Published: Fri, March 10, 2017
Economy | By Melissa Porter

AIG shares climb on Hancock exit

AIG shares climb on Hancock exit

Hancock, 57, will remain CEO until a successor is named, as part of the company's transition plan.

AIG shares climbed 1.6 percent in early NY trading as investors reacted positively to the resignation of CEO Peter Hancock.

Hancock said in a statement on Thursday that he could not continue in his role without "wholehearted shareholder support".

Icahn endorsed Thursday's developments, saying on Twitter (Swiss: TWTR-USD.SW - news) "we fully support the actions taken today by the board of AIG". Of those, Robert Benmosche, who took charge in 2009, ran the company for the longest stint, until Hancock took over in 2014.

Keefe Bruyette & Woods analyst Meyer Shields said the change of leadership was a "significant positive" for the company.

The note said that there are few executives with the skills to turn around AIG, but added that "several successful turnarounds within (the property/casualty sector) over the last decade or so suggest that it's achievable, notwithstanding the considerable difficulty", citing turnarounds at Aon P.L.C., CNA Financial Corp, Marsh & McLennan Cos.

In February, AIG reported a fourth-quarter loss of $3.04 billion, the New York-based company's worst since the 2008 financial crisis when it was saved from collapse by a $185 billion bailout from the federal government.

The stock was trading up 1.58 percent at $64.44 as of 14:53 GMT as markets digested the news, which was released before trading began this morning. He was previously CEO of AIG Property Casualty.

Still, ratings firm A.M. Best has been reviewing AIG's financial strength score after the latest losses prompted Hancock to pay about $10 billion to Berkshire Hathaway assume risks on insurance contracts that were initiated by his company.

Hancock "tackled the company's most complex issues, including the repayment of AIG's obligations to the U.S. Treasury in full and with a profit, and is leaving AIG as a strong, focused and profitable insurance company", board chairman Douglas Steenland said in a statement.

Like this: