Image via Wikipedia American International Group, Inc. (AIG), is known as a world leader in both insurance and financial services. They are also the leading international insurance operation in more than 130 countries and jurisdictions.
American International Group companies supply services to commercial, institutional and individual clients utilizing the most largest property-casualty and life insurance networks of any insurer worldwide. Additionally, AIG companies are holds the leading position of providing retirement services, financial services and asset management around the globe. AIG’s common stock is listed on the New York Stock Exchange, stock exchanges in Ireland and Tokyo.
AIG was founded in 1919 in Shanghai by Cornelius Vander Starr. At present, AIG hold a market capitalization of US$5.46 billion, with a total asset of US$ 1.050 trillion (2nd quarter 2008), US$ 78.09 billion total equity (2nd quarter 2008) and 116,000 employess (2008).
Back then in 1919, Cornelius Vander Starr became the first westerner who sell insurance to the Chinese by establishing the agency. Following the successful business in Asia, Cornelius expanded his service to other regions including Latin America, Europe, and the Middle East.
In 1962, the US company’s focus was shifted from personal insurance to high-margin corporate coverage after the management was given to Maurice R “Hank” Greenberg. Greenberg preferred insurance selling through independent brokers rather than agents in order to avoid selling insurance at much too low prices (to cover the future payouts) given marketplace competition. A company with agents must pay their salaries even while selling little to no insurance. Instead, with brokers, AIG could price insurance properly even if it suffered decreased sales of certain products for great lengths of time with very little extra expense. In 1968, Starr named Greenberg his successor. And in 1969, the company went public.
AIG’s Business
- 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 is also the principal sponsor of English football team Manchester United and the Japan Open Tennis Championships.
- AIG owns AIG American General, a life insurance company based out of Houston, Texas.
- AIG sells auto insurance through AIG Direct. Policies include auto, motorcycle, recreation vehicle and commercial vehicle insurance. AIG purchased the remaining 39% that it did not own of online auto insurance specialist 21st Century Insurance in 2007 for $749 million.
- AIG owns 19.8% of People’s Insurance Company of China (PICC) through direct and indirect holdings. PICC P&C is China’s largest insurer of casualty insurance.
- AIG Life (Australia) underwrites over one million life insurance policies in Australia held through industry pension plans. The general insurance arm offers mainly corporate insurance and is among the top 10 insurers in the Australia.
- AIG owns more than two dozen companies licensed to offer insurance in California, according to the California Insurance Commissioner. They include: 21st Century Casualty Co.; 21st Century Insurance Co.; AIG Casualty Co.; AIG Centennial Insurance Co.; AIG Premier Insurance Co.; AIU Insurance Co.; American General Indemnity Co.; American Home Assurance Co.; American International Insurance Co. of California Inc.; Birmingham Fire Insurance Co. of Pennsylvania; Commerce And Industry Insurance Co.; GE Auto & Home Assurance Co.; GE Indemnity Insurance Co.; Granite State Insurance Co.; Hartford Steam Boiler Inspection and Insurance Co.; Insurance Co. of the State of Pennsylvania; Landmark Insurance Co.; National Union Fire Insurance Co. of Pittsburgh, Pa; New Hampshire Insurance Co.; Pacific Assurance; Putnam Reinsurance Co.; Transatlantic Reinsurance Co.; United Guaranty Commercial Insurance Co. of North Carolina; United Guaranty Credit Insurance Co.; United Guaranty Residential Insurance Co.; and Yosemite Insurance Co.
- AIG owns International Lease Finance Corporation (ILFC) , the world’s largest aircraft leasing company, with hundreds of aircraft ranging from Airbus A319s to Airbus A380s. Total assets under lease are $55 billion as of June 30, 2008. Estimates of its value range from $5 billion to $8 billion based on a comparison with similar but smaller rivals
- AIG is one of the owners of London City Airport, along with GE and Credit Suisse; it was purchased for £750m in 2006.
- As of August 2007, AIG Investments (through its member company AIG Capital Partners, Inc.) acquired a 90% stake in Bulgarian Telecommunications Company (BTC) from Viva Ventures Holding GmbH (“Viva”) and certain minority shareholders. At the time, the estimated value of BTC was 1.7 billion euros ($2.3 billion).
- As of March 16, 2007, AIG Investments, a division of AIG, completed the purchase of 100% of the stock of P&O Ports North America from Dubai-based Dubai Ports World. At the time, the estimated price was $700m, though AIG did not disclose the exact figure because the number was too low to be deemed significant to the company’s asset base.
- On July 2, 2007, Marine Terminals Corporation became part of the AIG Global Investment Group through its acquisition by AIG Highstar Capital. MTC provides the shipping community with a comprehensive network of stevedoring, terminal operating and related cargo handling services. Terms were not disclosed.
- AIG owns Stowe Mountain Resort. AIG’s connection to Stowe started when C.V. Starr, the company’s founder, invested in the resort in 1946. It is AIG’s sole ski business. A $300m, 10 year expansion was started in 2005.
- AIG owns Ocean Finance, a United Kingdom based company providing home owner loans, mortgages and remortgages.
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