Dec. 17 (Bloomberg) -- Dennis Busti, who played a leading role in building the insurance business that tracked the rise and fall of corporate raider Saul Steinberg, has died. He was 71.
He died on Dec. 14 at his home in Eastchester, New York, after a long illness, according to his daughter, Joanna Busti.
Steinberg, who died one year ago, hired Busti in 1987 to start a new property and casualty insurance business unit of his New York-based Reliance Group Holdings Inc. Busti reported to Steinberg’s brother, Robert.
The new division, Reliance National Insurance Co., took a more aggressive path than Reliance Group’s Reliance Insurance Co., which had been founded in Philadelphia in 1817 and taken over by Steinberg in 1968.
Busti’s unit was created to handle “unique exposures,” or high-risk insurance coverage for such clients as nuclear-plant operators, chemical manufacturers and corporate directors, the Philadelphia Inquirer reported in its magazine in 2001.
Some employees at the more traditional Reliance Insurance arm in Philadelphia predicted their new colleagues were writing policies that could lead to debilitating claims and payouts, the newspaper said. After several years the Philadelphia-based unit began writing such policies as well.
“My job was to build a company, and to generate premium and cash flow -- it was very simple,” Busti recalled, according to the Inquirer’s account. As president and chief executive officer, he built Reliance National into a business of 1,500 employees and more than $4 billion in premiums, according to a death notice in the New York Times.
Steinberg, who early in his career was quoted as saying that “like the Rockefellers, I’ll own the world,” built a personal fortune that once exceeded $600 million, according to Forbes. His business empire took on water in 1990s as insurance losses mounted and its stock price foundered.
Until 2000, regulators permitted Reliance Insurance to send hundreds of millions of dollars annually to the Reliance Group to help pay interest on loans, the Inquirer said.
The Inquirer quoted Busti as saying in 2001 that “we made a couple of mistakes, and they were biggies.” Busti by then had left Reliance Group for New Century Global, a New York insurance agency it had formerly owned.
Reliance Group, listing $12.6 billion in assets and $12.9 billion in debts, filed for bankruptcy protection in 2001.
Dennis Anthony Busti was born on July 21, 1942, in the Bronx, New York, to Silvio and Emily Busti.
He began his career as an underwriter in 1964 with Empire Mutual, moving in 1970 to American International Group Inc., where he became president of its American Home Assurance Co. unit.
He was president and CEO of Columbia Insurance Co., a division of Berkshire Hathaway Inc., before joining Reliance Group.
“Busti Is Ace in the Hole as Insurer Plays to Win,” the Journal of Commerce headlined its story about his move to Reliance Group.
The Steinbergs had chosen Busti because he had built American Home “into a multibillion-dollar commercial insurer, one of the top casualty companies in the United States,” the newspaper reported.
“We’re prepared to take on the big players in this business -- AIG, Cigna, Chubb, Home and Hartford,” Busti said at the time, according to the article. “But we’re in no rush. We’ll build slowly and cautiously.”
In addition to his daughter, survivors include his wife, Mary; a son, Jason; two brothers, Louis Scampone Sr. and Edward Busti; and two grandchildren. He was predeceased by another brother, Andrew.
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