PDF Annual Report 2005 Annual Report

210 Pages·2006·5.43 MB·English

53201_AIG_L01CVRSv4.qxd 3/21/06 12:25 AM Page 1
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American International Group, Inc. ep
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70 Pine Street ■ New York,NY 10270
www.aig.com
AIG2005AR
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Shareholder Information
Corporate Headquarters Annual Meeting of Shareholders
American International Group, Inc. The 2006 Annual Meeting of Shareholders will be held
70 Pine Street on Wednesday, May 17, 2006 at 11:00 a.m. at the
New York, New York 10270 offices of AIG, 72 Wall Street, eighth floor, New York,
[phone] New York.
Stock Market Listings
New York, London, Paris, Swiss and Tokyo Stock Exchanges
Shareholder Assistance
NYSE trading symbol: AIG
Visit the AIG corporate website at www.aigcorporate.com.
Requests for copies of the Annual Report to Shareholders
AIG Stock Trading and Statistical Information and Annual Report onForm 10-K for the year ended
December 31, 2005 should be directed to:
Common Stock Prices*/Dividends
Investor Relations
High Low Dividends
American International Group, Inc.
2005
70 Pine Street
First Quarter $73.46 $54.18 $0.125
New York, New York 10270
Second Quarter 58.94 49.91 0.125
[phone]
Third Quarter 63.73 56.00 0.150
Fourth Quarter 64.40 60.43 0.150
Investor Help Desk
$0.550
[phone]
2004
First Quarter $75.12 $66.79 $0.065 Transfer Agent and Registrar
Second Quarter 76.77 69.39 0.065
Computershare, N.A.
Third Quarter 72.66 66.48 0.075
P.O. Box 43078
About AIG Contents Fourth Quarter 68.72 54.70 0.075
Providence, Rhode Island 02940-3078
$0.280
[phone]
*Closing sales price per share of AIG’s common stock as reported on the
NYSE composite tape. Courier Service Address:
American International Group, Inc. (AIG), world 1 Financial Highlights Computershare, N.A.
leaders in insurance and financial services, is the leading 2 Letter to Shareholders Number of shareholders of record Approximately 56,000 250 Royall Street
international insurance organization, with operations 11 AIG: Making a Difference Common shares outstanding 2.597 billion Canton, Massachusetts 02021
Market capitalization at 12/31/05 $177.17 billion
For e-mail instructions, please go to
in more than 130 countries and jurisdictions. AIG 28 AIG at a Glance
www.computershare.com/equiserve.
companies serve commercial, institutional and individual 30 Review of Operations SEC Certifications
customers through the most extensive worldwide 44 Reconciliation in Accordance with Regulation G The certifications by the Chief Executive Officer and the
Duplicate Mailings/Householding
property-casualty and life insurance networks of any 45 Five Year Summary of Consolidated Operations Chief Financial Officer of AIG, required under Section 302 A shareholder who receives multiple copies of AIG’s
of the Sarbanes-Oxley Act of 2002,were filed as exhibits
insurer. In addition, AIG companies are leading providers 46 Five Year Summary of Selected Financial Information proxy materials and Annual Reportmay eliminate dupli-
of retirement services, financial services and asset 47 Supplemental Financial Information com thoe rAeiInG.’s Annual Report on Form 10-K and are included cate report mailings by contacting our transfer agent.
management around the world. 48 Board of Directors yc.
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49 Corporate Directory ge NYSE Certification
w.t
Annual Report on Form 10-K w The Chief Executive Officer of AIG made an unqualified
w
InBsaicdke C; certification to the NYSE with respect to AIG’s compliance
Cover Shareholder Information NY with the NYSE Corporate Governance Listing Standards
c, in September 2005.
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Photographs of AIG colleagues from around the world appear throughout this Annual Report, both on the cover and in the body of the si
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text. Their dedication, commitment and professionalism set them apart in the industry. AIG colleagues stay close to their customers pre
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and work hard for them. They are our most important asset. E
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Financial Highlights
(in millions, except per share data and ratios) 2005 2004 % Change
Net income $ 10,477 $ 9,839 6.5
Realized capital gains, net of tax 201 85 –
FAS 133gains, excluding realized capital gains (losses), net of tax 1,530 315 –
Cumulative effect of an accounting change, net of tax – (144) –
Adjusted net income(a) 8,746 9,583 (8.7)
Net income, per common share– diluted 3.99 3.73 7.0
Adjusted net income, per common share– diluted(a) 3.33 3.64 (8.5)
Book value per common share 33.24 30.69 8.3
Revenues(b) $108,905 $ 97,666 11.5
Assets 853,370 801,145 6.5
Shareholders’ equity 86,317 79,673 8.3
General Insurance combined loss and expense ratio 104.69 100.30
General Insurance combined loss and expense ratio, excluding catastrophe losses 97.63 97.56
(a) Excludes realized capital gains,which includepricing net investment gains,the cumulative effect of an accounting change and FAS133gains.
