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Book Review: The AIG Story

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The AIG Story is corporate history, and the first look at confidential company information. Maurice Greenberg's driving force created what became the world's largest insurance company. When he left AIG, it had $ 1 trillion in assets, and $ 11 billion net income. This is one of the most dramatic success stories in American corporate history.

My view of the story is tempered by having read two similar books by CEOs, for whose companies I worked. At times, I reported directly to one of the CEOs. I know enough about both of them to know something of how they operated—the dark side as well as the sunny side. But despite this caveat, The AIG Story is well worth reading, and instructive.

The first part of this book details "Building A Business." Like many careers in the 1950s and 60s, Greenberg's career path came by chance. In 1952 he was walking down William St and saw the office of Continental Casualty. He went in, applied for a job, was turned down, pushed on and was hired as a management trainee. For those who remember the Property & Casualty business of this era, it was a traditional, establishment industry.

At AIG, Greenberg used a lot of innovation and dynamic energy to create an insurance company which out performed its competitors. Greenberg's approach is described as "a relentless quest to be first—first to develop and launch products, first to open and grow markets, first in performance from earnings to growth to assets. This culture spawned a commitment to innovation unlike the culture at any other insurance company." Along with this corporate culture, AIG's growth was driven by Greenberg's management focus. This included product innovation, expense control, risk management, profit centers, systematic meeting with executives and accountability.

Under Greenberg's leadership, AIG was early into what is now commonplace, international business on a global scale. International grew to be half AIG's revenue. In many countries, AIG faced governments trying to protect their local insurance companies—international trade agreements were structured in terms of goods, not services. In this arena, AIG learned to deal with an array of different cultures, histories, and politics, and Greenberg developed top-tier government relationships. Greenberg was on the Defense Industry Intelligence Agency Advisory Board, and on the President's Advisory Committee for Trade Policy and Negotiations. He was active in the Council on Foreign Relations and in Asia Society, and spent a lot of time on airplanes for essential face-to-face meetings. Exceptional energy was a essential part of his success.

The second part details "The Destruction of A Business." After Greenberg left AIG, the company went over the edge with its now highly publicized derivatives speculation. This model of business success ended with being taken over by the US government. But the book contains one last instructive lesson for the reader—career relaunch, or, coming back after disaster. Greenberg is now busily working on creating a new global insurance company, as CEO of C.V. Starr & Co. In today's world of rapid turbulence, business growth, and collapse, this is an important lesson and role model for financial professionals.

–Bill Hayes

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The book is not an autobiography. It is co-written by Lawrence Cunningham. It is a corporate history and a critique of prevailing corporate governance and prosecutorial culture.

Jennifer, thank you for your comments. The error has been corrected.

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