American International Group Case Study Example | Topics and Well Written Essays - 1000 words

American multinational Group - Case Study ExampleThe major business line of American International Group are functions, supports, services, and operations. The failure of these lines would result on the huge material loss of profit, revenue and certify value for the organization as a whole. Therefore, American International Group prepared a declaration plan and for that purpose 22 companies as material entities were identified, from which one is AIG Markets, Inc and the type of this entity is differentials intermediaries. Fear of revenue, profit and right value loss motivated organization to be a part of derivatives market. American international concourse utilizes derivatives as a part of the accompanys risk management framework. The major purpose of the company in entering in a derivative market is to mitigate the risk either by providing a profile of the investment or by hedging exposure. American international group is no longer engage in cloakivities of derivatives that contributed materially to concerns throughout the financial crisis or also not act as a market for the contracts of derivatives. The exposure of derivatives and derivative portfolio is examined on a regular basis in order to avoid any risk and fulfill the market standards of investment. Interest rate derivatives are apply to deal with interest rate risk that is associated with insurance assets and liabilities. The company is involved in making investments in hybrid securities in order to generate more income. Therefore, company is involved in such derivative activities that are associated with investment operations for risk mitigation (AIG, 2014).After the financial crisis of 2008 the insurance industry equal other industries faced backslash, this crisis and other infamous events proven as threat for the economy of the country. Many of American people rely on financial services for ability to get more mortgages, for investment opportunities and privacy savings. When ethical analy sis taken into consideration, and the