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AIG Company Profile

Key Facts

American International Group, Inc. (AIG) is a holding company engaged in a range of insurance-related activities in the United States and abroad.  Primary activities include both General Insurance, Life Insurance, and Retirement Services operations.  AIG is engaged in other activities including Financial Services and Asset Management.  AIG provides insurance, financial and investment products and services to both businesses and individuals in over 130 countries.

They currently have 116,000 employees and had $110 billion in net revenues with $6.2 billion in profits during 2007.  The company’s common stock has not payed a dividend since September 19, 2008.

AIG has a market capitalization of $1.13 billion with nearly 2.7 billion outstanding shares.

CEO

Edward M. Liddy is Chairman of the Board and Chief Executive Officer of AIG.  Mr. Liddy was Chairman and CEO of Allstate, another insurance company, from 1999 to 2006.  He led the initial public offering of Allstate from Sears, Roebuck and Co. in 1995.

Former AIG CEO Hank Greenberg resurrected the failing insurance giant in 1962, and expanded the business model outside of traditional Insurance Services for nearly 40 years before stepping down amid an accounting scandal in 2005.

Headlines

The federal government recently announced plans to overhaul its $150 billion bailout of AIG in a bid to save the beleagured insurer, but its plan will expose U.S. taxpayers to more financial risk.

The new deal, now the fourth bailout for AIG, is a reversal from the steep interest rates of the plan from September.  The government is eliminating interest terms, hoping to revive the company, which is expected to report a $60 billion quarterly loss on Monday.

The new bailout means that the company will most likely be forced to restructure in order to further reduce loses.

Under the latest plan, the U.S. will give AIG access to up to $30 billion in new cash from its Troubled Asset Relief Program, bringing the grand total of bailouts to approximately $200 billion, including funds given before TARP.

Officials believed they had little choice but to use the TARP money, particularly because they lack the authority to unwind a troubled firm such as AIG the way they can with failing banks.

This bailout will probably not be the last for AIG because government officials are prepared to continue assisting the ailing firm until it can shrink and dispose of  its failing businesses.

Major credit rating firms have given approval to the current deal, but stay posted for further dismal news regarding the ailing insurer.

Data quoted from Wall Street Journal. (Pleven)