American International Group

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American International Group, Inc.

logo
legal form Incorporated
ISIN US0268747849
founding 1919
Seat New York City , United StatesUnited StatesUnited States 
management Brian Duperreault, CEO
Number of employees 46,000
sales $ 49.7 billion
Branch Insurance
Website www.aigcorporate.com
As of December 31, 2019

Old logo

The American International Group, Inc. ( AIG ) is a listed insurance group headquartered in New York City . For a long time the company was the largest primary insurance group in the world; in 2008 it was in third place after Allianz SE and ING Groep .

The company offers insurance for business and private customers as well as many other financial services. In fiscal 2007, AIG had sales of 110.1 (previous year: 113.2) billion US dollars and a profit of 6.2 (previous year: 14.0) billion US dollars. AIG employs around 116,000 people in 130 countries (as of 2007) and has 74 million customers - including banks, insurance companies, large companies, cities and municipalities. In 2008, the company posted a loss of $ 99.3 billion, the fourth quarter alone accounting for $ 61.7 billion - the highest loss for a company in a quarter in economic history.

history

AIG was founded in 1919 by Cornelius Vander Starr in Shanghai , Republic of China . Starr was the first Western businessman to sell insurance to the Chinese. After the company thrived in China, it continued to expand into Asia, Latin America, Europe and the Middle East. In 1926, Starr opened the American International Underwriters insurance agency in New York , the first office in the United States. However, business in the United States was not as successful as in the other branches of the company. In 1939, AIG relocated its company headquarters to New York because of the threat of war. During the Second World War, AIG expanded in Latin America, outperforming the traditionally strong European insurance companies. After the end of the Second World War, AIG opened new subsidiaries in Germany, Japan, the Philippines and Western Europe in 1946, where the traditionally strong domestic insurance companies were only able to act to a limited extent due to the war damage. In the early years, the Japanese branch of AIG was limited to insurances for members of the American occupation forces; since 1951, as the Japanese insurance market opened up, it was also allowed to sell insurance to Japanese customers. In 1952, AIG took over the majority of the Globe & Rutgers Fire Insurance Company .

In 1962, Starr handed over the US business to Maurice R. Greenberg , who developed the group into one of the top companies in the US. In the 1960s, AIG took over, among other things, the New Hampshire Insurance Company and the National Union Fire Insurance Company , based in Pittsburgh , its subsidiary Lexington Insurance Company , the Commerce and Industry Insurance Company and the Transatlantic Reinsurance Company . In 1967 AIG was converted into a holding company, whose shares have been traded on the stock exchange since 1969. AIG shares have been traded on the New York Stock Exchange since 1984 .

In 1979, AIG was the first western insurance company to set up branches in Hungary, Poland and Romania. In 1990 AIG took over the International Lease Finance Corporation . On April 8, 2004, AIG was included in the Dow Jones Industrial Average , the index of the 30 largest publicly traded companies.

In 2005, a misrecognition scandal in connection with transactions between AIG and the reinsurer General Re of the holding company Berkshire Hathaway rocked the company. As a result of these irregularities, Maurice R. Greenberg had to resign. His successor is Martin J. Sullivan.

In August 2007, AIG took over Württembergische und Badische Versicherungs-Aktiengesellschaft (Wüba) from the US subsidiary JC Flowers & Co. LLC ; Until January 2005, Wüba belonged to the German financial group Wüstenrot & Württembergische .

Financial crisis from 2007

For the fourth quarter of 2007, AIG reported write-downs of $ 11 billion on its credit insurance portfolio as a result of the subprime crisis , resulting in a record quarterly loss of $ 5.3 billion. The main reason for the company's losses from the end of 2007 onwards are default (mortgage) loans from AIG customers, which were hedged (reinsured) through AIG via credit default swaps .

AIG asked the US Federal Reserve 14 September 2008 Fed and thus a gradation of its US American taxpayer, but also the European savers to a bridge loan of about 40 billion dollars ratings to prevent. On September 16, 2008, the Fed granted the company a loan of 85 billion US dollars, but took over 79.9 percent of the shares in return. So there was de facto an emergency nationalization . At the same time, the state also received a veto right on dividend distribution.

At the beginning of November 2008 the US government supported the American International Group with a total of around 150 billion dollars; this was the largest government grant to a private company in United States history.

