Property and casualty insurance exposed AIG to Mother Nature’s vicissitudes: earthquakes, floods, and tsunamis. The business is also volatile as a result of myriad other factors from the vagaries of interest rates to the uncertainties of litigation. A property and casualty insurance company can generate an underwriting profit for several years only to face a massive loss due to such circumstances. It is therefore desirable to diversify such risks by entering into businesses that operate in different ways. In comparison, life insurance is stable, at least so long as premiums received are invested conservatively, and in any event the variability in life insurance is usually different in both kind and time compared to property and casualty. The two lines together, therefore, provided an optimal mix for AIG, especially as it diversified its life insurance business across the world and in many product lines.
Starr built small branch life insurance operations throughout Southeast Asia beginning in the 1930s. Ousted by China’s new rulers in 1949, Starr relocated his Asian base of operations to Hong Kong under the new name, American International Assurance Company (AIA).1 AIA followed a company-wide business model whereby mobile overseas personnel (MOPs) were dispatched to recruit local staff and provide professional training so they would view their jobs as careers. Agents, preferably paid variable commissions, fanned out nationwide to educate people about life insurance and tailor products to suit customer needs.
The company reinvested capital in infrastructure projects benefiting the national economy—bridges, dams, hospitals, houses, roads, and schools. As soon as it became feasible, each local company committed capital to construct its company-owned office buildings in leading cities to demonstrate its permanence, reliability, and scale. AIA’s buildings were designed according to ornate architectural plans and advanced engineering standards, achieving landmark status. At dedication ceremonies, the company’s local executives would beseech the nation’s leader—prime minister, president, king, or the like—to officiate. Critical in every life insurance operation abroad is sensitivity to local economic conditions, being sure that capital is invested patiently, including by avoiding temptation to invest in high-yield instruments that tend to be both risky and volatile. After all, life insurance companies serve as trustees of policyholders’ funds.
In the Philippines, AIG’s flagship company was Philamlife, short for Philippine American Life Insurance Company. Starr had begun a life insurance business in the Philippines in the mid-1920s, though it was disrupted by World War II. Fortunately, just as the Japanese army marched on Manila in December 1941, Starr’s loyal colleagues, Clayton L. Seitz, a regional manager, and Werner Stamm, an accountant, stored most of the company’s records.2 That helped the company resume business after the war ended. Postwar rebuilding of the country required cooperation between the United States and Filipino governments, collaboration between governments and business, and the commitment of Filipino citizens. As always, personal relationships proved critical: Starr became friends with General Douglas MacArthur, who oversaw the country on behalf of the victorious allies, and Paul V. McNutt, a popular American diplomat, appointed ambassador by President Harry S. Truman.3
After Ambassador McNutt stepped down from that post, Starr persuaded him to serve as Philamlife’s chairman. This proved to be shrewd recruiting. An initial challenge to building an insurance company after the war was a lack of insurance consciousness among citizens. The chaos of war and its aftermath left many policyholders across the country undercompensated for destruction. Reviving trust in insurance was vital, and Starr thought that Ambassador McNutt’s popularity among Filipinos made his name a badge of trust for the company. To run the operation, Starr and Ernie Stempel, head of Starr’s life insurance operations, recruited Earl Carroll, a colorful character who had become a local hero among the prisoners at Santo Tomas camp, where the Japanese had interred prisoners during the war. Philamlife attracted prominent and capable Filipinos as senior executives, who in turn hired and trained an impressive legion of insurance agents and managers to blanket the country’s 7,107 islands and build the business.
The sales strategy targeted the middle class, from farmers to merchants, using agents knocking on doors selling small policies and collecting premiums. Filipinos, struggling to move themselves and their country from poverty to prosperity, cherished financial security. Without many banks or investment alternatives such as stocks, bonds, or mutual funds, life insurance was an attractive way to amass savings. Many Filipinos so prized their investments in Philamlife that they hung framed copies of their policies on their living room walls.
From its inception, a basic premise of Philamlife was to invest its capital in ventures that would accelerate the county’s economic development.4 In addition to financing infrastructure projects, Philamlife supported agriculture and industries like cement making, food processing, oil refining, and pharmaceuticals. These civic-minded commitments went beyond typical capital investment to include free annual health exams for policyholders and such steps as circulating mobile x-ray units to administer free tuberculosis tests.
