70 Pine Street
New York, New York 10270
Telephone: (212) 770-7000
Fax: (212) 425-3499
Total Assets: $492.98 billion (2001)
Stock Exchanges: New York London Tokyo Paris Swiss
Ticker Symbol: AIG
NAIC: 523120 Securities Brokerage; 523920 Portfolio Management; 524126 Direct Property and Casualty Insurance Carriers; 524113 Direct Life Insurance Car- riers; 524130 Reinsurance Carriers; 524210 Insurance Agencies and Brokerages; 532411 Commercial Air, Rail, and Water Transportation Equipment Rental and Leasing; 551112 Offices of Other Holding Companies
AIG has the highest ratings and is one of the world's most innovative companies, well positioned to capitalize on opportunities on behalf of its clients throughout the global marketplace. While AIG's products and services have changed over the years with the needs of its customers, the AIG core values of integrity, quality service, financial strength and responsive leadership will never change.
1919: Cornelius Vander Starr forms American Asiatic Underwriters, a two-clerk insurance agency in Shanghai, China.
1926: Starr opens a New York office under the name American International Underwriters.
1939: With much of the world on the brink of war, Starr moves his headquarters from Shanghai to New York.
1948: Starr begins uniting his fragmented network of insurance companies by forming two Bermuda-based entities: American International Underwriters Overseas, Ltd. and American International Reinsurance Company, Inc. (AIRCO).
1949: Following the communist takeover of China, Starr moves his regional headquarters to Hong Kong.
1952: AIRCO gains control of American Home Assurance Company.
1960s:Several acquisitions are completed, including National Union Fire Insurance Company of Pittsburgh, Pennsylvania, and New Hampshire Insurance Company.
1967: As part of a major reorganization, American International Group, Inc. (AIG) is formed to become the holding company for the various insurance companies; Maurice R. Greenberg becomes president and CEO of AIG.
1968: Starr dies and Greenberg adds the chairmanship to his duties.
1969: AIG goes public.
1976: AIG is organized into four broad categories: the foreign general insurance division, the brokerage division of domestic general insurance, the agency division of domestic general insurance, and a life insurance division.
1987: The Financial Services Group is formed, consolidating the firm's burgeoning financial services operations.
1999: SunAmerica Inc., a major player in annuities and mutual funds, is acquired for $18.3 billion.
2001: AIG acquires American General Corporation for $23 billion; AIG reports losses of $820 million stemming from the events of September 11.
American International Group, Inc. (AIG) is a holding company for a network of subsidiaries primarily engaged in insurance and insurance-related activities, including property, casualty, life, financial services, retirement savings products, asset management, and aircraft leasing. AIG operates in more than 130 countries and jurisdictions, and its combined revenues make it the largest U.S.-based international insurance organization and one of the largest insurance firms in the world. AIG is the leading underwriter of commercial and industrial insurance in the United States and holds the number two position in the U.S. life insurance sector. The corporation, whose earliest roots were in Asia, has had an active history of mergers, acquisitions, and consolidations, and under the renowned stewardship of Maurice R. "Hank" Greenberg from the late 1960s into the early 21st century the company has grown into a global insurance giant.
Origins As a Chinese Insurance Agency
In 1919 a 27-year-old U.S. businessman, Cornelius Vander Starr, opened a two-room, two-clerk insurance agency in Shanghai, China, and named it American Asiatic Underwriters (AAU). AAU, which later became part of American International Underwriters (AIU), initially served as an underwriter for insurance companies that had established branches in Shanghai. During a trip to New York in 1921 Starr added representation of other U.S. companies to his operations, including the Globe & Rutgers Company. Later that decade Starr brought representation of the Pittsburgh, Pennsylvania, company, National Union Fire Insurance, into his fold.
Starr's next quest was to gain general life insurance agency powers, but he found no U.S. companies willing to assume the risk because there were no life-expectancy statistics available for the Chinese population. In 1921 Starr overcame this obstacle by forming his own company, Asia Life Insurance Company (ALICO). ALICO's most popular product was a 20-year endowment policy, with rates established on the basis of Starr's personal observation that in general Chinese enjoyed longer life expectancies than their Western counterparts.
