AIG - American International Group

[gfp]

I've never seen a director not be required to file form 4 for stock sales before.  I've seen plenty of companies play it way too aggressively - Jony Ive, for instance is not a reporting insider at Apple for god sakes.  Even Marc Hamburg at Berkshire Hathaway was for many many years an 'executive vice president' or something like that, when he was obviously CFO.  But with all the reporting on Paulson's sales, there is no mention of why he wasn't required to file form 4's within a few days of each trade.  I'm not really concerned with whether or not he traded on material nonpublic information, just really curious as to how he wasn't required to disclose the sales.

 

I'm wondering if anyone here can shed some light on this question I have - If John Paulson is a member of the AIG board of directors, and a reporting insider as a director of the company, how is it that he (Paulson & Co.) was able to sell shares in AIG during the 4th quarter without filing a Form 4 with the SEC at that time?  As a director, he was no-doubt briefed on the reserve charge and other material non-public information - yet somehow it appears that he did not have a reporting requirement on stock sales?

 

Can anyone explain how that is allowed to happen?  Seems strange but since I haven't read of any big dust-up about it, it must be somehow legal?

 

There are two issues.  One is selling on MNPI whether or not the sale is disclosed.  We don't know when he learned of the information and when sales took place.  Second is proper disclosure.  At minimum, not reporting the ownership of (and any changes in) shares in entities he controls is aggressive and pushing the boundaries.  I think it is improper.  Solitron is tiny and we wouldn't do it that way.

[fareastwarriors]

AIG Directors Weigh Consequences for CEO After Big Setback

AIG board to discuss whether to penalize or oust CEO Peter Hancock over fourth-quarter results, sources say

 

https://www.wsj.com/articles/aig-directors-to-discuss-whether-to-penalize-or-oust-ceo-over-fourth-quarter-results-1488219815

[fareastwarriors]

CEO is out.

 

http://www.reuters.com/article/us-aig-moves-ceo-idUSKBN16G1RB

[zippy1]

https://finance.yahoo.com/news/american-international-group-posts-1q-204856870.html

American International Group posts 1Q profit

NEW YORK (AP) -- American International Group Inc. (AIG) on Wednesday reported first-quarter net income of $1.19 billion, after reporting a loss in the same period a year earlier.

 

The New York-based company said it had net income of $1.18 per share. Earnings, adjusted for non-recurring costs, were $1.36 per share.

 

The results surpassed Wall Street expectations. The average estimate of eight analysts surveyed by Zacks Investment Research was for earnings of $1.11 per share

[zippy1]

https://finance.yahoo.com/news/aig-board-directors-authorizes-repurchase-201600096.html

merican International Group, Inc. (AIG) today announced the following actions taken by its Board of Directors:

 

Authorized the repurchase of additional shares of AIG Common Stock with an aggregate purchase price of up to $2.5 billion. During the three-month period ended March 31, 2017, AIG repurchased approximately $3.6 billion of AIG Common Stock, pursuant to prior authorizations from the Board of Directors. AIG repurchased an additional approximately $1.1 billion of AIG Common Stock through May 3, 2017. AIG’s aggregate remaining share repurchase authorization, inclusive of today’s announced $2.5 billion authorization, is approximately $3.8 billion. Repurchases may be made from time to time in the open market, private purchases, through forward, derivative, accelerated repurchase or automatic repurchase transactions, or otherwise (including through the purchase of warrants).

Declared a quarterly dividend of $0.32 per share on AIG Common Stock, par value $2.50 per share. The dividend is payable on June 28, 2017, to stockholders of record at the close of business on June 14, 2017.

“We are pleased to increase AIG’s share repurchase authorization by $2.5 billion and declare a quarterly dividend,” said Douglas M. Steenland, Chairman of the Board of Directors of AIG. “The company has returned $18.1 billion of capital to shareholders during 2016 and to date in 2017, including share and warrant repurchases and dividends paid. AIG’s Management and Board of Directors remain committed to executing our strategy and delivering value to investors, both today and into the future.”

 

This dividend will result in an adjustment to the exercise price of the outstanding Warrants (CUSIP number 026874156) and an adjustment to the number of shares of AIG Common Stock receivable upon Warrant exercise. The exact adjustments, determined by a formula set forth in the Warrant Agreement, will become calculable on or around June 9, 2017. Once the adjustments are determined, AIG will announce the actual adjustment to the Warrant exercise price and shares receivable. Further information on the Warrants and the adjustments is available in the Investor Relations section of AIG’s website.

