Billionaire Carl Icahn, one of the largest investors in American International Group Inc., is easing off his demands for a breakup of the insurer after the company sold assets and brought on a new chief executive officer, according to people familiar with the matter.

Icahn wants to give new CEO Brian Duperreault a chance to improve the company’s return on equity, said the people, who asked not to be identified discussing private deliberations.

Duperreault, a veteran insurance industry leader who became AIG’s CEO last month, said after the company’s annual meeting Wednesday that he might scale back share buybacks and use excess capital to pursue acquisitions. Those remarks raised questions about whether Icahn would support the strategy. After all, the activist disclosed a stake in AIG in 2015 with a letter that said AIG was ” too big to succeed” and should be broken into three companies.

AIG shares have advanced about 8 percent since the close on April 19, the day before Bloomberg reported that the company was weighing a plan to hire Duperreault, the former CEO of Ace Ltd. and Marsh & McLennan Cos. Still, AIG only trades for about 80 percent of book value, while most large U.S. insurers trade for at least the measure of assets minus liabilities.

Icahn believes that the company is undervalued because investors lost faith in prior management, when it was led by former banker Peter Hancock, according to the people. The billionaire also feels that some risk-reduction measures taken under Hancock could cut the chance of future surprises tied to climbing claims costs.

Hancock, a former banker, used reinsurance contracts with companies including Warren Buffett’s Berkshire Hathaway Inc. to free up capital. He also sold assets like a mortgage insurer.

CEO’s View

There is precedent for Icahn improving relationships with companies that change leaders, such as Hologic Inc. and Cheniere Energy Inc. Icahn in 2016 called Cheniere’s decision to name Jack Fusco CEO “a great step in the right direction.” The energy company has gained almost 50 percent since announcing the switch.

Duperreault, 70, said the day his hiring was announced that he didn’t see his mission as a breakup of AIG. Asked Wednesday whether there was pressure to change his view, the CEO said “I think the shareholders are looking forward to my executing the statements that I made.”

Susan Gordon, a spokeswoman for Icahn, declined to comment, as did AIG’s Jennifer Hendricks Sullivan.