2007 Annual Report - AIG.com

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We then consolidated 21st Century with AIG’s existing auto platform. The combined operation, aigdirect.com SM , is an organization with the reach and expertise needed to compete more effectively in the U.S. auto insurance marketplace. Through AIG-managed funds, we are a leading investor in the infrastructure business. In 2007, our investments in P&O Ports North America, AMPORTS and MTC Holdings were organized under one management structure. We believe the new entity, Ports America, constitutes the largest and most experienced independent port operator and automotive import/export processor in the United States. In addition to these accomplishments, we made good progress on several other fronts. Customer Focus—We devoted a great deal of attention to our customers as we broadened the implementation of our “Deliver the Firm” strategy. Specifically, we examined how to realign the way AIG does business so we can deploy our products and services in ways that allow us to meet multiple needs of customers around the world. For our customers, it means more convenience, more choices and even better services. For our employees, it means broader engagement with other AIG businesses and colleagues. For our shareholders, it means tapping the vast potential for new growth and higher returns. Capital Management—The implementation of our economic capital model provides us with a tool to help us allocate our capital efficiently. The tool provides one of the metrics we will use with increasing frequency to allocate capital to promising growth areas, judge performance on a consistent basis across our business segments and help us set compensation policy. AIG’s capital position is excellent and we have the flexibility to take advantage of growth opportunities. Innovation—Our reputation as an industry innovator gained widespread recognition when AIG Private Client Group’s Wildfire Protection Unit acted swiftly to protect client homes from raging wildfires in the western United States. The unit’s response teams treated client homes with a fire retardant in advance of the flames, reducing losses and claims. Meanwhile, AIG Product Development maintained a steady flow of new products, launching one every 14 days on average, with individual businesses launching even more. New offerings ranged from Family Protector, an urban protection package launched in South Africa, to AIG Oilfield Services Insurance, a one-stop coverage solution designed specifically for independent oil and gas clients. Building our Brand—We made substantial progress in 2007 in strengthening worldwide recognition of the AIG brand. Our success is attributable to greater consistency in the implementation of our brand and judicious investments in brand advertising and sponsorship opportunities. Our sponsorship of the Manchester United Football Club has helped tremendously to increase our recognition worldwide, particularly in key Asian markets. Of course, it has helped build recognition in the United Kingdom as well. The consolidation of our New Hampshire and Landmark businesses under the name AIG UK Limited will allow us to further leverage our Manchester United sponsorship. In Australia and New Zealand, all of our We devoted a great deal of attention to our customers as we broadened the implementation of our “Deliver the Firm”strategy. businesses now market under the AIG brand name. We launched a vigorous branding campaign in India to support our business growth there. National Union Fire Insurance Company of Pittsburgh, Pa., now markets under the name AIG Executive Liability SM and AIG VALIC, a leader in the K-12, healthcare and higher education markets, has re-branded as AIG Retirement. It was gratifying to see the growing strength of our brand recognized when BusinessWeek magazine included AIG in its annual list of the world’s top brands, ranking us at 47, the highest rank of any insurer, in our first-ever appearance on the list. While we are proud of these successes, we clearly need to improve in several areas. There is no disputing the severity of the U.S. residential mortgage crisis and the dislocation in the credit markets, but that cannot be an excuse for poor performance. We need to reverse higher losses and expenses and work through product and distribution shortcomings in several other businesses. Even though we have made progress increasing the average number of products sold per customer, there is still room for improvement. 4 AIG 2007 Annual Report
Group Executive Committee We are addressing these weaknesses through operational and structural investments and improvements, and I can assure you we are doing so with a sense of urgency. Vision and Values While financial strength, quality assets and a solid strategy are critical elements of success, it is also important to synthesize those elements with a set of core values that are shared by all employees. In 2007, we engaged a sampling of employees around the world and formalized a vision and set of values for AIG that will serve as our touchstone for future progress: Our Vision is to be the world’s first-choice provider of insurance and financial services. Our Values are People, Customer Focus, Performance, Integrity, Respect and Entrepreneurship. Our Vision and Values define and unite us as an organization. You can read more about our Vision and Values further on in this report. General Insurance In the United States and abroad, AIG’s General Insurance businesses write substantially all lines of commercial property-casualty insurance and various personal lines. A combination of product diversification, distribution strength and underwriting discipline allowed the General Insurance group to achieve higher operating income despite decidedly uneven market conditions. The Domestic Brokerage Group (DBG), which provides commercial insurance products and services to a wide range of businesses in the United States, had a record year, with operating income climbing 25 percent. DBG is the largest property-casualty insurance organization in the United States with market-leading businesses such as AIG Executive Liability, a premier provider of executive and professional liability insurance; Martin J. Sullivan 4 President and Chief Executive Officer Edmund S.W. Tse 5 Senior Vice Chairman Life Insurance Steven J. Bensinger 2 Executive Vice President and Chief Financial Officer Anastasia D. Kelly 3 Executive Vice President General Counsel and Senior Regulatory and Compliance Officer Rodney O. Martin, Jr. 11 Executive Vice President Life Insurance Kristian P. Moor 10 Executive Vice President Domestic General Insurance 1 2 6 3 7 8 9 Win J. Neuger 8 Executive Vice President and Chief Investment Officer Nicholas C. Walsh 6 Executive Vice President Foreign General Insurance Jay S. Wintrob 12 Executive Vice President Retirement Services William N. Dooley 9 Senior Vice President Financial Services Andrew J. Kaslow 1 Senior Vice President and Chief Human Resources Officer Brian T. Schreiber 7 Senior Vice President Strategic Planning 4 10 5 11 12 AIG 2007 Annual Report 5
Page 1 and 2: AMERICAN INTERNATIONAL GROUP, INC.
Page 3 and 4: FINANCIAL HIGHLIGHTS (in millions,
Page 5: overall financial condition, althou
Page 9 and 10: AIG’s life insurance network is t
Page 11 and 12: We have also begun to address the e
Page 13 and 14: WHAT WE SEE The ability to see and
Page 15 and 16: The Major Accounts Practice within
Page 17 and 18: Around the world, the middle class
Page 19 and 20: WE SEE GROWTH OPPORTUNITIES IN EMER
Page 21 and 22: To grow the strength of the AIG glo
Page 23 and 24: Since 2003, the AIG Disaster Relief
Page 25 and 26: RESPECT Respect encompasses how we
Page 27 and 28: Life Insurance & Retirement Service
Page 29 and 30: Domestic Brokerage Group— Gross P
Page 31 and 32: In the summer of 2007, widespread f
Page 33 and 34: in gross premiums written. It launc
Page 35 and 36: It grew new business premiums from
Page 37 and 38: emerging markets for its services,
Page 39 and 40: ILFC—Revenues by Region Total = $
Page 41 and 42: AIG Investments acquired a 94 perce
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American International Group, Inc.
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Index of Notes to Consolidated Fina
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SHAREHOLDER INFORMATION Corporate H
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