(b) Represents the sum of General Insurance net premiums earned, Life Insurance &Retirement Services GAAP premiums, net investment income, Financial Services
interest, lease and finance charges, Asset Management advisory and management fees and net investment incomefromguaranteed investment contracts,and realized
capital gains (losses).
Net Income Revenues Assets Shareholders’ Equity
(billions of dollars) (billions of dollars) (billions of dollars) (billions of dollars)
9
9.84 10.48 97.7 108. 801.1 853.4 79.7 86.3
5.73 8.11 60.0 66.2 79.4 490.6 561.6 675.6 49.9 58.3 69.2
9
0
4.
’01(c) ’02(d) ’03(e) ’04(f) ’05(g) ’01 ’02 ’03 ’04 ’05 ’01 ’02 ’03 ’04 ’05 ’01 ’02 ’03 ’04 ’05
(c) 2001 includes catastophe losses of $581 million, restructuring charges of $1.38 billion, and FAS 133 losses of $115 million.
(d) 2002 includes General Insurance loss reserve charge of $1.34 billion and FAS 133 gains of $20 million.
(e) 2003 includes FAS 133 losses of $697 million.
(f) 2004 includes $729 million in catastrophe losses, $144 million related to the cumulative effect of an accounting change, $553 million for a change in estimate
for asbestos and environmental exposures, and $315 million of FAS 133 gains.
(g) 2005 includes $2.11 billion in catastrophe losses, $1.19 billion for General Insurance fourth quarter reserve charge, $1.15 billion of settlement charges,
and $1.53 billion of FAS 133 gains.
AIG ■2005Annual Report 1
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Dear Fellow Shareholders:
I
n what has been a most eventful and into the future. In February, 2006, we In a presentation to the financial
challenging year for AIG, I am pleased announced that AIG would take a fourth community in September, 2005, I laid out
to report that your company is finan- quarter 2005 after-tax charge to net a series of AIG priorities and key growth
cially very strong and well positioned for incomerelated to an increase in our strategies. They were: staying customer
the future. Through the dedication and General Insurance net reserve for losses focused; continuing our geographic expan-
hard work of thousands of AIG employees, and loss expenses.This charge was the sion; expanding distribution; identifying
we have accomplished a great deal since result of a careful review of our actuarial new business opportunities; developing
my last letter to you in June, 2005. We analyses and the results of an outside additional acquisitions or strategic
finished the year withsolidearnings and a study conducted by Milliman Inc. alliances; focusing on driving down costs
strong balance sheet, despite the most Despite many distractions, the AIG through the use of technology; emphasiz-
devastating series of catastrophes our family remained intensely focused on ing new product development; and
industry has ever suffered. We entered our business objectives, continuing to investing for growth. These priorities seek
a number of important new overseas innovate with new products and services to achieve growth in our franchise by cap-
markets that will provide good growth to meet our customers’ needs around the italizing on the unmatched global network
opportunities in the years ahead; we made world. No other insurance and financial and capabilities that already distinguish
major advances in our corporate gover- services organization has the combination AIG from our competitors. I believe we
nance and management practices; and we of depth of talented staff, entrepreneurial made significant progress in each of these
conducted an extensive internal review culture, leading worldwide market posi- areas during the past year.
of our accounting and reporting policies tions, extensive distribution capabilities In this letter, I will review AIG’s
andprocedures. Most importantly, in and diversity of major businesses that AIG financial performance for 2005, discuss our
early 2006, we resolved our regulatory has builtover the years. In all of our successes in addressing the regulatory,
issues withthe Securities and Exchange principal business sectors, we have strong corporate governance and accounting
Commission, theUnited States growth opportunities. As an example of issues and talk about the opportunities and
Departmentof Justice, the Office of the our global leadership and emerging market challenges facing us in the coming year.
