AIG 2013 Annual Report Download - page 86

We expect to continue to expand our comprehensive portfolio of products by developing superior, differentiated
product solutions that meet consumer needs for financial and retirement security while incorporating volatility risk
controls. Our scale and capital base provide competitive advantages that enable us to pursue market opportunities
for growth.
AIG Life and Retirement has been able to meet the demand for guaranteed products and grow sales while managing
risk. We offer competitive products with strong de-risking features, such as volatility control funds, rider fees indexed
to a market volatility index and required minimum allocations to fixed accounts, and we employ a dynamic risk
hedging program. In addition to individual variable annuities, our Retirement Income Solutions product line is
expanding our offerings of index annuities, including those with guarantee features, to provide additional solutions for
consumers approaching retirement.
Sales of our fixed annuities are expected to benefit in 2014 from anticipated increasing interest rates and steepening
of the yield curve, as these market conditions make fixed annuity products more attractive compared to alternatives
such as bank deposits. Our Fixed Annuities product line is also introducing new delayed-income annuities, products
that are experiencing significant growth in the marketplace as they provide both flexibility and a guaranteed income
stream to consumers approaching retirement.
Our Institutional Markets product line is expected to continue contributing to growth in assets under management with
stable value wraps and utilizing a disciplined approach to growth and diversification of our business by pursuing
select opportunities in areas such as the terminal funding and pension buyout business.
In the highly competitive life insurance marketplace, we are continuing to execute our strategy of leveraging our scale
advantage, utilizing our expertise in risk selection and disciplined approach to pricing new business, and creating
differentiated product offerings based on consumer-focused research.
We intend to expand relationships with key distribution partners to fully realize the benefits of our diverse product
offerings across multiple channels, and implement a more uniform branding strategy. Our focus on ease of doing
business for consumers and producers includes enhancements to our Group Retirement platform and services and
other initiatives to improve the recruitment, training and productivity of our affiliated distribution partners, which are
expected to enhance sales and service through these channels.
Our investment strategy for AIG Life and Retirement is to maximize net investment income and portfolio value,
subject to liquidity requirements, capital constraints, diversification requirements, asset-liability matching and available
investment opportunities. Our objective is to maintain a diversified, high quality portfolio of fixed maturity securities
having weighted average durations that are matched to the duration and cash flow profile of our liabilities, to the
extent practicable.
We are continuing to invest in initiatives to enable a simpler and more agile low-cost operating model that provides
superior service and will position our operating platforms to accommodate significant future growth. For example, our
One Life initiative is focused on leveraging our most efficient systems environments and increased automation of our
underwriting processes.
We intend to continue to enhance profitability and capital efficiency within our insurance entities through disciplined
pricing and effective management of risk. Volatility risk controls within our product design and our comprehensive
dynamic hedging program are critical tools for managing volatility for products where we have significant exposure to
Strategic Initiatives
Product Diversity and Capacity for Growth
Integrated Distribution Strategy
Investment Portfolio
Operational Initiatives
Effective Risk and Capital Management
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AIG 2013 Form 10-K68
ITEM 7 / EXECUTIVE SUMMARY
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