Just the Beginning
As Starr Companies gears up for its centennial anniversary next year, CEO Greenberg explains how he aims to build the next global insurance powerhouse.
- Lee McDonald
- August 2018
Maurice R. Greenberg at Starr's New York City headquarters.
As the 100th anniversary of Starr Companies approaches, A.M.BestTV sat down with Maurice R. “Hank” Greenberg, the company's chairman and chief executive officer to discuss the organization and how he aims to build the next global insurance powerhouse.
Starr traces its history back to December 1919, when Cornelius Vander Starr founded an insurance enterprise in Shanghai, China.
Starr Companies, the worldwide marketing name for the services offered by the operating insurance and travel assistance companies and subsidiaries of Starr International Co. Inc. and for the investment business of C.V. Starr & Co. Inc. formed Starr International in 1943 in Panama. During the 1940s, Starr International became the parent company to all of the overseas companies.
Greenberg worked for C.V. Starr and was CEO of American International Group from 1967 to 2005. AIG was created by C.V. Starr & Co. Inc.
Following is an edited transcript of the interview.
Why don't we start with the big picture? Cornelius Vander Starr was a fascinating man.
You knew him, worked with him very closely over the years. He established a unique company, a unique organization, a unique place in the world for the time. It's now 100 years. How does what he started carry on today in the Starr Companies in terms of its organization and values?
The culture, number one. Start with that. A very international outlook, number two. Attracting the best people and underwriters for the company.
When you have to explain the Starr organization today, how do you describe it?
The Starr Companies were founded in China, number one. Starr went to China after [World War I] to try and find a direction and a future. He did. A couple of things he did differently. He insured Chinese companies. The Brits and the French who were there would never touch a Chinese company.
He established himself among the Chinese elite and good business people, that he was trustworthy and that he can help them. He did. He expanded to Southeast Asia, almost every country, in the Philippines particularly. Back here he had very little on the insurance side. He represented some other companies as well as his own. That's a fundamental part of the company.
When I joined Starr, it was to run a domestic company and to build simultaneously a worldwide business for accident and health, which I did. Both were successful. When I organized AIG, I succeeded him. AIG was not owned by C. V. Starr, it was a public company. We went public. We had a market value of $300 million. When I left it was $180 billion, the largest insurance company in history.
It was, until somebody in Albany wanted to become governor. That's the history, roughly.
Let's move to today with Starr. Let's leave China aside for a second. You're still active in world markets, particularly in Asia. Where are you active in Asia today and how do you see that area developing in today's perspective?
We're virtually all over Asia. We have a small business in Japan but it's growing. We're in Hong Kong. We're in the Philippines. We're in Malaysia. We're in Singapore. We're soon going to be in Thailand. We're in Australia. We've covered quite well.
What's your assessment of that area? Is it growing the way you expected it to?
Some countries, yes. Some countries, no.
Any of them particularly attractive at this point?
They're all attractive to me. Asia is a growing area of the world.
Let's move to China. You have a long history in China. You were one of the first business, and certainly insurance, people to get in there and open things up, make a lot of progress. Where do things stand today for Starr in China and where do you see them headed?
It's heading very good. Our business is quite good. We have two businesses. The insurance business, property/casualty, mostly commercial business and a very good investment team separate apart from the insurance side.
Do you see the Chinese market as open to innovation for the things that you're trying to do or would you consider it to be a slow-moving market, resistant?
It depends on the company and who you are.
Do you see yourself as insuring non-Chinese risks in China or Chinese risk coming out?
Both, if they pass muster from an underwriting point of view.
This is a very interesting time of the year because of all the trade activity that's been going on with China.
I'm aware of that.
What's your take on that? What do you think the outcome will be?
I think that we need patience and I hope we can solve it over a period of time. Both sides would lose if we didn't. My guess is it will be resolved.
Do you think mostly they're just negotiating at this point or do you think it might have any long-term impact?
If you make major changes, it will have an impact on somebody.
The tariffs and things like that are based around traditional industries. Do you think insurance will be affected by any of this?
Not that I'm aware of. China has already said some time ago that they would open up the insurance industry, both property/casualty and life.
You expect that to continue?
One of the things that you alluded to, and we won't go into the whole New York thing, but there's the idea of regulatory risk. Since you have such a broad view of the world, how is regulation changing? Is it becoming more difficult to ensure an environment like that or easier?
You're talking about the United States or any place?
You're painting with too broad a brush.
Let's stick with Asia.
Asia is fine. I don't see the changes being harmful.
And that's true in China as well?
In China, at this moment, it's a little more difficult unless you've been there for a long time. You know your way around. I would say that China has loosened up quite a bit though in the last couple of years.
The Starr Companies, you are at 100 years. What do you see ahead for this company? Where do you want it to go? What things is it not in today that you want it to be in?
We're going to keep growing. That's the idea. We'd like to do what we did in AIG, become the largest insurance company in history.