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AIG 2007 AR


									World leaders in insurance and
financial services, AIG has four
principal business segments:
General Insurance
The largest U.S. underwriters of commer-
cial and industrial insurance and the most
extensive international property-casualty
network, including personal lines business
and mortgage guaranty insurance.

Life Insurance & Retirement Services
The most extensive global network of any
life insurer, a leading U.S. life insurance
organization and a premier retirement serv-
ices franchise with a leadership position
in the U.S. fixed annuities market as well
as a growing international network.                              At a Glance
Financial Services
A major presence in aircraft finance,
capital markets, consumer finance and
insurance premium finance.

Asset Management
Institutional and individual assets, retail
funds and private banking through a
growing global network.

          A M E R I C A N I N T E R N A T I O N A L G R O U P, I N C .

 General Insurance                                                                                              Financial Services
 AIG’s General Insurance operations include the largest U.S. underwriters of commercial                         AIG’s Financial Services businesses
 and industrial insurance, the most extensive international property-casualty network,                          specialize in aircraft and equipment leasing,
 a personal lines business with an emphasis on auto insurance and high-net-worth clients,                       capital markets, consumer finance and
 a mortgage guaranty insurance operation and a leading international reinsurer. AIG’s                           insurance premium finance. These busi-
 leadership is a result of its underwriting skill, innovative insurance solutions, financial                     nesses complement AIG’s core insurance
 strength, superior service and responsive claims handling. The AIG claims operation                            operations and achieve a competitive
 gives clients access to a vast worldwide network of dedicated experts and top legal firms.                      advantage by capitalizing on opportunities
                                                                                                                throughout AIG’s global network.

  Domestic Brokerage Group                              United Guaranty Corporation                              The businesses in AIG’s Financial Services Group
  The principal units of the Domestic Brokerage         United Guaranty Corporation subsidiaries provide         are leaders in the markets they serve.
  Group (DBG) provide a wide range of commercial        residential mortgage guaranty insurance for first-      s International Lease Finance Corporation (ILFC)

  and industrial coverages.                             and second-lien mortgages, private education loan        is AIG’s aircraft leasing business. With a fleet
s AIG Executive Liability is the leading provider       default insurance, and other financial services to        of more than 900 planes, ILFC is a market leader
  of directors and officers, and employment              financial institutions and mortgage investors.            in the leasing and remarketing of new advanced
  practices liability, and a premier underwriter of                                                              technology commercial jet aircraft worldwide.
  professional liability, fidelity coverage, network                                                              ILFC is the largest single customer to date for
  security insurance and fiduciary coverages.                                                                     the new Boeing 787 Dreamliner.
  Its products were previously marketed under                                                                  s Capital Markets operations are conducted through

