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Context of 'July-September 2008: AIG Makes Record Quarterly Loss'

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The insurance giant AIG makes the biggest quarterly loss in its 89-year history, $5.29 billion. This is primarily due to an $11.1 billion writedown of derivatives known as credit default swaps. The loss will be announced on February 28, 2008 (see February 28, 2008). [Bloomberg, 9/16/2008]

Entity Tags: AIG (American International Group, Inc.)

Timeline Tags: Global Economic Crises

Insurance giant AIG makes a loss of $7.81 billion for the first quarter of 2008. In the previous quarter, it had lost over $5 billion, which at that time was its worst ever result (see October-December 2007). The loss will be announced in May (see May 8, 2008). [Bloomberg, 9/16/2008]

Entity Tags: AIG (American International Group, Inc.)

Timeline Tags: Global Economic Crises

AIG makes a quarterly loss of $5.36 billion. This is its third such loss in a row, but is lower than the previous quarter’s loss (see January-March 2008). The loss will be announced on August 6. [Bloomberg, 9/16/2008]

Entity Tags: AIG (American International Group, Inc.)

Timeline Tags: Global Economic Crises

Troubled insurance giant AIG makes a record quarterly loss of $24.47 billion. The loss is caused by writedowns on assets linked to subprime mortgages and capital losses. This is the worst loss it has ever made, coming hard on the heels of losses in the previous three quarters (see October-December 2007, January-March 2008, and April-June 2008). Over the four quarters, the combined loss totals $42.5 billion. The company will be in such bad shape that the government has to take it over by the end of the quarter (see September 16, 2008). The loss will be announced on November 10 (see November 10, 2008). [Reuters, 4/17/2009]

Entity Tags: AIG (American International Group, Inc.)

Timeline Tags: Global Economic Crises

AIG logo.AIG logo. [Source: American International Group (AIG)]In an historic move, the federal government bails out insurance corporation AIG with an $85 billion loan, giving control of the firm to the US government. After resisting AIG’s overtures for an emergency loan or other intervention to prevent the insurer from falling into bankruptcy, the government decided AIG, like the now-defunct investment bank, Bear Stearns, was “too big to fail” (see March 15, 2008). The US government will lend up to $85 billion to AIG. In return, the government gets a 79.9 percent equity stake in warrants, called equity participation notes. The two-year loan will carry a LIBOR interest rate plus 8.5 percentage points. LIBOR, the London InterBank Offered Rate, is a common short-term lending benchmark. The bailout comes less than a week after the government allowed a large investment bank, Lehman Brothers Holdings Inc., to fold (see September 14, 2008). As part of the loan agreement, Treasury Secretary Henry Paulson insists that AIG’s chief executive, Robert Willumstad, steps aside. Willumstad will be succeeded by Edward Liddy, the former head of insurer Allstate Corp (see September 18, 2008). [Wall Street Journal, 9/16/2008] Shares in AIG drop to $3.75 on the news. [Bloomberg, 3/5/2009]

Entity Tags: Henry Paulson, AIG (American International Group, Inc.), Edward Liddy, Robert Willumstad, US Federal Reserve

Timeline Tags: Global Economic Crises

The recently bailed-out insurance company AIG makes the largest quarterly loss ever in the history of business. The $61.7 billion loss follows four other extremely high losses and is more than double what the insurer lost in the previous quarter (see October-December 2007, January-March 2008, April-June 2008, and July-September 2008). The result will be announced in March 2009 (see March 2, 2009). [Bloomberg, 3/5/2009; Reuters, 4/17/2009]

Entity Tags: AIG (American International Group, Inc.)

Timeline Tags: Global Economic Crises

The terms of the bailout given to troubled insurance giant AIG are modified, following calls from the insurer (see October 22, 2008 and November 7, 2008). The conditions of the government bailout were set in September (see September 16, 2008), but the interest rate is now lowered and the term is extended from two years to three. In addition, the rescue package grows to $150 billion, including a $60 billion loan, a $40 billion capital investment, and about $50 billion to buy mortgage-linked assets owned by AIG or guaranteed by it through credit default swaps. AIG also announces a record loss (see July-September 2008). [Bloomberg, 3/5/2009]

Entity Tags: AIG (American International Group, Inc.)

Timeline Tags: Global Economic Crises

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