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Chubb names GMAC's Finnegan as CEO, ending search

NEW YORK, Nov 3, 2002; Bill Rigby writing for Reuters reported that Chubb Corp., a leading U.S. home and business insurer, on Sunday named John Finnegan, president of General Motors Corp.'s finance unit, as its new chief executive, ending a six-month search for a new chief.

The appointment, effective Dec. 1, ends a period of uncertainty for the Warren, New Jersey-based insurer, after long-time Chief Executive Dean O'Hare in April announced his plan to retire by the end of the year.

Chubb reached outside the company -- and the insurance industry -- to appoint Finnegan, 53, who was chairman and president of General Motors Acceptance Corp. (GMAC), as well as executive vice president of its parent, General Motors, the world's No. 1 automaker.

"I intend to get up to speed quickly on the company and the industry so that we can tackle the issues that face the company head-on," said Finnegan in a statement."

GMAC, with about $15 billion in annual revenue, sells some warranty and car insurance products, but is focused on commercial and personal loans. Chubb, with about $8 billion in revenues, specializes in insuring wealthy people's possessions and liability risks for executives.

ASBESTOS LOOMS

Finnegan takes over Chubb at the height of the insurance cycle, as premium rates soar after the Sept. 11 attacks and lawsuits against directors soar.

But the company faces long-term problems, like its rivals, in the shape of asbestos, which is wreaking havoc with U.S. manufacturers. Last week Chubb took a $625 million charge to beef up its asbestos reserves.

The reserve charge, following a review of the company's asbestos exposure, was the last act of retiring chief O'Hare, who said he wanted to leave Chubb in good shape for the future when he announced his retirement.

O'Hare, who will retire as chairman and CEO on Nov. 30, spent 39 years with Chubb, and served 14 years as CEO. Finnegan will be only the seventh chief of Chubb since its founding 120 years ago.

In line with what it calls "best practices in corporate governance," Chubb will split the chairman role from that of CEO, naming Joel Cohen, the firm's lead director, as non-executive chairman.

To replace Finnegan, Detroit-based General Motors named its treasurer, Eric Feldstein, 43, as the new president of GMAC.