The Account List That Didn't Exist
When Peter Zaffino arrived at AIG in 2017 as the new chief operating officer, he made what any incoming insurance executive would consider a reasonable request: "Get me an account list. I want to see underwriters' names, who performs well, who doesn't — I want to learn from both." The company looked through its systems and discovered that underwriters' names weren't linked to specific policies. Nobody knew who underwrote what in the commercial auto and trucking division. This was not a technology problem or a staffing problem. It was a symptom of something far more severe — an institution that had suffered such catastrophic organizational trauma that it had lost the ability to perform the most basic function of its industry. Underwriting, the act of evaluating risk and pricing it correctly, is the single skill upon which every insurance company's survival depends. AIG had spent a decade failing at it. Between 2009 and 2019, the company hemorrhaged more than $30 billion in cumulative underwriting losses, paying out consistently more in claims than it collected in premiums. And the company couldn't even tell you which humans were responsible.
The missing account list is the kind of detail that sounds like anecdote but is actually diagnosis. It explains, in miniature, how the largest insurance company in American history — a firm that once ranked ninth on the Fortune 500, operated in more than 130 countries, and employed the most feared CEO in global finance — could require a $182 billion government bailout, lose 98% of its market value, become a national symbol of corporate recklessness, repay every dollar with interest, and then spend another decade still unable to underwrite profitably. The story of AIG is not a story of a single catastrophe. It is a story of three distinct companies occupying the same corporate charter across a century: a visionary foreign-markets pioneer built from a two-room office in Shanghai; a colossal financial conglomerate assembled through ruthless acquisitional logic and imperial management; and a stripped-down, technology-deficient property-casualty insurer struggling to remember what it once knew.
By the Numbers
AIG at a Glance
$24BNet premiums written (2024)
200+Countries and jurisdictions served
$182BPeak government bailout commitment (2008)
$0Government balance remaining (repaid 2012)
$30B+Cumulative underwriting losses, 2009–2019
1919Year founded in Shanghai, China
~$46BApproximate market capitalization (2025)
The Spymaster's Insurance Agency
The origin of AIG is unlike the origin of any other major American financial institution. It begins not in New York or Hartford or Omaha but in Shanghai, in 1919, in a two-room office on the Bund, where a 27-year-old Californian named Cornelius Vander Starr established American Asiatic Underwriters. Starr had dropped out of the University of California, Berkeley, sold ice cream in his hometown of Fort Bragg, enlisted in the Army during World War I (he never deployed — the war ended), and then, possessed by what his contemporaries described as an irresistible urge to see the world, took a clerk's job with the Pacific Mail Steamship Company in Yokohama before migrating south to Shanghai. He had no insurance background. What he had was an insight that would prove, across a century, to be the single most durable strategic advantage in the company's history: that the markets Western insurers ignored — Asia, Latin America, the Middle East, postwar Europe — represented not marginal opportunity but the core of a global franchise.
Starr's insight was simple and radical. People in Asia wanted insurance for the same reason people anywhere wanted it — a desire to protect families, to be prudent. The Western insurance establishment, anchored in London and Hartford, viewed these markets as exotic, peripheral, uninsurable. Starr saw the opposite. By 1923 he had hired Nelle Vander Starr — no relation — who became one of the first female insurance executives in the industry. By 1926 he had opened the first U.S. office, American International Underwriters, in New York. By 1937 he had expanded into Latin America through Cuba. The company's growth map reads like an itinerary of twentieth-century geopolitics: China in the 1920s, Latin America in the 1930s, Japan and Germany in 1946 (initially insuring the American military), Brazil in 1949, the United Kingdom in 1953, Australia in 1957, Ireland in 1976.
Starr's wartime biography adds another layer. Declassified intelligence files later revealed that he worked with the Office of Strategic Services — the precursor to the CIA — during World War II while still in China. As journalist Mark Fritz documented in the Los Angeles Times, Starr was part of a remarkable unit of "secret insurance agents" who leveraged global insurance industry intelligence for wartime espionage: "They knew which factories to burn, which bridges to blow up, which cargo ships could be sunk in good conscience." After the war, he hired O.S.S. captain Duncan Lee, a lawyer, as AIG's long-term general counsel. The company's DNA was formed in the liminal space between intelligence-gathering and risk assessment — both, at their root, enterprises of pricing the probability of catastrophe.