New York Attorney Generaland the New focus, in 2005 AIG announced new li- I will also focus on what I believe to be
York State Department of Insurance. censes and operations in Lithuania, Latvia, AIG’s most important asset – our talented,
We also added experienced and talented the Republic of Georgia and Vietnam. dedicated and professional group of 97,000
individuals to our Board of Directors, and employees around the world. They were
we have in place the strategies for our critical to our performance and accom-
major businesses that will serve AIG well plishments in 2005, and they are the key
to our future.
2 Letter to Shareholders
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AIG is financially
very strong and well positioned
for the future.
2005 Results
A
IG’s net income totaled
$10.48 billion in 2005, an
increase of 6.5 percent over
net income for 2004. On a per share basis,
AIG earned $3.99 in 2005, up 7.0 percent
from the $3.73 per share earned in
the preceding year. This performance was
achieved after a $1.15 billion after-tax
charge resulting from settlements with our
regulators and a $1.19 billion after-tax
charge in the fourth quarter related to an
increase inthe General Insurance net
reserve for losses and loss expenses.
AIG also reported a record $2.11 bil-
lion in after-tax catastrophe losses, net
of reinsurance recoverables, primarily from
Hurricanes Katrina, Rita and Wilma in
the Southeast United States.In 2004,
AIG incurred $729 millionin after-tax
catastrophe losses.Taken together, the
years 2004 and 2005 were the two worst
Martin J. Sullivan
years for catastrophes inthe insurance
President and
industry’s history. Chief Executive Officer
Hurricane Katrina was the most costly
natural disaster the insurance industry has
ever experienced. In its aftermath, and
under the most difficult of conditions, our
top priorities were to respond to our
customers who had sustained devastating
loss of life and property, and to ensure
the well-being of our employees in the
region. Katrina’s wake of destruction was
unprecedented, but AIG’s financial
AIG ■2005Annual Report 3
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Our total shareholders’ equity
at year-end 2005
was $86.32 billion.
strength and claims management expertise nesses– General Insurance, Life Insurance Accounting Issues and Corporate Governance
A
enabled us to respond to a catastrophe of & Retirement Services, Financial Services s has been widely reported
this magnitude. I am extremely proud of and Asset Management. All are global during the past year, AIG con-
AIG’s actions, including our employees’ businesses, and all are well positioned in ducted an extensive internal
outstanding and generous response to the their domestic and overseas markets. review, carried out in conjunction with
victims of Hurricane Katrina and the other AIG’s franchise is unmatched. Our entre- outside counsel and our independent
disasters. Their financial support through preneurial culture also sets AIG apart from accounting firm.With the filing of our
the AIG Disaster Relief Fund was others– something that has characterized 2004 Annual Report on Form 10-K/A, we
matched by personal commitment through the organization from its earliest days– restated our financial statements for the
volunteer efforts and personal sacrifices on and this will not change. Our network of years ended December 31, 2004, 2003 and
behalf of AIG colleagues and customers in 714,000 agents and brokers around the 2002, along with affected Selected
need. AIG matched our employees’ contri- world produce business from a worldwide Consolidated Financial Data for 2001 and
butions to the Fund on a dollar-for-dollar customer base of some 65million cus- 2000, and quarterly financial information
basis,and, in sum, the AIG Disaster Relief tomers. Finally, our financial strength, for 2004and 2003. Wealsorestatedthe
Fund collecteda total of $8.6 million in which is the bedrock of this company, pro- first three quarters of 2005. These actions
2005. In addition, AIG’s claims personnel vides us with a multitude of opportunities are consistent with AIG’s commitment to
turned in excellent performance in coming around the globe. correct all material errorsand to provide
to the aid of our policyholders along the In recent months, we have made greater transparency inthe company’s
Gulf Coast. progress in stabilizing AIG’s ratings. financial statements and accounting in
AIG’s total shareholders’ equity at Currently, Standard &Poor’s rates AIG’s the future.
