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Will likely see $69 by EOY
Job well done Mr. Benmosche, we thank you.
http://www.bloomberg.com/news/articles/2015-02-27/robert-benmosche-who-led-aig-in-repaying-bailout-dies-at-70
The Feds philosophically believe in rate increases, even amidst a widening oil glut promising higher levels of unemployment.
AIG 60 plus dollars coming IMO.
It goes much higher. It is worth sooo much more ++
Just take a peek at the P/E.
New price target of $61 soon realized
Barclays Analysts Give American International Group a $61.00 Price Target (AIG)
February 17th, 2015 - by Justin Garson
Click For sleekmoney.com Article
Barclays set a $61.00 price target on American International Group (NYSE:AIG) in a research report sent to investors on Friday morning. The firm currently has a a buy rating on the stock.
A number of other analysts have also recently weighed in on AIG. Analysts at Deutsche Bank set a $61.00 price target on shares of American International Group and gave the company a buy rating in a research note on Monday, February 9th. Analysts at Credit Suisse downgraded shares of American International Group from an outperform rating to a neutral rating and lowered their price target for the stock from $60.00 to $59.00 in a research note on Thursday, January 8th. Finally, analysts at Zacks reiterated a neutral rating and set a $59.00 price target on shares of American International Group in a research note on Tuesday, December 23rd. Seven analysts have rated the stock with a hold rating and eight have assigned a buy rating to the company’s stock. American International Group presently has a consensus rating of Buy and a consensus target price of $61.08.
American International Group (NYSE:AIG) opened at 53.96 on Friday. American International Group has a 52 week low of $48.27 and a 52 week high of $56.79. The stock’s 50-day moving average is $52.36 and its 200-day moving average is $53.57. The company has a market cap of $75.539 billion and a P/E ratio of 8.68.
American International Group (NYSE:AIG) last announced its earnings results on Thursday, February 12th. The company reported $0.97 EPS for the quarter, missing the Thomson Reuters consensus estimate of $1.07 by $0.10. The company had revenue of $5.21 billion for the quarter, compared to the consensus estimate of $8.68 billion. During the same quarter in the prior year, the company posted $1.15 earnings per share. The company’s quarterly revenue was down 1.8% on a year-over-year basis. On average, analysts predict that American International Group will post $4.96 earnings per share for the current fiscal year.
The company also recently announced a quarterly dividend, which will be paid on Thursday, March 26th. Investors of record on Thursday, March 12th will be paid a dividend of $0.125 per share. This represents a $0.50 annualized dividend and a dividend yield of 0.93%. The ex-dividend date is Tuesday, March 10th.
American International Group, Inc (NYSE:AIG) is a global insurance company. The Company provides a range of property casualty insurance, life insurance, retirement products, mortgage insurance and other financial services to customers in more than 130 countries.
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interesting trade: some money mrgs snapping up $FNMA on bet that hank greenberg wins case vs feds over AIG bailout more @FoxBusiness
get on your horse
AIG Turnaround Still A Work In Progress
By Matthew Lerner February 13, 2015
Click For Article
Photo by Bloomberg
Despite a sharp fall in profit in the fourth quarter of 2014, American International Group Inc. is making progress in improving its business, but the insurer has a ways to go before the years' long turnaround is complete, according to analysts.
The New York-based insurers' management was more bullish in a conference call discussing the results Friday, highlighting a stock buyback and other positive developments.
AIG reported on Thursday 2014 fourth-quarter net income of $655 million, a 67.2% fall compared with the same period in 2013, on an $834 million charge for debt extinguishment.
On a conference call with analysts Friday morning, CEO Peter Hancock said the debt extinguishment provided a half-billion dollars worth of “incremental economic value” to shareholders despite the size of the charge.
Mr. Hancock also gave the company's new $2.5 billion stock buyback a high profile at the beginning of the call while conceding challenges such as the ongoing effects of the low-interest-rate environment and a decline in property/casualty rate increases.
Net premiums written for AIG's commercial insurance operations in the quarter fell 3.3% to $7.56 billion, while investment income slid 1.0% to $1.25 billion. The fourth-quarter combined ratio for commercial insurance improved to 96.5% from 101.7% in the year-ago period.
Net premiums written in the company's property/casualty business declined 3.2% to $4.69 billion, while net investment income in the segment fell 7.2% to $1.11 billion.
John Doyle, executive vice president and CEO of commercial insurance for AIG, said on the call that U.S property rates were down 6% in the quarter.
The insurer's fourth-quarter property/casualty combined ratio improved to 103.4% from 108.7% in the same period last year.
Life operations strong
David Herzog, executive vice president and chief financial officer, said the company's newly announced $2.5 billion stock buyback reflected strong cash flow from AIG's life insurance operations.
He added that 2015 could see $6 billion to $7 billion in potential stock buybacks and dividends. AIG also repurchased $1.5 billion in stock in the fourth quarter.
Analysts were mixed on the quarter.
In a note published after results, Cliff Gallant, San-Francisco-based analyst with Nomura Securities, said the results were “OK with signs of improvement,” citing an improved underlying commercial combined ratio before reserve additions, discount rate changes and catastrophes as well as the debt reduction and stock buybacks.
Mr. Gallant said that compared with others in the sector, AIG's underlying combined ratio is not nearly as good as its peers, nor is its return on equity. However, the insurer is making progress, he said.
Amit Kumar, New York-based vice president and senior analyst of insurance at Macquarie Capital (USA) Inc., was less optimistic, writing in his note that “the noise from adjustments to reserves was higher than anticipated. We do not think the company is nearing the finish line in terms of volatility in quarterly reserve adjustments.”
