AIG 2007 Annual Report Download - page 31

AIG 2007 Annual Report 29
to all of coastal Florida and Suffolk County, New York. AIG
Private Client Group also offered admitted group excess coverage
targeted at wealth advisors and financial services companies; intro-
duced a risk management program, called Architectural Legacy, for
owners of historic homes; and streamlined processes for policy
issuance by providing agents with an easy-to-use online system.
The reach of the Wildfire Protection Unit also expanded to more
than 150 zip codes in the country.
The group also began operations overseas as it introduced yacht
insurance in the U.K. and established an office in Australia.
United Guaranty Corporation
The performance of United Guaranty Corporation (UGC) has a
high degree of correlation to the U.S. housing industry, which expe-
rienced significant home price deterioration in most markets in 2007.
Although UGC had taken steps beginning in 2006 to stem the adverse
impact on its business by changing credit underwriting standards,
product eligibility guidelines and portfolio caps, its second-lien
insurance business had a difficult year.
Reflecting its long-term strategy to diversify income sources,
UGC added new customers and products in the domestic private
education loan business; opened a business development office in
India; obtained licenses in Korea and Mexico; and began writing
mortgage insurance in Canada.
As mortgage lenders and investors return to higher quality mort-
gage lending and standard loan instruments, UGC is well-positioned
to take advantage of opportunities when the market emerges from
its current correction.
Transatlantic Holdings, Inc.
Transatlantic Holdings, Inc., AIG’s majority-owned reinsurance
organization, reported record highs in net income and operating
cash flow in 2007 as favorable loss experience in property lines
benefited results. Premiums also increased compared to the year-ago
period, largely because of recent underwriting initiatives in the
United States and overseas, and the strength of major foreign
currencies against the dollar.
Transatlantic’s long-term success is built on its financial strength,
global reach through a network of offices spanning six continents
and its enterprising group of reinsurance professionals worldwide.
To address the challenge of market pricing weakness in many regions
and lines of business, Transatlantic continues to focus on underwriting
discipline and is capitalizing on opportunities in less-saturated areas
in the global reinsurance marketplace.
Foreign General Insurance
AIG’s Foreign General Insurance business achieved growth in
commercial and consumer lines, driven by business from both
established and new distribution channels. Net premiums written
rose 14 percent to $13.05 billion.
AIG’s Foreign General and its marketing unit, American
International Underwriters (AIU), have a broad geographic scope
and portfolio mix, as well as a seasoned management team, to
serve clients in more than 80 countries around the world. In 2007,
AIU continued its strategy of expansion into the world’s most
promising emerging markets, while deepening its footprint in the
developed markets of Japan, continental Europe and the U.K./Ireland.
Its multidistribution strategy targeted commercial and consumer
In the summer of 2007, widespread flooding throughout the United Kingdom
resulted in nearly £3 billion in industry-wide insurance claims. Following the
floods, emergency response claims teams from AIG Europe (UK) Limited visited
affected policyholders within days to assess damage and expedite payments.