AIG 2007 Annual Report Download - page 34

32 AIG 2007 Annual Report
REVIEW OF OPERATIONS—
LIFE INSURANCE & RETIREMENT SERVICES
customers. Moreover, AIA has continued to diversify—from selling
traditional insurance products to nontraditional ones, such as
universal life, structured and investment linked products—in response
to the needs of customers.
In Vietnam, AIG and the Bank of Investment and Development
of Vietnam, the country’s leading state-owned commercial bank,
signed a memorandum of understanding to expand business coop-
eration and develop long-term initiatives in banking, insurance and
financial services in this important emerging market. AIA Vietnam
also launched its first universal life product, which has quickly
contributed about 25 percent of its new business.
AIA Thailand grew its network of agents to more than 76,000,
which is the largest in the country and a substantial generator of
new business. AIA Thailand has been actively expanding up country
to develop attractive business opportunities in that relatively
untapped region.
To provide specialized training to agents and enhance the quality
of customer service, AIA Singapore opened the AIA Financial
Health Check Academy. In support of AIG’s Manchester United
sponsorship, AIA Singapore issued the world’s first “First Day”
Commemorative Stamp cover validated by Singapore Post Limited.
AIA Malaysia was the first insurer in the country to launch a
comprehensive medical plan to cover policyholders up to age 100
and the first in the local industry to launch a needs-based selling
concept, called Financial Health Check.
In 2007, AIG Life Korea continued to hold the number one
position in fixed annuity products sold through banks—marking the
fourth consecutive year it has achieved this distinction. AIG Life Korea
also launched its first-ever variable annuity product.
The two life companies in Indonesia—AIA and AIG Life—consoli-
dated their business processing, back-office and customer service func-
tions for employee benefits under a single umbrella to bring greater
operational synergies and economies of scale. Successfully leveraging
AIG’s Manchester United sponsorship, AIG Life Indonesia imple-
mented a recruitment drive for new agents and expanded the bancas-
surance channel through the branch network of Bank Central Asia.
AIA Hong Kong focused on serving the growing affluent
segment for wealth management products and financial services
by complementing the agency force with wealth management
elites (WMEs), financial advisors who provide investment advice
and services. In 2007, selected WMEs participated in the Investment
Advisor project jointly conducted by AIA and AIG Wealth
Management Services. AIA also achieved the record of being the
first insurer in Hong Kong to have more than 1,000 agents qualify
for the Million Dollar Round Table, an international association
of life insurance and financial services professionals.
AIA China celebrated the 15th anniversary of its return to China
in 2007, when AIG was the first foreign insurance company to estab-
lish operations in Shanghai in 1992. In 2007, AIA China reached the
milestone of 30,000 agents, the largest agency force among foreign
life insurance companies in the country. It established 29 new sales and
service centers for a total of 104 centers in 19 cities in the country.
The underlying performance of AIG’s Life Insurance & Retirement
Services businesses provided further evidence that the continued
focus on multiple distribution initiatives to capitalize on its broad
product portfolio is gaining traction. Operating income growth in
this segment, however, was affected by unusual items in 2007 and
2006, as well as by market volatility.
Foreign Life Insurance & Retirement Services
For 76 years, American International Assurance Company,
Limited (AIA), has served the life insurance market in Asia,
and is a household name and a leading provider of insurance and
financial services. Its reputation and track record are second to
none, earning numerous industry accolades in 2007, ranging from
consumer confidence to service excellence, and from management
excellence to outstanding contributions to economic development.
In 2007, AIA forged significant strategic alliances to diversify
and grow its distribution capabilities, while at the same time
enhancing the agency channel,its core distribution franchise.
AIA has leveraged AIG’s Manchester United Football Club spon-
sorship to deepen the brand affinity with existing and prospective
Serving millions of customers around the world, AIG’s
growing global Life Insurance & Retirement Services busi-
nesses constitute the industry’s most extensive network.
Life Insurance & Retirement Services Financial Results
(in millions) 2007 2006
Premiums, deposits and other
considerations(a) $92,730 $81,007
Premiums and other considerations 33,627 30,766
Net investment income 22,341 20,024
Operating income before net
realized capital gains (losses) 10,584 10,033
Net realized capital gains (losses) (2,398) 88
Operating income 8,186 10,121
(a) Represents aggregate business activity during the respective periods presented on
a non-GAAP basis.
Life Insurance 56.0%
Individual Variable Annuities 20.4%
Personal Accident and Health 9.2%
Individual Fixed Annuities 7.9%
Group Life/Health 6.5%
Foreign Life Insurance & Retirement Services—Premiums,
Deposits and Other Considerations by Major Product
Total = $67.5 billion