In Manila, Starr constructed Philamlife’s first building in 1961, designed by local architect Carlos D. Arguelles, and featured in both National Geographic and Time.5 Known locally as “The House of Savings,” one graceful feature stood out for its role in the public sphere: a rounded marble tunnel off the lobby opened into an acoustically sophisticated 800-seat auditorium. The auditorium staged a variety of public artistic and civic events, from symphonies and operas to government and United Nations programs.6
Greenberg took a trip to the Philippines shortly after the 1965 election of Ferdinand Marcos as president, and the two would work closely together in the Philippines for the next two decades. Greenberg developed an abiding relationship with President Marcos, though punctuated by disagreement and eventual disillusionment. One sour note in the early days concerned the House of Savings, which Philamlife owned outright (and so epitomized Philamlife that the company was also known as the House of Savings). Although a treaty between the United States and the Philippines, called the Laurel-Langley agreement,7 committed each country to respecting ownership rights of the other’s companies, Marcos fixed on another domestic law restricting ownership of real property by foreign companies. Greenberg objected that the restriction Marcos invoked was specifically targeted to Japanese companies—not American companies.
The two had been discussing this for many months, Greenberg understanding Marcos’s motivation but resisting given the importance of real estate assets to a life insurance business as well as the symbolic importance of the company’s headquarters. Greenberg thought that a resolution was all but concluded. He was shocked when Marcos confronted him at a state dinner in the Malacañang Palace, stating that the deal was off and that Philamlife would have to share ownership in the building with a Filipino partner. Greenberg was livid, and, though he tried not to make a scene, the two soon raised their voices at one another, drawing the attention of many guests in the dining room.
Normally, guests at a state dinner do not depart before the president leaves. That night, however, Greenberg left immediately after this heated discussion, which few in the room could miss despite Greenberg’s best efforts at decorum. The Greenbergs drove to the nearby airfield and boarded their plane for Hong Kong, where they spent the night. The next morning, the U.S. ambassador, Henry Byroade, called Greenberg. President Marcos wished them to return to the Philippines. Upon their return, Marcos proposed a resolution. In the end, President Marcos conceded Greenberg’s argument.8
In those early days, Greenberg and President Marcos maintained a collegial enough relationship that Marcos would invite Greenberg to play pelota, an ancient court sport similar to handball. The fast-paced game puts players in close physical proximity with one another. Greenberg joked with Stempel, who joined one of the games, that they had to be careful how close they got to Marcos, as he was invariably accompanied by military aides.9
While visiting the Philippines in 1966, Marcos invited Greenberg to the Malacañang Palace for breakfast. Greenberg’s relationship with Marcos entailed giving practical advice and counsel. On arrival, it was impossible to miss the oversized flowers spread ungainly in the middle of the dining table. As Greenberg approached, a Filipino colleague, Cesar Zalamea, put his index finger to his lips, nodding his head to direct Greenberg’s attention to the flowers. Duly warned of a tape recorder in surreptitious use, Greenberg watched his words.
Marcos entered the room and the men sat down to eat and chat. After a short while, Marcos casually remarked, “I am thinking about introducing mutual funds into the Philippines. What do you think of that?”
“We have evaluated whether mutual funds would be appealing to citizens here,” Greenberg said. “We have determined that, at least at present, there is not enough demand to make a fund succeed. What makes you think about this?”
“I have a particular businessman in mind who has proposed the idea. I wanted to see if you and Philamlife would be interested in a joint venture or partnership with him.”
“We usually don’t prefer joint ventures or partnerships,” Greenberg explained, “but who is that?”
“Bernie Cornfeld,” President Marcos replied.
Greenberg almost choked on his mango.
Marcos continued. “He’s selling mutual funds throughout Europe and Asia and wants to break into our country.”
“We don’t want to have anything to do with that,” Greenberg replied, “and neither should you.”
