Willumstad steps in as new exec for AIG

The new AIG leader is known for his hands-on management style.

NEW YORK (AP) — When Robert Willumstad said goodbye to Citigroup Inc. three years ago, he boldly declared he was leaving to run a major company. Now, at 62, he’s making good on that promise — at a floundering AIG during the most challenging climate of his four-decade career.

Wall Street has yet to be convinced that American International Group Inc. is headed for profitability anytime soon. Not only did the world’s largest insurer get trampled when the credit markets seized up last year, but it also never quite recovered from then-New York Attorney General Eliot Spitzer’s industry shake-up a few years ago.

But if AIG needs a cleanup, most industry watchers are saying — tentatively — that Willumstad is the man for the job. Trained by the master cost-cutter himself, Citigroup’s ex-CEO Sanford Weill, Willumstad had a strong record at the world’s biggest bank by assets.

“I consider myself a hands-on manager,” he told investors on a conference call Monday.

He’s also been on AIG’s board since 2006, long enough to know the basics of what went wrong at the company during the last year.

Willumstad said he will conduct a review of AIG over the next two to three months. In that time he will meet with shareholders, ratings agencies, regulators and AIG’s noisiest stockholder: ex-CEO Maurice “Hank” Greenberg, whom Willumstad said he telephoned Sunday night and plans to meet with this week, schedules permitting.

Willumstad’s review could mean some more management reshuffling at AIG. The new CEO said that finding a new chief financial officer to replace Steven Bensinger — now a vice chairman — is a priority, and that AIG needs to make sure it has “the right people in the right positions.”

The review could also result in AIG shedding some of its businesses. Though Willumstad said “it would be very hard for me to imagine seeing the insurance businesses broken up,” he also said that “nothing is off the table, and there will be no sacred cows.”

The most likely candidates for shearing appear to be AIG’s credit derivatives business — which has been the most problematic of AIG’s segments lately — and its airplane leasing business, said Stifel Nicolaus analyst Michael Paisan. AIG’s asset management is another non-insurance segment of AIG, but it offers significant synergies with the insurance business, according to Paisan.

It is also possible that AIG will pull out of certain regions, Paisan added. AIG operates in about 130 countries worldwide.