Travelers CEO Jay Fishman to Step Down, Says He Probably Has ALSSonali Basak and Noah Buhayar
Jay Fishman, who built Travelers Cos. into one of the biggest insurers in the world then steered it profitably through the financial crisis, is stepping down as chief executive officer because of his health.
“It appears likely that I am dealing with a variant of amyotrophic lateral sclerosis, or ALS,” Fishman, 62, said in a letter to staff.
Alan Schnitzer, 49, who leads Travelers’ business-and-international insurance segment, its largest, will become CEO Dec. 1, the New York-based company said Tuesday in a statement.
Fishman has shaped Travelers for the better part of two decades. He ran the insurer in the late 1990s, when it was part of Sanford “Sandy” Weill’s Citigroup Inc., then departed in 2001 to take the top job at St. Paul Cos. Less than three years later, Fishman engineered a $17.9 billion merger with his old firm, which had been spun off from the bank. The combined business took the Travelers name.
Under Fishman’s watch, the insurer avoided some of the investment mistakes that hobbled rivals during the 2008 financial crisis. That, along with steady buybacks and a focus on underwriting, helped Travelers’ stock more than double since 2004, outpacing gains in the Standard & Poor’s 500 Index. The company was added to the Dow Jones Industrial Average in 2009.
Fishman said in November that he’d been diagnosed with a neuromuscular condition, without specifying the ailment. He later said he made the disclosure to provide clarity to people around him who had noticed that “something was amiss.”
‘Comes a Time’
At every company, “there comes a time for new leadership,” Fishman said in the letter Tuesday. “Because of the progression of my neuromuscular condition, this time has come a little earlier than I had hoped.”
Schnitzer, who has a law degree from Columbia University, was previously a partner at Simpson Thacher & Bartlett LLP. Avrohom J. Kess, the head of the law firm’s public company advisory practice, recalled his former colleague as a “born leader” who could inspire others.
“Even at an incredibly young age, he was the one who everybody came to for the toughest judgment calls,” Kess said in an interview.
Schnitzer joined Travelers in 2007 as chief legal officer and was later put in charge of international operations. Last year he added responsibility for business insurance.
Over the past few years, Travelers has struck deals to grow abroad. The insurer agreed to pay about $1 billion to buy a business from E-L Financial Corp. in Canada and has recently expanded a partnership with J. Malucelli Participacoes em Seguros e Resseguros SA in Brazil.
The choice of Schnitzer is “not a shock,” said Paul Newsome, an analyst at Sandler O’Neill & Partners. “The only real surprise is the speed in which the transition has happened. We were all hoping that Jay Fishman would remain healthier for longer.”
On a conference call with analysts Tuesday, Fishman said that there hasn’t been a recent change in his health and that he still feels focused on the job.
“Since I knew I was dealing with something worse than a bad back, I’ve been regularly discussing my circumstance with our board of directors,” he said. “I will be 63 in November, so even absent any health issue, this was a topic that was getting regular attention.”
Fishman will become executive chairman at Travelers when Schnitzer takes over as CEO. Chief Operating Officer Brian MacLean will add duties overseeing the business-and-international segment. The leadership team will still include Chief Financial Officer Jay Benet, Chief Investment Officer Bill Heyman and Vice Chairman Doreen Spadorcia.
“Among Brian, Jay Benet, Bill Heyman and Doreen, the shortest tenure among them at Travelers is 23 years,” Schnitzer said on the call. “They’re the best in the business at what they do.”
Fishman became presiding director of Exxon Mobil Corp. in 2013 and is on the board of buyout firm Carlyle Group LP. A spokesman for the oil company didn’t immediately respond to a message seeking comment about Fishman’s service on that board. Carlyle declined to comment.
ALS, sometimes called Lou Gehrig’s disease, is a progressive and incurable condition in which nerve cells in the brain and spinal cord that control voluntary muscle movement slowly die. Patients become more paralyzed, and may gradually lose their ability to walk, eat, talk and breathe. Though the course of the disease is variable, the average life expectancy of someone with ALS is two to five years.
About 30,000 Americans have ALS, according to the ALS Association. The disease generally hits people between the ages of 40 and 70, it says.
Fishman said on the call that he is focusing on each day after getting over the horror of the diagnosis. The CEO also cited a lesson that he’d learned from the man who will replace him.
“Alan Schnitzer taught me a while ago that the day breaks down into two portions,” Fishman said. “There’s the caffeine portion and the alcohol portion. And I’m sitting here with a glass of wine, well into the alcohol portion.”
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