For full year 2014, commercial insurance net written premiums slipped 0.04% to $33.43 billion, while net investment income fell 4.1% to $4.92 billion.
The full-year commercial insurance combined ratio improved to 96.3% from 98.2% in 2013.
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Congressional Approval of TRIA guarantees $56 minimum, imo
American International Group Inc (AIG) Pleased Congress Renews TRIA
BY STEVE VRIONIS · JANUARY 8, 2015 04:33 PM PST
Click For Link
AIG CEO, Peter Hancock
American International Group Inc (NYSE:AIG) President and Chief Executive Officer Peter Hancock released a statement regarding the re-authorization of the Terrorism Risk Insurance Act.
CEO Comments
$AIG BIG BIG money loading zone > > >
Another 2.5M yesterday at the bell
Rising nicely and looking here very soon for a nice breakout
$$$AIG$$$
$AIG ..watch for a nice rise in sp
I wonder how I missed this one?
AIG Bailout Judge Not Intimidated by Government, Wall Street Names
By Andrew Zajac and Christie Smythe | December 1, 2014
Click For Link
Hank Greenberg’s legal assault on the U.S. government and the terms imposed in its 2008 bailout of American International Group Inc. brought a parade of financial crisis superstars to a Washington courthouse, providing an insider’s account of the struggle to save the U.S. economy.
Ben Bernanke, Henry Paulson and Timothy Geithner each took the witness stand, attesting to the calamity they faced, and how the way they saved what was once the world’s biggest insurer was the best course for the nation.
The former Fed chairman and ex-Treasury secretaries told their stories not to a jury, but to one man: U.S. Court of Federal Claims Judge Thomas Wheeler. During the two-month trial, the 66-year-old, white-haired ex-government contract lawyer often decided against the U.S., while ruling for Greenberg and his Starr International Co., once AIG’s biggest shareholder.
In consideration for an $85 billion loan from the Federal Reserve Bank of New York, the insurer had to agree to a 14 percent interest rate and a demand for an 80 percent government equity stake, arrangements that cost shareholders as much as $40 billion, Greenberg claimed. Led by attorney David Boies, Starr’s lawyers argued AIG investors deserve that money back.
The presentation of testimony in the case ended last week. Once considered a long-shot, Wheeler’s rulings in favor of Boies, the lawyer’s success in eliciting damaging testimony and the judge’s impatience with the tactics of government lawyers have made a victory for Greenberg and Starr seem plausible.
Wheeler, who sang in his church choir and coached softball, is seen by those who know him as unfazed by the heavyweights who were called as witnesses during the AIG trial.
“Those are big names. That’s not going to intimidate Tom,” said Carl Vacketta, a former law firm colleague who said he taught Wheeler when he was a student at Georgetown University Law Center. “He’s smart and adept,” Vacketta said. “He’s not going to be bothered by anybody from Wall Street.”
Credit-Default Swaps
The government in 2008 sought to save AIG before it was brought down by billions of dollars of credit-default swaps, fearing its collapse from bad mortgage bets would ripple outward from a firm that insured thousands of municipalities, retirement plans and companies, and was a counterparty to some of the biggest banks.
“AIG exploited a huge gap in the regulatory system” and its Financial Products unit operated without oversight as it made derivative bets on subprime loans, Bernanke told lawmakers in 2009. “This was a hedge fund basically that was attached to a large and stable insurance company.”
$182 Billion
The AIG bailout ballooned to $182 billion. The New York- based insurer eventually returned to profitability and repaid the assistance in 2012, leaving the government with a $22.7 billion profit.
In the trial, the U.S. argued that it had authority to demand equity, and that the bailout was voluntarily agreed to by AIG’s board as a preferable alternative to bankruptcy.
Boies, 73, has used government correspondence to argue that, instead of being a hedge against risk as U.S. lawyers argued, the stiff costs of the loan were an attempt to make money.
Much of the case has focused on Starr’s allegations that the government coerced AIG’s board into accepting the bailout, and exercised control of the company at key moments afterward.
Those elements are crucial to Starr’s claim the government took shareholders’ property without just compensation, in violation of the U.S. Constitution.
Defining Feature
Wheeler, who declined to be interviewed for this article, repeatedly expanded the range of government documents available to Starr. The judge’s insistence on compiling an expansive record was one of the trial’s defining feature.
He was disinclined to allow the government to use redacted documents, and frequently overruled objections to the introduction of evidence, promising to apply “my reliability yardstick” when evaluating the merits of disputed material.
The judge made at least three rulings that worked to Starr’s advantage, including a pair that increased access to government documents and another that barred the U.S. from calling three lawyers for AIG as witnesses.
Perhaps the most significant decision by Wheeler came Nov. 5, when he ruled that because of the way the government questioned an outside attorney for the New York Fed, it waived attorney-client privilege, opening the door for Starr to access 30,000 additional documents.
“I don’t want there to be any loopholes here,” Wheeler said.
Government Rebuked
Wheeler rebuked government attorneys for attempting to rely on hearsay, introducing exhibits in violation of rules about redactions and dragging out proceedings by reading lengthy passages from documents into the record.
At times, Wheeler gave Boies, who represented the government in the 1999 Microsoft Corp. antitrust trial and former U.S. Vice President Al Gore in the 2000 presidential recount, a wide berth.
He kept silent as Boies chastised government witness Marshall Huebner of Davis Polk & Wardwell LLP, who served as outside counsel to the New York Fed, for what he deemed insufficiently responsive answers.
