Updated 12/10/2015 10:47am

(Bloomberg) -- American International Group Inc., the insurer being pressured by activist investor Carl Icahn to boost returns, said Chief Financial Officer David Herzog is among top managers leaving the company as Chief Executive Officer Peter Hancock shakes up management.

Sid Sankaran, the chief risk officer, will take on the CFO role after AIG files its annual report with regulators early next year, the New York-based insurer said in a statement Thursday. Also leaving is John Doyle, head of commercial insurance, which is one of AIG’s most important businesses. Rob Schimek, who is CEO of the Americas, will take on Doyle’s role.

Hancock, who became CEO in September of last year and reshaped management that month, told investors after posting a third-quarter loss last month that the company plans to dismiss about 23 percent of the top 1,400 members of senior management. He is shrinking the leadership team after telling staff in a town-hall meeting that they shouldn’t count on lifetime employment with the insurer, according to people familiar with his remarks.

“We are moving forward with a continued sense of urgency,” Hancock said in the statement. “I have streamlined my senior leadership structure in a manner that will accelerate our decision-making and ensure that we have strong end-to-end accountability.”

High-Cost Debt

Herzog had been CFO since late 2008, helping the insurer recover from its bailout earlier that year. He was one of AIG’s top-paid employees and had focused recently on redeeming debt that was issued when interest rates were higher. Herzog was named in October by the U.S. Treasury Department to the Federal Advisory Committee on Insurance, joining other industry leaders including New York LifeInsurance Co. CEO Ted Mathas.

Sankaran joined the company in 2010 from consulting firm Oliver Wyman, a unit of insurance broker Marsh & McLennan Cos., as AIG sought to avoid a repeat of the oversights that led to billions of dollars of losses on derivative contracts and the U.S. rescue. Hancock was also brought on that year in a risk- management role.

“We are very surprised by Mr. Herzog’s departure,” analysts led by John Nadel at Piper Jaffray Cos. said in a note. “We think Mr. Herzog is likely to land a new role within the industry very quickly. On the other hand, we are less surprised by the departure of Mr. Doyle given the recent lack of any significant improvement in commercial results.”

AIG slipped 22 cents to $61.96 at 9:49 a.m. in New York, narrowing its gain for the year to about 11 percent. The company had decided about a year ago to shrink the size of the leadership team, according to a person familiar with the situation who asked not to be identified discussing internal deliberations.

Hernandez, Martinez

Also leaving are Jose Hernandez, who led the Asia-Pacific region, and Eric Martinez, who was executive vice president of global claims and operations. AIG has taken longer than it previously planned to integrate the AIU unit with Fuji Fire & Marine in Japan and struggled with underwriting losses on property-casualty coverage.

“The operating performances of the key divisions has deteriorated,” John Heagerty, an analyst at Atlantic Equities, said in a note Thursday before the departures were announced. “We see considerable headwinds remaining - a deteriorating commercial insurance market, low interest rates and the strong U.S. dollar.”

Dachille, Maag

Icahn said in October that Hancock should break up AIG into three separate companies, one selling lifeinsurance, a second offering property-casualty coverage and a third backing mortgages. The billionaire also mocked Hancock’s inability to generate a 10 percent return on equity.

Doug Dachille, a former colleague of Hancock at J.P. Morgan & Co. who was named in July as AIG’s chief investment officer, was given the additional duties of supervising Chief Science Officer Murli Buluswar. Hancock has highlighted the role that Buluswar’s operation can have analyzing trends in claims costs. AIG intends to continue to increase Dachille’s duties as the science group grows, according to the person familiar with the company’s plans.

Seraina Maag, who was head of the Europe, Middle East and Africa region, is also adding duties. She was named CEO of regional management and operations. The EMEA, Americas and Asia- Pacific CEO roles are being consolidated. Kevin Hogan, who runs consumer operations worldwide, will have increased oversight of Japan after Hernandez’s departure.

Alessa Quane will replace Sankaran as chief risk officer and retain the role of chief corporate actuary, reporting to the CFO and to the board’s risk and capital committee.

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