Insurance News

Benmosche says AIA change puts ‘best team on field’

Posted on: July 25, 2010

NEW YORK (Bloomberg)?Robert Benmosche, the American International Group Inc. CEO who replaced the head of the insurer’s main Asia unit, said the change was needed to prepare for the division’s initial public offering.

Mark Tucker was named head of AIA Group Ltd. Monday, replacing Mark Wilson, 43. Mr. Tucker has 15 years of experience building the Asia operations of competitor Prudential P.L.C., Mr. Benmosche told employees Monday in a letter obtained by Bloomberg. AIG is proceeding with an IPO of the Hong Kong-based business after a $35.5 billion agreement to sell AIA to Prudential collapsed in May.

?It is critical that we put the best team on the field to ensure the success of AIA’s IPO,? Mr. Benmosche said in the memo. ?Taking a company public is not easy, and we all will need to work well together to succeed. The experience of public investors holding you accountable for results also will be a new challenge.?

Mr. Benmosche, 66, overhauled AIA’s management after clashing with directors on how to divest the business to repay AIG’s $182.3 billion bailout. The CEO demanded more control over AIA last month at a board meeting, pushing for Mr. Wilson’s dismissal, said a person with knowledge of the event. Harvey Golub stepped down last week as chairman after the board rejected a reduced bid from Prudential that Mr. Benmosche had supported.

?Ready to go?

The unit?s public offering would be ?ready to go in the coming months when market conditions are optimal,? Mr. Benmosche said in the letter, adding that he couldn?t speculate about the precise timing. Mr. Wilson will assist Mr. Tucker, 52, through the end of this year, AIG said.

Mr. Wilson had spoken directly to board members to advocate for an IPO of AIA, according to the person. Mr. Benmosche had pushed for Prudential?s revised $30.4 billion bid for the business after the London-based insurer?s investors had balked at the original $35.5 billion price.

?Wilson was undoubtedly aware that he was running risks by going around Benmosche to the board,? said Clark Troy, an analyst for research firm Aite Group. Mr. Benmosche is ?trying to limit the exodus to those parties very close to Wilson.?

AIA has more than 23 million customers and offices in at least 15 countries including China, India and Australia. Mr. Benmosche plans to focus on global property/casualty coverage and U.S. life and retirement services after divesting AIA and another non-U.S. life unit.

Copyright 2010 Bloomberg

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