Insurance giant gets another bailout of $30 billion

(2 Mar 2009)
February 27, 2009
1. Exterior of American International Group Inc. office building
2. Woman walking into AIG building
3. AIG sign on revolving doors
March 2, 2009
4. SOUNDBITE (English) Bob O’Brien, Stocks Editor for Barrons.com:
“It’s effectively one of the bricks at the very bottom of the financial pyramid and if you pulled that away, the whole financial services structure would effectively collapse. It would mean that billions of dollars in assets in other financial services companies are holding, would have to be written off and that would put further damage, further strain on an already precarious financial services market.”
February 27, 2009
5. Exterior AIG building
6. AIG sign
March 2, 2009
7. SOUNDBITE (English): Bob O’Brien, Stocks Editor for Barrons.com:
“Clearly we’re taking on some of the risks for decisions that were made by European banks, Asian banks, banks basically around the globe and with all the distress that we’re seeing here in the United States, a lot of taxpayers are raising the question, why are we taking on the concerns that perhaps some of the European governments are deciding to avoid?”
February 27, 2009
8. Mid shot AIG building entrance
9. Wide shot AIG building exterior
March 2, 2009
10. SOUNDBITE (English): Bob O’Brien, Stocks Editor for Barrons.com:
“And is the government going to continue to have to prop this up? Yeah I think they will. They’ve effectively said with this fourth restructuring of the bailout initiative that there’s absolutely nothing but conviction on the part of the US government that it’s going to continue to save this company. Goodness knows, if these guys were out on the street, borrowing money from racketeers, somebody would have sent somebody over to break their thumbs a long time ago. The government unfortunately can’t be in the thumb-breaking business, so they have no recourse.”
February 27, 2009
11. Tight shot AIG logo on revolving doors
STORYLINE:
American International Group Inc., once the world’s largest insurer, said Monday it lost 61.7 (b) billion US dollars in the fourth quarter, the biggest quarterly loss in US corporate history, amid continued financial market turmoil.
The results come as the US government announced a restructuring of a bailout plan for the troubled insurer, extending 30 (b) billion US dollars in additional aid to the company.
Bob O’Brien, stocks editor for Barrons.com, said the government continued to step in because AIG was too big to fail, calling it “one of the bricks at the very bottom of the financial pyramid”.
The insurance giant does business with virtually every financial institution in 130 countries.
The New York based company said it lost 22.95 US dollars per share in the last three months of 2008.
It lost 5.3 (b) billion US dollars, or 2.08 US dollars per share, in the same quarter a year ago.
Revenue fell to negative 23.8 (b) billion US dollars, as the company had to reverse gains it recorded from investments in past quarters.
The latest results include 7.2 (b) billion US dollars in unrealised losses and credit valuation adjustments at AIG Financial Products, the source of credit-default swaps, and pretax losses of 21.6 (b) billion US dollars tied to the declining value of AIG’s investment portfolio.
AIG’s general insurance business swung to a loss on 2.8 (b) billion US dollars in net realised capital losses.
General insurance net premiums dropped 16.3 percent to 9.2 (b) billion US dollars, and net premiums earned fell 5.9 percent to nearly 11 (b) billion US dollars.
Adjusted to exclude certain items, operating losses totalled 37.9 (b) billion US dollars, or 14.17 US dollars per share, versus a loss of 3.2 (b) billion US dollars, or 1.25 US dollars per share, last year.

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