American International Group

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American International Group, Inc

Type	Public (NYSE: AIG; TYO: 8685 )
Founded	1919
Headquarters	70 Pine Street, New York, New York
Key people	Martin J. Sullivan, CEO
Industry	Insurance
Products	Insurance
Revenue	US$108.905 Billion (2005)
Net income	US$10.477 Billion (2005)
Employees	97,000
Website	www.aig.com

American International Group, Inc. (AIG) (NYSE: AIG; TYO: 8685 ) is a major American insurance corporation based in New York City. It has its European HQ in Croydon in London, England and its Asian HQ in Hong Kong, China. AIG is the fourth-largest company in the world according to the 2006 Forbes Global 2000 list. The company became a component of the Dow Jones Industrial Average on April 8, 2004. It is also the sponsor of Manchester United F.C. On December 11, 2006 it was announced that a division of AIG would purchase from Dubai Ports World disputed North American ports.

1 History
2 Holdings
3 Business
4 Business Model
5 Litigation
6 Accounting fraud claims
- 6.1 Timeline
7 Corporate Governance
- 7.1 Board of directors
8 External links

[edit] 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 Maurice R. "Hank" Greenberg, who shifted the company's U.S. focus from personal insurance to high-margin corporate coverage. Greenberg focused on selling the insurance through independent brokers rather than agents because Greenberg wanted to avoid selling insurance at prices which occasionally became too low (to cover the future payouts) given marketplace competition; a company with agents must pay their salary 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 long lengths of time with very little extra expense. In 1968, Starr named Greenberg his successor. The company went public in 1969. Greenberg resigned as the company's CEO in February 2005 amid concern from the board about regulatory inquiries.

On 6 April 2006, AIG president and chief executive Martin J. Sullivan, announced American International Group (AIG) as the new shirt sponsors of English football (soccer) team Manchester United, in a British record shirt sponsorship deal of £56.5 million (£14.1 million a year) over four years.

[edit] Holdings

AIG owns ILFC, the world's largest aircraft leasing company, with hundreds of aircraft ranging from Airbus A319s to Boeing 747s.

Through various subsidiaries, AIG owns about 62% of 21st Century Insurance Group (see http://finance.yahoo.com/q?s=TW)

AIG directly owns 9.9% of PICC. Through three subsidiaries plus its direct ownership, AIG actually owns 19.8 percent.

AIG owns Stowe Mountain Resort and a private golf course in Vermont. AIG's connection to Stowe started when C.V. Starr, the company's founder, invested in the resort in 1946. Maurice R. Greenberg has a home in Stowe and still skis. Stowe is AIG's sole ski business. At Stoic Old Stowe, a New Era

[edit] Business

AIG 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. AIG also sponsor English football team Manchester United.

[edit] Business Model

A major focus of AIG's insurance business model is the concept of an underwriting profit. For example, an auto insurer collects money every month from its customers in the form of premium. Should a customer have a covered auto accident, the company pays out a claim. In the time between the receipt of each premium payment and the paying of the claim, the money received by the insurer can be invested. Returns from investments are the primary source of profits for an insurance company. If the amount of premiums taken in is greater than the claims paid out even before taking into account investment returns the excess additional profit is call an "underwriting profit". Greenberg believed that it was necessary for an insurance company to make an underwriting profit, even though typically most insurance companies do not.

[edit] Litigation

In November 2004, AIG reached a US$126 million settlement with the U.S. Securities and Exchange Commission and the Justice Department partly resolving a number of regulatory matters, but the company still must cooperate with investigators continuing to probe the sale of a "non-traditional insurance product." The settlement concerned a so-called "finite insurance" product.

In September 2006, a former employee filed a claim against AIG, and its subsidiaries, AI Risk, and Lexington Insurance. This claim cited retaliation resulting in termination, due to a complaint regarding supervios harassment, discrimination due to gender and disability, anxiety disorder caused by a hostile work environment, and defamation of character, due to several middle management employees, as well as a vice president's secretary stating the employee had physically threatened his superior, and that same superior telling others that the employee was no longer with the company because they "lost it" one day. Finally, a personal injury claim due to the internet use of the employee's picture without their consent. This claim is pending suit. --JONES99679 14:24, 10 March 2007 (UTC)

[edit] Accounting fraud claims

In 2005 AIG came under investigation for accounting fraud.

[edit] Timeline

On October 14, 2004 the New York State Office of Attorney General Eliot Spitzer announced that it had commenced a civil action against Marsh & McLennan Companies for steering clients to preferred insurers with whom the Company maintained lucrative payoff agreements, and for soliciting rigged bids for insurance contracts from the insurers. The Attorney General announced in a release that two AIG executives pleaded guilty to criminal charges in connection with this illegal course of conduct.
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.
On February 9, 2006, AIG and the New York State Attorney General's office agreed to a settlement in which AIG would pay a fine of $1.6 billion.