Former AIG CEO Hank Greenberg on How the Global Economy Has Changed

Hank Greenberg on the economy.

Morgan Housel
Morgan Housel
Mar 22, 2013 at 11:24PM

Deep recessions only occur every few decades. Big economic shifts occur only a few times a century. An analyst or businessman with 20 or 30 years' experience can still be wet behind the ears as far as history is concerned.

Which is why someone like former AIG (NYSE:AIG) CEO Hank Greenberg is so fascinating to talk to. Greenberg has been an insurance executive since the 1950s, and has done business in dozens of countries. It's not a stretch to say he is one of the most experienced financiers alive. If he hasn't seen it all, he's come darn close.

In a recent interview, I asked Greenberg how the global economy has changed since he began half a century ago. Here's what he had to say (transcript follows):

Morgan Housel: You've been in this business for a long time, some 40-50 years. How is the global economy different today from what it was when you were starting and growing AIG, several decades ago?

Hank Greenberg: Much different -- it's a good question. We were first movers in many countries. Trade in services didn't exist when we were building AIG. We traded with other countries for goods, but services they looked askance at you and said, "WTO doesn't cover services."

Banks, insurance companies, credit card companies, had to fight to get into a country and trade. I was on the President's advisory board for trade negotiations. I had to first convince our own government that we ought to be negotiating trade in services.

We finally did. It took a long time, and even then many countries were very stubborn in opening their markets. You had to fight to get into these markets. That was one of the major differences; the amount of time that we had to spend in opening markets.

Then, as a first mover, you had an advantage. We could bring things, products, in countries that never had those products before -- insurance products. It was an exciting adventure. Of course, we were very good at product innovation. The world changes all the time; new opportunities arise. If you've got the people and the vision, you do well -- and we did.