Fallen Giant: The Amazing Story of Hank Greenberg and the History of AIG (英語) ハードカバー – 2006/10/6
Insurance, Mr. Greenberg realized early, is the game of playing only when the odds are in one’s favor. For instance, if a far-flung customer wants insurance against a kidnapping — a risk that few others will touch — chances are that you can charge a lot for the policy. As Mr. Greenberg did not fail to notice, plenty of overseas executives are kidnapped, but many more are not — and they pay premiums, too.
Throw in a few other “unfair” advantages, like lobbying, cajoling or otherwise persuading governments to do one’s bidding as well as, quite possibly, obscuring some of the truth about one’s operations, and you have the secret of a great insurance fortune.
Accusations of cooking the books more or less forced Mr. Greenberg to resign last year. Mr. Shelp, a former Greenberg lieutenant and troubleshooter at A.I.G., wrote the book ostensibly to explain his old boss’s fall from grace.
He asks some very good questions. One is why Mr. Greenberg would risk his $3 billion fortune on some “fairly modest fiddling.” Another is this: What did Eliot Spitzer, New York’s attorney general and now its governor-elect, have against Mr. Greenberg, whom he all but accused of criminality on Sunday morning television? Then, after the A.I.G. board forced Mr. Greenberg to resign, Mr. Spitzer neglected to charge him after all. Well, never mind. (Mr. Spitzer did file civil charges, which Mr. Greenberg is contesting.)
Mr. Shelp leaves no doubt that A.I.G. was a master at shaping and, at times, bending the rules, but he argues that the offenses that got Mr. Greenberg canned were pretty modest, and notes that reversing the deals in question resulted in a write-down of only 3 percent of A.I.G.’s equity.
The author does not probe deeply enough to resolve the legal issues, nor does he have much fresh news, but that is not his point. Mr. Shelp is more interested in another question: How did A.I.G.’s “unique corporate culture” contribute to its autocratic chairman’s success and — after 37 years at the helm — his undoing?
This gives Mr. Shelp license for telling one of the great unsung stories in American business, namely the origins of A.I.G. The company was founded by Cornelius Vander Starr, a gadabout soda-fountain operator in Fort Bragg, Calif., who switched to real estate, then insurance. For no particular reason, he hopped a boat to the Far East and in 1919 began to sell policies in Shanghai. Somehow, he talked American insurance companies into giving him their “pen” — that is, letting him act as their agent.
Starr had a wonderful idea, which was that the Chinese were not such a bad risk. (Other Western insurance companies in China preferred to sell policies only to Occidentals.) As you can imagine, this broadened his client base considerably. Mr. Shelp says Starr proved his affection for the natives by selling to them, but this is patronizing. What he proved was his good business sense.
Starr branched into other countries, bought newspapers in China, became friendly with American intelligence operatives. The author, who aims to be fair but does not pretend to be neutral, relates quite a few tales from those swashbuckling days, some of which are relevant to his narrative and many of which are interesting.
His style is conversational, as if he were telling the story from an adjacent barstool. When Starr marries, the author says his wife “would have been in her 20s” — as if the author were only dimly recalling an unverifiable detail.
We will allow Mr. Shelp his penchant for certain colonial mannerisms — for instance, referring to this or that character as a “Dutchman” or a “Chinese gentleman.” But a few of his sentences ought not to have slipped past his editor, nor his co-writer, Al Ehrbar. Here is one: “I persuaded friends at A.I.G. that an outsider writer but former employee who is basically friendly to A.I.G. would be read more widely than a corporate book, which might be read by some of those they give it to.” Here is another: “Apparently, they did well, for none withdrew because they were losing money.” This is perfectly good writing if you have just swallowed your fifth highball.
The pity is that Mr. Shelp, in his quirky fashion, arrives at a truth about A.I.G. that writers who focused on the insurance deals missed. A.I.G. was created, as it were, from the outside in: first in foreign outposts and only later in New York. It grew up beholden to a single executive, and accustomed to having its way more than conventional companies stacked with M.B.A.’s.
It was Starr who started the “revolution” in the way Bermuda regulated insurance companies, meaning that he arranged for the island to write rules that insurers found convenient. A brilliant protégé, perhaps less lonely than his mentor, Mr. Greenberg arrived at A.I.G. just as Starr was sadly unwinding and relinquishing the reins. Grabbing the opportunity, Mr. Greenberg tartly informed his only remaining rival: “Sit down, Gordon, and shut up. I’m in charge now.” That was in 1968. For the next 37 years, no one contended otherwise.
TRUE to the company heritage, Mr. Greenberg combined diplomatic cunning, business hardball and a sense that he was entitled to make his own rules. He lobbied for China’s admission into the World Trade Organization in 2001 — then maneuvered for a delay, at the last moment, until the Chinese agreed to let A.I.G. operate freely on Chinese soil.
Measured in terms of stock price appreciation, Mr. Greenberg’s success was stunning.
Alas, even modest fiddling, such as the “earnings management” he was accused of, is no longer tolerated in American business. Mr. Greenberg seems not to have noticed. But even if A.I.G. hadn’t changed, the world had. (New York Times, December 17, 2006)
"a rather interesting (and, on the whole, balanced) account of the Shakespearean turn of events that toppled the industry’s most powerful figure—at least temporarily."--National Underwriter Review
Ron Shelp has many years of experience in both the corporate and nonprofit sectors. He served as a domestic and international troubleshooter and also supervised world-wide government relations, corporate communications, and advertising/sales promotion at AIG. He also served on a number of AIG boards. Following his departure from AIG, Shelp worked at Celanese Corporation as a member of the management committee and for Burson-Marsteller. He later became president and CEO of an Internet company. Shelp's nonprofit experience includes serving as president and CEO of New York City Partnership, which was founded by David Rockefeller.