In 1926 Starr opened a New York office under the name American International Underwriters to serve as an insurance writer on U.S.-owned risks outside of North America. Like its Chinese counterpart, AIU also served as a general agent for U.S. insurers. By the end of the decade Starr's Chinese operations were seeing modest profits, and branch offices for both general and life insurance had been established throughout the Shanghai region. In 1931 Starr joined British and Chinese businessmen in a partnership and established the International Assurance Company (INTASCO).
AIU established a foundation for Latin American business in 1932 when George Moszkowski, who ran the company's New York office, negotiated the purchase of the Central American and Caribbean portfolios of a U.S. insurer withdrawing from foreign operations. AIU's operations in Central America remained modest throughout the decade.
Before, during, and after World War II, AIU was able to capitalize on world economic and political situations. With much of the world on the brink of war, in 1939 Starr moved his headquarters to New York, temporarily closing the Shanghai office. After hostilities broke out, operations of dominant Italian, German, and British agencies were reduced, and AIU expanded in Central America. In 1940 AIU established a regional headquarters in Cuba, and a half dozen offices in South America soon followed. AIU's Central American business grew with the local economies of these neutral countries during the war years.
At the end of World War II, the Shanghai office was reopened under the guidance of K.K. Tse. Several profitable years followed until the late 1940s, when the future of foreign activities in Shanghai grew dim. In 1949 key employees and documents were airlifted out of Shanghai and the regional headquarters moved to Hong Kong. In late 1950 operations in China were closed.
Meanwhile, many surrounding countries were recovering from war. With economic improvement underway, AIU entered Japan and West Germany by selling insurance to occupying U.S. troops. AIU's prewar operations in Europe had been limited to small agencies in France, Belgium, and the Netherlands, but postwar conditions, resulting in tight financing for local insurers, placed AIU in a position to expand its European business. At the same time, expansion of U.S. business abroad created opportunities for AIU's "home-foreign" business.
In 1947 Starr began a reorganization designed to revive war-torn operations and lay the groundwork for future growth. Starr's first move was to announce the incorporation of a Philippine arm of the American Life Insurance Company, the Philippine American Life Insurance Company (Philam Life), in 1947. U.S. businessman Earl Carroll was named to head up the new company, which grew quickly, largely through the sale of endowment policies. These policies provided farmers and small merchants with the means to build their savings in a country with few banks. Sales revenue was frequently reinvested in the local economy.
Started as a partnership, INTASCO, which until this time had maintained a relatively small life insurance business, was reorganized in 1948 when Starr took control of the business. He added "American" to the company's name, changed the company's abbreviated name to AIA, and assigned it the Southeast Asian territories of Malaysia, Singapore, and Thailand and the home-base front of Hong Kong.
That same year Starr began uniting his somewhat fragmented network of insurance companies, beginning with the creation of two Bermuda-based entities. The first, American International Underwriters Overseas, Ltd. (AIUO), became the parent of all established AIU agency companies overseas. The second, American International Reinsurance Company, Inc. (AIRCO), was designed to hold companies dealing primarily in life insurance. AIRCO also took control of company investment programs and served as a reinsurer for these subsidiaries. The last of Starr's trio of new organizations was American International Underwriters Association (AIUA), established in 1949 to serve as a partnership of U.S. insurance companies that were represented by AIU. AIUA provided for pooled business in stipulated percentages and shared assets that were kept overseas to meet local regulations.
Perhaps the most dramatic reorganization occurred within Starr's oldest life insurance company, ALICO. After lying dormant for a decade, the company was renamed American Life Insurance Company and assigned the Caribbean, Middle East, and some growing African nations. ALICO marketed life insurance to populations previously not attractive to insurers.
Rapid Expansion in the 1950s
The 1950s were a period of rapid expansion for AIU. Branches were established in Western Europe, the Middle East, North Africa, and Australia. By the end of the decade AIU was operating in 75 countries. The 1950s also marked the emergence of Starr's companies in domestic markets.
