[21] The steady growth of the Latin American agencies proved significant as it would offset the decline in business from Asia due to the impending World War II.

[26] By the end of the decade, C.V. Starr's general and life insurance organization included an extensive network of agents and offices in over 75 countries.

Using brokers, AIU could price insurance according to its potential return even if it suffered decreased sales of certain products for great lengths of time with very little extra expense.

In 1967, American International Group, Inc. (AIG) was incorporated as a unifying umbrella organization for most of C.V. Starr's general and life insurance businesses.

[29] The 1970s presented many challenges for AIG as operations in the Middle East and Southeast Asia were curtailed or ceased altogether due to the changing political landscape.

However, AIG continued to expand its markets by introducing specialized energy, transportation, and shipping products to serve the needs of niche industries.

[30] During the 1980s, AIG continued expanding its market distribution and worldwide network by offering a wide range of specialized products, including pollution liability[30] and political risk.

[39] In 2005, AIG became embroiled in a series of fraud investigations conducted by the Securities and Exchange Commission, U.S. Justice Department, and New York State Attorney General's Office.

[43] On November 9, 2005, the company was said to have delayed its third-quarter earnings report because it had to restate earlier financial results, to correct accounting errors.

[50] On June 15, 2008, after disclosure of financial losses and subsequent to a falling stock price, Sullivan resigned and was replaced by Robert B. Willumstad, Chairman of the AIG Board of Directors since 2006.

[51] AIG's board of directors named Bob Benmosche CEO on August 3, 2009, to replace Liddy, who earlier in the year announced his retirement.

[53][54] In January 2011, the Financial Crisis Inquiry Commission issued one of many critical governmental reports, deciding that AIG failed and was rescued by the government primarily because its enormous sales of credit default swaps were made without putting up the initial collateral, setting aside capital reserves, or hedging its exposure, which one analyst considered a profound failure in corporate governance, particularly its risk management practices.

The company is much larger and complex than Lehman Brothers and its assets hitting the market all at once would likely cause worldwide chaos and send values plummeting.

[58][59] AIG's Financial Products division, headed by Joseph Cassano in London, had entered into credit default swaps to insure $441 billion worth of securities originally rated AAA.

[61][62] The AIG board accepted the terms of the Federal Reserve rescue package that same day, making it the largest government bailout of a private company in U.S.

Newly inaugurated President Barack Obama, who had voted for TARP as a Senator[66] responded to the planned payments by saying "[I]t's hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay.

AIG began selling some assets to pay off its government loans in September 2008 despite a global decline in the valuation of insurance businesses, and the weakening financial condition of potential bidders.

[75] Bloomberg L.P. reported on March 29, 2010, that after almost three months of delays, AIG had completed the $500 million sale of a portion of its asset management business, branded PineBridge Investments, to the Asia-based Pacific Century Group.

Government commitments were fully recovered, and Treasury and the FRBNY to date had received a combined positive return of approximately $15.1 billion.

[94] AIG announced plans for an initial public offering of 19.9 percent of United Guaranty Corp., a Greensboro, North Carolina–based provider of mortgage insurance for lenders in January 2016.

Industry veteran Brian Duperreault became the chairman of the new entity, and Richard Friesenhahn, the executive vice president of U.S. casualty lines at AIG, became CEO.

The company was also a Lloyd's of London syndicate, involved in insurance-linked securities,[114] a specialist in US small commercial excess and surplus underwriting, and a provider of crop insurance.

[118] In November 2019, a Carlyle-managed fund and T&D Holdings acquired a majority interest in Fortitude Re, leaving AIG with a 3.5% stake "subject to required regulatory approvals and other customary closing conditions.

In 2019,[109] Duperreault stated that the new executive team had restructured the business, implemented new risk and underwriting guidelines, and "overhauled its reinsurance buying strategy.

SunAmerica, life-insurance and retirement-services division, was renamed AIG Life and Retirement; other existing brands continue to be used in certain geographies and market segments.

[147] Hank Greenberg, with lead lawyer David Boies, independently sued the U.S. Government for $40 billion (US) in the United States Court of Federal Claims in 2011.

"[156] The trial lasted thirty-seven days and included testimony from Former Chairman of the Federal Reserve Ben Bernanke, and former Secretaries of the Treasury Timothy Geithner, Henry Paulson.

[162][163] Judge Wheeler did not award compensation to the plaintiffs, ruling that they did not suffer economic damage because "if the government had done nothing, the shareholders would have been left with 100 percent of nothing.

[166] The specific issue was whether the Federal Reserve Bank of New York transferred $18 billion in litigation claims on troubled mortgage debt through Maiden Lane Transactions, entities created by the Fed in 2008.

[168] On May 7, 2013, Los Angeles U.S. District Judge, Mariana Pfaelzer, ruled in a case between AIG and Bank of America concerning possible misrepresentations by Merrill Lynch and Countrywide as to the quality of the mortgage portfolio, that $7.3 billion of the disputed claims had not been assigned.