The Hartford Finds Ayer's Successor: BofA Veteran McGee
KENNETH R. GOSSELIN and DAN HAAR
September 30, 2009
The Hartford, beating its self-imposed deadline by three months, has brought in a longtime Bank of America executive as chairman and CEO to take the helm at a pivotal time in the company's 199-year history.
Liam E. McGee, who until Aug. 3 headed Bank of America's vast retail network, takes over the dual role Thursday, The Hartford said late Tuesday. McGee, 55, ran the largest retail banking operation in the nation, with more than 50 million customers and more than 6,100 locations.
He succeeds Ramani Ayer, who is retiring Nov. 1 after a brief transition.
The Hartford Financial Services Group Inc., with 12,000 employees in central Connecticut, is emerging from a financial crisis of the past year in which its capital reserves, sapped by losses from bad investments and problems in its variable annuity business, had to be shored up. German insurer Allianz invested $2.5 billion, and a bailout from the U.S. Treasury's Troubled Asset Relief Program brought $3.4 billion.
In an interview with The Courant, McGee said he is up to the challenge, even though he has not previously run a company the size and complexity of The Hartford. His experience at Bank of America has prepared him well, he said, because the primary customers of both companies are consumers and small- and medium-size businesses.
"Obviously, I have some things to learn," said McGee, who has an MBA and a law degree. "But I am a reasonably quick study."
McGee praised Ayer and The Hartford's board for taking dramatic steps to strengthen the insurer's capital reserves, moves that have boosted confidence on Wall Street. Clearly, he said, assessing risk, part of what caused The Hartford's troubles, could have been done better and he plans improvements.
The company is on track to cut 9 percent of its global workforce, or 2,800 positions, by the end of the year and those plans haven't changed, a spokeswoman for The Hartford said late Tuesday. As of June, The Hartford said it had laid-off 1,100 employees worldwide, including 475 in Connecticut. No updated figures were available Tuesday.
Ayer, 62, who has spent his entire career at The Hartford, starting in 1973, said in June that he would retire by the end of this year. Widely credited for operations strategy, Ayer has been a strong supporter of maintaining work in the headquarters region, where the company is by far the largest employer among insurers.
It was made clear from the start that Ayer's successor would come from outside the company, following a wide-ranging search.
Several top executives who might have been successors to Ayer left over the last two years, notably Thomas Marra, who was named president and chief operating officer in 2007, and departed earlier this year. The choice of someone from the banking world rather than property-casualty or life insurance is consistent with The Hartford's strong emphasis on building and maintaining its brand among customers — and with the company's place as a financial institution in the midst of retooling.
"Liam's strong track record of success in leading large, complex financial services organizations makes him the ideal person to build on The Hartford's strong foundation," said Michael G. Morris, The Hartford's presiding director and former chairman and CEO of Northeast Utilities.
McGee said The Hartford's brand will be a valuable asset in navigating the company's current troubles.
"Any brand research will come back with the same conclusion," McGee said. "It's an iconic brand."
While it was too early Tuesday to say how the brand might be further promoted, McGee sees possibilities as the company approaches its 200th anniversary.
Ayer praised the selection of his successor.
"Liam is a proven leader in the financial services industry with an outstanding set of skills, a deep appreciation of balancing risk and return, and broad experience in a variety of financial businesses," Ayer said in a written statement. "He also shares The Hartford's values, including product and customer service excellence, integrity, and a commitment to giving back to the communities in which we operate."
McGee, who joined Bank of America in 1990, was until recently president of the consumer and small business bank for Bank of America Corp. He was widely seen as a strong candidate to succeed CEO Kenneth Lewis, but left the bank in August after he was no longer in contention, according to published reports.
McGee said Tuesday that he left the bank because he wanted "to run a public company and wanted to pursue that goal."
The son of a Los Angeles bus driver, McGee was born in Ireland and came to the U.S. as a child. He was a teller in college and later worked for Wells Fargo & Co. and BankAmerica Corp.
In 1998, when NationsBank Corp. purchased BankAmerica and took its name, McGee was named to a key post, heading the bank's California operations.
He played a prominent role in acquisitions that followed, including Bank of America's takeover of FleetBoston Financial, making it Connecticut's largest bank.
McGee said he would move to the Hartford area with his family.
Reprinted with permission of the Hartford Courant.
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