AIG annuity

American International Group, Inc. (AIG) (NYSE: AIG) is a major American insurance corporation based in New York City. The UK headquarters are located on Fenchurch Street in London, England. UK, Continental Europe operations are based in La Defense, Paris and its Asian HQ is in Hong Kong. According to the 2008 Forbes Global 2000 list, AIG is the 18th-largest company in the world. It became a component of the Dow Jones Industrial Average on April 8, 2004. As of March 16, 2007, AIG Investments, a division of AIG, completed the purchase of 100% of the stock of P&O Ports North America from Dubai-based DP World.

AIG is one of the largest international insurance and financial services organizations in the world, with operations in more than 130 countries and jurisdictions. AIG member companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In the United States, AIG companies are the largest underwriters of commercial and industrial insurance and AIG American General is a top-ranked life insurer.

IF it were actually to play out that an insurer went instantaneously from A+(Best), AA+ (S&P), Aa2 (Moody's), AA+ (Fitch) to insolvent, go directly to insolvent, do not pass Go, etc. and the result of that was that annuitants were affected in any way beyond seeing a new logo on the monthly payment checks, then someone has some 'splainin' to do and quite frankly I'd like to see it done in a court of law.

Unlike Guaranty Association protection, these ratings darn well are used as an inducement to buy... customarily and universally used as an inducement to buy... as in

Quote:

When choosing an income annuity, the financial strength of the insurance company that issues the annuity is very important. You will be relying on the insurance company to make payments over many years. Vanguard's insurance partners in the Vanguard Lifetime Income Program are AIG Life Insurance Company and, in New York State only, American International Life Assurance Company of New York (collectively, "the AIG Insurers"). With a reputation for stability and integrity built up over decades, the AIG Insurers are highly rated for insurer financial strength from the principal ratings agencies

Consumers absolutely are encouraged to think that the ratings mean something.

If you buy a policy from an A+ rated company and the ratings gradually decline over time from A+ to A to A- to B++ to B+ and eventually to C, D, E, and F, that's one thing. That's still a bummer. But if it turns out that a company can actually go from A+ to insolvent instantly, leaving policyholders with actual losses, then the ratings are worthless and the way in which consumers are encouraged to rely on them is deceptive.

I'm not saying the ratings don't actually reflect something valid about the company; I'm saying it's represented that they have some useful predictive value in the situation where, in Vanguard's words, "You will be relying on the insurance company to make payments over many years."

If the ratings have a shelf life shorter than supermarket chicken, then they can't help you decide about whether a company can "make payments over many years."