Weekly Industry News — and most other insurance publications — have been following the trials and tribulations of AIG. At one point it was one of the biggest — if not “the” biggest — and most important insurance companies on the planet. AIG was on top. Strong, secure and successful.
Then came the scandals that saw the ousting of AIG founder, president and CEO, Maurice “Hank” Greenberg and the attacks on AIG and Greenberg by New York Attorney General Elliot Spitzer. A year later in 2008, AIG nearly collapsed because of its unwise involvement in the housing market and credit default swaps.
The federal government ended up bailing out AIG to the tune of $182 billion.
For several years the company floundered and has struggled through several CEOs. One after another they came and while the firm did better, it never quite got turned around.
It might be on the right track now.
AIG’s fourth quarter results are excellent. Net income for the quarter hit $922 million. Compare that to a $622 million loss a year ago in the fourth quarter.
The results for all of 2019 aren’t bad either. AIG had a net income of $3.3 billion. That tops the loss of $6 million the year before.
AIG President and CEO Brian Duperreault is getting credit for the turnaround. He said: “Our financial results for the fourth quarter and for full year 2019 reflect the significant progress we made over the course of 2019 to position AIG for long-term, sustainable and profitable growth. For the full year 2019, after tax income attributable to common shareholders was US$4.1 billion and adjusted ROCE was 8.3%.”
Duperreault gives credit for the good year to several parts of the company but focuses on underwriting as being the key.
“As we look to 2020, we will continue to be laser focused on executing on our strategy to position AIG as both a leading insurance franchise and a top-performing company and we remain committed to achieving a 10% adjusted ROCE by the end of 2021,” he said. “In addition to continued work as part of the turnaround of General Insurance, AIG 200 will be a top priority. AIG 200 is our multi-year, enterprise-wide transformation program focused on the long-term strategic positioning of AIG and designed to achieve operational excellence.”
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