The company posted losses of $ 37.6 billion for the first three quarters of 2008. In the last quarter of 2008, AIG broke all previous limits and posted the highest loss ever reported by any company of $ 61.7 billion.

Due to the increased need for write-downs on private and now also commercial real estate, the Fed has already provided additional loans of $ 22.5 billion and $ 30 billion. However, more state rescue injections were required. As part of a restructuring, AIG had to part with some of its subsidiaries and divisions. For the life insurance division American Life Insurance , the Metropolitan Life Company is said to have offered $ 11.2 billion for the time being.

AIG sold its US auto insurer 21st Century Insurance to Farmers Group , a subsidiary of Swiss Zurich Financial Services, for approximately $ 1.9 billion . The US auto insurer had premium income of 3.6 billion US dollars in 2008.

The German news magazine Der Spiegel described AIG in 2009 as "The most dangerous company in the world" and published a cover story about "How the American insurance company AIG drove the banks into risk and the financial world almost into collapse". However, the causes of the financial crisis were much deeper and could not be restricted to AIG.

The US government had expected that the state participation would end on a positive balance: "[T] he final cost will be significantly less than the initial investment. This is true for two reasons. First, many of the troubled assets that the government buys will increase in value as the market recovers. That means that the government eventually will be able to resell them for a higher price. Second, the government will receive quarterly dividends from the equity shares it purchases in financial institutions. "(President Bush in a speech on October 17, 2008, German:" The final costs will be significantly lower than the initial investment. This is for two reasons Applicable: First, many of the harmful assets that the government buys will rise in value as the market recovers, meaning that the government will eventually be able to sell them at a higher price Government receives quarterly dividends from equity interests acquired by financial institutions. ")

The Handelsblatt reported in March 2011 under the headline “AIG fills the treasury” : “The American taxpayers had to step in with 182 billion dollars - the most expensive rescue operation in the financial crisis. How much of this money has since flowed back, Massad left open. In November, the Treasury Department put the state's outstanding investment at $ 120.6 billion. In addition to the Ministry, the US Federal Reserve had also helped the insurance company. But not every dollar AIG earns goes directly to the state: Another $ 3.3 billion from the sale of former Metlife properties remains in the AIG coffers. AIG had already squeezed billions off a previous sale in order to bolster its meager reserves and be prepared for claims. "( Handelsblatt )

At its peak, the government held 92.1 percent of AIG, and at the end of 2012 the last shares were sold again. According to its own statements, the US Treasury made a total profit of 22.6 billion US dollars with the AIG bailout .

In 2014, ILFC was sold to Dutch AerCap and merged with it for USD 7.6 billion .

Asia business AIA

In early March 2010, AIG announced that it would sell its Asian division to British competitor Prudential and use the proceeds to repay the debt to the US state. The deal was valued at $ 35.5 billion, of which $ 25 billion was paid in cash and the remainder in securities. The AIA Group Ltd. named Asia division had more than 20 million customers. Your planned sale to Prudential failed, so AIA went public in October 2010. The initial public offering with a volume of 159.08 billion Hong Kong dollars (20.51 billion US dollars) made it the third largest IPO in the world to date. On December 21, 2012, AIG sold its entire 13.69% stake in AIA.

AIG Europe

The AIG Europe companies were renamed Chartis Europe SA and Chartis Europe Limited in mid-October 2009 . In Germany it operated as Chartis Europe SA - Direktion für Deutschland . On December 1, 2012, the structure in Europe was simplified and Chartis Europe SA was merged with Chartis Europe Limited , which now operates as AIG Europe Limited .

Effects of the corporate crisis on German communities

Due to the fact that cross-border leasing by German municipalities for urban systems (waste incineration plants, sewer networks, etc.), which has become more common in the past , these have come under pressure because of the AIG's difficulties, as the AIG has lost its previously good rating. This means that a new insurance company has to be found for cross border leasing to cover the leasing contracts in the event that the leasing partner of the municipalities fails or the creditworthiness of the insurer changes (in this case, a contractual penalty is due). Since such insurance is difficult to find in a financial crisis - at least on acceptable terms - the municipalities are left with these default risks or the contractual penalty that they now have to bear themselves. The reason for this is the design of the cross border leasing as a kind of credit default swap. It is not possible to simply withdraw from the contract as the leasing contracts usually have a term of at least 30 years.

