Former CEO Benmosche, who steered AIG during bailout, dies

Robert Benmosche (left), president and CEO of AIG, speaks to a reporter as he arrives at the White House in Washington, October 2, 2013, for a meeting with US President Barack Obama. — Reuters pic
Robert Benmosche (left), president and CEO of AIG, speaks to a reporter as he arrives at the White House in Washington, October 2, 2013, for a meeting with US President Barack Obama. — Reuters pic

NEW YORK, Feb 28 — Robert Benmosche, who took the helm of insurer American International Group after a massive government bailout at the height of the financial crisis, died yesterday at 70 after a battle with lung cancer.

Benmosche is credited with steering AIG through the turbulent period following its near collapse and rescue by the US government. During his tenure, which started in August 2009, AIG fully repaid the US$182.3 billion (RM658.1) government bailout it received in 2008 to stave off bankruptcy.

Benmosche, who stepped down in September 2014, weathered intense scrutiny and was sharp-tongued at times, referring to federal officials as “those crazies down in Washington.”

Critics often likened the former CEO, who also tangled with then-New York State Attorney General Andrew Cuomo over bonuses paid to AIG staff after the bailout, to a bull in a china shop.

“I can be — I can break things,” he said in an interview at his villa in Croatia in August 2009, when asked about his sometimes pugnacious manner shortly after taking the AIG job.

That was about 11 months after the insurer was brought to its knees because of a unit that sold credit-default swap contracts on risky securities, as well as other investments in subprime mortgage-backed securities.

Benmosche also often defended AIG employees from public criticism of the company and its role in the financial crisis, which helped trigger the worst recession in the United States in 70 years.

“A lot of (employees) feel hurt, embarrassed, a lot of people have lived in fear because of what I call lynch mobs with pitchforks,” he said in the Reuters interview.

That defence of AIG employees won him praise from his workers. After Benmosche was diagnosed with cancer in late 2010, employees would tear up when discussing his illness.

“Bob was a brilliant man who brought tremendous leadership, energy, passion, and tenacity to his job. At AIG, we will honor his legacy by continuing to focus on integrity and performance. He will be deeply missed,” said Robert S Miller, chairman of AIG's board of directors.

Benmosche was CEO of MetLife Inc from 1998 to 2006. He came out of retirement to lead AIG, which announced his death in a statement yesterday.

Maurice “Hank” Greenberg, who built AIG into a global financial-services powerhouse during nearly 40 years at its helm, told Reuters on Friday that he had recommended Benmosche to the US government when it was looking for a new chief.

“He was a good man, strong, knowledgeable and honourable — everything we look for in a CEO,” said Greenberg, who was chair of AIG from 1967 to 2005, before being forced out.

Benmosche said an AIG failure could be devastating for the United States and other countries.

“Some of us need to come out of retirement — who have done this before — to help deal with the crisis,” Benmosche said to Reuters in 2009. “If I sit here, I just felt that there are going to be continuing problems. I felt I had some of the skills necessary to fix the problems of AIG in particular and it made sense to come back.”

Benmosche, who had undergone treatment for lung cancer since 2010, announced his intention to leave AIG in June of last year. He did so in September, and was succeeded as president and CEO by Peter Hancock.

Benmosche, who died at NYU Langone Medical Centre in New York City, is survived by his wife Denise, three children, three siblings, and six grandchildren.

The Brooklyn-born Benmosche prided himself on a reputation for toughness. He earned a bachelor's degree in mathematics from Alfred University in Alfred, New York, later serving in Korea as a lieutenant in the United States Army Signal Corps. — Reuters

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