AIG Launches Crowdfunding Fidelity For Investor Protection
Zacks Investment Research | May 25, 2016 08:45AM ET
American International Group, Inc. (NYSE:AIG) recently came up with a new insurance product, Crowdfunding Fidelity, to protect investors on equity crowdfunding platforms. The product, which is the first of its kind in the industry, will cater to the global crowdfunding investment industry by shielding investors from issuer fraud.
Equity Crowdfunding has predominantly been a niche sector available to select high net worth individuals, venture capital funds and private equity firms. Though these platforms are currently in their initial phase, they are growing rapidly and are already a reliable option for start-ups. These platforms enable entrepreneurs and innovators to pitch their ideas and gain funding from retail investors.
AIG believes that Crowdfunding Fidelity will boost confidence among investors and innovators about these platforms by increasing security. The product guards individual investors from theft of issuer assets by issuer directors, officers, or general employees, thus minimizing direct loss from such incidents. Though the sector is not challenged by too many fraud cases, AIG’s new product will help build investor trust using these platforms by ensuring issuer’s credibility.
Dubai-based Crowdfunding platform – Eureeca – has purchased this product and made it available to investors. Notably, Eureeca is the first platform to use this product. AIG worked extensively with the company to gain a better insight of the industry’s risk exposures. The aforesaid product was developed accordingly.
AIG, which currently carries a Zacks Rank #3 (Hold), works continually to ramp up its growth profile by collaborating with other companies from the industry and launching new products. On May 11, the company announced a new streamlined portfolio of index universal life (IUL) insurance products in addition to new educational resources for finance professionals to provide better protection to individual and small businesses.
Some better-ranked insurance stocks to consider are Loews Corporation (NYSE:L) , FBL Financial Group Inc. (NYSE:FFG) , AXA Group (OTC:AXAHY) . All these stocks hold a Zacks Rank #2 (Buy).
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