American International Group is currently focusing on evaluating current personnel for a successor to President and CEO Robert Benmosche.
In comments on Fox Business Network yesterday, Benmosche said he is suggesting that the company also take a look at external candidates to ensure AIG has the right leadership to succeed him in running such a “large and complex company.” He also noted the “company is clearly on the way up” as it continues to gain strength from its near-death experience in 2008.
He said that in divesting its airline leasing unit, International Lease Finance Corp., AIG is taking a stake in the company, AerCap, that is buying the unit that might extend two or three years. Benmosche said AIG hopes to complete that deal in the second quarter.
He also said the company is in the process of de-risking is casualty-insurance business through stronger underwriting and risk-evaluation systems, but he cautioned the business is still “a zig-zag,” that is, subject to ups and downs.
Analysts are deeply concerned about that issue because significant weather events are becoming more commonplace, and therefore insurance companies are now more subject than before to unpredictable earnings patterns, which are anathema to analysts and the investors who attempt to predict stable earnings patterns.
Benmosche also said that as a systemically significant financial institution, AIG won’t be subject to the Comprehensive Capital Analysis and Review (CCAR) analysis by the Federal Reserve, or, as they are also known, stress tests, until 2015.
He further said the “too big to fail” designation of AIG is a good thing because it ensures “we have excess liquidity above and beyond what we think would be necessary to meet a significant, significant stress event.”
Benmosche’s comments on succession were prompted by his earlier statement that he planned to leave the company in early 2015.
Benmosche made his comments in an interview with Maria Bartiromo.
Regarding the state of AIG, he said, “I think we have a very strong foundation of our business. We are continuing to focus on 2014, making sure that we continue to develop the leadership, the team; the company—making sure what we have will be sustainable well into the future.
He said the company is working hard this year “because succession is clearly something we all have to deal with, starting with me.”
He said the board “really should make sure they have done an internal and external scan to make sure the best candidate is going to take AIG to the next level,” because “there's no question this is still—for all that was simplified—this is a very large, complex company.”