AIG: Rise, Fall, and Rebirth - [Business Breakdowns, EP.187]

Today, we are breaking down the insurance giant AIG. AIG's story is one of a remarkable turnaround, a tale of a global insurance giant emerging from near collapse during the great financial crisis. Over nearly two decades, AIG has transformed itself into a more focused and efficient property and casualty insurer.  

To grasp the magnitude of AIG's journey, consider this: During the financial crisis, the company required a $180 billion bailout from the U. S. government, a sum it fully repaid with interest. 

To help tell the story of AIG's transformation and its current position, I'm joined by Austin Hawley, Portfolio Manager at Diamond Hill. Today, under Peter Zaffino's leadership, AIG has refocused its underwriting efforts, returning to profitability while divesting noncore businesses, including the demerger of its life insurance arm, Corebridge. The AIG of today stands as a near pure play specialty insurer with a focus on achieving top-quartile industry returns. Please enjoy this breakdown of AIG

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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Show Notes

(00:00:00) Introduction to Business Breakdowns

(00:04:57) AIG: A Tale of Turnaround

(00:05:31) Understanding PNC Insurance

(00:06:56) AIG's Historical Context

(00:09:58) AIG's Post-Crisis Struggles

(00:15:17) The 2017 Management Overhaul

(00:21:42) Berkshire Hathaway's Role

(00:24:26) Strategic Moves and Divestitures

(00:28:32) AIG's Strategic Transformation

(00:30:40) Understanding AIG's Business Metrics

(00:32:10) Specialty Lines and Global Footprint

(00:33:31) AIG's Niche Businesses

(00:34:47) Evaluating Insurance Companies

(00:38:04) Competitive Advantages in Insurance

(00:42:04) Pricing Environment and Market Dynamics

(00:45:35) AIG's Investment Strategy

(00:48:25) Competitors and Comparisons

(00:50:03) Lessons from Breaking Down AIG's Turnaround