In the early days, AIG was a struggling small business. Through hard work and determination, the founder persevered and the grew into a global giant. However, the financial crisis of 2008 was a setback for the company.
Ultimately, AIG has shown resilience and has overcome many challenges. They are a company that is always looking for new opportunities and ways to grow.
AIG’s Early Years: A Struggle to Survive.
The company was founded in December 1919 by Cornelius Vander Starr, a American insurance entrepreneur who had recently moved to Shanghai. True to his roots he started a insurance company and within 2 years it had grown to the point of further adding a life insurance product.
Starr started growing and opened offices in several SE Asian countries. They did well and by 1926 he was in a position to open a office in the United States. He then set about looking for opertunities in South and central America. His timing was excellent as his Asian business was severly disrupted by WWII.
AIG’s Growth and Expansion Post WWII.
When war broke out he relocated his head office to New York. The business continued to develop through the war years due to his activities in Latin America. After the war ended Starr looked for more growth markets and opened up offices in Japan and Germany. His insurance products were targeted at the GI’s stationed abroad.
In 1952 Starr had an opertunity to become more active in North America. He bought a Globe & Rutgers Fire Insurance Company and by the end of the 1950’s his insurance company was represented in over 75 coutries.
Further growth happened in 1960 when Starr hired Maurice R. Greenberg (Hank), to build a global accident and health business. Greenberg focused on selling insurance through independent brokers which drove down costs.
It wasn’t until 1967 that American International Group was incorporated and the company went public in 1969.
Further Growth and Changes Through the 1970s.
There were many changes happening for AIG and they found their Middle East and Asian businesses being effected by political changes, wars, etc. This lead the company towards creating more niche products and exploring new markets. Though slow initially things started to take off and the business grew.
Two further break throughs happened in the 1970s following a personal visit to China by Maurice R. Greenberg. He secured the first direct business relationship with the People’s Republic of China. He also managed to enter the Irish market which had been pretty closed to American businesses.
AIG Starts Trading on the New York Stock Exchange.
In 1984 AIG listed it’s shares on the New York Stock Exchange and this lead to steady share price growth. By the end of 1995 the share price started to take off and hit a peak in November 2000 at over $1,670 per share. In October 2007 the shareprice fell dramatically and by November 2007 the share price hit rock bottom at around $26 per share.
AIG started diversifying into the airline industry at the end of the 1990’s and signed a deal with the Chinese government to provide life insurance. They also purchase a North American retirement company in 1999.
The Financial Crisis of 2008.
In 2008, the world was rocked by a financial crisis that started in the United States and quickly spread around the globe. The crisis was caused by several factors, including subprime mortgage loans, a housing bubble, and lax regulation of the financial industry.
AIG, one of the world’s largest insurance companies, was particularly hard hit by the crisis. The company had to be bailed out by the US government to the tune of $180 billion.
However, AIG has since bounced back and is now once again one of the most successful companies in the world. The financial crisis was a setback for AIG, but it was not a death blow.
Thanks to its strong management team and its diversified business portfolio, AIG was able to weather the storm and come out on top.
The Current Chairman and CEO.
Paul Zaffino was appointed as the CEO of AIG in August 2017. He lives in the New York metro area with his wife Zaffino and their three children. He studied at Boston College (BA in Economics) New York University (MBA in Finance) before joining GE Capital Services in 2001.
Zaffino then took a job offer from a Marsh & McLennan Companies to work in their subsiduary company Guy Carpenter & Co. In February 2008 he became the CEO of Guy Carpenter & Co. He worked on making a number of key changes to the company personel and business structure which were very effective.
In April 2011 Marsh & McLennan Companies appointed him president and CEO of their subsidiary Marsh, Inc. In 2015 he was appointed chariman of Risk & Insurance Services.
The Roller Coaster of the Last 20 Years.
AIG has embarked on a period of significant growth and expansion in recent years, with a particular focus on entering new markets and acquiring new businesses.
A key part of this strategy has been the establishment of AIG Ventures, a dedicated venture capital fund that invests in early-stage companies across a range of industries.
AIG Ventures has made some high-profile investments in recent years, including in the online insurance broker Policygenius and the digital health startup Solera Health. AIG’s growth strategy has also seen the company enter into many new markets, such as the commercial insurance market in Brazil.
Additionally, AIG has acquired several businesses in recent years, most notably the UK-based insurance company NIG. AIG’s growth strategy is continuing to pay off, with the company reporting strong financial results in 2018 and 2019.
Conclusion.
AIG is a large, multinational insurance company with a long history. The company has weathered many storms over the years, including the Great Depression, 9/11, and the 2008 financial crisis.
AIG was one of the hardest hit companies during the latter event, and it required a government bailout to stay afloat.
Despite these challenges, AIG has emerged as a stronger and more resilient company. It has made many changes in its operations to become more efficient and reduce risk.
AIG is now well-positioned to continue its success into the future.
Sources: THX News, AIG & Wikipedia.
