Book Review: Fallen Giant

I am glad I read this book, but I found it less than satisfactory.  Why?  Wait a moment on that question, while I tell you about the book’s strong points, which I appreciated.

AIG’s founder was Cornelius Vander (C.V.) Starr, sometimes called Neil Starr.  (Alas, but the book does not explain the nickname.)  He was an amazing guy who worked like crazy to create an insurance brokerage in China for US companies, and then brokered insurance in many other places in the world.  The success was so significant that the company returned to the US and bought up some of the companies that it had placed business with.

C. V. Starr was a fascinating man who appreciated art, skiing, golf, global travel, and was open-minded toward other cultures, incorporating bright local managers into his firm.  He had an aptitude for sensing management talent, which seemed to correlate with willingness to embrace multiple cultures.  He was also a business animal, which led to a tight-knit culture with his top lieutenants, and an inability to keep a wife acquired later in life happy.

He created a complex corporate structure to reward significant long-termers with AIG.  That would later prove to be a major source of contention when Greenberg was forced out.

The book divides into four sections:

  1. The Life of C. V. Starr
  2. The Arrival and Success of Maurice Raymond (M. R. “Hank”) Greenberg.
  3. The author’s experiences working for AIG (1973-mid-80’s).  He was a lieutenant of Hank’s dealing with foreign affairs.
  4. The fall of Hank Greenberg and the demise of AIG.

Do you see the big gap?  The story jumps from the mid-’80s to 2005.  There is a 20-year gap of which little is said.  There are snippets, yes, but there is nothing comprehensive.  The book is written chronologically in a micro-sense, but not in a macro sense.  Chapters are topical, but chronological within the chapters.  The chapters are chronological, but the periods overlap, chapter to chapter.

There are other weaknesses to the book as well:

  • It doesn’t really explain how Greenberg became so influential at AIG, and gained the trust of Starr.  (There are stories that I heard, but I have no idea how true they were.)
  • It doesn’t tell the story of growth in the middle years.  Why did they succeed?  What of the takeovers that they missed?
  • It doesn’t deal with critical business decisions like why AIG acquired ILFC, SunAmerica, and American General.  With the latter two, why was Greenberg willing to pay up?  That was not his style in prior days, which was why AIG did not buy The Equitable.
  • How the strategy of AIG changed from nimbleness (entering and leaving markets at will) to omnipresence (we do business everywhere.
  • Not recognizing the continuing increase in debt at AIG.
  • The author sees the “small” issues that led to the ouster of Greenberg, but does not find anything larger that merits attention.  The Financial Products unit gets a mention, but the insolvency of the life companies does not.
  • For the lawsuits that emerged after Greenberg’s ouster, the author takes a slightly pro-Greenberg slant.

Who would benefit from this book?  Anyone who wants to learn about the amazing C.V. Starr.  That is the main benefit of this book.  If you are looking for a history of AIG, well, this may be the best book out there, but it has the inadequacies that I listed above.

Unlike other reviewers, I read every book I review, and in the few cases where I scan a book, I disclose it.  Any reader entering Amazon through my site and buying anythig there, I get a small commission.  You can buy today’s book here: Fallen Giant: The Amazing Story of Hank Greenberg and the History of AIG