American International Group (AIG)

American International Group Logo

American International Group, Inc. (AIG) is a multinational finance and insurance corporation with operations in more than 80 countries and jurisdictions. As one of the world's largest insurance organizations, AIG provides a range of property casualty insurance, life insurance, retirement solutions, and other financial services to support both individual and business clients. The company's history, marked by both significant achievements and challenges, reflects its role in the global financial landscape.

AIG Building

AIG tower

History

AIG was founded in 1919 by Cornelius Vander Starr in Shanghai, China, as a general insurance agency. The company expanded internationally throughout the 20th century, establishing its first U.S. office in 1926. Over the decades, AIG grew into a global insurance leader, diversifying its services and expanding its reach. However, the company faced a severe liquidity crisis in 2008, which led to a controversial federal bailout by the United States government. Since then, AIG has undergone significant restructuring, focusing on its core insurance operations and divesting non-core assets.

Operations

AIG's operations are divided into three main segments: General Insurance, Life & Retirement, and a technology-enabled subsidiary. The General Insurance segment includes commercial, personal insurance, and U.S. and international field operations. The Life & Retirement segment offers a variety of life insurance, retirement, and institutional products. AIG's technology-enabled subsidiary, Blackboard Insurance, focuses on using technology to simplify and improve the insurance process.

Financial Crisis and Bailout

In 2008, AIG was at the center of the financial crisis due to its exposure to mortgage-backed securities and credit default swaps. The company's near-collapse and the subsequent federal bailout, which totaled approximately $180 billion, sparked significant controversy and debate over the role of government in the financial sector. AIG has since repaid the government bailout funds, with the U.S. government also making a profit from its stake in the company.

Restructuring and Recovery

Following the financial crisis, AIG underwent a significant restructuring process, selling off a number of its assets to repay the bailout funds and focus on its core insurance operations. This process included the sale of its Asian life insurance operation, AIA Group, and its American life insurance company, American General Life. The restructuring efforts have helped stabilize the company and improve its financial health.

Controversies

AIG has been involved in several controversies, including allegations of accounting fraud in the early 2000s and criticism over executive bonuses following the 2008 bailout. These incidents have led to increased regulatory scrutiny and changes in corporate governance at the company.

Current Status

Today, AIG continues to be a leading global insurance company, offering a wide range of insurance products and services. The company is focused on leveraging technology to improve its operations and customer service, as well as expanding its global presence in key markets.