Tax avoidance

The Luxembourg leaks made it known that AIG "smuggled money past the US Treasury through complicated financial structures".

various

American International Building

The AIG owned the 290-meter-high American International Building in Manhattan (today's name: "70 Pine Street"); the company resided in this skyscraper , which is one of the tallest buildings in New York City .

From the 2006/07 season to June 2010, AIG was the shirt sponsor of Manchester United football club .

Web links

Commons : American International Group  - collection of images, videos, and audio files

Individual evidence

  1. ↑ a b Annual Report 2019 ( en ) Accessed June 13, 2020.
  2. ↑ Allianz draws on stock market value with AIG, Financial Times Deutschland (print edition) of June 25, 2008, page 17.
  3. ↑ USA: The black hole . In: The time . No. 08/2009 ( online ).
  4. ↑ AIG lost nearly $ 100 billion in 2008 - 62 of them in the fourth quarter
  5. ↑ Anja Krüger: AIG buys Flowers subsidiary Wüba , Financial Times Germany of August 13, 2007.
  6. ↑ The financial crisis affects the insurance industry , article in the Frankfurter Allgemeine Zeitung from March 1, 2008
  7. ↑ Torsten Riecke: The credit crisis is shaking insurer AIG , article in the Handelsblatt from March 3, 2008
  8. ↑ Reuters: Media: AIG asks Fed for short-term financial aid - September 15, 2008
  9. ↑ Welt.de: Banks financial crisis escalates dramatically - September 15, 2008
  10. ↑ New York Times: AIG Seeks $ 40 Trillion in Fed Aid to Survive - September 14, 2008
  11. ↑ boerse.ARD.de: 85 billion state dough for AIG ( memento of September 18, 2008 in the Internet Archive ) of September 17, 2008.
  12. ↑ ANDREW TAYLOR / Associated Press 2008: AIG blowout party, did they fund it with taxpayer bailout dollars? ( Memento of February 10, 2009 in the Internet Archive ) (via Internet Archive )
  13. ↑ marketwatch: Washington dramatically ages AIG bailout
  14. ↑ AIG loses $ 100 billion - FAZ March 3, 2009
  15. ↑ a b Financial Times Deutschland - AIG before 100 billion annual loss ( memento from February 6, 2013 in the web archive archive.today ) from February 24, 2009
  16. ↑ Financial Times Deutschland - Zurich secures AIG car insurance ( memento from April 18, 2009 in the Internet Archive ) from April 16, 2009
  17. ↑ Beat Balzli, Klaus Brinkbäumer, Ullrich Fichtner, Hauke ​​Goos, Thomas Hüetlin, Christoph Pauly: In the headquarters of greed . In: Der Spiegel . No. 29 , 2009, p. 42-59 ( online ).
  18. ↑ President Bush - October 17, 2008 speech
  19. ↑ debt settlement
  20. ^ US Department of the Treasury: Investment in AIG. Retrieved January 29, 2017 .
  21. ↑ Julie Johnsson, Zachary Tracer: AerCap Finishes $ 7.6 Billion ILFC Deal as AIG Narrows Aim - Bloomberg. In: bloomberg.com. May 15, 2014, accessed September 4, 2014 .
  22. ↑ AerCap Completes Acquisition of ILFC from AIG and Closes Private Offering of $ 2.6 Billion Aggregate Principal Amount of Senior Notes. In: aercap.com. May 14, 2014, accessed September 4, 2014 .
  23. ↑ AIG sells Asia division to Great Britain
  24. ↑ Prudential buys AIG Asia division for $ 35.5 billion
  25. ↑ Renaming completed: AIG is now called Chartis Insurance. Financial Times Deutschland , October 21, 2009, archived from the original on October 24, 2009 ; Retrieved February 11, 2010 .
  26. ↑ http://www.aig.de/corporate-Enthaben-Sie-AIG_3194_428410.html
  27. ↑ US insurer AIG is dangerous for Germany . In: Die Welt Online of March 2, 2009, last accessed on January 13, 2010.
  28. ↑ Süddeutsche Zeitung, AIG's tax tricks: Saved by the state, cheated on the state