In 1952 AIRCO acquired a majority interest in the Globe & Rutgers Insurance Company, a medium-sized U.S. fire insurance company once represented by AIU. A Globe & Rutgers subsidiary, the Insurance Company of the State of Pennsylvania, came with the purchase. Founded in 1794, the Pennsylvania subsidiary was the second oldest stock insurance company in the United States. American Home Assurance Company, which was founded in 1853, was also included in the package. Globe & Rutgers was later merged with American Home and took its name.
Starr and his colleagues joined the American Home board but left the company largely under old management. Earnings at the new subsidiary fluctuated greatly for several years. A net loss of $1.4 million was reported in 1957, followed by a net profit of better than $950,000 the following year. In an effort to stabilize earnings, AIRCO sold American Home's agency business to another insurer in 1962. That same year Starr named Maurice R. Greenberg as American Home president, and the company formed the American International Life Assurance Company of New York to specialize in term and group insurance. Greenberg had begun his insurance career ten years earlier with Continental Casualty Company. In 1960 he joined American International and was assigned the task of developing an overseas accident and health business.
In leading American Home, Greenberg focused on broker sales, allowing the company to issue its own policies and maintain underwriting control. The company concentrated on commercial and industrial risks, which involved negotiated rather than state-controlled rates. American Home also developed substantial reinsurance facilities in order to cover large shares of major risks and control insurance ratings. Greenberg initiated new products and services such as personal accident insurance, which emphasized deductibles. Meanwhile, American Home avoided medical insurance. The new sales system caught on, offering brokers the high deductibles that traditional insurers avoided but that some large corporations sought in order to cut costs.
Late 1960s: Creation of the Modern AIG
During the late 1960s American International's corporate structure began to resemble its present form as it became an important commercial and industrial property and casualty insurer. While a new company organization was being forged through further acquisitions and reorganization, the insurance group began capitalizing on its innovative products and entrance into new markets.
Acquisitions during this period included controlling interests in the National Union Fire Insurance Company of Pittsburgh, Pennsylvania, which had been represented by AIU since 1927, and the New Hampshire Insurance Company. The former, which was threatened by high underwriting losses, was transformed much like American Home, and then linked with it in a pooling agreement. Commerce and Industry Insurance Company, a small property insurer specializing in highly protected risks, and Transatlantic Reinsurance Company were also acquired during this period.
The wholly owned American International Group, Inc. was formed by AIRCO in 1967. AIG represented the beginning of a major corporate reorganization, with the company formed to hold shares of other domestic companies, including American Home and New Hampshire. ALICO was soon added to AIG's holdings. Greenberg was elected president and CEO of AIG in 1967. The following year Starr died, having seen only the beginning of a new era for the insurance empire he had created.
In 1969, after going public, AIG acquired majority interests in National Union, New Hampshire, and American Home, paying for its increased stake in the three companies with AIG stock. In 1970 AIU and its agencies and subsidiaries became wholly owned subsidiaries of AIG.
Throughout the 1960s AIU's overseas business grew, despite the loss of its large Cuban business following Fidel Castro's takeover of that country. Since it had entered most major markets a decade earlier, expansion during this time was limited to growth within areas with established territories. In an effort to strengthen AIG's overseas position, an 18-month program was initiated in 1972 creating a regional system of benefits managers for Europe, Africa, Central America, South America, the Middle East, the Far East, and the United States. That same year the AIG subsidiary ALICO became the first foreign-owned company granted a license to sell insurance to Japanese nationals in Japan.
During the early 1970s AIG increased its specialization by forming a number of new groups. Subsidiaries created by AIG during this time included A.I. Credit Corporation to finance general insurance premiums written through both affiliate and nonaffiliate insurers; North American Managers, Inc., to sell insurance in the United States for foreign companies; AIG Oil Rig, Inc., to initiate and manage insurance for offshore oil- and gas-drilling rigs; AIG Risk Management, Inc., to provide worldwide risk management services; AIG Data Center, Inc.; and American International Insurance Company of Ireland, Ltd. During this period AIG also acquired all remaining shares of the New Hampshire and National Union companies.