Cornfeld was among the most controversial figures in global finance at the time, peddling American mutual fund interests across the world in a company called Investors Overseas Services.10 Pitched to small investors, Cornfeld appeared to have grown it into a billion-dollar enterprise. But it eventually collapsed and was taken over by another infamous financier of the age, Robert Vesco. Cornfeld was investigated for securities fraud and settled charges by agreeing to wind up or sell all his U.S. operations. His ventures abroad prospered for a few years before failing in 1970. Legal disputes battled him the rest of his life, and he never made a comeback.11 Marcos, who trusted Greenberg’s judgment, heeded the advice to stay away.
Greenberg never learned who bugged that dining room or why, but eavesdropping on him and his entourage had become standard. One defense often employed when traveling: at the last minute, he would switch hotel rooms with AIG’s pilots and crew.
During the 1970s, the Philippines was marked by corruption, lawlessness, and a sputtering economy. Feeling imperiled, Marcos desperately clung to power even as his grip loosened. To maintain control, his staff allowed a rumor to flourish that an insurgent group was conspiring to start a communist insurrection. As such rumors swirled, Marcos considered declaring martial law. President Marcos dispatched his brother-in-law, a top aide, to run the proposal for martial law by Greenberg. Marcos hoped that, given Greenberg’s connections in Washington, Greenberg would be able to forecast the official reaction. Greenberg told the interlocutor he could not make such a prediction and advised him to ask the U.S. government himself. Greenberg then promptly reported the pending despotism to State Department officials. Marcos declared martial law the next day, which he maintained through 1981.
President Marcos lurched from one national crisis to another. Marcos stood for reelection as president in 1981, shortly after lifting martial law, and won, in part because the opposition boycotted the election in protest. The domestic economy returned as a sore spot in Marcos’s third term. To address this, in 1983, Marcos radically devalued the Filipino peso, a move that reduced Philamlife’s capital position and income, reversing years of profitability. But net damage to AIG was offset by the broader diversification of its businesses around the world that its people had been relentlessly pursuing. By 1983, such diversification had diminished the relative weight of operations in the Philippines.12 At the same time, the situation in the Philippines continued to decline.
Benigno S. Aquino Jr. had been a presidential candidate against Marcos during the period of martial law, but subsequently left the country to teach for several semesters in the United States. As he was planning a return to the Philippines to run for the presidency again, rumors circulated that his life might be in jeopardy. Ignoring the warnings, he flew back to Manila. After disembarking from his plane, while walking down the gangway, an assassin killed him. Some citizens pointed the finger at senior officials in the Marcos administration. Government officials denied the murder charges without investigation. Public furor erupted, becoming by February 1986 the potent “People Power Revolution.”
Although President Marcos planned to seek a fourth term in the presidency, people had lost confidence in his leadership and were eager for change. This turn of events concerned the United States and AIG. Both had invested substantially in the country and both felt a responsibility to people in the Philippines. The United States had important military bases there—Clark Air Base and Subic Bay Naval Base. Many Filipino citizens thirsted for independence from the United States, and thus some preferred to have U.S. forces withdraw. Presidential leadership was needed to explain why military withdrawal was not in the national interest and why the close alliance with the United States was essential. From AIG’s perspective, Philamlife was not only a prosperous business but an important Filipino corporate citizen. Its interests and presence in the Philippines ran deep. It had built a large employee and policyholder base, helped people accumulate savings (it was the “House of Savings”), contributed significantly to the development of the national economy, and projected and sustained a positive image of America in the popular Filipino mind.
In April 1985, a senior U.S. government official contacted Greenberg to ask if he would talk to President Marcos about foregoing another term. U.S. government officials believed that Greenberg’s knowledge of the Philippines and relationship with its leadership positioned him better than anyone to make this overture. It was always delicate for one country to intervene in another country’s domestic politics and thorny for the U.S. government to enlist the aid of private citizens in such an intervention. To arrange the meeting, Greenberg reached out to Roberto (“Bobby”) V. Ongpin, a top aide to Marcos then serving as minister of trade and industry.
Visiting Manila in May 1985, Greenberg was joined in the effort by Admiral Robert L. J. Long, retired U.S. commander of the Pacific, and John S. Reed, chairman of Citicorp, which also had a significant presence in the Philippines dating to the early twentieth century.13 The men flew in separately, meeting at the Manila airport in the late afternoon before heading to the Malacañang Palace for dinner. When they arrived, it was clear that Marcos had become gravely ill. After the meal, while sipping tea, Greenberg took up his task. Turning toward Marcos, Greenberg cleared his throat: “Mr. President, we have known one another for a long time. I need to speak frankly with you about something.”
