AIG 'Going Back to Our Roots': CEO Benmosche
AIG has refocused on its core businesses of insurance and underwriting, putting the financial crisis in the rear-view mirror, CEO Robert Benmosche told CNBC on Wednesday.
"A lot of people were saying that for AIG to get out from underneath government ownership, it was going to take a very, very long time," he said on "Squawk on the Street."
"The good news is that we found out what a very, very long time is. Basically from then it was about seven months. What we said then is that we were going to build a foundation this year. You can see the results, especially in the first quarter that the fundamentals are right."
As part of the bailout of AIG in 2008, the government received warrants for 79.9 percent equity stake in the company. Since the bailout, AIG had sold assets to pay back the money. The Treasury Department sold its last shares in the company in December.
Benmosche, who spoke to CNBC after addressing AIG shareholders, explained how the improving health of his firm is apparent to investors.
"You've seen consistent improvement. After we took the big hit in 2010, loss reserves have been going up slightly. We've been looking through all the things in that reserve, making sure we've got the number right. We feel pretty comfortable in the reserve," he said. " Now what we're dealing with is how do we take big data and turn it into a more technical, intuitive mode and how we do a better job of underwriting."
"For now, AIG is a smaller and more focused company. It's a company that is in the insurance business. We are out of some of the financial derivatives and other things we were doing. So we're really basically going back to our roots, which is an insurance company," he said.
As a result, he said, it's easier to manage and more secure.
Benmosche said the company is trying to optimize its technology, including consolidating technology centers and servers. He estimates that these efficiencies, although they are increasing expenditures in the short term, will reduce costs by hundreds of millions of dollars. The company is also backing up its data centers so that they are all "bullet proof" in the face of natural disasters, such as Hurricane Sandy, he said.
AIG, in general is looking to be more integrated, he said. "We can't have these individual businesses anymore because there are too many and they are too big. We feel the approach we are on is the right one. We a lot of have respect for the different teams of AIG and the brands of AIG but we have to work together as a partnership more than ever before."