AIG's profits took off in the 1970s, at a compounded growth rate of roughly 20 percent, with AIG's net income surpassing $50 million by 1975. High premiums in the new market areas of oil rigs and pension-fund management as well as the use of limited partnership insurance for high risks contributed to the growth.
Consolidation and reorganization continued in 1976, when AIU stopped writing policies for insurance companies it did not own. That same year the company was organized into four broad categories: the foreign general insurance division, the brokerage division of domestic general insurance, the agency division of domestic general insurance, and a life insurance division. The following year the subsidiary Transatlantic Reinsurance was reorganized as a major reinsurer, with shares sold to seven other companies. AIG absorbed its parent company, AIRCO, in 1978, completing a nine-year consolidation plan to simplify the corporate structure.
In 1979 AIG entered Eastern Europe and initiated joint ventures with state-owned insurers in Hungary, Poland, and Romania. In succeeding years similar operations were started in China and Yugoslavia. At the end of the 1970s AIG had 20 percent annual growth in revenues and had increased its size nearly tenfold. In 1979 AIG reported over $250 million in net income.
Diversification and Consolidation in the 1980s
During the 1980s AIG ventured into healthcare services, and acquired a variety of financial and investment sources as well as real estate holdings. Acquisitions included United Guaranty Corporation, a residential mortgage insurance company; the Swiss bank Uberseebank A.G.; Ticino Societa d'Assicurazioni Sulla Vita, a Swiss-based life insurer; Southeastern Aviation Underwriters--later renamed AIG Aviation, Inc.--an airlines, aviation, and space program insurer; and Jurgovan & Blair, a health maintenance organization consulting business. In 1981 AIG, in combination with Presidio Oil Company, purchased a majority interest in 109 natural gas wells.
In 1984 the company reported its first decline in profits, largely owing to underwriting losses including those resulting from a major hurricane. Some of AIG's specialty companies, such as AIG Oil Rig, AIG Energy, AIG Entertainment, and AIG Political Risk, which were created during the preceding 15 years, were consolidated in 1984 under the name AIG Specialty Agencies, Inc. That same year AIG special services division was introduced to underwrite risks such as extortion, kidnapping, and ransom demand.
In 1985 AIG's profit margin rebounded, with the company exceeding 1983 earnings and posting a net income of $420 million. In 1987 AIG surpassed $1 billion in net income. That same year AIG was authorized by the South Korean government to begin life insurance operations, ending a 15-year struggle to break into the Korean market. AIG became the second foreign insurance company in South Korea, with its largest international competitor, CIGNA Corporation, given approval earlier in the year.
Two important AIG executives, National Union President Joseph P. DeAlessandro and American Home President Dennis Busti, left AIG in 1987 for other companies. Maurice Greenberg's son, Jeffrey W. Greenberg, was moved over from the presidency of AIU's North American division and named new president of National Union, while Joseph R. Wiedemann was named American Home president. Wiedemann had been president of AIG's Boston-based subsidiary Lexington Insurance Company.
AIG broadened its trading markets in 1987 when it became the first foreign insurance organization on the Tokyo Stock Exchange. The following year AIG was listed on the London International Stock Exchange. Additional listings include Paris and Switzerland, added in 1990.
AIG continued diversification moves in 1988, forming a Hong Kong-based venture to introduce U.S. fast-food franchises into the Asian market. The venture marked the first time a U.S. institutional investor--AIG's Financial Investment Corporation of Asia--moved into an overseas franchise market.
That same year AIG also experienced some difficulty. It was involved in what is believed to be one of the largest insurance-related arbitration awards in history. Enron Corporation was awarded a $162 million claim from insurers for Peruvian properties that had been expropriated, and AIG was forced to pay nearly two-thirds of the judgment.
