...Title: American Insurance Group (AIG) Group Name: Date: Executive Summary: Company Background American International Group, Inc. (AIG) is a world leader in insurance and financial services. It is a holding company for a network of subsidiaries primarily engaged in insurance and insurance-related activities, including property, casualty, life, financial services, retirement savings products, asset management, and aircraft leasing. It is headquartered in New York City, and operates in more than 130 countries and jurisdictions. In 2006, AIG had sales of $113 billion and 116,000 employees (Saporito, 2009). According to the 2008 Forbes Global 2000 list, AIG was once the 18th-largest public company in the world. Its common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. AIG faltered in America’s sub-prime mortgage crisis. It had traded heavily in credit default swaps and could not meet its obligations. In that case, United States government came to its rescue with an $85 billion bailout on September 16, 2008. As of March 2009, AIG has taken a major step toward cleaning up its image by reorganizing its insurance units under American International Underwriters. It is the foreign general insurance segment of AIG. AIU and its subsidiary brands are now distinct from AIG (National News, 2009). The holding company, itself, is currently undergoing rebranding that includes a new name, which is expected to be revealed in the near...
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...Introduction GP Ocean Food Sdn Bhd, which was founded in 1980, is Malaysia’s first and biggest fully integrated seafood producer which includes activities encompass trawling, aquaculture of fish and prawns and seafood processing. It is also an investment holding company. This company advantageously located in the Federal Territory of Labuan, Malaysia in order to provide easy access to deliver the products. In addition, more than 70% of the sales are exported to US, EU countries, Japan and others. Scandle 1 Problem Malaysia, just like other developing countries, is unable to run away from the corporate scandals that have been emphasized by the media. After all the recommendation and efforts contributed by the various parties to eliminate these scandals, however it is still happening and there is no sign of stopping or reduction of the fraud in the future. Though GP Ocean Food Sdn Bhd is a well-known company, but the former company directors of seafood exporter have been acquitted of charges of submitting misleading information to the Securities Commission (SC) in 2006. Some even were charged with bribing case in order for their company to get listed in Bursa Malaysia. The company was highly involved with various allegations of corruption and irregularities. Besides, GP Ocean was scheduled to be listed in July 2006, but the company announced a rescheduling of that event in early June which was two weeks before its pamphlet was to be launched. After the approval...
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...An analysis of American International Group (AIG) indicates that it is a multinational insurance corporation that operates across the globe with around 88 million customers in its database. The company accounts for employing more than 64000 people across 90 countries. There are three major types of businesses that are currently operated by the company and these include AIG Property Casualty, AIG Life and Retirement and United Guarantee Corporation. These are the three important divisions that are noted in respect to AIG and they accounts for providing different insurance products and services to its customers. As for instance, AIG Property Casualty accounts for providing insurance products especially in respect to segments involving commercial, institutional and individual customers whereas AIG Life accounts for providing life insurance and retirement services to its customers. With regard to the UGC section, it focuses on providing mortgage guarantee insurance and mortgage insurance to its customers. Thus, the AIG Group as a whole accounts for providing insurance services of different categories to its larger customer database that is widely diversified, and its services are available throughout the globe. Following the financial crisis of 2008, the financial industry suffered backlash from the public following a historic and infamous series of events that threatened America’s economy. From media pundits to organized efforts such as the “Occupy: Wall Street” movement, there...
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...manufactured 500 different kinds of steel used in everything from General Motors (GM ) cars to Maytag (MYG ) appliances. These days, the sprawling site, which spans both banks of the Cuyahoga River, is largely still. Just two mills, manned by about 1,200 workers are still operating, although at something far below capacity. To most observers, the Cleveland plant looks like the last gasp of a dying Rust Belt behemoth, but not to Wilbur L. Ross. Ross is a collector of the junked, the unloved, the wretched refuse of an economy that has mostly given up making things in favor of buying them elsewhere. Ross, who picked up the plant for a song in February, 2002, is almost laughably contrarian. In May, he added mammoth Bethlehem Steel to his International Steel Group Inc. He has also bet big on Japanese banks, Korean insurance, U.S. textiles, and telecom. All are part of his growing empire of the damned. QUICK TURNAROUNDS At 66, an age when peers are looking toward retirement, Ross is taking on more risk, bigger deals, and wilder bets than ever. Three years ago he gave up the security of Rothschild Inc., a global investment bank, where he had spent 24 years as an adviser to the creditors and stockholders of blowups such...
