American International Group, Inc. (AIG) is an American multinational finance and insurance corporation with operations in more than 80 countries and jurisdictions.
, AIG companies employed 49,600 people.
[https://www.aig.com/content/dam/aig/america-canada/us/documents/investor-relations/2019/aig-2018-annual-report.pdf page 7]
The company operates through three core businesses: General Insurance, Life & Retirement, and a standalone technology-enabled subsidiary.
General Insurance includes Commercial, Personal Insurance, U.S. and International field operations. Life & Retirement includes Group Retirement, Individual Retirement, Life, and Institutional Markets.
AIG is a sponsor of the AIG Women's Open
AIG's corporate headquarters are in
New York City
New York, often called New York City or NYC, is the List of United States cities by population, most populous city in the United States. With a 2020 population of 8,804,190 distributed over , New York City is also the L ...
and the company also has offices around the world. AIG serves 87% of the
Fortune Global 500
The ''Fortune'' Global 500, also known as Global 500, is an annual ranking of the top 500 corporations worldwide as measured by revenue. The list is compiled and published annually by '' Fortune'' magazine.
Until 1989, it listed on ...
and 83% of the Forbes 2000
AIG was ranked 60th on the 2018
The ''Fortune'' 500 is an annual list compiled and published by ''Fortune'' magazine that ranks 500 of the largest United States corporations by total revenue for their respective fiscal years. The list includes publicly held companies, along w ...
According to the 2016 Forbes Global 2000 list, AIG is the 87th largest public company in the world.
On December 31, 2017, AIG had $65.2 billion in shareholder equity.
financial crisis of 2007–2008
Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline o ...
The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a ...
bailed the company out for $180 billion and assumed control, with the Financial Crisis Inquiry Commission
correlating AIG's failure with the mass sales
of unhedged insurance.
AIG repaid $205 billion to the United States government in 2012.
1919–1945: Early years
AIG was founded December 19, 1919
[ when American Cornelius Vander Starr (1892–1968) established a general insurance agency, American Asiatic Underwriters (AAU), in Shanghai, China.] Business grew rapidly, and two years later, Starr formed a life insurance operation. By the late 1920s, AAU had branches throughout China
China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's List of countries and dependencies by population, most populous country, with a Population of China, population exceeding 1.4 billion, slig ... and Southeast Asia, including the Philippines
The Philippines (; fil, Pilipinas, links=no), officially the Republic of the Philippines ( fil, Republika ng Pilipinas, links=no),
* bik, Republika kan Filipinas
* ceb, Republika sa Pilipinas
* cbk, República de Filipinas
* hil, Republ ..., Indonesia
Indonesia, officially the Republic of Indonesia, is a country in Southeast Asia and Oceania between the Indian and Pacific oceans. It consists of over 17,000 islands, including Sumatra, Java, Sulawesi, and parts of Borneo and New Guine ..., and Malaysia
Malaysia ( ; ) is a country in Southeast Asia. The federal constitutional monarchy consists of thirteen states and three federal territories, separated by the South China Sea into two regions: Peninsular Malaysia and Borneo's East Malay .... In 1926, Starr opened his first office in the United States, American International Underwriters Corporation (AIU). He also focused on opportunities in Latin America
Latin America or
* french: Amérique Latine, link=no
* ht, Amerik Latin, link=no
* pt, América Latina, link=no, name=a, sometimes referred to as LatAm is a large cultural region in the Americas where Romance languages — languages derived ... and, in the late 1930s, AIU entered Havana
Havana (; Spanish: ''La Habana'' ) is the capital and largest city of Cuba. The heart of the La Habana Province, Havana is the country's main port and commercial center., Cuba. The steady growth of the Latin American agencies proved significant as it would offset the decline in business from Asia due to the impending World War II. In 1939, Starr moved his headquarters from Shanghai, China, to New York City.
1945–1959: International and domestic expansion
After World War II, American International Underwriters (AIU) entered Japan
and Germany, to provide insurance for American military personnel. Throughout the late 1940s and early 1950s, AIU continued to expand in Europe, with offices opening in France, Italy, and the United Kingdom. In 1952, Starr began to focus on the American market by acquiring Globe & Rutgers Fire Insurance Company and its subsidiary, American Home Fire Assurance Company. By the end of the decade, C.V. Starr's general and life insurance organization included an extensive network of agents and offices in over 75 countries.
