American International Group, Inc.

-- Company History Page 1 of 9

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American International Group, Inc.

Address:
70 Pine Street
New York, New York 10270
U.S.A.

Telephone: (212) 770-7000

Fax: (212) 425-3499
http://www.aig.com

Statistics:
Public Company
Incorporated: 1967
Employees: 81,000
Total Assets: $492.98 billion (2001)
Stock Exchanges: New York London Tokyo Paris Swiss
Ticker Symbol: AIG
NAIC: 523120 Securities Brokerage; 523920 Portfolio Management; 524126 Direct Property and Casualty
Insurance Carriers; 524113 Direct Life Insurance Car- riers; 524130 Reinsurance Carriers; 524210 Insurance
Agencies and Brokerages; 532411 Commercial Air, Rail, and Water Transportation Equipment Rental and Leasing;
551112 Offices of Other Holding Companies

Company Perspectives:
AIG has the highest ratings and is one of the world's most innovative companies, well positioned to capitalize on
opportunities on behalf of its clients throughout the global marketplace. While AIG's products and services have
changed over the years with the needs of its customers, the AIG core values of integrity, quality service, financial
strength and responsive leadership will never change.

Key Dates:
1919: Cornelius Vander Starr forms American Asiatic Underwriters, a two-clerk insurance agency in Shanghai,
China.
1926: Starr opens a New York office under the name American International Underwriters.

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American International Group, Inc. -- Company History Page 2 of 9

1939: With much of the world on the brink of war, Starr moves his headquarters from Shanghai to New York.
1948: Starr begins uniting his fragmented network of insurance companies by forming two Bermuda-based entities:
American International Underwriters Overseas, Ltd. and American International Reinsurance Company, Inc.
(AIRCO).
1949: Following the communist takeover of China, Starr moves his regional headquarters to Hong Kong.
1952: AIRCO gains control of American Home Assurance Company.
1960s:Several acquisitions are completed, including National Union Fire Insurance Company of Pittsburgh,
Pennsylvania, and New Hampshire Insurance Company.
1967: As part of a major reorganization, American International Group, Inc. (AIG) is formed to become the holding
company for the various insurance companies; Maurice R. Greenberg becomes president and CEO of AIG.
1968: Starr dies and Greenberg adds the chairmanship to his duties.
1969: AIG goes public.
1976: AIG is organized into four broad categories: the foreign general insurance division, the brokerage division of
domestic general insurance, the agency division of domestic general insurance, and a life insurance division.
1987: The Financial Services Group is formed, consolidating the firm's burgeoning financial services operations.
1999: SunAmerica Inc., a major player in annuities and mutual funds, is acquired for $18.3 billion.
2001: AIG acquires American General Corporation for $23 billion; AIG reports losses of $820 million stemming
from the events of September 11.

Company History:

American International Group, Inc. (AIG) is a holding company for a network of subsidiaries primarily engaged in
insurance and insurance-related activities, including property, casualty, life, financial services, retirement savings
products, asset management, and aircraft leasing. AIG operates in more than 130 countries and jurisdictions, and its
combined revenues make it the largest U.S.-based international insurance organization and one of the largest
insurance firms in the world. AIG is the leading underwriter of commercial and industrial insurance in the United
States and holds the number two position in the U.S. life insurance sector. The corporation, whose earliest roots were
in Asia, has had an active history of mergers, acquisitions, and consolidations, and under the renowned stewardship
of Maurice R. "Hank" Greenberg from the late 1960s into the early 21st century the company has grown into a
global insurance giant.

Origins As a Chinese Insurance Agency

In 1919 a 27-year-old U.S. businessman, Cornelius Vander Starr, opened a two-room, two-clerk insurance agency in
Shanghai, China, and named it American Asiatic Underwriters (AAU). AAU, which later became part of American
International Underwriters (AIU), initially served as an underwriter for insurance companies that had established
branches in Shanghai. During a trip to New York in 1921 Starr added representation of other U.S. companies to his
operations, including the Globe & Rutgers Company. Later that decade Starr brought representation of the
Pittsburgh, Pennsylvania, company, National Union Fire Insurance, into his fold.

Starr's next quest was to gain general life insurance agency powers, but he found no U.S. companies willing to
assume the risk because there were no life-expectancy statistics available for the Chinese population. In 1921 Starr
overcame this obstacle by forming his own company, Asia Life Insurance Company (ALICO). ALICO's most
popular product was a 20-year endowment policy, with rates established on the basis of Starr's personal observation
that in general Chinese enjoyed longer life expectancies than their Western counterparts.

