Robert H. Benmosche, who last week came out of retirement totake over as American International Group's fourth chief executiveofficer in just over a year, drew high praise from many industryobservers, who nonetheless warn that he has a major salvage jobahead of him.

Mr. Benmosche, who last served aschair, president and CEO of MetLife, took the reins from Ed Liddy,the former Allstate chair and CEO. Mr. Liddy came aboard last fallto steer the troubled AIG through some rough waters after creditdefault swaps on securitizations of subprime mortgages in thecompany's Financial Products unit nearly bankrupted the iconicfirm, prompting a massive federal bailout.

Mr. Benmosche credited Mr. Liddy with stabilizing the companyand implementing a strategy to repay its debt to the government.(See the story about Mr. Liddy's farewell address to AIG on page10.)

“Now he has passed the baton to me, and I look forward tocontinuing the race,” he said in a statement. “With my AIGcolleagues, we will focus on this mission–maximizing the value ofthe company's assets and meeting all of our stakeholderobligations.”

No one expects a cakewalk for the new CEO, who has maintaineddirect contact with the business world by serving as a member ofthe board of directors at Credit Suisse Group–a post he has heldsince 2002. AIG still faces significant hurdles to pay back tens ofbillions in federal loans, while selling more units and maintainingthe viability of its remaining subsidiaries in the midst of a deeprecession and uncertain investment market.

But the 65-year-old Mr. Benmosche appears to possess theexperience and toughness required to manage AIG's ongoing recovery,analysts, agents and brokers told NationalUnderwriter.

An executive who worked with Mr. Benmosche, and requestedanonymity, said AIG has gotten a tough boss who will be wellinformed and not take a lot of abuse.

“Don't expect Mr. Benmosche to be a punching bag when he talksto Congress,” the executive said. “He will speak his piece and willnot take the abuse Mr. Liddy did when explaining his position [tomembers of Congress].”

Mr. Benmosche is a hands-on executive who “operates by thenumbers,” he noted.

“Managers at AIG ought to be stepping up their efforts becausehe will demand results,” said the source. “He will take home reamsof reports and he will come back the next day ready to ask thetough questions.”

Julie Burke, managing director for Fitch Ratings, observed thatAIG has gotten an executive with a “pretty expansive resume,” whichshould serve his new company well.

Still, he has an enormous task ahead of him, she noted, addingthat the job is no less formidable than what he faced when handlingthe MetLife demutualization in 2000.

The major issue Mr. Benmosche will confront will be restoringthe reputation of AIG–whatever names its insurance subsidiaries goby–as a premier carrier in the eyes of its customers, according toTom Adderhold, president of Preferred Insurance Group, a brokeragein Duluth, Ga.

“AIG, on paper, is as solid as you can get,” he said, but themajor challenge for the new chief executive will be instilling“confidence again” in the company, its agency force and customers,he added.

Mr. Adderhold said the word on the street is that Mr. Benmoscheis a good listener who “talks to those in the trenches beforemaking a decision,” noting that a recent telephone conference withAIG company executives in regional offices left them upbeat andimpressed.

“If he can stabilize AIG and return it to its leading positionin the industry, it will be a win-win for everybody,” Mr. Adderholdconcluded.

One word of caution came via C. Brett Nilsson, senior vicepresident of The Buckner Company in Ogden, Utah, and chair of theIndependent Insurance Agents and Brokers of America. While wishingthe new chief executive well, he expressed his personal opinionthat Mr. Benmosche is an unknown quantity in the property andcasualty insurance marketplace.

“He certainly has been successful in past endeavors throughouthis life with MetLife, as well as both securities and bankingventures,” he noted, but whether that will translate into thep&c realm remains to be determined.

“AIG has also gone through a number of changes over the mostrecent past, and if they are able to secure some stability it coulddo nothing less than calm the marketplace,” according to Mr.Nilsson.

“Most of what I have heard regarding AIG revolves around thenewer entity of AIU Holdings, the property and casualty division ofAIG,” he noted, referring to p&c units that will now be brandedas Chartis.

“This division appears to have calmed down and offered somereassurance that the insurance arm of AIG is alive and well, as ithistorically has been–unlike many of the other services offeredoutside of insurance to various customers,” he said.

Mr. Nilsson added that “it is the government involvement as wellas the ancillary interests that have affected the poor public imageof AIG in the past year, as the company concentrates more on payingback its government-backed loans instead of running thebusiness.”

Thomas Minkler, president of the Clark-Mortenson Agency inKeene, N.H., said Mr. Benmosche “faces a huge task to get [thecompany] back to a place of normalcy and focused on the insuranceside of the aisle.”

Reacting to the appointment, the world's three biggest brokersissued statements praising Mr. Liddy and congratulating Mr.Benmosche on his appointment.

“We all owe Ed Liddy a debt of gratitude for all of his work andeffort on behalf of AIG and the insurance industry,” said GregCase, president and CEO of Aon Corp. “[Mr.] Benmosche is anexcellent choice to succeed Ed in taking up the mantle ofleadership to guide AIG.”

“Ed Liddy is to be commended for stepping into the breach andleading AIG under very trying conditions,” said Joe Plumeri, CEOand chairman of Willis. “I congratulate Bob Benmosche on hisappointment. He's got a strong track record of leadership anddecisiveness that will serve the company well, and I look forwardto working with him.”

“Ed Liddy did a terrific job under very difficult circumstances,and we wish him well,” said Brian Duperreault, president and CEO ofMarsh & McLennan, the parent company of insurance broker Marsh.“At Marsh, we very much look forward to doing business with Mr.Benmosche and wish him great success in his new role.”

BACKGROUND

Mr. Benmosche comes out of a four-year retirement after asuccessful career where he moved up the ranks in finance andmarketing before joining life insurer MetLife as an executive vicepresident in 1995. There, he is credited with stabilizing thecompany's sales force and increasing sales productivity.

Beginning his career in financial services in 1976, he joinedChase Manhattan Bank, where he worked until 1982. From there hemoved to Paine Webber, where he was an executive vice president anddirected the merger with Kidder Peabody.

Despite not having an insurance background, he joined MetLife in1995 as executive vice president, responsible for businessintegration and product development, marketing and sales efforts,focusing on the company's individual customers. A few years afterjoining MetLife, Mr. Benmosche was named to head the company.

National Underwriter reported that Mr. Benmosche saidhis appointment at the time reflected a “changing playing field” inthe financial industry because customers were looking for a widerrange of services. He saw the need for MetLife to demutualize,stating that “the concept of a mutual company no longer allowscompanies to be competitive.”

In 2000, MetLife went through a massive demutualization, andafter going public acquired Travelers Life & Annuity formCitigroup Inc. for $11.5 billion.

“The spring of 2006 is the time I want to commence an active andfulfilling retirement, leaving MetLife in the strongest possibleposition to go forward as a leader in our industry,” he said whenhe left the business. Three years later, he has put his retirementplans on hold to write the next chapter in his career story, aimingto restore AIG to a sound financial footing, while repairing itsdamaged reputation as well.

(With additional reporting by Arthur D.Postal.)