Throughout the 1980s AIG operated as one of two major sources of environmental-impairment-liability (EIL) insurance. Early in 1989 Greenberg proposed the creation of a hazardous-waste-cleanup tax funded through a 2 percent premium fee assessed on all commercial and casualty and property policies, with insurers matching that amount. Greenberg suggested the tax could help fund cleanup of Environmental Protection Agency Superfund sites and ultimately bring more insurers into EIL writing, but critics charged the plan was self-serving.
Late 1980s to Mid-1990s: Continued Diversification into Financial Services
The late 1980s saw continued consolidation for AIG. The Financial Services Group was formed in 1987 to consolidate specialized financial operations. UNAT, AIG's general insurance company on the European continent, was formed later that year to consolidate operations in Europe and prepare for the elimination of trade barriers among European nations in 1992. Headquartered in Paris, UNAT's expanding territory included France, Belgium, the Netherlands, Sweden, Norway, and Denmark.
In 1989 AIGlobal was formed to provide a single source of comprehensive property and casualty, life, and group insurance, and facilitate corporate financial services for multinational companies. That same year International Healthcare and Jurgovan & Blair were merged to form American International Healthcare, Inc., an international consulting and management company for healthcare services.
From 1987 into the mid-1990s AIG continued its diversification into financial services. In 1987 a joint venture, AIG Financial Products Corp., was established to structure complex financial transactions, including interest rate and currency swaps. In 1988 AIG acquired ownership of 30 percent of A.B. Asesores Bursatiles, a Spanish brokerage, and invested in certain investment management and venture capital operations in the United Kingdom and Hong Kong. AIG Trading Corporation, a joint venture engaging in commodity transactions, was established in early 1990, and later that year AIG acquired International Lease Finance Corporation, which was engaged primarily in the acquisition of new and used commercial jet aircraft and the leasing of such aircraft to domestic and foreign airlines (it later became the leader in such leasing). In 1994 AIG Combined Risks Ltd. was formed as a London-based investment bank providing risk management solutions involving corporate finance, reinsurance, and derivative instruments. All of these companies were placed under the umbrella of AIG's Financial Services Group. By 1994 operating income for the group had climbed to $404.9 million.
During 1990 Transatlantic Holdings, Inc., a holding company formed to hold Transatlantic Reinsurance Company and another reinsurer, Putnam Reinsurance Company, went public in a secondary offering. AIG continued to hold approximately 41 percent of Transatlantic Holdings after the public offering.
In June 1990 AIG agreed to buy Fischbach Corporation for $43 million. Fischbach, a Florida-based contractor, was an AIG performance-bond customer that had begun to experience financial difficulties. If Fischbach had failed, AIG could have been forced to pay hundreds of millions of dollars to companies with which Fischbach had contracted. After the purchase, AIG sold 51 percent of Fischbach to contractor Peter Kiewit Sons' Inc.
In 1992 AIG garnered much bad publicity over a memo written by Jeffrey Greenberg, who by then had become an executive vice-president of AIG. Issued on the day that Hurricane Andrew reached the coast of Florida, the memo, sent to presidents of AIG subsidiary companies, seemed to suggest that AIG underwriters should be encouraged to push for premium increases in the wake of the hurricane: "Begin by calling your underwriters together and explaining the significance of the hurricane. This is an opportunity to get price increases now. We must be the first and it begins by establishing the psychology with our own people. Please get it moving today." When the memo was made public it prompted investigations in both Florida and Louisiana, and denunciations from insurance watchdog groups, as well as consumer activist Ralph Nader who accused AIG of trying to start a cycle of "price gouging." Maurice Greenberg maintained, however, that the contents of the memo were taken out of context and were part of a larger AIG discussion of long-needed rate increases for commercial insurance.