In 1926 Starr opened a New York office under the name American International Underwriters to serve as an
insurance writer on U.S.-owned risks outside of North America. Like its Chinese counterpart, AIU also served as a
general agent for U.S. insurers. By the end of the decade Starr's Chinese operations were seeing modest profits, and
branch offices for both general and life insurance had been established throughout the Shanghai region. In 1931 Starr
joined British and Chinese businessmen in a partnership and established the International Assurance Company
(INTASCO).

AIU established a foundation for Latin American business in 1932 when George Moszkowski, who ran the
company's New York office, negotiated the purchase of the Central American and Caribbean portfolios of a U.S.
insurer withdrawing from foreign operations. AIU's operations in Central America remained modest throughout the

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American International Group, Inc. -- Company History Page 3 of 9

decade.

Before, during, and after World War II, AIU was able to capitalize on world economic and political situations. With
much of the world on the brink of war, in 1939 Starr moved his headquarters to New York, temporarily closing the
Shanghai office. After hostilities broke out, operations of dominant Italian, German, and British agencies were
reduced, and AIU expanded in Central America. In 1940 AIU established a regional headquarters in Cuba, and a half
dozen offices in South America soon followed. AIU's Central American business grew with the local economies of
these neutral countries during the war years.

At the end of World War II, the Shanghai office was reopened under the guidance of K.K. Tse. Several profitable
years followed until the late 1940s, when the future of foreign activities in Shanghai grew dim. In 1949 key
employees and documents were airlifted out of Shanghai and the regional headquarters moved to Hong Kong. In late
1950 operations in China were closed.

Meanwhile, many surrounding countries were recovering from war. With economic improvement underway, AIU
entered Japan and West Germany by selling insurance to occupying U.S. troops. AIU's prewar operations in Europe
had been limited to small agencies in France, Belgium, and the Netherlands, but postwar conditions, resulting in
tight financing for local insurers, placed AIU in a position to expand its European business. At the same time,
expansion of U.S. business abroad created opportunities for AIU's "home-foreign" business.

In 1947 Starr began a reorganization designed to revive war-torn operations and lay the groundwork for future
growth. Starr's first move was to announce the incorporation of a Philippine arm of the American Life Insurance
Company, the Philippine American Life Insurance Company (Philam Life), in 1947. U.S. businessman Earl Carroll
was named to head up the new company, which grew quickly, largely through the sale of endowment policies. These
policies provided farmers and small merchants with the means to build their savings in a country with few banks.
Sales revenue was frequently reinvested in the local economy.

Started as a partnership, INTASCO, which until this time had maintained a relatively small life insurance business,
was reorganized in 1948 when Starr took control of the business. He added "American" to the company's name,
changed the company's abbreviated name to AIA, and assigned it the Southeast Asian territories of Malaysia,
Singapore, and Thailand and the home-base front of Hong Kong.

That same year Starr began uniting his somewhat fragmented network of insurance companies, beginning with the
creation of two Bermuda-based entities. The first, American International Underwriters Overseas, Ltd. (AIUO),
became the parent of all established AIU agency companies overseas. The second, American International
Reinsurance Company, Inc. (AIRCO), was designed to hold companies dealing primarily in life insurance. AIRCO
also took control of company investment programs and served as a reinsurer for these subsidiaries. The last of Starr's
trio of new organizations was American International Underwriters Association (AIUA), established in 1949 to
serve as a partnership of U.S. insurance companies that were represented by AIU. AIUA provided for pooled
business in stipulated percentages and shared assets that were kept overseas to meet local regulations.

Perhaps the most dramatic reorganization occurred within Starr's oldest life insurance company, ALICO. After lying
dormant for a decade, the company was renamed American Life Insurance Company and assigned the Caribbean,
Middle East, and some growing African nations. ALICO marketed life insurance to populations previously not
attractive to insurers.

Rapid Expansion in the 1950s

The 1950s were a period of rapid expansion for AIU. Branches were established in Western Europe, the Middle
East, North Africa, and Australia. By the end of the decade AIU was operating in 75 countries. The 1950s also
marked the emergence of Starr's companies in domestic markets.