“One of the differences between being a lawyer and being a witness is as a witness you’re supposed to answer my questions” while as a lawyer, “you get to make arguments,” Boies told Huebner Nov. 5. “But I would ask you to listen to my questions, as opposed to make the points that you want to make.”
Spring Verdict
Wheeler gave both sides until next week to finish submitting evidence, including material from the trove he forced the government and others to produce. He set a Feb. 9 deadline for both sides to file conclusions of law, with closing arguments to follow as soon as March.
He set no page limit on the post-trial filing, in keeping with his preference for a broad record.
“He really wants to understand the facts and the circumstances and anything that’s germane to make sure it’s on the record and can be taken into account,” said Fernand Lavallee, a lawyer at Jones Day who worked with Wheeler at DLA Piper LLP. “That was how he practiced as a government contracts litigator.”
Daughter-in-Law
In the early stages of the litigation, Wheeler told lawyers for both sides that his daughter-in-law worked for AIG as a paralegal and asked for their views on his participation.
The judge said that, after checking with the court’s ethics adviser, “I don’t think this circumstance creates any cause for recusal whatever, so I’m anxious to remain on the case and be of service to you all.”
Starr and the government didn’t object.
The disclosure followed the best practice of “putting your cards face-up on the table,” said Charles Geyh, a professor at the Indiana University Maurer School of Law. “It tells the lawyers, ‘speak now or forever hold your peace.’”
Wheeler didn’t explain his acquaintance with an expert witness who appeared on behalf of Starr, telling economist Michael Cragg, “I believe I remember you from a prior case.”
Cragg, the judge wrote in a previous opinion, “was the single most helpful expert” in a tax case in which Wheeler rejected BB&T Corp.’s bid to recover more than $688 million in taxes and penalties for a disallowed tax shelter.
In the Starr trial, Cragg testified the government lacked a strong economic rationale for the stringent terms of the AIG bailout, abused its power and treated the insurer “as a political scapegoat” for the financial crisis.
No Obligation
Wheeler had no obligation to disclose anything about Cragg’s earlier appearance, since it was already in the public record, Geyh said.
“In this small legal universe, there is a recycling of these experts,” he said.
Nicole Navas, a spokeswoman for the Justice Department, declined to comment on Cragg’s testimony. Robert Dwyer, one of Starr’s attorneys, said the decision to have Cragg appear as an expert witness was made before the BB&T ruling, but agreed that his standing with Wheeler was an unexpected bonus.
Contract Claims
Wheeler was appointed in 2005 to a 15-year-term on the U.S. Court of Federal Claims by Republican President George W. Bush. The court primarily hears financial or contract claims against the federal government. For more than 30 years before his appointment, Wheeler worked in private practice, specializing in government contract issues.
After receiving his undergraduate degree from Gettysburg College in Pennsylvania and a law degree from Georgetown, he worked at law firm Pettit & Martin and then Piper & Marbury, which through mergers eventually became DLA Piper.
Lavallee recalled hearing Wheeler’s wife, Janet, talking about taking him to choir practice.
Wheeler “kind of had that sheepish, humble look on his face, and he says, ‘Yeah, I really enjoy the church choir,’” Lavallee said.
A friend of the couple, Sheila Stark-Bailey, a senior counsel at AECOM Technology Corp., said Wheeler was “an absolutely fantastic mentor” at DLA Piper.
The Wheelers like to tailgate at Penn State University football games, and the judge is sometimes called “Judge Coach” by former law firm colleagues who remember his stint on the office softball team, said Stark-Bailey.
Wheeler used their shared interest in the game to lend a humorous, personal touch when he presided at her wedding in 2007, Stark-Bailey said.
“He was always criticizing how I handled the fielder’s choice,” she said.
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I think they've wrapped up testimony. There's a big pot of money here for the lawyers to siphon from. Count on this to drag on for months yet.
I thought the verdict was expected before Thanksgiving. Porgie, anyone have an update. AIG is well positioned for a surge depending on the ruling. All the pieces seem to be in place...
Me, either. It's impossible to predict. The prediction has been that any government loss in this case will surely get appealed, likely dragging this on for years of re-review. The decision should be out by Thanksgiving and more may be known about future impact then.
The lawsuit is hanging heavy over AIG's share price, that's a certainty.
The basis of the suit requires Starr to prove that the government acted criminally in violation of the US Constitution by seizing private property. But that claim is balanced by the fact that the AIG board voted to accept the bailout terms.
The government didn't "seize" anything, the government took an 80% ownership stake in the form of shares which obviously diluted shareholders. But those shares weren't "seized". They were held as collateral for a line of credit. Requiring collateral for a loan is a well established business practice.
The problem for AIG is that should Starr win his case against the government, there was an indemnification clause in the bail out terms that lets the government off the hook for any payouts that might be required due to litigation. So any payout Starr International might win would have to be covered by AIG's shareholders. But some legal experts say that proving the government guilty of criminality would cancel any such provision and it would be the taxpayers, not AIG, who would be on the hook.
Me, I don't have an answer.
The metrics and outlook are excellent except for the litigation and risk of invoking indemnity if Greenberg prevails. The old shareholders coup reap a bonanza, paid for in large part with the blood and guts of current shareholders. If the U.S. decides to imperil AIG by thrusting them into another financial abyss, the market cap could evaporate in a nanosecond. Hank didn't do you guys any favors, IMO.
I can definitely see $200 within 12 months..
All looks good. Don't know why share price got hammered at the open. On track for 5% earnings growth for 2014 compared to 17% in 2013 is probably the market's problem, and will be forgotten about by this afternoon.
I sold Nov. $55 and $55.50 calls last week to take advantage of pre-earnings implied volatility. At least that looks good this morning.