When Japan invaded China, Starr relocated his headquarters to New York in 1939. A decade later, as Mao's People's Liberation Army advanced on Shanghai, AIG left China entirely. The company would not return for more than forty years. But the architecture Starr built — a global network of relationships, local-market expertise, and an institutional comfort with operating in places others wouldn't go — would prove to be the foundation upon which his successor would construct an empire.
Starr died in Manhattan on December 20, 1968. His hand-picked successor was already in place.
Hank the Great and Terrible
Maurice Raymond "Hank" Greenberg is one of the most consequential — and divisive — business executives in American history. Born in 1925, he landed on the beaches of Normandy on D-Day and helped liberate Nazi concentration camps, earning a Bronze Star. He returned from the war, earned a law degree, and entered the insurance industry through the bottom. By 1962, at age 37, he was handed leadership of American Home, a small, failing subsidiary within Starr's empire. Over the next four decades, he would transform it into the largest insurance company on Earth.
To understand what Greenberg built, you must first understand how he built it. The early consolidation was crucial. When he became CEO of the newly incorporated American International Group in 1967 (the company went public in 1969 and listed on the NYSE in 1984), the enterprise was a sprawling collection of subsidiaries with numerous minority interests. Greenberg bought them all in, creating a single, focused entity. That decision — eliminating competing incentive structures to create one unified organism — allowed the ruthless capital allocation that followed.
We think alike. If you showed us 10 deals, we would probably come to pretty similar conclusions on most of them.
Greenberg's AIG was, for decades, the better bet even than
Warren Buffett's Berkshire Hathaway. A July 2000
New York Times analysis laid bare the heretical numbers: $10,000 invested in AIG on June 30, 1990 would have grown to $100,300 a decade later, versus $74,700 for the same amount in Berkshire. Over five years, the gap was even wider — $44,100 for AIG versus $23,000 for Berkshire. Both men ran insurance empires. Both saw insurance as fundamentally a business of deploying assets to the greatest possible gain. Both ruled their companies with what the
Times called "imperial authority, in gracious defiance of the conventions of good corporate government." But Greenberg had something Buffett lacked: a willingness to go anywhere, insure anything, and expand into adjacent businesses with an aggression that bordered on recklessness.
And so AIG expanded. Into life insurance through the acquisitions of SunAmerica (1998) and American General (2001) — both purchased at prices that critics, including the sharp-eyed insurance analyst David Merkel, called exorbitant. Into aircraft leasing. Into asset management. Into commodities. Into derivatives. The company that had been primarily a U.S. property-casualty insurer through the late 1980s became, in Greenberg's phrase, a behemoth — big in life and P&C everywhere, plus a dozen adjacent businesses. Revenue exploded. AIG rose to number nine on the Fortune 500. By 2004 it was the eighteenth largest company in the world.
But Greenberg's genius contained the seed of AIG's destruction. He ran risk management personally. Not institutionally. Personally. As David Merkel observed in his review of
The AIG Story: "Risk control should be institutionalized, not personalized. That was Greenberg's fault. No one man should be in charge of risk for a whole company." When Greenberg was ousted in 2005 — forced out amid an investigation by New York Attorney General Eliot Spitzer into accounting irregularities — the risk controls went with him. The organism that had been disciplined by a single, fierce intelligence was suddenly an organism without a brain.
The Unit Nobody Regulated
The division that destroyed AIG was called AIG Financial Products, or AIGFP. It was not an insurance company. It was not regulated as one. It existed in a regulatory blind spot — what Sullivan & Cromwell partner Rodgin Cohen later called "an orphan in terms of regulation." Insurance, Cohen noted, "tends to be very well regulated, particularly the big states have very strong insurance commissioners." But AIGFP wasn't part of any insurance subsidiary. It was a holding-company-level derivatives operation, and in the deregulatory climate of the late 1990s and early 2000s, nobody was watching it.
