American International Group Inc. said late Monday that it plans to split itself into two independent companies, choosing a new chief executive to follow through with the separation.
A simpler corporate structure will unlock shareholder value, AIG said. Shares of AIG
rallied more than 7% in the extended session Monday, after ending the regular trading day down 3.5%.
AIG’s board of directors has named Peter S. Zaffino the company’s new chief executive, effective March 1. That is in addition to Zaffino’s current role as AIG’s president. He also joins the board, effective immediately.
Outgoing CEO Brian Duperreault will become executive chairman, also effective March 1, the insurance company said.
In a separate press release late Monday, AIG said it plans to spin off its life and retirement business from AIG.
A “simplified corporate structure will unlock significant value for shareholders and other stakeholders,” the company said in the statement. “Although no decisions have been made as to how to achieve a full separation, the board’s intent is to accomplish it in a way that maximizes shareholder value and establishes two independent, market leading companies.”
In a third communication Monday, AIG said it estimates that its general-insurance catastrophe losses, including COVID-19-related ones, would reach $790 million in the third quarter, of which $185 million are connected to COVID-19 claims.
Third-quarter non-COVID-19 catastrophe losses of $605 million reflect windstorms and tropical storms in the Americas and Japan, as well as wildfires on the West Coast, AIG said.
“The third quarter experienced a high frequency of global catastrophe events with low to moderate severity, including the ongoing impact of COVID-19,” the company said in the statement. “These events have had a limited impact on AIG as a result of our underwriting discipline, reinsurance programs, revamped risk appetite and the strength of our balance sheet.”
Shares of AIG have lost 39% this year, contrasting with gains around 5% for the S&P 500 index