For many, the history of AIG (AIG +0.88%) starts in September, 2008, when it collapsed and was bailed out by the U.S. government.
That's unfortunate, because the company has a deep history spanning nearly a century. Long before it was bailed out, and long before it bet heavily on risky mortgage derivatives, it was the one of the most successful and admired insurance companies in the world.
I recently interviewed former AIG chairman and CEO Hank Greenberg, who ran the company for almost 50 years before retiring in 2005. I asked him a simple question: What made AIG great during its heyday? Here's what he had to say (transcript follows):
Morgan Housel: What I liked about the book is that it spent most of the time on the early days and the growth of AIG during its heyday. I think what’s unfortunate is that for a lot of Americans, the history of AIG begins in September 2008.
Hank Greenberg: That’s exactly right.
Morgan Housel: What was AIG’s key to success during its heyday?
Hank: Many things. First of all, we had a culture that was quite unique, and I think a lot of it was also when we started. Starr died in 1968. I became the head of the company in 67, and the people around us then, most of us at the very senior level were veterans, had been officers of the military, so there was a separate culture that was just unique, almost a military-like culture of discipline.
We attracted the best and the brightest, people who could live with a very high-powered environment. We were totally committed to building a great company, and we did. It was the largest insurance company in history. The largest in history, in 130-odd countries; it didn’t happen by accident. The planning and the execution were great.
Morgan Housel: You talk a lot about the culture of success. What other publicly traded companies today do you admire, that are doing things right?
Hank Greenberg: I think one of the companies now public was a part of AIG called AIA, in Hong Kong. Its market value today is almost that of AIG. It was wholly owned by AIG. I just had lunch with the guy running it, the CEO, yesterday. The company is a replica of what AIG was.
