For the second time this year, Chase Manhattan Corp. is looking for a new executive to captain its insurance subsidiary.
The banking company confirmed Tuesday that Peter Aharonyan, chief executive officer of Chase Insurance Agency, plans to leave this month for a senior post at the insurance giant AIG Life Cos. in New York. Mr. Aharonyan will be an executive vice president, sources said.
Mr. Aharonyan's departure comes seven months after he succeeded Dennis Kosovac, a five-year veteran. Mr. Kosovac, who left for a job at International Business Machines Corp., has since returned to Chase, though as chairman and chief executive officer of Chase Electronic Investments, the bank's on-line brokerage unit.
Observers said Mr. Aharonyan's departure is a setback for an insurance program that has been held up as a model for other banks. "I think he's a very capable guy and it hurts Chase," said James Overholt, a consultant at Milliman & Robertson, a Chicago consulting and actuarial company. "He's one of the guys who's not only a good leader but also knew the nuts and bolts of the operation."
Chase's presence in insurance dates from its predecessor Chemical Banking Corp., which started selling insurance products in 1993. Mr. Kosovac headed the Chemical program and stayed in that role when Chemical and Chase merged in 1996.
Under Mr. Aharonyan Chase had bold plans and had projected that it would generate about $170 million of revenue across a broad product line. This projection has not changed, said a company spokesman. In the last five years, he said, Chase has increased revenues from insurance sales by 30% per year, and earnings have grown 25% per year.
"We have a very strong management team that's been in place for some time," the spokesman added.
Thomas McGuire, a senior vice president in diversified consumer services, will be interim head of the insurance agency while Chase seeks a successor for Mr. Aharonyan, the spokesman said. The company will look inside and outside for candidates, he said.
Continuity is a key ingredient to success, said Glen Milesko, president of Bank One Corp.'s insurance unit. Stability has been important to Bank One in the crucial job of promoting insurance within the company itself, he said.
Though some bank insurance executives have been forced out for not hitting performance targets, others simply are taking up attractive offers at insurance companies looking to hire candidates with broader expertise, said Mr. Milesko.
"A lot of insurance companies are very actively looking for people with bank insurance backgrounds," he said.
Kenneth Kehrer, a Princeton, N.J., consultant, said insurance companies increasingly are looking to banks for executive recruits. Mr. Aharonyan offered AIG "a very strong general management, banking experience," he said. "That's very attractive."
Others wondered at Mr. Aharonyan's decision to jump. "I'm surprised at the move," Mr. Kehrer said. "It must have been a very good opportunity at AIG."