Business and Management Review <o> </o> <o> </o>
1) Is the business simple and understandable? <o> </o>
Insurance is a business that is very simple and understandable. Value investors are taught to love the insurance business because of its tremendous simplicity and its strengths. Insurance is wonderful because the company is able to take in premiums and invest the funds, keeping the profit on the investments after any claims are paid out. American International Group is primarily an insurance company and is thus a simple and understandable company.
<o> </o> 2) Does the business have a consistent operating history? <o> </o>
AIG has a long history in the insurance business, and that operating history has remained consistent and constant over its history. Financially, the company has achieved a positive net income for over 10 years and has paid a dividend for many years.
<o> </o> 3) Does the business have favorable long term prospects? <o> </o> Insurance will always be around, and AIG will likely be a prominent member of the insurance industry despite growing competition from others. The company continues to seek growth through international ventures, which bodes well for shareholders.
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$39.52 (05/15/08)
