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2011 Newsmakers


It may be an understatement to say 2011 has been an eventful year for American International Group Inc. CEO Robert Benmosche. Mr. Benmosche began 2011 by announcing that, after consulting with doctors who had been treating him for cancer, he intended to remain in his position until 2012. Shortly thereafter, he presided over AIG's first earnings call since 2009, which occurred after the federal government assumed nearly 80% ownership of the company after its near-collapse in September 2008. One of Mr. Benmosche's goals has been to repay the government in full and re-establish AIG as a truly independent entity. In late May, AIG and Treasury participated in a stock offering of AIG common shares, which reduced the Treasury's ownership of AIG. Meanwhile, AIG's Chartis Inc. unit underwent a management shakeup and revamping as AIG Executive Vp Peter D. Hancock replaced Kristian P. Moor as the unit's CEO. Throughout the year, AIG continued to pay back the government for its financial assistance. And it continued this fall despite suffering a $4.11 billion loss in the third quarter. Yet Mr. Benmosche remained optimistic about AIG's outlook. “Despite the difficult external environment, we are encouraged by the progress we've made and the underlying strength of our core insurance businesses,” Mr. Benmosche said in a statement discussing AIG's third quarter performance in early November.

One of the top insurance stories of the century to date took a new turn in August when a three-judge panel of the 2nd U.S. Circuit Court of Appeals in New York overturned the convictions of four former executives of General Re Corp. and one former executive of American International Group Inc. convicted in 2008 in connection with a bogus finite reinsurance deal. The appeals court judges ruled in part that the jury that originally heard the case had been improperly instructed. The defendants in the case—Ronald E. Ferguson (pictured), former Gen Re CEO; Christopher P. Garand, former Gen Re senior vp in charge of U.S. finite underwriting; Robert Graham, former Gen Re senior vp and assistant general counsel; Elizabeth Monrad, former Gen Re chief financial officer; and Christian M. Milton, former AIG vp for reinsurance—were convicted on various counts, including conspiracy, fraud and making false statements to the U.S. Securities and Exchange Commission. All of the defendants received prison sentences, but all appealed. In early August, the appeals panel ruled that U.S. District Court Judge Christopher Droney in Hartford, Conn., had erred in his failure to instruct his jury to determine whether the company executives directly caused the improper accounting of the sham reinsurance deal. The panel also said Judge Droney admitted inappropriate evidence about the deal's impact on the New York insurer's market performance. The panel ordered a new trial, for which a date has not yet been set.

The usually outspoken Maurice R. Greenberg, former chairman and CEO of American International Group Inc. and now head of C.V. Starr & Co., was true to form this year. He started off the year by criticizing his former company for selling off assets such as Nan Shan Life Insurance Co., charging that it is making itself weaker. He subsequently predicted the U.S. Treasury will be an AIG shareholder for “a very long time,” then sued the government for $25 billion, claiming its AIG takeover was unconstitutional. His legal travails also continued. While many allegations were dropped after AIG's 2006 agreement to pay $1.6 billion in damages and penalties in a case involving the New York-based insurer's accounting, some charges remain, including that Mr. Greenberg and former AIG Chief Financial Officer Howard I. Smith were involved in arranging a bogus 2001 loss portfolio transaction with General Re Corp. Attorneys for Messrs. Greenberg and Smith filed a motion in March seeking to remove the presiding judge in the case, Charles Ramos, claiming he was biased. And in May, he said he was set to appeal decisions Judge Ramos had made in the case. Meanwhile, Messrs. Greenberg and Smith received $60 million in insurance proceeds to reimburse them for legal costs. Mr. Greenberg also was active in his latest position. Starr formed a strategic partnership with a Chinese insurer Dazhong Insurance Co. Ltd. and was among the bidders, with Enstar Group Ltd., for Transatlantic Holdings Inc.

Michael McRaith won considerable praise from the insurance industry when the Obama administration named him as the first director of the new Federal Insurance Office. Mr. McRaith, previously Illinois' insurance director, drew plaudits for his industry knowledge and fairness. His expertise was deemed particularly critical for his new job, which includes representing the United States in international insurance regulatory forums and overseeing the federal government's terrorism insurance backstop program. The office was created by the Dodd-Frank Wall Street Reform and Consumer Protection Act. But contrary to the hopes of some in the insurance industry who favor greater federal regulation of insurance, FIO will serve primarily as an advisory body that issues reports on various aspects of insurance. Its power to trump state regulation extends only to some areas of international insurance arrangements. Since his appointment in March, Mr. McRaith has maintained a relatively low profile, and didn't even appear before a congressional committee until months after he had assumed his new job. But as the first federal insurance regulator, limited as his regulatory powers may be, Mr. McRaith seems certain to shape the job and office in ways that will affect the federal government's approach to insurance matters for years to come.

Patrick G. Ryan, chairman and CEO of Ryan Specialty Group L.L.C., achieved his ambition of entering the Lloyd's of London market when Ryan Specialty acquired Jubilee Group Holdings Ltd. this year. Making use of a rule change that once again allows brokers to own managing agencies at Lloyd's, Ryan Specialty bought Jubilee in May and installed former Lloyd's Chairman Max Taylor as Jubilee's nonexecutive chairman and well-known Lloyd's underwriter Johnny Rowell as its CEO. Mr. Ryan described the acquisition as a “major event” and said he believed the buy would allow Ryan Specialty to introduce and support new products and programs in global markets “in a meaningful way.” It has been a busy year for Mr. Ryan, an industry veteran who returned to the insurance field to found Ryan Specialty in 2010 after taking time out to head Chicago's bid to host the 2016 Olympic Games. His new venture has grown through acquisitions and by launching new operations. In January, Ryan Specialty launched Technical Risk Underwriters, a specialty managing general underwriter focused on complex construction and property risks. It then acquired American E&S Insurance Brokers from Wells Fargo Insurance Services Inc. In July, the firm launched a managing general underwriter, PER Se, specializing in renewable energy risks. Ryan Specialty also was named one of just two wholesalers to which Aon Corp., founded by Mr. Ryan, would show business before showing it to other whole-salers if neither could provide the coverage.