In the video below, Fool analyst Matt Koppenheffer discusses some key areas that investors in AIG (NYSE:AIG) should be watching.
The first area is management. CEO Robert Benmosche, who took over after the company was bailed out, has done a fantastic job bringing the company back from the brink, Matt says. Non-core operations have been sold off. The balance sheet has been repaired.
The problem is, he won't be the long-term CEO. He came out of retirement to lead AIG, and will be returning to retirement in the near future. The succession plan is important.
AIG's reaction to interest rates is the second area to watch, Matt says. A big part of the insurance business is hanging on to customers' premiums and investing the money. When interest rates are low like they have been, it's tougher for insurers to make money.
The final piece to watch is the performance of the core businesses at AIG, the property and casualty insurance business and life insurance business. With others assets shed, their performance is key to the company's success.