On January 26, AIG’s Board of Directors and management announced a series of strategic actions, organizational changes, and operating improvements to create a leaner, more profitable and focused insurer.
Highlights of the plan include the return of at least $25 billion of capital to shareholders over the next two years, the IPO of up to 19.9% of United Guaranty Corporation in mid-2016 as a first step towards a full separation, and the sale of AIG Advisor Group to Lightyear Capital LLC and PSP Investments.
The Board approved a number of organizational changes, including the creation of nine “modular” business units, each with its own specific financial metrics, and a new “legacy” portfolio to hold non-strategic assets.
In operational actions, AIG also announced targeted expense reductions of $1.6 billion within two years, a target of improving the Commercial P&C accident year loss ratio by six percentage points, and a consolidated ROE target of ~9% by 2017, reflecting 10.3% to 10.7% in the operating portfolio.
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AIG continues to take steps to narrow its focus, improve its financial performance, and return capital to shareholders. Check here for relevant news stories.
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