AIG 2009 Annual Report Download - page 6

4 AIG 2009 Annual Report
FRBNY. This is the second time we have
reduced the amount we could borrow. Last
year, we reduced the original $85 billion to
$60 billion, and recorded a similar acceler-
ated amortization amount of $6.6 billion.
AIG’s foreign life insurance operations
have always been one of the company’s
crown jewels. By and large, they have
weathered the storm of the global  nancial
crisis in good shape, with strong earn-
ings performance. In March 2010, AIG
announced de nitive agreements to sell
American International Assurance
Company, Limited (AIA) to Prudential plc,
and American Life Insurance Company
(ALICO) to MetLife, Inc., subject to regu-
latory approvals. These agreements marked
critical milestones in our efforts to repay
taxpayers. We are on track to generate
approximately $50.7 billion from these
two transactions alone, consisting of ap-
proximately $31.5 billion in cash to repay
the FRBNY, plus another approximately
$19.2 billion in securities that we will
sell over time to repay the government.
In addition, both sales give AIG greater
 exibility to move forward with our
restructuring and rebuilding efforts, and
focus on enhancing the value of our key
insurance businesses.
Our plan calls for each of our major
businesses to contribute to our future
success, and our company-wide strategy is
focused on repaying
taxpayers, achiev-
ing growth, and
balancing risks. The
risk diversi cation
represented by our
property casualty
operations (underwriting risk) and life and
retirement services businesses (interest
rate risk, market risk, and mortality risk)
provides AIG with a stronger pro le going
forward. Let me give some examples.
Chartis, our worldwide property
casualty insurance organization, is already
one of the world’s largest insurers cover-
ing commercial risks, large and small,
with a global network built up over many
Our plan calls for each of our major
businesses to contribute to our future
success, and our company-wide strat-
egy is focused on repaying taxpayers,
achieving growth, and balancing risks.
decades. The Chartis team is the best in
the business, and has emerged from a very
dif cult period with its business intact and
as focused as ever on pro tability. During
2009, Chartis executed the largest market-
ing plan in its history, meeting with tens
of thousands of brokers and customers to
reassure them of the  nancial stability and
operating strengths of the company.
Chartis also integrated its domestic
and foreign businesses to form, for the
 rst time, a truly global property casualty
operation. The bene ts of one global
franchise are already manifested through
the enhanced service Chartis provides
to customers transacting business across
borders and around the world.
From an unmatched worldwide plat-
form, Chartis’ international businesses
continue to seek out new opportunities in
both established and emerging markets.
This was clearly evident in Chartis’ recent
announcement that it will take a majority
stake in Fuji Fire and Marine Insurance
Company, Ltd., which will make Chartis,
subject to regulatory approval, the fourth-
largest insurance organization in Japan.
In the U.S., Chartis’ industry leadership
is largely derived from its ability to un-
cover new markets and to create innovative
products and services that customers value.
In 2009 alone, its U.S. businesses launched
a new product or service every two weeks.
We will continue that emphasis.
When I think about AIG’s life insur-
ance and retirement services business, I see
enormous growth opportunities that
exist in the U.S. for our products. During
2009, AIG’s Domestic Life and Retirement
Services division was rebranded as
SunAmerica Financial Group, and now
represents the fourth-largest life insur-
ance organization in the United States,
with over $19 billion in premiums and
deposits and more than 16 million custom-
ers. SunAmerica Financial Group offers
a comprehensive suite of life insurance,
retirement savings, and guaranteed
income products through a multi-channel
distribution network.
SunAmerica has terri c opportunities
associated with the aging baby boomer
population. As members of this group
approach age 65, they are dealing with