(Adds comment from AIG’s Schimek and stock price)
By Suzanne Barlyn and Sweta Singh
Sept 25 (Reuters) - American International Group Inc said on Monday it will reorganize into three new units and will no longer have separate commercial and consumer businesses, marking the first major strategic move by new Chief Executive Officer Brian Duperreault.
Under the new structure, AIG will have a general insurance business, a life and retirement unit and a stand-alone technology unit. Two of those businesses will be led by longtime colleagues Duperreault recruited to AIG in July.
The shakeup marks Duperreault’s first major restructuring action after taking the helm of the company in May. Former CEO Peter Hancock stepped down, citing a lack of confidence from the board and investors.
Widely seen as a turnaround expert, Duperreault, 70, has said he wants to grow AIG’s businesses.
The insurer’s stock has underperformed rivals and the broader market for almost a decade since its near collapse and $182 billion taxpayer-funded bailout during the financial crisis in 2008.
AIG shares rose 0.5 percent on Monday, closing at $61.01.
For his leadership team, Duperreault selected Peter Zaffino to be CEO of AIG’s general insurance unit. Formerly head of Marsh & McLennan Cos Inc’s brokerage business, he was previously Duperreault’s choice as AIG’s chief operating officer.
Kevin Hogan will head the new life and retirement unit. An AIG veteran, he most recently ran the consumer insurance unit.
Seraina Macia will be CEO of the technology unit, AIG said. She is the former head of Hamilton USA, North American arm of Duperreault’s former company, Hamilton Insurance Group Ltd.
AIG agreed to buy Hamilton USA for $110 million in May.
The insurer also named a new general counsel, Lucy Fato, on Sept. 5.
Rob Schimek, CEO of AIG’s commercial unit, will leave the company at the end of October, AIG said.
“I could not be more proud of what this company has accomplished over the last 12 years, from navigating the financial crisis and winning back the confidence of our partners and clients, to focusing on innovations that have outpaced the market,” Schimek wrote in an memo to AIG employees.
The restructuring ”better aligns with how investors actually prefer to analyze AIG,” said Meyer Shields, an analyst at Keefe, Bruyette & Woods.
Duperreault’s changes place a greater focus on product underwriting rather than on AIG’s relationships to clients, said Credit Suisse analyst Ryan Tunis in a note. AIG still needs more hires with commercial underwriting expertise, Tunis said.
AIG said it expects its year-end financial reporting to reflect the new structure, which will also be aligned with its incentive and performance management plans.
The insurer has been trying to convince U.S. regulators to shed its “systemically important financial institution” label, which triggers stricter oversight and greater capital requirements. AIG received the label after the bailout by the Federal Reserve and U.S. Treasury during the financial crisis.
Since then, AIG has sold dozens of businesses, including two Asian life insurance operations and one of the world’s biggest aircraft leasing businesses.
It recently sold a mortgage-insurance unit. It remains the largest commercial insurer in the United States and Canada.
Reporting by Sweta Singh in Bengaluru; Editing by Bernard Orr, Bill Rigby and David Gregorio