American International Group
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Aig may also refer to the abbreviation of the creationist organization Answers in Genesis
American International Group, Inc. (AIG) Template:Nyse is an insurance corporation, ranked number 4 on the Forbes 500 list for 2003, and 10 on the Fortune 500 list in 2004. The company made a component of the Dow Jones Industrial Average on April 8, 2004.
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History
AIG was founded in 1919 by Cornelius Vander Starr in Shanghai, China. Starr was the first Westerner in Shanghai to sell insurance to the Chinese. When his business was successful there, he expanded to Asia, Latin America, Europe, and the Middle East.
In 1962, Starr gave management of the company's unsuccessful U.S. holdings to Hank Greenberg, who shifted the company's U.S. focus from personal insurance to high-margin corporate coverge. In 1968, Starr named Greenberg as his successor. The company went public in 1969. Greenberg resigned as the company's CEO in February 2005 amid concern from regulatory inquiries. See also: Greenberg scandal (http://www.forbes.com/associatedpress/feeds/ap/2005/03/14/ap1883819.html)
Holdings
AIG owns ILFC, the world's largest aircraft leasing company, with hundreds of aircraft ranging from to from Airbus A319s to Boeing 747-400s.
Business
It is the world's leading international insurance and financial services organization, with operations in more than 130 countries and jurisdictions. AIG member companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In the United States, AIG companies are the largest underwriters of commercial and industrial insurance and AIG American General is a top-ranked life insurer. AIG's global businesses also include financial services, retirement services and asset management. AIG's financial services businesses include aircraft leasing, financial products, trading and market making. AIG's growing global consumer finance business is led in the United States by American General Finance. AIG also has one of the largest U.S. retirement services businesses through AIG SunAmerica and AIG VALIC, and is a leader in asset management for the individual and institutional markets, with specialized investment management capabilities in equities, fixed income, alternative investments and real estate. AIG's common stock is listed on the New York Stock Exchange, as well as stock exchanges in London, Paris, Switzerland and Tokyo.
Litigation
In November of 2004 AIG reached a $US126 million settlement with the SEC and the Justice Department that resolved the matter in part, but the insurer must still co-operate with investigators who are continuing their probe into the sale of a "non-traditional insurance product". The settlement was related to a so called "finite insurance" product.
Accounting Fraud
In 2005, after a scandal on insurance and mutual funds the year before, AIG is under investigation for accounting fraud. The company already lost over 58 billion US dollars worth of market capitalisation because of the scandal as of May.
AIG has the fastest decrease in market value since the Worldcom and Enron scandals. Investigations also discovered over a billion US dollars worth of errors in accounting transactions. One such error involves a supposedly 500 million US dollar transaction with Berkshire Hathaway that drastically inflated AIG's revenues. This error involved reinsurance transactions. Reinsurance supposedly is used only for spreading out risk, but it may also be used for the questionable purpose of polishing a company's financial statements, in the same way the manner of accounting for revenue did for Enron. See also: Greenberg gives wife shares (http://money.cnn.com/2005/04/13/news/newsmakers/aig_greenberg.dj/)
Timeline
- In early May 2005, AIG restates financial statements, and issues a reduction in book value of USD $2.7 billion, a 3.3 percent reduction in net worth. AIG's share price falls due to conservative investors selling shares. See AIG fraud (http://money.cnn.com/2005/05/02/news/fortune500/scandal_aig.reut/index.htm)
Future outcome for the company is still pending. The company has aggressively tried to increase shareholder confidence, replacing a significant part of the board of directors with more independent members.
See also
Other articles
External links
- AIG Website (http://www.aig.com)
Data
- Yahoo! – American International Group, Inc. Company Profile (http://biz.yahoo.com/ic/10/10095.html)
Articles
- AIG to reveal details of Gen Re deal (http://cbs.marketwatch.com/news/story.asp?guid=%7B4D3EC60B%2D75DA%2D4A80%2DAFA0%2D4A184CF7E44D%7D&siteid=mktw&dist=)
- Famous Philanthropists and the Foundations They Built - Part 1 ... - Cornelius Vander Starr (http://www.plannedlegacy.com/newsletter/starr.html)