Before he lost the confidence of big-name investors and his company’s board members, Peter Hancock squandered the faith of many of his staff.

It was November 2015, after a disappointing quarter for American International Group Inc., and Hancock — then a year into his tenure as chief executive officer — told employees they shouldn’t count on lifetime jobs. Many in the organization felt insulted. Some of them cried. A lot of them ended up quitting.

On Thursday, Hancock ended his own career at AIG, following a long line of leaders at the insurer who found it easier to make promises than deliver. The former banker, who drew skepticism with his vision of turning AIG into a tech powerhouse, will stay on as CEO until the company names a replacement.

During Hancock’s watch, AIG was burned on higher-than-expected costs on one segment after another: workers’ compensation, environmental liabilities, commercial vehicles and even guaranteed payments to accident victims. While some of the policies were written before Hancock joined AIG, it was becoming harder for him to avoid the blame. The company posted a $3.04 billion quarterly loss in February and lowered a 2017 profitability target made just months earlier. Hancock’s decision to take a huge reserve charge in the period was the right thing to do, and will make the next CEO’s job easier, said Tom Russo, AIG’s former general counsel, who retired last year.

“So much of what has happened today is very short run,” Russo said. “I thought it was the wrong way to go because I would have let Peter’s strategy play itself out” with Hancock still at the helm.

AIG dropped 23 cents to $63.21, extending its loss since Dec. 31 to 3.2 percent. Icahn said in a Twitter post that “We fully support the actions taken today by the board of $AIG.”

Losing Credibility

Activist investors John Paulson and Carl Icahn, who won board representation last year, have been pushing for more immediate moves to bolster the share price. It didn’t help that analysts at firms like Barclays Plc and Evercore Partners Inc. said the company was losing credibility. S&P Global Ratings downgraded AIG in January, and A.M. Best dealt the company another blow when it said that it was reviewing the insurer’s grades amid “challenges” in reserving and risk management.

Buyers of U.S. commercial property-casualty coverage play close attention to A.M. Best’s scores when picking an insurer. Hancock acknowledged Feb. 16 that a downgrade “would certainly impact certain lines with major accounts.”

“AIG’s been such an outlier in terms of having to take reserve charges while most of its competitors are releasing reserves,” Rob Haines, an analyst at CreditSights, said in an interview. “Ultimately, someone’s going to have to take the blame there.”

A former J.P. Morgan & Co. executive, Hancock, 58, joined AIG in 2010 to help the insurer avoid the investing blunders that led to a 2008 government bailout that swelled to $182.3 billion. After helping to repay the rescue, Hancock became CEO in 2014. From that post, he learned that mistakes in insurance underwriting could also be expensive.

Visionary Plans

Hancock had big plans for the insurer, and some felt that he tried too hard to turn AIG into a technology-driven company. He was an avid watcher of talks by Silicon Valley leaders and would send videos of titans such as Sergey Brin and Elon Musk to his colleagues. But many executives no longer fit in, some of them preferring to focus on traditional underwriting, rather than tech upgrades. And, one after another, they started to depart.

In less than three years, Hancock replaced the chief financial officer, head of investing, leader of life insurance and others. Phil Fasano, the chief information officer who was one of Hancock’s first major hires, said this week he was leaving AIG.

Hancock’s remarks could seem dissonant, like the day after posting a loss in February when he told analysts, “I couldn’t be prouder of how the team has worked together under a great deal of pressure to deliver these results.”

By the time Hancock intensified his focus on cutting costs, Icahn had taken a stake and began agitating to split off AIG into three insurers. Hancock said he wanted to avoid a fire sale, but still promised to boost performance and cut jobs. He could fall back on AIG’s stock, which was outperforming the S&P 500 from his arrival until Icahn entered the picture in October 2015.

Different Era

In January 2016, Hancock made a presentation about a plan to return $25 billion to shareholders over two years. He announced the sale of a broker-dealer network and followed with deals to exit a mortgage guarantor, a Lloyd’s of London unit and some operations in nations including Japan and Turkey.

The sales were an acknowledgment that AIG was built for a different era. Maurice “Hank” Greenberg made the New York-based company the world’s largest insurer through decades of acquisitions. When AIG had a top credit rating and giant balance sheet, company executives assumed they could profit from ventures such as aircraft leasing or a financial products unit that bet on subprime mortgages. And it was easy to win business from commercial clients impressed by the company’s huge balance sheet, not to mention its motto “The Strength to Be There.”

After the bailout, AIG was no longer operating from a position of strength. Rivals such as Travelers Cos., Chubb Corp. and Warren Buffett’s Berkshire Hathaway Inc. impressed investors with their vows to shun business at unattractive prices. AIG was under pressure to show it could retain or win customers.

Credit Apocalypse

“AIG was basically forced to give business away during the credit apocalypse and its aftermath,” David Havens, a debt analyst at Imperial Capital, wrote after the company announced another reserve shortfall. Years later, the bills came due.

AIG’s stock missed out on this year’s rally in financial shares. The hedge fund led by Paulson, a director at AIG, has been cutting its stake in the insurer.

Other members of the board, which includes a director chosen by Icahn, were also growing impatient. Late into Wednesday night they discussed the company’s future. Hancock announced Thursday that it didn’t make sense to stick around “without wholehearted shareholder support.” He was unavailable to comment Thursday, AIG said.

“We are not surprised by the change in management,” Elyse Greenspan, an analyst at Wells Fargo & Co., said in a note to investors. “We think a new CEO will be helpful.”