AIG REPORTS THIRD QUARTER 2014 NET INCOME OF $2.2 BILLION AND DILUTED EARNINGS PER SHARE OF $1.52
• Third quarter 2014 after-tax operating income increased 23 percent to $1.7 billion, or $1.21 per diluted share
• Third quarter 2014 insurance pre-tax operating income increased 14 percent to $2.6 billion
• Approximately $1.5 billion of shares repurchased during the third quarter of 2014 and $3.4 billion year-to-date
• Increase in share repurchase authorization of $1.5 billion on October 31, 2014
• $2.5 billion of dividends and loan repayments in the form of cash and fixed maturity securities to AIG Parent from insurance subsidiaries in the third quarter of 2014
Click for Link
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The trial is Starr International vs. the United States. The effect it has or will have on the current AIG is nil.
The trial being out there though does cause anxiety in the market and is probably holding share price down.
What will happen AIG price after trial? if who win? if who lost? please explain more
Thank you so much for your perspective on AIG! It is much appreciated and I will do more DD on the new CEO, as you suggested! Thanks lots!!
If you are going long, yes;then buy on the dips.
This stock tends to move with the market.
As there is a new CEO at the helm,I'd do a bit of due diligence on his credentials and where he plans on taking AIG in the future....
AIG,as you know,had to sell off divisions,etc, in order to return to the government,what was once given. (Quite a turnaround)
They won't return to that former glory because they are a "slimmer" company today.
I do however see room for growth and the brand name gaining further respect from the insurance industry,as time goes by.
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Is this a good AIG entry point and do you think we could go back to $1000-$2000 a share some day?? Thanks!!
AIG accuses investment firm, philanthropist of 'life settlements' fraud
BY JOSEPH AX Sept 5 Fri Sep 5, 2014 12:30pm
Click For reuters.com Link
(Reuters) - An American International Group Inc unit sued a company headed by Philadelphia philanthropist Alan Buerger, accusing it of a $150 million fraud involving life insurance policies sold by elderly individuals in exchange for a quick payment.
The lawsuit, filed on Friday in Manhattan federal court, said AIG's Lavastone Capital had paid Coventry First of Fort Washington, Pennsylvania, more than $1 billion since 2006 to help it acquire the policies, known as "life settlements."
Coventry is the "leader and creator" of the life settlement industry, according to its website. Investors who acquire a policy cover the premiums until the individual's death and then collect the payout.
Rather than identifying appropriate policies and selling them to Lavastone at the elderly individuals' asking price, the lawsuit claimed, Coventry used a network of shell companies to artificially inflate the prices to Lavastone.
"Thus, defendants' behavior is no different than an auction house that knows a bidder's maximum price ceiling and then uses 'shill bidders' associated with the auction house to fraudulently inflate the price to that bidder's maximum bid," the lawsuit said. It called Coventry and Chief Executive Officer Buerger "scam artists."
Buerger said he could not comment on the lawsuit because he had not yet read it.
Lavastone lost more than $150 million as a result of the arrangement, according to the lawsuit, which said that figure was "likely just the tip of the iceberg." Lavastone accused Coventry of engaging in racketeering, fraud, conspiracy, breach of contract and other violations.
The lawsuit also noted two previous civil fraud actions against Coventry brought by the New York Attorney General's office and Florida's insurance regulator, both of which were settled.
Besides Coventry, the lawsuit names a number of other business entities as well as Buerger and several family members.
Lavastone spent approximately $6.5 billion over a decade to acquire nearly 7,000 life settlements with a face value of $20 billion, according to the lawsuit. AIG has since wound down its life settlement business, the lawsuit said.
The Buergers are well-known philanthropists in Philadelphia. Last year they donated $50 million to the Children's Hospital of Philadelphia.
The case is Lavastone Capital LLC v. Coventry First LLC et al., U.S. District Court for the Southern District of New York, No. 14-7139.
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Governor Haslam, Commissioner Hagerty Announce AIG to Expand, Relocate in Nashville
September 03, 2014
Click For insurancejournal.com Link
NASHVILLE, Tenn., Sept. 2 -- Gov. Bill Haslam, R-Tenn., issued the following news release:
Tennessee Gov. Bill Haslam, Economic and Community Development Commissioner Bill Hagerty and AIG officials announced today the company will expand its Davidson County operations by developing headquarters for the marketing and distribution of financial products related to life insurance.
The expansion will add approximately 200 new jobs over the next three years.
"We want to thank AIG for its continued investment in Tennessee and the jobs they are creating in Davidson County," Haslam said. "We remain focused not only on recruiting new businesses to the state but also helping our existing industries continue to grow here. Today's announcement is another step toward our goal to make Tennessee the No. 1 location in the Southeast for high quality jobs."
"Tennessee has attracted some of the world's largest corporations to our state, and it's reassuring to know that our state's business-friendly environment and quality workforce can aid in their growth and success," Hagerty said. "AIG is a globally recognized, thriving company and with clients in more than 130 countries worldwide, I am pleased to see that AIG has chosen to expand its Tennessee operations."
In order to accommodate the expansion, AIG's life insurance organization plans to relocate operations in 2016 to a new facility that will be built at 340 Seven Springs Way in Nashville. The new jobs will include financial advisory roles as well as training and operations positions.
"At AIG's life insurance division, we offer a variety of best-in-class products and services to secure the livelihoods of everyday Americans, allowing them not only to retire with dignity and send their kids to college, but also helping protect them against bad things when they happen," said John B. Deremo, Executive Vice President and Chief Distribution Officer, Life Insurance, AIG Financial Distributors. "We are excited that our new location within a new office building will provide more space as well as more amenities for our current and future employees so that they can better serve our customers."
