American International Group, Inc. , also known as AIG , is an American multinational financial and insurance company with operations in over 80 countries and jurisdictions. As of December 31, 2016, the AIG company employs 56,400 people. The company operates through three core businesses: General Insurance, Life & amp; Retirement, and subsidiaries supported by independent technology. General insurance covers commercial operations, Personal, US and International Insurance. Live & amp; Pensions include Group Pension, Individual Retirement, Life, and Institutional Market.
AIG's corporate headquarters are located in New York City and the company also has offices around the world. AIG serves 87% of Fortune Global 500 and 83% of Forbes 2000. AIG ranks 49th in the Fortune 500 list 2016. According to Forbes Global 2000 list 2016, AIG is the 87th largest publicly traded company in the world. On December 31, 2016 AIG had $ 76.3 billion in shareholder equity.
AIG was the central player in the 2008 financial crisis. The fund was redeemed by the federal government for $ 180 billion, and the government took over. The Financial Crisis Investigation Commission (FCIC) of the US government concluded AIG failed primarily because it sold a large amount of insurance without protecting it. Outstanding credit swap sales "are made without putting up initial guarantees, setting aside capital reserves, or protecting exposure hedges - major failures in corporate governance, particularly risk management practices." The US government sells its shares after the crisis and completes the process in 2012.
Video American International Group
Histori
Tahun-tahun awal: 1919 hingga 1945
AIG was founded on December 19, 1919 when American Cornelius Vander Starr (1892-1968) established the general insurance agency, American Asiatic Underwriters (AAU), in Shanghai, China. Businesses grew rapidly, and two years later, Starr formed a life insurance operation. In the late 1920s, AAU has branches throughout China and Southeast Asia, including the Philippines, Indonesia, and Malaysia. In 1926, Mr. Starr opened his first office in the United States, American Underwriters Corporation (AIU). He also focused on opportunities in Latin America and, in the late 1930s, AIU entered Havana, Cuba. The steady growth of Latin American agents proved significant as it would offset the decline in business from Asia due to the coming World War II. In 1939, Mr. Starr moved his headquarters from Shanghai, China, to New York City.
Domestic and international expansion: 1946 to 1959
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, opening offices in France, Italy, and the United Kingdom. In 1952, Mr. Starr began focusing on the American market by acquiring Globe & amp; Rutgers Fire Insurance Company and its subsidiary, American Home Fire Assurance Company. By the end of this decade, C.V. Life and soul insurance organization Starr includes an extensive network of agents and offices in over 75 countries.
Reorganization and specialization: 1960 to 1979
In 1960, C.V. Starr employs Maurice R. Greenberg to develop an international accident and health business. Two years later, Mr. Greenberg reorganized one of C.V. Starr's US ownership to several successful operators' lines. Greenberg focuses on selling insurance through independent brokers rather than agents to eliminate agent salaries. By using a broker, AIU can set the insurance price in accordance with its potential return even if it has decreased sales of certain products for a very long time with a little extra cost. In 1967, American International Group, Inc. (AIG) was established as a unifying umbrella organization for most C.V. Starr's general insurance business and soul. In 1968, Starr was named his successor Greenberg. The company went public in 1969.
The 1970s presented many challenges for AIG as operations in the Middle East and Southeast Asia were limited or stopped altogether due to the changing political landscape. However, AIG continues to expand its market by introducing specialized energy, transportation, and shipping products to serve the needs of specialized industries. In 1979, with an ever-expanding workforce and office network around the world, AIG offers clients superior technical and risk management skills in an increasingly competitive marketplace.
New opportunities and directions: 1980 to 1999
During the 1980s, AIG continued to expand its distribution of markets and networks worldwide by offering a wide range of specialty products, including pollution and political risk responsibilities. In 1984, AIG listed its shares on the New York Stock Exchange (NYSE). Throughout the 1990s, AIG developed new revenue sources through a variety of investments, including the acquisition of International Lease Finance Corporation (ILFC), a provider of aircraft leased to the aviation industry. In 1992, AIG received the first foreign insurance license granted in more than 40 years by the Chinese government. In the US, AIG acquired SunAmerica Inc., a retirement savings company, in 1999.
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Further expansion and decline: 2000 to 2012
Growth
The early 2000s experienced a marked growth period when AIG acquired American General Corporation, a leading provider of life insurance and annuities, and AIG entered new markets including India. In February 2000, AIG created a strategic advisory venture team with Blackstone Group and Kissinger Associates "to provide financial advisory services to companies seeking high-level strategic advice." AIG was an investor at Blackstone from 1998 to March 2012, when it sold all of its shares in the company. Blackstone acted as adviser for AIG during the 2007-2008 financial crisis.