1959–1979: Reorganization and specialization
In 1960, C.V. Starr hired Maurice R. Greenberg, known as Hank, to develop an international accident and health business. Two years later, Greenberg reorganized one of C.V. Starr's U.S. holdings into a successful multiple line carrier.
Greenberg focused on selling insurance through independent brokers rather than agents to eliminate agent salaries. Using brokers, AIU could price insurance according to its potential return even if it suffered decreased sales of certain products for great lengths of time with very little extra expense. In 1967, American International Group, Inc. (AIG) was incorporated as a unifying umbrella organization for most of C.V. Starr's general and life insurance businesses. In 1968, Starr named Greenberg his successor. The company went public in 1969.
The 1970s presented many challenges for AIG as operations in the Middle East and Southeast Asia were curtailed or ceased altogether due to the changing political landscape. However, AIG continued to expand its markets by introducing specialized energy, transportation, and shipping products to serve the needs of niche industries.
1979–2000: New opportunities and directions
During the 1980s, AIG continued expanding its market distribution and worldwide network by offering a wide range of specialized products, including pollution liability
and political risk. In 1984, AIG listed its shares on the New York Stock Exchange (NYSE). Throughout the 1990s, AIG developed new sources of income through diverse investments, including the acquisition of International Lease Finance Corporation (ILFC), a provider of leased aircraft to the airline industry. In 1992, AIG received the first foreign insurance license granted in over 40 years by the Chinese government. Within the U.S., AIG acquired SunAmerica Inc. a retirement savings company managed by Eli Broad
Eli Broad ( ; June 6, 1933April 30, 2021) was an American businessman and philanthropist. In June 2019, ''Forbes'' ranked him as the 233rd-wealthiest person in the world and the 78th-wealthiest in the United States, with an estimated net worth of ..., in 1999.
2000–2012: Further expansion and decline
The early 2000s saw a marked period of growth as AIG acquired American General Corporation, a leading domestic life insurance and annuities provider, and AIG entered new markets including India. In February 2000, AIG created a strategic advisory venture team with the
Blackstone Inc. is an American alternative investment management company based in New York City. Blackstone's private equity business has been one of the largest investors in leveraged buyouts in the last three decades, while its real estate b ... and Kissinger Associates "to provide financial advisory services to corporations seeking high level independent strategic advice". AIG was an investor in Blackstone from 1998 to March 2012, when it sold all of its shares in the company. Blackstone acted as an adviser for AIG during the 2007–2008 financial crisis.
In March 2003 American General merged with Old Line Life Insurance Company.
In the early 2000s, AIG made significant investments in Russia as the country recovered from its financial crisis
A financial crisis is any of a broad variety of situations in which some financial assets suddenly lose a large part of their nominal value. In the 19th and early 20th centuries, many financial crises were associated with banking panics, and man .... In July 2003, Maurice Greenberg met with Putin to discuss AIG's investments and improving U.S.-Russia economic ties, in anticipation of Putin's meeting with U.S. President George W. Bush later that year."
In November 2004, AIG reached a $126 million settlement with the U.S. Securities and Exchange Commission
The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ... and the Justice Department
A justice ministry, ministry of justice, or department of justice is a ministry or other government agency in charge of the administration of justice. The ministry or department is often headed by a minister of justice (minister for justice in ... partly resolving a number of regulatory matters, and the company needed to continue to cooperate with investigators continuing to probe the sale of a non-traditional insurance product.
In 2005, AIG became embroiled in a series of fraud investigations conducted by the
Securities and Exchange Commission
The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ..., U.S. Justice Department, and New York State Attorney General
The attorney general of New York is the chief legal officer of the U.S. state of New York and head of the Department of Law of the state government. The office has been in existence in some form since 1626, under the Dutch colonial government ...'s Office. Greenberg was ousted amid an accounting scandal in February 2005. The New York Attorney General's investigation led to a $1.6 billion fine for AIG and criminal charges for some of its executives.
On May 1, 2005, investigations conducted by outside counsel at the request of AIG's Audit Committee and the consultation with AIG's independent auditors, PricewaterhouseCoopers LLP resulted in AIG's decision to restate its financial statements for the years ended December 31, 2003, 2002, 2001 and 2000, the quarters ended March 31, June 30 and September 30, 2004, and 2003 and the quarter ended December 31, 2003.
