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Ace Names New Vice Chairman

November 07, 2001|Bloomberg News

Evan Greenberg, the youngest son of American International Group Inc. Chairman Maurice "Hank" Greenberg, was named to run the reinsurance business of Ace Ltd., Bermuda's second biggest insurer.

Evan Greenberg, who resigned as president of AIG (AIG) in September 2000, will become vice chairman of Ace (ACE) and chief executive of its Ace Tempest Re reinsurance business, which provides insurance for insurance companies.

Greenberg has the knowledge and contacts to ensure that Ace wins a bigger share of the reinsurance market at profitable prices, with rates up by as much as 60% since the terrorist attacks, said Lanny Thorndike, a money manager at Century Capital Management.

Reinsurance rates began to rise before Sept. 11; the attacks gave reinsurers more clout to push prices higher. Several companies, including AIG, Chubb Corp. (CB) and Marsh & McLennan Cos. (MMC), which is run by Evan's brother, Jeffrey Greenberg, have started new reinsurance companies to take advantage of higher prices.

Greenberg's arrival at Ace also will rekindle speculation that AIG may try to buy Ace or Marsh & McLennan to resolve the question of who will succeed 76-year-old Hank Greenberg, said J. Paul Newsome, an analyst at Lehman Bros.

"This will not be the first time investors have mentioned Ace as a possible acquisition target by AIG," Newsome said. "Many of ACE's senior executives, including Ace CEO Brian Duperreault, are former AIG executives."

Evan Greenberg dismissed such speculation, saying "AIG is a large international organization, well spread around the world. I'm not sure what an acquisition of Ace would do for AIG."

AIG spokesman Ned Burke declined to comment on the possibility of AIG purchasing Ace.

Ace shares fell 5 cents to $39.96 Tuesday. Ace shares are up 21.9% since the terrorist attacks, while the S&P index of nine property-casualty insurers is up 4.5%.

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