AIG traces its roots to China in 1919, when a young American entrepreneur named Cornelius Vander Starr arrived in Shanghai and formed a small insurance agency which he named American Asiatic Underwriters. The agency initially specialized in fire coverage and later branched out into other areas, including casualty and marine lines. Two years later, he established Asia Life Insurance Company to market life insurance products to the Chinese. During the 1920s, both companies expanded their operations into other Chinese cities and neighboring countries of Southeast Asia. Starting from a two-room office, Starr in 1927 moved his combined operations into larger quarters located at #17 The Bund on Shanghai’s busy waterfront.

In 1926, Starr determined he needed an office in the United States, and established American International Underwriters (AIU) in New York with the aim of forging closer relationships with the U.S. insurers he represented in Asia. During the 1930s, the Starr companies expanded into other overseas markets, including in Latin America. When the Asian markets were effectively shuttered during World War II, Starr moved the headquarters to New York in 1939 and the business in Latin America kept the enterprise alive.

Following the end of the war, re-establishing the Asian business was a priority for Starr. In 1947, he formed The Philippine American Life and General Insurance Company (Philamlife), which is today the largest life company in that nation, and established American International Assurance Company, Ltd. (AIA) to re-enter the life insurance markets of Southeast Asia. Asia Life was also reactivated at that time as American Life Insurance Company (ALICO) and assigned the life markets of Latin America, Africa and the Middle East. AIU also entered Germany and Japan to serve the insurance needs of the U.S. military forces in those countries. By the end of the 1950s, the Starr companies were represented in approximately 75 countries around the world.

Building in the United States

The 1960s were important years for the Starr group in the United States. In 1952, one of the Starr companies had purchased a majority interest in Globe & Rutgers Fire Insurance Company, which later took the name of its subsidiary, American Home Assurance Company. Now, under its new leader Maurice R. Greenberg, American Home was transformed away from an agency company to one selling through brokers, concentrating on larger commercial and industrial risks. It also developed substantial reinsurance facilities, enabling the company to write larger shares of major risks. This pattern became the strategy Greenberg applied to other acquisitions he consummated in the 1960s: the New Hampshire Insurance Company; National Union Fire Insurance Company of Pittsburgh, Pa and its subsidiary Lexington Insurance Company; Commerce and Industry Insurance Company; and Transatlantic Reinsurance Company. These companies form the basis today of AIG Commercial Insurance in the United States.

In an effort to rationalize the corporate structure, American International Group, Inc. (AIG) was formed in 1967 to hold the shares of the Starr domestic companies. Two years later, AIG went public with Greenberg as President and CEO. In 1970, through a series of steps, AIG acquired the AIU agency business. At this point, all the businesses were now under one roof. AIG shares were listed on the New York Stock Exchange in 1984.

A series of U.S. acquisitions in the 1980s further enhanced AIG’s specialty capabilities. Southeastern Aviation Underwriters was acquired in 1983 and under its new name, AIG Aviation, Inc., has become a major player in the global aviation insurance market. United Guaranty Corporation, a North Carolina holding company for a group of mortgage guaranty insurance companies, was acquired in 1982 and now ranks among the top four mortgage guaranty insurers with a growing international presence. Audubon Insurance Group, based in Baton Rouge, Louisiana, expanded AIG’s capabilities in agency-produced personal and small business lines. AIG also entered the personal lines market in the U.S., developing a direct response auto business based in Wilmington,

Delaware. This position was augmented by AIG's purchase of a majority interest in a California low-cost direct auto writer, 20th Century Industries, in 1994. AIG purchased the outstanding minority interest in what had been renamed 21st Century Insurance Group in 2007.

An Industry Leader

By the end of the 1980s, AIG reported revenues of $14 billion, assets of $46 billion and net income of $1.37 billion. The company had become the largest underwriter of commercial and industrial coverages in the United States and the leading international insurance organization. AIG was on the cutting edge of innovation in the insurance industry, among the leading providers of directors and officers insurance, environmental insurance and other management liability products.

 In the 1990s, AIG continued its international expansion, led by its return to China as the first foreign insurance organization granted a license by the Chinese authorities to operate a wholly-owned insurance business in Shanghai. AIG’s operations in China later expanded to other key cities, including Guangzhou, Shenzhen and most recently Beijing. AIG entered Vietnam in 2000 as the first foreign life company to be licensed there, and in 2001 established two joint ventures in general insurance and life insurance in India with the Tata Group, the leading Indian industrial conglomerate. New companies also followed in the wake of the break-up of the Soviet Union, with general and life companies formed in Russia, Poland, Hungary, the Czech Republic and other emerging markets.

Expanding into Financial Services

AIG’s Financial Services Group, formed in the late 1980s, grew rapidly in the 1990s through highly targeted operations that complemented AIG’s insurance businesses. The first to be established was AIG Financial Products Corp., formed in 1987 to specialize in complex derivative product transactions. Several years later, AIG Trading Group, Inc. was formed to engage in hedged trading and market making activities in foreign exchange, precious metals and energy. Later, these two units were consolidated into the AIG Capital Markets Group. A major acquisition in financial services occurred in 1990 when AIG acquired International Lease Finance Corporation (ILFC), the international market leader in leasing and remarketing advanced technology commercial jet aircraft to airlines around the world.

A major step into the retirement savings market came in 1999 when AIG acquired SunAmerica, Inc. a leading provider of life insurance, retirement savings products, annuities and mutual funds. It was AIG’s largest acquisition at the time. In the same year, AIG formed the Asset Management Group to bring together the company’s growing global third-party asset management business along with AIG’s insurance invested assets. Now known as AIG Investments, its businesses include institutional and individual asset management, broker-dealer services, private banking and spread-based investment programs. The Asset Management Group also includes AIG Private Bank Ltd., AIG Global Real Estate, and the AIG SunAmerica mutual funds.

AIG in the New Century

In a move to expand further its general insurance business, AIG acquired HSB Group, Inc. in 2000. This company is the parent of The Hartford Steam Boiler Inspection and Insurance Company, the leading provider of equipment breakdown insurance and engineering services to businesses, industries and institutions. A specialty company with an outstanding reputation, HSB fits well into AIG’s portfolio of general insurance operations.

In 2001, AIG made its largest acquisition ever when it purchased American General Corporation, a leading U.S. life insurer as well as one of the largest providers of fixed and variable annuities in the United States. This acquisition propelled AIG for the first time into the front ranks of the U.S. life insurance industry. In addition, American General had a consumer lending business, American General Finance, Inc., which added to the overall scope of AIG’s growing worldwide consumer finance business. As the American General operations have been integrated into AIG’s life insurance, financial services and asset management businesses, they have increasingly been identified with the AIG brand, and today AIG American General, AIG Annuity Insurance Company and AIG Retirement Services, Inc. all carry the AIG brand in their corporate names.

In early 2005, after 45 years of service and an unprecedented record of financial and business growth and success, M.R. Greenberg retired as Chairman and CEO of AIG. He was succeeded by Martin J. Sullivan and President and CEO, with Frank Zarb as interim Chairman. In his three years as AIG’s CEO, Mr. Sullivan dealt adeptly with a number of significant legal and governance issues that faced the company, and also made significant contributions in executing AIG’s strategy and building on its unmatched global franchise. Mr. Sullivan resigned from AIG in 2008, and was succeeded as CEO by Robert B. Willumstad. Mr. Willumstad, who was formerly President and Chief Operating Office of Citigroup, Inc., had been elected to the AIG Board of Directors in 2006 and was named AIG's non-Executive Chairman that same year. Mr. Willumstad now holds both the CEO and Chairman positions.