Blunt-Talking AIG CEO Benmosche’s True Passion Is Wine

By Adam Tanner | September 3, 2009

AIG’s new CEO, Robert Benmosche, has sparked just about as many headlines as one executive can in the past few weeks — and all while on
holiday at his villa in Croatia looking over the Adriatic.

He has been unusually outspoken for the head of a major New York-based corporation that has been bailed out by the U.S. government.

He recently made waves by saying that New York Attorney General Andrew Cuomo had acted like a “criminal” and also ignored concerns about corporate excess by showing a Reuters reporter around his 12-bathroom villa in Dubrovnik. And his very presence here has upset some — as he came to Croatia on holiday only days after taking the helm at AIG on Aug. 10.

But perhaps the context for some of this can be found in the passion the 65-year-old American has for his avocation as a vintner. When he was CEO of the largest U.S. life insurer MetLife Inc, Benmosche dreamed of retiring here and producing wine from the nation’s vineyards.

Benmosche, who first visited Dubrovnik on a corporate retreat in the 1980s and was charmed by the city and scenery, spent millions to make that dream come true. He bought and renovated a massive villa, acquiring vineyards and then after a year of seeking approvals from U.S. and Croatian authorities importing 1,500 vines from California to produce the popular
American Zinfandel type of wine. Coming out of retirement to one of the toughest jobs in corporate America had not been part of the original plan.

This summer was the first harvest from these vines — now multiplied to 6,000 plants — a harvest Benmosche had no intention of missing.

“My hope is that the vineyard becomes a source of true, high-quality wine for this region,” Benmosche said last week during an interview at his Dubrovnik villa.

“Because they are really not there yet. They are just struggling coming back from the war, they are still struggling with this whole idea of capitalism. If they become part of the European Union, their wine making is not going to compete unless they make a better class of wine. I want to show them.”

An apparently solved mystery around the original source of the popular American Zinfandel type of wine added to the allure of investing in vineyards on the Peljesac peninsula, halfway between Croatia’s ancient cities of Split and Dubrovnik.

Zinfandel grapes once grew in abundance in Croatia but virtually disappeared a century ago after being hit by disease. In California, since the late 19th century fruity Zinfandel grew in popularity and is now the state’s third-most popular type, according to the Wine Institute, a California trade group.

In recent years, DNA testing has linked Zinfandel back to a Croatian grape variety called Crljenak, and Benmosche wanted to reintroduce Zinfandel grapes.

“I was curious to see what would happen. My original theory was if it is true, why not see if it grows?” said Benmosche, who began to dial back from some of his more colorful outbursts Tuesday when he said he regretted comments about Cuomo.

“My idea was that if Zinfandel grapes came from Croatia — they weren’t sure then, but they are now — what I said to myself was … when the time came to retire I had stuff going on here and I would just hit the ground running.”

WINE TOURISTS
Experts say that reintroducing Zinfandel wine to Croatia makes good business sense.

“Zinfandel is an established wine variety with a global market,” said Carole Meredith, a grapewine geneticist whose 2001 DNA tests linked Zinfandel’s origins to Croatia.

“The wines from those vines can be labeled Zinfandel and can compete on the world market, assuming that the quality is going to be good,” she continued. “There is almost no market for the other Croatian grapes because the names are unfamiliar.”

Another plus is that the Zinfandel name could lure wine tourists to Croatia, said Meredith, who now runs her own vineyard in California’s Napa Valley, a region north of San Francisco where such visitors are a significant business.

Benmosche has already created a pilgrimage site on his five-hectare vineyard of terraced hillside rising from half a kilometre (three-tenths of a mile) of seafront in Viganj, an area across the water from the medieval walled island city of Korcula.

Small steps lead up the side of the hill and rocks surround three plants that he says are three original Crljenak plants dating back to the area’s cultivation many decades ago.

“They are absolutely original plants, they don’t know why they are alive, they don’t know how they survived,” Benmosche said. “It’s like a shrine — we built the steps going up the shrine and there are the three plants that overlook Korcula. It’s like unbelievable.”

Boris Mrgudic, who manages Bemmosche’s vineyards in Viganj and a second area nearby that are used to produce Dingac wines, says the first Zinfandel harvest in August went well, although it will take years to show a profit.

“In 10 or 15 years this will be shown as a very good investment,” he said while showing off the vineyard land Benmosche bought starting in 2006.

Although Benmosche, whose impressive villa is a two hours’ drive to the south in Dubrovnik, clearly enjoys dabbling in the wine business, he says his ultimate goal is to help his children after his death.

“This is about leaving something behind that I know is self-supporting,” he said. “I want to make sure that the estate that I leave behind is not only of value, but is a viable business.”

(Reporting by Adam Tanner, editing by Martin Howell and
Matthew Lewis)

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Latest Comments

  • September 8, 2009 at 8:16 am
    TC says:
    I think the journal should get real and understand we don't give a hoot about his wine. Nor AIG either. I really do wish the governemnt was out of the insurance and wine busin... read more
  • September 4, 2009 at 9:43 am
    Txlady says:
    Not really sure what this has to do with insurance? Was it a slow day at The Insurance Journal and this is the best they could come up with for a story?
  • September 3, 2009 at 4:08 am
    Reverend-CPCU,CLU,FLMI says:
    Relax! It's just insurance. If the CEO is overseas, he is probably not stealing anything. Maybe AIG needs a little less micro-management.
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