NEW YORK — American International Group Inc., which has lost billions on bad bets on the mortgage market, on Sunday named former Citigroup Inc. executive Robert Willumstad to replace the insurer’s besieged chief executive.
Willumstad, 62, will take over for Martin Sullivan, 53, effective immediately, the company said. Stephen Bollenbach, the former chief executive of Hilton Hotels Corp., will be named AIG’s lead director.
AIG named Willumstad chairman of the board in fall 2006, about a year after he left his post as president and chief operating officer at Citigroup. Citigroup had passed him over for the CEO job, which went instead to the now-dethroned Charles Prince.
Sullivan, who had worked with AIG for 37 years, joins the long list of CEOs who have been pushed out since the credit crisis started slamming the financial-services industry last year. That list includes Citigroup’s Prince, Merrill Lynch & Co.’s Stanley O’Neal and Wachovia Corp.’s Ken Thompson.
New York-based AIG — the world’s biggest insurer with $1.05 trillion in assets — lost $7.8 billion during the first quarter of the year due to investments and contracts tied to bad loans. Its shares have fallen by more than 50 percent over the past 12 months.
