Greenberg, Maurice R.
GREENBERG, MAURICE R.
GREENBERG, MAURICE R. (1925– ), U.S. insurance executive. Born in New York City, Greenberg was six when he moved to a dairy farm after his father's death and his mother's remarriage. After fighting in Europe, Greenberg went to college under the g.i. bill, graduating from the University of Miami and then from New York Law School. Recalled to fight in Korea, he came out as a captain at age 27 and won the Bronze Star. He got a job in the New York office of the Continental Casualty Company and became the protégé of Milburn Smith, an important executive at Continental, who brought Greenberg with him when he joined a predecessor of the American International Group in 1960. From 1967 to 1989, Greenberg, known as Hank, after the Jewish baseball star, was president and chief executive officer of aig, which became the world's leading global insurance and financial services organization, operating in 130 countries. In 1989 be became chairman and chief executive officer. In 10 years under Greenberg, operating profits grew at a compound rate of 25 percent a year. A key to Greenberg's immense success was his concentration on giant commercial deals rather than cyclical car and home insurance business. During his tenure, he increased aig's share of the life insurance business and supplied coverage on unusual risks: kidnap insurance and protection from suits against officers and directors of corporations. Known for his aggressiveness, Greenberg rarely lost money on underwriting, knowing which risks can be insured at a profit, how much to charge, and spreading the risk among others called reinsurers. aig used brokers primarily as go-betweens, merely bringing business to the company, where aig technicians examined the risk factors more closely. The reinsurers paid aig a commission for the business they got, thus helping pay the cost of underwriting the whole risk.
Greenberg, whose company was founded in Shanghai but has had headquarters in New York since 1939, courted the Chinese market and won a major contract with the People's Insurance Company of China in 1980. He was active in a number of trade and cultural organizations, including the Asia Society, the U.S.-Philippine Business Committee, the U.S.-Korea Business Council and the Council of Foreign Relations. He served on the board of directors of the New York Stock Exchange and was a past chairman of the Federal Reserve Bank of New York. In New York City, he served on several hospital boards and museum boards.
Greenberg and his wife had four children, two of whom, Evan (1955– ) and Jeffrey (1952– ), became leaders of important insurance companies after they left aig. Jeffrey joined the Marsh & McLennan Companies, an industry giant, as a partner in its investment unit. In November 1999 Jeffrey became chief executive of Marsh & McLennan and he added the title of chairman in 2002. In October 2004, New York's attorney general, Eliot *Spitzer, filed a civil suit against the brokerage, charging that Marsh & McLennan was rigging bids and fixing prices in the sale of property and casualty insurance to businesses. Jeffrey submitted his resignation as part of an agreement negotiated by the company and its directors that would keep Spitzer from bringing criminal charges against the company. At the time it was the largest insurance broker in the world. In 2004, Evan Greenberg became chief executive of Ace Ltd., a Bermuda-based insurer with worldwide reach. Ace did well in the insurance boom that followed the attacks on the World Trade Center. In November 2004 Ace was a subject of the New York attorney general's investigation into bid-rigging and price-fixing.
In March 2005, Maurice Greenberg stepped down as chief executive of aig after a series of run-ins with regulators raised questions about the company's complex and often obscure operations. His exit appeared intended to avert a head-on collision with two regulators: the Securities and Exchange Commission and the New York attorney general, Spitzer. The departure of Greenberg after almost 40 years at the helm was a final chapter to one of corporate America's great rags-to-riches stories.
[Stewart Kampel (2nd ed.)]
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