On November 9, 2005, the company was said to have delayed its third-quarter earnings report because it had to restate earlier financial results, to correct accounting errors.
Expansion to the credit default insurance market
Martin J. Sullivan became CEO of the company in 2005. He began his career at AIG as a clerk in its London office in 1970.
AIG then took on tens of billions of dollars of risk associated with mortgages. It insured tens of billions of dollars of derivatives against default, but did not purchase reinsurance to hedge that risk. Secondly, it used collateral on deposit to buy mortgage-backed securities. When losses hit the mortgage market in 2007–2008, AIG had to pay out insurance claims and also replace the losses in its collateral accounts.
AIG purchased the remaining 39% that it did not own of online auto insurance specialist 21st Century Insurance in 2007 for $749 million. With the failure of the parent company and the continuing recession in late 2008, AIG rebranded its insurance unit to 21st Century Insurance.
On June 11, 2008, three stockholders, collectively owning 4% of the outstanding stock of AIG, delivered a letter to the Board of Directors of AIG seeking to oust CEO Martin Sullivan and make certain other management and Board of Directors changes. This letter was the latest volley in what '' The Wall Street Journal
''The Wall Street Journal'' is an American business-focused, international daily newspaper based in New York City, with international editions also available in Chinese and Japanese. The ''Journal'', along with its Asian editions, is published ...'' called a "public spat" between the company's board and management on one hand, and its key stockholders and former CEO Maurice Greenberg on the other hand.
On June 15, 2008, after disclosure of financial losses and subsequent to a falling stock price, Sullivan resigned and was replaced by Robert B. Willumstad, Chairman of the AIG Board of Directors since 2006. Willumstad was forced by the US government to step down and was replaced by Ed Liddy on September 17, 2008. AIG's board of directors named Bob Benmosche CEO on August 3, 2009, to replace Liddy, who earlier in the year announced his retirement.
2008 liquidity crisis and government bailout
In late 2008, the federal government bailed out AIG for $180 billion, and technically assumed control, because many believed its failure would endanger the financial integrity of other major firms that were its trading partners--
Goldman Sachs () is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered at 200 West Street in Lower Manhattan, with regional headquarters in London, Warsaw, Bangalore, Hon ..., Morgan Stanley
Morgan Stanley is an American multinational investment management and financial services company headquartered at 1585 Broadway in Midtown Manhattan, New York City. With offices in more than 41 countries and more than 75,000 employees, the f ..., Bank of America
The Bank of America Corporation (often abbreviated BofA or BoA) is an American multinational investment bank and financial services holding company headquartered at the Bank of America Corporate Center in Charlotte, North Carolina. The bank ... and Merrill Lynch
Merrill (officially Merrill Lynch, Pierce, Fenner & Smith Incorporated), previously branded Merrill Lynch, is an American investment management and wealth management division of Bank of America. Along with BofA Securities, the investment ban ..., as well as dozens of European banks. In January 2011, the Financial Crisis Inquiry Commission issued one of many critical governmental reports, deciding that AIG failed and was rescued by the government primarily because its enormous sales of credit default swaps were made without putting up the initial collateral, setting aside capital reserves, or hedging its exposure, which one analyst considered a profound failure in corporate governance, particularly its risk management practices. Other analysts believed AIG's failure was possible because of the sweeping deregulation of over-the-counter (OTC) derivatives, including credit default swaps, which effectively eliminated federal and state regulation of these products, including capital and margin requirements that would have lessened the likelihood of AIG's failure.
Illustrating the danger of an AIG bankruptcy, a September 17, 2008, ''CNN Money'' article stated, "But in AIG's case, the situation is even more serious. The company is much larger and complex than Lehman Brothers
Lehman Brothers Holdings Inc. ( ) was an American global financial services firm founded in 1847. Before filing for bankruptcy in 2008, Lehman was the fourth-largest investment bank in the United States (behind Goldman Sachs, Morgan Stanley, ... and its assets hitting the market all at once would likely cause worldwide chaos and send values plummeting. Experts question whether there are even enough qualified buyers out there to digest the company and its subsidiaries." [Why the Fed pulled the trigger on AIG: What did the government get for its $85 billion? Time to try to unwind a company with $1 trillion in assets.](_blank)
AIG had sold credit protection through its London unit in the form of
''CNN Money'', Tami Luhby, Sept. 17, 2008.
