Bring on tomorrow - AIG.com

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ROBERT S. MILLER Non-Executive Chairman of the BoardWe have a past,we have a present,and – with thanksto AIG’s employeesand America’ssupport – now wehave a future.DEAR AIG SHAREHOLDER,When I said in my letter for AIG’s 2011 Annual Report that “timewill tell” if the people of AIG had executed the largest turnaroundin corporate history, it was with optimism that I believed it wouldhappen so quickly.Beyond its impressive exit of government ownership, AIG continuedto make sound business decisions in 2012, helping positionthe company for a strong future by divesting non-core assets,streamlining global operations under clear reporting lines, andlooking for smart opportunities to grow AIG’s business. Now thetrue measure of success will be what we can do together as weopen a new chapter in 2013.We believe the role of the Board of Directors is to fully understandthe business of AIG and, using that knowledge, to providetrue oversight and make informed decisions.With this belief in mind, we have been an engaged Board, withour sleeves rolled up, working independently and alongsidemanagement to better guide AIG’s future. We will continue to dowhatever it takes, and we remain committed to implementing andoverseeing a set of guiding principles that act as AIG’s foundation.For example, at every Board of Directors meeting, we getupdates from AIG’s Enterprise Risk Management (ERM) functionand review the results of stress tests that examine how AIG wouldbe affected by any number of scenarios. I firmly believe that thework of the Board and the ERM team will help ensure that AIGnever again faces the kind of crisis we did in 2008.Another example is Federal Reserve (Fed) oversight. In 2012,when U.S. government ownership of AIG fell below 50 percent,the Fed became AIG’s global regulator. AIG has welcomed theFed’s presence, as it has served to strengthen us by holding ourcompany to the highest standards. We feel strongly that it is importantto maintain a transparent relationship and open dialoguewith the Fed – at the corporate level and at the Board level.Besides me, several key Board committee chairs meet regularlywith representatives from the Fed to share perspectives. We willcontinue to listen and respond to their questions, suggestions,and guidance.The Board also sees firsthand AIG’s operations in action, as weschedule our meetings at various company locations around theworld. In the days after Storm Sandy, I, along with a group ofBoard members, went to AIG’s Operations & Systems facility inKuala Lumpur, where we were surrounded by IT professionals, amobilized command center working seamlessly with its sister commandcenter in Fort Worth, Texas, and a team of AIG colleaguesworking tirelessly to support our business operations in NewJersey and New York. While we need to continue to review andstrengthen our business continuity capabilities, AIG already hasproven its ability to deal with disruption. The global reach of thiscompany is impressive and invaluable in overcoming adversityand seeking new opportunities.And I see no more telling sign of AIG’s recovery than the decisionto retire the Chartis and SunAmerica Financial Group names,again making AIG the go-to-market brand of our Property Casualtybusiness, and renaming the life and retirement business AIG Lifeand Retirement. Coupled with a refreshed logo and brand promiseencouraging employees, clients, and partners to bring on thechallenges of tomorrow, we truly are looking to the future.A good Board of Directors should empower people to stretchand expand the limits of what is possible, and we will continueto work hard to help AIG reach its full potential. We cannot waitto begin the next chapter in the AIG story. We have a past, wehave a present, and – with thanks to AIG’s employees and America’ssupport – now we have a future. This is the time to make themost of it.Robert S. Miller February 21, 20134
Financial HighlightsYears Ended December 31,(dollars in millions, except per share data) 2012 2011 2010Operating results:Total revenues $ 65,656 $ 59,812 $ 72,829Net income attributable to AIG 3,438 20,622 10,058After-tax operating income (loss) 6,635 2,086 (1,549)Earnings (loss) per share (EPS):Net income (loss) attributable to AIG 2.04 11.01 14.98After-tax operating income (loss) attributable to AIG $ 3.93 $ 1.16 $ (11.34)Balance sheet:Total assets $ 548,633 $ 553,054 $ 675,573Shareholders' equity 98,002 101,538 78,856Book value per share (1) 66.38 53.53 43.20Book value per share, excluding Accumulatedother comprehensive income (AOCI) (1) $ 57.87 $ 50.11 $ 38.27Key metrics:AIG Property Casualty combined ratio 108.6 108.8 116.8AIG Property Casualty accident year combined ratio,as adjusted (2) 99.9 99.2 100.3AIG Life and Retirement premiums, depositsand other considerations $ 20,994 $ 24,392 $ 19,505(1) 2011 and 2010 adjusted to reflect reclassification of income taxes from Accumulated other comprehensive income to Additional paid-incapital. Book value per share in 2010 is presented on a pro forma basis as if to reflect completion of the recapitalization prior toJanuary 2011.(2) Combined ratio presented excluding catastrophe losses and related reinstatement premiums, prior year development, net of premiumadjustments and the impact of reserve discount.After-Tax OperatingIncome (Loss)($ in billions)Total Assets($ in billions)Shareholders' Equity($ in billions)Book Value per ShareExcluding AOCI$(1.5)$2.1$6.6$675.6$553.1$548.6$78.9$101.5$98.0$38.27$50.11$57.8720102011 2012 20102011 2012 20102011 201220102011 20125
Page 1 and 2: American International Group, Inc.2
Page 3 and 4: KEY FACTS & FIGURES52,000+ $65.7 bi
Page 5: ■We said we would return to profi
Page 9 and 10: ~63,000AIG EMPLOYEES AROUND THE WOR
Page 11 and 12: $115.1 millionAVERAGE CLAIMS PAID E
Page 13 and 14: $10,000MAXIMUM DONATION MADE BY AIG
Page 15 and 16: American International Group, Inc.F
Page 18 and 19: AMERICAN INTERNATIONAL GROUP, INC.A
Page 20 and 21: ITEM 1 / BUSINESS / AIG............
