Full Description

American International Group, Inc. (AIG) is a holding company which, through its subsidiaries, is engaged in a range of insurance and insurance-related activities in the United States and abroad. AIG’s primary activities include both General Insurance and Life Insurance & Retirement Services operations. Other significant activities include Financial Services and Asset Management. The Company operates in four segments: General Insurance, Life Insurance & Retirement Services, Financial Services and Asset Management. Through these operating segments, AIG provides insurance, financial and investment products and services to both businesses and individuals in more than 130 countries and jurisdictions. AIG’s subsidiaries serve commercial, institutional and individual customers through a property-casualty, and life insurance and retirement services network. AIG’s Financial Services businesses include commercial aircraft and equipment leasing, capital markets operations and consumer finance, both in the United States and abroad. AIG also provides asset management services to institutions and individuals. In September 2008, AIG sold its 50% stake in London City airport. In December 2008, AIG’s United States life insurance companies sold its residential mortgage-backed securities portfolio to Maiden Lane II LLC.

In July 2009, the Company closed the sale of 21st Century Insurance Group, the wholly owned subsidiaries of AIG's United States personal auto insurance business, to Farmers Group, Inc. In May 2009, Alico Japan, a unit of AIG, acquired a 100% stake in Financial Learning KK, a Japanese subsidiary of AIG that provides training to bank employees. In April 2009, AIG announced the completion of the sale of AIG Private Bank Ltd., a wholly owned subsidiary of the Company to a subsidiary of Aabar Investments PJSC (Aabar). On April 1, 2009, AIG completed the sale of AIG Life of Canada to BMO Financial Group, and Hartford Steam Boiler to the Munich Re Group. In April 2009, the Company completed the sale of AIG's retail bank, AIG Retail Bank Public Company Limited, and credit card operation, AIG Card (Thailand) Company Limited, in Thailand to Bank of Ayudhya Public Company Limited.

General Insurance Operations

AIG’s General Insurance subsidiaries are multiple line companies writing substantially all lines of property and casualty insurance, and various personal lines both domestically and abroad. It constitutes the AIG Property Casualty Group and the Foreign General Insurance Group. AIG Property Casualty Group includes commercial insurance, transatlantic, personal lines and mortgage guaranty businesses. In General Insurance, workers’ compensation business is the largest class of business written and represented approximately 11% of net premiums written, during the year ended December 31, 2008. During 2008, 9%, 5% and 5% of the direct General Insurance premiums written (gross premiums less return premiums and cancellations, excluding reinsurance assumed and before deducting reinsurance ceded) were written in California, New York and Texas, respectively. The majority of AIG’s General Insurance business is in the casualty classes, which tend to involve longer periods of time for the reporting and settling of claims.

AIG’s primary property casualty division is commercial insurance. Commercial insurance’s business in the United States and Canada is conducted through American Home, National Union, Lexington, HSB and certain other General Insurance company subsidiaries of AIG. During 2008, Commercial Insurance accounted for 47% of AIG’s General Insurance net premiums written. Commercial insurance writes substantially all classes of business insurance, accepting such business mainly from insurance brokers. 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 coverages, commercial insurance 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 coverages. Also included in commercial insurance are the operations of AIG Risk Management, which provides insurance and risk management programs for large corporate customers, and AIG Environmental, which focuses specifically on providing specialty products to clients with environmental exposures. Lexington Insurance Company (Lexington) writes surplus lines for risks, on which conventional insurance companies do not readily provide insurance coverage. The AIG Worldsource Division introduces and coordinates AIG’s products and services to United States-based multinational clients and foreign corporations doing business in the United States.

Transatlantic Holdings, Inc. (Transatlantic) subsidiaries offer reinsurance capacity on both a treaty and facultative basis both in the United States and abroad. Transatlantic structures programs for a range of property and casualty products with an emphasis on specialty risk. AIG’s Personal Lines operations provide automobile insurance through 21st Century Insurance, its direct marketing distribution channel, and the Agency Auto Division, its independent agent/broker distribution channel. It also provides a broad range of coverages for high-net-worth individuals through the AIG Private Client Group (Private Client Group). Coverages for the Personal Lines operations are written predominantly in the United States. The main business of the subsidiaries of United Guaranty Corporation (UGC) is the issuance of residential mortgage guaranty insurance, both domestically and internationally, that covers the first loss for credit defaults on high loan-to-value conventional first-lien mortgages for the purchase or refinance of one to four family residences.

AIG’s Foreign General Insurance group writes both commercial and consumer lines of insurance, which is 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. The Foreign General Insurance group uses various marketing methods and multiple distribution channels to write both commercial and consumer lines insurance with certain refinements for local laws, customs and needs. AIU operates in Asia, the Pacific Rim, Europe, the U.K., Africa, the Middle East and Latin America. During 2008, the Foreign General Insurance group accounted for 32% of AIG’s General Insurance net premiums written.

