AIG Insurance Review

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With nearly 100 years in business, American International Group (or AIG) is truly an international company, and one of the largest property & casualty insurers in the U.S. Their image is one of strength, in spite of the financial crisis of 2008 and the company receiving the largest U.S. government bailout of a private company to date.

AIG Overview

AIG was founded in 1919 in Shanghai, China, as American Asiatic Underwriters. The company grew incredibly fast, opening its first office in the U.S. in 1926 as American International Underwriters Corporation. Following many years of global expansion and subsidiary formation, the company officially became American International Group in 1967, and went public two years later.

By the early years of the 2000s, AIG was an enormous company, but not without a few problems. In this time, the corporation came under investigation by the Securities and Exchange Commission, eventually facing fines and criminal charges for some executives.

More trouble followed in 2008, when the company faced a financial crisis and wound up the recipient of an enormous and controversial bailout package from the U.S. government. By 2012, the government had sold the AIG stock and made a nice profit, and the following year AIG launched a media campaign thanking America for the bailout. That wasn’t the end of the controversy, though – a lawsuit regarding the legality of the way the bailout was handled was eventually settled in 2015.

During this process, AIG sold off a number of holdings in order to pay back loans and regain financial stability.

In spite of the controversy, AIG remains a huge international corporation, and in 2013 was the largest commercial property & casualty insurer in the U.S.

AIG’s products today include both personal and commercial lines coverage. Their main focus is on property & casualty, life insurance, and other financial products. AIG doesn’t write the traditional lines of personal insurance – although they do offer some options for home and auto through their Private Client Group, which caters to the extremely wealthy.

For the average person, AIG is more likely to be an option for life insurance, annuities, or retirement products. They also offer some health insurance products. Although they previously owned 21st Century Insurance, which sells more individual products such as auto insurance, that company was sold to Farmer’s Insurance during AIG’s financial crisis.

AIG products are sold both directly and through agents and brokers across the country. The website offers quick online quotes for life insurance products, but most other products require a more involved quoting process.

AIG’s headquarters is in New York, New York, with offices located around the world.
Among the companies in the group:

  • AIG Direct
  • American General Life Companies
  • VALIC
  • Western General
  • AIG Life and Retirement

AIG is also associated with a number of other insurance companies, including Lexington and Travel Guard.

The Bailout

The government bailout of AIG was perhaps one of the most reported and controversial of that time period. As previously noted, the bailout happened in 2008 when AIG ran into major financial difficulty following some major losses in various markets.

As AIG faced bankruptcy, the U.S. government approved an $85 billion bailout, the largest in history. Not long after, AIG paid out large bonuses to its executives, causing a great deal of general outrage.

After the bailout, AIG began a slow process of selling off assets, including the sale of 21st Century Insurance, American General Life, and Hartford Steam Boiler. Meanwhile, the U.S. Treasury began selling their shares in the company over time, eventually clearing them entirely.

A 2013 lawsuit made accusations that the particulars of the AIG bailout were illegal, alleging that AIG was treated to harsher measures than other companies. The lawsuit pointed out that government took over nearly 80% of the company and ousted the CEO – measures that contrasted with other large bailouts.

Behind the lawsuit were AIG shareholders and the CEO who lost his job through the process, Maurice Greenberg. In early 2015, they won the suit, with a judge acknowledging the federal government’s actions in relation to the buyout and AIG’s ability to pay back their debt were in fact illegal. At the end of the suit, however, no reparations were required.

The bailout was something of a culmination of a period of financial difficulty in the U.S., and AIG became one of the more memorable players. Although the financial aspect was settled by 2012, the lawsuit was settled in 2015, placing AIG only recently in a position to really put the entire event in the past.

Further down, we’ll talk more about how AIG has rebuilt its reputation and what the bailout and other controversies mean for potential clients of the company.

Personal Insurance Products

AIG products are divided between personal and commercial lines, with a much larger selection of products on the commercial side. Their personal lines products are centered on financial planning and estate planning, with most of the more common personal lines products absent.

The main areas of personal insurance from AIG are in life insurance and health coverage. Other personal products are mainly financial in nature. AIG does not generally write auto insurance, home insurance, or other vehicle insurance, with the exception of their Private Client Insurance.

