Posted On: November 20, 2008, 1:53 pm CST

Posted By: Guy in the know

GL, thanks for the comment, however, AIG employee I am not. The point I was trying to make is that people tend to post here before having all of the information. If people actually did any investigating (Wall Street Journal, Yahoo Finance, etc) they would be more educated on the situation and could make intelligent comments instead of off-the-cuff remarks - everyone is entitled to their opinion, but at least look into the facts before commenting on a piece of a larger story. I presented the facts - you can interpret however you want.

Back to your original comment, GL - about AIG undercutting the market and not posting a profit - a savvy investor would have noted that in AIG's 2007 Annual report, they posted a Combined Ratio of 90.33% - as you know, the insurance industry is considered profitable when the combined ratio is around 100% or less because income from investments should still help the company post profits (this is harder now with the weakening ecomnomy - it would be harder for a company to post profits since most investment portfolios have seen a decrease in value). Let's also remember that what got AIG into trouble was the CDO's (collateralized debt obligations) and CDS's (credit default swaps), which are financial products, not an insurance product even though they are typically compared to insurance because they have similarites.