Page 22 and 23: ITEM 1 / BUSINESS / AIG............
Page 24 and 25: ITEM 1 / BUSINESS / AIG PROPERTY CA
Page 27 and 28: ITEM 1 / BUSINESS / AIG PROPERTY CA
Page 29 and 30: ITEM 1 / BUSINESS / AIG LIFE AND RE
Page 35 and 36: ITEM 1 / BUSINESS / OTHER OPERATION
Page 37 and 38: ITEM 1 / BUSINESS / OTHER OPERATION
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Page 49 and 50: ITEM 1A / RISK FACTORS.............
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ITEM 1A / RISK FACTORS.............
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ITEM 1A / RISK FACTORS.............
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ITEM 1B / UNRESOLVED STAFF COMMENTS
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ITEM 5 / MARKET FOR REGISTRANT’S
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ITEM 6 / SELECTED FINANCIAL DATA...
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ITEM 6 / SELECTED FINANCIAL DATA...
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ITEM 7 / MANAGEMENT’S DISCUSSION
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ITEM 7 / USE OF NON-GAAP MEASURES..
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ITEM 7 / EXECUTIVE SUMMARY.........
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ITEM 7 / RESULTS OF OPERATIONS.....
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ITEM 7 / LIQUIDITY AND CAPITAL RESO
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ITEM 7 / INVESTMENTS...............
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ITEM 7 / ENTERPRISE RISK MANAGEMENT
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ITEM 7 / CRITICAL ACCOUNTING ESTIMA
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ITEM 7 / GLOSSARY..................
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ITEM 7 / GLOSSARY..................
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ITEM 7A / QUANTITATIVE AND QUALITAT
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ITEM 8 / INDEX TO FINANCIAL STATEME
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AMERICAN INTERNATIONAL GROUP, INC.C
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ITEM 8 / NOTE 1. BASIS OF PRESENTAT
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ITEM 8 / NOTE 2. SUMMARY OF SIGNIFI
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ITEM 8 / NOTE 3. SEGMENT INFORMATIO
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ITEM 8 / NOTE 3. SEGMENT INFORMATIO
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ITEM 8 / NOTE 4. DIVESTED BUSINESSE
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ITEM 8 / NOTE 4. DIVESTED BUSINESSE
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ITEM 8 / NOTE 5. BUSINESS COMBINATI
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ITEM 8 / NOTE 6. FAIR VALUE MEASURE
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ITEM 8 / NOTE 7. INVESTMENTS.......
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ITEM 8 / NOTE 8. LENDING ACTIVITIES
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ITEM 8 / NOTE 9. REINSURANCE.......
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ITEM 8 / NOTE 10. DEFERRED POLICY A
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ITEM 8 / NOTE 10. DEFERRED POLICY A
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ITEM 8 / NOTE 11. VARIABLE INTEREST
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ITEM 8 / NOTE 11. VARIABLE INTEREST
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ITEM 8 / NOTE 12. DERIVATIVES AND H
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ITEM 8 / NOTE 13. LIABILITY FOR UNP
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ITEM 8 / NOTE 14. VARIABLE LIFE AND
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ITEM 8 / NOTE 15. DEBT OUTSTANDING.
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ITEM 8 / NOTE 15. DEBT OUTSTANDING.
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ITEM 8 / NOTE 16. CONTINGENCIES, CO
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ITEM 8 / NOTE 17. TOTAL EQUITY.....
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ITEM 8 / NOTE 18. NONCONTROLLING IN
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ITEM 8 / NOTE 19. EARNINGS (LOSS) P
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ITEM 8 / NOTE 20. STATUTORY FINANCI
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ITEM 8 / NOTE 21. SHARE-BASED COMPE
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ITEM 8 / NOTE 21. SHARE-BASED COMPE
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ITEM 8 / NOTE 22. EMPLOYEE BENEFITS
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ITEM 8 / NOTE 24. INCOME TAXES.....
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ITEM 8 / NOTE 26. QUARTERLY FINANCI
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ITEM 8 / NOTE 27. INFORMATION PROVI
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PART II............................
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PART IV............................
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SignatureTitle/s/ ARTHUR C. MARTINE
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ExhibitNumber Description Location(
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Condensed Financial Information of
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Condensed Financial Information of
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Notes to Condensed Financial Inform
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Supplementary Insurance Information
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Valuation and Qualifying AccountsFo
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Subsidiaries of RegistrantExhibit 2
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Percentageof VotingSecuritiesJurisd
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Percentageof VotingSecuritiesJurisd
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CONSENT OF INDEPENDENT REGISTERED P
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CERTIFICATIONSI, Robert H. Benmosch
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CERTIFICATIONExhibit 32In connectio
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SECURITIES REGISTERED PURSUANT TO S
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American International Group, Inc.1
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