NEW YORK–While declining to address any regulatory controversies in light of ongoing litigation, industry icon Maurice “Hank” Greenberg returned to the industry speaking circuit today with a call for insurers to defend continued globalization not only for their own “selfish” reasons, but for the good of the country's economy.

“I am not going to talk about regulation…not yet. I will soon, and I can't wait,” Mr. Greenberg told nearly 400 members of the Association of Professional Insurance Women and the New York chapter of the Chartered Property Casualty Underwriters Society, packed into a New York City hotel ballroom.

The only other time he touched on his own situation was a self-deprecating remark after noting Chinese efforts to crack down on corruption holding back efficient economic growth. “The Chinese will make examples of some very high-profile people to get everyone else in line,” he added, before quipping: “Sound familiar?”

Probes into alleged accounting irregularities–including charges that AIG misused finite reinsurance to artificially bolster its bottom line–were among the issues that eventually forced Mr. Greenberg to relinquish his chairman and chief executive officer posts at the company in 2005. A civil suit filed by former New York Attorney General (now Governor) Eliot Spitzer is still pending.

Mr. Greenberg, now chairman and CEO of C.V. Starr & Company, has denied any wrongdoing on his part.

Meanwhile, his work at C.V. Starr–a global insurance and investment firm founded in China in 1919 by Cornelius Vander Starr, who also started up AIG–continues to take him around the world.

“From my own selfish point of view, I have operated companies that do business globally, but the benefits of globalization are not limited” to his firm's interests, he said, warning earlier that “if globalization is threatened, it would be terrible not only for the insurance industry, but for the world economy as well as U.S. interests.”

He described a booming Chinese economy that has propelled the country “up the economic food chain dramatically,” but added that growing pains are already evident, creating opportunities to put U.S. risk management concepts to work.

“The rapid growth there has caused terrible pollution,” he said. “The environmental problems are just staggering, and if they don't do something soon to correct that, their health care costs will skyrocket as well.”

He also predicted that China will keep expanding beyond its borders, creating opportunities for U.S. insurers.

“They will start up branches of Chinese companies or buy into markets around the world, including our own,” he said. “It won't be long before you see a lot of Chinese cars on our highways, many of which likely will be built in U.S. plants, where the Chinese won't face the legacy issues of pensions and health care costs crippling U.S. manufacturers.”

Such a trend is ultimately “good for us because it increases Chinese exposure to the global economy and creates more interdependence and cooperation.”

However, globalization could be derailed if calls for protectionism are heeded in the face of a growing trade imbalance with China and fears about U.S. job losses, he said–warning that punitive tariffs and trade restrictions would inevitably do the U.S. economy more harm than good.

“We don't operate in a vacuum,” he said. “As their trade surplus grows, they pile up U.S. dollars, then they buy our Treasury bills, thus keeping our interest rates down and our inflation low.”

A more productive response, he suggested, would be to improve teacher pay and bolster U.S. school systems “so that we can keep our biggest competitive edge, which is our innovative, knowledgeable and productive work force.”

Special Reports /

Greenberg Urges Insurers To Defend Globalization

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