AIG has a special history in China. Founded by Cornelius Vander Starr in Shanghai in 1919, AIG had to leave China twice—once during WWII and once again following the Communist revolution. But the company never stopped its plan to return to the country of its birth. And in the 1970s, it “broke down a great wall” by being the first U.S. insurer to conduct business directly with the People’s Republic of China.
The groundwork for the historic relationship was laid years before. Chinese employees relocated to Hong Kong after the 1949 Communist revolution in China, but they continued to visit their relatives on the mainland, helping AIG to retain some visibility. Then, after President Richard Nixon’s visit in 1972, AIG company officers began to hold talks with the Chinese government-owned Ming An Insurance Co. in Hong Kong.
In 1975, AIG reached a reciprocal agreement with the government-owned insurer, in which the companies would participate in each other’s reinsurance treaties. This spread out the risk between the two parties and ensured that neither company would bear a disproportionally large loss from any single policy. The agreement also authorized each company to handle claims on the other’s behalf.
The U.S.-China Business Review said the agreement benefited both U.S. importers of Chinese products as well as those who exported products to China. “It marks another milestone in the step-by-step development of U.S. trade ties with China.”
In 1979, AIG placed an ad in The Wall Street Journal that outlined the various types of coverage the company offered in China as well as the United States, including marine cargo, contractors all risk, aviation, general liability, group benefits, and even political risk.
In the years that followed, AIG’s ties with China deepened further, and the company opened a branch office in Shanghai in 1992, after becoming the first foreign organization to be granted an insurance license in China, and more branches followed in other cities over the next two decades. Its Shanghai offices moved in 1998 to the building that had once housed the 1927 headquarters, and operated there for the next two decades, bringing the company full circle.