AIG 2007 Annual Report Download - page 6

4AIG 2007 Annual Report
We then consolidated 21st Century with
AIG’s existing auto platform. The com-
bined operation, aigdirect.comSM, is an
organization with the reach and expertise
needed to compete more effectively in
the U.S. auto insurance marketplace.
Through AIG-managed funds, we are
a leading investor in the infrastructure
business. In 2007, our investments in
P&O Ports North America, AMPORTS
and MTC Holdings were organized
under one management structure. We
believe the new entity, Ports America,
constitutes the largest and most experi-
enced independent port operator and
automotive import/export processor in
the United States.
In addition to these accomplishments,
we made good progress on several
other fronts.
Customer Focus—We devoted a
great deal of attention to our customers
as we broadened the implementation
of our “Deliver the Firm” strategy.
Specifically, we examined how to realign
the way AIG does business so we can
deploy our products and services in ways
that allow us to meet multiple needs
of customers around the world. For our
customers, it means more convenience,
more choices and even better services.
For our employees, it means broader
engagement with other AIG businesses
and colleagues. For our shareholders, it
means tapping the vast potential for new
growth and higher returns.
Capital Management—The imple-
mentation of our economic capital
model provides us with a tool to help us
allocate our capital efficiently. The tool
provides one of the metrics we will use
with increasing frequency to allocate cap-
ital to promising growth areas, judge per-
formance on a consistent basis across our
business segments and help us set com-
pensation policy. AIG’s capital position
is excellent and we have the flexibility to
take advantage of growth opportunities.
Innovation—Our reputation as an
industry innovator gained widespread
recognition when AIG Private Client
Group’s Wildfire Protection Unit acted
swiftly to protect client homes from rag-
ing wildfires in the western United States.
The unit’s response teams treated client
homes with a fire retardant in advance
of the flames, reducing losses and claims.
Meanwhile, AIG Product Development
maintained a steady flow of new products,
launching one every 14 days on average,
with individual businesses launching
even more. New offerings ranged from
Family Protector, an urban protection
package launched in South Africa, to AIG
Oilfield Services Insurance, a one-stop
coverage solution designed specifically
for independent oil and gas clients.
Building our Brand—We made sub-
stantial progress in 2007 in strengthening
worldwide recognition of the AIG brand.
Our success is attributable to greater
consistency in the implementation of
our brand and judicious investments
in brand advertising and sponsorship
opportunities. Our sponsorship of
the Manchester United Football Club
has helped tremendously to increase our
recognition worldwide, particularly in
key Asian markets. Of course, it has
helped build recognition in the United
Kingdom as well. The consolidation of
our New Hampshire and Landmark
businesses under the name AIG UK
Limited will allow us to further leverage
our Manchester United sponsorship.
In Australia and New Zealand, all of our
businesses now market under the AIG
brand name. We launched a vigorous
branding campaign in India to support
our business growth there. National
Union Fire Insurance Company of
Pittsburgh, Pa., now markets under the
name AIG Executive LiabilitySM and
AIG VALIC, a leader in the K-12,
healthcare and higher education markets,
has re-branded as AIG Retirement. It was
gratifying to see the growing strength of
our brand recognized when BusinessWeek
magazine included AIG in its annual
list of the world’s top brands, ranking us
at 47, the highest rank of any insurer,
in our first-ever appearance on the list.
While we are proud of these successes,
we clearly need to improve in several areas.
There is no disputing the severity of the
U.S. residential mortgage crisis and the
dislocation in the credit markets, but
that cannot be an excuse for poor per-
formance. We need to reverse higher
losses and expenses and work through
product and distribution shortcomings in
several other businesses. Even though we
have made progress increasing the average
number of products sold per customer,
there is still room for improvement.
We devoted a great
deal of attention to
our customers as
we broadened the
implementation of
our “Deliver the
Firm”strategy.