[zippy1]

https://finance.yahoo.com/m/08a74d37-9069-3179-b3bb-e753b836997b/ss_aig-to-name-duperreault-as-ceo.html

merican International Group ( AIG) is expected to name Brian Duperreault, a onetime lieutenant to former CEO Maurice R. "Hank" Greenberg, as the global insurer's next CEO, with an announcement expected as soon as today, according to people familiar with the matter, the Wall Street Journal reports. Duperreault, 70, is founder and CEO of Bermuda-based Hamilton Insurance Group.  Duperreault and AIG are said to be working out final details of his employment contract but are very close to final agreement, according to the people who spoke with the Journal.

[fareastwarriors]

From Fort Knox Clerk to Insurance Kingpin: The Rise of AIG’s New CEO

Brian Duperreault’s plan to revive the insurance giant includes acquisitions and a focus on life insurance

 

https://www.wsj.com/articles/from-fort-knox-clerk-to-insurance-kingpin-the-rise-of-aigs-new-ceo-1500629400

[fareastwarriors]

AIG returns to pre-bailout paydays for CEO, top execs

 

 

 

•Duperreault has pledged to revive the insurer's glory days of top talent, underwriting discipline and fat profit margins.

•As he rejoined AIG in May, the 70-year-old insurance industry veteran received bigger awards than any of his predecessors since Maurice "Hank" Greenberg.

 

 

https://www.cnbc.com/2017/08/27/aig-returns-to-pre-bailout-paydays-for-ceo-top-execs.html

[Sunrider]

Ah crap, probably time to sell then. Life insurance is a commodity business, if I'm not mistaken ... and the thesis has been good capital management and increased returns to get to at least BV.

 

Any views?

Thanks.

C.

 

 

AIG returns to pre-bailout paydays for CEO, top execs

 

 

 

•Duperreault has pledged to revive the insurer's glory days of top talent, underwriting discipline and fat profit margins.

•As he rejoined AIG in May, the 70-year-old insurance industry veteran received bigger awards than any of his predecessors since Maurice "Hank" Greenberg.

 

 

https://www.cnbc.com/2017/08/27/aig-returns-to-pre-bailout-paydays-for-ceo-top-execs.html

[racemize]

Mostly my bet with this one is that they get to mediocre.  If they do that they should trade over book.  Add that with the low CoL of the warrants, it seems like a decent bet to me.

 

So, I don't particularly care what strategy they do to get to mediocre.  Hancock's seemed straight-forward, but he lost credibility on underwriting.  This guy seems to have a good track record, so this strategy could work too.

[Happy]

Apparently, Icahn tried to get Duperreault to run AIG when he made his initial investment. Now he finally got his preferred pick. With Hancock, massive buybacks probably were the smartest choice because he wasn't a strong CEO. Duperreault might create more value with M&A than through buybacks.

 

I felt one of his speeches on Youtube was worth listening to. If he tries to adapt AIG better to the future of insurance, some M&A might actually be needed.

[fareastwarriors]

AIG Could Get Some Disaster Relief on SIFI

https://www.bloomberg.com/gadfly/articles/2017-09-08/aig-could-get-some-hurricane-disaster-relief-on-sifi

[zippy1]

http://www.insuranceinsider.com/aig-remains-too-big-to-fail-after-fsoc-skips-vote

AIG keeps ‘too big to fail’ tag after FSOC skips

AIG did not win a reprieve from stricter federal oversight during a regulatory meeting today.

 

The global insurer's status as a systemically important financial institution, often referred to as "too big to fail", was up for discussion when a panel of regulators met to weigh such designations, according to news reports and lobbyists.

 

The Financial Stability Oversight Council, a 10-member panel led by Treasury Secretary Steve Mnuchin, discussed the annual reevaluations of nonbank companies that have been placed in the

[Sullivcd]

https://www.bloomberg.com/amp/news/articles/2017-09-29/aig-sheds-too-big-to-fail-label-in-victory-for-ceo-carl-icahn

 

So now they lose their SIFI designation. Should be a positive for share price, at least in the short term.

[ourkid8]

Why only short term? 

 

 

https://www.bloomberg.com/amp/news/articles/2017-09-29/aig-sheds-too-big-to-fail-label-in-victory-for-ceo-carl-icahn

 

So now they lose their SIFI designation. Should be a positive for share price, at least in the short term.

[Sullivcd]

Probably because I'm jaded. There always seems to be something lurking around the corner with these guys. I like what the new ceo has said but the massive reserve restatement, under cost of capital history of this company makes me skeptical. This stock has underperforned for years despite huge returns of shareholder capital in a rising market. My fear is losing SIFI will just give these dip shiats more rope to hang themselves. Why long term?