"AIG is an excellent and well-respected corporate citizen in Tennessee, and I am pleased they have chosen to expand their existing operations here," Speaker Beth Harwell said. "I congratulate the company on this latest success and thank them for the new, quality jobs created for our citizens."
Companies like AIG are choosing Nashville to consolidate their operations based on the strength of our workforce, the low cost of doing business here and the area's high quality of life," Mayor Dean said. "I thank AIG for expanding in Nashville, which further demonstrates the vibrancy of our city as an attractive place for quality jobs."
"It is a testament to our region's economic strength that AIG has chosen Nashville as the best place to grow their operations," Courtney Ross, chief economic development officer for the Nashville Area Chamber of Commerce, said. "The thriving economy of the Nashville region and our skilled workforce creates a perfect environment for AIG's continued success."
"TVA and NES congratulate AIG on its plans to expand operations and create more jobs in Nashville," TVA Senior Vice President of Economic Development John Bradley said. "We are proud to be partners with the State of Tennessee, the Nashville Area Chamber of Commerce, and the Metropolitan Government of Nashville and Davidson County to help Nashville area companies grow and offer new job opportunities."
AIG regularly explores real estate options to ensure that the organization is effectively utilizing locations and providing employees with modern, state-of-the art office space. AIG is committed to making the relocation as quickly and professionally as possible, while taking great care that the important day-to-day business is not disrupted and that service to AIG customers continues seamlessly.
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AIG Switch Like Changing Generals After War, Chairman Says
By Zachary Tracer September 02, 2014
Click For businessweek.com Link
The leadership transition at insurer American International Group Inc. (AIG:US) is like switching generals after winning a war, Chairman Steve Miller said today.
“We’re changing generals as we move from wartime to peacetime,” Miller, 72, said today in an interview with Bloomberg Television’s Betty Liu.
Peter Hancock, 56, yesterday replaced Robert Benmosche, who departed after five years as chief executive officer of New York-based AIG. Benmosche, 70, started at the insurer less than a year after the firm’s 2008 taxpayer bailout, which swelled to $182.3 billion. AIG finished repaying the rescue in 2012.
Miller said today that he learned from Benmosche “the power of great leadership, even in the most disastrous of circumstances.”
AIG in June announced Benmosche’s plans to depart. Around that time, the prognosis for the CEO’s cancer had worsened, hastening his decision to step down, Benmosche told Liu on Aug. 24. As CEO, Benmosche oversaw divestitures of foreign insurance units and AIG’s plane-leasing business, helping focus the firm on sales of property-casualty coverage globally and life and retirement products in the U.S.
In a memo today, Hancock said AIG is sticking with that strategy, while making some changes to how it evaluates employee performance. Hancock most recently led AIG’s property-casualty unit, where he emphasized profitability over growth, scaling back from some less-lucrative coverage such as workers’ compensation. He’s pushing to expand in consumer lines such as car insurance and travel and health policies.
‘Modest Changes’
Among AIG’s priorities are a “focus on customers, sustainable growth and profitability,” and making the company more efficient, Hancock wrote in the memo. “We are staying the course with the direction and strategy we have pursued for the past several years.”
Hancock joined AIG in 2010 as a top aide to Benmosche after a stint at Cleveland-based KeyCorp. Earlier in his career, Hancock spent two decades at J.P. Morgan & Co., rising to chief financial officer. At the lender, he played a key role in the creation of credit derivatives and developed a reputation as a student of risk. He left the bank in 2000, shortly before it was acquired by Chase Manhattan Corp.
Hancock said in the memo that he plans to make “modest changes” to AIG’s performance-ratings process to make it more flexible. He said he’s working to do a better job of incorporating team results into performance reviews.
“Like many large companies, we suffer from a culture where operating within a silo is the norm,” Hancock wrote. “We need to do more to reward high-performing teams and team dynamics.”
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But my timing wasn't the best. No worries though, as the stock doubled for me there and I got to sell a lot of call premium before my shares were called away.
AIG is a completely different company now than the financial services giant Greenberg built it into. There is no doubt that his ongoing legal challenges are a weight to AIG's share price. But I don't think Greenberg's suits are going to matter much once the dust has settled.
AIG's New CEO Looks to Data to Chart Insurer's Course
Peter Hancock, Taking Helm From Robert Benmosche, Seeks to Use Trove of Information in Quest to Boost Profits
By LESLIE SCISM Aug. 29, 2014 12:07 p.m. ET
Click For wsj.com Link
Peter Hancock in his Manhattan office. The new CEO of AIG aims "to manage down the cost of risk," by investing in computers and people to dive deeper into data. Keith Bedford for The Wall Street Journal
For clues about what direction Peter Hancock is taking American International Group Inc., AIG +0.59% check out his tennis racket.
"It's the coolest thing," said Mr. Hancock, the insurer's incoming CEO, of the $350 racket. "It tells you exactly how many forehands, backhands you hit, where on the strings you hit the ball, how many were top spins…" He called it "just one tiny example of the kinds of things [technology] can measure now."
Mr. Hancock, an active sportsman whose first day at the helm is Sept. 1, is betting that data crunching can improve more than just his serve: The 56-year-old is pushing AIG to wring greater efficiency—and profits—out of the vast reams of information it keeps about its customers, among other sources.
If the strategy works as he expects, the results will include new products, better identification of fraud and potentially lower premiums for certain customers.
"If we can do that, we become not the biggest insurance company, but the most valued in the eyes of those customers," he said.