credit default swap
A credit default swap (CDS) is a financial swap agreement that the seller of the CDS will compensate the buyer in the event of a debt default (by the debtor) or other credit event. That is, the seller of the CDS insures the buyer against som ...s (CDSs) on collateralized debt obligation
A collateralized debt obligation (CDO) is a type of structured asset-backed security (ABS). Originally developed as instruments for the corporate debt markets, after 2002 CDOs became vehicles for refinancing mortgage-backed securities (MBS).Lepk ...s (CDOs) but by 2008, they had declined in value. AIG's Financial Products division, headed by Joseph Cassano in London, had entered into credit default swaps to insure $441 billion worth of securities originally rated AAA. Of those securities, $57.8 billion were structured debt securities backed by subprime loans. As a result, AIG's credit rating was downgraded and it was required to post additional collateral with its trading counter-parties, leading to a liquidity crisis that began on September 16, 2008, and essentially bankrupted all of AIG. The New York United States Federal Reserve Bank (led by Timothy Geithner who would later become Treasury secretary) stepped in, announcing creation of a secured credit facility, initially of up to $85 billion to prevent the company's collapse, enabling AIG to deliver additional collateral to its credit default swap trading partners. The credit facility was secured by the stock in AIG-owned subsidiaries in the form of warrants for a 79.9% equity stake in the company and the right to suspend dividends to previously issued common and preferred stock. The AIG board accepted the terms of the Federal Reserve rescue package that same day, making it the largest government bailout of a private company in U.S. history.
In March 2009, AIG compounded public cynicism concerning the " too big to fail" firm's bailout by announcing that it would pay its executives over $165 million in executive bonuses. Total bonuses for the financial unit could reach $450 million, and bonuses for the entire company could reach $1.2 billion. Newly inaugurated President Barack Obama, who had voted for TARP as a Senator responded to the planned payments by saying " 's hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay. How do they justify this outrage to the taxpayers who are keeping the company afloat?" Both Democratic and Republican politicians reacted with similar outrage to the planned bonuses, as did political commentators and journalists in the AIG bonus payments controversy
The AIG bonus payments controversy began in March 2009, when it was publicly disclosed that the American International Group (AIG) insurance corporation was going to pay approximately $218 million in bonus payments to employees of its financial s ....
AIG began selling some assets to pay off its government loans in September 2008 despite a global decline in the valuation of insurance businesses, and the weakening financial condition of potential bidders. In December 2009, AIG formed international life insurance subsidiaries, American International Assurance Company, Limited (AIA) and American Life Insurance Company (ALICO), which were transferred to the Federal Reserve Bank of New York
The Federal Reserve Bank of New York is one of the 12 Federal Reserve Banks of the United States. It is responsible for the Second District of the Federal Reserve System, which encompasses the State of New York, the 12 northern counties of New ..., to reduce its debt by $25 billion. AIG sold its Hartford Steam Boiler unit on March 31, 2009, to Munich Re
Munich Re Group or Munich Reinsurance Company (german: Münchener Rück; Münchener Rückversicherungs-Gesellschaft) is a German multinational insurance company based in Munich, Germany. It is one of the world's leading reinsurers. ERGO, a Muni ... for $742 million. On April 16, 2009, AIG announced plans to sell its 21st Century Insurance subsidiary to Farmers Insurance Group for $1.9 billion. In June 2009 AIG sold its majority ownership of reinsurer Transatlantic Re. '' The Wall Street Journal
''The Wall Street Journal'' is an American business-focused, international daily newspaper based in New York City, with international editions also available in Chinese and Japanese. The ''Journal'', along with its Asian editions, is published ...'' reported on September 7, 2009, that Pacific Century Group
Pacific Century Group (PCG), chaired by Richard Li, is an Asia-based private investment group founded in 1993 with interests in technology, media and telecommunications, financial services, infrastructure, property and other investments. It oper ... had agreed to pay $500 million for a part of AIG's asset management business, and that they also expected to pay an additional $200 million to AIG in carried interest and other payments linked to future performance of the business.
