Aig History

1984-2001 AIG HISTORY

In 1984 the company reported its first decline in profits, largely owing to underwriting losses including those resulting from a major hurricane. Some of AIG's specialty companies, such as AIG Oil Rig, AIG Energy, AIG Entertainment, and AIG Political Risk, which were created during the preceding 15 years, were consolidated in 1984 under the name AIG Specialty Agencies, Inc. That same year AIG special services division was introduced to underwrite risks such as extortion, kidnapping, and ransom demand.

In 1985 AIG's profit margin rebounded, with the company exceeding 1983 earnings and posting a net income of $420 million. In 1987 AIG surpassed $1 billion in net income. That same year AIG was authorized by the South Korean government to begin life insurance operations, ending a 15-year struggle to break into the Korean market. AIG became the second foreign insurance company in South Korea.

AIG broadened its trading markets in 1987 when it became the first foreign insurance organization on the Tokyo Stock Exchange. The following year AIG was listed on the London International Stock Exchange. Additional listings include Paris and Switzerland, added in 1990.

AIG continued diversification moves in 1988, forming a Hong Kong-based venture to introduce U.S. fast-food franchises into the Asian market. The venture marked the first time a U.S. institutional investor--AIG's Financial Investment Corporation of Asia--moved into an overseas franchise market.

That same year AIG also experienced some difficulty. It was involved in what is believed to be one of the largest insurance-related arbitration awards in history. Enron Corporation was awarded a $162 million claim from insurers for Peruvian properties that had been confiscated, and AIG was forced to pay nearly two-thirds of the judgment.

The Financial Services Group was formed in 1987 to consolidate specialized financial operations. UNAT, AIG's general insurance company on the European...