Tags: aig | retirement | ages | 80 | 70 | debt | deficit

AIG Chief: Retirement Age Likely to Climb to 80

Sunday, 03 Jun 2012 07:19 PM

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
American International Group Inc. (AIG) Chief Executive Officer Robert Benmosche said Europe’s debt crisis shows governments worldwide must accept that people will have to work more years as life expectancies increase.

“Retirement ages will have to move to 70, 80 years old,” Benmosche, who turned 68 last week, said during a weekend interview at his seaside villa in Dubrovnik, Croatia. “That would make pensions, medical services more affordable. They will keep people working longer and will take that burden off of the youth.”

The crisis, now in its third year, threatens to destroy Europe’s 17-nation currency union as Greece contemplates exiting the euro and Spain sees its bond yields rise and banking industry falter. German Chancellor Angela Merkel hardened her opposition to joint debt sharing in the euro region as U.S. President Barack Obama singled out Europe’s leaders for not doing enough to arrest the crisis.

Greece abandoning the euro could be a disaster for the country and Europe must work to keep that from happening, said Benmosche, whose company was the world’s biggest insurer before it took a U.S. bailout.

“People in Greece have to see there is no easy way out of this” and the government must get them to work longer, he said in the June 2 interview on the Adriatic coast. “If not, and if they go to their own currency, I think they will see huge inflation and it will be devastating for people on fixed incomes.”
Life Expectancy

Greece, where the average life expectancy is 81.3 years, has an effective retirement age of 59.6, among the lowest in Europe, according to data compiled by Bloomberg. French President Francois Hollande, the Socialist who was sworn in last month, has pledged to cut the retirement age to 60 from 62 while increasing corporate and bank taxes and introducing a 75 percent levy on earnings of more than 1 million euros ($1.2 million).

Peter Hancock, CEO of AIG’s Chartis property-casualty unit, said last week the insurer has assigned staff from Argentina to advise their counterparts in Athens as the company prepares for a possible Greek exit from the euro, with the common currency at its lowest against the U.S. dollar since June 2010. Argentina defaulted on a record $95 billion of debt in 2001 and later abandoned a decade-long 1-to-1 peso peg to the greenback.

“We have gone through the crisis in Argentina and other countries over time, so we have experience there,” Benmosche said.
Taxpayer Rescue

Benmosche has sold non-U.S. life insurers, a consumer lender and other businesses to pay back its taxpayer rescue, which swelled to $182.3 billion as the U.S. extended more credit and lowered the interest charged. The Treasury Department has cut its stake to 61 percent from 92 percent through three share sales totaling about $17.6 billion. In the most recent two, AIG bought back a total of $5 billion in stock.

AIG still seeks to divest its plane-leasing unit and sell its remaining stake in Hong Kong-based insurer AIA Group Ltd.

“The overhang from the government’s ownership interest in AIG is in the process of going away,” Paul Newsome, an analyst at Sandler O’Neill & Partners LP, wrote in a May 30 research note. “AIG should have sufficient enough capital to facilitate the Treasury Department’s exit.”

Treasury raised $5.8 billion in the first offering in 2011, selling for $29 a share. At the same time, AIG sold 100 million shares for $2.9 billion to demonstrate access to the capital markets and satisfy a condition of its bailout. The insurer bought half of the $6 billion in stock the department divested at $29 apiece in March and $2 billion of a $5.75 billion offering that went for $30.50 a share in May. The government needs to average $28.72 to break even on its investment.
Lack Confidence

AIG slid 6.8 percent on June 1 to close the week at $27.21 after U.S. employers created the fewest jobs in a year and the nation’s jobless rate rose to 8.2 percent. Reports also showed manufacturing grew less than estimated in the U.S. and China, and contracted for a 10th month in the euro region.

Benmosche said people and businesses in the U.S. lack confidence and are hesitant to invest as financial regulation and tax policies remain unsettled.

“I am optimistic that we’ll continue to grow, and if we get past this period of uncertainty and gain confidence again in the U.S. economic system, that will help lead the world out of the situation we are in today.”


© 2014 Newsmax. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Suspect in Killing of Deputies Was Twice Deported

Saturday, 25 Oct 2014 23:04 PM

Federal authorities say a man suspected of killing two deputies during a shooting rampage in Northern California was dep . . .

IRS Seizes Money From Those Accused of No Crime

Saturday, 25 Oct 2014 22:34 PM

The Internal Revenue Service has been seizing money from the bank accounts of individuals and businesses with no proof,  . . .

US Struggles to Turn the Tide Against ISIS

Saturday, 25 Oct 2014 21:50 PM

After more than two months of air strikes, a U.S.-led coalition has prevented the fall of a northern Syrian town to Isla . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved