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What happens if AIG goes under?

AIG is one of the largest insurance companies in the world with a workforce which is four times that of Lehman Brothers. The company literally has a hand in every major insurance market around the world and if it were to cease trading then customers would need to look elsewhere for their insurance cover - not to mention Manchester United having to replace their £56 million sponsorship deal!

The problem which AIG has now is the fact that the 'genie is out of the bottle' and nobody is willing to make finance available to the group at any price. The only real chance the group has of survival is a takeover by a major group on rock bottom terms, more asset fire sales or the government stepping up to the mark when crunch time comes. Whether the group has left any or all of these options too late remains to be seen.

The affect upon the worldwide insurance market will be catastrophic to say the least with confusion reigning supreme. If customers are not able to trust the largest insurance group in the world, i.e. AIG, where does that leave the other players in the market? It will also prompt the question as to who will be next in the firing line, who will be forced to reveal a whole heap of 'toxic' investments.

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