What Is on Peter Hancock’s To-Do List at AIG?

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June 11 (Bloomberg) -- Josh Stirling, analyst at Sanford Bernstein, discuses AIG promoting Peter Hancock to Chief Executive Officer, replacing Robert Benmosche and looks at what is expected of his leadership of the company. He speaks on Bloomberg Television’s “Bloomberg Surveillance.”

Shareholders wanting peter hancock to stay the course that was set or does he need to put his own stamp on the company?

Good morning, absolutely, i think people look at this as a constructive sign.

This is an important milestone for the company.

Bomb ben moshe accomplished a lot, the right man at the right moment and was able to reset the town in 2009 when it was the most hated company in america and pushed back on congress and the treasury and reset the conversation around getting as much value as they needed to repay by fundamentally managing a fire sale but also by fixing the company.

They recognized eventually that they had to create value in order to repay the u.s. treasury.

Under that vision, rather than dissolving the firm, one of the biggest moves he made was to hire peter hancock.

He is an unusual candidate to run a global insurance company.

He is a risk management executive and built the business at jpmorgan and was the cfo later but worked with the fed and helping -- helping them fix itself during the financial crisis and when he was brought in to help with derivatives at aig at the fed's suggestion, bowed ben moshe realize this was a senior executive who can help them execute his vision for renewing the firm.

Bob benmosche i sparred with the government over different limitations, fanning public backlash.

Hancock is more conciliatory and has embraced regulatory supervision so what kind of concrete effect is that have on how aig is run in the coming years?

The world is currently involved in what the company needs.

The fed is very much constructive -- is involved in constructive engagement.

This is a company that is well-positioned to work with the fed but ultimately, you have to be careful about how you manage that relationship.

They did a20 to 1 reverse split.

You nailed that in your report.

Is aig too big to ignore?

They are the biggest insurance company in the world.

What will be either hank cox first to do?

The most important thing for the next couple of years -- imagine if he is successful, he will have a long-term run.

The first couple of years clearly are all about driving margins in the business.

This is a company that runs at half the level of profitability and it trades at half the multiple.

We see a big opportunity.

They will get to something like 12 or 13% roe.

What they are doing and the reason we look at this as a strategic decision by the board is they have looked to create a renaissance or renewal at aig.

They are focusing on margins over volume.

Its value over volume which is driving profitability as opposed to growing topline growth.

Also catching up on deck is long overdue simplification, bringing order from chaos at this company , streamlining its systems and consolidating businesses come a lot of logical low hanging fruit.

Finally, the thing that perhaps -- i give peter credit compared to anything else -- he has made a big investment to reshape the firm and focus it on what they call science.

I would call it data analytics.

Guys who win big and insurance over the past 20 years or so have always been driven by being smarter than their peers.

This is a company that did not have a lot of that.

Thanks so much.

We've got breaking news?

This is the headline the just crossed -- siemens of germany's is in talks with mitsubishi of japan.

Ge had made this vid for alsom and now siemens is in discussion.

The timing is perfect.

We have jason trennert with us.

I will say six years ago in i would dobby -- abu dhabi and you talk about transnational corporations and here we are with mitsubishi teaming with a german company to buy a french icon.

We will see how the employees feel about a german -- japanese approach to buying the company.

This text has been automatically generated. It may not be 100% accurate.


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