December 31, 2005 was$86.32 billion, an long-term debt“AA”,and most of our Other important changes have
increase of 8.3 percent from year-end financial strength ratings are“AA+”. occurred in our corporate governance
2004. AIG remains among the most Moody’s rates AIG’s long-term debt“Aa2”, procedures. Our Board of Directors has
strongly capitalizedorganizationsin our and our financial strength ratings are adopted a majority voting guideline and a
industry. Cash flow from our insurance either “Aa1”or“Aa2”. Fitch rates AIG’s mandatory retirement age of 73. The
operationsand our balance sheet remain long-term debt“AA” and our financial Board has also put in place another
very strong. AIG investsan average of strength ratings are“AA+”. A.M.Best guideline to reflect its view that at least
$200 million a day, and the majority of rates AIG’s insurance companies“A+”. two-thirds of AIG’s Board should be
our portfolio consists of high quality fixed At these levels, AIG’s ratings are among independent, as defined by the New York
income assets. Worldwiderevenues in the highest of any insurance and financial Stock Exchange, and approved a change
2005 were $108.91 billion.For 2005, AIG services organization in the world. in AIG’s bylaws to provide that the role
achieved a return onequity of 12.3 percent. of Chairman should be separate from that
AIG’s ability to report solid earnings of the CEO, and that the Chairman
and cash flow in the face of difficult should be selected from the independent
external and internal issues reflects the Directors. We are also providing greater
diversity and strength of our major busi- information in our financial statements
and continue to build an open and
4 Letter to Shareholders
53201T_AIG_L01P01_27v3 3/19/06 10:55 PM Page 5
Left to right:
Martin J. Sullivan
President and
Chief Executive Officer
Win J. Neuger
Executive Vice President and
Chief Investment Officer
Kristian P. Moor
Executive Vice President
Domestic General Insurance
Edmund S.W.Tse
Senior Vice Chairman
Life Insurance
Steven J. Bensinger
Executive Vice President and
Chief Financial Officer
constructive dialogue with our regulators. General Insurance insurance in the United States, with lead-
G
All of these initiativesreflect“best eneral Insurance, one of AIG’s ing positions in a wide range of products
practices”, keep us in the forefront of good core businesses for decades, had including directorsand officers liability,
corporate governanceand enhance AIG’s a good year in 2005 despite the workerscompensation, environmental
leadership role as one of the world’s costs associated with catastrophes, remedi- coverages, excess casualty, aviation, equip-
largest, strongest and best governed com- ation efforts, and the reserve charge. ment breakdown, surplus lines and ocean
panies. In addition, the Board has created General Insurance net premiums written marine. Financial strength, claims exper-
two new committeesto provide a sharper rose 3.1 percent to $41.87 billion. tise and responsiveness continue to be
focus on corporate governance and Operating income for the year totaled significant differentiators forDBG. The
corporate social responsibility – the $1.98 billion before realized capital gains Group has cross-selling as a key strategy,
Regulatory, Compliance and Legal and losses, compared to $2.95 billion as well as expanding distribution into
Committee,and the Public Policy and the previous year. regional and national brokers.
Social Responsibility Committee. These The Domestic Brokerage Group Our Domestic Personal Lines business
steps, taken together, will strengthen (DBG)posted net premiums written had solid results in 2005, outperforming
our corporate governance, increase trans- of $23.13billion and a combined ratio of industry premium growth. The Private
parency and improve disclosure. 113.83, including the effect of catastrophe Client Group had strong results, and
losses. Excluding such losses,DBG’s servesnearlyone-third of the Forbes“400
combined ratio was105.54, and further Richest Americans.”
excluding the fourth quarter reserve
charge, it was96.12. We are the largest
provider of commercial property-casualty
AIG ■2005Annual Report 5
53201T_AIG_L01P01_27v3 3/19/06 10:56 PM Page 6
Jacob A. Frenkel (Left)
Vice Chairman
Global Economic Strategies
Frank G. Wisner
Vice Chairman
External Affairs
77.4 percent to $2.34 billion. The Foreign in individual life insurance issued and in
General combined ratio was 85.56, com- term life sales, and is a leader in the
pared to 90.81 a year earlier. universal life and structured settlements
We have long been leaders in opening markets. AIG American General’s results
new insurance markets around the world, reflect our continued commitment to
drawing on our heritage,which extends growing the business through proven dis-
back to the 1920s in China. Continuing tribution channels, innovative strategies
this trend, in December,AIUreceived a and breadth of product. AIG American
license to operate a whollyowned general General has initiatives under way to
insurance company in Vietnam, a country increase accident and health sales through
of 84 million people. This is the first prop- worksite and direct marketing, while
erty-casualty license granted by Vietnam remaining disciplined in underwriting and
to a U.S.-based insurerand complements riskselection.
