The AIG Story, + Website
Selected as one of Motley Fool’s "5 Great Books You Should Read"
In The AIG Story, the company's long-term CEO Hank Greenberg (1967 to 2005) and GW professor and corporate governance expert Lawrence Cunningham chronicle the origins of the company and its relentless pioneering of open markets everywhere in the world. They regale readers with riveting vignettes of how AIG grew from a modest group of insurance enterprises in 1970 to the largest insurance company in world history. They help us understand AIG's distinctive entrepreneurial culture and how its outstanding employees worldwide helped pave the road to globalization.
- Corrects numerous common misconceptions about AIG that arose due to its role at the center of the financial crisis of 2008.
- A unique account of AIG by one of the iconic business leaders of the twentieth century who developed close relationships with many of the most important world leaders of the period and helped to open markets everywhere
- Offers new critical perspective on battles with N. Y. Attorney General Eliot Spitzer and the 2008 U.S. government seizure of AIG amid the financial crisis
- Shares considerable information not previously made public
The AIG Story captures an impressive saga in business history--one of innovation, vision and leadership at a company that was nearly--destroyed with a few strokes of governmental pens. The AIG Story carries important lessons and implications for the U.S., especially its role in international affairs, its approach to business, its legal system and its handling of financial crises.
Chairman’s Note xi
Chapter 1 Independence 3
Chapter 2 Innovation 19
Chapter 3 Succession 31
Chapter 4 Vision and Culture 43
Chapter 5 The Internationalist 53
Chapter 6 Raising the Iron Curtain 63
Chapter 7 Opening Trade in Services 79
Chapter 8 Reopening China 95
Chapter 9 The Life Business 111
Chapter 10 The Domestic Front 125
Chapter 11 Investments 139
Chapter 12 Governance 149
Chapter 13 Hostile Change 171
Chapter 14 Restating History 189
Chapter 15 Civil War 203
Chapter 16 Saving the Starr Foundation 213
Chapter 17 Chaos 223
Chapter 18 Nationalization 243
About the Companion Web Site 309
About the Authors 311
Maurice R. Greenberg is Chairman and CEO of C.V. Starr & Co., Inc. He joined C.V. Starr & Co., Inc. as Vice President in 1960 and was given the additional responsibilities of President of American Home Assurance Company in 1962. He was elected Director of C.V. Starr & Co., Inc. in 1965, Chairman and CEO in 1968 and continues in that role. Mr. Greenberg retired as Chairman and CEO of American International Group, Inc. (AIG) in March 2005, after serving as Chief Executive Officer from 1967. Under his leadership, AIG became the largest insurance company in the world and generated unprecedented value for AIG shareholders. During the nearly forty years of his leadership, AIG's market value grew from $300 million to $l80 billion.
Lawrence A. Cunningham is the Henry St. George Tucker III Research Professor at the George Washington University Law School and Director of GW's Center for Law, Economics and Finance (C-LEAF) in New York. Previous books include Contracts in the Real World: Stories of Popular Contracts and Why They Matter (Cambridge University Press 2012). His writingson a wide range of business and legal topicshave also appeared in leading scholarly journals and such periodicals as the New York Times, the Financial Times, and the New York Daily News.
“Summing Up: Recommended. General readers; all levels of undergraduate students; professionals.” (Choice, 1 August 2013)
"Did the U.S. government break the law when it seized control of American International Group during the financial crisis of 2008? In 'The AIG Story,' the man who built the giant insurer says that the answer is yes and explains his reasoning. Former AIG chief executive Maurice R. 'Hank' Greenbergalong with his co-author, Lawrence A. Cunninghamalso offers a fascinating company history and an account of how, after Mr. Greenberg's ouster in 2005, AIG made the disastrous mortgage bets that drove it into the arms of the feds." (The Wall Street Journal)
"[A] strong, fast-moving and well-crafted book...In effect, there are two stories here, both well told: the first, the story of a man who dreamed the American dream and realized it through drive, determination, and adherence to principle; and the second, the story of what seems to be an evolving model, with government officials, always for political reasons, exercising what increasingly approaches operational control over American business. It’s to the great credit of Greenberg that he's never accepted the validity of the second and has devoted his life and great energies to keeping the first alive and well." (The National Interest)
"The early chapters of 'The AIG Story' trace the acquisition of its U.S. units and international expansion, and offer interesting anecdotes. The book also paints a clear picture of the hard-driving, profit-centered corporate culture Mr. Greenberg famously fostered at AIG." (Business Insurance)
"The AIG Story is well documented, telling of how the company virtually collapsed and Greenberg was pushed out of leadership. The book has much information to share with financial leaders to help grow a business and to protect the identity of a company during periods of economic downturns."ABA Banking Journal
"The only first-hand account of AIG's rise and near destruction, this book is a compelling chronicle of one of the great business success stories of the twentieth century as well as a history of the evolution of global capitalism over the past six decades."Continuity Risk & Insurance
Former AIG Chairman and CEO Maurice R. “Hank” Greenberg and GW law professor Lawrence A. Cunningham set the record straight in The AIG Story (Wiley; February 2013; $29.95; hardcover & ebook; ISBN: 978-1-118-34587-0), a riveting account of the rise and near-destruction of AIG, the once-great insurance company Greenberg steered for 37 years, well before the turmoil it endured during the 2008 financial crisis. In a page-turner that reveals facts about AIG previously unknown to the public, this book will change the way people view AIG and the story behind its astonishing achievements, offering invaluable lessons for entrepreneurs and businesses in search of success.