AIG then sold its American Life Insurance Co. (ALICO) to MetLife Inc. for $15.5 billion in cash and MetLife stock in March 2010. Bloomberg L.P. reported on March 29, 2010, that after almost three months of delays, AIG had completed the $500 million sale of a portion of its asset management business, branded PineBridge Investments, to the Asia-based Pacific Century Group
Pacific Century Group (PCG), chaired by Richard Li, is an Asia-based private investment group founded in 1993 with interests in technology, media and telecommunications, financial services, infrastructure, property and other investments. It oper .... Fortress Investment Group
Fortress Investment Group is an American investment management firm based in New York City. Fortress was founded as a private equity firm in 1998 by Wes Edens, Rob Kauffman, and Randal Nardone. When Fortress launched on the NYSE in February ... purchased 80% of the interest in financing company American General Finance in August 2010. In September 2010 AIG sold AIG Starr and AIG Edison, two of its Japan-based companies, to Prudential Financial
Prudential Financial, Inc. is an American Fortune Global 500 and Fortune 500 company whose subsidiaries provide insurance, retirement planning, investment management, and other products and services to both retail and institutional customers ... for $4.2 billion in cash and $600 million in assumption of third party AIG debt by Prudential. On November 1, 2010, AIG raised $36.71 billion from both the sale of ALICO and its IPO of AIA. Proceeds went to repay some of the aid it received from the government during the financial crisis.
AIG sold its Taiwanese life insurance company Nan Shan Life to a consortium of buyers for $2.16 billion in January 2011. Due to the Q3 2011 net loss widening, on November 3, 2011, AIG shares plunged 49 percent year to date. The insurer's board approved a share buyback of as much as $1 billion.
Nine years after the initial bailout, in 2017, the U.S. Financial Stability Oversight Council removed AIG from its list of too-big-to-fail institutions.
2012–2016: Modern era
United States Department of the Treasury
The Department of the Treasury (USDT) is the national treasury and finance department of the federal government of the United States, where it serves as an executive department. The department oversees the Bureau of Engraving and Printing and ... announced an offering of 188.5 million shares of AIG for a total of $5.8 billion on May 7, 2012. The sale reduced Treasury's stake in AIG to 61 percent, from 70 percent before the transaction. Four months later, on September 6, 2012, AIG sold $2 billion of its investment in AIA to repay government loans. The board also approved a $5 billion stock repurchase of government-owned shares in AIA. The next week, on September 14, 2012, the Department of Treasury completed its fifth sale of AIG common stock, with proceeds of approximately $20.7 billion, reducing the Treasury's ownership stake in AIG to approximately 15.9 percent from 53 percent. Government commitments were fully recovered, and Treasury and the FRBNY to date had received a combined positive return of approximately $15.1 billion.
On October 12, 2012, AIG announced a five and a half year agreement to sponsor six New Zealand-based rugby teams, including the world champion All Blacks. The AIG logo and the Adidas logo, the league's primary sponsor, were displayed on the league's team jerseys.
The U.S. Department of the Treasury in December 2012 published an itemized list of the loans, stock purchases, special purpose vehicles (SPVs) and other investments engaged in with AIG, the amount AIG paid back and the positive return on the loans and investments to the government. The Treasury said that it and the Federal Reserve Bank of New York provided a total $182.3 billion to AIG, which paid back a total $205 billion, for a total positive return, or profit, to the government of $22.7 billion. In addition, AIG sold off a number of its own assets to raise money to pay back the government. On December 14, 2012, the Treasury Department sold the last of its AIG stock in its sixth stock sale for a total of approximately $7.6 billion. In total, the Treasury Department realized a gain of more than $22 billion from the sale of AIG common stock and $0.9 billion from the sale of AIG preferred stock. [ The same month, Robert Benmosche announced that he would be stepping down from his position as president and CEO due to his advancing lung cancer.
AIG began an advertising campaign on January 1, 2013, called "Thank You America," in which several company employees, including AIG President and CEO Robert Benmosche, talked directly to the camera and offered their thanks for the government assistance. Peter Hancock succeeded Benmosche as president and CEO of AIG in September 2014.] While Benmosche stayed on in an advisory role, he died in February the following year.