Life Insurance & Retirement Services Operations

AIG’s Life Insurance & Retirement Services operations provide insurance, financial and investment-oriented products throughout the world. Insurance-oriented products consist of individual and group life, payout annuities (including structured settlements), endowment and accident and health policies. Retirement savings products consist generally of fixed and variable annuities. In its Foreign Life Insurance & Retirement Services businesses, AIG operates principally through American Life Insurance Company (ALICO), AIG Star Life Insurance Co., Ltd. (AIG Star Life), AIG Edison Life Insurance Company (AIG Edison Life), American International Assurance Company, Limited, together with American International Assurance Company (Bermuda) Limited (AIA), Nan Shan Life Insurance Company, Ltd. (Nan Shan) and The Philippine American Life and General Insurance Company (Philamlife).

ALICO has operations either directly or through subsidiaries in Europe, including the United Kingdom, Latin America, the Caribbean, the Middle East, South Asia and the Far East, with Japan being the largest territory. AIA operates primarily in China (including Hong Kong), Singapore, Malaysia, Thailand, Korea, Australia, New Zealand, Vietnam, Indonesia and India. The operations in India are conducted through a joint venture, Tata AIG Life Insurance Company Limited. Nan Shan operates in Taiwan. Philamlife is a life insurer in the Philippines. AIG Star Life and AIG Edison Life operate in Japan. Operations in foreign countries comprised 80% of Life Insurance & Retirement Services premiums and other considerations, during 2008.

AIG’s principal Domestic Life Insurance and Domestic Retirement Services operations include American General Life and Accident Insurance Company (AGLA), American General Life Insurance Company (AIG American General), AIG Annuity Insurance Company (AIG Annuity), The United States Life Insurance Company in the City of New York (USLIFE), The Variable Annuity Life Insurance Company (VALIC) and AIG SunAmerica Life Assurance Company (AIG SunAmerica). The Domestic Life Insurance and Domestic Retirement Services operations comprised 20% of total Life Insurance & Retirement Services premiums and other considerations.

Financial Services Operations

AIG’s Financial Services subsidiaries engage in diversified activities, including aircraft leasing, capital markets, consumer finance and insurance premium finance. Together, the Aircraft Leasing, Capital Markets and Consumer Finance operations generate the majority of the revenues produced by the Financial Services operations. Imperial A.I. Credit Companies (A.I. Credit) also contributes to Financial Services results principally by providing insurance premium financing for both AIG’s policyholders and those of other insurers.

AIG’s Aircraft Leasing operations are the operations of ILFC, which generates its revenues primarily from leasing new and used commercial jet aircraft to foreign and domestic airlines. Capital Markets is comprised of the operations of AIG Financial Products Corp. and AIG Trading Group Inc. and their respective subsidiaries (collectively, AIGFP), which engaged as principal in a variety of financial transactions, including standard and customized financial products involving commodities, credit, currencies, energy, equities and interest rates. AIGFP also invests in a portfolio of securities and principal investments, and engages in borrowing activities that involve issuing standard and structured notes and other securities and entering into guaranteed investment agreements (GIAs).

Consumer Finance

AIG’s Consumer Finance operations in North America are principally conducted through American General Finance, Inc. (AGF). AGF derives most of its revenues from finance charges assessed on real estate loans, secured and unsecured non-real estate loans and retail sales finance receivables. During 2008, AGF ceased its wholesale originations (originations through mortgage brokers). AIG’s foreign consumer finance operations are principally conducted through AIG Consumer Finance Group, Inc. (AIGCFG). AIGCFG operates primarily in emerging and developing markets. AIGCFG has operations in Argentina, China, Brazil, Hong Kong, Mexico, the Philippines, Poland, Taiwan, Thailand, India and Colombia.

Asset Management Operations

AIG’s Asset Management operations comprise a variety of investment-related services and investment products. These services and products are offered to individuals, pension funds and institutions (including AIG subsidiaries) globally through AIG’s Spread-Based Investment business, Institutional Asset Management, and Brokerage Services and Mutual Funds business. Also included in Asset Management operations are the results of certain SunAmerica sponsored partnership investments.

AIG’s Institutional Asset Management business, conducted through AIG Global Asset Management Holdings Corp. and its subsidiaries and affiliated companies (collectively, AIG Investments), provides an array of investment products and services globally to institutional investors, pension funds, AIG subsidiaries, AIG affiliates and high-net-worth investors. These products include traditional equity and fixed maturity securities, and a range of real estate, private banking and alternative asset classes. Services include investment advisory and sub-advisory services, investment monitoring and transaction structuring. Within the equity and fixed maturity asset classes, AIG Investments offers various forms of structured investments. Within the alternative asset class, AIG Investments offers hedge and private equity funds and fund-of-funds, direct investments and distressed debt investments. AIG Global Real Estate provides a range of real estate investment, development and management services for AIG subsidiaries, as well as for third-party institutional investors, pension funds and high net worth investors. AIG Global Real Estate also maintains a real estate investment portfolio through various joint venture platforms.