Anticipating new sources of systemic risk in insurance

Insurers played a central role in the 2008 global financial crisis. American International Group (AIG)—a holding company principally consisting of insurance businesses—was, by most accounts, a primary culprit in destabilizing the global financial system. ¹ AIG's role in the crisis was rivaled to some extent by several financial guarantee (or “monoline”) insurers, which offered insurance against the default of various types of bonds but were unable to make good on their promises. ²