The emphasis on analytics is one of the clearest signs of how Mr. Hancock hopes to address the main challenge now facing AIG: boosting profits.
Mr. Hancock is taking over from Robert Benmosche, the chief executive since 2009, who initially focused on morale and keeping AIG afloat after its financial-crisis bailout. Through a series of divestitures, Mr. Benmosche slimmed down AIG considerably; in 2012, the company repaid the last of the bailout money. AIG announced Mr. Hancock's promotion in June. Mr. Benmosche, 70, had indicated he would stay into early next year, but he advanced his retirement to allow the new CEO to move ahead with decisions and as he continues to be treated for a 2010 cancer diagnosis.
AIG is now built primarily around two large, valuable franchises: a world-wide property-casualty insurance business, which Mr. Hancock has run since 2011, and a U.S. life-insurance and retirement-services unit. Analysts say a key challenge for Mr. Hancock is to catch up to many of AIG's peers in profitability metrics such as return on equity.
Mr. Hancock wants AIG to use its expertise "to manage down the cost of risk" by investing heavily in computers and people to dive deeper into data, he said in an interview in his 30th-floor downtown Manhattan office, which features an ergonomic stand-up workstation.
Mr. Hancock said he was recruiting a chief information officer, who will report directly to him "to raise the profile of technology" at the company. Already, Mr. Hancock has a "chief science officer," a position he added in 2012 to the property-casualty unit as part of his effort to focus on science-driven decisions about strategy. The science team numbers about 130, many of them Ph.D.s.
Retiring CEO Robert Benmosche was focused on morale and keeping AIG afloat after its massive financial-crisis bailout. Associated Press
As an example of how the concepts he champions can work in practice, Mr. Hancock points to recent analysis by AIG, in conjunction with Johns Hopkins University, of about 23 million of its workers' compensation claims. The effort identified addiction and other problems stemming from overuse of opiates.
"It is a terrible cost to the industry, a terrible cost to employers, and it's a terrible cost to society," Mr. Hancock said. AIG now has teams of doctors and nurses who reach out to injured workers and their primary-care physicians early in treatment to suggest nonaddictive pain solutions, he said.
Mr. Hancock also has been tweaking the business mix, including reducing sales of certain types of workers' compensation accounts, such as those the company doesn't see as profitable enough. AIG is also boosting sales of property insurance and aiming to expand in many emerging markets.
But significant improvement in AIG's return on equity—a measure of profit relative to shareholders' investment in a company—may be a ways off. That figure stands in the single digits, in part because AIG sends a larger percentage than do many rivals of each dollar earned in premiums back out the door to pay claims and other expenses.
Some analysts have raised concerns about a deceleration of price increases for property-casualty insurers industrywide and whether a tougher pricing environment is slowing AIG's turnaround. In the company's second-quarter earnings call, Mr. Hancock said the company was "clearly experiencing some headwinds in the pricing" of certain business lines.
Mr. Hancock's data push also adds to costs at a time when the company is shaving expenses.
"His approach to the business is still a work in progress," said Janney Capital Markets analyst Larry Greenberg. For now, Mr. Greenberg believes shareholders care more about share buybacks—which AIG has under way as well—as a way to boost the stock price than they do about data analysis.
"Our businesses continue to demonstrate our discipline and resilience, underscoring our focus on improving the results of our core insurance businesses," an AIG spokesman said.
Other analysts are more bullish. Josh Stirling of Bernstein Research applauds the decision "to aggressively embrace data and analytics," and especially likes what he calls AIG's "hiring binge" of scientists and other talent.
Mr. Hancock arrived at AIG in 2010 with extensive risk-management experience. In the 1990s, he worked at J.P. Morgan, now part of J.P. Morgan Chase & Co., where he helped develop the market for products such as credit-default swaps. In those early years, banks and their corporate clients typically used the swaps to mitigate risk on debt exposure.
AIG went to the brink of collapse in 2008 after a now-defunct financial-products unit used credit-default swaps to essentially bet on the subprime-mortgage market. Mr. Hancock chafes at the suggestion he indirectly contributed to AIG's difficulties.
"That was certainly not something I anticipated the tool to be used for," said Mr. Hancock, who was hired to beef up the insurer's risk management and to help unwind the bad bets.
Mr. Hancock said he looked forward to the challenge of running AIG. A novice in the extreme sport of kitesurfing, he grew up in Hong Kong, where his father worked at a Canadian insurer and was involved in competitive sailing.
The family had sessions in which they ran through scenarios for what could go wrong in a race, and who would do what if it did.
"My dad taught me an important lesson," Mr. Hancock said. "If you rehearse every maneuver ahead of time, people don't panic when things get really intense."
TRUTH
Hey, porgie. Did not know you were over here. I like AIG if the litigation gets settled, but I do not like the Starr suits or Maurice's belated legal gambit.
Sold my WAG @ $71.30 for a huge gain. Your call on growing debt and headwinds proved to be sound. G L. Enjoy the holiday weekend.
B-Y
Benmosche Sped Up AIG Exit Amid Year-to-Live Prognosis
By Zachary Tracer Aug 28, 2014 8:00 AM ET
Click For bloomberg.com Link
Robert Benmosche, who is stepping down this weekend after five years as American International Group Inc.’s chief executive officer, said he learned in May that he had nine months to a year to live.
Benmosche, 70, said in an interview that he moved up his exit, which had been slated for early 2015, as his health deteriorated. The CEO, who was diagnosed with cancer in 2010, said he wants to enjoy the time he has left after outliving earlier prognoses and repaying the insurer’s $182.3 billion U.S. bailout.
