USD Magazine Fall 2014

Save a 204-year-old financial icon Step two: Bow out gracefully b y S h a w n T u l l y p h o t o g r a p h y b y J o n a t h a n F i c k i e s / B l o omb e r g

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he day Liam McGee took charge at Hartford Financial Services Group — Oct. 1, 2009 — he was facing one of the toughest rescue operations in the annals of the financial crisis. The job was to save a venerable institu- tion that was then just a year from its 200th anniversary. The Hartford had helped finance the Golden Gate Bridge and the Hoover Dam; it had contracted to pay benefits to Babe Ruth if the Sultan of Swat were sidelined by illness. It was a history reflected in the company’s baronial lobby — the one that McGee often walked past to reach the CEO suite. There on the wall was a framed homeowner’s policy that the company had issued to Abraham Lincoln in 1861. The annual premium? A prodigious $24. On McGee’s arrival, The Hartford itself was in danger of becoming a fusty heirloom. Just four months earlier, it had been on the brink of demise, surviving only after taking a $3.4 billion bailout from the Troubled Asset Relief Program. The company was reeling from a loss of $2.7 billion in 2008. Its stock price had cratered 75 percent from its 2007 peak. And it was stuck with paying its customers far more return on their annuities than its tattered investment portfolio, packed with toxic real estate securities, could earn. Over the next nearly five years, McGee repaid TARP, rebuilt the gutted balance sheet, and reconfigured its investment portfolio. That allowed the company to concen- trate on what it had — for numerous decades at least — done very well: writing steady, highly profitable policies for America’s storefront bakeries, dentists’ offices, and other businesses. Now, earnings are running at around $2 billion a year and trending toward the mid-2000s peak. “It was one of the least-heralded but most outs tanding turnarounds,

against stiff odds, in financial services,” says Marc Feigen, a consultant who has counseled many prominent CEOs and who advised McGee on how to address thorny management issues in his first months at the helm. On June 9, McGee’s remarkable tenure ended unexpect- edly when he announced his resignation as CEO and president. McGee, who will continue on as chairman until the annual shareholder’s meeting next spring, says he chose to depart his main management role early, at the age of 59, due to a medical condition. In January 2013, The Hartford announced that McGee had surgery for the removal of a brain tumor found during a routine checkup, and that he was cancer- free. But McGee, who before joining The Hartford was president of global consumer and small business banking at Bank of America, recently underwent a second procedure. He declines to discuss the details, but it’s clear that the follow-up treatments are tiring. “Sure, part of it was health,” McGee told Fortune in a phone interview the day of the announcement. “But it’s also because the financial turn- around was largely complete. These years have been an adrenalin rush for me.” The new CEO is McGee’s first major hire Christopher Swift, 53, a former accountant and top executive at rival AIG. Swift, unlike ex-banker McGee, has spent his career in this arcane field. He revels in its complexities, and is an expert on risk and capital management. McGee, for his part, prides himself on the team-building effort that enabled the board to choose an internal candidate. “I focused on succession from day one,” he says. “It’s the CEO’s most important job.”

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