MPR: St. Paul Cos. new CEO looks forward to growth period

St. Paul Cos. new CEO looks forward to growth period
By Bill Catlin
Minnesota Public Radio
October 12, 2001
The new head of the St. Paul Cos. says the company is not for sale, but there are things that need fixing. The number four U.S. business insurer Thursday named Jay Fishman of Travelers Insurance Group to head the state's oldest corporation. Fishman says he wants employees to spend corporate dollars with the same care as they spend their own.

The new CEO of the St. Paul Cos., Jay Fishman, told MPR's Bill Catlin that the insurance company is not for sale. He expressed confidence in the growth opportunities for the St. Paul. Listen to the entire interview.
(Photo courtesy of the St. Paul Cos.)

FISHMAN WAS A TOP EXECUTIVE AT CITIGROUP, THE FINANCIAL SERVICES giant resulting from the marriage of Citicorp and Travelers Group, run by Wall Street favorite Sandy Weill. Weill's fame rests in part on a reputation for cost-cutting, a term that often implies job cuts. Fishman told Bloomberg News cost-cutting would be a major focus of his. Asked if he sees fat at the St. Paul that needs to be trimmed, Fishman says he doesn't know after only a day and a half. But he says he wants a corporate philosophy in which employees spend the company's -that is, shareholders' - money as if it were their own.

"It's not a question of seeing fat. It's not a question of over-staffing - it's really a question of philosophy," says Fishman. "Does the place reflect a philosophy that says we're going to spend money, we're going to have staffing levels that would be at the levels if you and I owned the place together? I don't know the answer to that right now."

Fishman says making that stance clear can lead to a tighter rein on spending, and he says he wouldn't be surprised if the company were more efficient in a year. The St. Paul employs about 3,100 people in downtown St. Paul. He takes the reins of a firm that for years has been the subject of periodic takeover speculation. Fishman is categorical that he is not coming in to clean up and sell the St. Paul.

"I personally have no interest - and would not have come - if the board had even asked me to fix it up and then sell it."

Still, Fishman says there are things that need fixing. The company is losing money in its medical malpractice insurance business. Fishman says he'll look at the inconsistent profit history in the company's reinsurance business, and decide if that's in the shareholders' interest. He also says the company's international operations are disappointing and will come under review.

One program that may not wind up in the cross hairs is the company's charitable giving program. The company has donated at least two percent of its pre-tax profits for years. Minnesota Public Radio is among the recipients. Last year The St. Paul donated about $12 million to charitable organizations.

"I come from a company that has a substantial charitable foundation, and gives away significant amounts of money supporting education, supporting arts, supporting civic and community events. Those are very important things," Fishman says. "So I think it's a wonderful philosophy, I encourage it, and my guess would be that this is one where, when asked the question, 'If we really owned it, would you all continue this?' I guess the answer would be, 'Yes.'"

Fishman was considered a potential successor to Sandy Weill at Citigroup, but Weill, who is 68, has given no sign of departing the stage.

Fishman admits his initial reaction when approached about The St. Paul was something like, "No way, they're not a particularly good company." But he immediately adds that's a little tongue-in-cheek. His was the view of a competitor, he says, and he hadn't done enough analysis of the company.

"I went ahead and I did the due diligence and I did the work necessary to convince myself that there was really a sound platform here. But yeah, that's true, my first reaction was, 'Forget about it - not for me.'"

Now Fishman is taking the reins from Douglas Leatherdale, who had a nearly 30-year career with the firm, serving as CEO since 1990. He'll remain on the company's board until next May.

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