American International Group (AIG) announced that CEO Peter Hancock will resign, although he will stay in place until a successor can be named. We have mixed feelings about this development. While Hancock has come in for much criticism, we believe his strategy was largely sound and focused on the right areas, although the recent reserve development hit suggests execution may have been lacking in some areas. The company’s board reaffirmed its commitment to previous financial targets as part of the announcement, and at this point, we don’t believe Hancock’s departure will lead to any radical strategic shifts. We will maintain our $74 fair value estimate and no-moat rating.
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Brett Horn, CFA does not own shares in any of the securities mentioned above. Find out about Morningstar's editorial policies.