American International Group, Inc, more commonly known as AIG Insurance, is a very well known insurance company by people from all walks of life and all ages. AIG is not only an insurance company; it provides financial services to many people all over the world. AIG is an insurance and financial services provider in more than 130 different countries and jurisdictions, making the company a leader in the insurance business just based purely on size and the numbers of people that they are able to reach.
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Being the fourth largest company in the world, AIG Insurance serves commercial, institutional, and individual customers that need property-casualty and life insurance, as well as a variety of other services that are an expansion of the insurance business. Known as just an insurance company to many people, AIG actually has companies that provide individuals with retirement services, financial services, and asset management all around the world. AIG Insurance is a name that consumers have grown to trust; in fact, AIG is so well known that it is traded and listed on the New York Stock Exchange, and the exchanges in London, Paris, Switzerland, and Tokyo.
AIG Insurance is unlike any other insurance company because it boasts a very solid business model that has grown over the years and stayed in touch with the needs of the average consumer. Insurance is the core of the business, but AIG serves over 65 million customers all over the world because of the combination of services that are offered. Despite being very busy and having many different businesses to oversee, AIG insurance is ranked at the top of the insurance industry year in and year out. There are more than 714,000 agents and brokers today that are offering AIG insurance to their clients. AIG also finds its way to consumers through alternative distribution channels such as direct marketing, credit cards, travel agents, banks, and even retailers.
AIG Insurance is very much in touch with its consumer base and continues to make improvements to the business model to meet the demands of its clients. For instance, in the last few years AIG has made it possible for their brokers to quote and bind insurance policies over the Internet in a matter of minutes. The reason that AIG insurance has gone this route is because the company as a whole is aware that convenience goes a long way with the average individual in need of insurance.
AIG Life Insurance
AIG serves millions of customers from all over the world, and one area of growth is the company’s life insurance business. Because AIG serves so many people who need life insurance, AIG has the most extensive network of any life insurer currently in business. As a company, AIG has created a network that allows the company to offer great services to everyone in the most efficient manner. This is what sets AIG apart from many other life insurance companies.
The company gets to know consumers through basic property-casualty insurance and then branches out from there. Most consumers are more comfortable seeking life insurance as well as a whole host of other services through a provider they can trust, such as AIG. AIG saw that branching out and including life insurance as one of its core businesses could be lucrative for the company as well as fulfill a need of current and future clients.
AIG Insurance Retirement Services
In addition to life insurance, AIG also focuses on new markets, such as retirement services. AIG has one of the premier retirement businesses in the United States. The AIG retirement service network is not limited to the United States, as it extends to those that need it all over the world. Many customers find out about these premier retirement services when they go to AIG for auto insurance. Once there, the customers soon discover that AIG is so much more than an insurance company. With more and more baby boomers nearing retirement, AIG has found that the retirement services really are a lucrative business and a service that consumers really are in need of like never before.
AIG Insurance Asset Management
In addition to property-casualty insurance, life insurance, and retirement services, AIG also has asset management group businesses. These businesses branch out from insurance and others to provide retail asset management, broker dealer services, private banking, spread-based investment business from the sale of guaranteed investment contracts, and finally management of AIG insurance invested assets. This portion of the AIG business provides consumers with the deep knowledge of markets that exist around the world, not just in the insurance business, but in a wide range of asset classes as well.
AIG Insurance Financial Services
Many AIG insurance customers become even more acquainted with the insurance company when they learn about AIG’s financial services. AIG has businesses that specialize in financial services, including aircraft and equipment leasing, capital markets, and consumer finance, as well as insurance premium finance. At first, this seems like an odd offshoot of the core insurance operations of AIG, but in reality it lends itself well to the insurance business. These financial services allow AIG to capitalize on opportunities throughout the very large and complicated AIG global network.
AIG Insurance History
Edwin Cornelius Vander Starr founded AIG in Shanghai, China in 1919. Mr. Starr was the first Westerner to sell insurance to the Chinese, so he and his insurance company were notable from the very start. Because he was successful selling insurance in China, he branched out and began selling insurance in Asia, Latin America, Europe, and even the Middle East. The one region that Starr was not all that successful in was the United States, so in 1962 he turned over the holdings to Hank Greenberg, who then shifted the company’s U.S. focus from personal insurance to the more profitable corporate coverage. Greenberg took the insurance business in a whole new direction, focusing on selling insurance through independent brokers instead of agents. Greenberg did this because he didn’t want to sell insurance at prices that became too low to cover future payouts.
Making the move to do away with agents was the key to the success of the company, because it allowed the company to price insurance competitively even if it suffered decreased sales of certain products. Basically, not having to worry about paying agents allowed AIG to prosper even if they were paying out on insurance claims and the like. By 1968 Mr. Starr named Greenberg as his successor and AIG went public the very next year. Greenberg would stay on with AIG until 2005 when he resigned due to concerns about regulatory inquiries.
While AIG Insurance has been very fortunate in creating a very stable business, they have suffered some setbacks. In 2004 AIG reached a $126 million settlement with the U.S. Securities and Exchange Commission and the Justice department. The settlement was in reference to a finite insurance product. The company has also suffered a loss of over 58 billion dollars worth of market capitalization because of the scandal and has reported a 3.3 percent reduction in net worth.
Today, AIG Insurance is known as a well-balanced and cost effective insurance option for people all over the world, despite their struggles with investigations and settlements in recent years.