In March 2003, the American General joined the Old Line Life Insurance Company.
In November 2004, AIG reached a settlement of US $ 126 million with the US Securities and Exchange Commission and the Department of Justice partially resolving a number of regulatory issues, but the company must keep working with investigators who continue to investigate the sale of non-traditional insurance. product.
Accounting scandal
In 2005, AIG became involved in a series of fraudulent investigations conducted by the Securities and Exchange Commission, the US Department of Justice, and the Office of the Prosecutor-General of New York. Greenberg was ousted amid an accounting scandal in February 2005. New York Attorney's Investigation led to a $ 1.6 billion fine for AIG and criminal charges for some of its executives.
On 1 May 2005 an investigation by an outside advisor at the request of the AIG Audit Committee and consultation with AIG's independent auditor PricewaterhouseCoopers LLP resulted AIG's decision to restate its financial statements for the years ended 31 December 2003, 2002, 2001 and 2000, the quarter 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 postponed its third quarter earnings report as it had to restate its previous financial results, accounting.
Expansion into the default credit insurance market
Martin J. Sullivan became CEO of the company in 2005. He started his career at AIG as a clerk in his London office in 1970. AIG then took the risk of tens of billions of dollars associated with mortgages. It insures tens of billions of dollars in derivatives against default, but does not buy reinsurance to protect that risk. Second, used collateral on deposits to buy mortgage-backed securities. When losses hit the mortgage market in 2007-2008, AIG had to pay insurance claims and also make up for losses in its collateral account.
AIG purchased the remaining 39% which is not owned by the online car insurance specialist Insurance 21st Century in 2007 for $ 749 million. With the failure of the holding company and a sustained recession at the end of 2008, AIG changed the name of its insurance unit into the 21st Century Insurance.
On June 11, 2008, three shareholders, collectively owning 4% of the outstanding shares of AIG, delivered a letter to the AIG Board of Directors that sought to overthrow CEO Martin Sullivan and make changes to management and other Directors. This letter is the latest volley in the so-called "public strife" between the company board and management, on the one hand, and the main shareholder, and former CEO Maurice Greenberg on the other. hand.
On June 15, 2008, after disclosure of financial losses and after a decline in stock prices, Sullivan resigned and was replaced by Robert B. Willumstad, Chairman of AIG's Board of Directors since 2006. Willumstad was forced by the US government to resign. and was replaced by Ed Liddy on September 17, 2008. AIG board of directors named Bob Benmosche CEO on August 3, 2009, replaced Mr. Liddy, who earlier this year announced his resignation.
Liquidity crisis and government bailout
By the end of 2008, the federal government redeemed AIG for $ 180 billion, and was technically in control, because its failure would jeopardize the financial integrity of other large trading partners - Goldman Sachs, Morgan Stanley, Bank of America and Merrill Lynch. (as well as dozens of European banks), as described below. The Financial Crisis Inquiry Commission (FCIC) in January 2011 issued one of the most important government reports, deciding that AIG failed and was rescued by the government primarily because of the huge sale of credit default swaps made without putting initial guarantees, setting aside the reserve capital, or hedging its exposure, which by one analyst is considered a major failure in corporate governance, especially risk management practices. Other analysts believe that AIG's failure is possible due to the deregulation of over-the-counter (OTC) derivatives, including credit default swaps, which effectively eliminate federal and state regulations from these products, including capital requirements and margins that will reduce the probability of AIG failure.
AIG has sold credit protection through its London unit in the form of credit default swaps (CDSs) on secured debt bonds (CDOs) but in 2008 they have declined in value. AIG Financial Products division, led by Joseph Cassano in London, has entered the credit default swaps to secure $ 441 billion of securities that AAA initially valued. Of the securities, $ 57.8 billion is a structured debt securities backed by subprime loans. As a result, AIG's credit rating was lowered and needed to post an additional guarantee with its counter-party trading, leading to a liquidity crisis that began on September 16, 2008, and basically bankrupted all of AIG. The Federal Reserve Bank of New York United States (led by Timothy Geithner who later became finance minister) stepped in, announced the creation of a secured credit facility, initially up to US $ 85 billion to prevent a corporate collapse, allowing AIG to provide additional guarantees. to its credit default credit exchange partner. The credit facility is secured by shares in a subsidiary owned by AIG in the form of warrants for 79.9% equity stake in the company and the right to postpone the dividend of common shares and previously issued shares. The AIG Board accepted the terms of the Federal Reserve rescue package on the same day, making it the largest government bailout of private companies in US history.
