by John Darer CLU ChFC CSSC RSP
Recently, a few attorneys have expressed concerns regarding the impact of the Spitzer settlement on AIG prompting me to address this issue in a new post. topic was partially discussed in a previous post on February 10, 2006, where I noted that the settlement amount, though substantial, did not significantly affect the long-term viability of the AIG brand. This is now underscored by today's news, reported in Business Insurance, in which it stated that "American International Group Inc. posted a profit of $10.48 billion for 2005, up 6.5% over 2004, though its fourth-quarter net income fell 72% to $444 million", largely due to the settlement being charged to the fourth quarter.
Whatever the industry, or in sports, people seem to like to bring down the big guy. In this case the big guy, AIG, seems to have suffered only a small "hair pull" out of some very strong legs. I'm sure AIG wishes that they didn't have to pay it. However there's no need for paranoia. The information about the amount of settlement is newsworthy but, like most things these days, media sensationalism needs to be discounted. It is important to look at the big picture (with numbers taken in context) before making rash and possibly costly decisions.
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