WASHINGTON — After World War II, a far-flung insurance company in China run by an American businessman took a risky bet ensuring that about 20 boats filled with Americans would make it back to the United States.

From those distant beginnings grew American International Group, which became one of the biggest insurance companies in the world, under the leadership of Maurice R. "Hank" Greenberg.

With more than $1 trillion in assets, AIG is bigger than Fannie Mae, Freddie Mac, Merrill Lynch, Lehman Brothers or the former Bear Stearns.

AIG's subsidiaries sell life, auto, property, workers compensation, kidnapping and ransom, and many other types of insurance. The company offers retirement plans such as annuities. Its financial markets subsidiary services investment banks, pension funds, governments and other institutional investors, and AIG manages portfolios of stocks, bonds and real estate. The company is the nation's largest leaser of aircraft.

Among the activities it ventured into: buying mortgage-related securities and offering other firms an exotic type of insurance to cover losses from investments tied to mortgages.

That proved to be a problem.

"AIG didn't have to be in those businesses," said David Schiff, a longtime observer of the company and editor of an industry trade publication. "Obviously they didn't think they were risking it. That's the problem: They didn't envision that the situation could have gotten so out of hand."

By Monday, it was clear that AIG needed emergency funds to keep it out of bankruptcy.

Analysts say that most of AIG's businesses are, on their own, in fine financial shape. But what is happening on Wall Street is at the root of AIG's troubles. The steep decline of AIG's holdings of mortgage-backed securities has weighed heavily on the firm's balance sheet — just as it has other fallen Wall Street firms.

But the role AIG plays is much broader than many other firms. AIG has sold $80 billion in credit default swaps — a type of insurance — to investment houses to cover their losses on mortgage-backed securities.

As the mortgage market has melted down, AIG has been on the line to cover more of the losses. Seventy-five percent of mortgage-related securities insured by AIG were derived primarily from subprime mortgages, which are failing at unprecedented high rates. In all, AIG has posted losses of $25 billion.

AIG's difficulties could have unleashed further chaos on Wall Street if the company was unable to meet its obligations. AIG has estimated that it would be responsible for stopgapping $8 billion or more in mortgage-related losses.

AIG was once a darling of Wall Street before it started running into trouble five years ago. The company achieved startling growth under Greenberg, an insurance scion whose sons also led major insurance concerns.

Greenberg was known as an irascible leader whose presence could be felt across a room. To build AIG, he launched a buying spree of insurance companies and other financial firms. That effort paid off personally: At one point, Greenberg was worth $3 billion.

In 2005, Greenberg was forced out as chief executive in a clash with regulators who questioned the company's accounting and other practices. AIG ultimately agreed to pay more than a billion dollars in fines to the government to resolve the charges.

Martin Sullivan, another AIG insider, replaced Greenberg. He was forced to resign earlier this year because of the company's growing mortgage-related losses, and was replaced by Robert Willumstad, a former Citigroup executive.