On March 17, 2009, AIG exacerbated public cynicism about a "too big to fail" bailout company announcing that it would pay its executives more than $ 165 million in executive bonuses. The total bonus for the finance unit could reach $ 450 million, and bonuses for the entire company could reach $ 1.2 billion. The newly installed President Barack Obama, who has chosen TARP as the Senator, responded to the planned payout by saying "[I] find it difficult to understand how derivatives traders at AIG guarantee any bonuses, let alone $ 165 million in additional payments How they justify this anger taxpayers that make companies afloat? "Both Democratic and Republican politicians react with the same anger with planned bonuses, as do political commentators and journalists in the AIG bonus payment controversy.
AIG began selling some assets to pay off its government loans in September 2008 despite a global downturn in the assessment of the insurance business, and the weakening financial condition of potential bidders. In December 2009, AIG established an international life insurance subsidiary, American International Assurance Company, Limited (AIA) and American Life Insurance Company (ALICO) transferred to the Federal Reserve Bank of New York to reduce its debt by US $ 25 billion. AIG sold the Hartford Steam Boiler unit on March 31, 2009, to Munich Re for $ 742 million. On April 16, 2009, AIG announced plans to sell its 21st Century Insurance subsidiary to the Farmers Insurance Group for $ 1.9 billion. June 10, 2009. AIG sells majority ownership of reinsurance Transatlantic Re. The Wall Street Journal reported on September 7, 2009, that Pacific Century Group has agreed to pay $ 500 million for part of AIG's asset management business, and that it is also expected to pay an additional $ 200 million to AIG in carrying interest and other payments related to business performance in the future.
AIG then sells American Life Insurance Co. (ALICO) to MetLife Inc. worth $ 15.5 billion in cash and MetLife shares in March 2010. Bloomberg LP reported on March 29, 2010, that after nearly three months of delays, AIG has completed $ 500 Ã, a million part sales from its asset management business, branded PineBridge Investments, to Pacific Century Group based in Asia. Fortress Investment Group purchased 80% of interest in financing company American General Finance in August 2010. In September AIG sold AIG Starr and AIG Edison, two Japanese companies, to Prudential Financial for $ 4.2 billion in cash and $ 600 million in third-party AIG debt assumptions by Prudential. On November 1, 2010, AIG collected $ 36.71 billion of ALICO and IPO sales from AIA. The proceeds go to pay off the FRB loan in New York.
In October 2010, The Wall Street Journal reported that the Tomlinson family was allowed to join a civil lawsuit involving AIG for alleged involvement in a 'foreign life insurance' scheme. The case involved JB Carlson and Germaine Tomlinson, and alleged that AIG's manager allowed Carlson to take a life insurance policy against Tomlinson with no insured interest, which some labeled "death bets". AIG originally filed a lawsuit against Carlson in 2008 to drop the claim altogether, arguing that it was filed fraudulently. The case was resolved and dismissed with prejudice by US District Court Judge Sarah Evans Barker on May 25, 2011
AIG sold its Taiwan life insurance company Nan Shan Life to a buyer consortium of $ 2.16 billion in January 2011. Due to Q3 2011 net income, on 3 November 2011, AIG shares plunged 49 percent year-on-year. The insurance board approved the repurchase of shares of $ 1 billion.
Nine years after the initial bailout, in 2017, the US Financial Stability Supervisory Board issued AIG from a list of agencies that were too large to fail.
The modern era: 2012 to present
The US Treasury Department announced the offering of 188.5 million AIG shares totaling $ 5.8 billion on May 7, 2012. Sales reduced Treasury shares at 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 the repurchase of a $ 5 billion government-owned stake in AIA. The following week, on September 14, 2012, the Treasury completed the sale of the five common shares of AIG, with proceeds of approximately $ 20.7 billion, reducing its Treasury shareholding in AIG to about 15.9 percent from 53 percent. Government commitment fully recovered, and Treasury and FRBNY have so far 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 All Blacks world champion. The AIG logo and the Adidas logo, the league's main sponsor, will be shown on the league team shirt.
The US Treasury Department in December 2012 published a detailed list of loans, stock purchases, special-purpose vehicles (SPVs) and other investments involved with AIG, the amount of AIG paid back and positive returns on loans and investments to the government. The Treasury Department said that and the Federal Reserve Bank of New York gave a total of $ 182.3 billion to AIG, which paid back $ 205 billion in total, for a positive return, or profit, to the government of $ 22.7 billion. In addition, AIG sells a number of its own assets to raise money to repay the government. On December 14, 2012, the Treasury sold its last AIG stake in sixth stock for a total of approximately $ 7.6 billion. In total, the Treasury realized a gain of over $ 22 billion from the sale of AIG's common shares and $ 0.9 billion from the sale of AIG's preferred stock. That same month, Robert Benmosche announced that he would resign from his position as President and CEO because of his lung cancer is getting worse.