Marcos, who looked bloated, was having difficulty breathing, as Greenberg continued, “Are you feeling okay?”
The president’s expression was blank, replying that he felt fine and his health was not of concern.
Greenberg leaned forward over the table, clasping his hands before him, saying, “As you know, running for office is strenuous. Given your health, is it really a good idea to run for president of the Philippines again?” Marcos assured Greenberg that he had the strength, brushing off the suggestion.
Greenberg persisted. “Why not step down at the top of your game? It would be a shame if you were to run and lose. Why would you do that?”
Marcos was resolute, telling his interlocutors: “Gentlemen, I’m going to run and win. And I have plenty of support, here and in the United States.”
“But many will be skeptical about whether you won fair and square,” Greenberg cautioned.
Reed repeated the plea in different words, adding that international investors were becoming anxious for an orderly succession in the Philippines.
“You’ll see. Don’t worry about these matters,” Marcos said.
The cavernous dining room in the palace was still, as Greenberg concluded the conversation. “I think it would be a mistake,” he said.
Throughout 1985, the U.S. government continued efforts to convince Marcos not to run again. Efforts included personal diplomacy by Nevada Senator Paul Laxalt. The senator, who consulted with Greenberg ahead of his mission, visited with Marcos in October 1985.14 Despite winning Marcos’s trust and confidence, however, Laxalt could not dissuade Marcos from going ahead with the election either.
The official results of the February 1986 election declared Marcos the winner by a wide margin. But, as Greenberg had warned, opponents and some international observers questioned the integrity of the results. Members of his own cabinet turned on Marcos as well. Marcos soon capitulated, renouncing the presidency, being airlifted from the palace by helicopter to assure his safety. President Reagan arranged for sanctuary in Hawaii, where Marcos lived in exile until his death in 1989.
The Philippines continues to be a valued U.S. ally and strategic interest, and an important member of the Association of Southeast Asian Nations. In 1997, with Philamlife prospering, the company moved from the old Philamlife building built under Starr’s direction to a 46-story office tower in Manila’s Makati City built under Greenberg’s direction.15 The Philamlife Tower, soaring 656 feet, remains among the tallest buildings in Manila. The massive building is modern in technology—with high-speed elevators, security card access, a gym, and a helipad—and contains a private dining and social club on the top floor that is among the most sought-after spots in town. Attesting to the role Philamlife has played in the country, on a later trip to the Philippines, Greenberg was happy to see that half the members of the cabinet of President Benigno Aquino III were former senior executives of Philamlife, as was a recent ambassador to the United States, Jose L. Cuisia Jr. Philamlife continues to be a very important entity in the Philippines.
AIG’s distinctive buildings, in Manila and a dozen other cities around the world, stood as symbols of community and permanence. The architecture reflected each site’s national culture,16 tailored to environments as varied as Hong Kong; Beirut, Lebanon; Havana, Cuba;17 and Karachi, Pakistan.18 In the 1960s, Starr proposed expanding operations in Bangladesh, the eastern region of Pakistan. Bangladesh was and remains among the world’s most populous yet poorest nations. To lift vast numbers of people out of poverty, Starr believed it was desirable to create a life insurance business there—along with a new building. One executive, Richard Rhodebeck, was opposed, referencing the country’s uncertain political and economic future.19 Rhodebeck concluded: “The building will be built only over my dead body.” Starr replied, “Okay, we’ll call it the ‘Rhodebeck Memorial.’” Throughout his business dealings, Starr always kept his witty acerbic side.
One asset that every American International company leveraged abroad was its “red, white and blue” American identity. The word American—American Home, American International, American Life Insurance Company (ALICO), or any of dozens of AIG companies—signaled the fortitude of the United States. Because selling life insurance overseas involved marketing values identified with the United States—savings, safety, and security—agents were trained to promote these associations.
