Aig Benefit to Society

AIG benefits to society

As a holding company AIG through its subsidiaries, is engaged in a range of insurance and insurance-related activities in the United States and abroad. AIG therefore provides insurance benefits to the society through such activities as General Insurance and Life Insurance & Retirement Services operations as well as Financial Services and Asset Management. AIG has over 30 million policyholders in the U.S. and is a major source of retirement insurance for, among others, teachers and non-profit organizations.

AIG benefits to the financial sector

AIG is beneficial to the financial sector as a significant counterparty to a number of major financial institutions. Prior to the fall of AIG, the company sold insurance policies on the trillions of dollars of mortgage-backed securities that made financial firms a fortune as housing prices went up. These reflected in the profits of benefiting financial institutions. AIG is a huge player in the new and mysterious business of credit-default swaps: derivative securities that allow banks, hedge funds and other financial players to insure against loans gone bad.

AIG is so important to both the society and the financial sector which was why the government believes it faces a terrible choice to either bail out AIG or risk bailing out all the businesses, cities, retirement funds, and individual Americans AIG still insures.

AIG's profit following the bailout may suggest the rescue effort has been a success. This goes to show the importance of AIG to the financial sector as the bailout of AIG prevented the further collapse of other financial institutions and endures through the profits reported by the survivors.

AIG past triumphs

AIG has lots of good businesses that still make money, and prior to the fall of AIG, the company made a made a fortune. Its past glory includes the fact that the company’s securities always carried the coveted "AAA" rating, which was conferred because AIG itself was a...