The Case of AIG: Strengths and Weaknesses Essay Example

underwriters of commercial and industrial insurance, and AIG American General is a life insurer.

Unfortunately, AIG has its own share of weaknesses. First, the accounting scandals it faced tarnished the company’s reputation. The company acknowledged that it had improperly accounted for the reinsurance transaction to bolster reserves, and detailed numerous other examples of problematic accounting.

It also announced the delay of its annual 10-K filing. AIG was suspected of fudging up its financial performance with dubious transactions and improper accounting. Second, the fraudulent practices of the top management exemplified through the highly unusual arrangement with three private entities, governed and controlled by AIG Chairman Maurice Greenberg and other AIG executives.

Lastly, the declining operational efficiency of general insurance business has affected AIG’s strong revenue growth and realized capital gains in comparison to capital losses in through the years.

Without doubt, AIG could do well if they will focus more on transparency, proper accounting, cooperation with industry regulators, and neglecting the conflicts of interests that pull the company down. For more than 80 years, AIG succeeded by making positive contributions to the consumers and companies they serve.

In focusing to solve the aspects of their weaknesses and magnifying their present strengths, AIG could do more than be competitive in the era of information and globalization, but they could conquer new heights of achievement for customers, shareholders and their employees.

References

Financial Reports. AIG Website, 2005. Acquired online last February 11, 2005 at http://www.aigwebcast.com/phoenix.zhtml?c=76115;p=irol-financialreports

Froot, K. A. ; Nelson, H. S. (1999, December 6). American International Group, Inc – Case.

Harvard Business School Cases – Finance, 200-026. Boston:

Harvard Business School.