How Peter Zaffino Led AIG to Stability, Profitability, and an AI-Driven Future

AIG's New Era of Stability Under Peter Zaffino

Peter Zaffino, AIG’s chairman and CEO, is steering the company toward a new phase of stability after facing significant challenges in the past decade. Following one of the largest U.S. government bailouts during the financial crisis, AIG underwent multiple management changes and asset sales to repay the Treasury. Since joining AIG in 2017 and becoming CEO in 2021, Zaffino has focused on streamlining the business, reducing exposure by over $1 trillion, and repositioning AIG as a more focused and resilient insurer.

This includes spinning off Corebridge Financial and selling AIG’s global personal travel insurance and assistance business in a $600 million deal. Zaffino is also pushing the company to adopt artificial intelligence, partnering with Anthropic and Palantir to integrate AI into underwriting and risk processes.

AIG’s Turnaround Strategy

When Zaffino joined AIG, the company was far from its pre-crisis stature. It had diversified into areas like aircraft leasing, but its financial and operational performance lagged behind its strong brand reputation. From 2008 to 2018, AIG lost over $30 billion in underwriting alone. This level of loss was unprecedented and highlighted the need for cultural and operational transformation.

Zaffino and his team redefined the company’s focus around underwriting discipline and operational excellence. They aimed to control volatility and improve predictability in outcomes by shedding over $1 trillion in risk exposure. Investment in data, technology, cloud computing, and service delivery has been central to this transformation. As a result, AIG has emerged as a top-quartile performer with a strong underwriting culture.

Reducing Risk Exposure and Volatility

One of the key decisions involved identifying which parts of the business to exit. Zaffino explains that the company analyzed portfolio performance and volatility to better understand risk. AIG historically took on excessive volatility, which made outcomes unpredictable, especially in the face of natural catastrophes. What used to be a $100 billion active season for natural disasters has now become a yearly norm, with last year’s figures reaching $140 billion.

The company has since reduced its volatility significantly, becoming one of the most predictable insurers in its peer group. The focus is now on underwriting profit and solving risk issues with more disciplined risk management.

Integrating AI Into Underwriting

Artificial intelligence plays a central role in AIG’s strategy to enhance underwriting. The company places the underwriter at the core but equips them with AI-powered tools to improve decision-making and reduce cycle times. Using generative AI and large language models, AIG delivers richer, more comprehensive information to underwriters faster than ever before.

To achieve this, AIG developed an end-to-end AI-enabled process. The company ingests structured and unstructured data, including PDFs and text, and uses AI models to extract relevant information that might otherwise be missed. Palantir supports AIG in turning this data into actionable insights, while Anthropic’s Claude models help improve data extraction and speed.

Early pilots demonstrated results exceeding expectations, with some processes running 10 times faster and delivering more detailed data. AIG is now scaling these AI capabilities across its larger business units.

Workforce Evolution with AI

The adoption of AI has shifted the roles within AIG’s workforce. Tasks like data entry and extraction, once done by underwriting assistants, are now simplified or automated. This allows underwriters to process information faster and handle more cases without compromising quality.

AIG is training its AI systems to handle up to 70% of underwriting tasks autonomously, allowing experienced underwriters to focus on complex cases. This transition requires upskilling and retraining employees to thrive in a tech-enabled environment. Beyond underwriting, AI is also expected to reduce costs in shared services, finance, and other operational areas.

Managing Geopolitical Risks

Geopolitical instability presents ongoing challenges. Tariffs and trade tensions have had limited short-term impact on AIG’s underwriting but remain areas of attention. Cybersecurity risks have intensified, with cyber attacks becoming more frequent and sophisticated. AIG dedicates significant resources to monitoring and evolving its cyber risk models.

Terrorism risks continue to be part of AIG’s risk assessment framework. The company actively evaluates how emerging technologies like AI may introduce new risks or amplify existing ones, particularly in cybersecurity.

These factors demand agility from AIG to adjust in real-time and provide clients with relevant risk advice. Collaboration with regulators and clear communication with investors—who are increasingly focused on AI developments—are also critical components of AIG’s approach.

Leadership Insights from Peter Zaffino

Zaffino distinguishes leadership from management by emphasizing vision and leading by example. He encourages debate but values timely, high-quality decision-making over endless deliberation. A strong leadership team committed to the company’s mission is essential to drive outcomes.

Transparency about challenges and opportunities helps build trust among professionals who understand the realities of business. This committed culture is what enables AIG to deliver on its goals and maintain relevance in a complex industry.

Through deliberate focus on underwriting excellence, disciplined risk management, and strategic AI adoption, AIG under Peter Zaffino’s leadership is positioned for sustainable success.

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