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AIG: Multinational Insurance Corporation

November 30, 2015

America International Group, Inc. (AIG), although its very name would clearly show that it is a US company has an interesting history. The company did not start out in America at all but in China.

An America by the name of Cornelius Vander Starr founded a general insurance agency called America Asiatic Underwriters (AAU), in 1919, in Shanghai, China. Two years later, due to the rapid growth of the company, Cornelius created a life insurance operation. AAU did very well and had branches all over China and Southeast Asia, including Malaysia, Indonesia, and the Philippines.

Cornelius opened his first office in the US called American International Underwriters Corporation (AIU) in 1926. He also entered the Latin American market in the late 1930. Entering this market helped offset the slowdown in the Asian market due to the coming of World War II. From Shanghai, China, Cornelius moved his headquarters to New York City in 1939.

After World War II AIU entered Japan and Germany providing insurance for American military personnel. Cornelius started to focus on the American market by acquiring Globe & Rutgers Fire Insurance Company and its subsidiary, American Home Fire Insurance Company in 1952. By the end of the decade AIU’s operations covered 75 countries.

American International Group (AIG) was incorporated in 1967 as a unifying organization for most of the general and life insurances businesses of Cornelius. The company went public in 1967. AIG would continue its march to become a big insurance player in the global arena. Becoming so large it had to watch the political landscape it was operating in as various parts of the world was rapidly changing.

The company had its shares of close calls such as an accounting scandal in 2005. It also received a huge government bailout as a result of the 2008-2009 financial crisis.

What began in China in 1919 is now an American multinational insurance corporation with over 88 million customers in 130 countries. It employs more than 64,000 people in 90 countries. Operating income was at $10.5 billion for 2014 with total assets of $515.6 billion.

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