American International Group (AIG) is a large multinational insurance company that provides life insurance, property insurance, retirement products and other financial services in more than 80 countries.AIG was at the center of the 2008 financial crisis. When the Treasury Department decided it was too large to fail, it received US$182 billion in government assistance. AIG repaid the government in full with nearly $23 billion in profits in 2012. After several years of restructuring and asset sales, AIG has restored its reputation and status as a global supplier of insurance products.
As a global provider of insurance products and services, AIG is composed of two main divisions: General Insurance and Life and Retirement. General Insurance consists of two operating divisions: North America and International. Life and Retirement consists of four operating departments: individual retirement, group retirement, life insurance and institutional market.Since May 2017, AIG has operated under the leadership of President and CEO Brian Duperreault.The company’s executive leadership team also includes General Insurance CEO and Global Chief Operating Officer Peter Zaffino, Life and Retirement Executive Vice President and CEO Kevin Hogan, Executive Vice President and Chief Investment Officer Douglas A. Dachille, and Executive Vice President And the chief auditor Naohiro Mouri and others.
In the last quarter of 2018, due to the increase in catastrophe reports, AIG’s after-tax catastrophe losses were approximately US$630 million. The company also reported unfavorable developments in the loss reserve for the previous year. But at the same time, the company’s general insurance division has improved, and life and retirement as sources of income have also remained stable.
AIG’s revenue growth
In February 2019, AIG released Form 10-K for 2018. Among them, the company emphasized its efforts in 2018 to “achieve long-term profit growth by improving underwriting capabilities, repositioning the reinsurance structure, and reducing risks and volatility.” Risk limitation” etc.
Many of the dozens of companies under AIG operate as subsidiaries of subsidiaries in a large group that has expanded to many countries around the world. In 2018, AIG reported total revenue of 47.39 billion U.S. dollars. This is a slight decrease from the $49.52 billion in revenue reported in 2017. The company reported that the dividends per common share declared in 2017 and 2018 were both $1.28.
Below, we will look at the five most important subsidiaries and affiliates of AIG.
1. AIG American General Life Insurance Company
American General Life Insurance Company is the main life insurance company operated by AIG in the United States.The company distributes a wide range of term and permanent life insurance products through local agencies, insurance brokers and AIG Direct.The company was confirmed as an A rating by AM Best, a rating agency, in 2019, indicating a stable outlook.
The General Insurance Company of the United States was established in 1926. Due to the large-scale acquisition frenzy in the 1980s, after AG’s assets grew to a staggering US$32 billion, AIG acquired the company in 2001 for approximately US$23 billion.
2. Variable Annuity Life Insurance Company
Variable Annuity Life Insurance Company (VALIC) provides a full range of financial products, including life insurance, annuities, qualified retirement plans, mutual funds and brokerage services.Today, VALIC is firmly among the largest life insurance companies in the United States.VALIC’s subsidiaries include VALIC Financial Advisors Inc. and VALIC Retirement Services Company.
VALIC was established in Texas in 1955 to provide employer-funded retirement plans for more than 2 million people working in public schools, higher education, government, healthcare, and non-profit organizations. In 1967, General Motors of the United States purchased a majority stake in VALIC for an undisclosed amount.
3. AIG Life and Retirement Company
AIG Life and Retirement Company is the renamed name of SunAmerica Life Assurance Company, which AIG acquired in 1998 at an undisclosed price. Headquartered in Los Angeles, SunAmerica is known as one of the fastest-growing deferred annuity and variable annuity providers.AIG was renamed SunAmerica in 2012 to take advantage of AIG’s outstanding reputation and influence in foreign markets.
4. AIG property damage
AIG Property Casualty Inc. is a multinational property and casualty insurance product and service provider.Its products include enterprise risk management solutions, workers’ compensation, business umbrellas and excess casualty solutions, guarantees and risk financing plans, and travel insurance. The company is also a group of professional property and accidental injury companies operating in the United States and abroad.
Its two larger subsidiaries are the American Home Insurance Company and the National United Fire Insurance Company.American Home provides a wide range of catastrophic risk transfer solutions for small and medium enterprises. It is also a major supplier of extended service contract plans for electronics, electrical and computer retailers. National Union provides accident insurance solutions for individuals and businesses. AIU Insurance is a property and accident insurance company with operations in Japan and many other countries. AIG Property Casualty was formerly Chartis, but it was renamed in April 2013.
5. AIG Global Real Estate
AIG Global Real Estate is one of the few non-insurance companies owned by AIG. Founded in 1987, the company is an AIG group of companies that invests in, develops and manages real estate for AIG member companies worldwide. In the United States, the company is involved in residential, commercial, hotel and retail projects. It actively participates in commercial markets in Eastern Europe and mixed-use projects in multiple regions of Asia.The company includes AIG Affordable Housing, which manages nearly 100,000 multi-family homes in the United States, and Stowe Mountain Resort, which was sold to Vail Resorts in 2017.Today, AIG Global Real Estate manages and invests approximately US$20.2 billion in real estate.
Recent acquisitions and acquisition strategies
In 2018, AIG made several notable acquisitions to complement its products and services. These include Validus, a reinsurance platform, Glatfelter Insurance, which provides professional plans, and Ellipse, a company that provides income protection, group life and critical illness insurance products. According to AIG’s 2018 10-K, the company has set the goal of changing its business portfolio as its top priority in 2019 to best promote the growth of its top business.Although the company did not specifically mention mergers and acquisitions as a tool to achieve this goal, it seems reasonable to expect that AIG will continue to explore this possibility in the future.