(Bloomberg) -- AmericanInternational Group Inc., the insurer being pressured bybillionaire investor Carl Icahn to split up, agreed to nominate oneof the activist’s allies to the board of directors along withhedgefund manager John Paulson.

The board will be expanded to 16 directors from 14, the NewYork-based insurer said Thursday in a statement. The second nomineeis Samuel Merksamer, a managing director at IcahnCapital.

AIG Chief Executive Officer Peter Hancock and Chairman DougSteenland are seeking to assuage Icahn, who faulted the insurer inOctober for failing to meet profitability targets and thenpressured AIG to focus primarily on property-casualty coverage.Icahn has said the plan announced in January by the insurer to exitsmaller assets, including the mortgage guaranty business andAdvisor Network, is not enough of a drastic change.

“I myself declined to go on the board because of my involvementin so many other companies at this time,” Icahn said in a separatestatement. “We continue to believe that smaller and simpler isbetter and look forward to working collaboratively with the boardand management to help catalyze a turnaround .”

Hancock has urged patience from investors while selling stakesin an aircraft lessor, a consumer finance company and someoperations overseas. He has repeatedly rebuffed Icahn’s plan tostrip down to property-casualty operations, citing diversificationbenefits, and has said a split could squander at least a third ofAIG’s more than $15 billion in tax assets.

Related: Ichan urges drastic AIG shift, says CEO credibilityon the line

Merksamer has joined boards of companies targeted by Icahnincluding Cheniere Energy Inc., Transocean Ltd., Hertz GlobalHoldings Inc., Talisman Energy Inc. and Navistar InternationalCorp. Paulson is known for his bets against subprime mortgagesbefore the financial crisis.

“John and Samuel will bring financial and business expertise tothe Board, and we look forward to benefiting from their insights aswe move forward with our strategy to create a leaner, moreprofitable and focused AIG,” Steenland said.

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