W E Are Moving Aig Forward
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WE ARE MOVING AIG FORWARD AMERICAN INTERNATIONAL GROUP, INC. 2011 Annual Report CONTENTS IFC Overview 2 Chairman’s Message 3 CEO’s Letter to Shareholders 4 Moving Forward 10 Board of Directors 11 2011 Form 10-K IBC Shareholder Information Chartis Inc. SunAmerica Financial Group Chartis Inc. (Chartis) is a world-leading property-casualty SunAmerica Financial Group (SunAmerica) is one of the and general insurance organization serving more than 70 largest life insurance and retirement services organizations million clients around the world. With one of the industry’s in the United States. With one of the broadest distribu- most extensive ranges of products and services, deep claims tion networks in the industry, SunAmerica helps its more expertise, and excellent fi nancial strength, Chartis enables than 18 million customers meet the challenges of fi nancial its commercial and personal insurance clients to manage and retirement security through American General, AGLA, virtually any risk with confi dence. VALIC, Western National, SunAmerica Asset Management, SunAmerica Retirement Markets, SunAmerica Affordable Q Voted best claims service in response to the New Housing Partners, Royal Alliance, SagePoint Financial, Zealand earthquakes, according to a survey by the and FSC Securities. Insurance Brokers Association of New Zealand. Q Q Partnered with the National Council of Youth Sports Recognized over 25 times in 2011 by various in the U.S. to launch “aHead of the Game,” a program industry associations for industry-leading customer to reduce concussions and other head injuries in and participant services, as well as marketing and youth sports. client materials. Q Q AIU Japan ranked #1 in two categories in the 2011 Earned top sales rankings in 2011 across product lines: J.D. Power Asia Pacifi c Customer Satisfaction Study. #1 in fi xed annuities, #4 in total annuities, #5 in term life, and #6 in variable annuities. Q Hand-delivered $10 million claims check to the Lambert-St. Louis International Airport within four days Q Uncovered signifi cant new information surrounding the of the April 2011 Missouri storms. evolving retirement attitudes of today’s pre-retirees through its groundbreaking SunAmerica Retirement Q Voted best European casualty insurer for 2011 by Re-SetSM Study. readers of Intelligent Insurer. AIG 2011 ANNUAL REPORT 1 OVERVIEW Our commitment to keeping our promises hasn’t changed, but there are many things about AIG today that are different. We have become simpler, divesting businesses to get us back to our roots in insurance and delivering on our commitment to help secure our clients’ fi nancial futures. United Guaranty Corporation International Lease Finance Corporation United Guaranty Corporation (United Guaranty) offers in- International Lease Finance Corporation (ILFC) is a full- novative private mortgage insurance, which helps mortgage service aircraft lessor, delivering a wide array of valuable lenders remain competitive while generating a sound and services via its operating lease, including fl eet planning and responsible book of business. United Guaranty has operations rationalization, revenue and route analysis, and product in the United States, Hong Kong, Korea, Japan, Australia, support programs. United Kingdom, Spain, Italy, Hungary, and Mexico. Q Is world’s largest independent aircraft lessor as Q Is the leading provider of mortgage insurance in the measured by aircraft owned, with a portfolio of over U.S., with a 30 percent market share. 1,000 owned or managed aircraft. Q SM Announced CoverEdge , rigorous, full-fi le underwriting Q Leases aircraft to airlines in every major geographic at origination with an additional post-closing review, region, including emerging and high-growth markets which — by ensuring guideline requirements are met in Asia, Latin America, the Middle East, and and essential documents are stored electronically — Eastern Europe. signifi cantly reduces mortgage insurance rescissions Q Has comprehensive fl eet management capabilities for covered loans. and is a leading supplier of certifi ed engines and parts Q Through support of, and participation in, the Home to maximize value across the complete life cycle of Affordable Refi nance Program (HARP) and other an aircraft. programs, worked with lenders to modify mortgages, enabling about 40,000 U.S. families to keep their homes in 2011. 