the life insurance license granted to Our overseas life network is the most
AIG’s Foreign General Insurance American International Assurance extensive of any life insurance organiza-
operations had very strong results in 2005. Company, Ltd. (AIA) in 2000. In just five tion, encompassing more than 70 coun-
The worldwide network of American years, AIA’s life operations in Vietnam tries, many of which we have served for
International Underwriters (AIU) is one have had excellent growth, and we now 50 years or more. AIG’s life insurance
that could not be duplicated today, given have more than 19,000 agents serving this companies lead the industry in many
its market positions in more than80 coun- market. Going forward, we believe emerg- countries. We have the proven ability to
tries around the world,developedover ing markets such as Vietnam, India and grow greenfield operations and focus
the past 86 years. AIU is increasingly a China will provide growth opportunities on a multi-distribution strategy to support
multi-distributionorganization, utilizing for AIG in both general and life insur- a broad array of protection and savings
brokers, agents, direct marketing, associa- ance, as well as in retirement services, products.
tions and bancassurance. financial services and asset management. In 2005, both AIA and American Life
In Asia, our General Insurance net- Insurance Company (ALICO), our two
Life Insurance & Retirement Services
work extends throughout Southeast Asia principal overseas life insurance
A
IG’s Life Insurance &
to China, Taiwan, Japan, Korea and India. operations, reported good growth in first
Retirement Services businesses
We are the number one foreign insurer year premiums, distributing a full range of
had a successful year in 2005.
in many of these markets. Wealso have life insurance products through multiple
Worldwide Life Insurance & Retirement
the largest U.S.-based general insurance distributionchannels.In Japan, the
Services had GAAP premiums in 2005 of
business in the United Kingdom and world’s largest life market outside the
$29.40 billion, a gain of 4.7 percent over
continental Europe. Foreign General net
2004. Operating income before realized
premiums written in 2005 was a record,
capital gains (losses) and pricing net
totaling nearly$10 billion, and operating
investment gains reached $9.06 billion, a
incomebefore realized capital gains rose
15.0 percent increase over the prior year.
In the United States, AIG American
General is one of the most profitable and
fastest growing life insurers, ranking first
6 Letter to Shareholders
53201T_AIG_L01P01_27v3 3/19/06 10:56 PM Page 7
Going forward, we believe
emerging markets such as Vietnam, India and China
will provide growth opportunities for AIG.
United States,AIG companies constitute from the country’s insurance regulators to services business. We have had initial
the largestforeign-owned life insurance establish branches in Lithuania and Latvia. success via bancassurance in both Korea
operation and the fifth largest of all AIG’s life insurance agency force now and Japan. We believe there are numerous
life insurers in the country based on total numbers over 270,000 full-time and part- opportunities to use our expertise in the
premiums. time agents and is widely recognized as United States and our successes in Japan
First year life premiumsand annuities the strongest and most professional in the and Korea to expand AIG’s Retirement
had good growth in China.We now have industry. Agency remains our core Services operations into new territories.
a 19.9 percent market share of total 2005 distribution system, and we will continue The growing need for private sector retire-
life insurance premiums written by foreign to emphasize training to deliver superior ment savings solutions is a global phenom-
life insurers in that rapidly expanding customer service. At the same time, we enon, fed in part by the realization that
market. In India, our joint venture with are expanding our distributionchannels, government programs will not be able to
The Tata Group is positioned to take which include banks, credit cards, travel provide for the growing number of senior
advantage of opportunities to serve the agents, retailers, worksite marketing, citizens in the years ahead.
expanding Indian middle class, which is direct marketing and brokerage.
Financial Services
increasingly turning to life insurance to Retirement Services is a growth busi-
F
inancial Services is a core business
provide for their families’ futures. Along ness for AIG, both domestically and over-
for AIG, one that benefits from our
with China and Vietnam, India is one seas. In the United States, AIG VALIC
strong financial position and global
of the most promising growth markets is the leader in the primary and secondary
reach. Our Financial Services operations
for life insurance. AIG’s excellent position education market, second in healthcare
are leaders in their markets and provide
in each of these countries should yield and third in higher education. AIG
diversification to AIG’s overall earnings
important benefits for us in the future. Annuity Insurance Company is the num-
stream.
