The American Insurance Group, the world’s largest Insurance company, situated in US, was amongst the most respected insurance companies just few years back. But with the collapse of Lehman Brothers in 2008 beginning, and with the sub-prime crisis growing out of proportion, and with commodity prices crash landing, AIG went into deep financial mess.

They were forced to seek an immediate 60 billion dollar aid from the US government in the middle of 2008 saying that they badly need the money , otherwise they will sink. The US government then could not afford to allow another big financial institution to fail, hence they forcibly agreed and pumped the money.

But the problem is not over. AIG has now sought another 100 billion dollars from the government, saying that they are unable to meet their financial liabilities to many other global institutions. They have also thrown a bomb shell on the US government saying that even after this second round of pumping in of huge funds, they may still make losses in the coming quarters.

Now, the US government is feeling the heat, because the money it will be paying to bail out AIG will be tax payers money, and it cannot be used without any end in sight. Over the next few months, we can expect a major revamp of the AIG top management because we cannot allow the same management with no control over the company, to continue managing the affairs.

Finding a capable new management for a messed up organization like AIG is a bigger trouble for the new Obama government, which looks inevitable. It will also make lot of sense to change the management as quickly as possible, because continuation of current messy style of functioning can put AIG under further financial strain which Obama cannot afford. Also changing the entire top management could also send the right signals to erring companies including top banks and automobile companies.