2007 Annual Report - AIG.com
2007 Annual Report - AIG.com
2007 Annual Report - AIG.com
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In the summer of <strong>2007</strong>, widespread flooding throughout the United Kingdom<br />
resulted in nearly £3 billion in industry-wide insurance claims. Following the<br />
floods, emergency response claims teams from <strong>AIG</strong> Europe (UK) Limited visited<br />
affected policyholders within days to assess damage and expedite payments.<br />
to all of coastal Florida and Suffolk County, New York. <strong>AIG</strong><br />
Private Client Group also offered admitted group excess coverage<br />
targeted at wealth advisors and financial services <strong>com</strong>panies; introduced<br />
a risk management program, called Architectural Legacy, for<br />
owners of historic homes; and streamlined processes for policy<br />
issuance by providing agents with an easy-to-use online system.<br />
The reach of the Wildfire Protection Unit also expanded to more<br />
than 150 zip codes in the country.<br />
The group also began operations overseas as it introduced yacht<br />
insurance in the U.K. and established an office in Australia.<br />
United Guaranty Corporation<br />
The performance of United Guaranty Corporation (UGC) has a<br />
high degree of correlation to the U.S. housing industry, which experienced<br />
significant home price deterioration in most markets in <strong>2007</strong>.<br />
Although UGC had taken steps beginning in 2006 to stem the adverse<br />
impact on its business by changing credit underwriting standards,<br />
product eligibility guidelines and portfolio caps, its second-lien<br />
insurance business had a difficult year.<br />
Reflecting its long-term strategy to diversify in<strong>com</strong>e sources,<br />
UGC added new customers and products in the domestic private<br />
education loan business; opened a business development office in<br />
India; obtained licenses in Korea and Mexico; and began writing<br />
mortgage insurance in Canada.<br />
As mortgage lenders and investors return to higher quality mortgage<br />
lending and standard loan instruments, UGC is well-positioned<br />
to take advantage of opportunities when the market emerges from<br />
its current correction.<br />
Transatlantic Holdings, Inc.<br />
Transatlantic Holdings, Inc., <strong>AIG</strong>’s majority-owned reinsurance<br />
organization, reported record highs in net in<strong>com</strong>e and operating<br />
cash flow in <strong>2007</strong> as favorable loss experience in property lines<br />
benefited results. Premiums also increased <strong>com</strong>pared to the year-ago<br />
period, largely because of recent underwriting initiatives in the<br />
United States and overseas, and the strength of major foreign<br />
currencies against the dollar.<br />
Transatlantic’s long-term success is built on its financial strength,<br />
global reach through a network of offices spanning six continents<br />
and its enterprising group of reinsurance professionals worldwide.<br />
To address the challenge of market pricing weakness in many regions<br />
and lines of business, Transatlantic continues to focus on underwriting<br />
discipline and is capitalizing on opportunities in less-saturated areas<br />
in the global reinsurance marketplace.<br />
Foreign General Insurance<br />
<strong>AIG</strong>’s Foreign General Insurance business achieved growth in<br />
<strong>com</strong>mercial and consumer lines, driven by business from both<br />
established and new distribution channels. Net premiums written<br />
rose 14 percent to $13.05 billion.<br />
<strong>AIG</strong>’s Foreign General and its marketing unit, American<br />
International Underwriters (AIU), have a broad geographic scope<br />
and portfolio mix, as well as a seasoned management team, to<br />
serve clients in more than 80 countries around the world. In <strong>2007</strong>,<br />
AIU continued its strategy of expansion into the world’s most<br />
promising emerging markets, while deepening its footprint in the<br />
developed markets of Japan, continental Europe and the U.K./Ireland.<br />
Its multidistribution strategy targeted <strong>com</strong>mercial and consumer<br />
<strong>AIG</strong> <strong>2007</strong> <strong>Annual</strong> <strong>Report</strong> 29