2007 Annual Report - AIG.com
2007 Annual Report - AIG.com
2007 Annual Report - AIG.com
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overall financial condition, although it is<br />
possible that realized losses could be material<br />
to <strong>AIG</strong>’s consolidated results of operations<br />
for an individual reporting period.<br />
Full year results also include pretax net<br />
realized capital losses of $3.59 billion.<br />
Consolidated assets increased in <strong>2007</strong><br />
to $1.061 trillion, up from $979.41 billion<br />
in 2006. At year end, book value per share<br />
stood at $37.87, down from $39.09<br />
at the end of 2006. Shareholders’ equity<br />
also declined to $95.80 billion from<br />
$101.68 billion at the end of 2006. <strong>AIG</strong><br />
recorded total revenues during the year of<br />
$110.06 billion, 2.9 percent below 2006<br />
revenues. Revenues, shareholders’ equity<br />
and book value per share were adversely<br />
affected by realized capital losses and<br />
the net unrealized market valuation loss<br />
recorded by <strong>AIG</strong>FP.<br />
<strong>2007</strong> Highlights<br />
We overcame the challenges of <strong>2007</strong> to<br />
make progress on several fronts. We were<br />
pleased when the China Insurance<br />
Regulatory Commission approved our<br />
application to establish a Wholly Owned<br />
Foreign Enterprise (WOFE) under the<br />
name <strong>AIG</strong> General Insurance Company<br />
China Limited (<strong>AIG</strong> General). Soon<br />
after, we opened a new <strong>AIG</strong> General<br />
headquarters in Shanghai and consolidated<br />
our Chinese general insurance<br />
operations there to capture efficiencies<br />
and provide a platform to establish new<br />
branches in other areas of China. AIA<br />
China continued to expand on the<br />
provincial licenses granted in 2006,<br />
opening 29 new sales and service centers<br />
in <strong>2007</strong>, for a total of 104 centers in 19<br />
cities. In addition, <strong>AIG</strong> Investments SM<br />
received approval to set up a representative<br />
office in Tianjin, our first operation in<br />
China’s third-largest city.<br />
In Korea, we obtained preliminary<br />
approval from the Financial Supervisory<br />
Service to offer mortgage reinsurance<br />
through <strong>AIG</strong> United Guaranty Insurance<br />
(Asia) Limited. We signed a memorandum<br />
of understanding with the Bank<br />
of Investment and Development of<br />
Vietnam for the expansion of our business<br />
cooperation agreement in that rapidly<br />
growing country. The agreement will<br />
allow us to expand beyond our existing<br />
relationship in life insurance to include<br />
a wide range of areas such as general<br />
insurance, consumer finance, asset<br />
management and banking services.<br />
We are rapidly building a consumer<br />
finance franchise in India to <strong>com</strong>plement<br />
our Tata <strong>AIG</strong> Life and General Insurance<br />
partnership. In <strong>2007</strong>, we established a<br />
presence in housing finance and consumer<br />
durable finance. In addition, we are<br />
strengthening our presence in asset management<br />
and real estate development.<br />
In the Middle East, American Life<br />
Insurance Company (ALICO) received<br />
a license to operate a retail life insurance<br />
business in the Qatar Financial Centre.<br />
ALICO is the first life insurance <strong>com</strong>pany<br />
to receive an expanded license, which is<br />
in addition to a wholesale life insurance<br />
license first obtained in February <strong>2007</strong>.<br />
Our acquisition of the German<br />
insurer Württembergische und Badische<br />
Versicherungs-AG (WüBa) reaffirmed our<br />
<strong>com</strong>mitment to growth in the German<br />
marketplace, and greatly enhanced<br />
our insurance offerings to small and<br />
midsize <strong>com</strong>panies.<br />
We advanced our strategy in the auto<br />
insurance sector when we acquired the outstanding<br />
shares of 21st Century Insurance<br />
Group that we did not already own.<br />
BusinessWeek named <strong>AIG</strong> one<br />
of the 100 Best Global Brands,<br />
a testament to the brand’s growing<br />
value in markets all over the world.<br />
In <strong>2007</strong>, <strong>AIG</strong> received approval from<br />
the China Insurance Regulatory<br />
Commission to establish a wholly<br />
owned general insurance subsidiary<br />
in China(pictured, Shanghai skyline).<br />
The <strong>AIG</strong> Private Client Group’s<br />
Wildfire Protection Unit ® uses the<br />
latest fire-mitigation technology to<br />
help protect policyholders’ properties<br />
in the western United States.<br />
<strong>AIG</strong> <strong>2007</strong> <strong>Annual</strong> <strong>Report</strong> 3