During the early 1990s AIG continued to expand outside the United States, thereby increasing its non-U.S. revenue to 52 percent of the total by 1994. Asia and the states of the former Soviet Union were particular targets during this period. Led by Maurice Greenberg's son Evan, AIG's Asia-Pacific Division reentered the Chinese market in 1992 when it became the first insurer to receive a license there since the Communist revolution in 1949. Two years later AIG also became the first insurer to return to Pakistan when it formed a subsidiary of ALICO to sell life and related types of insurance (the Pakistani government had nationalized all insurance companies in 1972). In early 1995, AIG reached an agreement with the Tata Group of India to jointly operate a life and nonlife insurance business in India once these insurance markets were opened to private and foreign investment. Meanwhile, AIG continued to be the largest foreign insurer in Japan.
To the west, Russia and Uzbekistan were added to the AIG empire in 1994. Through joint ventures with local firms, AIG established commercial insurance and political risk insurance operations in Uzbekistan. Later in 1994 AIG received a license for its joint venture in Russia, the Russian American Insurance Company, which would offer commercial insurance to Russian companies and foreign firms operating in Russia.
During 1994 AIG also branched out into additional insurance lines within the U.S. market. AIG made an initial $216 million investment in 20th Century Industries, a private auto insurer in California that had incurred heavy losses as a result of the Northridge earthquake and was on the brink of insolvency. AIG pledged to invest additional capital if certain conditions were met. AIG also stepped in to rescue Alexander & Alexander Services, Inc. (A&A), a New York-based independent insurance broker. AIG's $200 million investment was intended to allow A&A to reorganize itself and improve profitability.
In the 27 years since Maurice Greenberg had taken over as CEO from the company founder, Greenberg had guided AIG into position as a leader in its field with total assets reaching $114.35 billion in 1994. In an industry that had been rocked by several huge natural disasters in the late 1980s and early 1990s, AIG's return on equity remained remarkably stable throughout the period, ranging from 11.75 percent to 18.83 percent, thanks largely to the geographic and operational diversity engineered by Greenberg.
Major Acquisitions at the Turn of the Millennium
In the late 1990s AIG made a number of significant acquisitions and investments as part of Greenberg's continuing expansion drive. In 1996 the firm spent more than $100 million to acquire SPC Credit Ltd., a medium-size Hong Kong company specializing in consumer and commercial finance. Two years later AIG spent $150 million for a 7 percent stake in the Blackstone Group, a leveraged buyout firm, and also agreed to invest $1.2 billion in future Blackstone buyout funds. Also in 1998 AIG gained majority control of 20th Century Industries and also took control of the company board as its influence at the company increased. Two years later 20th Century changed its name to 21st Century Insurance Group.
Having maintained prominent positions in two key business areas--general insurance and life insurance--over the decades and having more recently built up a significant financial services business, AIG next sought to add a fourth leg to its operations in the area of retirement savings and asset management. The first major move toward this end came at the beginning of 1999 when SunAmerica Inc. was acquired for $18.3 billion. Based in Los Angeles, SunAmerica was a major player in the hot area of variable annuities, a retirement savings product similar to a mutual fund but with insurance features and tax advantages. SunAmerica was also involved in the more traditional area of fixed annuities as well as in managing mutual funds. In 1997 it had $2.1 billion in revenue, $379 million in net income, and $40 billion in assets. The synergies that could be gained through the acquisition were quite apparent: AIG would gain access to SunAmerica's network of more than 9,000 U.S. brokers who could sell AIG life insurance and other products, while SunAmerica's retirement savings products could be sold through AIG's huge life insurance sales force in Asia, Europe, and South America.
In November 2000 AIG acquired HSB Group Inc. for about $1.2 billion. HSB was the parent company of the Hartford Steam Boiler Inspection and Insurance Company, which specialized in insuring steam boilers and other mechanical and electrical equipment. Also in 2000 AIG became the first U.S. insurance company to receive a license to establish a subsidiary in Vietnam. Early the following year, a bankruptcy court in Japan named AIG to be the exclusive sponsor of the reorganization of the troubled Chiyoda Mutual Life Insurance Company, the 12th largest insurer in Japan. This led later in the year to the acquisition of Chiyoda, which was renamed AIG Star Life Insurance Co., Ltd., a move that further added to AIG's already strong position in Japan.