2 AIG 2011 ANNUAL REPORT Robert S. Miller Non-Executive Chairman of the Board Chairman’s Message Dear AIG Shareholder, insurance company, Bob recognized And we have a particularly keen sense I have said it many times over the past that AIG was made up of proud profes- of how AIG needs to be a responsible year, and, as Chairman of AIG, I believe sionals who were the best, the most corporate citizen in this new era. it is worth repeating: Thank you. innovative, and consistently the fi ercest We are also actively working with Thank you to the American tax- competitors in nearly every core busi- AIG management on certain key proj- payers for giving the people of AIG a ness in which AIG operated. ects. For example, the Board formed the chance to prove what they are worth. Bob asked the Board, “Isn’t AIG Special Technology Committee to over- Thank you to the people of AIG for worth more together than the sum of see AIG management’s work to enable realizing we were given a second chance its parts?” “Aren’t AIG’s people worth the people of AIG to manage risk and and for quietly, without pausing, look- more?” These questions begged a business processes in a very complex ing forward and working every day change in course — and made us recon- environment. with conviction. Thank you to Bob sider our plans. Bob knew the answers Another priority is succession Benmosche, AIG’s President and Chief and set about planning and executing planning. Like me, Bob joined AIG out Executive, for persevering against all what ultimately raised nearly $45 bil- of retirement, and while he has made odds imagined and unimagined, and lion, nearly every cent directly payable commitments to stay for longer than never wavering from what he believes. to the U.S. government. Eventually, we anticipated, we are planning for his In my career, I have been honored with the U.S. Department of the Trea- eventual retirement. The AIG Board of to be part of and witness dramatic turn- sury and the Federal Reserve convinced Directors has devoted much to being arounds. The story of AIG’s transfor- that the breakup of AIG wasn’t neces- prepared for the future, and we have a mation and the progress this company sary, the complete recapitalization of strong governance structure in place. has made, from my vantage point, are the U.S. government investment was AIG made tremendous progress remarkable. Bob deserves tremendous put in motion. during 2011. This was the year that praise and respect for everything The unprecedented accomplish- galvanized the people of AIG to put accomplished at AIG since he joined in ments, persistence, and commitment the crisis behind them and refocus on August 2009. To quote the old idiom, of Bob and the people of AIG raise business fundamentals. On behalf of the “Time will tell,” but I predict that Bob the bar on what we as Board members AIG Board of Directors and everyone and the people of AIG may have think is expected of us. As a Board, we at AIG, thank you for your continued orchestrated the largest turnaround feel the need to do our part to ensure support and for allowing us to really in corporate history. that these accomplishments are not prove what AIG is worth. Less than three short years ago, wasted. We certainly have fi duciary and Sincerely, AIG leadership was steering this great governance responsibilities mandated company to its breakup. Under the by corporate charter and regulators, theory that selling off the company’s but this Board feels a greater sense of assets was the best way to generate the purpose and responsibility. funds to repay American taxpayers, We are continually planning for the Robert S. Miller legal mechanisms were put in place, future and actively engaged in provid- February 29, 2012 businesses were rebranded, and assets ing this unbeatable AIG team with the were being sold. Unfortunately, these tools and the leadership to continue to efforts would have fallen far short of be in the best position to compete. A repaying our obligations to the taxpayers. top priority is ensuring that AIG has the Then Bob came along with an appropriate controls over risk. Much of outsider’s fresh perspective of what this work on risk helps us be prepared it meant to compete against AIG. As for additional regulatory supervision. former Chief Executive of another large AIG 2011 ANNUAL REPORT 3 Robert H. Benmosche President and Chief Executive Offi cer To Our Shareholders, At AIG, the crisis is over. We are well Our businesses are on the right ment returns by redeploying investment on our way to achieving a complete track. Across the board, customer assets, manage our capital better, and turnaround, a feat that many believed, loyalty is high, sales are strong, and reduce costs. Recently, we began execut- even a year ago, was impossible. retention rates are robust. We reorga- ing on our Board of Directors’ authori- Thanks to the hard work of our nized Chartis, our property and casualty zation to repurchase up to $1 billion of employees and our partners in the U.S. division, and its new global structure AIG common stock. government, 2011 was the year that we better aligns consumer and commercial Let me conclude with a few words refocused on becoming the world’s most capabilities with the needs of custom- about our employees. Ever since I joined valuable insurance company. For the ers.