Jay Fishman, the chairman and former chief executive officer of Travelers Cos. who steered the insurer through the financial crisis and into the Dow Jones Industrial Average, has died. He was 63.
He died Friday at his home in New Jersey, Patrick Linehan, a spokesman for the company, said by telephone. Fishman had amyotrophic lateral sclerosis, or ALS, and was replaced in 2015 as CEO by Alan Schnitzer. Travelers said in a statement that John Dasburg was named chairman of the board.
“Though he would be too humble to admit it, Jay was an icon among corporate leaders,” Schnitzer said in the statement. “I’ll miss my dear and close friend, and on behalf of all of us at Travelers, our hearts go out to his wife of nearly 40 years and childhood sweetheart Randy Fishman, Jay and Randy’s children and their beloved grandchildren.”
For the better part of two decades, Fishman was the steady hand guiding Travelers through natural disasters, market cycles and the Great Recession. But his path to running one of the biggest U.S. insurers was circuitous.
He first oversaw the business in the late 1990s, when it was part of Sanford “Sandy” Weill’s Citigroup Inc. In 2001, he got the urge to run his own company and left to take the top job at a competitor, St. Paul Cos.
Two years later, he bumped into his former colleague, Robert Lipp, at the New York City Ballet. By that time, Citigroup had spun off Travelers, and Lipp was running it.
“We just started chatting, and we thought it would be useful to get to together and talk about the possibilities of perhaps putting the two companies together,” Fishman recalled at the time.
They dubbed the idea, “Project Charlie,” after Lipp’s daughter’s 70-pound (32-kilogram) English bulldog. It was a fitting name for a blockbuster deal. Their $17.9 billion transaction installed Fishman as CEO of the combined company, which eventually took the Travelers name.
Above all else, Fishman knew he was in the business of risk. He just wasn’t going to be pushed into writing insurance or buying securities that didn’t properly compensate the insurer for the chance of losses.
He used the word “thoughtful” on almost every conference call for years, occasionally several times at an event. He spoke of “underwriting thoughtfulness,” “thoughtful data-driven strategies,” “thoughtful pricing” and “being very thoughtful on the management of capital.”
When central bank stimulus policies drove bond yields to record lows, Fishman wasn’t one to buy riskier securities to pick up extra income. Instead, he focused on making sure Travelers was profitable as an underwriter, and boosted shareholder returns through an aggressive stock buyback program.
“People say, ‘Where are you going for yield?’ And the answer is, ‘Nowhere,’” he said at a conference in September 2012. “We continue to be invested in the same asset classes that we have been before and accept the premise of lower returns.”
That same posture had already served Travelers well. In the run-up to the 2008 financial crisis, Fishman resisted the temptation to buy mortgage-linked bonds that would have boosted short-term profit at his company. Several of its competitors didn’t and were hurt in the crash.
“Jay was not fooled by the housing bubble,” Weill said in a 2015 interview. “They sacrificed earnings to protect their capital.”
As a result, Travelers emerged from the crisis as one of the strongest U.S. financial firms. In 2009, it was added to the 30-company Dow Jones Industrial Average along with Cisco Systems Inc., replacing General Motors and Citigroup, both of which required government bailouts.
Just before the crisis, Travelers had bought back its iconic red umbrella logo from Citigroup. To mark the occasion, Weill sent his former deputy a collection of cuff links and ties emblazoned with the image. Some of them were made by Hermes.
“I was very proud of the logo,” Weill said. “And I had pride that at least somebody who was doing a good job was using that logo again.”
Among the executives Fishman worked with was Jamie Dimon, now the leader of JPMorgan Chase & Co.
“From the time I hired Jay into what ultimately became Citi, he was from start to end a great professional and, more importantly, a treasured friend,” Dimon said in an e-mailed statement.
Jay Steven Fishman was born Nov. 4, 1952, in New York to Edward Fishman and the former Shirley Cantor. He grew up in the Bronx, and his father ran a small printing business, scraping together enough money for rent and his kids’ education.
After graduating from University of Pennsylvania’s Wharton School, Fishman worked at American Can Co. and Shearson Lehman before joining Weill at the company that would eventually become Citigroup. In 2000, he was also named the bank’s chief operating officer in charge of finance and risk.
