AIG 2015 Annual Report Download - page 72

ITEM 7 / EXECUTIVE OVERVIEW

72
Information-driven Strategy
We believe that strengthening our information-driven decision making and marketing capabilities through the use of enhanced
analytics, stronger platforms and tools, a well-designed product portfolio and expanded relationships may allow us to bring
more effective product solutions to our chosen markets.
We focus on rate adequacy through our global underwriting practices and tools and analytics, and seek to optimize the value
of our business lines through product and portfolio management and refined technical pricing. We strive to deliver leading
customer experience and efficiency through claims best practices, deployment of enhanced operating structures and
standardized processes and systems, while managing claims-handling efficiency.
Sharpen Consumer Focus
Retirement Income Solutions intends to continue capitalizing on the opportunity to meet consumer demand for guaranteed
income by maintaining competitive variable annuity product offerings, while managing risk from guarantee features through
risk-mitigating product design and well-developed economic hedging capabilities. Retirement Income Solutions continues to
invest in hedging and market risk management capabilities. Retirement Income Solutions is also focused on diversifying its
product portfolio by growing sales of fixed index annuities with guarantee features, which provide additional income solutions
for consumers approaching retirement, and introducing new investment-focused variable annuities, which offer various
investment options, including alternative asset classes, to investors seeking higher returns.
Fixed Annuities sales will continue to be challenged by the low interest rate environment. Sales of fixed annuities could
improve if interest rates rise and the yield curve steepens, as these market conditions make fixed annuity products more
attractive compared to alternatives such as bank deposits. The growing market for immediate and deferred income products,
driven by customers seeking guaranteed income products, provides an opportunity for Fixed Annuities to increase the
diversification of its product portfolio.
Life will continue to invest to position itself for growth, serve its customers more effectively, and maintain pricing discipline in its
overall strategy. Life’s organization has been aligned to serve its customers in the Americas, Asia Pacific and EMEA regions
with a focus on the demographic, governmental and socioeconomic trends unique to each region. As part of this initiative, our
Group Benefits business recently merged with our U.S. Life, Health and Disability business to focus on strong existing
relationships with multi-line and specialty producers. In 2016, we announced a plan to improve capital efficiency by using
reinsurance to reduce certain statutory reserves that are above economic requirements in our domestic Life business.
Personal Insurance aims to provide clients with the products and services they desire, delivered through the channels they
prefer. We continue to focus and invest in the most profitable markets and segments, while narrowing our footprint where
appropriate. We are also leveraging our multinational capabilities to meet the increasing demand for cross-border coverage
and services. Personal Insurance will continue to utilize its strong risk management and market expertise to foster growth by
providing innovative and competitive solutions to its customers and distributors.
Operational Effectiveness
We are continuing to invest in initiatives that we believe will make our operating platforms simpler and more agile, enabling us
to provide superior service and accommodate future growth. In Japan, we continue to invest in technology to improve
operating efficiency and ease of doing business for our distribution partners and customers. In the U.S. Life business, we are
focused on leveraging our most efficient systems and increasing automation of our underwriting process. We believe that
simplifying our operating models will enhance productivity and support further profitable growth.
Investment Strategy