American International Group, Inc.

KEY FACTS
American International Group, Inc.
70 Pine Street
New York
NY 10270
United States
Tel: 1 212 770 7000
Fax: 1 212 509 9705
Web: www.aigcorporate.com
New York Ticker: AIG
No. Employees: 92,000
Turnover: (US$ Mn)97,987
Financial Year End: December

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BUSINESS DESCRIPTION
American International Group (AIG) is the world's leading international insurance and financial services organization, with operations in more than 130 countries and jurisdictions. AIG member companies serve commercial, institutional and individual customers through extensive worldwide property-casualty and life insurance networks. In the US, AIG companies are the largest underwriters of commercial and industrial insurance and AIG American General is a top-ranked life insurer. AIG's global businesses also include retirement services, financial services and asset management. The group?s financial services businesses include aircraft leasing, financial products, trading and market making. AIG's growing global consumer finance business is led in the US by American General Finance. The company also has one of the largest US retirement services businesses which is operated through AIG SunAmerica and The Variable Annuity Life Insurance Company (VALIC), and is a leader in asset management for the individual and institutional markets, with specialized investment management capabilities in equities, fixed income, alternative investments and real estate.After an organizational restructure in 2004, the company has reduced the number of operating segments from four to three. These are now general insurance, life insurance (which includes the former segment of retirement services); and financial services.With the segment of general insurance, AIG?s subsidiaries are multiple line companies writing substantially all lines of property and casualty insurance. US general insurance operations are comprised of the domestic brokerage group (DBG), which includes the operations of The Hartford Steam Boiler Inspection and Insurance Company (HSB); Transatlantic Holdings (Transatlantic), Personal Lines, including 21st Century Insurance Group (21st Century); and United Guaranty Corporation (UGC). The primary general insurance arm of the company in the US operates through DBG. DBG?s business is derived from brokers in the US and Canada and is conducted through its subsidiaries including American Home, National Union, Lexington and certain other general insurance subsidiaries. DBG writes substantially all classes of business insurance, accepting such business mainly from insurance brokers. This provides it with the opportunity to select specialized markets and retain underwriting control. Any licensed broker is able to submit business to DBG without the traditional agent-company contractual relationship, but such brokers usually have no authority to commit DBG to accept a risk. AIG uses managing general agents owned by Starr to produce business in certain lines. In addition to writing substantially all classes of business insurance, including large commercial or industrial property insurance, excess liability, inland marine, environmental, workers compensation and excess and umbrella coverage, DBG offers many specialized forms of insurance such as aviation, accident and health, equipment breakdown, directors and officers liability (D&O), difference-in-conditions, kidnap-ransom, export credit and political risk, and various types of professional errors and omissions coverage. The company?s risk management operation provides insurance and risk management programs for large corporate customers. The risk finance operation is a provider of customized structured insurance products. In addition, also included in DBG, are the operations of AIG Environmental, which focuses specifically on providing specialty products to clients with environmental exposures. Another subsidiary, Lexington, writes surplus lines, for risks that conventional insurance companies do not readily provide insurance coverage, either because of complexity or because the coverage does not lend itself to conventional contracts. The AIG Worldsource division introduces and coordinates AIG?s products and services to US-based multinational clients and foreign corporations doing business in the US. Transatlantic subsidiaries offer reinsurance capacity on both a treaty and facultative basis both in the US and abroad. Likewise, the company?s personal lines operations engage in mass marketing of personal lines coverages, primarily private passenger auto and personal umbrella coverages, principally through American International Insurance Company and 21st Century. The business of UGC and its subsidiaries is also included in the domestic operations of AIG. The principal business of the UGC subsidiaries is the writing of residential mortgage loan insurance, which is guaranty insurance on conventional first mortgage loans on single-family dwellings and condominiums. This type of insurance protects lenders against loss if borrowers default. UGC subsidiaries also write home equity and property improvement loan insurance on loans to finance residential property improvements, alterations and repairs and for other purposes not necessarily related to real estate. In addition, AIG?s foreign general insurance group accepts risks primarily underwritten through American International Underwriters (AIU), a marketing unit consisting of wholly owned agencies and insurance companies. The foreign general insurance group also includes business written by AIG?s foreign-based insurance subsidiaries. It uses various marketing methods and multiple distribution channels to write both business and personal lines insurance with certain refinements for local laws, customs and needs. AIU operates in Asia, the Pacific Rim, the UK, Europe, Africa, the Middle East and Latin America.Within the second segment of life insurance