Aig-the Rise and Fall of American International Group, Inc

The Rise and Fall of American International Group, Inc.

Cynthia Stallworth

Lekol Kordah

Curtis Wimberly

Alexis Gailes

Felicia Wimberly

BUS490: Business Policy

Glenn King, Instructor

April 23, 2013

Abstract

On February 28, 2008, American International Group, Inc., the then largest insurance company in the United States, announced their 2007 earnings of $6.20 billion or $2.39 per share. At the close of the day, its stock was at $50.15 per share. Less than seven months later, AIG was on the verge of bankruptcy and had to be rescued (bailout) by the United States government through an $85 billion loan. Within the last few years AIG has been at the forefront of much debate about their financial decisions. This research paper will explain how AIG, a company that had a $1 trillion in assets and $95.8 billion in shareholders’ equity, suddenly collapsed. The reader will also understand how the fall of AIG affected society, its impact on the US economy and the way the media handled the situation. Lastly, the paper will demonstrate the remedies, approaches, and theories the company took in order to resolve their matter.

AIG is an insurance operation that offers services to commercial, institutional and individual customers. “AIG offers general insurance, life insurance, retirement services, and asset management services. AIG also provides commercial aircraft and equipment leasing, capital markets operations and customer financing. It serves commercial, institutional and individual customers across the world through an extensive property-casualty and life insurance network.” AIG headquarters is located in New York. AIG’s leadership is a result of its underwriting skill, innovative insurance solutions, financial strength, superior service and responsive claims handling. The AIG claims operation gives clients access to a vast worldwide network of dedicated experts and top legal firms. (B. Harat, November 2012)

AIG serves millions of customers...