Rebirth of England.

Chapter 637 AIA Insurance
It seems that Jamie Dimon did get relatively accurate information, but this is inevitable. When some things are going on, it is almost impossible to keep them completely confidential.

When Barron met with Paulson before, he had already proposed that he planned to acquire some assets of American International Group (AIG) through the British Insurance Group.

As early as June, American International Group was on the verge of collapse due to heavy losses in the subprime mortgage crisis - mainly because they undertook too many CDS (subprime bond swap default insurance), and was eventually taken over by the US government.

Initially, the US government injected $850 billion into American International Group to ensure that the largest insurance group in the United States could survive the crisis...

But then, they found that they had still underestimated the scale of CDS involved in AIG. In desperation, they could only continue to increase capital. So far, the US government has injected more than US$1500 billion into AIG in two installments!
Even so, AIG has not yet gotten out of its predicament - according to information obtained by Barron's, AIG's losses in the past three months have exceeded $600 billion, a figure that marks the largest corporate quarterly loss in American history.

In the previous meeting, Barron could see that Paulson was still worried about the current situation of American International Group.

But what to do? There is a term called "sunk cost". Since so much money has been invested in American International Group, should we just give up now?

What else can I do? Keep saving...

In addition to funding from the U.S. government, American International Group itself is also preparing to sell some of its assets to obtain funds for self-rescue.

In Barron's previous life, American International Group sold their private bank, Hartford Steam Boiler (HSB) engaged in machinery-related insurance business, and Canadian life insurance business at the end of this year and the beginning of next year, and obtained some funds.

They are even preparing to sell some of the shares of their wholly-owned subsidiary, AIA, to obtain funds and recover losses...

Barron's target this time is AIA.

In Barron’s previous life, before his rebirth, AIA gave people the impression that it was already a Hong Kong company.

In fact, at present, AIA is still an American company and a wholly-owned subsidiary of American International Group. American International Group has many subsidiaries involved in insurance business, the two most important of which are AIA and AIU Property and Casualty Insurance Co.

What many people probably don't know is that the American International Group has a deep relationship with Huaxia - in fact, it can be said that this largest insurance group in the United States was founded in Huaxia...

The history of American International Group can be traced back to 1919, when the group's founder, Shi De, established an insurance agency company, American International Insurance, in Shanghai with 300 yen to provide fire and marine insurance protection.

Shi De was also the first Westerner to bring the concept of insurance to the Chinese in Shanghai.

Then in 1921, Shide established AIA Life Insurance, and within just ten years, expanded its business to all of China and Southeast Asia...

In 1926, AIG opened a branch in New York, USA. When his insurance business in China was successful, he established Four Seas Insurance Company in Hong Kong in 1931, and then expanded to Europe and the Middle East.

Later, due to the outbreak of the Japanese invasion of China, Shide moved the company's headquarters from Shanghai to the United States, and then expanded into the Latin American market.

In 1949, AIG withdrew its insurance business in China.

In 1968, Shide died of illness, and his successor was Greenberg, who developed AIG's American business.

In 1969, AIG returned to the United States and was listed again. After years of development, AIG's business has been distributed in more than 130 countries and regions, and it has also expanded from insurance business to other financial services, including pension services, non-life insurance property insurance, asset management and related investments.

AIG members provide services to commercial, institutional and individual clients through the largest global property and casualty insurance and life insurance service network in the insurance industry. AIG members are the largest commercial insurance institutions in the United States, and its subsidiary AIG American General is one of the top life insurance institutions in the United States.

Well, until the subprime mortgage crisis, American International Group was considered a behemoth operating in multiple fields including insurance and finance.

Now, it needs to rely on government aid and sell its own assets to survive.

In Barron's previous life, Prudential, the largest insurance company in the UK, almost bought AIA from American International...

However, the deal was not finalized. After American International Group sold part of its shares in AIA, AIA was listed in HK in 2010. American International Group gradually reduced its holdings in AIA. Eventually, the American capital color of AIA gradually faded and it became a HK company.

Speaking of which, among the many insurance businesses under American International Group, Barron is most interested in AIA.

First of all, AIA's main business is in the Asia-Pacific region, and Barron knows that the insurance business in this region will also be the fastest growing in the world in the future - according to estimates by relevant institutions, 40% of global life insurance premium growth in the next five years will occur in Asia.

Currently, AIA has more than 2000 million customers and more than 20 insurance sales agents in Asia.

In the Chinese market, since AIA withdrew from the Chinese mainland market in 1949, they have once again entered the Chinese Magic City as a wholly-owned enterprise since 1992, becoming the first foreign company allowed to operate insurance business in China.

As of now, AIA has become the largest foreign-funded life insurance company in China, and in major cities including Beijing, Shanghai and Guangzhou, AIA's share even exceeds that of some old Chinese life insurance companies.

Judging from the results of Barron's current contacts with the management of American International Group, the other party is still willing to sell AIA.

Edward Reedy, chairman and CEO of American International Group, has also stated that American International Group will refocus on its property and liability insurance business in the future.

And AIG plans to retain its domestic property and liability insurance business in the United States and its property insurance business abroad... So it is obvious that between AIA, whose main business is in the Asia-Pacific region and is mainly life insurance, and AIG, which is mainly property insurance, the core business that AIG is preparing to expose is AIG...

"I know that you have extensive connections in the upper echelons of America, Mr. Dimon, especially with the management and board of directors of American International Group, so..."

Baron to Jamie Dimon:
"We are friends, aren't we? You don't have an insurance business, and Standard Chartered Merrill Lynch has grown sufficiently. It's time for us to support each other."

Even if American International Group intends to sell AIA, they will definitely not get a bargain on the price.

However, correspondingly, after accepting a huge amount of aid from the government, American International Group's say in some matters... still needs to consider the government's opinions. As for JPMorgan Chase's relationship with the government, we can see how they turned decay into magic in their acquisitions of Bear Stearns and Washington Mutual Bank.

So, are you really willing to establish "friendship" with yourself?

As Barron watches, Jamie Dimon should give the answer...

Of course, Barron does not really expect to be treated as the "son" of JPMorgan Chase, but at least he should give himself a "conscience price".

(End of this chapter)