In 1952 AIRCO acquired a majority interest in the Globe & Rutgers Insurance Company, a medium-sized U.S. fire
insurance company once represented by AIU. A Globe & Rutgers subsidiary, the Insurance Company of the State of
Pennsylvania, came with the purchase. Founded in 1794, the Pennsylvania subsidiary was the second oldest stock
insurance company in the United States. American Home Assurance Company, which was founded in 1853, was
also included in the package. Globe & Rutgers was later merged with American Home and took its name.

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Starr and his colleagues joined the American Home board but left the company largely under old management.
Earnings at the new subsidiary fluctuated greatly for several years. A net loss of $1.4 million was reported in 1957,
followed by a net profit of better than $950,000 the following year. In an effort to stabilize earnings, AIRCO sold
American Home's agency business to another insurer in 1962. That same year Starr named Maurice R. Greenberg as
American Home president, and the company formed the American International Life Assurance Company of New
York to specialize in term and group insurance. Greenberg had begun his insurance career ten years earlier with
Continental Casualty Company. In 1960 he joined American International and was assigned the task of developing
an overseas accident and health business.

In leading American Home, Greenberg focused on broker sales, allowing the company to issue its own policies and
maintain underwriting control. The company concentrated on commercial and industrial risks, which involved
negotiated rather than state-controlled rates. American Home also developed substantial reinsurance facilities in
order to cover large shares of major risks and control insurance ratings. Greenberg initiated new products and
services such as personal accident insurance, which emphasized deductibles. Meanwhile, American Home avoided
medical insurance. The new sales system caught on, offering brokers the high deductibles that traditional insurers
avoided but that some large corporations sought in order to cut costs.

Late 1960s: Creation of the Modern AIG

During the late 1960s American International's corporate structure began to resemble its present form as it became
an important commercial and industrial property and casualty insurer. While a new company organization was being
forged through further acquisitions and reorganization, the insurance group began capitalizing on its innovative
products and entrance into new markets.

Acquisitions during this period included controlling interests in the National Union Fire Insurance Company of
Pittsburgh, Pennsylvania, which had been represented by AIU since 1927, and the New Hampshire Insurance
Company. The former, which was threatened by high underwriting losses, was transformed much like American
Home, and then linked with it in a pooling agreement. Commerce and Industry Insurance Company, a small property
insurer specializing in highly protected risks, and Transatlantic Reinsurance Company were also acquired during this
period.

The wholly owned American International Group, Inc. was formed by AIRCO in 1967. AIG represented the
beginning of a major corporate reorganization, with the company formed to hold shares of other domestic
companies, including American Home and New Hampshire. ALICO was soon added to AIG's holdings. Greenberg
was elected president and CEO of AIG in 1967. The following year Starr died, having seen only the beginning of a
new era for the insurance empire he had created.

In 1969, after going public, AIG acquired majority interests in National Union, New Hampshire, and American
Home, paying for its increased stake in the three companies with AIG stock. In 1970 AIU and its agencies and
subsidiaries became wholly owned subsidiaries of AIG.

Throughout the 1960s AIU's overseas business grew, despite the loss of its large Cuban business following Fidel
Castro's takeover of that country. Since it had entered most major markets a decade earlier, expansion during this
time was limited to growth within areas with established territories. In an effort to strengthen AIG's overseas
position, an 18-month program was initiated in 1972 creating a regional system of benefits managers for Europe,
Africa, Central America, South America, the Middle East, the Far East, and the United States. That same year the
AIG subsidiary ALICO became the first foreign-owned company granted a license to sell insurance to Japanese
nationals in Japan.

During the early 1970s AIG increased its specialization by forming a number of new groups. Subsidiaries created by
AIG during this time included A.I. Credit Corporation to finance general insurance premiums written through both
affiliate and nonaffiliate insurers; North American Managers, Inc., to sell insurance in the United States for foreign
companies; AIG Oil Rig, Inc., to initiate and manage insurance for offshore oil- and gas-drilling rigs; AIG Risk
Management, Inc., to provide worldwide risk management services; AIG Data Center, Inc.; and American
International Insurance Company of Ireland, Ltd. During this period AIG also acquired all remaining shares of the
New Hampshire and National Union companies.

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AIG's profits took off in the 1970s, at a compounded growth rate of roughly 20 percent, with AIG's net income
surpassing $50 million by 1975. High premiums in the new market areas of oil rigs and pension-fund management
as well as the use of limited partnership insurance for high risks contributed to the growth.

