AIG life unit reorganizes, sales under one umbrella

Thu Apr 12, 2012 8:29am EDT

* Sets up new distribution organization

* Moving toward 2015 ROE goal of 10 pct

* Goldman exec joins to run alternative products

By Ben Berkowitz

April 12 (Reuters) - AIG's domestic life insurance unit will unify its sales organizations and bring in a Goldman Sachs executive to oversee a new separate unit dealing with companies that want to terminate pension plans, the chief executive of the life insurance business said on Thursday.

SunAmerica Financial Group is one of AIG's core businesses, along with global property insurer Chartis. Though only a fraction of Chartis's size on a premiums written basis, SunAmerica is generally more profitable.

The business has seen a turnaround since the financial crisis, particularly as major brokers began to sell its products again. To accelerate that improvement, SunAmerica said it would set up SunAmerica Financial Group Distributors, unifying its various sales teams and account executives.

SunAmerica Chief Executive Jay Wintrob, in an interview, said bringing together sales teams would let the life insurer cross-sale to corporate clients in a way that it is not doing currently.

"I like to say we're just back to the starting gate," Wintrob said of the company's recovery. "In many cases we're just in those firms with one of our various products."

SunAmerica also said it would set up an institutional products unit to manage various specialty lines like structured settlements, corporate-owned life insurance and something called "pension terminal funding," where companies shutting their pension plans transfer their liabilities to insurers.

That last product in particular is one that AIG is targeting, especially as more companies confront huge retirement obligations in a weak economy.

"We see that as potentially quite a growth market so we've decided to commit additional resources," he said. "We think it's going to be big and it's going to be quite profitable."

Jonathan Novak, who worked in risk management for Goldman , will join SunAmerica to run that business.

In addition, SunAmerica named a chief financial officer, promoting Mary Jane Fortin, who had been president of the subsidiary American General Life.

The changes are designed in part to push SunAmerica closer to the long-term goals AIG laid out roughly a year ago: return on equity of 10 percent and annual mid-teens percentage growth in earnings per share by the end of 2015.

For SunAmerica, that means assets under management of $320 billion and life insurance in force of $1 trillion. At the end of 2011, SunAmerica had assets under management of about $257 billion and life insurance in force of almost $910 billion.

Wintrob is often tipped as a potential successor to Bob Benmosche, the AIG chief executive who is widely credited with saving the company from a breakup and turning it back into a profitable insurer.

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