In June 2015, Taiwan
Taiwan, officially the Republic of China (ROC), is a Country, country in East Asia, at the junction of the East China Sea, East and South China Seas in the northwestern Pacific Ocean, with the China, People's Republic of China (PRC) to the n ...'s Nan Shan Life Insurance acquired a stake in AIG's subsidiary in Taiwan for a fee of $158 million. Later that year, activist investor Carl Icahn
Carl Celian Icahn (; born February 16, 1936) is an American financier. He is the founder and controlling shareholder of Icahn Enterprises, a public company and diversified conglomerate holding company based in Sunny Isles Beach. Icahn takes ... called for a breakup of AIG, describing the company as "too big to succeed". AIG announced plans for an initial public offering
An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investm ... of 19.9 percent of United Guaranty Corp., a Greensboro, North Carolina
Greensboro (; formerly Greensborough) is a city in and the county seat of Guilford County, North Carolina, United States. It is the third-most populous city in North Carolina after Charlotte and Raleigh, the 69th-most populous city in the U ...-based provider of mortgage insurance for lenders in January 2016. Later that year, Icahn won a seat on the board of directors and continued to pressure the company to split up its major divisions. AIG also began a joint venture
A joint venture (JV) is a business entity created by two or more parties, generally characterized by shared ownership, shared returns and risks, and shared governance. Companies typically pursue joint ventures for one of four reasons: to acce ... with Hamilton Insurance Group and Two Sigma Investments to serve the insurance needs of small- to medium-sized enterprises. Industry veteran Brian Duperreault became the chairman of the new entity, and Richard Friesenhahn, the executive vice president of U.S. casualty lines at AIG, became CEO. In August 2016, AIG sold off United Guaranty, its mortgage-guarantee unit, to Arch Capital Group, a Bermuda
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, ...-based insurer, for $3.4 billion.
Brian Duperreault was appointed CEO of AIG on May 15, 2017.
Duperreault, who previously worked at AIG from 1973 until 1994, was hired as CEO from Hamilton Insurance Group following Hancock's announcement in March 2017 that he would step down as AIG CEO under pressure after a period of disappointing financial results. Due to previous calls in 2015 and 2016 to shrink or break up AIG, Duperreault announced his intention to grow AIG and maintain its multiline structure as a provider of life and retirement solutions and non-life insurance, outlining a strategy to focus on technology, " underwriting
Underwriting (UW) services are provided by some large financial institutions, such as banks, insurance companies and investment houses, whereby they guarantee payment in case of damage or financial loss and accept the financial risk for liabilit ... discipline," and diversification.
/ref> through early 2019 saw AIG hire a number of new upper level executives,
including 125 senior underwriters and most of Duperreault's direct subordinates. [Reuters](_blank)
/ref> In 2017, Duperreault named his former Marsh & McLennan Companies colleagues Lucy Fato as
A general counsel, also known as chief counsel or chief legal officer (CLO), is the chief in-house lawyer for a company or a governmental department.
In a company, the person holding the position typically reports directly to the CEO, and their ... and Peter Zaffino as AIG COO, later also naming him CEO of AIG's General Insurance business. Zaffino succeeded Duperreault as president of AIG in January 2020, with Duperreault remaining AIG's CEO. [Reuters](_blank)
/ref> The company announced plans in 2017 to reorganize its Commercial and Consumer segments into General Insurance and Life & Retirement, respectively.
In September 2017, the Financial Stability Oversight Council
The Financial Stability Oversight Council (FSOC) is a United States federal government organization, established by Title I of the Dodd–Frank Wall Street Reform and Consumer Protection Act, which was signed into law by President Barack Obama on ... determined that AIG was no longer considered a nonbank systemically important financial institution ( SIFI). Duperreault commented in response that the development reflected "the progress made since 2008 to de-risk the company."
