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AIG Reorganizes US Life Insurance, Retirement Businesses to Include All-Channel Distribution Firm

Posted on 13 Apr 2012

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American International Group Inc. (AIG) has reorganized its U.S. life insurance and retirement services business that includes creating a new all-channel distribution organization intended to boost sales and profitability.

The revamp of SunAmerica Financial Group, the enterprise formed to combine AIG's domestic life and retirement services companies, also includes several top management changes. Mary Jane Fortin was named chief financial officer of SunAmerica Financial and James A. Mallon has been tapped to lead the American General Life companies.

Fortin served since 2009 as president and chief executive officer of the American General Life companies. Succeeding her as president and CEO of the American General Life companies is Mallon, president of American General Life and Accident Insurance Co., a position he has held since 2004. He will continue to lead AGLA.

SunAmerica Financial Group Distributors, the new distribution arm, will oversee sales and account management efforts across SunAmerica Financial.

The unit will oversee all sales of American General Life companies life, accident and health insurance products, Variable Annuity Life Insurance Co.s group retirement and rollover offerings, Western Nationals fixed annuities, and SunAmericas variable annuities and mutual funds.

Advisor Group, comprised of broker-dealers FSC Securities Corp., Royal Alliance and SagePoint Financial, also will be part of this new distribution organization.

Linda Malamut, a spokeswoman for SunAmerica Financial, said in an email the "entire senior leadership team" remains with SunAmerica Financial and "we've attracted a few very well-respected industry experts to our organization as well." The focus is positioning SunAmerica Financial "for greater growth and profitability," she said, saying the company has "no plans for layoffs at this point."

"We just aligned all of our distribution efforts and sales professionals into one organization," she said declining to elaborate on the move.

Stephen A. Maginn has been named president of the new organization. Maginn, who joined SunAmerica in 2008, most recently served as chief distribution officer for SunAmerica Retirement Markets and SunAmerica Mutual Funds, where he helped to increase sales of stock-market linked variable annuities and mutual funds.

The reorganization also includes establishing an institutional markets division to oversee the structured settlements, pension terminal funding, private placement life and annuity and COLI/BOLI businesses. Institutional markets will be led by Jonathan Novak, who joins SunAmerica from Goldman Sachs, where he served in that firms financial institutions risk management business leading a team focused on solutions for insurance companies and banks.

"Our new organizational structure will enable us to better serve our broad network of distribution partners as we work together to help even more Americans plan for and achieve financial and retirement security," said Jay Wintrob, president and CEO of SunAmerica Financial Group, in a statement.

When AIG was in danger of failing in 2008 due to investments related to mortgage-backed securities, the U.S. government stepped in to offer it up to $182 billion in assistance, including moving troubled assets off of AIG's balance sheet. Of that bailout, $21 billion was unused or expired, AIG said, noting just $44.7 billion of government assistance is outstanding today.


The company has been working to pay back the government by selling off assets, including the sale of Nan Shan, AIG's Taiwan-based life insurer, to Ruen Chen Investment Holdings Co. Ltd., for $2.16 billion in cash last August; and the sale of American Life Insurance Co. to MetLife for $16.2 billion in November 2010.

In the summer of 2009, AIG moved forward with plans to establish its property/casualty and general insurance businesses under an independently managed company, renaming it Chartis and establishing a special purpose vehicle to hold its equity. AIG initially created AIU Holdings to hold the commercial insurance, foreign general insurance, and private client groups that now make up Chartis (Best's News Service, July 27, 2009).

Around that time, AIG also launched SunAmerica Financial, which combined American General Life; American General Life & Accident Insurance Co.; Variable Annuity Life Insurance Co.; Western National Life Insurance Co. (formerly AIG Annuity); SunAmerica Retirement Markets; SunAmerica Asset Management; and Advisor Group, comprised of FSC, Royal Alliance and SagePoint Financial.

SunAmerica Financial Group says it had more than $257 billion of assets under management at year-end 2011.