIG in the year 2009, and is now planning to cut on cost and restore the firm’s tarnished reputation followed by a near collapse. By selling non-U.S. life insurance products, AIG is increasingly becoming dependent on property-casualty coverage at Chartis, a business that reported a significant loss in underwriting for four years.
In this context, Josh Stirling, Sanford C. Bernstein & Co. analyst said that AIG is spending a lot of efforts in making Chartis turnaround. When this effort starts off to deliver results, revenues will automatically start incoming. At the same time, AIG is expecting a profit of 5-10 cents in underwriting on every dollar of premiums collected for property-casualty coverage by the end of the year 2015. As reported by Stirling, the insurer can achieve the projected profit by cutting expenses, increasing the coverage costs, and performing better in evaluating he risks and handling insurance claims.
AIG is primarily focusing on building a profitable business than making revenues on premiums, said Peter Hancock, CEO of property-casualty unit. He is particularly improving the focus on the emerging markets, and dipping business in segments that demands the insurer to hold increased capital. Talking about the narrow focus that CEO Benmosche has adopted to rescue the company from its tarnished position, Timothy Massad, Treasury assistant secretary for financial stability said that AIG is a completely different company today. It is much smaller, and primarily focused on key insurance services; hence, it is less risky as well.
Benmosche has successfully restored the brand name ‘AIG’ to the property-casualty and United States life insurance units in 2012, exemplifying how the company bought back a major portion of the shares to wind down bailout. At the same time, the CEO has also introduced a new company logo, and agreed to sponsor the rugby teams in New Zealand.