In August 2001 AIG completed the largest acquisition in its history--in fact, the largest insurance takeover ever--the $23 billion purchase of American General Corporation. This deal was a logical follow-up to the SunAmerica acquisition as Houston-based American General had a strong position in fixed and variable annuities and in mutual funds. But American General, which had total assets in excess of $120 billion, was also a major player in the U.S. life insurance and consumer finance markets, and the acquisition resulted in AIG becoming the number two life insurance firm in the United States, trailing only Prudential Financial, Inc. Life insurance was also now by far AIG's largest business segment, accounting for 48.3 percent of 2001 pretax income, with general insurance contributing 25.5 percent; financial services, 17.1 percent; and retirement savings and asset management, 9.1 percent.
In December 2001, with insurance rates surging in the aftermath of the events of September 11, and with the insurance industry facing in excess of $50 billion in claims--by far the largest insurance event in history--AIG joined with Chubb Corporation, a unit of Goldman, Sachs & Co., and other investors to form Allied World Assurance Company Holdings, Ltd. Based in Bermuda, the new firm was created to provide additional commercial property and casualty insurance and reinsurance capacity to meet the needs of clients with large and complex risks. For insurance companies, joint ventures such as this one--and there were several others formed around this same time--provided a way for the firms to pool risks.
Despite suffering $820 million in losses related to September 11 and taking a special charge of $1.36 billion in connection with the acquisition and integration of American General, AIG still managed to post net income for 2001 of $5.36 billion, which was only a slight decline over the $5.64 billion figure for the preceding year. Revenues increased 9.4 percent for the year, to $62.4 billion, and total assets grew 15.5 percent, to $492.98 billion. Return on equity was 11.9 percent, an uncharacteristically low figure for a company that had reported four straight years of return on equity in excess of 15 percent.
It was clear that AIG was continuing its remarkable period of stellar performance under Maurice Greenberg's leadership, and Greenberg during his more than 30 years in charge had become a legend in the insurance industry. One question that kept recurring year after year in regard to AIG's future was who would succeed Greenberg (he turned 76 in 2001) and become only the third leader in AIG history. Over the years several potential successors had left AIG to head up other firms, not willing to wait for Greenberg to retire. A new and louder round of speculation arose in mid-1995 when Jeffrey Greenberg, who had been widely rumored to be the latest heir apparent, abruptly resigned from the firm. Some observers then raised the possibility that Jeffrey's brother Evan was the new heir apparent, using his recent promotion to executive vice-president to support their theory. Evan remained the assumed heir until September 2000 when he too resigned suddenly. This latest departure led to expressions of concern from certain analysts, but Maurice Greenberg continued to state that he had no plans to retire and that a succession plan was in place--although he refused to provide any details about it.
Principal Subsidiaries: AIG Annuity Insurance Company; AIG Financial Products Corp.; AIG Global Investment Group, Inc.; AIG SunAmerica Life Insurance Company; American General Finance, Inc.; American General Life Companies; American Home Assurance Company; American Life Insurance Company; The Hartford Steam Boiler Inspection and Insurance Company; International Lease Finance Corporation; Lexington Insurance Company; National Union Fire Insurance Company of Pittsburgh, Pa.; New Hampshire Insurance Company; SunAmerica Asset Management Corp.; SunAmerica Life Insurance Company; Transatlantic Reinsurance Company; United Guaranty Residential Insurance Company; The Variable Annuity Life Insurance Company; American International Assurance Company (Bermuda) Limited; American International Reinsurance Company Limited (Bermuda); American International Underwriters Overseas, Ltd. (Bermuda); American International Assurance Company, Limited (Hong Kong); AIG Star Life Insurance Co., Ltd. (Japan); Nan Shan Life Insurance Company, Ltd. (Taiwan).
Principal Competitors: Allianz AG; AXA; ING Groep N.V.; Zurich Financial Services; Prudential Financial, Inc.; Metropolitan Life Insurance Company; State Farm Insurance Companies; The Allstate Corporation; Travelers Property Casualty Corp.
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