What AIGFP did was sell credit default swaps — a form of insurance against defaults in credit contracts, particularly the complex mortgage-backed securities that were proliferating throughout the financial system. The logic seemed elegant: AIG's triple-A credit rating meant it could write this insurance cheaply, and the fees were enormous. As long as the housing market didn't collapse, AIGFP would collect premiums forever. The business grew to gargantuan scale. By 2008, AIGFP had written hundreds of billions of dollars in notional exposure, mostly on pools of mortgage-backed securities.
The problem was not just concentration. It was correlation. Subprime and other mortgage risk had metastasized through the entire AIG organism — not just in AIGFP's credit default swaps but in the investment portfolios of the life insurance companies, in securities lending operations, in direct lending, and in mortgage insurance. When the housing bubble burst and the financial crisis peaked in September 2008, AIG couldn't come up with the money it suddenly owed. The counterparties demanding payment were the largest financial institutions in the world. If AIG failed to pay, those institutions would have been forced to reappraise the value of the securities they held, triggering a cascade of write-downs across the global financial system.
It would have been a chain reaction. The spillover effects could have been incredible.
The policymakers who were supposed to see this coming didn't. Phil Angelides, chair of the Financial Crisis Inquiry Commission, later testified that regulators "only come to grips with the extent of the challenges and the problems days before its imminent collapse." It was the Friday night before the Lehman Brothers bankruptcy — September 12, 2008 — that the depth of AIG's crisis fully registered. The following Tuesday, September 16, the Federal Reserve reversed course and agreed to an $85 billion rescue, taking a 79.9% equity stake in the company. It was the most radical intervention in private business in the Fed's history.
Representative Barney Frank captured the political surreality of the moment. "The secretary and the chairman of the Fed, two Bush appointees, came down here and said, 'We're from the government, we're here to help them,'" he recalled. When Frank asked Fed Chairman Ben Bernanke whether he had $85 billion, Bernanke responded: "I've got $800 billion." Under a Depression-era statute, the Fed could lend to any entity in America as long as the loan was adequately collateralized. Few people, including Frank himself, had been fully familiar with that authority.
One Hundred and Eighty-Two Billion Dollars
The initial $85 billion was not enough. The government's commitment to AIG ultimately swelled to approximately $182 billion — a sum so staggering it remains the largest corporate bailout in American history. The rescue was structured across multiple vehicles: direct equity injections, revolving credit facilities, and special-purpose vehicles set up by the Federal Reserve Bank of New York, including the now-infamous Maiden Lane II and Maiden Lane III, which absorbed toxic mortgage-backed securities from AIG's balance sheet.
The public fury was immediate and unrelenting. AIG became the most hated company in America. The anger crystallized around a single, almost comically tone-deaf detail: in March 2009, it emerged that AIG had paid more than $165 million in retention bonuses to employees of AIGFP — the very division that had precipitated the collapse. Eleven of the 73 employees who received bonuses of $1 million or more no longer even worked at the company. The top individual bonus exceeded $6.4 million. Employees received death threats. President Obama urged that "every legal avenue be pursued" to block the payments. Congressional Democrats issued an ultimatum: return the money or watch us tax it away. New York Attorney General Andrew Cuomo noted that the bonus contracts had been written in March 2008, guaranteeing employees 100% of their 2007 bonus amounts for 2008 — "despite obvious signs that 2008 performance would be disastrous in comparison to the year before."
Key dates in the government rescue of AIG
Sep 2008Federal Reserve extends initial $85B credit facility; government takes 79.9% equity stake
Nov 2008Bailout restructured; commitment grows to ~$150B including Maiden Lane II and III vehicles
Mar 2009$165M AIGFP retention bonus scandal erupts; total government commitment reaches ~$182B
Oct 2010AIA Group IPO in Hong Kong raises $17.8B — largest IPO globally at that time
Mar 2012AIG raises $6B by reducing AIA stake; Treasury begins selling AIG common shares
Dec 2012U.S. Treasury sells final AIG shares; government recoups full investment plus ~$22.7B profit
By the end of 2008, AIG had lost 98% of its market value. Some 20,000 employees departed or were laid off in the immediate aftermath. The company that Cornelius Vander Starr had built from a two-room office in Shanghai, that Hank Greenberg had expanded into the world's largest insurer, was now a ward of the state — its survival dependent on the willingness of American taxpayers to absorb the consequences of risk decisions made by a derivatives unit that most of those taxpayers had never heard of.
