American International Group’s announcement last week that it was cutting ties with its incoming president, John Neal, left the insurance world stunned — and sparked a wave of questions about how a seasoned executive could lose a $17 million job before even stepping into the role.
This week, the answer finally came into focus.
Lloyd’s of London — the insurance powerhouse where Neal served as CEO until earlier this year — revealed on Wednesday that it has been investigating his conduct since last month. That same day, The Wall Street Journal reported that AIG pulled its offer after learning about the probe, which focused on an alleged relationship between Neal and a Lloyd’s employee.
This seemed to be one office romance too many. It was already public knowledge that the board of QBE Insurance Group — where Neal had previously served as CEO — slashed his 2016 bonus by more than A$550,000 ($354,000) after discovering he failed to disclose a relationship with a subordinate. Bloomberg also reported that the woman involved had taken over the role of Neal’s former assistant — after he’d married her predecessor.
AIG had nothing to say — and Neal didn’t respond to messages seeking comment.
The abrupt reversal highlights just how risky workplace relationships can be. In recent years, similar scandals have toppled CEOs at companies ranging from Nestlé and Kohl’s to Astronomer — where Andy Byron lost his job in July after being caught on a stadium "kiss cam" with the company’s chief people officer during a Coldplay concert.
It’s also a stark reminder that even the world’s biggest companies can get blindsided by high-stakes hires — including those who’ve been aggressively recruited, heavily vetted, and promised millions in compensation.
"Workplace culture has become one of the biggest risk factors in the financial sector," Ian Hargreaves, a partner at commercial-disputes firm Quillon Law, told Bloomberg.
“Many firms have rewritten rules on workplace relationships, and some have moved close to outright bans,” Hargreaves said. “With that level of scrutiny, the idea that this latest issue slipped through the gaps is surprising.”
Waiting for Neal at AIG was a potential $17.2 million pay package. His first year alone would have brought in about $5 million in salary and bonuses, plus a target annual equity award of $5 million, a Day-1 restricted-stock grant worth $4.5 million that vested over three years, and a $2.7 million cash bonus.
Life in the Insurance World
Neal, 60, began his career in 1986 as a trainee commercial motor underwriter at Lloyd’s, according to a LinkedIn post when he departed the firm. He went on to lead Ensign, Lloyd’s specialist commercial motor underwriter, which was later acquired by QBE. After roughly eight years with the Australian insurer, Neal’s relentless focus on profitability propelled him to the role of CEO.
But during Neal’s time as CEO, the insurer lagged behind its peers in the Australian market. QBE’s shares delivered investors an annualized total return of roughly 1% under his leadership — compared with about 21% from rival companies, according to Bloomberg data at the time of his departure.
Before leaving QBE, Neal admitted he had failed to disclose a relationship with his personal assistant — prompting the board to slash his bonus.
In 2018, Neal was appointed CEO of Lloyd’s of London as the company wrestled with post-Brexit profitability challenges. While he steered the insurance exchange back to the black within a year, Lloyd’s was also shaken by a 2019 Bloomberg Businessweek report revealing widespread sexual harassment at the firm.
The Businessweek report prompted Neal to introduce sweeping changes to tackle sexual harassment at Lloyd’s, including lifetime bans, a whistleblower hotline, and an independent review of all harassment claims.
“This is not the Lloyd’s that I want to be part of,” Neal said in an interview with Bloomberg in March 2019. “We have got to ensure that everybody, whether it’s a woman or a man, should feel safe at any time of day doing anything that’s associated with the Lloyd’s market. I’m determined that will be the case.”
Neal’s exit from Lloyd’s was announced in January. He had agreed to lead Aon Plc’s global reinsurance unit when AIG stepped in with a more lucrative offer, announcing in July that he would become its president and head the property and casualty business.
As Neal prepared to take on one of the industry’s top roles, rumors about his relationship with a subordinate were making their way to the highest levels of his former employer. Lloyd’s Chairman Charles Roxburgh "became aware of market speculation concerning possible historic breaches of policy" and launched an independent fact-finding review in October, the firm said in a statement Wednesday.
Inga Beale, Neal’s predecessor at Lloyd’s, served as CEO from 2014 to 2018. She spearheaded her own diversity and inclusion initiatives, but faced pushback from the rank-and-file.
“My initial reaction is disappointment,” Beale said in an interview on learning of the investigation. “I thought we had made a lot of progress and these sorts of things were not going to be happening in this day and age.”
On Friday, AIG announced it had reached a "mutual agreement" with Neal, confirming he will no longer join the insurer as president. He had been scheduled to start on Dec. 1.
James Berkeley, a London-based adviser to insurance executives, said the announcement casts doubt on AIG’s vetting process, noting that Neal had been slated to take over many of the responsibilities previously held by David McElroy.
McElroy, formerly AIG’s chairman of general insurance, was charged by Vermont state prosecutors late last year with three counts of sexual assault and one count of lewd and lascivious conduct involving a woman who attended an AIG conference last March at a Stowe resort. In April, AIG announced that McElroy — who is distantly related to CEO Peter Zaffino — would "accelerate his retirement date for personal reasons.”
“The evidence that has developed since the case was filed more than a year ago continues to show that David McElroy has been wrongfully charged and is innocent,” David Kirby, McElroy’s attorney, wrote in an emailed statement. “He looks forward to his day in court; until then, the charges should be seen for what they are — mere allegations that are vehemently denied.”
Given that matter, AIG shareholders would have expected the board “to have conducted effective due diligence, and weighed up the risk of a CEO with past weaknesses,” Berkeley said. “Perhaps they were so convinced of John Neal’s hugely scarce, and compelling value, as president that they were willing to roll the dice.”
Still, Berkeley said he wasn’t surprised by AIG’s sudden reversal. Reflecting on Neal’s history, he added, "my only surprise is that we are surprised."
Photograph: John Neal, CEO of Lloyd’s of London, after a Bloomberg Television interview in London on Thursday, March 28, 2024. Photo credit: Chris Ratcliffe/Bloomberg.