Al Ehrbar is an experienced business journalist, who was formerly an editor and writer at Fortune and chief economics writer for the Wall Street Journal.
- 出版社 : Wiley; 第1版 (2006/10/6)
- 発売日 : 2006/10/6
- 言語: : 英語
- ハードカバー : 248ページ
- ISBN-10 : 047191696X
- ISBN-13 : 978-0471916963
- 寸法 : 16.05 x 2.51 x 23.35 cm
- Amazon 売れ筋ランキング: - 1,199,871位洋書 (の売れ筋ランキングを見る洋書)
Maurice R. "Hank" Greenberg took over the absolute control of AIG in 1968, and shifted its focus from personal insurance to high-margin corporate coverage, and building on the Starr's solid foundations grew the business into the largest insurance conglomerate and one of the most respected corporations, in the world. It was a prodigious achievement, one of the most remarkable of all business successes of the era, and it was accomplished by Mr Greenberg, not exactly single-handedly but subject to his close control and always under his directions and leadership.
AIG was a truly international insurance business that grew during a period when the rules and regulations concerning insurance companies were not as developed as nowadays. With cash flows flying to and forth across the globe from premiums, claims, reinsurance, dividends, loans etc. it was easier to influence, within the letter of the law and regulations, the financial results of the companies, and certainly AIG like most others took advantage and did so. Reinsurance, for example, used as a 'financial shaping tool' was commonplace in the insurance industry until auditors and regulators started to become alarmed at the possible distortions it could cause to a companies financial results, and began to call a halt to the practice.
The general perception until fairly recently of the insurance industry is that of conservative and a 'bit stuffy', but happenings in the past 10 years or so, have shown this to be far from the truth, and in his quest to keep AIG at the front of the pack, Mr Greenberg used whatever financial devices and 'sleight of hands' were legitimately available,or he'd been accustomed to being available, to present optimum financial statements. In the heady, somewhat 'free-wheeling' under-regulated days of insurance, many companies and syndicates played the game this way, and what AIG did was not uncommon within the industry. Other games played were to maximise, reduce or hide losses, by 'massaging' loss reserves in respect of future claims, which was very difficult for auditors to track down.
As regulations and permitted practices tightened, did Mr Greenberg believing his actions proper and in accord with previous accepted practices, step over the very thin line dividing legitimacy and illegality? That is sixty-four thousand dollar question and the nub of the problem that caused his board to dump him, Mr Spitzer the then NY attorney general, to relentlessly pursue, harass and accuse him of being a crook on television, and the onset of a multiplicity of legal actions by all and sundry, that show little sign of abating.
Ron Shelp in his most excellent book on AIG's history, growth, parting with Hank Greenberg and 'nationalisation' to save collapse, sums up thus "All Hank Greenberg wanted was 'an unfair advantage'" by shaping and, at times bending the rules. Whether what he did was illegal or not may never be determined, the only beneficiaries being the attorneys earning multi-millions in fees. Many are of the view that is a shame, and unnecessary that efforts are being made to publicly and formally blacken the name and reputation of a legendary and very old entrepreneur who on balance, has made a massive positive contribution to America and elsewhere both commercially and charitably, particularly in China where he is regarded with much respect and acclaim. I am sure that there are differing strong views held widely on this issue and the discussions will continue, but whether to any one's advantage is debatable.
Then, there is the story of how AIG evolved. It started in China and became an "American" company only after establishing itself internationally.
Then you have the fall of Hank Greenburg as a result of Elliot Spitzer's war on Wall Street and, of course, the meltdown of AIG as a significant part of the collapse of the world's financial system in 2008/2009.
Altogether, that's five stories any one of which would, properly told, make a great book.
Unfortunately, Ron Shelp is far from the writer who can do justice to any, much less all of these stories. Yes, he worked at AIG and worked directly with Hank Greenberg. But that's about it: Fallen Giant is like a series of lunches with Ron were he recounts what he knows in a very conversational style from the perspective of someone not all that involved in any of these stories.
Martinis are served at these lunches. So Ron often repeats himself.
I give the book two stars primarily on the strength of its presentation of AIG's early days and superficial bio of C.V. Starr. I appreciate being introduced to these two stories.
I sincerely hope that all of these deserving stories are treated properly someday.
Neither of these attempts has met with much success, though the struggle continues; the final results depending upon how various litigations play out over time.
Ron Shelp's tenure within the company itself, his careful research, and his personal association with most of the players who weave through this complex, intriguing, and essentially sad tale, give the author outstanding credentials to tell the story and tell it well. He never steers away from telling the unvarnished truth, but at the same time refrains from garbing any of the characters in an entirely white or black hat. And he leavens the saga at times with some wry humor and a sense of humanity. He understands what one of the characters in a C.S. Lewis novel said: "I happen to believe you can't really study men, you can only get to know them, which is quite a different thing."
The book is filled with interesting nuggets, such as investors who once quipped that they would gladly invest in AIG but - due to the company's tight-fisted claim-paying reputation - would never actually buy an insurance policy from AIG. Also, many insiders at AIG used to quip that the company's initials stood for "All Is Greenberg." Cult of personality hardle begins to describe the overshadowing influence of Greenberg at AIG.
Some of the early history of foreign expansion and the life of C.V. Starr is presented in eye-glazing detail. "Fallen Giant" is a case study in how a successful company can find itself deep in crisis, when the imperative for survival amidst choppy legal waters prompts the jettisoning of an iconic CEO.