The AIG Story narrates how Greenberg, at the age of 27, chanced upon a career in the insurance industry and quickly distinguished himself as an innovative and daring business executive: competitive, entrepreneurial, risk-savvy, disciplined, and willing to challenge the industry’s status quo. In the late 1960s, he led the creation of AIG. By 2005, it was the world’s largest insurance company, generating unprecedented value for its shareholders. During the nearly forty years of his leadership, AIG's market value grew from millions to nearly $200 billion.
Unfortunately, AIG then suffered a reversal of fortune reminiscent of a Greek tragedy. AIG became the target of the notoriously overzealous New York State Attorney General, Eliot Spitzer. Spitzer’s relentless war against AIG—which ultimately forced Greenberg to resign from the company he proudly built —would drive AIG to near destruction. Greenberg and Cunningham detail how Spitzer’s prosecutorial tactics served neither the interests of shareholders nor, more importantly, of the public.
But that was not the end of AIG’s troubles. As the AIG culture Greenberg helped to build faded after his departure, AIG found itself the in the middle of the financial collapse of 2008, teetering on bankruptcy. By the time the crisis was over, AIG was a mere shadow of the great company Greenberg and
AIG’s tens of thousands of loyal employees had created. AIG went from being an American icon with nearly $1 trillion in assets to the verge of extinction at the hands of government officials purporting to “rescue” the company.
In spite of its recent troubles, AIG’s legacy will be that of a pioneer forging new trails, not only in the insurance industry but also throughout the world, by paving the way for globalization. It assembled an innovative, loyal and committed workforce without peer in the industry. Time and again it custom-tailored insurance products to fit clients’ needs, including groundbreaking insurance policies designed for a world plagued by tort litigation, environmental disasters, war, and terrorism.
Thanks to AIG’s commitment to innovation and its clients, the total market value of AIG’s stock under Greenberg’s tenure soared from hundreds of millions in the late 60s to $180 billion—an increase of 19,000%. By 2005, it was the largest insurance company in world history and one of the largest companies in any industry.
The AIG Story captures the excitement behind the birth and evolution of AIG as it conveys a sense of its distinctive strategies and culture. Although the book details the near-destruction of AIG, most of it is about how to build a business: how to develop the vision and promote an innovative entrepreneurial culture focused on risk management, cost control, and profitability. Successful businesses must excel at establishing relationships, creating products, and opening markets. No one knows how to accomplish these goals better than Hank Greenberg.
Topics discussed in The AIG Story include:
- How AIG, in the days after 9/11, created a unique aviation insurance pool that would keep the world’s fleet of commercial and passenger aircraft aloft in spite of the newly emerged terrorist threat.
- AIG’s key role in the US government’s top-secret mission to recover a sunken Soviet nuclear submarine deep in the waters of the Pacific Ocean at the height of the Cold War.
- How AIG managed to do business with Iron Curtain nations and helped pave the way to reopen trade with China, thus setting the stage for globalization.
- The “profit center model,” an organizational innovation implemented by Greenberg that boosted profits and became the distinctive hallmark of all the businesses in the AIG empire.
- In overcoming institutional resistance to new business ideas and practices, Greenberg was a grandmaster. Learn how he did it in cultures as diverse as Japan, Russian, China, and, of course, in the U.S.
- How Greenberg’s emphasis on relationships in business led him and AIG to befriend the late 20th century’s most important global leaders in government, business and diplomacy.
- The ways in which AIG, with its vast international network of “global overseas personnel,” became a valuable asset to the U.S. government in the decades leading to globalization.
- The true facts behind Spitzer’s attack on AIG and Greenberg’s resignation from the company
- The real story behind the U.S. government’s intervention against AIG during the 2008 financial crisis
- The latest on Greenberg’s current business endeavors as Chairman and CEO of C.V. Starr and Co., using the practices and policies that made AIG a uniquely world-class company.
AIG’s culture was characterized by 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. The culture spawned a commitment to innovation unlike the culture at any other insurance company. Creativity was ignited by paying close attention to trends and pockets of hazards where insurance was needed. It paid rich rewards to shareholders, employees and customers alike.
AIG is one-of-a-kind, perhaps impossible to duplicate, but the company remains a promising paradigm for business visionaries wishing to pursue their dreams and achieve unparalleled success. The AIG Story shows how Hank Greenberg put that remarkable paradigm into practice.