American International Group of scamsters, Inc.
American International Group, Inc. (AIG) (NYSE: AIG) is a major American insurance corporation based at the American International Building in New York City. The British headquarters are located on Fenchurch Street in London, continental Europe operations are based in La Défense, Paris, and its Asian HQ is in Hong Kong.
According to the 2008 Forbes Global 2000 list, AIG was the 18th-largest public company in the world. It was on the Dow Jones Industrial Average from April 8, 2004 to September 22, 2008.
It suffered from a liquidity crisis after its credit ratings were downgraded below "AA" levels, and the Federal Reserve Bank on September 16, 2008, created an $85 billion credit facility to enable the company to meet collateral and other cash obligations, at the cost to AIG of the issuance of a stock warrant to the Federal Reserve Bank for 79.9% of the equity of AIG.
In November 2008 the U.S. government revised its loan package to the company, increasing the total amount to $152 billion. AIG is attempting to sell assets to repay the loans. So far the U.S. government has given the company over $170 billion.
AIG's history dates back to 1919, when Cornelius Vander Starr established an insurance agency in Shanghai, China. Starr was the first Westerner in Shanghai to sell insurance to the Chinese. Right after the Chinese Civil War which put Mao Zedong and the Chinese Communist Party in power, AIG moved out of China and into New York City. After his business became successful in Asia, he expanded to other markets, including Latin America, Europe, and the Middle East.
In the mid-2000s AIG became embroiled in a series of fraud investigations conducted by the Securities and Exchange Commission, U.S. Justice Department, and New York State Attorney General's Office. Greenberg was ousted amid an accounting scandal in February 2005. The New York Attorney General's investigation led to a $1.6 billion fine for AIG and criminal charges for some of its executives.
On September 16, 2008, AIG suffered a liquidity crisis following the downgrade of its credit rating. Industry practice permits firms with high credit ratings to enter swaps with limited margin. When its credit rating was downgraded, the company was required to post collateral with its trading counter-parties, and this led to a liquidity crisis. The London unit of the world's largest insurer (by assets) sold credit protection Credit default swaps (CDS) on collateralized debt obligations (CDOs) that had declined in value.
On October 9, 2008, the company borrowed an additional $37.8 billion via a second secured asset credit facility created by the Federal Reserve Bank of New York. From mid September till early November, AIG's credit-default spreads were steadily rising, implying the company was heading for default.
On November 10, 2008, the U.S. Treasury announced it would purchase $40 billion in newly issued AIG senior preferred stock, under the authority of the Emergency Economic Stabilization Act's Troubled Asset Relief Program.
Federal officials said the $40 billion investment would ultimately permit the government to reduce the total exposure to AIG to $112 billion from $152 billion.
The following week (of September bailout), AIG executives participated in a lavish California retreat which cost $444,000 and featured spa treatments, banquets, and golf outings.
AP reported on October 17 that AIG executives spent $86,000 on a luxurious English hunting trip.
An October 30, 2008 article from CNBC reported that AIG had already drawn upon $90 billion of the $123 billion allocated for loans.
On November 10, 2008, just a few days before renegotiating another bailout with the US Government for $40 billion, ABC News reported that AIG spent $343,000 on a trip to a lavish resort in Phoenix, Arizona.
Following widespread criticism of AIG’s decision to pay $165 million in bonuses from taxpayer bailout funds to employees of its particularly troubled financial products unit, as part of a larger total payout reportedly valued at $450 million, on March 16, 2009 U.S. President Barack Obama expressed outrage and said he had asked Treasury Secretary Timothy Geithner to pursue all legal avenues to block them.
Business
In the United States, AIG is the largest underwriter of commercial and industrial insurance, and AIG American General is a top-ranked life insurer.
Auto insurance
AIG sold auto insurance policies through its subsidiary unit, AIG Direct (aka aigdirect.com). The policies they offered included insurance for private automobiles, motorcycles, recreational vehicles and commercial vehicles.
AIG purchased the remaining 39% that it did not own of online auto insurance specialist 21st Century Insurance in 2007 for $749 million. With the failure of the parent company and the continuing recession in late 2008, AIG rebranded its insurance unit to 21st Century Insurance.