The Croatian Vineyard and the Bastille Day Boardroom
Into this wreckage walked Bob Benmosche. It was 2009, and the former MetLife CEO was called out of retirement — he was enjoying his sun-swept villa in Croatia — to become AIG's fifth CEO in as many years. Few believed taxpayers would ever get their money back. The challenge was not merely financial; it was existential. AIG's workforce had been demoralized by public hatred, congressional scrutiny, and the departure of institutional knowledge. The brand was toxic.
Benmosche was, by all accounts, a force of nature — combative, profane, and utterly unwilling to manage by consensus. His tenure featured continuous conflict with the U.S. Congress, with his own board, and especially with his board chairman, Harvey Golub, the former American Express CEO. The tension between Benmosche and Golub became one of the most dramatic corporate governance showdowns of the era. Benmosche felt Golub involved himself too deeply in management decisions. Golub complained Benmosche made major strategic calls without consulting the board. The conflict reached its climax on July 14, 2010 — Bastille Day, as Benmosche noted with dry amusement.
At a board meeting on the 18th floor of 70 Pine Street, Benmosche delivered an ultimatum. He walked the directors through every change he'd made since becoming CEO — the effort to restore workforce morale, the battles with government pay czar Kenneth Feinberg over compensation, the clawback of bonus money, the improving situation with AIGFP, the sale of the American Life Insurance Company — and then declared, in effect, that either Golub left or he did. Jim Millstein, the restructuring expert recruited by the Obama administration, was present. "We had the most dramatic board meeting of my career," Millstein later said. "I've never seen anything like it."
Golub departed. Benmosche stayed. Over the next four years, he downsized AIG, returned it to profitability, and — remarkably — repaid the government in full, plus interest. The repayment was completed by December 2012. The U.S. Treasury ultimately earned approximately $22.7 billion in profit on the AIG investment. AIG ran a public relations campaign thanking the American taxpayer. It was, depending on your perspective, either a gracious acknowledgment or a breathtaking act of chutzpah.
Benmosche died of cancer on February 27, 2015. His posthumous memoir, written with Peter Marks and Valerie Hendy, captured the full intensity of his tenure. But the deeper truth of Benmosche's era is that repaying the government, however astonishing, did not actually fix AIG. It fixed the balance sheet. The operating business — the thing that's supposed to underwrite risk profitably — remained broken for years to come.
The Decade of Losing Money on Purpose
The most overlooked fact in AIG's story is this: the company lost more than $30 billion in cumulative underwriting losses between 2009 and 2019. A full decade. This means that for ten consecutive years after the bailout, AIG was consistently paying out more in claims than it was collecting in premiums. It was, in the most fundamental sense, failing at its core job.
How does an insurance company lose money underwriting for a decade? Several overlapping pathologies. First, the post-crisis desperation to retain market share led to aggressive pricing — AIG was writing policies at rates that didn't adequately compensate for the risk. Second, the company's technology infrastructure was, to put it diplomatically, catastrophic. When Peter Zaffino arrived in 2017 and asked for basic underwriting data, the system couldn't produce it. Accenture CEO
Julie Sweet, whose firm later partnered with AIG on a massive transformation initiative, relayed what her chief technology officer told her after examining AIG's systems: "You have not just the worst tech in the industry, but it may be in the top three he has ever seen." Third, the organizational exodus — 20,000 people lost after the crisis, and many more in subsequent years — had stripped the company of institutional knowledge. Experienced underwriters who understood how to price complex risks had simply left.
The parade of leadership didn't help. After Benmosche, the company cycled through Peter Hancock (2014–2017) and then Brian Duperreault (2017–2021). Duperreault, a respected industry veteran, brought in more than a dozen senior executives and 125 senior underwriters — many of them AIG alumni returning — to try to rebuild underwriting discipline from the ground up. He also acquired Hamilton USA (rebranded to Blackboard) for $110 million, a bet on integrating data science and machine learning into commercial insurance underwriting. But the cultural damage ran deep, and the technology deficit was not something that could be fixed with a few hires.
