AIG 2006 Annual Report Download - page 10

8AIG 2006 Annual Report8AIG 2006 Annual Report
information technology. Mr. Orr, Chairman of the Board of Trustees
of the Rockefeller Foundation, brings a wealth of experience from
the financial services industry. He is past President and Chief
Executive Officer of United Asset Management Corp. and past
Chairman and CEO of UNUM Provident Corp.
One of AIG’s long-serving directors, Pei-yuan Chia, retired from
the AIG Board in September of 2006. Pei, former Vice Chairman
of Citicorp, has been an active Board member providing us with
valuable counsel. His deep experience in global finance has been a
great asset to AIG, and we are grateful for his contributions. We
will miss Pei and, on behalf of the Board and management, I would
like to thank him for his 10 years of service to our company.
Thomas R. Tizzio, Senior Vice Chairman, General Insurance,
retired in 2006 after more than 38 years with the company. Tom
made countless contributions to AIG during his long and distin-
guished career, which included his strong leadership as AIG’s
President from 1991 to 1997. We look forward to continuing to
benefit from Tom’s experience and counsel in his role as an
Honorary Director and advisor to AIG.
During the year,we were pleased to welcome three new mem-
bers to AIG’s International Advisory Board: Abdlatlf Al-Hamad,
Director General and Chairman of the Board of Directors, Arab
Fund for Economic and Social Development; Chen Yuan, Governor,
China Development Bank; and The Rt. Hon. Lord Christopher
Patten, Chancellor of Oxford University. These new members bring
broad experience and global perspective in areas that are important
to our organization.
In 2006, we bid a fond and sincere farewell to The Rt. Hon.
Lord Prior, PC, who retired from AIG’s International Advisory Board
after 18 years of valuable service. It has been our good fortune to
work with Jim these many years and we wish him the very best.
The AIG family lost a dear member in October when Marion
Fajen passed away. Marion joined C.V. Starr & Co., Inc. as
Assistant Secretary in 1971 and was named AIG Corporate
Secretary in 1974. She was elected AIG Assistant Vice President in
1980 and Vice President two years later before becoming the first
woman to be named to the AIG Board of Directors in 1984. Marion
was a dedicated AIG executive and dear friend to many of us who
knew and worked with her. Wewill miss her deeply.
2007 Outlook and Priorities
In the coming year,there will be no relaxing of our priorities: main-
taining customer focus and cost control are essential in the face of
increasing competition; continuing our tradition of product innovation
and careful investment will provide the tools for expanding distribu-
tion, geographic reach and developing new alliances; and our
approach to both acquiring and disposing of assets will be thoughtful.
The steps we take must make sense in the context of our new
economic capital model. We will follow through on our “Deliver the
Firm” strategy and an internal team is dedicated to coordinating
this critical effort. Our expansion will continue in markets around
the world where we believe we can meet customers’ needs with
competitively priced products.
Having ambitious plans is one matter; executing those plans is
quite another. We are not naïve about the difficulties we face,
whether from increasing competition, challenging economic condi-
tions or continually changing government and regulatory policies.
However, AIG has shown time and again its ability to execute in try-
ing circumstances, to innovate and to grow profits year after year.
That is why we believe our future prospects are bright. Although
many of our businesses have leading positions, many of the mar-
kets we serve still have room to expand or are good candidates for
the introduction of new business lines. Additionally, we believe that
we are in a good position to respond to several important macro
trends, including shifting centers of economic growth, a global
aging population, growth in the global middle class and greater risk
and uncertainty for our customers. We are supporting economic
development with products that manage risk and encourage business
formation, as well as through microfinance and microinsurance initia-
tives that help spread opportunity across all economic classes.
The strongest justification for my optimism, however, derives
from AIG's unparalleled global network and the 106,000 talented
employees who make it work. At year-end, AIG’s market capitalization
was approximately $186 billion and we are on the verge of surpass-
ing the $1 trillion mark in assets. The scope of our enterprise gives
us a tremendous advantage that cannot easily be duplicated. It is an
edge that AIG has built through decades of industry leadership. We
will continue to expand our scope through AIG know-how in opening
markets, developing new products and leveraging our distribution
network. And we will be sensitive to the interests of our customers,
shareholders, regulators, employees and business partners.
My job as CEO, along with my senior management team,
is to keep making progress and reward your investment with every
decision we make. In short, we will strive to be the best insurance
and financial services organization in the world while observing
high standards of corporate governance and social responsibility.
We are committed and determined to maximize value for our
shareholders—and we will.
Sincerely,
Martin J. Sullivan
President and
Chief Executive Officer
March 16, 2007