Replacing A Legend

Replacing A Legend

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

No, these were not fans of Hanks racing to see their idolalthough he is as close as there is to a star in this low-key industry, there are no insurance groupies, and this throng had no idea who he was. They were after a true celebrityactor James Spader, who had emerged from the elevator on his way to a TV interview about his Emmy Award winning role on “The Practice.”

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

Stepping down was for the good of the company, which has been besieged by a barrage of government probes and subpoenas. Mr. Greenberg himself was reportedly involved in one incident under investigation, and as Martha Stewart was quick to learn, you cant run a massive corporate enterprise while trying to defend yourself against aggressive prosecutors.

While hes not quite gone yetremaining on board, at least for the short term, as “non-executive chairman”he is no longer in charge of day-to-day operations. That unenviable duty falls to Martin J. Sullivan, who took over as president and CEO after serving over 30 years with AIG, most recently as vice chairman and co-chief operating 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 down his neck, stepping in for a giant would be no picnic. Taking over during a crisis is brutal.

But its likely this, too, shall pass, and Mr. Sullivan is bullish. “We have an extremely strong business and our financial fundamentals remain intact,” he said. “The company is committed to cooperating with the governmental authorities in their ongoing investigations. We take these matters seriously and want to bring them to resolution.”

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

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

When Hank finally fought his way through that Spader-frenzy back in 2003 and made it to the podium to deliver his speech, the spotlight shifted. There was no question he was the star on this stage. Forget what they used to say in the ads for long-forgotten E.F. Huttonwhen Hank Greenberg spoke, people listened. Who in this industry 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 serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.