The Zaffino Machine
Peter Zaffino's path to the CEO office was paved through a very specific corner of the insurance world — the intermediary side. Boston College undergraduate, NYU Stern MBA in finance, then a career at GE Capital specializing in alternative risk reinsurance before moving to Marsh & McLennan, where he ran Guy Carpenter (one of the world's leading reinsurance brokers) and then Marsh itself, the world's largest insurance broker. He was, in other words, a person who had spent decades studying how insurance companies operated from the outside — watching their underwriting decisions, seeing which ones priced risk well and which ones didn't, understanding the entire value chain from broker to underwriter to reinsurer. When he arrived at AIG in 2017 as COO, he was not bringing an insider's blind spots. He was bringing the broker's eye: cold, comparative, unsentimental.
What Zaffino saw was worse than he expected. The account list that didn't exist was just the surface. The technology was pre-digital. The underwriting data was balkanized. The organizational structure was bloated. And the fundamental underwriting philosophy — if you could even call it that — was to pursue volume at the expense of profitability, a hangover from the post-crisis desperation to prove the company still had market relevance.
Zaffino became CEO in 2021 and Chairman in 2022. His approach was methodical, almost surgical. He attacked multiple dimensions simultaneously: underwriting discipline (imposing accountability, linking underwriter names to policies, culling unprofitable books of business), technology (the Accenture partnership, which began after a serendipitous meeting with Julie Sweet in December 2019), organizational restructuring (6,000 AIG employees became Accenture employees en masse — "the most people we've ever taken on at one time," Sweet said), and portfolio simplification.
The simplification was perhaps the boldest move. AIG had been a sprawling conglomerate for decades — property-casualty, life insurance, retirement services, asset management, and numerous other operations. Zaffino's answer was to strip the company back to its core. In 2022, AIG's life and retirement business unit, Corebridge Financial, began publicly trading as a separate company on the New York Stock Exchange. The divestiture was massive — AIG was, in effect, shedding an entire industry vertical to focus on what it knew (or needed to relearn): general insurance. The company has been progressively reducing its stake in Corebridge ever since.
In an environment that has never been more dynamic or complex, AIG is at the forefront of originating risk solutions. The expertise and support we provide enables businesses, institutions and individuals to overcome uncertainty and withstand challenges.
The results have been measurable. By 2025, wall Street analysts from Keefe, Bruyette & Woods were declaring a "turnaround fully underway." Barclays analyst Tracy Benguigui cited AIG's "strong underwriting acumen." In Q2 2025, AIG reported a $1.1 billion profit, reversing a $4 billion loss a year earlier (the prior-year loss was driven largely by the Corebridge divestiture accounting). Adjusted after-tax income rose 56% year over year. Earnings per share of $1.81 beat consensus estimates of $1.60. Revenue of $6.88 billion surpassed expectations. The company that couldn't link an underwriter's name to a policy in 2017 was, eight years later, beating Wall Street's numbers.
The Art of Strategic Reinvestment
But Zaffino's ambitions extend beyond fixing what was broken. In late 2025, AIG announced two deals that signaled a fundamentally different posture — not defensive restructuring but offensive capital deployment. The first was a $2 billion acquisition deal with reinsurance company Everest Group. The second, and more revealing, was a nearly $5 billion multifaceted investment in specialty insurer Convex Group and asset manager Onex Corporation.
The Convex deal's architecture is worth studying. AIG committed an initial $2.2 billion for a 35% stake in Convex, a London-based specialty insurer founded in 2019 that had grown rapidly to more than $5 billion in premiums. Convex's combined ratio — the key profitability metric measuring how efficiently an insurer runs its core underwriting business — was 87.6%, nine percentage points better than the overall U.S. P&C industry average. Its return on equity was 17%, placing it in the top quartile of global reinsurers. Simultaneously, AIG invested approximately $640 million for a 9.9% stake in Onex, Convex's majority shareholder. Over the next three years, AIG will deploy an additional $2 billion into Onex's investment funds.
