Eric Andersen landed a job that most insurance executives would have long considered too good to be true: leading a strong AIG.
Thanks to a dramatic turnaround under his predecessor, Peter Zaffino, American International Group Inc. is no longer battling the regulatory headwinds and financial woes that tarnished the firm’s reputation earlier in the century.
But as Andersen, 61, takes over as chief executive officer Monday, he faces a different challenge: a bruised corporate culture.
Lauded in the industry for a hard-working ethos and attention to detail, Zaffino, 59, has also perturbed senior executives during his five-year tenure. While some long-time associates joined AIG because they believed he could rebuild the firm, his demanding approach also prompted others to leave, according to people familiar with the company, who asked not to be identified discussing internal matters.
Nine of the 14 people who made up Zaffino’s bench of top deputies just over two years ago are no longer on the executive leadership team. The company has also cycled through four chief financial officers since the start of 2023.
Some of the people familiar with the matter described a top-down culture where Zaffino pits deputies against one another and employees are reluctant to speak in meetings. While one of the people said some senior leaders are comfortable challenging Zaffino and that he invites contradicting views, they said he will often trust his own instincts.
And while his intense focus on expenses helped restore AIG’s finances, Zaffino remained minutely involved in his deputies’ day-to-day affairs, some of the people said. The executive approved the size of AIG’s intern corps when he was chief operating officer, one of the people said, and still vets new open roles across the firm, including for accountants and secretaries. Remote-work agreements have to be thoroughly argued for and approved by top management, and Zaffino keeps track of those, people said.
Vermont Charges
Zaffino’s transition to executive chair, which isn’t expected to affect the vesting of a $50 million equity award next year, follows a sharp recovery for the insurance giant. Under Zaffino, underwriting profits steadily improved and the stock climbed 69%.
While that shows AIG has come a long way since receiving a $182.3 billion taxpayer bailout during the 2008 financial crisis, alleged misconduct by some of the firm’s most senior personnel have clouded Zaffino’s final years as CEO.
The company is facing scrutiny following accusations against former executive David McElroy and John Neal, whose appointment as AIG president was derailed before he could even start the job.
In 2024, prosecutors in Vermont charged McElroy, then-chairman of the company’s general insurance business, with three counts of sexual assault and one count of lewd and lascivious conduct against a woman who attended an AIG conference at a ski resort that March.
A month later, AIG announced that McElroy intended to “accelerate his retirement date for personal reasons,” without making any public statements about the allegations. AIG later said that Vermont authorities instructed the firm to keep the matter confidential.
Prosecutors dropped the charges late last year, saying in a court document dismissing the case that the plaintiff was suffering from “ongoing trauma which prevents her from fully participating in the criminal case at the present time.”
In November, AIG rescinded its offer to hire Neal as president, after learning that Lloyd’s of London, where he was previously the CEO, was investigating his conduct related to an alleged office romance with a subordinate. Earlier, when Neal was CEO of QBE Insurance Group Ltd., his failure to disclose a relationship with a subordinate cost him part of his bonus.
“From a professional standpoint, you can’t have that in your organization,” Meyer Shields, a Keefe Bruyette & Woods analyst who covers AIG, said in an interview.
Neal didn’t respond to a request for comment. A lawyer for McElroy said “the criminal case has been dismissed and the parties have otherwise resolved any disputes between them.”
