American International Group's (AIG) Growth and Future: The Greenberg Factor
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Code : LDS0011
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Region : USA |
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Introduction: American InternationalGroup (AIG) is a leading global insurance and financial services organization operating through its subsidiaries in 130 countries and jurisdictionsworldwide. AIG’s global businesses include financial services, retirement services and assetmanagement.Maurice “Hank”Greenberg’s (Greenberg) charismatic leadership and product innovation built a small international insurance company into a global financial powerhouse. Under his leadership, themarket value of company increased from $452 million in 19696 to $168.5 billion in 2004, while the net revenues increased from $456 million7 to nearly $100 billion.8 But with the introduction of new corporate governance regulations in 2002 mandating the inclusion ofmany independent directors in the board, his prominence started declining. In addition, since 2004, AIG has been facing regulatory probes over its non-traditional reinsurance plans and its accountingmethods. New YorkAttorney General Eliot Spitzer (Spitzer) aswell as the Securities and Exchange Commission (SEC) and the JusticeDepartment are investigating whether the company has improperly bolstered its reserves and exacted smooth earnings. This resulted in Greenberg’s era ofmore than three decades coming to an end. Analysts are skeptical over the future of the company since Greenberg still indirectly controls AIGthrough hismajority stock ownership. |
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