
AIG replaces CEO after subprime losses mount
AIG chairman Robert Willumstad will assume the additional position of chief executive officer, replacing Sullivan, who had been in the role since March 2005. Willumstad has been chairman of the board of AIG since November 2006.
Sullivan's departure comes after the insurance firm revealed a net loss of $7.81 billion for the first quarter of this year, which came on the back of a $5.29 billion loss for the fourth quarter of 2007. In the first three months of 2008, AIG’s capital markets division recorded an operating loss of $8.85 billion, primarily due to $9.11 billion of writedowns on AIG Financial Products’ (a wholly owned subsidiary of AIG) super-senior credit default swap (CDS) portfolio.
AIG attributes its losses to continuing weakness in the US housing market, disruption in the credit markets, as well as equity market volatility.
“In the coming months, we will conduct a thorough strategic and operational review of AIG's businesses and their performance. The board and I recognise that results over the past two quarters have been unacceptable, but we are confident in AIG's future. We are determined to get the organisation back on track as quickly as possible,” said Willumstad.
The insurer’s recent woes are reflected in its CDS spreads. The cost of five-year protection for the insurer, which was 83.5 basis points as recently as May 2, had risen to 197bp by close of play on June 13.
See also:
AIG admits errors in credit loss estimates
Péretié to replace Mustier at SG CIB
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
More on People
Barclays retools inflation desk with two senior hires
UK bank raids Deutsche Bank and JP Morgan for new regional heads
Asia moves: Senior hires at Nomura, HKEX and more
Latest job news from across the industry
Asia moves: Senior hires at Citi, Nomura and more
Latest job news from across the industry
People: UBS rehires Ermotti for top job, Citi promotes Selva to COO, and more
Latest job news across the industry
People: More Goldman sackings, Citi promotes for Emea, and more
Latest job news across the industry
Asia moves: senior hires at Societe Generale, Deutsche Bank and more
Latest job news from across the industry
People: Credit Suisse’s FX revamp; Barclays hires co-heads; and more
Latest job changes across the industry
Asia moves: senior hires at Natixis CIB, Citi and more
Latest job news from across the industry