Benmosche Battles AIG Myths, Staves off Retirement

AIG's CEO Robert Benmosche debunks the many myths held against the large insurer, talks about putting off his retirement further and shares how Hank Greenberg first approached him for the job.

By JONATHAN KENT, a business reporter and editor based in Bermuda

HAMILTON, Bermuda---American International Group CEO Robert Benmosche is fed up with his company's name signifying corporate disaster. Instead, he wants to see the AIG brand associated with overcoming adversity against the odds.

The 67-year-old, who has led the bailed-out insurance giant to relative stability over the past two years after it teetered on the brink of collapse during the financial crisis, told delegates at the Bermuda Captive Conference that AIG was "back to being a really strong insurance company."

He addressed what he described as "myths" surrounding AIG and sought to debunk them one by one in front of a 500-strong audience dominated by insurance professionals at the Fairmont Southampton Hotel.

"I want AIG to no longer be the symbol of everything that went wrong," he said. "I want AIG to be symbolic of people working hard to put things right."

Many people were surprised that AIG still existed, he said, particularly its rivals, which had been hoping for an avalanche of new business.

"A lot of you said, 'There is no way AIG could ever be here again'," he said. "In fact, a lot of our competition has been waiting for the customers to arrive--and if they have to arrive, they're not coming on their own."

It was an ebullient performance from the now-bearded Benmosche, who is battling cancer but showed no sign of weakness. The former MetLife chairman and CEO was plucked from retirement to take on the momentous task of turning around the fortunes of the New York-based behemoth. He has been credited with restoring morale and stability and setting the group on the road to paying back the taxpayer.

STAYING ON AND ENJOYING IT

Afterward, he said he had informed the company board that he would be open to the idea of extending his tenure into 2013, health permitting.

"If they want me to stay on, I've decided that retiring, with my health issues, is not the best and that I'd like to stay active a little bit," Benmosche said in an interview. "So I said that in 2012, if the board would like me to stay on until 2013, and my health says I'm able to do that, then I'd consider doing that.

"I'm enjoying it, because we're at a point now where we're actually successful. I get a lot of energy from the people in this company and their feelings of success and their appreciation for all of us working together. That's part of the psychology of staying strong," he added.

Benmosche has led the restructuring of the company into a smaller, more insurance-focused organization, following a taxpayer-funded $182 billion bailout. More than two dozen businesses have been sold off to pay of chunks of its debt, leaving AIG to concentrate chiefly on its Chartis property/casualty arm and its SunAmerica life insurance and annuity operation.

The U.S. government still owns 77 percent of AIG, even after selling off 200 million shares for $5.85 billion last month. Benmosche is adamant that every cent will be repaid.

Benmosche told his audience that he was looking to sell the group's aircraft leasing operation, International Lease Finance Corp., which has a fleet of 930 planes. When he believed it could get its book value of $8.3 billion in an IPO, he would look to sell it off, he said.

HANK STEPPED IN

Benmosche had agreed to suspend his plans to retire and produce wine in Croatia after first being approached in early 2009 by former AIG chairman Maurice "Hank" Greenberg, who tried to persuade him to go for the AIG job.

"Hank said things were going to get worse, and there may be nothing left of AIG," Benmosche recalled. "And this industry could not afford to have AIG fall apart."

The U.S. Treasury came calling in June 2009, and Benmosche agreed to succeed Edward Liddy. His own holding in MetLife, a large proportion of his own private wealth, was instrumental in his decision to take what seemed to many a poisoned chalice.

"If AIG folded, this industry would take a decade to recover, and we'd all suffer," Benmosche said.

Though the charismatic leader has earned praise from many quarters for getting AIG back on an even keel, Benmosche was keen to pass on the credit to AIG's workforce.

"I'm absolutely shocked with the amount of success the people of AIG have had in the 22 months I've been here," he said in an interview.

"When you talk about long-service employees and staff who have stayed here and they're all committed to getting this right, they're way ahead of any expectation, and I think it speaks well of the 65,000 people here," he said.

THE MYTHS DEBUNKED

Loss of many key managers and customers were among the "myths" Benmosche challenged. The CEO said that AIG had lost about 3 percent, or 60, of its top-ranking 2,000 staff, while 57 percent of those who remained had been with the company 10 years, and 20 percent for 20 years.

On business retention, Benmosche said: "We've retained 92 percent of our relationships, and we're in the low 80s for policies and premiums."

He also disputed the idea that AIG had offloaded its "crown jewels" with a much diminished company left behind.

"We're still the largest property/casualty company in the world," Benmosche said. "I think it's huge what's left behind."

"The ratings agencies were blown away by what we still had intact," the CEO added. "AIG sits here today as an investment-grade company with pretty good ratings. We are back to being a really strong insurance company."

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