Reinsurance News

Duperreault plans to grow AIG, not break it up

16th May 2017 - Author: Luke Gallin

Brian Duperreault, the new President, Chief Executive Officer (CEO) & Director of AIG, plans to make the firm better than it’s ever been and sees opportunities to pursue both organic and inorganic growth as he looks to take the company forward.

Speaking at the firm’s Consumer Insurance Investor Day webcast, Duperreault discussed plans to expand the company and move it forward following his appointment as President & CEO, driven by a combination of growth and underwriting discipline.

Duperreault talked of “making AIG better than it’s ever been,” announcing, “I didn’t come here to break the company up, I came here to grow it.”

The more activist of AIG shareholders have, in recent times, noted a need to reduce the scale of AIG in response to its poor performance, suggesting a need to break up the company to improve its fortunes. However, Duperreault was very eager to talk up growth opportunities during his speech, both organic and inorganic, and dismissed talks of breaking up the company.

He highlighted a need for underwriting discipline, diversification and growth as a way for AIG to outperform its peers, driven by a need for more sustainable underwriting profits, a valuable business mix and level of expenses, ultimately aiming to improve the strength of the company’s balance sheet.

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Duperreault stressed that his priority is to drive growth at AIG, and he said capital would be deployed to assist with, and ensure long-term shareholder value, again underlining the importance of underwriting discipline in order to return more profits and grow the company.

In the challenging and highly competitive insurance and reinsurance marketplace growth has been increasingly difficult to come by, but this certainly didn’t deter Duperreault from announcing his plans to grow AIG in the months and years ahead.

Furthermore, any organic growth across AIG will likely push more risk to Hamilton Re, following a recently announced strategic reinsurance partnership between the pair, so it will be interesting to see what growth opportunities AIG takes advantage of in the coming months, should market conditions and underwriting discipline present the right opportunities.

But one thing is clear, Duperreault’s appointment isn’t going to result in the company breaking up, like certain investors might still be hoping for, but instead he aims to expand the re/insurer and will look to combine growth with underwriting discipline.

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