AIG made a number of acquisitions in 2018. That July, AIG acquired Validus Holdings Ltd., a provider of reinsurance based in
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, .... The company was also a Lloyd's of London
Lloyd's of London, generally known simply as Lloyd's, is an insurance and reinsurance market located in London, England. Unlike most of its competitors in the industry, it is not an insurance company; rather, Lloyd's is a corporate body gov ... syndicate, involved in insurance-linked securities, a specialist in US small commercial excess and surplus underwriting, and a provider of crop insurance. The deal "brought in fresh underwriting talent," particularly in property risk and catastrophe risk. Also in 2018 AIG acquired Ellipse, a UK life insurance business, from Munich Re
Munich Re Group or Munich Reinsurance Company (german: Münchener Rück; Münchener Rückversicherungs-Gesellschaft) is a German multinational insurance company based in Munich, Germany. It is one of the world's leading reinsurers. ERGO, a Muni .... In 2018, AIG established Fortitude Re to hold most of its run-off portfolios and late in 2018 sold a minority stake to The Carlyle Group
The Carlyle Group is a multinational private equity, alternative asset management and financial services corporation based in the United States with $376 billion of assets under management. It specializes in private equity, real assets, and pri .... In November 2019, a Carlyle-managed fund and T&D Holdings acquired a majority interest in Fortitude Re, leaving AIG with a 3.5% stake "subject to required regulatory approvals and other customary closing conditions."
Duperreault and Zaffino set out a turnaround strategy for the General Insurance business in 2017 and began execution. In 2019, Duperreault stated that the new executive team had restructured the business, implemented new risk and underwriting guidelines, and "overhauled its reinsurance buying strategy." In 2019, AIG signed a five-year contract to be the title sponsor of Women's British Open, its first deal in golf. In 2020, the contract was extended to 2025 and the championship was rebranded as the AIG Women's Open, with the largest LPGA major women's prize fund in 2021, totaling $US5.8 million.
In August 2019, Duperreault and Zaffino announced "AIG 200", a multi-year program to improve operations by shedding legacy processes and excess manual interventions, modernizing and digitizing workflows, and unifying operations. Also during that month, AIG reported its second consecutive quarter of underwriting profits, and AIG's Life and Retirement business, led by CEO Kevin Hogan, delivered "solid growth" and returns despite a volatile credit and equity market. In January 2020, AIG announced it was ending its decade-long sponsorship of the All Blacks in 2021. On March 1, 2021, Peter Zaffino succeeded Brian Duperreault as AIG's CEO, with Duperreault becoming executive chairman of the board. As part of AIG's 2020 plan to form an independent company of its life and retirement insurance business with a 2022 IPO, the company announced, in July 2021, that Blackstone Group
Blackstone Inc. is an American alternative investment management company based in New York City. Blackstone's private equity business has been one of the largest investors in leveraged buyouts in the last three decades, while its real estate b ... would acquire 9.9% of the new unit for $2.2 billion cash. Blackstone and AIG also entered a long-term asset management agreement for about one quarter of AIG's life and retirement portfolio, set to increase in subsequent years. After the spin-off, Corebridge Financial became an independent entity.
In Australia and China, AIG is identified as a large financial institution and provider of financial services including credit security mechanisms. In the United States, AIG is the largest
Underwriting (UW) services are provided by some large financial institutions, such as banks, insurance companies and investment houses, whereby they guarantee payment in case of damage or financial loss and accept the financial risk for liabili ... of commercial and industrial insurance.
AIG offers property casualty insurance, life insurance, retirement products, mortgage insurance and other financial services. In the third quarter of 2012, the global property-and-casualty insurance business, Chartis, was renamed AIG Property Casualty. SunAmerica, life-insurance and retirement-services division, was renamed AIG Life and Retirement; other existing brands continue to be used in certain geographies and market segments.
* AIG Europe S.A.
[https://www.aig.com/content/dam/aig/america-canada/us/documents/investor-relations/2019/aig-2018-annual-report.pdf page 142]
* American General Life Insurance Company
* American Home Assurance Company
* Lexington Insurance Company
* National Union Fire Insurance Company of Pittsburgh, PA
* The United States Life Insurance Company in the City of New York
* The Variable Annuity Life Insurance Company (VALIC)
*American International Group UK Ltd.
*AIG General Insurance Co. Ltd.
*Validus Reinsurance, Ltd.
* ''Starr International Co v U.S. Federal Circuit Court of Appeals''
Hank Greenberg, with lead lawyer David Boies, independently sued the U.S. Government for money damages in the United States Court of Federal Claims in 2011. The AIG board had announced on January 9 that the company would not join the lawsuit. After hearing thirty-seven days of testimony from Ben Bernanke, Timothy Geithner, Hank Paulson and others, Judge Thomas C. Wheeler ruled that the Federal Reserve payment to AIG had been an illegal exaction, as the
Federal Reserve Act
The Federal Reserve Act was passed by the 63rd United States Congress and signed into law by President Woodrow Wilson on December 23, 1913. The law created the Federal Reserve System, the central banking system of the United States.
