AIG Auto Insurance Companies

The heavyweight auto insurance company naming AIG had collapsed surprising many insurance companies of the world. Nobody knew that such a giant company will collapse in such a way. There were many warning signals which could not be taken seriously by the company officials and the employees.

Had they taken it seriously and adopted preventive measures the collapse could have been averted.

According to the committee selected to study the reasons of the downfall of the compa
y, they had concluded that the regulators had warned them five months earlier that there was something going wrong with the company in their books, but the AIG Insurance Company's top officials did not pay any attention to the report. It appears that the executives of the AIG did the same mistake that in the year 2000 many stock companies did and the stock market crashed. Such type of problems could be solved in the coming years if some stringent regulations are issued by the Government that the companies invest their cash wisely instead of risky investments which attract higher returns and have high risks like volatile commodities.

The company could not focus its time and energy into its main business i.e. the insurance business. Had it concentrated on the insurance business , the fall could have been delayed or even averted. The business of the AIG was going in an efficient manner for quite some time but it diverted from its main business and invested the funds in other activities which proved fetal for the company. The downfall of the company was due to the greed of the top executives of the company which lured them to invest the funds in risky investments which promised them of high returns.

The Bush administration took some preventive measures and relaxed certain regulatory factors to improve the working of Wall Street. Many companies were benefited due to these relaxations and were in a position to improve their performances. The new Government has the responsibility not to repeat the mistakes done by the previous government. This is the duty of the top CEO's to look into the interest of the investors and do their job in an efficient manner so that the investors maintain their faith in the companies. The Government also has to ensure and keep in mind that these things do not recur again and the faith of the large number of investors is considered on priority.

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