and retirement services operations, AIG offers a range of insurance and investment-oriented products both in its domestic market of the US and abroad. Insurance-oriented products consist of individual and group life, payout annuities, endowment and accident and health policies. Investment-oriented products consist generally of fixed and variable annuities.The segment?s operations in foreign countries comprise around 78% of GAAP premiums and 62.4% of operating income. AIG operates overseas principally through American Life Insurance Company (ALICO), American International Assurance Company Bermuda (AIA), Nan Shan, Philamlife, AIG Star Life, and AIG Edison Life. ALICO is incorporated in Delaware and all of its business is written outside of the US. It has operations either directly or through subsidiaries in Europe, Latin America, the Caribbean, the Middle East, South Asia and the Far East, with Japan being the largest territory. Similarly, AIA operates primarily in China (including Hong Kong), Singapore, Malaysia, Thailand, South Korea, Australia, New Zealand, Vietnam, and India. The operations in India are conducted through a joint venture, Tata AIG Life Insurance Company. Nan Shan operates in Taiwan. Philamlife is the largest life insurer in the Philippines. Another subsidiary, American International Reinsurance Company (AIRCO), acts primarily as an internal reinsurance company for AIG?s foreign life operations. This facilitates insurance risk management (retention, volatility, concentrations) and capital planning locally (branch and subsidiary). It also allows AIG to pool its insurance risks and purchase reinsurance more efficiently at a consolidated level and manage global counterparty risk and relationships. The group?s principal US life insurance and retirement services operations include American General Life and Accident Insurance Company (AGLA), AIG American General, AIG Annuity, The United States Life Insurance Company in the City of New York (USLIFE), VALIC and SunAmerica Life. These companies utilize multiple distribution channels including independent producers, brokerage, career agents and banks to offer life insurance, annuity and accident and health products and services as well as financial and investment products. In addition to the above, AIG also has subsidiary operations in Canada, Egypt, Mexico, Poland, Switzerland and Puerto Rico, and conducts life insurance business through a joint venture in Brazil; and through the American International Underwriters Overseas (AIUO) subsidiary company in Russia, and in certain countries in Central and South America. These foreign life insurance and retirement services companies have over 250,000 full and part-time agents, as well as independent producers, and sell their products largely to indigenous persons in local and foreign currencies. In addition to the agency outlets, these companies also distribute their products through direct marketing channels, such as mass marketing, and through brokers and other distribution outlets, such as financial institutionsA significant portion of this segment?s operating revenues are derived from AIG?s insurance investment operations. AIG?s worldwide insurance investment policy places primary emphasis on investments in government and other high quality, fixed income securities in all of its portfolios and, to a lesser extent, investments in high yield bonds, common stocks and partnerships, in order to preserve policyholders? surplus and generate net investment income. Within the final segment of financial services, AIG?s financial services subsidiaries engage in diversified financial products and services including aircraft leasing, capital market transactions, and consumer and insurance premium financing. Aircraft finance operations represent the operations of International Lease Finance Corporation (ILFC), which engages primarily in the acquisition of commercial jet aircraft and the leasing and remarketing of such aircraft to airlines around the world. ILFC also provides, for a fee, fleet management services to certain third-party operators. Consumer finance operations include AGF as well as AIG Consumer Finance Group (AIGCFG). AGF provides a variety of consumer finance products, including real estate mortgages, consumer loans, retail sales finance and credit-related insurance to customers in the US. Likewise, AIGCFG through its subsidiaries is engaged in developing a multi-product consumer finance business with an emphasis on emerging markets. AIG?s other operations include asset management operations. These operations are comprised of a variety of investment-related services and investment products, including institutional and retail asset management, broker dealer services and spread-based investment business from the sale of guaranteed investment contracts, also known as funding agreements (GICs). Such products and services are offered to individuals and institutions both domestically and overseas. Finally, certain other AIG subsidiaries provide insurance-related services such as adjusting claims and marketing specialized products. Several wholly owned foreign subsidiaries of AIG operating in countries such as Ireland, Bermuda, Barbados and Gibraltar provide insurance and related administrative and back office services to a variety of insurance and reinsurance companies. These companies include captive insurance companies unaffiliated with AIG, subsidiaries of AIG and the subsidiaries of holding companies in which AIG holds an interest, such as IPC Holdings and Allied World Assurance Holdings. AIG also has several other subsidiaries which engage in various businesses. For example, American International Technology Enterprises provides information technology and processing services to businesses worldwide; and Mt. Mansfield Company, owns and operates the ski slopes, lifts, school and an inn located at Stowe, Vermont.
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