ALICO targeted markets in Latin America, Europe, the Middle East, and Japan. By 1971, ALICO had $1 billion of life insurance in force—an amount Greenberg thought modest compared to what was possible. He asked Stempel and the energetic Ken Nottingham, an MOP, to make it happen. They reorganized ALICO along AIG’s profit center model. They decentralized its operations by creating regional vice presidents, general managers, and branch offices in different countries. They increased cross-selling of products, among them an offer to add a personal accident and health policy to every life insurance plan. ALICO’s customers found this appealing, and it drove substantial underwriting profits. The reorganization succeeded: the business grew more than eightfold within a decade, and ALICO became one of the largest international life insurance companies in the world, operating in 60 countries through 70,000 agents.
ALICO operated in a dozen Latin American countries, where the company had planted roots in the 1950s, when the region was an economic dynamo compared to Asian and European economies decimated by war. Following a model akin to that of AIA, ALICO targeted less developed markets, dispatched experienced managers to create a local company, adhered to local customs, recruited talented locals, and let them build the business, with profits reinvested in the local economy.20 Its products started out simple, just whole life. As the economy and market matured, the product line became more complex, adding annuities and, ultimately, retirement and pension programs. However, the environment in most of Latin America was never ripe for AIG to establish a leading life insurance business there as it clearly had in Asia.
ALICO’s efforts in Europe faced different challenges, as AIG lacked the first-mover advantages arising from introducing customers to the value of life insurance. It faced sophisticated competition using powerful entrenched distribution systems. Germany, for example, boasts large, strong trusted life insurance companies tied to major banks. Still, ALICO innovated in Europe, penetrating markets with creative distribution techniques: direct marketing in Germany, specialty products in France, and cobranding deals in the United Kingdom. It also found its familiar first-mover advantages in southern Europe, in Portugal, Italy, Greece, and Spain (long before others dubbed those four countries the “PIGS”) and, after the Cold War, in eastern Europe, especially Hungary, Poland, and Romania.
Innovation meant tailoring products to meet local needs and tastes. In the Middle East, ALICO’s agents concentrated on basic whole life insurance in small offices throughout the region: Jordan, Kuwait, Lebanon, Saudi Arabia, Syria, and Turkey. In Japan, ALICO pursued advanced financial products such as annuities and pensions marketed using direct mail, in retail stores, by credit card, and over the phone. In 2000, AIG bought Chiyoda Mutual Life Insurance, and in 2003 GE Edison Life Insurance—heavily negotiated deals between Greenberg and GE’s CEO, Jeffrey Immelt, that made AIG a top 10 Japanese life insurance company.
AIG was also a pioneer in developing business in Africa. It built prosperous operations in many parts of that continent in such countries as Kenya, Nigeria, and South Africa. However, its overtures were ahead of their time in some places, notably Uganda. There, in the early 1970s, AIG formed a joint venture run by Louis D. LeFevre, the MOP who also faced harrowing challenges in Nigeria. In Uganda, LeFevre was obliged to operate under the vicious rule of military dictator Idi Amin, who reigned from 1971 to 1979 with brutal force.
Greenberg visited the country on a trip to South Africa with John Roberts. They stayed at the Kampala International Hotel—a name that sounded better than it was, where thieves prowled and danger lurked at every turn. The American ambassador hosted a party for Greenberg and AIG at the hotel, located in the heart of Kampala, the nation’s capital, on the hotel’s top floor.
After passing through the receiving line, Greenberg and Roberts and their wives observed two senior Ugandan officials and their wives standing along the rail of the rooftop. They appeared to be dropping glasses off the roof and then laughing after they dropped. Asked what they were doing, the ambassador reluctantly confessed that they were seeing if they could hit passersby below. The atrocious behavior was a microcosm to the horrors of Amin’s Uganda—where AIG did not remain for long.
In the United States, Starr had invested briefly in the life business before World War II in U.S. Life. That had been one of his trademark companies before selling it, due to duplicative regulations, to the company where Greenberg got his first job with Mil Smith, and the proceeds of which he used to acquire American Home. Decades later, a successful life insurance business in the United States gave AIG a basis for expanding into the more sophisticated retirement planning products. These had become the central business of Sun America, the financial services company run by Eli Broad.
