While the
spotlight of the insurance sector has fallen firmly on AIG since it revealed its quarterly results, one man has remained extremely positive about the company’s prospects.
That man is chief executive officer Peter Hancock who, despite the company’s biggest stock drop since 2011, has claimed that the worst is now behind the firm especially on the back of its deal that will limit its risk on poorly performing policies going forward.
At a conference hosted by Bank of America Corporation yesterday, Hancock claimed that “our mix of business is better positioned today than a year ago by quite a margin.”
“We’re really reshaping the portfolio to a more sustainable mix around the clients that value what we do most,” he claimed. “This is a very important moment in the company’s history in terms of putting the past behind us.”
Hancock is confident after an agreement was reached last month to
pay an affiliate of Warren Buffett’s Berkshire Hathaway close to $10 billion to assume risks relating to further losses on a portfolio of commercial contracts. According to a
Bloomberg report, AIG has been particularly stung in recent years by higher than expected claims costs, specifically relating to commercial vehicle coverage and workers’ compensation, prompting the $3.04 billion loss for the fourth quarter.
Yet the CEO believes “2016 was a year with a lot of change and a lot of accomplishments,” and noted “I’m very happy with the total progress of the year.”
In addition, Hancock noted that he expected to renew a reinsurance deal with
Swiss Re AG on “favorable terms.”
His words helped the company rebound 1.6% on Thursday on the back of a 9% slide on Wednesday.
Related stories:
What’s behind the AIG slump?
AM Best puts AIG’s ratings under review with negative implications
