American International Group (AIG) chief executive Robert Benmosche suggested the U.S. economy is still not in a position to reach its untapped potential, saying there’s a lack of confidence among businesses due to concerns over regulations and the future of healthcare.
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“I don’t see people taking on new risks,” Benmosche said Monday in an interview with FOX Business Network’s Maria Bartiromo. “They’re still worried about regulation and…what’s going to happen with the cost of health care. We won’t see that extra [growth] until they become more confident.”
Right now, businesses are “planting seeds for the future,” he added.
As for AIG, Benmosche said the insurance giant has a “strong foundation” for its next leader. According to Benmosche, who plans to retire in early 2015, AIG is looking at internal and external candidates.
“We want to make sure what we’ve done is sustainable,” he said, adding it’s not for him to decide whether AIG should promote from within or hire an external candidate.
AIG is a “very large, complex company,” and it’s important for any candidates to “understand that complexity” and risk management, Benmosche explained.
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The New York-based company took a step to reshape its portfolio in December, announcing a $5.4 billion deal to sell its aircraft leasing unit to AerCap Holdings (AER). International Lease Finance Corp. is the world’s largest independent aircraft lessor with almost 1,000 owned and managed aircraft.
As part of the deal, AIG will receive a 46% stake in AerCap. Benmosche said AIG will likely remain a shareholder for at least the next couple of years following the transaction’s close, which is expected in the second quarter.
“I think the company is very strong. They have a lot of capability and are going to be a major player in the marketplace,” Benmosche said of AerCap. “It’s important to determine before you sell something, what you’re going to do with the money.”
The executive said AIG has spent the last two and a half years rebuilding risk management capability and lowering accident year loss ratios, although he cautioned investors not to expect the measure to go straight down.
When asked about being tagged systemically important by the U.S. government, Benmosche said the move protects AIG shareholders by putting the company “through very extensive rigor” to ensure it won’t have any problems during a future crisis.
“It means we need to be supervised in a very strong way, not just in the U.S., but globally,” he added.