American International Group (AIG) has officially named Peter Zaffino as chief executive officer, succeeding Brian Duperreault, AIG’s current CEO, who will become executive chairman of the board. Both moves are effective March 1, 2021.

Duperreault’s move to executive chairman is temporary; he will step down as executive chairman at the close of 2021 and become a non-officer employee.

The plan to have Zaffino succeed Duperreault as CEO was announced last October, after Zaffino had taken on the role as president and also become a director.

The two leaders have worked together for a while. When Duperreault became AIG president and CEO in 2017, he brought on Zaffino – then the Marsh CEO- as executive vice president and global chief operating officer. Prior to his role at Marsh, Zaffino was president and CEO of Guy Carpenter from 2008 to 2011, a company he first joined in 2001.

When he started at AIG in 2017, Zaffino took on oversight of the day-to-day business of all country operations, including U.S. commercial field operations and AIG’s multinational organization, as well as global business services, administration and communications. He was also involved in developing AIG’s long-term strategy and operating plan.

He assumed the additional role of CEO of AIG’s General Insurance business in November 2017 and during his tenure that unit reported a $179 million underwriting profit, its first underwriting profit since the financial crisis

Last January, Zaffino took on the title of president from Duperreault.

On February 11, 2021, AIG entered into letter agreements with Zaffino and Duperreault laying out the leadership transition.

The agreement with Zaffino, 53, provides that he will serve as president and CEO for an initial annual target direct compensation of $17 million , comprising an annual base salary of $1.5 million, a target 2021 short-term incentive opportunity of $4 million and a target 2021 long-term incentive opportunity of $11.5 million.

Additionally, Duperreault will serve as executive chairman upon the through the close of business on December 31, 2021, after which he will become a non-officer employee of AIG “providing assistance and advice to the extent requested” by the CEO. His agreement provides for a 2021 annual target direct compensation beginning of $12,750,000, comprising an annual base salary of $1 million, a target 2021 short-term incentive opportunity of $750,000 and a target 2021 long-term incentive opportunity of $11 million in the form of 50% restricted stock units and 50% stock options. During his term as executive chairman, he will continue to be entitled to benefits consistent with senior executives of AIG.

As well, the agreement with Duperreault also provides for 2022 annual target direct compensation for service as a non-officer employee of $7.5 million, comprising an annual base salary of $500,000 and a target 2022 long-term incentive opportunity of $7 million in the form of 50% in restricted stock units and 50% in stock options. Duperreault’s employment will end at the close of business on December 31, 2022.

Prior to becoming CEO at AIG, Duperreault was chairman CEO of Hamilton Insurance Group from 2013 to 2017. He served as president CEO of Marsh & McLennan Companies from 2008 to 2012. Before joining MMC, he served for two years as non-executive chairman of ACE Limited and as CEO of ACE from 1994 through 2004. Prior to joining ACE, Duperreault held various senior executive positions with AIG and its affiliates from 1973 to 1994.

AIG releases its fourth quarter and full tear 2020 result today.

*This story ran previously in our sister publication Insurance Journal.