By: Luke Jones, Published on August 7, 2018 08:31 AM, Last Update on August 7, 2018 05:32 AM
Over the last decade, AIG has gone from being the leader in the insurance industry to almost collapsing under the 2008 financial crisis, followed by the US government bailing out the company and setting a path to mediocrity and confusion. While AIG is a shadow of its former self, chief executive officer Brian Duperreault says the company can reach a recovery.
Since that controversial bailout a decade ago, AIG has struggled to grow, let alone reach the heady heights of its glory days. Once valued at US$240 billion, AIG was among the biggest companies in the world. These days, the firm is a giant in reputation alone and is valued around a fifth of those halcyon days.
Reorganizations, corporate reshuffles, company splits, and investor unrest have all failed to breath new life into an ailing giant. Still, Duperreault remains confident a turnaround is on the horizon.
“We continue to work with a sense of urgency as we take actions designed to establish a culture of underwriting excellence and to leverage the strength and flexibility of our diversified businesses…,” said Duperreault during AIG’s most recent earnings call.
During that call, the company delivered its second quarter financial results and offered a general outlook for the remainder of the year. During the second quarter of 2018, AIG reported net income of US$937 million, a year-on-year fall from US$1.1 billion from Q2 2017. After-tax income also fell from 2017’s US$1.4 billion to US$961 million in this year’s second quarter.
“Looking ahead to 2019 and beyond, our goal is to deliver top quartile financial performance relative to the industry,” noted the CEO. He also says he expects an underwriting profit at the end of 2018.
Concurring, general insurance CEO Peter Zaffino said: “As Brian shared, we continue to focus on achieving underwriting profitability on an exit run rate basis by the end of 2018. Our top priority is to improve the core performance of general insurance through risk selection, altering our mix of business, managing gross and net limits to reduce volatility, and continuing to add high quality underwriters to our team.”
“I remain confident in our team’s ability to deliver improved operating and financial performance as we continue to execute against our strategic priorities and importantly, reinforce AIG’s position as a leading global insurer, a responsible corporate citizen, and a rewarding place for our talented and committed colleagues,” added Duperreault.