One of the most confusing insurance companies at the moment is AIG simply because it has undergone so many structural reorganizations since the financial meltdown in the United States in 2008. Prior to that time AIG was one of the largest insurers in the world and continually vying for one of the top three or four spots in the U.S. They carried a broad range of insurance products from life insurance to property and casualty and even automobile insurance through AIG Direct. During that time their credit rating was downgraded and the company suffered what is known as a liquidity crisis. The federal government stepped in with ‘bailout’ money, roughly $85 billion, and in return took over 79.9% of the company’s stock.
Measures Taken to Recover
Since then, the federal government has increased aid to AIG and it is estimated that by May 2009 the total money invested in AIG’s bailout was in the vicinity of $182.5 billion dollars. In an effort to pay back monies contributed by the United States government, and consequently the taxpayers, AIG began systematically selling off its holdings. But in order to understand what a massive undertaking this was, it is necessary to try to imagine just how huge their holdings were.
AIG Direct and 21st Century Insurance
One of the first to go was their auto insurance company AIG Direct. The types of insurance offered through AIG Direct were policies for privately owned vehicles, motorcycles, RVs and commercial vehicles as well. This particular company was huge and often competed with Nationwide and GEICO, contending for the number one spot in auto insurance in the U.S. It began when AIG bought the remaining 39% of shares in 21st Century that they didn’t currently own in 2007. Unfortunately, when the parent company failed, AIG Direct took a major hit that was not quick enough in recovering. In 2009 AIG sold 21st Century Insurance to the Farmers Insurance Group for $1.9 billion.
To date, AIG is still one of the largest insurance companies worldwide and they have holdings in more than 130 countries. Their products fall into four main categories including General Insurance, Life Insurance & Retirement Services, Financial Services and Asset Management. They still have a long list of subsidiaries owned by the parent company in such countries as Japan, Australia, China, Indonesia, Pakistan, several European countries including the U.K. and elsewhere around the globe. The primary focus of current business is General Insurance and Corporate Products.
Now a division of AIG that was formally known as “Property and Casualty Insurance,’ Chartis now is viewed as the largest source of potential future income for AIG and there are no plans in the works to sell this company. Products available from Chartis are lines for both personal and business sectors and they include private client insurance, travel insurance, home and property insurance, and business products which include:
- Executive Liability
- Professional Liability
- Worker’s Compensation
- Accident & Health
Along with a number of financial products and services such as crisis management, captive management services and loss control.
While AIG is no longer the insurance giant it once was, it is still a force to be reckoned with and is working its way back to financial stability. Although automobile insurance is no longer a product available through AIG (which is the insurance product that made AIG a household name), their lines of personal property & casualty as well as life insurance products are still keeping AIG near the top of the list as one of the largest insurance companies around the world.