In the Philippines, The Philippine ber one issuer of fixed annuities in the
International Lease Finance Corpora-
American Life and General Insurance United States. It also had strong operating
tion (ILFC) is one of the largest lessors
Company, the country’s leading life insurer income growth in 2005, in spite of being
of new advanced technology commercial
for over half a century, substantially affected by the low interest rate and flat
aircraft to airlines around the world. In
increased its market share. Nan Shan Life yield curve environment. Finally, AIG
2005, ILFC had operating income of
Insurance Company, Ltd. is the second SunAmerica Retirement Markets reported
$679.5 million, compared to $642.2mil-
largest life insurer in Taiwan. substantial increases in fee income and
lion in 2004. As a lead customer of Boeing
Outside of Asia, ALICO reported solid assets under management.
and Airbus, ILFC is able to offer its cus-
results in the United Kingdom and the International Retirement Services
tomers attractive lease terms and delivery
Central and Eastern Europe region. In had excellent results. Our strategy is to
positions for their fleet expansions and
many of the markets of Central and leverage AIG companies’ presence in local
modernizations. During the year, ILFC
Eastern Europe, AIG’s operations are the markets worldwide to build our retirement
experienced strong demand and an overall
largest foreign-owned life insurance
firming of lease rates and residual values.
businesses. During 2005, ALICO’s Polish
ILFC’s customer base is well diversified
life insurance company received approval
geographically and its fleet of more than
750 jet aircraft is one of the most modern
of any lessor.
AIG ■2005Annual Report 7
53201T_AIG_L01P01_27v3 3/19/06 10:57 PM Page 8
AIG is committed
to being a good global
corporate citizen.
AIG’s Capital Markets operations Asset Management was the extension by Congress of the
F
comprisethe businesses of AIG Financial or years, AIG has been one of the terrorism insurance legislation thatpro-
Products Corp. and its subsidiaries largest institutional asset managers vides an essential federal backstop to the
(AIGFP), whichengage as principal in a in the world, investing AIG’s own private market, which cannot generate
customer driven financial transactions general and life insurance investment sufficient capital for what is, ultimately,
business.AIGFPoffersa wide spectrum of portfolios. Over the past 10 years, AIG an infinite risk.
standard and customized financial prod- has alsodevelopedits outside client asset AIG also remains actively engaged in
ucts, includingcommodities, credit, cur- management business conducted through encouraging liberalization of world trade
rencies, energy, equities and rates. Capital AIG Global Investment Group (AIG- through bilateral, regional and multilateral
Markets had operating income in 2005 of GIG). At year-end 2005, these client initiatives. During the year, a number
$2.66 billion, compared to $662.4 million assets under management, including insti- of important free trade agreements were
in 2004.Excluding the effects of FAS 133, tutional accounts and retail mutual funds, negotiated and adopted. Although the
Capital Markets operating income was exceeded $62 billion.Combined with World Trade Organization negotiations
$647.3 million in 2005, compared to more than a half-trillion dollars of assets faltered over agricultural issues, we remain
$784.7 million in 2004.Fluctuations in AIGGIG manages for AIG’s insurance cautiously optimistic that a multilateral
both revenues and operating income for companies, AIG ranks in the top five agreement, including liberalization of
this segment are to be expected, giventhe institutional asset managers in the world. key markets for financial services, will be
transactional natureof the businessand Asset Management operating income rose reached by year-end 2006.
the volatilityin reported results emanating 6.0 percent to a record $2.25 billion, and
AIG’s Report on Corporate Social Responsibility
from the accounting treatment forderiva- new institutional assets in 2005 totaled
A
IG is firmly committed to being
tivesunder FAS 133. $13.55 billion.
a leader in all areas of social
In Consumer Finance, a growing busi- Clients choose to invest alongside
responsibility. Giving back to
ness for AIG globally, operating income AIG companies because of our extensive
the communities we serve is a top priority
rose 11.5 percent to $900.7 million. In knowledge of developed and emerging
at AIG. Our new Board Public Policy and
the United States, American General markets worldwide, as well as our product
Social Responsibility Committee will
Finance, Inc.is one of the largest con- depth and capital markets expertise. We
help oversee and monitor AIG’s continued
sumer finance organizations, with the are sharply focused on expanding our
progress in this important area and
second largest consumer finance network international retail distribution through
further enhance our role as a good global
in the country, as well as a growing intermediaries, as well as developing new
corporate citizen. Recently, AIG has
Internet-based business. Overseas, AIG’s productsin anticipationof market needs.
undertaken a corporate-wide project to
consumer finance business was robust
Public Policy Issues describe and highlight the activities of
in 2005, reporting record operating
I
n 2005, AIG worked hard on two AIG employees and units throughout the
income,with strong results in Poland,
public policy issues that helped keep world in the area of corporate social
Hong Kong and Argentina.
the U.S. economy growing. The first responsibility, including environmental
was the successful adoption by Congress initiatives, volunteerism, diversity, philan-
of class action reform after many years of thropy and community service. This effort
debate. This will help reduce the burden
on our economy of excessive litigation
and its hidden tax on business. The other
8 Letter to Shareholders