International holdings
Australia
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 Australia.
Pakistan
Principal office is in Karachi and branch offices are in Karachi, Lahore, Islamabad, Faisalabad and Sialkot. Selling automobile insurance in Pakistan since 1949.
China
AIG owns 19.8% of People's Insurance Company of China (PICC) through direct and indirect holdings. PICC P&C[clarification needed] is China's largest insurer of casualty insurance.
AIG owns a controlling share pack of Beijing PanAm International Aviation Academy or BPIAA. BPIAA was established in 2004 as the largest privately-owned flight training academy in China. Its bases located in Wuhai, Bautou, Shijajuan and Handan. In 2008, following the global crisis and economic recession, BPIAA has stopped it's operation awaiting company re-purchase from other, more capable investors.
Hong Kong
AIG's American International Assurance operations include 2.2 million policy holders.
India
AIG is the minority partner with the Tata Group in two insurance companies in India, holding 26 percent each in Tata AIG Life Insurance Co Ltd and Tata AIG General Insurance Co Ltd.
Philippines
AIG owns Philippine American Life and General Insurance Company (Philamlife), the Philippines' biggest insurance company. It has a total asset of P170 billion ($3.6 billion). Philamlife serves over a million customers and maintains the widest network of over 200 offices and sales agencies nationwide.
Philamlife, on October 3, 2008, announced it is among the assets being sold by AIG to pay off debt to the U.S. government: "it had been identified for possible divestment along with some of its affiliates." AIG identified Philamlife as one of "extremely valuable" assets intended for sale. Philamlife president and CEO Jose Cuisia Jr. said in a statement: "Philamlife remains to be (a) stable and strongly capitalized organization. Our policy owners and clients can be assured that their interests are protected because of the company's financial strength. A change of ownership will not in anyway diminish policy owners' benefits and security. We will remain focused on daily execution of our business and continue to provide our policy owners and clients with the highest levels of service. Philamlife, the largest and most profitable insurance company in the country and the undisputed market leader for over 60 years, is a crown jewel for AIG and will surely attract local and international interest." Cuisia said groups expressed interest to buy Philamlife, including the Yuchengco family which owns Rizal Commercial Banking Corporation. Another possible contender is the formidable Ayala Corporation that owns Bank of the Philippine Islands, Globe Telecom, and Ayala Land among others. Philamlife has total assets of 170 billion pesos ($3.6 billion), also has interests in banking, asset management and outsourcing. But contrary to the report, Philamlife doesn't have any interest on AIG BPSI, an AIG owned outsourcing company based in the Philippines, that services other subsidiary companies of AIG like American General and others.
Singapore
AIA Singapore is a wholly owned subsidiary of AIG in Singapore. It has more than two million policies in force, more than 3,800 financial services consultants and 800 employees in its Singapore offices. General manager Mark O'Dell resigned on September 18, 2008 in response to policy holders queuing up to cash in their policies in the face of concern of the future of AIG.
United Kingdom
AIG operates in the UK with the brands AIG UK, AIG Life and AIG Direct. It has about 3,000 employees, and sponsored the Manchester United football club, paying them the largest amount by a sponsor in history.
In response to redemption demands, AIG Life (UK) suspended redemptions of its AIG Premier Bond money market fund on September 19, 2008 in order to provide an orderly withdrawal of assets.
Indonesia
There are three companies under AIG brands in Indonesia: AIG LIFE; AIA, which sells life insurance; and AIU, which sells general insurance. AIG LIFE currently is voted the best insurance company in Indonesia by the Bisnis Indonesia newspaper. In Indonesia, various major banks, both international and local, are part of their distribution channel, such as ABN AMRO (now RBS bank), Bank Central Asia (one of the biggest banks in Indonesia), and Commonwealth Bank.
Insurance holdings by state
California
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.
Pennsylvania
Twenty AIG subsidiaries are licensed to do business in Pennsylvania, including National Union Fire Insurance Co. in Pittsburgh, believed to be the second largest AIG underwriter in the nation. Other subsidiaries include New Hampshire Insurance, Insurance Company of the State of Pennsylvania, Granite State Insurance and New Hampshire Indemnity.
