Replacing A Legend

In the fall of 2003, I spotted Maurice Greenberg struggling tomake his way through a crowded New York hotel lobby to deliver yetanother keynote address. The most powerful person in theproperty-casualty insurance worlda huge presence, yet relativelysmall in physical staturewas in danger of being swept away in thehuman current of those rushing towards him.

No, these were not fans of Hanks racing to see theiridolalthough he is as close as there is to a star in this low-keyindustry, there are no insurance groupies, and this throng had noidea who he was. They were after a true celebrityactor JamesSpader, who had emerged from the elevator on his way to a TVinterview about his Emmy Award winning role on “The Practice.”

To quote Yogi Berra, it felt like d?j? vu all over again when itwas announced last week that Mr. Greenberg would finally step asideas CEO of AIG after 38 years at the helm. Once again, it appearedhe was being swept away by forces beyond his controla rare eventduring his long reign.

Stepping down was for the good of the company, which has beenbesieged by a barrage of government probes and subpoenas. Mr.Greenberg himself was reportedly involved in one incident underinvestigation, and as Martha Stewart was quick to learn, you cantrun a massive corporate enterprise while trying to defend yourselfagainst aggressive prosecutors.

While hes not quite gone yetremaining on board, at least for theshort term, as “non-executive chairman”he is no longer in charge ofday-to-day operations. That unenviable duty falls to Martin J.Sullivan, who took over as president and CEO after serving over 30years with AIG, most recently as vice chairman and co-chiefoperating officer.

Mr. Sullivan realizes what hes up against in replacing a legend.“It is a daunting task to step into the shoes of Hank Greenberg,”he conceded. Even without government investigators breathing downhis neck, stepping in for a giant would be no picnic. Taking overduring a crisis is brutal.

But its likely this, too, shall pass, and Mr. Sullivan isbullish. “We have an extremely strong business and our financialfundamentals remain intact,” he said. “The company is committed tocooperating with the governmental authorities in their ongoinginvestigations. We take these matters seriously and want to bringthem to resolution.”

AIG will take a hit, just like Marsh and Aon did recently, butit will survive and is likely to prosper in the long term. No otherU.S. insurer enjoys its global reach. This is no house of cardslike WorldCom or Enron.

However, it is unlikely Mr. Sullivan will ever be able toreplace his predecessor in terms of Hanks high profile in thebusiness and influence in governmentor even if he aspires to do so.Thats a big loss for an industry already weakened by its lack ofunity on key issues. Insurance never speaks with one voice on thep-c side, but Mr. Greenbergs came closest to resonating throughoutthe field.

When Hank finally fought his way through that Spader-frenzy backin 2003 and made it to the podium to deliver his speech, thespotlight shifted. There was no question he was the star on thisstage. Forget what they used to say in the ads for long-forgottenE.F. Huttonwhen Hank Greenberg spoke, people listened. Who in thisindustry will people listen to now?

Sam Friedman

Editor-In-Chief

Reproduced from National Underwriter Edition, March 17, 2005.Copyright 2005 by The National Underwriter Company in the serialpublication. All rights reserved.Copyright in this article as anindependent work may be held by the author.