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...Ethics Paper: AIG Introduction American International Group Inc. (AIG) is a multi trillion dollar insurance giant. AIG originated in China in 1919 and was perceived as a humble honest company (Gilani, 2008). Within the last few years AIG has been at the forefront of much debate about their financial decisions. A few attributed to AIGs demise was their accumulation of misplaced bets on credit default swaps. AIG also was ran by a CEO named Maurice R. Greenherg who grew the company aggressively and diversified the insurance company to a trillion-dollar balance sheet. AIG found its investments going bad when the housing market began to crash (AIG: What Went Wrong). Analysis AIG was the world’s largest insurance company. The company originally a humble honest company that was founded in China in 1919 and up until recently had a reputable reputation. There are many steps leading up to AIGs financial hardships such as their participated in global trade of derivatives and invested in mortgage-related investment portfolios and collateral calls on credit defaults (Actions Related to AIG). An associate company of AIG was writing insurance in the form of credit default swaps. These swaps offered buyers protection against losses on debts and loans of borrowers in the amount of $447 billion (Gilani, 2008). AIG also participated in collateralized debt obligations (CDOs) that mainly incorporated subprime mortgages and Alt-A mortgages, just to name a few. AIG used these premiums as...
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...INTRODUCTION AIGFP was founded in 1987. Henry Sosin and two others persuaded CEO Hank Greenberg to create a division focused on investments that fed on AIG’s AAA rating. AIGFP had made more than $60 million in the first six months. Sosin left in 1993 and was replaced as CEO by Tom Savage. In 1998, AIGFP had revenue of $500 million and had yet to divulge in credit-default swaps. However, later that year, with the backing of Joe Cassano, who was at the time COO, Savage signed off on the backing of JP Morgan’s complex debt. This is where credit-default swaps were first acted on. These credit-default swaps were a series of payments made to a buyer in which the seller would compensate the buyer if the buyer defaulted on the loan. In 2000, Cassano took over as CEO. According to the numbers, the company had brought in over $1 billion that year. In 2002, it came out that AIGFP had helped conceal the bad assets of PNC Financial services by setting up a “special purpose entity” to undertake the assets. By 2004, AIG had paid an $80 million fine for helping conceal these bad assets. Later in 2005, rumors about bad accounting practices were going around and Hank Greenberg stepped down as his role of CEO. When he did this, credit-rating agencies dropped AIG’s credit rating from AAA to AA. This required AIGFP to have over $1 billion in collateral for their credit default swaps. After taking a second look at the portfolio, it became alarming that many of the credit-default swaps...
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...Insert name Tutor Course Date Introduction American International Group, Inc. (AIG) is an American insurance company. Its business headquarters are situated in the American International Building of New York City. The British headquarters is located on the Fenchurch Street of London while the European headquarters is situated in La Défense, Paris, while the Asian main office is situated in Hong Kong. Reports from the 2008 Forbes Global 2000 listing highlighted that AIG was by then the 18th-biggest public corporation worldwide, and also appeared in the reports of the Dow Jones Industrial survey between April 8, 2004 and September 22, 2008. AIG experienced a liquidity catastrophe when its financial ratings dropped below "AA" rankings around September 2008. The U. S. Federal Reserve Bank on September 16, 2008 formed an $85 billion credit capacity to allow the company to overcome its increased collateral requirements following the credit ranking downgrade, in a swap over for the issuance assets merit to the Federal Reserve Bank for 79.9% equity of the AIG. The Federal Reserve Bank along with the U. S. treasury around May 2009 extended the potential monetary boost to the AIG, with the enhancement support in form of $70 billion investment, of which $60 billion was channeled on credit line as well as $52.5 billion to purchase mortgage-based properties belonging to or insured by AIG, raising the total sum available to around $182.5 billion. AIG later sold some of its...
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...A Team Experience While taking the required Business 305 course, I was assigned to a group in order to complete a required project. The subject we decided to write about was the scandal created by AIG Insurance and its effects on the economy. Based on the abundance of information available for this topic, the group believed that we would have no problems completing the project. Everyone in the group seemed to be a team player in the early stages of our brainstorming sessions. The group decided to divide the tasks at hand between the 4 members, and we were confident that each one of us would easily accomplish our portion of the assignment. During our class meetings, we briefly consulted one another about the progress each of us was making. Everyone in the group seemed to be moving along just fine. The group decided to schedule a time to meet, in order to discuss our progress thus far or any questions we might have. At the first meeting, one of the group members did not show up, even though she said she was available. The 3 of us who showed up decided to continue without her. At the next class meeting, the person who did not show apologized for her absence and told us that everything was just fine on her end. We decided to meet again on the CSULA campus, everyone agreed to the time and place. Once again the same student did not show up, we went about our business, discussing the project. After the meeting we decided to send the missing classmate an email...
