AIG CEO Brian Duperreault said the company accumulated $750 million to $800 million in catastrophe losses in the fourth quarter, but its general insurance unit is on track to enter 2019 “at a slight underwriting profit.” The catastrophe losses do not include December.
Duperreault said the company expects an overall adjusted return on equity of 8% going into 2019. He said wildfires in California would add between $150 million and $175 million to AIG’s net pretax losses for the fourth quarter.
“But let me be clear. We are not satisfied with 8%,” he said at the Goldman Sachs U.S. Financial Services Conference in New York. Duperreault also said the company intends to reach a double-digit adjusted return on equity, but the process could take up to three years.
“The problems that AIG had when I arrived were the result of over a decade of firefighting but we are moving beyond that era,” Duperreault said.
The company also named its chief actuary Mark Lyons as CFO, replacing Sid Sankaran. Lyons will join the executive leadership team and report to Duperreault. He was the CFO, treasurer, and executive vice president at Archer Capital Group from 2012 to 2018, when he joined AIG.
“Since his arrival at AIG, Mark has made an immediate and positive impact on our company,” Duperreault said. “With his proven track record as a public company CFO and his deep actuarial expertise, we are confident that he will further strengthen our financial processes and forecasting capabilities, as well as build on the progress we have made to restore AIG’s position as a growing, profitable leader in the insurance industry.”
In a statement, the company said Sankaran would remain at AIG as an adviser through the year-end reporting process. He would also remain chief actuary of general insurance until a successor was named.
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