AIG 2014 Annual Report Download - page 5

We see opportunities to grow our core businesses profitably
by focusing on delivering value to our clients. In our Com-
mercial Insurance business, for example, we’ve invested in
our engineers, helping us grow in markets where relatively
few competitors have the dedicated industry expertise our
clients need. From cyber-risk insurance to crisis management
and environmental consulting, our innovative offerings and
investments in loss control services are increasingly differen-
tiating AIG and opening up new avenues to expand client
relationships. And to extend our advantage in the multination-
al segment, we are investing in improved multicountry service
platforms and better consulting tools.
We have a number of conduits for organic growth. We cur-
rently insure 99.6 percent of the For tune 500 companies and
see an opportunity to increase the proportion of these clients
for whom we are their lead insurer. In Consumer Insurance,
we are also applying our capabilities to reduce people’s
fear of outliving their savings, endemic in aging populations
in a number of large economies. We are optimistic about the
demand for insurance in India and China, and are well
positioned to collaborate with our long-standing partners
Tata Group and People’s Insurance Company of China.
Also in Consumer Insurance, our acquisition of London-based
Ageas Protect Limited will strengthen our profile in the UK.
Already in 2015, we announced the acquisition of Laya
Healthcare, Ireland’s second-largest health insurance provid-
er, which will give us nearly 500,000 additional clients and
new capabilities in the health insurance area, where we see
substantial opportunities around the world.
Growing our company is one aspect of value-based
management. Running AIG according to these principles
also means that, where our current products, services, and
offerings do not support our strategic and financial goals,
we will look for ways to redeploy capital or return it to you.
The unwinding of the Direct Investment book (DIB) portfolio
and the systematic settlement of the Runoff insurance lines are
examples of this.
Creating Value Beyond the Sum of the Parts
Our recent history has also taught us that complexity jeop-
ardizes long-term shareholder value by increasing cost, risk,
and the time it takes to reach and implement decisions, while
reducing accountability. So a key element of our plan is
further simplifying AIG’s business and operating models, and
creating structures that promote clear accountability.
As I said earlier, delaying investment in infrastructure is not
a sustainable option compatible with long-term sharehold-
er value. Failure to invest deprives our employees of the
tools needed to properly measure risk, evaluate business
opportunity, and deliver best-in-class service to our clients
in an increasingly competitive marketplace. Consequently,
we continue to invest in our IT infrastructure, Science, and
Compliance functions. These investments are incorporated
into our financial target to reduce GOE by 3 to 5 percent
a year.
From a conglomerate of businesses, largely operated as
silos, to a core group of insurance businesses run by a central
leadership team, AIG has greatly simplified and de-risked its
structure over the past several years. After becoming CEO in
September, I further refocused AIG’s businesses and aligned
them by clients served – Commercial and Consumer – rather
than by products offered.
I also launched a comprehensive look at how we can
enhance our decision making at AIG by leveraging our
unparalleled strategic data assets to make the most informed
business decisions, and by improving our employees’ ability
to act quickly to advance the interests of our clients and
shareholders.
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