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Insurance was insulated from the global meltdown? I thought AIG was ground zero. Were they just one big outlier?
by prodigal_erik 16y ago
Insurance was insulated from the global meltdown? I thought AIG was ground zero. Were they just one big outlier?
- rdl 16y agoAIG failed due to AIG Financial Products, which sold overly-cheap high risk derivative Credit Default Swaps on mortgage-backed securities, not due to their core insurance business. CDSes are insurance of a sort against default risk, but they didn't involve actuaries, a real risk model for pricing, etc. All the other parts of AIG were actually doing quite well.