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Chartis to Cut Less than 1% of Workforce

Posted on 05 Oct 2011

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American International Group Inc. (AIG) is cutting jobs at property-casualty carrier Chartis as the company seeks to improve the performance of its largest unit.

“As part of Chartis’s review of its personnel needs, we have resized our staffing levels to reflect our business objectives,” said Mark Herr, a spokesman for the New York-based insurer, in an e-mailed statement today. “We continue to hire where we see the best potential for growth.”

The reductions amount to less than 1 percent of the staff at Chartis, he said. The unit has about 40,000 employees, according to its website.

AIG Chief Executive Officer Robert Benmosche in March named Peter Hancock to lead Chartis after it was forced to take a $4.2 billion charge because reserves were inadequate. Benmosche is working to reverse the company’s stock slide as he seeks private investors to buy shares acquired by the U.S. Treasury Department through its bailout. AIG plunged 58 percent this year in New York Stock Exchange composite trading.

Chartis contributes more than half of AIG’s revenue after the company sold non-U.S. life insurers, a consumer lender and a fund manager to help repay its rescue. The firm is among insurers pressured this year by natural disasters including Japan’s costliest earthquake and U.S. tornadoes.

Reducing Volatility

AIG, once the world’s largest insurer, has cut its workforce as Benmosche, 67, dismantles the company that Maurice “Hank” Greenberg built with $50 billion in acquisitions in his four decades leading the firm through 2005. The insurer had about 63,000 workers as of Dec. 31, according to a regulatory filings. That compares with 116,000 at the end of 2008, the year it was rescued by the government.

Chartis’s management “continues to review its underlying business to ensure that they meet overall performance measures, while seeking to reduce the overall volatility of results,” AIG said in August in its second-quarter filing with the U.S. Securities and Exchange Commission.
Herr declined to comment on where the job cuts occurred at Chartis.