The American International Group, once the world’s largest insurance company, made a big news splash back in 2008 and 2009 when it received a $182 billion bailout. The near-collapse and subsequent bailout of AIG can be summed up in two words: derivatives and deception. Some analysts would also cite the failure of Government regulation and supervision as a contributor, and probably rightfully so. Regardless of the politics involved, the mess at AIG sent shockwaves throughout the insurance industry. No one thought that the (once) largest insurer in the world could ever reach the point of insolvency.
The question we’ve been asked lately, especially from our business insurance customers, is where is AIG today? The answer, thankfully, is that AIG is alive and kicking and taxpayers have largely been made whole on the TARP bailout. To get to this point, the behemoth that was once AIG has been broken up and much of it sold off. AIG today is profitable once again, having posted a $1.8B net profit for the 2nd quarter of 2011. This return to profitability is good news for investors, taxpayers and policyholders alike. It means we can all be optimistic that taxpayers will be made completely whole, and that AIG will continue to be a strong player in the insurance industry for the foreseeable future.