Hartford Financial Services Group Inc. named a former Bank of America Corp. executive to be its new CEO, and he already has plans to introduce enhanced risk management after record losses at the 199-year-old insurer.
Liam McGee, former head of consumer banking at Bank of America, will become chairman and chief executive at Hartford effective Oct. 1, the company said on Tuesday. He replaces Ramani Ayer, 62, who had announced his intention to step down back in June.
In an interview with Reuters, McGee said his immediate task will be strengthening the company’s risk management to “avoid the mistakes of the past.”
Hartford has taken $3.4 billion in federal aid to shore up its finances after massive losses — including $1.2 billion in losses through the first half of 2009 — although its shares have rebounded more than 80 percent since the announcement on June 4 of Ayer’s departure.
McGee said he believes the company has adequate capital to operate in the current economy and even if it deteriorates.
He declined to discuss a specific timeframe for the company to repay its government aid.
Longer term, McGee will complete an “intense review” of Hartford by early 2010, including business unit strategies and management.
He said any discussion of a strategic shift would be premature.
The choice of a banking executive to head up the Connecticut-based property and casualty insurer was unusual for the industry, said Drew Woodbury, insurance analyst with Morningstar.
“I’m a little bit surprised they went outside the insurance sector,” he said, adding that most insurance firms typically look for chief executives with prior industry experience.
Ayer had spent his entire career with Hartford Financial.
McGee, 55, once considered a potential successor to Bank of America’s Chief Executive Ken Lewis, is the former head of Bank of America’s consumer and small business banking unit. He left the Charlotte, North Carolina-based bank in August after spending nearly two decades with the company.
(Reporting by Joe Rauch; Editing Bernard Orr)
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