Life Insurance

For 2014, AIG was ranked at #2 among America’s biggest life insurance companies by LifeHealthPro. They write a wide variety of different types of life insurance to meet the needs of nearly any customer, from traditional to more modern policy types.

  • Whole Life – AIG writes basic whole life insurance policies that provide stable premiums and a guaranteed death benefit along with a cash accumulation account.
  • Universal Life – These policies are designed to offer flexible premium options with a guaranteed death benefit as well as cash accumulation that can be accessed if needed.
  • Variable Universal Life – Similar to a Universal policy, but with even more flexibility, Variable Universal Life can be used as an investment as well as offering a guaranteed death benefit.
  • Index Universal Life – With a little more risk and less guarantee, this type of policy offers a more unusual investment opportunity within a Universal life insurance policy.
  • Term Life – AIG offers a range of terms and death benefits to allow individuals to get the coverage they need when they most need it.
  • Quality of Life Insurance – This unique and more modern product from AIG offers both a life insurance policy with a death benefit, but also allows access to the policy benefits during your lifetime. The policy uses flexible riders to offer living benefits for critical illness and other crisis situations that can have a major financial impact.

Accident & Health Insurance

AIG writes simple Accidental Death & Dismemberment policies available with no medical exam. These affordable policies provide benefits for a variety of accident injuries and death. They are available at several levels of benefits and price points.

Travel Insurance

AIG writes a wide variety of travel insurance policies through an association with Travel Guard. Policies include travel health, trip interruption, package policies, and more. AIG does not underwrite these policies.

Private Client Insurance

Unless you happen to be among the wealthiest people in the world, AIG’s Private Client Insurance plans won’t likely apply to you. According to the company, this program provides insurance for auto, home, yachts, excess liability and more to 40% of the Forbes list of wealthiest Americans. The program is designed to provide for the insurance needs of the very wealthy – made obvious by the available $100 million in excess liability coverage.

Financial Products

AIG offers a large range of financial products for individuals, for all ages and lifestyles.
Among them are:

  • Annuities
  • Mutual Funds
  • IRAs
  • Individual Investment Accounts
  • College Savings
  • Group Retirement
  • Real Estate Loans

Commercial Insurance Products

AIG is an enormous commercial insurer in the U.S., writing a large array of products for businesses large and small. Commercial insurance is written internationally and covers most aspects of business needs in a large number of industries.

AIG’s Commercial Insurance offerings include:

  • Accident and Health
  • Alternative Risk
  • Benefit Solutions
  • Crisis Management
  • Management Liability
  • Marine and Inland Marine
  • Mortgage Insurance
  • Political Risk
  • Professional Liability
  • Property & Casualty
  • Trade Credit
  • Travel Insurance
  • Surety
  • Warranty

Property & Casualty commercial policies are AIG’s bread and butter, and they consistently rank among the largest providers in the nation.

Their policies include coverage for:

  • Energy Warranty
  • Coastal Condo, Hotel, and Motels and their particular risks
  • Commercial Umbrella
  • Construction All-Risk coverage
  • Equipment Breakdown
  • Firearms Business Insurance
  • Fitness and Recreation Centers
  • Foreign Casualty
  • General Liability
  • Healthcare Liability
  • Human Services Program coverage
  • Large Limits property coverage
  • Offshore Property
  • Product Liability
  • Standalone Terrorism coverage
  • Worker’s Compensation

They also provide group insurance options for businesses including group retirement plans, life insurance plans, and other financial services. They assist companies in providing benefits packages to their employees as well as basics like Worker’s Comp.

Prices & Premiums

The vast majority of AIG’s products are not easily quotable, mainly because they require a great deal of information and rates can vary greatly.

AIG is a big company, but does not generally aim its products at the average person. The exception to this might be their life insurance and financial planning products. Because the company doesn’t position itself as a discount insurance company, and makes no effort to advertise itself as a budget option, it can be expected that most of the premiums won’t be the most competitive option on the market.

That said, AIG is a huge force in the life insurance market, which speaks to the fact that a large number of people are finding the products affordable as well as being a solid choice. AIG does offer online quoting for its term life insurance product, but requires personal information entered and contact information for a follow-up. This differs from some simple life insurance quoting options provided by other companies, which are without any sort of commitment to being contacted by the company afterward.

