The AIG Story
Maurice R. Greenberg, Lawrence A. Cunningham
Format: PDF / Kindle (mobi) / ePub
The AIG Story first chronicles the origins of the company and its relentless pioneering of open markets everywhere in the world from 1970 to 2005. It then explores how the company faltered after it adopted a one-size-fits-all corporate governance structure that turned the company upside down and put it at the center of the 2008 financial crisis where the authorities seized upon it as both scapegoat and solution to the crisis. Produced based on a combination of co-author Hank Greenberg's personal involvement and the craftsmanship and objective writing of Professor Lawrence Cunningham, this book:
- Corrects common misconceptions about AIG that arose due to its role at the center of the financial crisis of 2008.
- Portrays one of the iconic businesses of the twentieth century which developed close relationships with many of the most important world leaders of the period and helped to open markets everywhere.
- Opens new critical perspective on battles with N. Y. Attorney General Eliot Spitzer and the 2008 U.S. government seizure of AIG amid the financial crisis.
- Shares confidential information publicly for the first time.
The AIG Story captures an impressive saga in business history--one of innovation, vision and leadership at a company that was almost destroyed with a few strokes of governmental pens. The AIG Story carries important lessons and implications for the U.S., especially its role in international affairs, its approach to business, its legal system and its handling of financial crises.
executives listened in amazement to these radical ideas, Greenberg argued that the goal should be to make an underwriting profit, meaning keeping both losses and expenses low as a percentage of premiums. The percentage of premiums absorbed by expenses, called the “expense ratio,” is an indicator of an insurance company’s operational efficiency. It tends to be higher in agency businesses than for direct underwriters because agents have less incentive to control costs. At American Home in this
in late 1993 at President Nixon’s home in Saddle River, New Jersey, Greenberg persuaded him otherwise. They were discussing Nixon’s foreign policy accomplishments, epitomized by reopening relations between America and China. Greenberg suggested making the American national interest the basis for the center. Greenberg became the founding chairman, joined by board members Henry Kissinger, Brent Scowcroft, and James Schlesinger. The Starr Foundation was a leading benefactor. Devoted to promoting
contemporary recipient was Chiharu (“Chick”) Igaya, a Japanese Olympic skiing champion, who attended Dartmouth University on a scholarship that Starr had provided.7 Starr described Igaya as a protégé and asked Smith if he could help find Igaya a spot in a U.S. insurance training program. Smith obliged. Shortly thereafter, Starr sent an assistant to visit Greenberg in Chicago to probe whether he might be willing to leave Continental Casualty to join one of his companies. Greenberg made it clear
specifically sought by them has been produced. 12. Brady Dennis & Robert O’Harrow Jr., “A Crack in the System,” Washington Post (December 30, 2008). 13. This episode has been widely reported. See, for example, Brooke A. Masters, Spoiling for a Fight: The Rise of Eliot Spitzer (New York: Times Books, 2006), 231; Peter Elkind, Rough Justice: The Rise and Fall of Eliot Spitzer (New York: Portfolio, 2010), 84. 14. See Greg Sargent and John Benson, “El-iot! Can Spitzer Go to 1600?” New York
Press, 2006), 40. 36. Terry Frieden, “FBI Warns of Mortgage Fraud ‘Epidemic’: Seeks to Head off ‘Next S&L Crisis,’” CNN (September 17, 2004), available at www.cnn.com/2004/LAW/09/17/mortgage.fraud. 37. Spitzer’s foray into subprime alleged that high-interest loans made by large national banks were disproportionately made to minority groups, violating state fair lending laws. Federal banking authorities challenged the power of states such as New York to pursue such claims. The Supreme Court