AIG is still one of the world's largest insurance and financial services companies, the #1 commercial insurer in North America and also a leader in fixed-rate annuity pensions. In 2008, however, it was almost bankrupted by its investments in subprime mortgages and credit insurance. Too big to be allowed to fail, it was only saved by an extraordinary package of financial aid from the US Treasury, increased several times to a total commitment of over $180bn. It had been expected to repay that debt by selling off non-core operations, but buyers were not at first easy to find. As a result, the group was split up. It still owns most of its commercial property & casualty operations and the global personal life & pensions business. For a while these were rebranded as Chartis and Sun America respectively, to limit contagion from the AIG brand. Several other businesses were sold or spun off, including most international operations. Its former Asia subsidiary now operates entirely independently as AIA. Another large part of the group was sold to rival MetLife. Gradually, CEO Robert Benmosche was able to turn around the surviving business, allowing the US government to sell all of its shareholding in AIG during 2012 at a significant profit. He was succeeded as CEO in 2014 by Peter Hancock. Revenues for 2016 were $52bn, down from over $110bn in the mid 2000s. An unexpected $3bn loss in the final quarter, mainly from higher than anticipated payouts on commercial policies, resulted in an $850m loss for the year, its first annual deficit since the 2008/9 crash. That prompted Hancock's sudden resignation in March 2017. He was eventually replaced by Brian Duperreault, who has steered the group away from risky investments and focused it on traditional insurance underwriting. Even so, a massive tax write-off in 2017 resulted in an even bigger net loss of $6.1bn, on revenues of $49.5bn. Pre-tax profit was $1.5bn. Just under two-thirds of revenues are generated by general insurance; the remainder mostly from life and retirement. The business was originally founded in China in 1919 by American entrepreneur Cornelius Vander Starr, and expanded its global footprint initially across Asia and then into Europe after WWII to serve American military personnel overseas. It became a global leader in insurance and pensions during the 1970's under Starr's successor Hank Greenberg, partly as a result of numerous acquisitions in the US including domestic rivals American General and Sun America.
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Capsule checked 28th December 2018
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