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The Greenberg Brothers: A Response From Aig

Readers Report

The Greenberg Brothers: A Response from AIG

Your article on the Greenberg family "Like father, like sons" (People, Mar. 1) is filled with inaccuracies that demonstrate lack of understanding of the insurance industry. The unfair characterization of both Evan and Jeffrey is offensive. In particular, the mean-spirited and personal nature of the comments about Evan Greenberg are a far cry from the responsible reporting one expects from BUSINESS WEEK. Nowhere is there a single quotation from an individual who had something positive to say about Evan Greenberg, AIG's president and chief operating officer.

The subhead, "The Greenbergs rule insurance," is not merely hyperbole but absurd. The U.S. insurance industry consists of thousands of companies. No single company has more than a relatively small share of premiums written. Why, for example, when discussing Marsh & McLennan's relationships with insurers including AIG, does the article not mention that there are other large brokers? The article gives the impression that AIG and Marsh & McLennan have some kind of holy alliance and that they completely dominate the industry. Anyone with any scant knowledge of the insurance industry knows this is simply not the case.

The article had a number of other factual errors and omissions. They include an inaccurate description of the business of AIG's Domestic Brokerage Group, overseen at one time by Jeffrey Greenberg (neither of the products mentioned existed in the Group during his tenure), the attribution to AIG of ownership of a Marsh & McLennan unit, the implication that Evan and Jeffrey Greenberg are CEOs of their respective companies when they are not ("the two brothers are sitting at the helm of two industry giants"), and the description of Evan Greenberg's education background which omitted reference to his attendance at New York University and the College of Insurance. Finally, it is almost idiotic to claim that the Greenberg family "controls" AIG, a public company with over 1 billion shares outstanding.

Florence A. Davis

Vice-President and General Counsel

American International Group Inc. New York

Editor's note: Here is BUSINESS WEEK's reply to the factual errors cited: K The story incorrectly identified Trident Partnership: It is a unit of Marsh & McLennan Cos., not AIG.

-- According to several sources, when Jeffrey Greenberg was head of AIG's Domestic Brokerage Group, he was active in developing products geared to reducing financial risk. But those products targeted to the specific risks cited were launched after he left.

-- The biography of Evan Greenberg provided by the company did not mention that he attended New York University or the College of Insurance. The company didn't respond to inquiries about his educational background.

-- The story clearly indicated that Evan is president and chief operating officer of AIG, while Jeff is president of Marsh & McLennan.

-- The story didn't say that the Greenberg family "controls" AIG. The story states: "Hank himself owns 2.45% of AIG's shares outright--and the Greenberg clan indirectly controls much more through holdings in three private entities that hold a combined 22% of AIG."

In addition, a quote by Nikki Finke, former wife of Jeff Greenberg, was inadvertently cut in the editing process. It should have read: "Evan, when he was younger, was the rebel of the family. Early on, the Greenbergs despaired that Evan would ever amount to anything. But, of course, he straightened out beautifully. By contrast, Jeff was always the dutiful son."Return to top

Managers Mitigate Risks. They Don't Court Them

"Insure corporate earnings? Bad idea" (Editorials, Feb. 8) says that "taking what managers are paid to do." The millions of managers who insure or hedge against losses from risks ranging from fires to currency fluctuations would disagree. Managers are paid to be alert to risks and then make prudent judgments about how to mitigate and manage them. Reliance National's Enterprise Earnings Protection Insurance (EEPI) is a valuable new tool for managing risks.

J. Bernard Friemann


Financial Risk Management

Reliance National

New YorkReturn to top

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