In 1998, Broad offered to sell the company to AIG. Decades earlier, Broad had founded a home-building company, Kaufman and Broad Home Corporation, in Los Angeles (the company was later renamed KB Home). The home-building business is notoriously cyclical. To diversify it, Broad acquired Sun Life Insurance Company of America, a life insurance company less sensitive to the business cycle.21 As the 1980s dawned, however, Broad found that small life companies like his could not beat their larger rivals. Broad decided that Sun Life should carve a new niche. Demographic trends—rising private wealth along with declining support from public programs such as Social Security—pointed to increasing need for retirement planning.
Sun Life wound down its life businesses and ramped up its investment lines, first moving into annuities and later mutual funds. It built a network of independent financial planners, nearly 10,000 nationwide. Broad changed the company’s name to Sun America and rebranded the business. The effort succeeded: by 1998, Sun America had become a leader in asset accumulation products. For AIG, synergies appeared: Sun America’s domestic distribution prowess would boost AIG’s domestic life insurance business, and AIG’s unmatched international capabilities would give Sun America’s retirement-planning businesses new fields to plow abroad. AIG bought 100 percent of Sun’s common stock, paying in AIG shares worth $18 billion. Within one month after Broad broached the possibility, the deal was approved by both corporate boards and signed in late August.22 In addition to the mutual product and distribution synergies, the fit between AIG and Sun America was strong for less tangible but important reasons: the companies shared an entrepreneurial culture, a commitment to expense control and a focus on the bottom line.
Similar attributes made American General Corporation, among the largest life insurance companies in the United States, an attractive target. On March 12, 2001, Prudential plc, the massive British life insurance company, and American General announced that they had signed a merger agreement. American General shareholders would receive shares in Prudential, then worth $50 per share, valuing American General at $27 billion. The deal would rank among the largest transatlantic financial mergers and redefine the global life insurance industry. In response to their perception that Prudential was overpaying, traders dumped Prudential’s shares on the London Stock Exchange, driving the deal’s value to American General down to $40 per share by April 3.23
Greenberg learned of these developments while meeting with company executives at a weekend retreat. Sensing opportunity, they acted that same day. They enlisted professional advisers in law and investment banking to consider the possibility of AIG’s making a bid for American General, a company that Greenberg knew well and had long admired. The lawyers spent the weekend reviewing the necessary steps, and the bankers prepared a valuation analysis. The advisers presented results to AIG on Monday, and the team formulated a tentative plan, arranging for an AIG board meeting to get input and approval.
After the board meeting, Greenberg called American General’s chairman and CEO to say that AIG was interested in acquiring the company. Greenberg said AIG was prepared to pay $46 per share in AIG stock, $25 billion in total.24 The next day, AIG made that unsolicited offer public and sent American General a formal letter outlining terms. Within one week, on April 9, American General’s board agreed to recommend AIG’s bid to its shareholders and cease supporting Prudential’s offer. A formal agreement was signed a month later.
Prudential could not match AIG’s offer and it sued, claiming AIG had wrongly interfered with its contract. That was a losing argument, however, and Prudential withdrew it after a court declined to block the AIG–American General deal. Instead, Prudential pointed to a provision in its agreement with American General calling for American General to pay Prudential a break-up fee of $600 million if it terminated in favor of a better bid. American General paid the fee, and AIG acquired the company on August 29, 2001, paying stock then valued at $23 billion.25
Acquiring American General cemented the achievement of AIG’s long-standing strategic objective of diversifying earnings through an expanded life insurance presence in the United States. The deal, the largest in AIG’s history, added a sizable retirement savings business that would bolster Sun America’s position in that market. In addition, American General had been growing its consumer finance business, which some AIG divisions abroad had been developing as well. Owning American General created new opportunities for AIG’s other units to cross-sell products, in the United States and overseas. It enabled consolidating back-office operations to slash expenses. American General increased AIG’s earnings by 10 percent.