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...AIG Liquidity Crisis American International Group, Inc is an American insurance corporation that was founded in 1919 (Sjostrom, 2009). The company operates in over 130 countries. Founder, Cornelius Vander Starr, ran the company until 1968 when he turned AIG over to Hank Greenberg. At that time, AIG was a privately held corporation (How Hank Did It). Greenberg had been running AIG for 37 years, longer than any other U.S. major corporation CEO. HeGreenberg transformed the company into the largest insurer in the world, made AIG the number 9 company on the Fortune 500 list, and at the end of 2005 the company’s $850 billion of assets made it the fourth largest company in the U.S. (How Hank Did It). The company consists of general insurance, life insurance & retirement services, and financial services and asset management. The general insurance unit engages in commercial property, casualty, workers’ compensation, and mortgage guarantee insurance. The financial services unit leases capital for equipment and aircraft, capital market transactions, consumer finance, and insurance premium finance. The asset management division engages in several investment related services and investment products to individuals, institutions, and pension funds (Sjostrom, 2009). In February 2005, American International Group, Inc. was subpoenaed by Eliot Spitzer, New York state’s attorney general, for documents relating to accounting fraud having to do with transactions known as finite...
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...Coping With Financial and Ethical risks AT A.I.G 1. American International Group’s headquarters is located in the American International building in New York. It is a company that is primarily engaged in insurance-related activities in the U.S and abroad, and offers services in more than 130 countries with 116,000 employees worldwide. AIG’s four major segments are general insurance, life insurance and retirement services, financial services and asset management. It was ranked as 16th in Fortune 500 in 2010 and was also known as the world’s fourth largest company according to “Global Forbes” in 2000. The company’s leading position in the global financial services market gives it significant bargaining power. However, exposure to the U.S sub prime crisis was the reason for its collapse. The AIG Financial Products unit, unfortunately, was operating as a company within the larger company in that the 500 employees of the unit who specialized in derivatives and complex financial contracts that were tied to subprime mortgages, sold credit default swaps (CDS) to financial institutions who in turn sold mortgage-based securities to the public. This of course contributed to the financial crisis of 2008 in that banks sold mortgages to people who were not credit worthy, because they received credit protection as a result. AIG made these collateralized debt obligations deals with a very small fraction of actual money on hand. Because most of the CDOs were attached to home mortgages...
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...The Ethical Dilemma of AIG Fair or Foul? A matter of public opinion. American International Group (AIG) was established in 1919 by Cornelius Vander Starr in Shanghai, China. He became the first westerner in Shanghai to sell insurance to the Chinese. After turbulent times and the hostile takeover of the communist regime, he left for greener pastures in 1949 and ended up in New York City. While in New York, the company began to grow and prosper. I wide range of premium services was being offered and the future looked bright. The company went public in 1969. Fast-forward thirty-five years, no one could have prepared for what was about to happen. In 2005 an accounting scandal rocked AIG to the tune of $1.6 billion. Criminal charges were filed against many of the company’s top executives. The summer of 2008 was a time that began to send shockwaves around all of the world markets. Financial statements were disclosed and stock prices began to fall rapidly. On September 16, 2008 AIG suffered a liquidity crisis following the downgrade of its credit rating. Industry practice permitted firms with the highest credit ratings to engage in high-risk investment practices. Credit default swaps without depositing any form of collateral with their trading counter-parties. The Federal Reserve announced the creation of a secured credit facility of up to $85 billion to keep the company from completely collapsing. In exchange, the government would receive an 80% equity...