Most other products from AIG will require a more intensive pricing process in order to provide an accurate quote. The one area where they offer a number up front is with Accident & Health coverage, which they state is available from $9/month for $50,000 in coverage without a medical exam.

As a financial services company selling most of their products through agents and brokers, customers can expect agent commissions and fees to impact the rates. AIG is not likely to be the most affordable option for most people, but focuses on offering strong products and good customer service, instead of low rates.

Claims

Because AIG isn’t your usual insurance company, offering auto and homeowner’s policies that see a lot of simple claims, one can expect claims be handled a bit differently. Claims are not nearly as centralized as one would find with a typical personal lines insurance company.

A large number of different possible claims options are listed on the AIG website, including phone numbers for business claims in various parts of the country and of the world, travel insurance claims which are handled through Travel Guard, and claims for the Private Client Insurance program.

There is no online claims filing option, although this isn’t surprising considering the type of policy the company sells. Life and health insurance claims require a much different approach than do auto and home policies.

AIG offers their IntelliRisk Services program to help clients to manage their risks as well as their claims. This is an award-winning program for those with complex insurance needs, generally larger businesses. Much of their claims services are aimed at their commercial services, which are likely to require a great deal more than the less complex personal lines products.

All AIG claims are handled through a network of global and local services to provide localized information and approaches to handling the various types of claims AIG deals with.

Although a good number of the complaints out there do refer to the claims process at AIG, their overall number of complaints is generally low.

Consumer Feedback & Reviews

AIG is not BBB accredited, but has an A rating with the BBB. There are only 113 complaints lodged against the company based on the BBB record for their New York headquarters. That’s very low for so large a company, but may reflect the diverse nature of their products and services and their worldwide status. Complaints are not always lodged on the headquarters record, but instead against branch offices.

AIG also writes the type of insurance that doesn’t see quite as many online reviews and complaints. Because their policies don’t have the frequency of claims and customer service interaction of a company selling auto and home insurance, they are less likely to have a large number of reviews and complaints.

Similarly, the number of complaints on review sites like Consumer Affairs are on the low side as well. This may back up the idea that companies like AIG see fewer reviews overall, either positive or negative, since this particular site tends to attract people who have something to complain about.

Most of the complaints center around claims that have not been paid in a timely fashion or flat-out denied for various reasons, which the customers do not believe to be valid reasons. Complaints center around life insurance and accidental death and dismemberment insurance, with the odd complaint about other products such as travel. Overall, they are similar in nature to what other life and health insurance companies see in terms of complaints.

Of course, the biggest question most consumers will have regarding AIG is the major controversy regarding their accounting fraud charges and the firing and subsequent jailing of certain executives. While this sort of thing doesn’t tend to affect the average customer on a personal level, it is certainly damaging to the reputation of the company overall. The company seems to be trying very hard to move forward and put these problems in the past, but it will most certainly be a while before the general public forgets, particularly in a climate of general concern over the behavior of large corporations.

The financial security of the company is also something consumers will want to consider before purchasing an insurance product. Since the bailout, AIG seems to have landed on its feet and does not show any current signs of financial trouble. Still, they have a long way to go in restoring consumer confidence and opinion, much of which will simply come with time.

Bottom Line

In spite of a rocky few years, AIG today is stable and moving forward from the scandals and financial troubles of the past. There’s no evidence that consumers should have concerns regarding the company’s stability.

AIG is likely to be a good choice for those who need financial planning products and are seeking a good selection of life insurance products. In the commercial market, AIG is a very good bet for anyone needing nearly any form of business insurance. Their commercial programs are solid and very reputable, and cover a wide variety of risks. AIG is a top performer in both life and business insurance, making the company one to put high on the list of choices.

AIG is also the insurance company of choice for anyone who has a large number of assets to protect – generally the wealthy who are in need of comprehensive personal insurance. This insurance won’t apply to the larger percentage of the population, who will need to seek auto and home insurance coverage elsewhere. Some people of more modest may find this side of the company as something of a sign that the “little guy” isn’t an important client, although reviews don’t seem to support this.

Overall, the company has little of concern in terms of reviews and complaints on a consumer level, and is most certainly on the path towards a better reputation for the future.

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