[ourkid8]

https://www.ft.com/content/31b36b9a-a662-11e7-93c5-648314d2c72c

 

This move finally levels the playing field for AIG...

[Sullivcd]

Shocker, another massive reserve addition. These guys are so frustrating.

[MYDemaray]

Duperreault:

This quarter marks the base, from which I intend to grow profitably.

 

Tacit admission of "big bath" quarter, his first at the helm? So, now they've taken the bath on 2016/17 (did I read this right, that they've essentially accelerated some of the reserving into Q3 from Q4)?

 

Sankaran:

. First, we have completed our assessment on over 80% of our reserves in total during our third quarter reviews. This leaves a little less than 20% of our reserves remaining to be reviewed in the fourth quarter.

 

As part of our studies, we accelerated approximately 6 billion of reserves into the third quarter from the fourth quarter based on lines that lines displayed adverse claims trends.

 

This coupled with the Berkshire reinsurance deal and I'm hoping (dangerous word) that this is the bottom. I'm also hoping that this means pricing is going up on 2018 renewals, which will probably lead to lower revenues (look for analyst fretting along these lines).

 

Could be the worst is past...or maybe I'm just a bagholder

 

EDIT:

 

Above, further addressed in Q&A:

 

Jay Gelb - Barclays Capital, Inc.

 

Thank you. One question and then a follow-up. The first, I just want to clarify that as the remaining reserves are reviewed for Property Casualty in the fourth quarter, and we realized there's around 20% left, am I right in saying or characterizing, what you're saying as, don't expect anything meaningful from a development standpoint in 4Q?

 

Brian Duperreault - American International Group, Inc.

 

I had a feeling you would ask something like that, Jay. So let me give you a couple of data points, okay. So there's 20% less -- $10 billion I think something like that and 80%, data point, 80% of that's basically covered by the ADC. So that gives – that is data point. And the other is, as Sid pointed out, we pulled forward anything that we saw that was showing deterioration signs, the rest isn't, so I think those are two indications of what the fourth quarter might produce.

[Spekulatius]

AIG has a long history on reserve adjustments. I recall at least 3 of them and each of them was supposed to be the last one.

 

I think AIG trades at fair value and possibly is even overvalued. There are better values in the insurance secotr like AXS or RE currently, IMO. Both  have a long history of positive reserve releases.

[Sullivcd]

The new CEO was signaling this is the end but that is left to be seen. With bvps at 74.10 this is only overvalued if another reserve addition or big cat reduces bvps significantly. If the new CEO does what he is promising, this stock will shoot up to a bvps premium. I'm not convinced either way yet, too early to tell.

[zippy1]

[urlhttps://www.wsj.com/articles/aig-strikes-5-56b-deal-to-acquire-a-bermuda-insurer-1516622329?mod=yahoo_hs&yptr=yahoo][/url]

The global insurance conglomerate said Monday it signed a definitive agreement to acquire Validus Holdings Ltd. VR 1.76% in an all-cash deal. AIG said the acquisition would immediately add to its earnings.

 

Reinsurance is an arrangement in which insurers take on the risk of policies that primary insurers sell to businesses and individuals. A big product line for Validus is property-catastrophe reinsurance for hurricanes and other disasters.

 

The company also has other operations, including a Lloyd’s syndicate, crop insurance, and a unit that insures small U.S. companies. They overlap minimally with existing businesses at AIG, a leader in insuring multinational corporations and other large businesses and a large U.S. life insurer..

 

At $68 a share, the deal represents a 46% premium to Validus’s closing share price Friday,  and a 16% premium to its 52-week high.

[Sullivcd]

They are using cash to buy a reinsurer at a 58% premium to book value and 50% premium to share price when they are trading at a discount to book value of close to 20%.  Genius

[Spekulatius]

Sold AIG. Not worth holding. I am overweighted insurers anyways, having recently added significantly to AXS, RE and AHL. At least the former two are not run by complete morons.

[Sullivcd]

https://www.insurancejournal.com/news/national/2018/01/23/478068.htm

 

"Validus, which had a market value of about $3.71 billion on Friday, provides protection for primary insurance companies that focuses on catastrophe, marine and specialty reinsurance, according to the statement. The company was formed in the wake of Hurricane Katrina with backing from a private equity firm run by Jeff Greenberg, the son of Maurice “Hank” Greenberg who ran AIG for decades before stepping down in 2005."