AIG 2006 Annual Report Download - page 34

32 AIG 2006 Annual Report
Foreign Life Insurance & Retirement Services
PDOC by Major Product
Total = $43.4billion
Life Insurance 55.6%
Individual Fixed Annuities 16.1%
Personal Accident & Health 12.9%
Group Products 8.1%
Individual Variable Annuities 7.3%
32 AIG 2006 Annual Report
retirement savings needs of an aging population. Taking advantage
of its expertise in the United States, AIGIRS is introducing variable
annuities with income security benefits in targeted countries in Asia.
In Europe, AIGIRS’s flexible and innovative product manufacturing
capability in the variable annuity business has spurred growth in the
region. Attractive new fund options are being launched in both the
United Kingdom and Italy. The U.K. business will continue to benefit
from increasing AIG brand recognition in the broker market and the
increased productivity and expansion of the sales organization.
Domestic Life Insurance & Retirement Services
AIG’s Domestic Life Insurance & Retirement Services companies
maintained leadership positions in 2006 despite difficult conditions
in some markets. Although the sales environment for universal life,
individual variable annuities and mutual funds was strong, the mar-
ket for individual fixed annuities and group retirement products was
challenging. This business is positioned, however, to overcome these
challenges based on the continued development of successful
strategies and products that will meet future customer needs and
market preferences.
AIG American General is a leading life insurance provider in the
United States with a portfolio that includes fixed and variable univer-
sal life insurance; whole and term life insurance; fixed, indexed and
immediate annuities; structured settlements; accident and health
insurance; and group and worksite benefits. The organization is
ranked among the top three providers in sales of individual life insur-
ance, term life insurance and universal life insurance, as well as in
the amount of insurance issued (as measured by policy face value).
AIG American General maintains its leadership positions by executing
three consistent strategies: diversification of distribution and product
lines, marketplace differentiation and operational excellence.
Diverse product lines and product innovation allow AIG American
General to compete effectively and profitably in its chosen markets.
With product lines ranging from individual life insurance and annu-
ities to group and worksite benefits and structured settlements, AIG
American General can readily respond to shifting consumer demands
and dynamic market conditions. In addition, by bringing innovative
products to market, the organization continues to differentiate itself
among competitors, consumers and its distribution partners. In
2006, more than 70 percent of sales through independent distribu-
tors came from products introduced or revised within the past two
years, such as the recently launched AIG Elite Global IULSM, a ground-
breaking universal life product that credits interest based in part on
the performance of three global large-cap indices.
AIG American General’s distribution network includes independ-
ent producers, career agents and various other third parties. Since
2001, the organization has nearly doubled the number of independ-
ent producers who sell its core life products. Overall, 57,500 inde-
pendent producers did business with AIG American General in 2006.
AIG American General is enhancing its distribution presence in
banks, wire houses and independent broker-dealers with teams ded-
icated exclusively to serving these channels. At the same time, the
organization is expanding its reach into new markets, such as the
multicultural market, by tailoring services especially for them.
AIG American General attracts new distribution partners with its
diverse and innovative product lines and retains them with a focus
on operational excellence. In 2007, for example, the organization
is introducing electronic signature technology to supplement its
be poised to compete more effectively in Japan’s dynamic life insur-
ance industry. This will be particularly true in areas outside the major
cities, which are traditional strongholds for AIG Edison and AIG Star.
Both companies had strong life insurance production in 2006, par-
ticularly driven by U.S. dollar-denominated single-premium products.
In Taiwan, which has the world’s highest life insurance penetration
rate, Nan Shan Life Insurance Companydistinguishes itself on many
levels. Attesting to its leadership, Nan Shan has for the fourth year in
arow earned the “Triple Crown Award” from Risk Management,
Insurance & Finance magazinefor “Best Insurance Company,” “Best
Claim Service” and “Insurance Company with the Best Agents” (it
has held this last distinction since 1994). In addition, Nan Shan con-
tinued to achieve success with its ongoing strategies of shifting from
traditional life to investment-linked product sales and expanding acci-
dent and health sales. In 2006, investment-linked sales grew sub-
stantially and accounted for the lion’s share of sales.
The Philippine American Life and General Insurance Company
(Philamlife) has a proud record over many decades of providing out-
standing products and services that have enabled its policyholders to
build better lives for their families. This record has fueled Philamlife’s
growth over time and secured its position as the premier life insurance
organization in the country. Building on this strong foundation,
Philamlife’s growth strategies continue to be focused on long-term
goals of increasing its dominant market share and achieving stable
and profitable operations.
Philamlife reported strong new business growth in 2006 with
asolid increase in premiums, deposits and other considerations.
Philamlife’s multiple distribution strategy helped drive these results.
The company’s agency force is its core distribution channel and the
largest in the Philippine life insurance industry. Banks are also an
important distribution channel, and in 2006 Philamlife generated a
record amount of premiums from its bancassurance partnership with
Equitable PCI Bank, one of the Philippines’ largest banks. During
the year, the company launched AKSITEXT, the Philippines’ first
micro-insurance product. AKSITEXT is an innovative product that is
both affordable and convenient for Filipinos, particularly for those
in lower income groups.
AIG International Retirement Services (AIGIRS) has made
significant progress in leveraging AIG companies’ presence in local
markets worldwide to build a global retirement services business.
In addition to initial successes in bancassurance in Korea and Japan,
AIGIRS has identified opportunities in Taiwan, based on the growing