American International Group, Inc. (AIG) today announced a reorganization of Chartis, its global property/casualty business, and named a new management team, including a new chief executive officer, Peter D. Hancock, currently AIG executive vice president for Finance, Risk and Investments.
As CEO of Chartis, Hancock succeeds Kristian P. Moor, who has been named vice chairman of Chartis, reporting to Hancock. Moor has been CEO of Chartis since 2009, when AIG gave the property/casualty division its own brand name and set it up to operate independently.
Under the new structure, Chartis will now consist of two major global groups — commercial and consumer – with the supporting claims, actuarial and underwriting disciplines integrated into these two major business operations. John Q. Doyle, previously chief executive officer of Chartis U.S., will run the global commercial business, and Jeffrey L. Hayman, currently Chartis’ chief administrative officer, will lead the global consumer business. Doyle and Hayman will be responsible for their groups’ overall underwriting and business results and will report to CEO Hancock.
“Our top priorities for our property casualty businesses are to strengthen all aspects of our underwriting, claims management, reserving, and risk management so that we consistently earn the right risk-adjusted returns,” said Robert H. Benmosche, president and CEO of AIG. “We believe this model – which aligns accountability for the business we write today with the long-term performance of that business – will drive the creation of even better products and services for our clients while delivering the performance that our clients and the investment community expect of us.
Benmosche thanked Moor “for all that he has done for AIG” and said Moor will work with Hancock on business development strategies and client matters. Moor has been with AIG for more than 30 years, and “his contributions to the organization through some very difficult years have been extraordinary,” Benmoshe said. “We expect that he will continue to play an important role in our organization going forward.”
Hancock said Chartis is a leader in the property casualty business and he is “confident that the new structure will fuel this organization’s entrepreneurial and inventive power on a global scale” for the insurers’ clients and distribution partners, “while meeting the demands of a new era in business and risk.”
“The world has become smaller, and so many of our clients have global needs. Under this structure, I truly believe we are powerfully positioned to provide a more consistent experience to our clients, improve our execution of multinational programs, and act as a more sustainable business partner for our customers,” Hancock said.
As part of the management realignment, Nicholas C. Walsh, previously president and CEO of Chartis International, will lead global distribution, reporting to Hancock. The global distribution organization will support the commercial and consumer groups by focusing on clients’ needs and working with underwriting and claims to deliver global and local insurance solutions to them.
Chartis will include four principal regions: U.S./Canada, led by Peter J. Eastwood, currently President of Lexington Insurance Co.; Europe, led by Alexander R. Baugh; Far East, led by Jose A. Hernandez; and Growth Economies, led by Julio A. Portalatin. These regional heads will report directly to Hancock, and they will focus on executing commercial, consumer, and distribution strategies within their respective territories, as well as managing day-to-day operations, including regulatory, financial, and general business issues.
Over the last 14 months, Hancock has played a pivotal role at AIG, according to the company, as a principal designer of AIG’s recapitalization plan, which led to the company repaying its outstanding obligations to the Federal Reserve Bank of New York and positioning itself to exit government ownership in its entirety. He oversaw the reorganization of the company’s Enterprise Risk Management function, as well as the completion of the de-risking of the AIGFP portfolios and the integration of the legacy AIGFP portfolios into AIG Investments.
Hancock’s current direct reports – David Herzog, CFO; William Dooley, head of Investments; and Sid Sankaran, head of Enterprise Risk Management – will now report to AIG CEO Benmosche. Paulette Mullings Bradnock, head of Internal Audit, will report to Michael Cowan, AIG chief administrative officer. She also has a direct reporting line to Christopher Lynch, chairman of the Audit Committee of the AIG board of directors. Eric Martinez, CEO of UGC, will continue to report to Hancock.
Chartis had $31.6 billion in net premiums written in 2010. It reported a fourth quarter operating loss of $4.0 billion, due to the reserve additions of $4.2 billion, compared to a loss of $1.8 billion in the fourth quarter of 2009. Excluding reserve strengthening, fourth quarter 2010 operating income for Chartis was relatively flat year over year.
The new management line-up at Chartis:
Peter Hancock, CEO, Chartis. Prior to joining AIG in February 2010, Hancock served as vice chairman for KeyCorp. Before that, he served for 20 years at J.P. Morgan, where he ran the Global Fixed Income Business and Global Credit Portfolio, and also served as the firm’s chief financial officer and chairman of its Risk Management Committee. Hancock also co-founded Integrated Finance Limited, an advisory firm specializing in strategic risk management, asset management, and innovative pension solutions.
Kristian P. Moor, who is now vice chairman for Chartis, was previously president and CEO of Chartis. Moor joined AIG’s National Union in 1981. He has previously served as president and chief executive officer of AIG Property Casualty Group, with responsibility for all of AIG’s commercial and personal lines property and casualty businesses in the U.S. and Canada.
John Q. Doyle, CEO of Global Commercial Business, Chartis. Doyle was previously president and CEO of Chartis U.S., responsible for Chartis’ U.S. and Canadian commercial property casualty business and its Private Client Group. Over the course of Doyle’s 25-year career, he has held senior executive positions in management and professional liability, excess casualty, workers’ compensation, and field management within the U.S. commercial property casualty companies of AIG.
Jeffrey Hayman, CEO of Global Consumer Business, was appointed senior vice president and chief administrative officer of Chartis in 2009. In that role, he was responsible for Chartis’ global communications, O&S, administration, marketing and program management. Hayman has also served as president of Chartis International’s Consumer Lines Division, as well as serving in a number of other roles in the Far East over his nearly 12 years in Tokyo.
Nicholas Walsh, vice chairman, chief distribution officer, Chartis. Walsh was previously president and CEO of Chartis International. Walsh has 37 years of experience working in the international businesses of AIG, and has also served as president and CEO of American International Underwriters (AIU).
Peter Eastwood, president and CEO, Chartis U.S., will take on this role in addition to his current responsibilities as president of Lexington Insurance Co. Eastwood has more than 20 years of experience at AIG and also held the positions of senior executive of Lexington’s Healthcare Division and president of Risk Specialists Companies, Inc.
Alexander R. Baugh, president and CEO, Chartis Europe Holdings Limited. Baugh will continue in his role as president and CEO of Chartis Europe Holdings Limited. Baugh has nearly 30 years of experience at AIG, holding senior positions in New York, London, and Paris.
Jose A. Hernandez, president and CEO, Far East Holdings K.K.. Hernandez will continue in that role Hernandez has more than 17 years of experience at AIG in international senior leadership roles.
Julio A. Portalatin will continue in his role as president and CEO of Growth Economies (formerly Emerging Markets), now expanded to include the Asia Pacific region. Portalatin has nearly 30 years of experience in the insurance industry and nearly 20 years in senior leadership roles at AIG.