West Virginia
AIG writes property and casualty insurance, life and annuity, and workers' compensation insurance in West Virginia. It has 4.7% of the life insurance market and 2.7% of the property and casualty market, as of the end of 2007.
Holdings
Mortgage lending
Since 2001 AIG has owned American General Finance Inc., an Evansville, Indiana firm with $29 billion of mortgage backed assets and more than 1,500 branches nationwide.
Aerospace
AIG Tower in Hong Kong
AIG owns International Lease Finance Corporation (ILFC) , the world's largest aircraft leasing company, with hundreds of aircraft including the full range of Boeing and Airbus jetliners, as well as the McDonnell Douglas MD-11 and MD-80 Series. Total assets under lease are $55 billion as of June 30, 2008. Estimates of its value range from $5 billion to $14 billion based on a comparison with rivals.
AIG was one of the owners of London City Airport, along with GE and Credit Suisse. The airport was purchased for £750m in 2006 and AIG reportedly sold its 50% stake for an undisclosed sum on September 30, 2008.
Real estate
AIG/Lincoln was established in 1997 as a strategic partnership between AIG Global Real Estate Investment Corporation, New York, a subsidiary of AIG - American International Group, New York, and Lincoln Property Company, a Dallas based commercial real estate manager.[77].[78]. It has developed or is currently developing over 2.2 million square meters of real estate in Poland, Hungary, Romania, Czech Republic, Germany, Italy, Spain, Switzerland, Austria and Russia.
Telecommunications
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 and certain minority shareholders. At the time, the estimated value of BTC was 1.7 billion euros ($2.3 billion).
Ports
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.
Skiing
AIG owns Stowe Mountain Resort which is AIG's only ski business.
AIG's connection to Stowe started when C.V. Starr, the company's founder, invested in the resort in 1946. A $300m, 10 year expansion was started in 2005.
Other holdings
AIG owns Ocean Finance, a British provider of home owner loans, mortgages and remortgages.
AIG is the principal sponsor of English football team Manchester United and the Japan Open Tennis Championships.
Subsidiary Holdings
• AIG American General Life Companies
• AIG Annuity Insurance Company
• AIG UK Limited
• AIG Financial Products Corp.
• AIG Hawaii Insurance Company, Inc.
• AIG Investments
o Utilities, Inc.
• AIG Retirement Services, Inc.
o AIG SunAmerica Life Assurance Company
o The Variable Annuity Life Insurance Company
• American General Finance Corporation
• American Life Insurance Company
• Brazos Capital Management, L.P., a mutual fund manager
• HSB Group, Inc., a specialty insurance company
• International Lease Finance Corporation
• Lexington Insurance Company
• SunAmerica Ventures, Inc.
o AIG Financial Advisors
• Transatlantic Holdings, Inc.
o Transatlantic Re (Brasil) Ltda.
o Transatlantic Reinsurance Company (NYSE: TRH), 58% owned by AIG
• United Guaranty Corporation
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 restated its financial position and issued a reduction in book value of USD $2.7 billion, a 3.3 percent reduction in net worth.
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.
There is an ongoing fraud investigation that has been launched by the FBI after the collapse in stock price.
Corporate governance
Board of directors
• Edward M. Liddy – Chairman of the Board of Directors and Chief Executive Officer, American International Group
• Stephen F. Bollenback – Former Co-Chairman and CEO, Hilton Hotels Corporation
• Martin S. Feldstein – Professor of Economics, Harvard University
• George L. Miles – President and Chief Executive Officer, WQED Multimedia
• Morris W. Offit – Chairman, Offit Capital Advisors LLC
• Michael H. Sutton – Consultant
• Fred H. Langhammer – Chairman, Global Affairs, and former CEO of The Estee Lauder Companies, Inc.
• Virginia M. Rometty – Senior Vice President, Global Business Services, IBM Corporation
• James F. Orr, III – Chairman of the Board of Trustees, The Rockefeller Foundation
• Edmund S.W. Tse – Senior Vice Chairman, Life Insurance, American International Group
• Suzanne Nora Johnson
