Robert H. Benmosche, a former MetLife chairman who engineered one of the greatest financial turnarounds in American corporate history when he took charge of the failed industry giant American International Group and restored it to health after it had been rescued by American taxpayers in a $182 billion bailout, died on Friday in Manhattan. He was 70.
His death, at NYU Langone Medical Center, was announced by A.I.G. The company said in 2010 that he had lung cancer. After the prognosis worsened in August, he was succeeded by Peter D. Hancock on Sept. 1.
Mr. Benmosche’s salvage operation began on a sunny afternoon in Croatia in July 2009. He was enjoying another day of retirement at his home on the outskirts of Dubrovnik, with the Adriatic Sea spread out before him and his vineyard in back, when he received a desperate phone call from New York. It was the executive search committee for A.I.G.’s board.
Once the largest insurance company in the world, A.I.G. became the worst casualty of the global financial crisis of 2008. It was labeled “the most hated company in America” after the bailout.
The search committee was calling Mr. Benmosche (pronounced ben-moh-SHAY), the former chairman and chief executive of another insurance giant, Metropolitan Life, to entreat him to come out of retirement and take the helm of A.I.G.
“My first response to them was, ‘You must think I’m crazy,’ ” Mr. Benmosche recalled in a 2012 interview. “But then I thought about it and said to myself, ‘You know, they’re right — the financial industry is in chaos, and I’ve got the skills.’ ”
The drama and self-regard were typical of Mr. Benmosche, a larger-than-life executive who was also an imposing physical presence at 6-foot-4. Not only did he restore A.I.G. to health by 2012, but he also repaid its entire debt to the American taxpayers and returned $22 billion in profit to them as well.
When he took over A.I.G., it was teetering on catastrophe after dominating global insurance for decades under its legendary chairman, Maurice Greenberg, known as Hank. Expanding beyond conventional property, casualty and life insurance, A.I.G. had plunged into esoteric financial products, most of them linked to mortgage-backed securities.
By 2007, it had built up a $500 billion portfolio of so-called credit-default swaps, which were supposed to insure the mortgage-backed securities of banks, pension funds and other insurers. Many of these mortgages were made to homeowners and businesses that could not afford them. When the mortgages went into default, the market in mortgage-backed securities collapsed, leaving A.I.G. with staggering insurance obligations that it could not cover.
But because A.I.G.’s demise would have toppled financial pillars worldwide and erased the assets held by pension funds for ordinary retirees, President George W. Bush and Congress felt obliged to save the company with the $182 billion bailout — in effect, nationalizing it.
A.I.G. further enraged Washington and the public by insisting on handing out $165 million in executive bonuses. The wrath was strikingly nonpartisan.
“How do they justify this outrage to the taxpayers who are keeping the company afloat?” President Obama, newly elected, asked. Senator Charles E. Grassley, an Iowa Republican, suggested that A.I.G. senior executives “resign or commit suicide.”
It was during this furor that Mr. Benmosche arrived in New York in August 2009 to take over the leadership of A.I.G. He was not an instant hit in Washington or on Wall Street. He demanded from A.I.G.’s board — which included representatives of the Treasury Department and the Federal Reserve Bank of New York — that he be permitted to keep his 500,000 MetLife shares, with options for 2.1 million more, although holding a stake in a rival insurer raised a potential conflict of interest. The board agreed. It also gave Mr. Benmosche use of a private plane.
In pep talks to thousands of A.I.G. employees, Mr. Benmosche vowed to fight the company’s critics in Congress — to tell them “to stick it where the sun don’t shine.” He later said his irascibility was part of a strategy to lift company morale.
Even government officials who cringed at Mr. Benmosche’s pugnacity agreed that it had motivated his employees.
“He got folks to realize that it’s not ‘Woe is me, I’m A.I.G.,’ but rather, ‘We’re here to stay and we’re going to make it through this very difficult time,’ ” Sarah Dahlgren, the New York Fed representative on an A.I.G. monitoring team, said in a 2012 interview with Institutional Investor.
Mr. Benmosche put in place a strategy to slim down A.I.G.’s bloated balance sheet and to raise profitability with new technology. Only three years after joining A.I.G., he cut its more than $1 trillion in assets in half and reduced its job rolls by 40,000 people, to 57,000.
In addition to cutting costs and losses, Mr. Benmosche encouraged his managers to make more use of A.I.G.’s vast database and advanced analytic tools to design and market more profitable insurance products. By the end of 2012, A.I.G. had again become the biggest, most valuable insurer in the United States. His survivors include his wife, Denise; two daughters, Nehama and Beth; a son, Ari; six grandchildren; and three siblings, Judith, Jayne and Michael.
Robert Herman Benmosche was born on May 29, 1944, in Brooklyn, the grandson of a rabbi who moved to the United States from Lithuania a half-century before. The family moved to Monticello, N.Y., where young Bob’s father owned an unsuccessful motel in the Catskills. As a strapping teenager, Mr. Benmosche became a truck driver for Coca-Cola to pay his way through Alfred University, where he earned a degree in mathematics. He served in South Korea as a lieutenant in the Army Signal Corps.
After military service and several positions at a management consultancy, Mr. Benmosche joined Paine Webber, a brokerage firm, where he remained for 14 years. In 1995, he became a senior executive at the Metropolitan Life Insurance Company. Three years later, he was named MetLife chairman and chief executive. By then he already had a reputation for undiplomatic frankness.
“He spoke very candidly about everything,” recalled Helene Kaplan, a former director at MetLife. “He always says what’s on his mind, regardless of the impact.”