Even though Weill saw him as a top candidate to take over his job one day, Fishman had his doubts.
“I wouldn’t have been an effective CEO” at Citigroup, he told Forbes for a 2011 article. “I had next to no experience in sales and trading, limited experience in investment banking and no experience in commercial banking.”
What he knew was insurance. With his focus on cutting costs, buying back shares and seeking rate increases from the least profitable customers, he oversaw years of gains for investors. From 2005, Travelers’ stock climbed every year except in 2008.
His standing in the corporate world helped him land positions on the boards of Exxon Mobil Corp., where he was the presiding director, and Carlyle Group LP, a private-equity firm. He also was a supporter of education and the arts, serving as a trustee for the University of Pennsylvania. In 2012, he was named chairman of the New York City Ballet.
In 2015, Fishman helped raise $20 million for scientists to develop therapies to treat ALS. That year, in an interview with Charlie Rose, he reflected on how fortunate he’d been and how he moved past the emotions of knowing his life would be cut short.
“I quickly said I wasn’t going to let the end of my life change the definition, or change my perspective on how I looked at the rest of it,” he said in the interview. “We’re all going to face this — maybe not this disease — but no one gets out alive.”
Fishman and his wife had two children.
Shares in London-listed insurance firms have taken another tumble today as analysts try to judge the damage that Brexit could inflict on their customer base and investment portfolios.
Insurance firms, while suffering less than the British banks in the aftermath of the referendum, are exposed to the global financial markets through their investments and generate sales that are dependent on the broader UK economy.
Aviva issued a statement as the stock market opened to reassure investors that its balance sheet remained strong, despite the asset price ructions following Friday’s vote to leave the EU.
“Aviva has one of the strongest and most resilient balance sheets in the UK insurance sector with low sensitivity to market stress and over the last four years Aviva has tripled its economic capital surplus,” the firm said.
After adopting an internal capital model to meet the European Solvency II rules in January, Aviva said its capital ratio remained “close to the top end of its working range of 150 to 180pc”.
Aviva’s shares fell 4pc by 11am, worsening the pain after a 15pc drop on Friday.
Analysts at Macquarie said the slump “reflects the Aviva balance sheet of three years ago rather than today”.
The analysts pointed out that Aviva has recently made efforts to stabilise its balance sheet by selling off distressed property loans and paring back its exposure to volatile equities. “While we do not believe Aviva has a ‘fortress’ balance sheet, it does offer a compelling valuation and dividend yield,” they said.
Aviva made 23pc of its earnings from Europe last year, the most of all the London-listed insurers, and France is its largest market outside the UK. The firm bought life insurer Friends Life for £5.6bn last year to improve its capital position and diversify the business.
Canaccord Genuity, meanwhile, cut its share price targets for Aviva and Legal & General by a fifth, with smaller reductions for other insurance groups, which it sees as less vulnerable to a shock from the fall in many global assets following the referendum result.
“We have lowered our price targets effectively to reflect a higher cost of capital, with the biggest price target cuts for those most sensitive to the macro environment,” said Canaccord.
RBC Capital Markets analysts said Legal & General, as well as the specialist bulk annuity firm Just Retirement Partnership, were among the most vulnerable firms to Brexit.
As well as predicting a pause in sales growth during a period of economic uncertainty, the analysts said a protracted spell of low interest rates and bond yields would impair the insurers’ investment returns and make individual and bulk annuities even less attractive to British pensioners.
“Uncertainty will continue for some time following the Brexit vote and we expect UK defined benefit pension schemes to slow the rate at which they transact with bulk annuity writers,” they said.
On the bright side, the analysts added that the Lloyd’s of London insurance market, which covers large global risks such as hurricanes and plane crashes, should be “relatively unaffected” as most of its business comes from the US.
Media groups have asked a Philadelphia judge to unseal insurance documents that could address whether Penn State football coach Joe Paterno was told in the mid-1970s that his assistant was molesting boys.
Media outlets also asked the judge June 9, 2016 to unseal details of the $92 million in settlements the school has paid to more than 30 people who say they are victims of Jerry Sandusky, who was convicted in 2012 of molesting 10 boys and sent to prison.
