Maurice R. Greenberg, who built American International Group Inc. into the world's largest insurer before his ouster in 2005, has re-emerged as one of the prime forces behind Grandparents.com, a social networking site for seniors that aims to sell them insurance.
Greenberg, 87, is personally directing the website's efforts to establish deals with insurers to offer health, auto, home and life coverage, Grandparents said in a statement. The New York company competes with services offered by the nonprofit AARP.
Greenberg pioneered the practice of selling coverage to groups of retired teachers, according to his autobiography published this year. The efforts paved the way for the establishment of the AARP, the executive said in the book, "The AIG Story."
"Hank basically says I can recreate what I did at AARP," Joseph Bernstein, co-chief executive of Grandparents.com Inc., said Thursday. "He's putting in personal time and effort. He picks up the phone and he calls the CEO of you-name-it."
Bernstein said it took more than two years of negotiations to reach a deal with Greenberg, who told the company it had to assemble a top management team, hire pitchmen and raise $5 million before he'd work with them. The parties reached an agreement in January that went into effect this month.
Grandparents.com will pay Greenberg's Starr International Co. $80,000 a month and commissions from future policy sales, Bernstein said. Starr is also in discussions with the site to take a 25% stake, he said.
The company has a market value of about $13 million, according to data compiled by Bloomberg. Leilani Brown, a spokeswoman for Greenberg, described the arrangement as a "strategic alliance" and declined to comment further.
The website has former CNN talk-show host Larry King and author Deepak Chopra as spokesmen.
The company, which went public last year, could use the help. Advertising sales plunged for Grandparents in 2012 amid pricing pressure, the company said in the statement.
Revenue in the nine months that ended Sept. 30 fell 30% to $224,330 as the advertising sales declined. Operating expenses more than tripled to $8.85 million, fueled by increased spending on salaries and marketing, according to a regulatory filing.
Grandparents said Thursday that it would "focus on developing revenue-generating activities led by an insurance division."
The firm currently sells some insurance products from Humana Inc. Bernstein declined to mention any other insurers that may sell through the site, citing non-disclosure agreements. Grandparents also plans to offer a branded debit card from JPMorgan Chase & Co.