American International Group said it will invest $1.3 billion over the next three years in its massive AIG 200 initiative, which is designed to revamp and improve core processes, technology infrastructure and services.
What’s more, the company has broken down the effort into “10 core operational programs” for which work is slated to begin in 2020, AIG President and COO Peter Zaffino disclosed during the company’s Q4 2019 analyst call on Feb. 13, 2020.
“We have been carefully planning operational road maps for each program, with a focus on resource and investment prioritization, as well as disciplined execution,” noted Zaffino, who is leading the multiyear effort.
Out of the 10 programs, three will focus on General Insurance – AIG’s property/casualty business. Those programs involve building out a standard commercial underwriting program designed to enable and improve better underwriting analysis, enhanced “digital first” efforts for AIG’s Japanese business, and improved capabilities in AIG’s Private Client Group.
Other projects involved shared services, IT, finance, procurement and real estate across AIG’s global operations, Zaffino noted.
Neither Zaffino nor CEO Brian Duperreault offered details about job cuts or other personnel realignments, but both said that there will be quarterly updates on progress for AIG 200.
Duperreault explained AIG 200 as “a marathon and not a sprint” and said that results will not be linear. With that in mind, he said that AIG 200’s ongoing execution “will require significant investment” to reduce the company’s cost structure over time.
Duperreault credited Zaffino and his team with progress made on the program, whose foundational work began in 2019. AIG first disclosed the effort publicly in the middle of last year.
“The team is identifying issues and pain points and creating plans that will redefine how we do business and create value for our stakeholders,” Duperreault said. “This is not about Band-aids or temporary fixes to simply kick the can down the road. This work will identify problems and position us for sustainable profitability.”
AIG has previously explained AIG 200 as something that it hopes will help reduce the expense ratio and general operating expenses, by way of modernizing technology, business processes and how it interacts with customers.