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...INTRODUCTION Who does one look to blame for the cause of the entire 2008 United States financial crisis? It is hard to point fingers at exactly one person because it was such an intertwined disaster, as far as involvement in the cause of the collapse. One thing is certain, however, American International Group (AIG) and American International Group Financial Products (AIGFP) were directly in the center of the collapse. Within AIG and AIGFP, a few managers stood out when it came to involvement in the financial scandal. Maurice “Hank” Greenberg is one manager that undeniably stands out. He was the founder and Chief Executive Officer of AIG until 2005. He micromanaged his workers and gave them little freedom (Bandler, Boyd, and Burke). Obviously, his managing tactics influenced the demographics of AIG tremendously. Joe Cassano, another core manager, was the CEO of AIGFP. He implemented credit-default swaps (CDSs) and oversold them, resulting in AIG having to file for bankruptcy because it couldn’t pay the buyers of these CDSs back (Serwer and Sloan). While these two men were heavily involved in the cause of the collapse, they raised many questions regarding the fact that AIG’s questionable decisions passed regulations and audits. Many people have looked into how AIG and AIGFP didn’t cause fuss while they were getting audited. How did they pass all of these regulations without any problems? It has been noted that Greenberg had previous relations with a lot of so-called “big-shots”...
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...Outrage Conclusion Bibliography Cornelius Vander Starr - Established an insurance agency in Shanghai, China. -The first Westerner in Shanghai to sell insurance to the Chinese in 1949. -Management of the company’s lagging U.S and holdings to Maurice R. Greenberg. M.R.Greenberg -American businessman and former chairman and CEO of AIG -The world’s 18th largest public company. -Selling insurance through independent brokers rather than agents to eliminate agent salaries. -Currently CEO of C.V.Starr and Company. 1919 American Asiatic Underwriters(AAU) -Sell American insurances in Shanghai. Asia Life Insurance Company - Target is Chinese to sell life insurance - Hong Kong, Indonesia, Philippine, Jakarta. 1926 American International Underwriters(AIU) - Header agent in America, they were guarantee for American’s accidents.(started from Home foreign business) -New strong agent in Latin America around 1930~45 1968 -Starr died and Greenberg became a CEO 1970 -Greenberg was succeeded as CEO by Martin J,Sullivan. -Martin J. Sullivan began his career at AIG in London Office. 1984 -AIG listed their stocks on New York stocks exchanges and AIG be came the largest insurance company. 2005 -Became embroiled in a series of fraude investigations conducted by the Securities and Exchange Commission, U.S Justice Department, and New York State Attorney General’s office. -The New York Attorney General’s investigation led to a $1.6 billion fine for AIG. 2008 ...
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...AIG: From Bailout to Bonuses (2008) Based on a paper by: Paige Vandermyn & Holden Canty Summary by: Andrew F. Roberts During 2008's "too big to fail" bailouts exercised by the federal reserve, many struggling multi-national companies were awarded cash in hopes of avoiding bankruptcy. One company deemed simply too big to fail was the American International Group, Inc. (AIG for short), which provides insurance for individuals and businesses. The company, which would have almost certainly been forced into bankruptcy if not for the bailout, received hundreds of millions of dollars to keep from drowning. However, in an utterly shocking series of events, the company paid $218 million to top executives in bonus money. In a completely unethical fashion, the company used taxpayer bailout money to fund vacations and private jet flights to the executives who many blamed for causing AIG's financial troubles in the first place. Additionally, many senior employees were flown to California for a "retreat" including spa treatments and golf outings. This retreat cost over $400,000 dollars. By the end of 2008, AIG had received over $100 billion in bailout money. Unfortunately, the general public was not sure if the money was going toward improving business of simply paying for luxuries of the organization. These actions by AIG completely ignored each and every theory related to the study of ethics. In regards to the individualistic theory of ethics, AIG seemingly followed...
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...completed post-graduate studies at the University of Ottawa. Louise Arbour is an internationally renowned judge and lawyer who became the United Nations High Commissioner for Human Rights in 2004. She previously served as a judge for the Supreme Court of Canada, and gained fame for her role as Chief Prosecutor during The International Criminal Tribunals relating to war crimes in Rwanda and the former Yugoslavia. Louise Arbour has shown a lot of leadership character traits but the main three U.S. Marine Leadership Traits she has shown are; Decisiveness, justice, and integrity. Louise Arbour’s decisiveness impacted many aspects of Canadians lives. The new facilities and programs created jobs for the general population. Providing opportunities for the inmates to become productive members of society upon their release, increased the possibility that the offenders would not be returning to the system, thus reducing the drain on the public purse. Louise Arbour’s many justice efforts span all aspects of peace keeping from preventing and resolving deadly conflict with the International Crisis Group, to seeking justice for war crimes and genocide with the International Criminal Tribunals, and ensuring the human rights for all as the UN high commissioner for Human Rights. Louise was determined to bring deserving criminals to justice and that shows another one of Louise’s leadership trait; Justice. Louise Arbour concerned for the protection of socio-economic rights that were...
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