Chairman’s Note

In the late 1960s, a group of domestic and international insurance executives began to build American International Group, popularly known as AIG. We developed close relationships with some of the most interesting and successful business and world leaders of our time. We forged new trails throughout the world and helped pave the way for globalization. We assembled an innovative, loyal, and committed workforce without peer in the industry, which formed AIG’s backbone. AIG became the largest insurance company in history with an unmatched record of growth and profit and a culture that attracted the best and the brightest.

Despite such achievements, in 2005 I became the target of an overzealous New York attorney general, Eliot Spitzer. He, along with a group of outside directors, lawyers, and accountants, coordinated to separate me from the company that we had built. Their aggression planted the seeds of AIG’s near-destruction and loss of billions of dollars for shareholders, which included pension funds, and myriad other investors.

I was forced to fight heated battles with a company I led for almost 40 years. The battles cost more than $1 billion in legal fees and lasted five years. A new batch of managers, consultants, and advisers dismantled AIG’s traditions, culture, and internal controls. The company decimated its risk management systems and exposed itself to a liquidity crisis that would have been unimaginable during my tenure at the company. I sought to warn the new management about the dangers of the changes they had implemented, but my overtures were rebuffed.

When the financial crisis of 2008 blew up, AIG was at the heart of it. The government took control of the company and used it as a funnel to move capital to a dozen other financial institutions in “backdoor” bailouts.

C.V. Starr & Co., a much older company that had founded AIG, had always remained independent of AIG. It became the vehicle for me and several of my colleagues, who were either forced out of or left AIG, to begin building a new global property/casualty insurance company, and we are making significant progress in that new endeavor.

My schedule is packed. I travel extensively to countries where we had been doing business for decades and, frankly, I spend almost every waking moment working on this new exciting business.

I want to be sure that the record is complete about the building and near-destruction of AIG so I asked Lawrence Cunningham to collaborate with me to produce the book you are reading. It is a story of the building of AIG, along with the unvarnished facts of what occurred at AIG in a brief period of time after I was forced to leave. The U.S. government nationalized AIG despite there being so many alternatives it could have taken. Those alternatives would have led to a soft landing rather than the turmoil that ensued.

M. R. G.