AIG 2011 Annual Report Download - page 18

Part I
ITEM 1. BUSINESS
American International Group, Inc. (AIG) is a leading international insurance organization serving customers in
more than 130 countries. AIG companies serve commercial, institutional and individual customers through one of
the most extensive worldwide property-casualty networks of any insurer. In addition, AIG companies are leading
providers of life insurance and retirement services in the United States. AIG Common Stock, par value $2.50 per
share (AIG Common Stock), is listed on the New York Stock Exchange and the Tokyo Stock Exchange.
Throughout this Annual Report on Form 10-K, the terms AIG, the Company, we, us and our are used to
collectively refer to AIG, a Delaware corporation, and its consolidated subsidiaries, unless the context otherwise
requires. The term AIG Parent refers solely to American International Group, Inc., a Delaware corporation, and
not to any of its consolidated subsidiaries.
In September 2008, liquidity issues resulted in AIG seeking and receiving governmental support through a credit
facility from the Federal Reserve Bank of New York (the FRBNY, and such credit facility, the FRBNY Credit
Facility) and funding from the United States Department of the Treasury (Department of the Treasury) through
the Troubled Asset Relief Program (TARP).
On January 14, 2011, AIG was recapitalized (the Recapitalization) and the FRBNY Credit Facility was repaid
and terminated through a series of transactions that resulted in the Department of the Treasury becoming AIG’s
majority shareholder with ownership of approximately 92 percent of outstanding AIG Common Stock at that time.
AIG understands that, subject to market conditions, the Department of the Treasury intends to dispose of its
ownership interest over time, and AIG has granted certain registration rights to the Department of the Treasury to
facilitate such sales.
On May 27, 2011, AIG and the Department of the Treasury, as the selling shareholder, completed a registered
public offering of AIG Common Stock. AIG issued and sold 100 million shares of AIG Common Stock for
aggregate net proceeds of approximately $2.9 billion and the Department of the Treasury sold 200 million shares
of AIG Common Stock. AIG did not receive any of the proceeds from the sale of the shares of AIG Common
Stock by the Department of the Treasury. As a result of the sale of AIG Common Stock in this offering, the
Series G Cumulative Mandatory Convertible Preferred Stock, par value $5.00 per share (the Series G Preferred
Stock) was cancelled and the ownership of the outstanding AIG Common Stock by the Department of the
Treasury was reduced from approximately 92 percent to approximately 77 percent after the completion of the
offering.
See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
(MD&A) — Capital Resources and Liquidity and Notes 1 and 17 to the Consolidated Financial Statements for
further discussion of the governmental support provided to AIG and the Recapitalization.
In order to align financial reporting with the manner in which AIG’s chief operating decision makers review the
businesses to allocate resources and assess performance, changes were made during 2011 to AIG’s segment
information. See Note 3 to the Consolidated Financial Statements for additional information. AIG now reports its
results of operations as follows:
•Chartis — Chartis offers a breadth of insurance products and services to businesses and individuals
worldwide. Commercial insurance products are primarily distributed to businesses through insurance brokers.
Major lines of business include casualty, property, financial lines and specialty (including aerospace,
environmental, marine, trade credit and political risk coverages, and various product offerings to small and
medium enterprises (SME)). Consumer insurance products are primarily distributed to individual consumers
or groups of consumers through individual agents, brokers, and on a direct-to-consumer basis. Consumer
lines of business include accident & health (A&H), personal lines, and life insurance.
Chartis conducts its business primarily through the following legal entities:
• National Union Fire Insurance Company of Pittsburgh, Pa.
4 AIG 2011 Form 10-K