“I said, ‘You know what, I’m not going to play the odds,’” Benmosche said in an exclusive interview with Bloomberg Television’s Betty Liu at his villa in Croatia. “So let’s accelerate my retirement. And the board was happy to do that.”
Benmosche is turning over the CEO post to Peter Hancock, who leads the property-casualty unit and previously spent two decades at J.P. Morgan & Co. before the bank merged with Chase Manhattan Corp. AIG announced in June that Hancock would become CEO on Sept. 1.
Benmosche has undergone aggressive and experimental treatments since 2010, when he was first told that he had no more than a year to live, he said in the interview. One pill that was supposed to help fight the disease for a single year proved effective for three before it stopped working, forcing another shift in his treatment, Benmosche said.
Robert Benmosche, president and chief executive officer of American International Group Inc.
“They say I’m stable, which is a big word, because it wasn’t stable for the last six months, and I went through a massive study on a new technology for about three to four months that did zero,” Benmosche said. “I’ll know in another month or two whether we’re making good progress.”
‘Terrible Diagnosis’
Benmosche told staff in 2010 that he had been planning even before the diagnosis to step down in 2012. He later extended that timeline, and the company said in its annual report filed with regulators in February that he intended to remain CEO until the first quarter of next year.
The CEO said he had to remain focused at the time of his diagnosis on the divestiture of Hong Kong-based life insurer AIA Group Ltd. AIG exited the business through four public offerings that raised about $35 billion.
“Some people say you fall apart when they tell you you’re going to die,” Benmosche said. “It’s a terrible diagnosis, but one thing I’ve learned in this business is that everybody dies.”
Benmosche took over at AIG less than a year after the company’s bailout. The insurer’s fifth CEO since 2005, he sold assets and cut jobs as he narrowed the company’s focus to global property-casualty coverage and U.S. life insurance and retirement products. The stock closed yesterday at $56.16, compared with $11.39 when his hiring was announced.
Mother’s Advice
Benmosche said that he felt like he’d completed his goals for the insurer by the time the transition had been announced. A month earlier, AIG sold its plane-leasing unit for $7.6 billion in what the insurers called its last major divestiture. Benmosche said the timing was also driven by advice from his late mother.
“My mother told me, ‘Don’t wait too long,’ and I’m glad I didn’t wait too long,” Benmosche told Liu. “She said, ‘Live your life when you’re healthy enough to live it.’”
To contact the reporter on this story: Zachary Tracer in New York at ztracer1@bloomberg.net
To contact the editors responsible for this story: Dan Kraut at dkraut2@bloomberg.net Dan Reichl
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UPDATE 1-U.S. loses bid to dismiss ex-AIG CEO's $25 bln lawsuit over bailout
Tue Aug 26, 2014 6:27pm EDT
Click For reuters.com Link
(Adds comments from Starr lawyer, Justice Department)
By Jonathan Stempel
Aug 26 (Reuters) - A federal judge has rejected the United States' bid to dismiss a more than $25 billion lawsuit filed by Maurice "Hank" Greenberg, the former chief executive of American International Group Inc, over the insurer's government bailout, clearing the way for a Sept. 29 trial.
Judge Thomas Wheeler of the U.S. Court of Federal Claims said the case brought by Greenberg's Starr International Co on behalf of itself and other AIG shareholders involves "complex financial and economic issues" that deserve analysis and testimony from qualified expert witnesses.
"The complexity of the submissions and the factual disagreements strongly point to the need for a trial," Wheeler wrote in an order dated Monday.
A trial is expected to last six weeks.
A U.S. Department of Justice spokeswoman declined to comment.
"The decision speaks for itself," David Boies, a lawyer for Starr and Greenberg, said in a statement.
Starr had been AIG's largest shareholder, with a 12 percent stake, before the government rescued the New York-based insurer on Sept. 16, 2008, from skyrocketing losses.
The government took an initial 79.9 percent stake in AIG and conducted a reverse stock split, diluting existing shareholders.
Starr sued in 2011, contending that the $182.3 billion bailout was an illegal taking that violated its due process rights under the Fifth Amendment of the U.S. Constitution.
Greenberg's company had separately sued the Federal Reserve Bank of New York over its role, accusing it of engineering a "backdoor" bailout for Wall Street banks exposed to AIG.
But the 2nd U.S. Circuit Court of Appeals in January said the New York Fed had authority to act in "unusual and exigent circumstances," including "to rescue AIG from bankruptcy at the height of the direst financial crisis in modern times."
AIG finished repaying the bailout in December 2012, leaving taxpayers with a nearly $23 billion profit.
Greenberg, 89, led AIG for nearly four decades before his 2005 ouster.
The Court of Federal Claims sits in Washington, D.C., and handles lawsuits seeking money from the government.
The case is Starr International Co v. U.S., U.S. Court of Federal Claims, No. 11-00779. (Reporting by Jonathan Stempel in New York; Additional reporting by Aruna Viswanatha in Washington, D.C.; Editing by Leslie Adler)
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American International Group Receives Consensus Rating of “Hold” from Brokerages (NYSE:AIG)
Posted by Hasmir Abdula on Aug 26th, 2014
Click For mideasttime.com Link
Shares of American International Group (NYSE:AIG) have earned a consensus rating of “Hold” from the sixteen analysts that are currently covering the stock, Stock Ratings News reports. Nine research analysts have rated the stock with a hold recommendation, five have issued a buy recommendation and one has issued a strong buy recommendation on the company. The average 1-year target price among brokerages that have updated their coverage on the stock in the last year is $57.36.