AIG started an advertising campaign on January 1, 2013, called "America's Thank You," in which several company employees, including AIG President and CEO Robert Benmosche, spoke directly to the camera and thanked the government for help. Peter Hancock succeeded Benmosche as President and CEO of AIG in September 2014. While Benmosche remained an advisory role, he died in February of the following year.
In June 2015, Shan Nan Life Insurance Taiwan acquired a stake in AIG subsidiary in Taiwan for a cost of $ 158 million. Later that year, activist investor Carl Icahn called for the outbreak of AIG, describing the company as "too big to succeed." AIG announced plans for an initial public offering of 19.9 percent of United Guaranty Corp., a mortgage insurance provider for lenders in Greensboro, North Carolina in January 2016. Later that year, Icahn won a seat on the board and kept pressuring the company to divide its key divisions. AIG also started a joint venture with Hamilton Insurance Group and Two Sigma Investments to serve the needs of small to medium business insurance. Veteran industry Brian Duperreault became chairman of the new entity, and Richard Friesenhahn, executive vice president of the US casualty line at AIG, became CEO. In August 2016, AIG sold United Guaranty, its mortgage guarantee unit, to Arch Capital Group, a Bermuda-based insurance company, for $ 3.4 billion.
Brian Duperreault was appointed CEO of AIG on May 15, 2017. In September, the company was reorganized into three segments, consisting of general insurance units, life and pension units, and a unit focused on stand-alone technologies.
Court bailout
- Starr International Co. v. Federal Circuit Court of Appeals
Hank Greenberg, with chief lawyer David Boies, independently sued the US Government for damages in the United States Federal Court in 2011. The AIG Board has announced on Jan. 9 that the company will not join the lawsuit. After hearing testimony thirty-seven days from Ben Bernanke, Timothy Geithner, Hank Paulson and others, Judge Thomas C. Wheeler decided that the Federal Reserve's payment to AIG had been illegal, since the Federal Reserve Act did not allow the New York Fed to nationalize corporations by owning its shares. Judge Wheeler did not compensate the plaintiffs, deciding that they did not suffer economic damage because "if the government does nothing, shareholders will be left with 100 percent nothing."
Greenberg and the US Government appealed to the Court of Appeals for the Federal Circuit, which ruled that Greenberg had no legal right to oppose the bailout because it belonged to AIG, which in this case, chose not to prosecute.
- AIG Inc. et al. v. Maiden Lane II LLC
AIG filed a lawsuit against the New York Federal Reserve in January 2013 to defend its formation rights to sue Bank of America and other issuers of bad bad loans. The specific problem is whether the New York Federal Reserve is transferring $ 18 billion in litigation claims for troubled mortgage debt through Maiden Lane Transactions, an entity made by the Fed in 2008. This transaction, according to AIG, prevents them from covering losses from insured banks. Due to events allowing AIG to continue with other related cases (see below), 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 District Judge Mariana Pfaelzer decided in a case between AIG and Bank of America about possible misinterpretations by Merrill Lynch and Countrywide regarding the quality of the mortgage portfolio, that $ 7.3 billion of disputed claims have not yet assigned. The two sides settled in July 2014, with Bank of America paying $ 650 million to AIG, which in turn denied their litigation.
Corporate governance
Board of directors
- Brian Duperreault - President and Chief Executive Officer, American International Group, Inc.
- W. Don Cornwell - Former Chairman of the Board and Chief Executive Officer, Granite Broadcasting Corporation
- Peter R. Fischer - Former Head of Portable Revenue Portfolio Management, Blackrock Inc.
- John H. Fitzpatrick - Chairman, Oak Street Management Co., LLC
- Christopher S. Lynch - Former Partner, KPMG LLP
- Samuel J. Merksamer - Managing Director of Icahn Capital LP
- Henry S. Miller - Chairman, Marblegate Asset Management, LLC
- Linda A. Mills - Former Vice President of Operations, Northrop Grumman Corporation
- Suzanne Nora Johnson - Former Vice Chairman, The Goldman Sachs Group, Inc.
- Ronald A. Rittenmeyer - Former Chairman, Chief Executive Officer and President, Electronic Data Systems Corporation
- Douglas Steenland - Former President and Chief Executive Officer, Northwest Airlines Corporation
- Theresa M. Stone - Former Executive Vice President and Treasurer, Massachusetts Institute of Technology
- William G. Jurgensen - Former Chief Executive Officer of National Insurance
Starting January 23, 2018
Business
In Australia and China, AIG is identified as a major financial institution and provider of financial services including credit security mechanisms. In the United States, AIG is the largest insurer of commercial and industrial insurance.
Source of the article : Wikipedia
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