The stock of insurance company American International Group (AIG) is down 7% immediately after CEO Peter Zaffino announced his retirement.
Claim 70% Off TipRanks Premium
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential
In a news release, AIG said that Zaffino, who has led the company since 2021, will transition to executive chair of the company’s board of directors and leave his post as CEO by the end of June this year. Longtime Aon PLC (AON) executive Eric Andersen will take over as AIG’s president and CEO on Feb. 16.
AIG, a property and casualty insurer, endured a decade of underwriting losses from 2008 to 2018, but has delivered an underwriting profit in each of Zaffino’s five years at the helm. His replacement, Andersen, has spent nearly three decades at Aon, most recently as a strategic advisor to CEO Greg Case.
AIG’s Profitability and Stock Buybacks
Andersen, who is viewed as an insurance industry veteran, has also served as president of Aon, CEO of reinsurance intermediary Aon Benfield, and CEO of Aon Risk Solutions Americas. During Zaffino’s tenure running American International Group, the insurer aggressively repurchased its own stock.
Over the past three years, AIG returned more than $19 billion to shareholders through stock buybacks and increasing dividend payments. In the last five years, AIG stock has risen 106%. “We have returned AIG to vastly improved profitability, significantly strengthened our balance sheet, and built tremendous financial flexibility,” Zaffino said in the news release.
Is AIG Stock a Buy?
AIG stock has a consensus Hold rating among 16 Wall Street analysts. That rating is based on three Buy and 13 Hold recommendations issued in the last three months. The average AIG price target of $87.94 implies 13.18% upside from current levels.