American International Group (NYSE:AIG) opened at 55.89 on Friday. American International Group has a one year low of $45.94 and a one year high of $56.09. The stock’s 50-day moving average is $54.12 and its 200-day moving average is $52.45. The company has a market cap of $79.748 billion and a price-to-earnings ratio of 9.23.
American International Group (NYSE:AIG) last released its earnings data on Monday, August 4th.
The company reported $1.25 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.05 by $0.20. The company had revenue of $8.53 billion for the quarter, compared to the consensus estimate of $8.13 billion. During the same quarter in the previous year, the company posted $1.12 earnings per share. The company’s revenue for the quarter was up 2.2% on a year-over-year basis. On average, analysts predict that American International Group will post $4.62 earnings per share for the current fiscal year.
The company also recently announced a quarterly dividend, which is scheduled for Thursday,
September 25th. Investors of record on Thursday, September 11th will be paid a dividend of $0.125 per share. This represents a $0.50 annualized dividend and a dividend yield of 0.89%. The ex-dividend date is Tuesday, September 9th.
Several analysts have recently commented on the stock. Analysts at Deutsche Bank reiterated a “hold” rating on shares of American International Group in a research note on Wednesday, August 6th. They now have a $59.00 price target on the stock, up previously from $58.00. Separately, analysts at RBC Capital raised their price target on shares of American International Group from $64.00 to $65.00 in a research note on Wednesday, August 6th. They now have an “outperform” rating on the stock. Finally, analysts at Nomura reiterated a “neutral” rating on shares of American International Group in a research note on Tuesday, August 5th. They now have a $55.00 price target on the stock, up previously from $53.00.
TRUTH
AIG Lobbyists Are Staging Their Comeback
DOUWE MIEDEMA, REUTERS
AUG. 16, 2014, 6:52 AM
Click For businessinsider.com Article
A banner for American International Group Inc hangs on the facade of the New York Stock Exchange
Thomson Reuters
WASHINGTON (Reuters) - Insurer American International Group <aig.n> is ramping up its lobbying team in Washington, almost six years after it halted such efforts following its rescue by the U.S. government during the financial crisis.
Many large companies deploy a handful of staff to provide access to Capitol Hill and the White House, but AIG has employed no officially registered lobbyists since 2009. Some of its government relations positions in Washington, which companies typically use to influence policymaking by regulators and other government officials, have been left vacant.
Yet in May of this year, Lauren Scott started working as AIG's director for international regulatory and government affairs in Washington, according to her LinkedIn profile. She was previously a director of international and insurance regulation at the American Council of Life Insurers, a trade group.
That follows the arrival in February of Mary Frances Monroe - a former Federal Reserve supervisor who worked for a Washington consultancy firm - as AIG's head of international regulatory in February, also according to LinkedIn.
Scott and Monroe did not respond to requests for comment. AIG declined to comment.
The lobbying build-up comes at a critical time for the insurer, which has been subject to new supervision by the Federal Reserve after it was designated as a "systemically important" firm by a top U.S. regulatory panel.
It is not clear whether the two will officially register as lobbyists, something that anyone spending more than 20 percent of their working hours on influencing senior U.S. policymakers needs to do. It is also unclear how much of their work is domestic, and how much focused on international lobbying.
Monroe worked as a registered lobbyist in a previous position, but Scott did not, according to official records.
The company said in October 2008 it would stop lobbying. It had faced public criticism when it continued to spend heavily to influence lawmakers despite receiving a $182 billion bailout that gave the government a majority stake, and because it continued to pay staff big bonuses.
The company, which says it has customers in more than 130 countries and jurisdictions, almost collapsed when a little-known London unit, AIG Financial Products, racked up colossal losses through complex derivative transactions it had engaged in.
But it is now slowly returning to normal, and has repaid the bailout funds to the government.
AIG's shares still linger at a fraction of where they were before the crisis, but it has resolved litigation and streamlined the business, and the company's second-quarter profit beat expectations earlier this month.
The Financial Stability Oversight Council, which brings together all the key U.S. financial regulators and is chaired by Treasury Secretary Jack Lew, has designated AIG and one other insurer, Prudential <pru.n>, as systemically important, and is considering doing the same with MetLife Inc <met.n>.
While AIG did not fight its designation, the insurance industry is trying to convince Congress to ease a provision in the 2010 Dodd-Frank financial reform law that applies strict bank capital standards to "systemically important" insurers. They argue the bank-specific approach is a bad fit for insurers' distinct business model.
RAMPING UP
AIG spent $11 million on lobbying Congress in both 2007 and 2008 - putting it among top spenders of that period, along with other major companies such as General Electric <ge.n> and Exxon Mobil <xom.n> - but it quickly pulled back after that, and it did not spend at all in either 2010 or 2011, official records show.
In 2012, it started spending again -- paying $120,000 for the services of law firm Patton Boggs when AIG was selling a majority stake in one of its units.
In 2013, it spent $140,000, and so far this year $80,000 with the same firm, now called Squire Patton Boggs, or with Ernst & Young, according to the Senate lobbying database.
Its Political Action Committee, or PAC - a fund to donate to election campaigns - donated $337,358 in 2008, with politicians on both sides of the aisle benefiting, but the organization has been dormant after 2010.
However, AIG in a recent job advertisement was looking to hire someone to perform "day-to-day AIG PAC activities", to coordinate with fundraising committees for candidates, and to "assist with planning AIG PAC events" - a sign that it may be planning to make political donations again.
(Reporting by Douwe Miedema, additional reporting by Sarah Lynch; Editing by Karey Van Hall and Martin Howell)
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