Common Pleas Judge Gary Glazer ignited a firestorm when he said in a ruling last month that a child had complained about Sandusky to Paterno in 1976. Glazer is presiding over Penn State’s lawsuit over its insurance coverage.
A son of the late Paterno has dismissed the 1976 claim as “bunk.”
The swollen Seine River kept rising June 3, 2016, spilling into Paris streets and forcing one landmark after another to shut down as it surged to its highest levels in nearly 35 years. Across the city, museums, parks and cemeteries were being closed as the city braced for possible evacuations.
The Seine was expected to peak in Paris sometime later Friday at about 5 metres (16 feet, 3 inches) above normal. Authorities shut the Louvre museum, the national library, the Orsay museum and the Grand Palais, Paris’ striking glass-and-steel topped exhibition centre.
“We evaluate the situation for all the (cultural) buildings nearly hour-by-hour,” said Culture Minister Audrey Azouley, speaking to journalists outside the world-famous Louvre. “We don’t know yet the evolution of the level of the Seine River in Paris.”
At the Louvre, home to Leonardo da Vinci’s “Mona Lisa,” curators were scrambling to move some 250,000 artworks from basement storage areas at risk of flooding to safer areas upstairs.
Nearly a week of heavy rain has led to serious flooding across a swathe of Europe, leaving 15 people dead and others missing.
Although the rain has tapered off in some areas, floodwaters are still climbing. Traffic in the French capital was snarled as flooding choked roads and several Paris railway stations shut down.
Basements and apartments in the capital’s well-to-do 16th district began to flood Friday afternoon as the river crept higher, and authorities were preparing possible evacuations in a park and islands on Paris’ western edge.
In addition to the Louvre, the Orsay museum, home to a renowned collection of impressionist art on the left bank of the Seine, was also closed Friday to prepare for possible flooding. The Grand Palais, which draws 2.5 million visitors a year, was also shut down.
The closures are highly unusual.
The Louvre said the museum had not taken such precautions in its modern history _ since its 1993 renovation at the very least. Disappointed tourists were being turned away.
“I am really sorry, but we’re closed today,” one staffer told visitors. “We have to evacuate masterpieces from the basement.”
Elsewhere in Europe, authorities were counting the cost of the floods as they waded through muddy streets and waterlogged homes.
German authorities said the body of a 65-year-old man was found overnight in the town of Simbach am Inn, bringing the country’s death toll over recent days to 10. France’s Interior Ministry also reported the death of a 74-year-old man who fell from his horse and drowned in a river in the Seine-et-Marne region east of Paris, the second death in France.
In eastern Romania, two people died and 200 people were evacuated from their homes as floods swept the area, including one man who was ripped from his bicycle by a torrent of water in the eastern village of Ruginesti.
In Belgium, rescue workers found the body of a beekeeper who was swept away by rising waters while trying to protect his hives in the village of Harsin.
The German Insurance Association estimates this week’s flooding has caused some 450 million euros ($500 million) in damage in the state of Baden-Wuerttemberg alone.
The foul weather has added to the major travel disruptions France is already experiencing, after weeks of strikes and other industrial actions by workers upset over the government’s proposed labour reforms. French rail company SNCF said the strikes had led to the cancellation of some 40 per cent of the country’s high-speed trains.
In addition, French energy company Enedis says that more than 20,000 customers are without power to the east and south of Paris because of flooding.
Outside the Louvre, tourists expressed understanding at the museum’s closure.
“It’s good that they are evacuating the paintings. It’s a shame that we couldn’t see them today, but it’s right that they do these things,” said Carlos Santiago, visiting from Mexico.
Paris is measuring river levels using an unusual method called the Austerlitz scale. It involves comparing the surface level with an underwater sensor slightly below the surface at the Austerlitz Bridge, said regional environment director Jerome Goellner.
In normal times, the river level is between 1 metre and 2 metres (3 feet, 3 inches to 6 1/2 feet) on the Austerlitz scale, he said, a system used out of historical habit so one flood could be compared to another. But a piece of trash trapped in the sensor led authorities to undercount the rise of the Seine earlier this week, he said.
The Seine has so far risen about 4.5 metres (15 feet) from its typical position following days of heavy rains. Goellner says it’s not possible to put a precise time on the peak but “we’re near the maximum.”
