After creating a plan to radically alter AIG's operations to help repay billions in government loans, chairman and chief executive Edward Liddy is leaving his vision for the insurer in the hands of a whole new set of managers.
On Thursday, Liddy said he was stepping down at a time when AIG will add six new directors to its board and is reshaping itself by spinning off or selling large parts of its operations.
With a major shake-up among its decision makers, new management will have the opportunity to continue with Liddy's plan to further reshape the company, or put their own stamp on how to create a leaner, more efficient AIG.
Once the world's largest insurer, AIG is already a dramatically different company than it was when the government first bailed it out about eight months ago.
AIG has sold about a dozen assets, announced plans to spin off at least two major operating units and given up an 80 percent ownership stake to the government in exchange for a package of loans worth more than $180 billion.
In recent weeks, AIG has said it would spin off its Asian life insurance group known as American International Assurance, or AIA Group, and its property and casualty insurance business AIU Holdings.
AIG will continue to own majority stakes in the firms.
The moves will also allow AIG to create new management teams and boards of directors for each of the businesses, meaning the new AIG managers stepping in will eventually cede oversight of some operations to even newer leaders.
The spin offs allow AIG to separate the still performing businesses from a parent company whose brand is likely hindering business.
Being able to rebrand some of the operations while cashing in a portion of their market value could help further stabilize business while paying off the government loan.
AIG was saved from the brink of collapse in September when the government provided it with an initial $85 billion lifeline. At that time, Liddy was hand-picked to come out of retirement to manage the government's newest investment.
Liddy had previously served as CEO of insurer Allstate.
Including the initial loan, AIG has received four rounds of government support to help it remain in business amid fears that a full collapse of the insurer would create widespread devastation in the financial markets.
AIG was devastated not by the traditional insurance operations like those being spun off, but by its financial products business which underwrote risky credit derivatives contracts known as credit default swaps.
The swaps are essentially insurance contracts protecting an investor against default on an underlying investment, such as mortgage-backed securities.
Rising defaults amid the underlying investments led to worries that AIG would not be able to cover all the outstanding swaps contracts and the effects would touch off a new, even more intense period of the credit crisis.
That's when the government stepped in, fearing that without its help, AIG's collapse would cripple financial markets in the U.S. and around the world.
With the government backing the company, a reconstituted board will be elected next month at the insurer's annual shareholders meeting in New York. The first task for the board will be to work in coordination with government trustees to find Liddy's replacement.
AIG said Thursday it is splitting the roles of chairman and chief executive, similar to what many other financial firms have done in recent months. After picking a new CEO, the board will then turn its attention to continuing asset sales to repay the government.
New managers will have to determine how to move forward with plans to spin off some operations and sell others, while retaining enough core businesses to try and return the insurer to profitability.
Aside from already announced deals, the new management could opt to sell business such as its aircraft leasing unit, International Lease Finance.
Regardless of whether Liddy's outline for the company is exactly followed, with so many new managers stepping in, the look of AIG is likely to be even more different in another eight months than it was last September when it was rescued.