Major Shakeup at Chartis

The work goes on in the effort to strengthen Chartis, American International Group Inc.’s (AIG) global property/casualty business. AIG announced a reorganization that consists of naming a new management team that includes a new CEO, and splits its business into two global groups—commercial and consumer.

Peter Hancock, currently AIG EVP, Finance, Risk and Investments, succeeds Kristian Moor as Chartis CEO. Prior to joining AIG in February 2010, Hancock held positions at KeyCorp and J.P. Morgan, where he ran the Global Fixed Income Business and Global Credit Portfolio, and served as the firm’s CFO and Chairman of its Risk Management Committee.

Moor made headlines last week, when it was announced that he wouldn’t receive his full bonus because of “underachievement of certain financial metrics.” He failed to meet the metrics set for him by the company, including maintaining grades from the four ratings companies. However, Moor did meet the strategic and operational metrics set for him, AIG said. In this reorganization Moor has been named vice chairman of Chartis, reporting to Hancock.

“I would like to thank Kris Moor personally for all that he has done for AIG,” AIG President and CEO Robert Benmosche said. “Kris will work closely with Peter on business development strategies and client matters, and play a key role in the successful implementation of the new structure. Kris has served AIG for more than 30 years, and his contributions to the organization through some very difficult years have been extraordinary. We expect that he will continue to play an important role in our organization going forward.”

Under the new structure, the supporting claims, actuarial and underwriting disciplines will be integrated into the two new major business operations. John Doyle, previously CEO of Chartis U.S., will run the global commercial business, and Jeffrey 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 Hancock.

AIG recognizes Hancock as playing a pivotal role in the business over the last 14 months. He was 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 becoming poised 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 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.

“Our property/casualty business is an industry leader, known for its great people and commitment to our clients and business partners,” Hancock says. “I am honored to have this opportunity, and I am confident that the new structure will fuel this organization’s entrepreneurial and inventive power on a global scale for our 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.”

In addition, Nicholas 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 Eastwood, currently president of Lexington Insurance Co.; Europe, led by Alexander Baugh; Far East, led by Jose Hernandez; and Growth Economies, led by Julio 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.

“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,” Benmosche said. “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.”