  the National Union Fire Insurance Company                                                                      AIG Financial Products Corp., which engages in
  of Pittsburgh, Pa., brand.                                                                                     transactions, as principal, to provide clients with
s Lexington Insurance Company is the leading                                                                     risk management solutions and sophisticated
  U.S.-based excess and surplus lines carrier,                                                                   hedging and investment products in standard and
  specializing in property, casualty, healthcare                                                                 customized transactions involving commodities,
  and program risks.                                                                                             credit, currencies, energy, equities and rates.
s AIG Excess Casualty is the leading provider
                                                                                                                 Clients include top-tier corporations, financial
                                                                                                                 institutions, governments, agencies, institutional
  of commercial umbrella and excess casualty
                                                                                                                 investors and high-net-worth individuals
  liability insurance.
                                                        Transatlantic Holdings, Inc.                             throughout the world.
s AIG Specialty Workers’ Compensation® is a
                                                        Transatlantic Holdings, Inc. (TRH), is a majority-     s AIG’s consumer finance business consists of
  market-leading workers’ compensation insurer
                                                        owned subsidiary of AIG. TRH’s subsidiaries offer        American General Finance, Inc. (AGF) and AIG
  for small and midsize businesses.
                                                        reinsurance capacity on both a treaty and faculta-       Consumer Finance Group, Inc.(CFG). AGF is one
s AIG Risk Management® provides casualty risk
                                                        tive basis worldwide—structuring programs for            of the largest consumer finance organizations in the
  management products and services to large             a full range of property and casualty products,          United States, with a branch network in 45 states,
  commercial customers.                                 with an emphasis on specialty risks.                     Puerto Rico and the U.S. Virgin Islands. AGF’s
s AIG Environmental is the largest U.S. provider                                                                 primary market is in the United States, but it
  of environmental liability coverages and services.     Foreign General Insurance Group                         continues to explore opportunities in interna-
s AIG Worldsource provides global insurance              The Foreign General Insurance Group comprises           tional markets. CFG, through its subsidiaries,
  programs for U.S.- and Canadian-based                  AIG’s international property-casualty operations.       offers a broad range of consumer finance products,
  multinationals, as well as foreign companies with    s American International Underwriters (AIU) is the        primarily in emerging markets. As these markets
  operations in the United States and Canada.            marketing unit for AIG’s overseas property-casualty     continue to attract investment, CFG’s businesses
s DBG also includes many specialty business units        operations and the most extensive foreign network       have significant potential to expand operations
  that draw on the worldwide resources of AIG            of any insurance organization. Stretching across        in developing countries around the world and
  companies to meet client needs in the aviation,        Asia and the Pacific to Latin America, Europe,           provide consumers with more products.
  transportation and construction industries,            Africa and the Middle East, AIU markets a full        s Imperial A.I. Credit Companies, Inc., is the

  the small business sector and the accident and         range of property-casualty products to both             largest insurance premium finance provider in
  health arena, as well as engineering services          commercial and consumer clients.                        the United States.
  through AIG Consultants, Inc.                        s AIU Accident & Health Division is a leading

s HSB Group, Inc., the parent company of The             provider of accident, supplemental health and
  Hartford Steam Boiler Inspection and Insurance         travel insurance to international businesses
  Company, HSB Engineering Insurance Limited,            and consumers.
  and The Boiler Inspection and Insurance              s AIU Commercial Lines Division is a market

  Company of Canada, is a leading worldwide              leader in financial lines in Europe, surpassing
  provider of equipment breakdown and engineered         one billion dollars in premiums.
  lines insurance.                                     s AIU Personal Lines Division operates globally

 Domestic Personal Lines
                                                         to provide automobile, personal property
                                                         and extended warranty coverages. It also provides
 AIG’s growing Domestic Personal Lines opera-            products and services for the high-net-worth
 tions provide automobile insurance through              segment, institutional and individual clients. and AIG Agency AutoSM, and offer
 a broad range of coverages for high-net-worth          The General Insurance segment also includes
 individuals through AIG Private Client Group.          AIG Global Marine and Energy which serves the
 AIG is among the top 10 writers of automobile          global insurance, risk management and loss control
 insurance, with historical growth rates exceeding      needs of marine and energy clients, including
 industry averages.                                     renewable operations such as biofuel, hydroelectric,
                                                        geothermal, solar and wind.
    Life Insurance & Retirement Services                                                                             Asset Management
    Serving millions of customers around the world, AIG’s growing global Life Insurance busi-                        AIG’s Asset Management businesses
    nesses make up the most extensive network of any life insurer. Strategies for enhancing                          include institutional and individual asset
    growth focus on developing new markets, expanding distribution channels and broadening                           management, broker-dealer services, private
    product offerings. AIG has one of the premier Retirement Services businesses in the                              banking and spread-based investment
    United States and also has an extensive international retirement services network—both                           programs, as well as the management of
    poised to meet the asset accumulation, protection and lifetime income needs of individuals                       AIG insurance invested assets.
    around the world.