From the small world department: American General then owned U.S. Life, the domestic life company that Starr had owned in the 1940s before selling it to Mil Smith’s company due to duplicative regulation, now returned to the family under Greenberg’s watch. Traced to humble beginnings, by 2005, AIG was the largest life insurance company in the world—and the life business was AIG’s largest segment, enjoying more than $9 billion in annual earnings26 from 70 countries through 175,000 agents.27
Notes
1. AIA also then became a subsidiary of AIRCO. In 1978, when AIRCO merged into AIG, AIG became AIA’s ultimate parent.
2. On December 8, 1941, Seitz, whose father, Carl, had helped Starr found one of his early companies, had arrived in his Manila office ready for business as usual. But he soon heard that the Japanese were simultaneously bombing Pearl Harbor in Hawaii (on the other side of the international dateline, where it was still December 7) and the Clark Air Base about 40 miles north of Manila. Communications between the Philippines and the outside world were cut off. But Seitz and Stramm managed to bury the books in Stramm’s garden just before Japanese troops seized Manila on New Year’s Eve and rounded up civilians, who were detained as POWs for the rest of the war. Guaazardi, Grose, et al., “Worth the Risk,” chap. 6, pp. 4–7; obituary for Clayton L. Seitz, Contact (August 1974).
3. Ambassador McNutt, previously a law professor and governor of Indiana, held many diplomatic posts during the 1930s and 1940s, and later chaired the Philippine-American Trade Council, a business group. He achieved considerable distinction during the period, as he appeared on the covers of Life and Time magazines in 1939 on his return from the Philippines and again on the cover of Time in 1942.
4. “The Philamlife Story,” Contact (September 1969).
5. “Home of Savings, House of Beauty,” Contact (August 1961); “Philamlife Building Complemented in National Geographic and Time,” Contact (November 1966).
6. Quoted from Contact magazine (September 1969).
7. Trade Agreement Renewing the Agreement of July 4, 1946, Sept. 6, 1955, U.S.-Phil., 6 UST 2981 (in effect until 1974).
8. Cunningham interview with Edward Matthews, Brewster, New York, September 12, 2011.
9. Stephen Miller, “Ernest E. Stempel 1916–2009,” Wall Street Journal (April 18, 2009).
10. Diana B. Henriques, “Bernard Cornfeld, 67, Dies; Led Flamboyant Mutual Fund,” New York Times (March 2, 1995).
11. See Charles Raw, Bruce Page, and Godfrey Hodgson, Do You Sincerely Want to Be Rich? The Full Story of Bernard Cornfeld and IOS (New York: Viking Press, 1971).
12. AIG Chairman’s Letter, AIG Annual Report (1983).
13. This story is based in part on a Cunningham telephone interview with John S. Reed, May 7, 2012.
14. See Paul Laxalt, Nevada’s Paul Laxalt: A Memoir (Reno, NV: Jack Bacon & Company, 2000), 271–280. Ahead of Senator Laxalt’s overture in October 1985, officials suggested he reach out to Greenberg for a briefing, which Greenberg naturally obliged. Senator Laxalt found the briefing helpful as Greenberg offered insight from a businessman’s perspective. Ibid., p. 273.
15. M.R. Greenberg Attends APC Meeting and Philamlife Tower Ground-Breaking, Contact (February/March 1997).
16. C.V. Starr & Company, “Starr Memorial Book” (1970), 34. The Helen Graham Park Foundation was established in 1994 to honor the life of Helen Graham Park, an internationally renowned architect who worked closely with Starr.
17. Ibid.
18. Ibid.
19. Rhodebeck was ALICO president from 1953 and chairman from 1963. Gordon Tweedy Succeeds Richard Rhodebeck As ALICO Chairman, Contact (February 1965): 8. He was an MOP and traveled extensively throughout the Middle East and the Caribbean, building ALICO’s life insurance business. Richard Rhodebeck, Contact (November 1965): 2 (reporting his death from cancer on November 7).
20. Discussion draws on “AIG Seizes Opportunity in Thriving Latin American Markets,” Contact (July/August 1997).
21. Guaazardi, Grose, et al., “Worth the Risk,” chap. 17, pp. 14–18.
22. “AIG to Acquire SunAmerica, Opening a New Window in Growing Retiree Markets,” Contact (November/December 1998).
23. AIG–American General joint proxy statement.
24. The AIG bid price of $46 in AIG stock was subject to a 5 percent collar. If AIG’s stock price traded outside a 5 percent range within so many days ahead of the deal’s closing date, the payment would be based on a fixed ratio agreed in advance rather than a dollar amount of share value.
25. See “AIG Reaches Agreement to Acquire American General,” Contact (July 2001) (agreement in May 2001, paid in AIG stock valued at $23 billion).
26. AIG Annual Report (2005), 28.
27. AIG Chairman’s Letter (2001).