Analysis Of America International Group

Submitted By jnsmith7
Words: 619
Pages: 3

America International Group (AIG) collapsed in September 2008 and was given a bailout by the United States Government. This bailout became one of the most controversial bailouts during the financial crisis of 2008 and 2009. This company was involved in a high stakes risk taking scheme which was supported by managers and employees who goals were short term financial rewards. One department within this company that was shown to be a culprit in the demise of this company was the financial products department. This department specialized in derivatives and other complex financial contracts that were tied to subprime mortgages or commodities (Ferrell, O., 2008). This department made billions of dollars for AIG. AIG’s market value in 2007, before the financial crisis was estimated at close to $200 billion and by end of 2009 this amount had fallen to $3.5 billion, only a government rescue in the amount of $180 billion in loans, investments, guarantees, and other financial injections prevented AIG from facing total bankruptcy (Ferrell, 2008). To try and turn this company around AIG increased it’s focus on data management. AIG is a company that is invested heavily in data analysis that’s main goal is to find new resources of information to help better inform the company’s business approach. The data analysis team is made up of 100 economics, physicists, data scientists and other specialists. During the financial crisis Mr. Murlie Buluswar, the chief science officer over the AIG’s property casualty operations department explained that there was no lack of data, just a lack of clarity as to what questions to ask and which ones mattered (Holm, E., 2012). The data analysis department will focus on recovering from the financial crisis by researching information about the market, customer service practices, underwriting assumptions and fraud detection programs. This department has a goal to improve loss forecasts, reduce costs and devise more accurate pricing for insurance policies for all clients big and small. Data analysis from AIG means crunching massive amounts of numbers to find what customers need and how to adapt to the changing customer requirements. This data analysis is not impossible, with the change in technology, digital data analysis, gives information quickly and can be interpreted as the information is processed into the computer. Data analysis has quickly become a growing trend in business, with an increase of 40% in the last few years across the globe (Holm, 2012). An example of this type of digital data can be seen in insurance