At 88, Former AIG Boss Is Building a New Empire



'Hank' Greenberg Is Quietly Building a Fast-Growing Insurance Conglomerate


Lately, Maurice "Hank" Greenberg, former chief executive of American International Group Inc., AIG +2.19% has been traveling the world, with stops in Shanghai, Istanbul, Manila and other far-flung locales.

The 88-year-old hasn't been sightseeing. Eight years after his forced resignation from AIG—which he turned from an obscure property-casualty player into a global financial powerhouse—Mr. Greenberg is staging an improbable comeback. He's quietly building a fast-growing insurance conglomerate, called Starr Cos., that's collecting billions in premiums all over the globe.

Sipping herbal tea in his Park Avenue offices decorated with paintings, sculptures and photographs of him with world leaders, Mr. Greenberg said he has no thought of retiring. "I am doing what I do best," he said. "I like building things."

His reign at AIG famously ended amid a giant accounting scandal. And today his rebranding efforts are complicated by one final obstacle from the past: a trial on civil-fraud charges alleging he used accounting shenanigans to portray an unduly rosy picture of AIG's results.

Late last month, the New York Court of Appeals denied an effort by Mr. Greenberg's lawyer, prominent trial attorney David Boies, to win dismissal of the civil-fraud charges that stuck from the original suit brought byNew York's then-Attorney General Eliot Spitzer in 2005.

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Mr. Greenberg has long denied he did anything wrong, and maintains that Mr. Spitzer never should have brought the case because, among other things, AIG's earnings restatement from the affair shaved off just 3% of shareholders' equity, an amount he considers immaterial. The U.S. Chamber of Commerce filed a friend-of-the-court brief in the state case calling for its dismissal, and politicians who lent support include former governors Mario Cuomo and George Pataki, who co-wrote an opinion piece in The Wall Street Journal in May.

Meanwhile, Mr. Greenberg prevailed on a matter affecting Starr's sizable AIG holdings: A federal claims court judge ruled on June 26 that an entity he heads could proceed with a lawsuit against the U.S. government over alleged unconstitutional elements of AIG's bailout during the 2008 financial crisis. The government says it did nothing wrong. Starr was AIG's largest shareholder until the government takeover.

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Because Mr. Greenberg's new venture is privately held and has ample capital, the New York ruling is unlikely to have immediate consequences for the firm, insurance experts say. He doesn't intend to take his Starr public, so a potential ban on serving as a public officer would be moot.

No matter the legal outcome, the road ahead is likely to be tough. Competition is fierce and the property-casualty insurance industry faces headwinds, including ultralow interest rates that hurt insurers' investment income.

Mr. Boies said he believes the case will be dismissed by the lower courts and plans to argue that the evidence used by the state is inadmissible hearsay.


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