Insurer AIG says CEO will step down in September, replaced by head of property casualty unit

NEW YORK, N.Y. – Insurer AIG says one of its top executives will take over as CEO on Sept. 1, replacing Robert Benmosche.

American International Group Inc. said Tuesday that Peter Hancock would become president and CEO and join the company’s board.

Hancock, 55, is currently an executive vice-president and CEO of AIG’s property casualty unit. He joined AIG in 2010 after 20 years at J.P. Morgan, where he established the bank’s global derivatives group.

New York-based AIG said that Benmosche is expected to also resign from the board and take on an advisory role with the company.

Benmosche, 70, became CEO in August 2009. He led AIG’s successful effort to repay its $182 billion bailout from the federal government at the height of the 2008 financial crisis. AIG has also been restructuring and selling off businesses, cutting its size in half.

AIG disclosed in October 2010 that Benmosche had been diagnosed with cancer and was undergoing “aggressive” chemotherapy. The type of cancer was not mentioned. The diagnosis caused the board to step up the pace of succession planning, Chairman Robert S. Miller said in later interviews.

In a statement provided by a spokeswoman, AIG said Tuesday that “While Bob is being treated for cancer, he remains active and engaged in the business.” The company said the board had been planning for a successor “for quite some time” and that once a successor was picked there was no reason to delay an announcement.

The company had said the board was considering internal and external candidates to replace him. The Wall Street Journal reported last month that the field had been narrowed to two insiders: Hancock and Jay Wintrob, who runs AIG’s insurance and retirement-products business.

Hancock’s experience in financial services, including risk management, and his success in revitalizing the property casualty business were among factors in his favour, Miller said in a statement.

Shares of AIG fell 6 cents to close at $55.01. In extended trading after the CEO announcement, they slipped 1 cent to $55. The stock has gained 8 per cent this year.