AIG 2015 Annual Report Download - page 39

ITEM 1A / RISK FACTORS
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In addition, when our products are distributed through unaffiliated firms, we may not be able to monitor or control the manner of
their distribution, despite our training and compliance programs. If our products are distributed to customers for whom they are
unsuitable or distributed in any other inappropriate manner, we may suffer reputational and other harm to our business.
Significant legal proceedings may adversely affect our results of operations or financial condition. We are party to
numerous legal proceedings, including class actions and regulatory and governmental investigations. Due to the nature of
these proceedings, the lack of precise damage claims and the type of claims we are subject to, we cannot currently quantify
our ultimate or maximum liability for these actions. Developments in these unresolved matters could have a material adverse
effect on our consolidated financial condition or consolidated results of operations for an individual reporting period. Starr
International Company, Inc. (SICO) has brought suit against the United States challenging the government’s assistance of AIG,
pursuant to which (i) AIG entered into a credit facility with the Federal Reserve Bank of New York and (ii) the United States
received an approximately 80 percent ownership interest in AIG. The United States has alleged that AIG is obligated to
indemnify the United States for any recoveries in these lawsuits. A determination that the United States is liable for damages
in such suits, together with a determination that AIG is obligated to indemnify the United States for any such damages, could
have a material adverse effect on our business, consolidated financial condition and results of operations. For a discussion of
the SICO litigation and other unresolved matters, see Note 15 to the Consolidated Financial Statements.
If we are unable to maintain the availability of our electronic data systems and safeguard the security of our data, our
ability to conduct business may be compromised, which could adversely affect our consolidated financial condition
or results of operations. We use computer systems to store, retrieve, evaluate and utilize customer, employee, and company
data and information. Some of these systems in turn, rely upon third-party systems. Our business is highly dependent on our
ability to access these systems to perform necessary business functions, including providing insurance quotes, processing
premium payments, making changes to existing policies, filing and paying claims, administering variable annuity products and
mutual funds, providing customer support and managing our investment portfolios. Systems failures or outages could
compromise our ability to perform these functions in a timely manner, which could harm our ability to conduct business and
hurt our relationships with our business partners and customers. In the event of a natural disaster, a computer virus,
unauthorized access, a terrorist attack or other disruption inside or outside the U.S., our systems may be inaccessible to our
employees, customers or business partners for an extended period of time, and our employees may be unable to perform their
duties for an extended period of time if our data or systems are disabled or destroyed. Our systems have in the past been, and
may in the future be, subject to unauthorized access, such as physical or electronic break-ins or unauthorized tampering. Like
other global companies, we have, from time to time, experienced threats to our data and systems, including malware and
computer virus attacks, unauthorized access, systems failures and disruptions. There is no assurance that our security
measures will provide fully effective protection from such events. AIG maintains cyber risk insurance, but this insurance may
not cover all costs associated with the consequences of personal, confidential or proprietary information being compromised.
In some cases, such unauthorized access may not be immediately detected. This may impede or interrupt our business
operations and could adversely affect our consolidated financial condition or results of operations.
In addition, we routinely transmit, receive and store personal, confidential and proprietary information by email and other
electronic means. Although we attempt to keep such information confidential, we may be unable to do so in all events,
especially with clients, vendors, service providers, counterparties and other third parties who may not have or use appropriate
controls to protect personal, confidential or proprietary information. Furthermore, certain of our businesses are subject to
compliance with laws and regulations enacted by U.S. federal and state governments, the European Union or other
jurisdictions or enacted by various regulatory organizations or exchanges relating to the privacy and security of the information
of clients, employees or others. The compromise of personal, confidential or proprietary information could result in remediation
costs, legal liability, regulatory action and reputational harm.
The integration of companies we acquire from time to time may not be as successful as we anticipate. Acquisitions
involve a number of risks, including operational, strategic, financial, accounting, legal and tax risks. Difficulties in integrating an
acquired company may result in the acquired company performing differently than we expected or in our failure to realize
anticipated expense-related efficiencies. Our existing businesses could also be negatively impacted by acquisitions. Risks
resulting from future acquisitions may have a material adverse effect on our results of operations and financial condition.