American International Group

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American International Group

(AIG), American multinational insurance corporation whose potential bankruptcy in 2008 led to the largest federal bailout of a private company. AIG was founded as American Asiatic Underwriters by Cornelius Vander Starr in 1919 in Shanghai, China; it soon expanded internationally and became known as American International Underwriters. With the advance of Mao Zedong's Red Army on Shanghai in 1949, Starr moved the headquarters to New York. In 1962 Maurice R. "Hank" Greenberg took over leadership of the company (until he was forced out as chief executive in 2005 because of transactions that created overstated earnings reports) and expanded it by buying up numerous insurance and other financial firms. The company, which assumed its present name in 1967, became one of the largest insurance companies in the world. In the 2000s, however, AIG incurred huge losses relating to subprime home mortgages, both its own and those of other companies and banks it had insured against losses on mortgage-backed securities, although many AIG businesses remained profitable.

By 2008 bankruptcy loomed due to a downgraded credit rating and increased calls for collateral required by the insurance on the mortgage-backed securites. The Federal Reserve Bank, concerned over potentially far-reaching repercussions to the international financial system should AIG fail, agreed to give AIG a line of credit for up to $85 billion in exchange for 80% of its stock, effectivily nationalizing the company. Eventually the Federal Reserve Bank and U.S. government increased their potential support to more than $182 billion through investment and credit lines and by buying mortgage-backed securities. The Treasury Dept. ultimately owned more than 90% of AIG before beginning to sell off shares in 2011. AIG sold a number of its profitable assets in order to pay back the U.S. government, and recovered from its near collapse in 2009. The bailout became controversial because large bonuses were paid to many AIG employees after the bailout (though these were largely later returned) and because some of the financial firms, such as Goldman Sachs, that benefited from the financial stability the bailout was designed to preserve also received sizable payments from AIG after the bailout. Goldman Sachs was also accused by some at AIG of having misled AIG over the quality of the mortgage-backed securities that AIG insured. In 2011 Greenberg brought a class-action lawsuit for damages against the government, contending it had exceeded its authority in demanding its stock in return for aid. The 2015 verdict said the government had had no right to demand the ownership control of AIG, but did not award damages because the company would have become bankrupt without the government aid.

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P/C Insurers Assets 2003 ($ billions) State Farm Group [00088] Berkshire Hathaway Ins Group [00811] American Intl Group Inc [18540] Allstate Ins Group [00008] Travelers P&C Group [18358] Zurich/Farmers Group [18579] CNA Ins Cos [18313] Liberty Mutual Ins Cos [00060] Hartford Ins Group [00048] Nationwide Group [05987] Note: Table made from bar graph.
P/C Insurers Policyholder Surplus 2003 ($ billions) Berkshire Hathaway Ins Group [00811] State Farm Group [00088] American Intl Group Inc [18540] Allstate Ins Group [00008] Hartford Ins Group [00048] Nationwide Group [05987] Travelers P&C Group [18358] USAA Group [04080] Zurich/Farmers Group [18579] Liberty Mutual Ins Cos [00060] Note: Table made from bar graph.
P/C Insurers Net Premiums Written 2003 ($ billions) State Farm Group [00088] American Intl Group Inc [18540] Allstate Ins Group [00008] Zurich/Farmers Group [18579] Berkshire Hathaway Ins Group [00811] Nationwide Group [05987] St Paul Travelers Cos [18358] Liberty Mutual Ins Cos [00060] Progressive Ins Group [00780] Chubb Group of Ins Cos [00012] Note: Table made from bar graph.
amp; E&S Writers Direct Premiums Written 2003 ($ billions) American Intl Group Inc [18540] Lloyd's [852021] Zurich/Farmers Group [18549] Markel Group [18468] Nationwide Group [05987] St Paul Travelers Cos (1) [18358] Ace LNA Group [18498] Berkshire Hathaway [00811] WR Berkley [04655] CNA Ins Cos [18313] Note: Table made from bar graph.
Writers Direct Premiums Written 2003 ($ billions) State Comp Ins Fund of CA [04028] American Intl Group Inc [18540] Liberty Mutual Ins Cos [00060] Zurich/Farmers Group [18549] Travelers P&C Group [18358] Hartford Ins Group [00048] CAN Ins Cos [18313] State Ins Fund of NY [04029] St Paul Cos [00080] Zenith Nationals Ins Group [03020] Note: Table made from bar graph.
Writers Direct Premiums Written 2002 ($ billions) American Intl Group Inc [18540] Zurich/Farmers Group [18549] Chubb Group of Ins Cos [00012] CNA Ins Cos [18313] St Paul Cos [00080] Ace INA Group [18498] Travelers P&C Group [18358] Liberty Mutual Ins Cos [00060] XL America Group [18491] Hartford Ins Group [00048] Note: Table made from bar graph.
Writers Direct Premiums Written 2003 ($ millions) American Intl Group Inc [18540] CAN Ins Cos [18313] Zurich/Farmers Group [18549] Hartford Ins Group [00048] FM Global Group [18502] State Farm Group [00088] Allianz of America Inc [18429] Assurant Solutions [18499] Chubb Group of Ins Cos [00012] St Paul Cos [00080] Note: Table made from bar graph.
Writers Direct Premiums Written 2003 ($ millions) American Intl Group Inc [18540] CAN Ins Cos [18313] ACE INA Group [18498] Allianz of America Inc [18429] White Mountains Ins Group [18490] Zurich/Farmers Group [18549] St Paul Cos [00080] Chubb Group of Ins Cos [00012] American Steamship Owners Mutual [00161] XL America Group [18491] Note: Table made from bar graph.
Writers Direct Premiums Written 2003 ($ millions) MLMIC Group [18439] GE Global Ins Group [18572] American Intl Group Inc [18540] ProAssurance Group [18559] Doctors Co Ins Group [18083] CNA Ins Cos [18313] Health Care Indemnity Inc [03701] ISMIE Mutual Group [18644] Zurich/Farmers Group [18549] FPIC Ins Group Inc [18457] Note: Table made from bar graph.
Writers Direct Premiums Written 2003 ($ millions) American Intl Group Inc [18540] Zurich/Farmers Group [18549] FM Global Group [18502] Travelers P&C Group [18358] Assurant Solutions [18499] Allianz of America Inc [18429] Royal & SunAlliance USA [18371] Hartford Ins Group [00048] St Paul Cos [00080] Balboa Life & Casualty Group [04062] Note: Table made from bar graph.
Writers Direct Premiums Written 2003 ($ millions) FM Global Group [18502] Zurich/Farmers Group [18549] American Intl Group Inc [18540] St Paul Cos [00080] Travelers P&C Group [18358] Royal & SunAlliance USA [18371] ACE INA Group [18498] XL America Group [18491] CNA Ins Cos [18313] Allianz of America Inc [18429] Note: Table made from bar graph.
Writers Direct Premiums Written 2003 ($ millions) Mortgage Guaranty Group [03014] PMI Mortgage Group [03267] Radian Group [18150] American Intl Group Inc [18540] Old Republic General Group [00734] Triad Guaranty Group [18374] CMG Mortgage Ins Co [02751] CMG Mortgage Assurance Co [02801] Citigroup Ins Cos [18598] Aztec Ins Co [01922] Note: Table made from bar graph.

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