21st Century CEO Resigns Unexpectedly

The chief executive of 21st Century Insurance Group has resigned as insurance behemoth and majority shareholder American International Group continued to strengthen its hold over the smaller Woodland Hills-based insurer.

William L. Mellick, president of 21st Century since 1994 and its CEO since 1995, said in a statement released Monday that he is resigning his positions at the company and on its board, effective Feb. 4., to “pursue other business and personal interests.” Mellick, who has been with the company since 1979, could not be reached for comment.

Insurance analyst Ira Zuckerman said the resignation, although unexpected, was not surprising given AIG Chairman Maurice R. “Hank” Greenberg’s efforts to take over 21st Century. AIG owns more than 50% of 21st Century.

AIG rescued 21st Century, then called 20th Century, with a capital infusion after claims from the 1994 Northridge earthquake nearly bankrupted the insurer. In 1998, AIG boosted its stake in 21st Century and took control of its board.

Analysts said 21st Century irritated AIG last year by announcing a stock buyback program that effectively thwarted AIG’s efforts to buy more of the company’s stock.

21st Century, like most insurers, has seen its profits and stock slide with price-cutting in the auto insurance market.

Greenberg reportedly has been impatient with the pace of the company’s expansion. 21st Century expanded into Oregon, Nevada and Washington in 1998 and last year returned to the homeowners insurance market after a five-year absence. The resignation news came after U.S. financial markets closed. On the New York Stock Exchange, 21st Century rose 13 cents to close at $19 and AIG fell $2.38 to $101.56.