AIG Below Book Value Means Work to Be Done, Miller Says
AIG is seeking to reward investors who helped recapitalize the company after losses in the financial crisis forced the New York-based insurer to take a bailout in 2008 that swelled to $182.3 billion. The insurer trades for 72 percent of its net worth, while investors pay about 1.2 times book value to own shares of rival Travelers Cos.
“While we have made remarkable progress over the last few years, there is still work to be done,” Miller, 72, said in the insurer’s annual report posted online yesterday. “One of our goals is to make AIG an investment worth keeping, and to grow value for all of our stakeholders.”
Chief Executive Officer Robert Benmosche, 69, has been working to simplify AIG and improve results after divesting units and repaying the U.S. in late 2012. The insurer boosted its quarterly dividend by 25 percent to 12.5 cents a share and authorized a $1 billion share buyback in February. Benmosche has also announced job cuts and said he’s shifting some workers to lower-cost locations.
“We continue to look at ways to simplify our organization so that there are as few layers as possible between us and our customers,” Benmosche said in the annual report. “We’ve invested a tremendous amount of time and effort into changing the company for the better over the past few years.”
AIG was designated a systemically important financial firm by U.S. and international regulators last year. Miller said that preparing for increased scrutiny is among the board’s priorities.
“We have two main objectives: ensuring global consistency of rules and requirements, and creating a framework that is appropriate for the insurance industry and that will help foster growth,” he wrote.
To contact the editors responsible for this story: Dan Kraut at email@example.com Peter Eichenbaum