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Nearly 50 years after he took American International Group Inc. public, Maurice R. Greenberg remains an iconic figure in the insurance industry.
Famed for building a hugely successful global corporation, Mr. Greenberg’s influence in the insurance business and elsewhere continues through his work leading C.V. Starr & Co. Inc., the company he built after leaving AIG, the army of executives throughout the industry who learned their trade at the insurer, and the numerous coverage innovations developed under his auspices.
In recognition of all his achievements in the insurance sector, Mr. Greenberg received the 2018 Crain Lifetime Achievement Award at the Business Insurance U.S. Insurance Awards last month in New York.
Widely known as “Hank” after the 1930s Detroit Tigers slugger, Mr. Greenberg was born in New York City and raised in the small summer resort town of Swan Lake in upstate New York.
He played football in high school, but games were suspended after the outbreak of World War II due to gasoline shortages. “So, I got bored and I joined the Army,” he said.
After attending the Army Signal School in Monmouth, New Jersey, he was stationed in England before taking part in the Allied invasion of France in June 1944.
Returning from the war, “I had to finish high school, which was the hardest thing I ever had to do. I came to New York to the Rhodes School and got a room for about $5 a week on the west side. I didn’t know anybody in New York. It was a very tough period,” Mr. Greenberg said.
After attending college followed by law school, he was recalled during the Korean War, rising to the rank of captain.
Returning to New York in 1952, he looked for a job to support his young family and visited some fellow law school graduates in Manhattan, but “they were all struggling.” Leaving their office, “I just walked down the street and walked into Continental Casualty,” an insurer now part of CNA Corp.
After poor treatment from the human resources manager, Mr. Greenberg walked into the office of the company’s regional vice president to tell him what he thought and left with a job.
Starting out in accident and health underwriting, he quickly made his mark, took on additional responsibilities and seven years later was named Continental Casualty’s youngest vice president.
In 1960, he was recommended to Cornelius Vander Starr, who founded an insurance agency in Shanghai in 1919 that had diversified and seen rapid growth.
Lured after a couple of tries to join the Starr organization, Mr. Greenberg first was tasked with building an international accident and health business and then with turning around the struggling American Home Assurance Co., which relied on an expensive agency network to sell insurance.
“It had horrible results, so I turned it around and built a brokerage business, not an agency business, and got out of simple classes and got into more difficult commercial classes,” Mr. Greenberg said. He performed similar turnarounds at National Union Fire Insurance Co. of Pittsburgh, Pa. and New Hampshire Insurance Co., which, along with a life insurance company, became the foundation of AIG.
Succeeding Mr. Starr, who died in 1968, Mr. Greenberg reorganized the various companies and a year later took AIG public with a market value of $300 million. The company embarked on an era of extraordinary global growth, and when he left 36 years later, it had a market value of $180 billion and did business in 137 countries.
With a firm grip on expenses — AIG consistently had an expense ratio significantly lower than its competitors — and focused on making an underwriting profit, Mr. Greenberg saw opportunities in insuring hard-to-place risks that traditionally had been covered in London. He began what became a long tradition at AIG of developing new products to cover tough and emerging liabilities.
“I hired some very good people, and it’s much easier doing business in the United States than going to London, so a lot of the brokers supported us and we did quite well,” he said.
A few years later, in 1975, Mr. Greenberg made the first of many trips to China to build contacts and learn more about the potentially huge market. After about 20 years of visits, AIG became the first foreign insurer to win a license for a wholly owned Chinese insurance company.
He also built operations in Eastern Europe, before the Iron Curtain came down, and throughout the rest of the world.
Mr. Greenberg built a culture that demanded commitment and results from both himself and his team.
“You have a culture that attracts certain kinds of people … it cleanses itself,” he said. “We never had a problem getting people.”
Mr. Greenberg’s leadership qualities are unique, said Kevin Kelley, vice chairman of global risk solutions at Liberty Mutual Group Inc., who worked at AIG for more than 30 years, rising to run its excess and surplus lines unit, Lexington Insurance Co.
“He has a clear, sharp and brilliant strategic mind, and he couples that with uncanny operating instincts, and generally the two of those don’t go together in individuals,” he said. “When you left his office, you always knew what the next move was, there was never any doubt or hesitation, and that’s the mark of a great leader,” he said.
In addition, “He created a culture at AIG that was a winning culture, and his passion spread to all of us. You either thrived in the culture or you didn’t, but if you did, it was fun.”
He also inspired loyalty because he was loyal to his staff, particularly on a personal level in instances when staff members suffered serious medical issues. Mr. Greenberg would use his extensive connections in the medical world to secure treatments, Mr. Kelley said.
After the extended period of success, AIG and Mr. Greenberg came under fire when former New York Attorney General Eliot Spitzer began investigating the finite risk market in the early 2000s using powers available under New York’s controversial Martin Act, which allows for prosecution without having to prove intent. Mr. Spitzer alleged AIG had used finite reinsurance deals to inflate loss reserves and pressured the board to make changes.
Mr. Greenberg resigned from the company in 2005, a few months before he had planned to retire as CEO, but fought the allegations, eventually settling the whittleddown charges for comparatively moderate amounts and without admitting wrongdoing. Mr. Greenberg sued Mr. Spitzer for allegedly defamatory remarks he made during the investigation, and the suit is ongoing.
On leaving AIG, which later under its new management nearly collapsed during the financial crisis, Mr. Greenberg maintained his position as head of C.V. Starr and built it into a multinational insurance and investment company. Starting with a small staff and about $3 billion in capital, the company now has about 3,000 staff and $9 billion in capital, he said.
Looking to the future, Mr. Greenberg sees huge changes ahead, but also opportunities. “There’s no question that technology will change our industry ... It’s going to have profound effects, not just on the insurance industry, and I’m all for it.”
ABOUT THE AWARD
The Crain Lifetime Achievement award, named after the family that founded Business Insurance, recognizes an individual whose outstanding contributions have had a lasting impact on the insurance and risk management sector. The 2018 honoree of Business Insurance’s most prestigious award is Maurice R. Greenberg, chairman and CEO of C.V. Starr & Co. Inc. Mr. Greenberg and the 2017 honoree, Patrick G. Ryan, chairman and CEO of Ryan Specialty Group L.L.C., are also the first inductees into the Business Insurance Hall of Fame. Both executives received their honors at the U.S. Insurance Awards presentation in New York on March 8.
Business Insurance recognized achievements by outstanding executives and teams of professionals working in the field of risk management and commercial insurance at its inaugural U.S. Insurance Awards presentation in New York on March 8.