  Foreign Life Insurance & Retirement Services              Domestic Life Insurance & Retirement Services             The businesses in AIG’s Asset Management
  AIG’s Foreign Life Insurance & Retirement                 In the United States, AIG’s Domestic Life                 Group leverage AIG’s deep knowledge of markets
  Services operations are conducted principally             Insurance & Retirement Services businesses offer          around the world and expertise in a wide range
  through the following market-leading companies:           a comprehensive range of life insurance, annuity,         of asset classes.
s American International Assurance Company,                 and accident and health products for financial           s AIG Investments manages equities, fixed income,

  Limited (AIA), is AIG’s flagship life insurance            planning, estate planning and wealth transfer.            private equity, hedge fund of funds and real
  company for Southeast Asia and the leading life           They use a full complement of distribution                estate investments for institutional, individual
  insurer in the region. Its extensive network of           channels, including banks, national and regional          and high-net-worth investors around the world.
  branches, subsidiaries and affiliates spans Australia,     brokerage firms, independent financial planning             AIG Investments ranks among the top seven
  Brunei, China, Guam, Hong Kong, India,                    firms, independent and national marketing                  money managers in the world by institutional
  Indonesia, Macau, Malaysia, New Zealand,                  organizations, brokerage general agencies,                assets under management.
  Singapore, South Korea, Thailand and Vietnam.             independent insurance producers and general             s AIG Private Bank Ltd., AIG’s Zurich-based private
                                                            agents, and worksite specialists. The principal           banking subsidiary, provides personalized private
                                                            operations include the following:                         banking and structured wealth management solu-
                                                          s AIG American General, one of the largest life             tions, including investment advisory and asset
                                                            insurance organizations in the United States,             management products to a worldwide clientele.
                                                            distributes a broad range of life insurance, annuity,   s AIG SunAmerica Asset Management Corp. manages
                                                            and accident and health products.                         and/or administers retail mutual funds, as well
                                                          s AIG Annuity Insurance Company is the largest              as the underlying assets in AIG SunAmerica
                                                            issuer of fixed annuities in the United States             and AIG Retirement variable annuities sold to
                                                            and the leading provider of annuities sold
                                                            through banks.
                                                          s AIG Retirement (formerly branded as AIG VALIC)
                                                            is the nation’s leading provider of group retirement
                                                            plans to K-12 education and the third largest to
s American Life Insurance Company (ALICO)                   healthcare and higher education institutions.
  is among the largest international life insurance       s AIG SunAmerica Retirement Markets is one
  companies in the world, with operations in more           of the nation’s leading distributors of individual
  than 50 countries. ALICO’s operations stretch             variable annuities and income solutions.
  from Japan to Europe, the Middle East, Latin
  America, South Asia and the Caribbean.
s AIG Star Life Insurance Co., Ltd., and AIG
  Edison Life Insurance Company contribute to
  AIG’s growing life insurance presence in Japan                                                                      individuals and institutional groups throughout
  through the sale of life, accident and health,                                                                      the United States.
  and retirement services products via agents,                                                                      s The AIG Advisor Group, Inc., broker-dealers

  brokers and bank partners.                                                                                          provide financial products, technology support
s Nan Shan Life Insurance Company, Ltd., is                                                                           and business-building programs to independent
  Taiwan’s second-largest life insurer in terms of                                                                    financial advisors serving the retirement
  total premium.                                                                                                      planning needs of clients in the United States.
s The Philippine American Life and General
  Insurance Company (Philamlife) is the largest
  and most profitable life insurance company in
  the Philippines.
ABOUT AIG                                                 FINANCIAL HIGHLIGHTS

