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American International Group, Inc SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2003 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition period from to Commission file number 1-8787 American International Group, Inc. (Exact name of registrant as specified in its charter) Delaware 13-2592361 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 70 Pine Street, New York, New York 10270 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code (212) 770-7000 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange Title of each class on which registered Common Stock, Par Value $2.50 Per Share New York Stock Exchange, Inc. Securities registered pursuant to Section 12(g) of the Act: Title of each class None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ü No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ü No The aggregate market value of the voting and nonvoting common equity held by nonaffiliates of the registrant computed by reference to the price at which the common equity was last sold as of June 30, 2003 (the last business day of the registrant’s most recently completed second fiscal quarter), was approximately $115,958,906,000. As of January 31, 2004, there were outstanding 2,608,947,657 shares of Common Stock, $2.50 par value per share, of the registrant. Documents Incorporated by Reference: The registrant’s definitive proxy statement filed or to be filed with the Securities and Exchange Commission pursuant to Regulation 14A involving the election of directors at the annual meeting of the shareholders of the registrant scheduled to be held on May 19, 2004 is incorporated by reference in Part III of this Form 10-K. PART I ITEM 1. Business American International Group, Inc. (AIG), a Delaware corporation, is a holding company, which through its subsidiaries, is engaged in a broad range of insurance and insurance-related activities in the United States and abroad. AIG’s primary activities include both General and Life Insurance operations. Other significant activities include Financial Services, and Retirement Services & Asset Management. The principal General Insurance company subsidiaries are American Home Assurance Company (American Home), National Union Fire Insurance Company of Pittsburgh, Pa. (National Union), New Hampshire Insurance Company (New Hampshire), Lexington Insurance Company (Lexington), The Hartford Steam Boiler Inspection and Insurance Company (HSB), Transatlantic Reinsurance Company, American International Underwriters Overseas, Ltd. (AIUO) and United Guaranty Residential Insurance Company. Significant Life Insurance operations include those conducted through American Life Insurance Company (ALICO), American International Reinsurance Company, Ltd. (AIRCO), American International Assurance Company, Limited together with American International Assurance Company (Bermuda) Limited (AIA), Nan Shan Life Insurance Company, Ltd. (Nan Shan), AIG Star Life Insurance Co., Ltd. (AIG Star Life), AIG Annuity Insurance Company (AIG Annuity), the AIG American General Life Companies (AIG American General), and SunAmerica Life Insurance Company (SunAmerica Life). AIG’s Financial Services operations are conducted primarily through International Lease Finance Corporation (ILFC), AIG Financial Products Corp. and its subsidiaries (AIGFP), and American General Finance, Inc. and its subsidiaries (AGF), while Retirement Services & Asset Management operations include The Variable Annuity Life Insurance Company (VALIC), AIG SunAmerica Asset Management Corp. (SAAMCo), AIG SunAmerica Life Assurance Company and AIG Global Asset Management Holdings Corp. (formerly known as AIG Global Investment Group, Inc.) and its subsidiaries and affiliated companies (AIG Global Investment Group). On August 29, 2001, AIG acquired American General Corporation (AGC). In connection with the acquisition, AIG issued approximately 290 million shares of common stock, $2.50 par value per share (common stock) in an exchange for all the outstanding common stock of AGC based on an exchange ratio of 0.5790 of a share of AIG common stock for each share of AGC common stock. The acquisition was accounted for as a pooling of interests and all prior historical financial information presented herein has been restated to include AGC. For information on AIG’s business segments, see Note 2 of Notes to Financial Statements. All per share information herein gives retroactive effect to all stock dividends and stock splits. As of January 31, 2004, beneficial ownership of approximately 11.9 percent, 2.0 percent and 1.8 percent of AIG common stock, was held by Starr International Company, Inc. (SICO), The Starr Foundation and C.V. Starr & Co., Inc. (Starr), respectively. At December 31, 2003, AIG and its subsidiaries had approximately 86,000 employees. AIG’s Internet address for its corporate website is www.aigcorporate.com. AIG makes available free of charge, on or through the Investor Information section of AIG’s corporate website, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after such materials are electronically filed with, or furnished to, the Securities and Exchange Commission (SEC). Throughout this Annual Report on Form 10-K, AIG presents its operations in the way it believes will be most meaningful, as well as most transparent. Certain of the measurements used by AIG management are “non-GAAP financial measures” under SEC rules and regulations. Gross premiums written, statutory underwriting profit (loss) and combined ratios are presented in accordance with accounting principles prescribed by insurance regulatory authorities. For an explanation of why AIG management considers these “non-GAAP measures” useful to investors, see Management’s Discussion and Analysis of Financial Condition and Results of Operations. FORM 10-K : 1 American International Group, Inc. and Subsidiaries The following table shows the general development of the business of AIG on a consolidated basis, the contributions made to AIG’s consolidated revenues and operating income and the assets held, in the periods indicated, by its General Insurance, Life Insurance, Financial Services, and Retirement Services & Asset Management operations and other realized capital gains (losses). (See also Management’s Discussion and Analysis of Financial Condition and Results of Operations and Notes 1 and 2 of Notes to Financial Statements.) Years Ended December 31, (in millions) 2003 2002 2001 2000 1999 General Insurance operations: Gross premiums written $ 47,440 $ 37,537 $ 29,640 $ 25,050 $ 22,569 Net premiums written 35,212 27,414 20,101 17,526 16,224 Net premiums earned 31,734 24,269 19,365 17,407 15,544 Underwriting profit (loss)(a) 2,220 (1,235) (b) 88(c) 785 669 Net investment income 3,022 2,760 2,893 2,701 2,517 Realized capital gains (losses) (172) (858) (130) 38 295 Operating income 5,070 667(b) 2,851(c) 3,524 3,481 Identifiable assets 121,791 109,068 91,544 85,270 76,725 Loss ratio 73.3 85.8 79.5 75.3 75.5 Expense ratio 19.1 20.2 21.2 21.4 20.8 Combined ratio 92.4 106.0(b) 100.7(c) 96.7 96.3 Life Insurance operations: GAAP premiums 22,879 20,320 19,063 17,163 15,476 Net investment income 13,640 12,274 11,084 9,962 8,932 Realized capital gains (losses) (826) (1,053) (254) (162) (148) Operating income 6,002 4,929 4,675(d) 4,058 3,610 Identifiable assets 432,633 339,847 296,648 248,982 231,843 Insurance in-force at end of year 1,596,626 1,324,451 1,228,501 971,892 950,933 Financial Services operations: Commissions, transaction and other fees 7,565 6,815 6,485 5,954 5,069 Operating income 2,464 2,189 1,991 1,666 1,417 Identifiable assets 137,299 124,617 107,322 94,173 78,868 Retirement Services & Asset Management operations: Commissions and other fees 3,896 3,485 3,712 3,465 3,093 Operating income 1,271 1,016 1,088 1,108 873 Identifiable assets 4,254 2,567 1,842 1,590 1,132 Other realized capital gains (losses) (435) (530) (452) (190) (44) Revenues(e) 81,303 67,482 61,766 56,338 50,734 Total assets 678,346 561,229 493,061 426,671 383,685 (a) Underwriting profit, a GAAP measure, is statutory underwriting income adjusted primarily for changes in the deferral of acquisition costs. This adjustment is necessary to present the financial statements in accordance with GAAP. (b) In the fourth quarter of 2002, after completion of its annual review of General Insurance loss and loss adjustment expense reserves, AIG increased its net loss reserves pertaining to accident years 1997 through 2001 by $2.8 billion.
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