‘Too Long’

The insurer said in 2010 that Benmosche was undergoing chemotherapy for cancer, increasing the urgency for succession planning. Benmosche, who previously postponed plans for retirement, said his latest intent was to stay on until February, and that succession was accelerated because “the transition was taking too long.” The board’s vote was June 9, he said in an interview.

He said that “things are going OK” with treatment for his cancer and that Hancock’s hiring represents continuity. “If the board wanted a dramatic change, they would have looked for someone outside,” he said.

Hancock becomes the company’s sixth CEO since 2005, when Maurice “Hank” Greenberg stepped down amid accounting probes after building AIG into the world’s largest insurer. Martin Sullivan left in 2008 after underestimating the potential for losses on bets tied to subprime mortgages. Robert Willumstad lasted only months, and Edward Liddy, who took over with the bailout, was replaced by Benmosche the next year.

Benmosche previously led MetLife Inc., the largest U.S. life insurer. He came out of retirement in August 2009 to take over AIG, which was reeling from losses, and set the company on the road to repaying taxpayers. Along the way, Benmosche became the most outspoken AIG chief since Greenberg.

‘So Much Trouble’

Benmosche sparred with government overseers, rebelled against U.S.-imposed pay caps that he said limited the firm’s ability to retain staff, threatened to quit and succeeded in ousting then-Chairman Harvey Golub with a him-or-me showdown.

“I create so much trouble, don’t I?” Benmosche told employees at a 2009 meeting. “That’s my job.”

He also criticized lawmakers for contributing to the public backlash against bonuses the firm paid, calling them “crazies down in Washington.”

The CEO’s intent was to show employees somebody would stick up for them, said Ernest Patrikis, AIG’s general counsel from 1999 through 2006 and now partner at White & Case LLP.