The Biggest Risks Facing AIG

In the following video, Fool analyst Matt Koppenheffer looks at some of the biggest risks facing insurer AIG (NYSE: AIG  ) .

AIG doesn't face the same risks it did in 2008 and 2009, when the company was on the brink of collapse. But it still faces risks today, Matt says.

The first of those is the possibility that AIG just is not a great insurer. Investors have to believe that AIG's core businesses, property and casualty insurance and life insurance, are ready to shine again. Investors need to be wary that it might not be as good as it's billed to be, Matt says.

The second concern is brand damage. AIG made a lot of splashy headlines in the financial crisis. That could potentially drive away customers.

Investors also need to consider government regulation. In the wake of the financial crisis, companies like AIG face new regulations that could hamper profitability.

Finally, investors need to consider catastrophes. When major catastrophes happen, insurers need to pay out big claims.

See more from Matt in the following video.

After bringing the financial world to its knees, most investors are wary about owning a stake in AIG today. We'll fill you in on both reasons to buy and reasons to sell AIG, and what areas that AIG investors need to watch going forward.. Just click here now for instant access.


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  • Report this Comment On January 21, 2013, at 11:22 PM, TEBuddy wrote:

    What business doesn't have risks? And these are pretty basic vague risks. I wonder how much AIG pays out for Sandy, when the US Government in their infinity fiscal irresponsibility passed aid to bail everyone out, or is that just the people without insurance? If I were an insurance company, I would make sure those funds are applied universally and the insurer's liability is reduced. It is simply irresponsible for the Government to bail out those that did not pay for insurance, since that would encourage others to not actually pay for insurance all over the US. Why be responsible for ourselves when the Government will save our behinds.

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