                                                          (in millions, except per share data and ratios)                                           2007                       2006        % Change
American International Group,
Inc. (AIG), a world leader in                             Net income(a)                                                                    $        6,200              $ 14,048                   (55.9)
                                                          Net realized capital gains (losses), net of tax                                          (2,386)                   33                      —
insurance and financial services, is
                                                          Capital Markets other-than-temporary
the leading international insurance                          impairments, net of tax(b)                                                             (418)                       —                   —
organization, with operations in                          FAS 133 gains (losses), net of tax                                                        (304)                   (1,424)                 —
more than 130 countries and                               Cumulative effect of an accounting change,
                                                             net of tax                                                                            —                          34                     —
jurisdictions. AIG companies serve                        Adjusted net income (c)                                                               9,308                     15,405                  (39.6)
commercial, institutional and                             Net income, per common share —diluted                                                  2.39                       5.36                  (55.4)
individual customers through the                          Adjusted net income, per common share —diluted(c)                                      3.58                       5.88                  (39.1)
most extensive worldwide property-                        Book value per common share                                                           37.87                      39.09                   (3.1)
                                                          Revenues(d)(e)(f)                                                                $ 110,064                   $ 113,387                   (2.9)
casualty and life insurance networks
                                                          Assets                                                                            1,060,505                    979,410                    8.3
of any insurer. In addition, AIG                          Shareholders’ equity                                                                 95,801                    101,677                   (5.8)
companies are leading providers of                        General Insurance combined loss and expense ratio                                     90.33                      89.06
retirement services, financial services                    General Insurance combined loss and expense ratio,
                                                             excluding catastrophe losses                                                          89.73                       89.06
and asset management around
the world. AIG’s common stock
is listed on the New York Stock
Exchange, as well as the stock
                                                          Net Income (a)                             Net Income per                                    Book Value per Common Share
exchanges in Ireland and Tokyo.                           (billions of dollars)                      Common Share —Diluted                             (dollars)
                                                                                                                                                                                   39.09   37.87
                                                                                    14.0             (dollars)
                                                                   9.8                                                   3.99                          26.54
F O R F U R T H E R I N F O R M AT I O N ,                                                                                               2.39


AIG Communications Department                             2003     2004     2005    2006    2007      2003       2004    2005    2006    2007           2003       2004    2005    2006    2007

tel (212) 770-3099
fax (212) 425-3499
                                                          Revenues (d)(e) (f )                        Assets                                           Shareholders’ Equity
                                                          (billions of dollars)                      (billions of dollars)                             (billions of dollars)
American International Group, Inc.                                                  113.4                                                1,060.5                                   101.7
                                                                            108.8           110.1
70 Pine Street                                                     97.8
                                                                                                                         853.0                                             86.3
New York, New York 10270                                  79.6
                                                                                                                 801.0                                          79.7
                                                                                                                                                       69.2                                                                                          675.6

AIG presents its operations and financial information
in the way it believes will be the most meaningful and
useful, as well as most transparent, to the investing
public and others who evaluate the performance of
AIG. For a reconciliation of such measures to the most
                                                          2003     2004     2005    2006    2007      2003       2004    2005    2006    2007           2003       2004    2005    2006    2007
comparable GAAP figures in accordance with SEC
Regulation G, visit the Investor Information section of
the AIG corporate Web site at

                                                              Certain reclassifications have been made to prior period amounts to conform to the current period presentation.
                                                          (a) In 2007 and 2006, includes out of period increases (decreases) of $(399) million and $65 million, respectively.
                                                          (b) Represents Capital Markets other-than-temporary impairments on securities available for sale.
                                                          (c) In 2007 and 2006, includes out of period increases (decreases) of $(261) million and $85 million, respectively.
                                                          (d) In 2007 and 2006, includes other-than-temporary impairment charges of $4.7 billion and $944 million, respectively. Also
                                                              in 2007 and 2006, includes gains (losses) of $(1.44) billion and $(1.87) billion, respectively, from hedging activities that
                                                              did not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange gains and losses.
                                                          (e) In 2006, includes a $730 million increase in revenue for out of period adjustments related to the accounting for UCITS.
                                                          (f) In 2007, includes an unrealized market valuation loss of $11.5 billion on AIGFP's super senior credit default
                                                              swap portfolio.

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