AMERICAN INTERNATIONAL GROUP, INC. (AIG)

American International Group emerged from humble beginnings in 1919 as an underwriter of unusual insurance risks—the kind major carriers wouldn’t touch. Founded by C.V. Starr in Shanghai, the company built a reputation for bold underwriting and global reach during an era when international insurance was still a frontier business. By mid-century, AIG had woven itself into the fabric of global commerce, known for writing coverage on everything from shipping losses in war zones to specialized industrial risks that other insurers dismissed as uninsurable.

The decades that followed saw AIG transform into something far larger: a financial conglomerate that didn’t just write insurance but accumulated assets, invested capital, and created derivative products that would eventually become a centerpiece of modern finance. Under Hank Greenberg’s leadership starting in 1970, AIG became a juggernaut—by the early 2000s, the company had tentacles in property-casualty insurance, life insurance, aircraft leasing, financial services, and derivatives trading through its Financial Products division. This diversification made AIG one of the world’s largest and most complex insurance organizations, with operations spanning more than 130 countries.

That complexity would prove catastrophic. AIG’s Financial Products division had become a factory for credit default swaps, particularly those tied to mortgage-backed securities. When the housing market collapsed in 2008, those derivative positions exploded into losses that the company could neither absorb nor easily offload. In September 2008, facing imminent collapse, AIG required a government intervention that would eventually total $182 billion—the largest bailout in American history. The bailout was politically toxic and economically necessary, as AIG’s failure would have cascaded through the financial system in ways that made the damage seem small by comparison.

The post-bailout AIG spent years in receivership and restructuring, selling major divisions, shrinking operations, and repaying the government. The company that emerged was no longer a financial engineering powerhouse but a more conventional (though still massive) insurance operator. Starwood Property Trust was spun off, General Electric acquired most of the aircraft leasing business, and the life insurance units were gradually shed or consolidated. By the early 2020s, AIG had become primarily a property-casualty and specialty insurance business, with a much simpler capital structure and a stated focus on underwriting discipline over financial leverage.

Today, AIG operates as a diversified insurer writing commercial property, casualty, and specialty lines for large corporations and institutions, alongside consumer-focused auto and homeowners policies. The 2008 crisis remains the defining moment in the company’s modern history—a reminder that even the largest financial institutions can encounter risks they failed to properly understand or quantify. The transformation from near-extinct conglomerate back to functioning insurer is itself a remarkable feat, though the AIG of the 2020s bears little resemblance to the ambitious, leverage-heavy machine of the pre-crisis years.