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The Wall Street Journal is reporting that American International Group Inc. (NYSE:AIG) could replace Edward Liddy with MetLife Inc. (NYSE:MET) former chairman and CEO Robert Benmosche.
According to the Journal's story, the board approved Benmosche as CEO Monday morning. Benmosche will replace AIG's former CEO and chair Liddy, who announced his retirement earlier this year. Liddy's desire was to separate the CEO and chair positions after his tenure. Benmosche, like Liddy, will re-emerge from retirement to help put AIG back together. The question is if Benmosche as the man selected to replace Liddy can handle the job, and, of course, how much more will it cost taxpayers. Liddy endured a lot of criticism in the position as he tried to revive the bailed-out insurer, especially due to the insurer's creeping asset sales and bonuses the financial products division received. The Journal seems to think that Benmosche, who retired from MetLife as CEO in March 2006 has what it takes to get AIG back on its feet due to the fact that "MetLife has weathered the financial crisis better than some of its competitors in the life insurance industry," the story states. Reuters, however, has a better reason of why Benmosche could be a good pick: "He led MetLife's demutualization in 2000, transforming the company from an insurer owned by its policyholders to one that is publicly traded on the New York Stock Exchange." Since AIG might be taking two of its life insurance businesses and its property and casualty businesses public, it could be a match made in heaven. What's more is that Benmosche is a former mergers specialist, with prior experience working at PaineWebber. Benmosche kept his hand in the M&A ring even as CEO of MetLife, negotiating the insurer's acquisition of Travelers Life & Annuity from Citigroup Inc. (NYSE:C). (Subscibers see story from The Deal Pipeline). That's a plus, since AIG is currently negotiating to divest several units and is struggling to maintain the valuations of the units, according to reports. He also helped MetLife recover from a scandal and helped maintain retention of employees during that time, according to Answers.com. The toughest challenge of Benmosche's career came when he was named MetLife's president and COO, responsible for both the Individual and Institutional businesses as well as the company's international insurance operations. At the time the sales force had been hampered by a scandal; an investigation had revealed that agents in the company's Tampa office had sold life insurance to nurses under the guise of a retirement plan. The publicly aired scandal sent agents running from the company, and sales plummeted. But under Benmosche's watch the sales force rebounded. Focusing on agent retention instead of recruitment--at the time an internally divisive strategy--he visited many of the company's 428 sales offices, meeting with agents one on one and in group meetings. Agents ceased to abandon the firm, and productivity per agent increased from $19,000 to $23,000. Of course, retention and avoiding scandal won't hurt the insurer, which has been plagued by harsh criticism by politicians. Besides taking on the challenging role, there is also an issue of salary. Liddy took on a salary of $1. Will Benmosche be as courageous? - Maria Woehr
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