The new CEO of US insurance giant American International Group (AIG) Brian Duperreault wants to grow the insurer trough new technology and dismisses a break-up of the company which had been demanded by some investors.
Duperreault, who had been CEO of Bermuda-based insurer Hamilton, has announced initiatives that will further AIG's focus on technology and data analytics as he took over the reins at the insurer.
He plans to develop the potential represented by the Hamilton/Two Sigma/AIG partnership called Attune, a technology-enabled platform that serves the particular needs of the small and medium-sized company insurance market in the US.
As part of the plan, Attune’s target market will be expanded to include companies with annual revenues of up to $35 million, a target market segment of up to $150 billion in annual gross written premiums.
In addition, AIG and Two Sigma Insurance Quantified (TSIQ), a data science provider, will enter into a partnership to leverage TSIQ’s insurance-focused data science and technology expertise for a broad spectrum of commercial insurance underwritten globally by AIG.
“Our investment with Two Sigma will support the creation of next generation insurance platform,” said Duperreault during AIG’s May 15 Consumer Insurance Investor Day, according to a transcript.
“I see technology, data analytics and innovation is transforming the delivery in underwriting of insurance and these initiatives will put AIG at the forefront of the industry. So while our technology is an essential component of long-term strategy, let me be clear I'm here to grow AIG,” he noted.
Hedge fund manager John Paulson and investor Carl Icahn had been advocating the separation of AIG’s life business, property and casualty insurance arm and the mortgage business.
AIG reported a net loss of $3.04 billion for the fourth quarter of 2016, up from a negative $1.84 billion in the same period of 2015, impacted by a $5.6 billion prior year adverse reserve development. The results were impacted by a $5.6 billion prior year adverse reserve development, driven by the US casualty operations.
But Duperreault has no plans to split up AIG.
“I recognize the value of the Company's multiline structure. I didn't come here to break the Company up, I came here to grow it,” he said.
“AIG has the substance in its businesses and people to pursue organic growth and inorganic growth opportunities. Growth combined with underwriting discipline is the path to outperforming our peers,” Duperreault added.
AIG has agreed in principle to acquire Hamilton Insurance Group's US platform for around $110 million.
“The work going on in Hamilton USA will increase the underwriters speed to market and efficiency,” Duperreault said, noting that the business will remain operating separately from the rest of AIG.
Nevertheless, Duperreault acknowledged that AIG faces “very tough” commercial markets which create a challenge for the company’s commercial property/casualty business.
He plans to build a more balanced commercial business that can deliver consistent underwriting profits through underwriting discipline, diversification and growth.
“The improvement in our commercial property/casualty business will be judged by the growth in our bottom line,” Duperreault said.
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Brian Duperreault, AIG, Hamilton Insurance Group, Technology, Bermuda, North America