The Panic ... did not authorize the New York Fed to nationalize a corporation by owning its stock. [ ''Recent Cases: Court of Federal Claims Holds that Government Acquisition of Equity Share in AIG Effected an Illegal Exaction''](_blank) Judge Wheeler did not award compensation to the plaintiffs, ruling that they did not suffer economic damage because "if the government had done nothing, the shareholders would have been left with 100 percent of nothing."
Greenberg and the U.S. Government appealed to the Court of Appeals for the Federal Circuit, which ruled that Greenberg had no legal right to challenge the bailout because that right belonged to AIG, which in this case, chose not to sue.
* ''AIG Inc. et al. v. Maiden Lane II LLC''
AIG filed suit against the Federal Reserve Bank of New York in January 2013 in order to maintain the former's right to sue Bank of America and other issuers of bad mortgage debt.
129 Harv. L. Rev. 859 (2016).
The specific issue was whether the Federal Reserve Bank of New York transferred $18 billion in litigation claims on troubled mortgage debt through Maiden Lane Transactions, entities created by the Fed in 2008. This transaction, AIG argued, prevented them from recouping losses from insured banks. Owing to events which allowed AIG to proceed in another related case, ''AIG Inc. v. Bank of America Corporation LLC'', AIG withdrew the Maiden Lane case "without prejudice" on May 28, 2013.
* ''AIG Inc. v. Bank of America Corporation LLC''
On May 7, 2013, Los Angeles U.S. District Judge, Mariana Pfaelzer, ruled in a case between AIG and Bank of America concerning possible misrepresentations by Merrill Lynch and Countrywide as to the quality of the mortgage portfolio, that $7.3 billion of the disputed claims had not been assigned. The two parties settled in July 2014, with Bank of America paying out $650 million to AIG, who in turn dismissed their litigation.
Board of directors
* James Cole Jr. – chairman and CEO, The Jasco Group
* John Rice - former vice chairman of GE, former president and CEO of the GE Global Growth Organization
* W. Don Cornwell – Former Chairman and CEO, Granite Broadcasting Corporation
*William G. Jurgensen – Former CEO,
Nationwide Mutual Insurance Company and affiliated companies, commonly shortened to Nationwide, is a group of large U.S. insurance and financial services companies based in Columbus, Ohio. The company also operates regional headquarters in Scott ...
* Henry S. Miller – chairman, Marblegate Asset Management, LLC
* Linda A. Mills – Former Vice President of Operations, Northrop Grumman Corporation
*Thomas F. Motamed – Former Chairman and CEO, CNA Financial Corporation
*Peter R. Porrino – Former Executive Vice President and Chief Financial Officer, XL Group Ltd
* Douglas Steenland
Douglas M. Steenland (born September 17, 1951) is an American former corporate attorney and former airline executive. He had a 17-year career at Northwest Airlines, where he held numerous executive roles, including as president from 2001 through 2 ... – Former President and CEO, Northwest Airlines Corporation
*Therese M. Vaughn – Former CEO, the National Association of Insurance Commissioners
* Peter Zaffino – President and CEO, AIG
''(as of 2022)''
A bailout is the provision of financial help to a corporation or country which otherwise would be on the brink of bankruptcy.
A bailout differs from the term ''bail-in'' (coined in 2010) under which the bondholders or depositors of global sys ...
* Late-2000s financial crisis
* List of United States insurance companies
"Losses in Perspective"
New York Times. September 17, 2008. (Graphic of AIG quarterly net profit & losses over five years, comparing Finance vs. Insurance activities.)
* (Graphic and interactive timeline.)
* For a list of counterparties receiving U.S. taxpayer dollars, see
* – official site
Life insurance companies of the United States
Companies based in Manhattan
Financial services companies based in New York City
Holding companies based in New York City
Insurance companies based in New York City
Multinational companies based in New York City
Publicly traded companies based in New York City
American companies established in 1919
Financial services companies established in 1919
Holding companies established in 1919
Chinese companies established in 1919
1960s initial public offerings
Companies listed on the New York Stock Exchange
Former components of the Dow Jones Industrial Average
Subprime mortgage crisis