With leading Paris museums closed, the surging currents are becoming a tourist attraction in themselves.
Prakash Amritraj of India, a 42-year-old visiting Paris with his wife and two children, took selfies on the Mirabeau Bridge in western Paris.
“I had never thought of possible floods in Paris city centre. In India, we have the monsoon, but here! It’s not supposed to happen!” he said.
While he sympathized with all those affected, he was able to appreciate the flooding from a different perspective.
“It’s kind of beautiful, in a way,” he said.
By Anders Melin and Gerry Smith | Bloomberg Technology
Comcast Corp. paid $490 million this year to unwind obligations under life insurance policies tied to late founder Ralph Roberts and his wife Suzanne, a remnant of an era when generous executive perks received less investor scrutiny.
The payments, some of which the cable company expects to eventually recoup, are related to life insurance policies organized under a split-dollar arrangement — once a common method employers used to help key executives get bigger death benefits. The policies went out of vogue because of their similarities to interest-free loans, which came under regulatory examination after scandals at Enron Corp. and Tyco International Ltd.
After the 2002 Sarbanes-Oxley Act prohibited companies from extending credit to top bosses, Comcast ceased to pay premiums on Roberts’s policies and in 2004 handed the then-chairman of the board’s executive and finance committee a $14.4 million stock award. It continued to grant Roberts special bonuses to cover his share of the deal until he died, regulatory filings show. In the six months following his death, the company paid Suzanne Roberts $30 million to cover the premiums and related tax costs.
Following Roberts’s death last year, Comcast concluded it was in its best interest to eliminate its obligations under the policies, since the annual premiums and tax costs would become “significantly greater” each year due to the age of Roberts’s wife, who was 94 at the time of an April 8 regulatory filing. Comcast paid $164 million to trusts established for Roberts’s beneficiaries to acquire the remaining policies that will lapse once his wife dies, according to the filing. It also made a one-time cash payment of $326 million to Suzanne Roberts to settle all future premium payments and taxes.
“It seems like a tremendous amount of money,” Parker Beauchamp, chief executive officer of insurance firm Inguard, said of the policies.
For wealthy Americans, life insurance is a customary part of estate planning to help heirs avoid selling assets to pay estate taxes. In split-dollar arrangements, an employer and employee split the premium payments and then share the benefits. The employer usually has the right to reclaim the aggregate sum of its premiums once the insured person dies, making those payments resemble an interest-free loan.
Comcast will get much of the money back eventually. The company expects to receive about $215 million from the policies’ cash surrender value once they lapse, of which $51 million comes from premiums it has already paid in. It also anticipates that the purchase will generate about $121 million in tax benefits. John Demming, a Comcast spokesman, declined to comment beyond the filings.
Ralph Roberts, who built Comcast into the largest U.S. cable-television operator, died last June at the age of 95. He co-founded American Cable Systems Inc. in Tupelo, Mississippi, in 1963 as a 1,200-subscriber service, and later renamed it Comcast. He served as chairman for 18 years until 2002, when he became chairman of the board’s executive and finance committee and his son, Brian, took over as chairman and CEO.
Comcast entered into the split-dollar arrangement with the elder Roberts in 1992. The deal required the company to pay its share of the premiums and also to pay Roberts a special bonus each year that would match his outlays for the policies and any taxes he’d be due, effectively making Comcast cover the full cost of the arrangement.
“It’s very generous to also gross up a person’s total compensation to cover the tax liability,” said Joshua Husbands, a partner at Holland & Knight LLP. “There’s nothing improper about it, but that’s not a typical arrangement.”
Brian Roberts had a similar insurance arrangement with a combined death benefit of $223 million. In 2009, following a shareholder proposal that raised concerns over Comcast’s posthumous benefits — so-called golden coffin arrangements — the CEO voluntarily relieved the company from any future payments toward his policies. Roberts is one of several beneficiaries of the trusts that previously held his father’s policies.
While rare, some companies still have legacy split-dollar policies in place for executives. The heirs of Time Warner Inc.’s CEO Jeff Bewkes will receive approximately $4.1 million from such a policy after he dies, according to a filing. Time Warner stopped paying premiums on the policy in 2003.