The deal structure reveals Zaffino's theory of the case: AIG doesn't just want underwriting exposure. It wants to participate in the full capital-formation ecosystem — underwriting profits through a quota-share reinsurance agreement with Convex, equity appreciation through minority stakes, and investment returns through fund commitments. It is a play to transform AIG from a legacy insurer into what Fortune described as "a more dynamic, capital-aligned institution."
Return to Shanghai
There is a poetic circularity to AIG's story that the company itself seems aware of. In 1992, the People's Republic of China granted AIG a license to operate a life and non-life insurance business in Shanghai — the first foreign insurer granted such a license in over forty years. It was a homecoming of sorts, a return to the city where Cornelius Vander Starr had opened his two-room office seven decades earlier. The relationship between AIG and China was not incidental to either party's history. It was foundational. Greenberg himself served as chairman of the Asia Society, as vice chairman of the National Committee on United States-China Relations, and as a member of the U.S.-China Business Council. The C.V. Starr Foundation, created by the company's founder in 1955, became one of the largest private foundations in the United States, with deep ties to Asian philanthropy and cultural exchange.
Key milestones in a century of international expansion
1919Cornelius Vander Starr founds American Asiatic Underwriters in Shanghai
1926First U.S. office opens in New York City
1939Headquarters relocate from Shanghai to New York amid Japanese invasion
1946Offices open in Japan and Germany to insure the U.S. military
1967American International Group, Inc. incorporates in Delaware
1992China grants AIG first foreign insurance license in 40+ years
1999AIG launches one of the industry's first cybersecurity insurance programs
2001
The network that Starr built and Greenberg expanded — operating across 200+ countries and jurisdictions — remains the company's most distinctive asset, the one structural advantage that survived the crisis, the bailout, the leadership chaos, the technology rot, and the decade of underwriting losses. Competitors can match AIG's underwriting talent, its technology, even its capital. Matching its geographic footprint and the institutional relationships accumulated across a century of operating in markets that other insurers avoided — that is a different order of difficulty entirely.
The Company That Was Three Companies
The tension that defines AIG — the thread that runs from Starr's Shanghai office through Greenberg's empire through the AIGFP disaster through the Zaffino rebuild — is the tension between scope and discipline. Every great era in the company's history was an era of expansion: into new geographies, into new product lines, into new financial instruments. And every crisis was a crisis of overreach: the life insurance acquisitions that flattened the stock price from 1999 to 2007, the derivatives exposure that nearly destroyed the global financial system, the underwriting indiscipline that bled $30 billion over a decade.
Zaffino's bet is that AIG can be disciplined and expansive simultaneously — that the Convex investment, the Everest deal, the global network, the three-segment structure (35% International Commercial, 35% North America Commercial, 30% Global Personal) can coexist with the kind of underwriting rigor that was absent for most of the post-crisis period. The early evidence is encouraging. Whether the evidence compounds over a full insurance cycle — through the next catastrophe year, the next market dislocation, the next temptation to chase premium volume at the expense of underwriting quality — remains the open question.
For readers seeking the full narrative of AIG's arc, two books provide complementary perspectives.
Fallen Giant: The Amazing Story of Hank Greenberg and the History of AIG focuses on the development of AIG under its founder, Cornelius Vander Starr, and the rise of Greenberg's empire, offering the deepest look at how the company's culture was forged.
The AIG Story, co-authored by Greenberg himself with professor Lawrence Cunningham, is an insider's account — partial and self-serving in places, as such accounts always are, but uniquely revealing about the operating philosophy and international strategy that made AIG what it was.
The company today writes $24 billion in net premiums annually. It operates across 200+ countries and jurisdictions. Its three segments are roughly balanced. Its CEO came from the brokerage side, bringing the assessor's eye rather than the underwriter's ego. And somewhere in its systems, a database now links every underwriter's name to every policy they've written — the most basic requirement of an insurance company, and the thing that, for the better part of a decade, AIG couldn't do. The account list exists now. What gets built on top of it will determine whether AIG's next century looks more like Starr's or like AIGFP's.
