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Context of 'February 28, 2008: AIG Halts Stock Buyback Program, in Response to Fourth Quarter Loss'

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The insurance giant AIG makes the biggest quarterly loss in its 89-year history, $5.29 billion. This is primarily due to an $11.1 billion writedown of derivatives known as credit default swaps. The loss will be announced on February 28, 2008 (see February 28, 2008). (Son and Holm 9/16/2008)

Following the announcement of poor results for the third quarter the day before (see July-September 2007), shares in the insurance corporation AIG fall to $56. Despite the problems, in a conference call the company says it is “comfortable” with businesses and investments tied to the US housing market. (Son and Holm 9/16/2008)

Six days after its shares hit a 52-week low (see November 8, 2007), the insurance corporation AIG announces that it will spend $8 billion on repurchasing stock. However, this program will be halted early next year (see February 28, 2008). (Son and Holm 9/16/2008)

Insurance giant AIG makes a loss of $7.81 billion for the first quarter of 2008. In the previous quarter, it had lost over $5 billion, which at that time was its worst ever result (see October-December 2007). The loss will be announced in May (see May 8, 2008). (Son and Holm 9/16/2008)

Following the announcement of a major loss for the fourth quarter of 2007 (see October-December 2007), the insurance corporation AIG halts a program to buy back shares it announced the previous year (see November 14, 2007). In addition, the loss prompts AIG to say for the first time that realized losses in derivatives known as credit default swaps could affect operations during a quarter. (Son and Holm 9/16/2008)

Joseph Cassano, head of the financial products unit at troubled insurance giant AIG, will leave the company, Chief Executive Officer Martin Sullivan says in a statement. Cassano’s unit was responsible for a recently announced $11.1 billion writedown due to credit default swaps (see October-December 2007), and he is stepping down with the company’s consent. Cassano had co-founded the unit in 1987 and built it into a business providing guarantees on more than $500 billion of assets at the end of 2007, including $61.4 billion in securities tied to subprime mortgages. At the same time, AIG says it has $14.5 billion to $19.5 billion in “excess capital.” (Son and Holm 9/16/2008)

At the annual shareholder meeting of the insurance giant AIG, Chief Executive Officer Martin Sullivan says he is “not discouraged,” despite the fact that the company has posted successive losses (see October-December 2007 and January-March 2008). Company chairman Robert Willumstad says the directors support the management, adding, “We think Martin’s the right guy.” Shares close at $39.44, a 46 percent drop over the past year. (Son and Holm 9/16/2008)

Troubled insurance giant AIG makes a record quarterly loss of $24.47 billion. The loss is caused by writedowns on assets linked to subprime mortgages and capital losses. This is the worst loss it has ever made, coming hard on the heels of losses in the previous three quarters (see October-December 2007, January-March 2008, and April-June 2008). Over the four quarters, the combined loss totals $42.5 billion. The company will be in such bad shape that the government has to take it over by the end of the quarter (see September 16, 2008). The loss will be announced on November 10 (see November 10, 2008). (Reuters 4/17/2009)

The recently bailed-out insurance company AIG makes the largest quarterly loss ever in the history of business. The $61.7 billion loss follows four other extremely high losses and is more than double what the insurer lost in the previous quarter (see October-December 2007, January-March 2008, April-June 2008, and July-September 2008). The result will be announced in March 2009 (see March 2, 2009). (Bloomberg 3/5/2009; Reuters 4/17/2009)


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