Consolidation and reorganization continued in 1976, when AIU stopped writing policies for insurance companies it
did not own. That same year the company was organized into four broad categories: the foreign general insurance
division, the brokerage division of domestic general insurance, the agency division of domestic general insurance,
and a life insurance division. The following year the subsidiary Transatlantic Reinsurance was reorganized as a
major reinsurer, with shares sold to seven other companies. AIG absorbed its parent company, AIRCO, in 1978,
completing a nine-year consolidation plan to simplify the corporate structure.

In 1979 AIG entered Eastern Europe and initiated joint ventures with state-owned insurers in Hungary, Poland, and
Romania. In succeeding years similar operations were started in China and Yugoslavia. At the end of the 1970s AIG
had 20 percent annual growth in revenues and had increased its size nearly tenfold. In 1979 AIG reported over $250
million in net income.

Diversification and Consolidation in the 1980s

During the 1980s AIG ventured into healthcare services, and acquired a variety of financial and investment sources
as well as real estate holdings. Acquisitions included United Guaranty Corporation, a residential mortgage insurance
company; the Swiss bank Uberseebank A.G.; Ticino Societa d'Assicurazioni Sulla Vita, a Swiss-based life insurer;
Southeastern Aviation Underwriters--later renamed AIG Aviation, Inc.--an airlines, aviation, and space program
insurer; and Jurgovan & Blair, a health maintenance organization consulting business. In 1981 AIG, in combination
with Presidio Oil Company, purchased a majority interest in 109 natural gas wells.

In 1984 the company reported its first decline in profits, largely owing to underwriting losses including those
resulting from a major hurricane. Some of AIG's specialty companies, such as AIG Oil Rig, AIG Energy, AIG
Entertainment, and AIG Political Risk, which were created during the preceding 15 years, were consolidated in 1984
under the name AIG Specialty Agencies, Inc. That same year AIG special services division was introduced to
underwrite risks such as extortion, kidnapping, and ransom demand.

In 1985 AIG's profit margin rebounded, with the company exceeding 1983 earnings and posting a net income of
$420 million. In 1987 AIG surpassed $1 billion in net income. That same year AIG was authorized by the South
Korean government to begin life insurance operations, ending a 15-year struggle to break into the Korean market.
AIG became the second foreign insurance company in South Korea, with its largest international competitor,
CIGNA Corporation, given approval earlier in the year.

Two important AIG executives, National Union President Joseph P. DeAlessandro and American Home President
Dennis Busti, left AIG in 1987 for other companies. Maurice Greenberg's son, Jeffrey W. Greenberg, was moved
over from the presidency of AIU's North American division and named new president of National Union, while
Joseph R. Wiedemann was named American Home president. Wiedemann had been president of AIG's Boston-
based subsidiary Lexington Insurance Company.

AIG broadened its trading markets in 1987 when it became the first foreign insurance organization on the Tokyo
Stock Exchange. The following year AIG was listed on the London International Stock Exchange. Additional
listings include Paris and Switzerland, added in 1990.

AIG continued diversification moves in 1988, forming a Hong Kong-based venture to introduce U.S. fast-food
franchises into the Asian market. The venture marked the first time a U.S. institutional investor--AIG's Financial
Investment Corporation of Asia--moved into an overseas franchise market.

That same year AIG also experienced some difficulty. It was involved in what is believed to be one of the largest
insurance-related arbitration awards in history. Enron Corporation was awarded a $162 million claim from insurers
for Peruvian properties that had been expropriated, and AIG was forced to pay nearly two-thirds of the judgment.

Throughout the 1980s AIG operated as one of two major sources of environmental-impairment-liability (EIL)
insurance. Early in 1989 Greenberg proposed the creation of a hazardous-waste-cleanup tax funded through a 2

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American International Group, Inc. -- Company History Page 6 of 9

percent premium fee assessed on all commercial and casualty and property policies, with insurers matching that
amount. Greenberg suggested the tax could help fund cleanup of Environmental Protection Agency Superfund sites
and ultimately bring more insurers into EIL writing, but critics charged the plan was self-serving.

Late 1980s to Mid-1990s: Continued Diversification into Financial Services

The late 1980s saw continued consolidation for AIG. The Financial Services Group was formed in 1987 to
consolidate specialized financial operations. UNAT, AIG's general insurance company on the European continent,
was formed later that year to consolidate operations in Europe and prepare for the elimination of trade barriers
among European nations in 1992. Headquartered in Paris, UNAT's expanding territory included France, Belgium,
the Netherlands, Sweden, Norway, and Denmark.

In 1989 AIGlobal was formed to provide a single source of comprehensive property and casualty, life, and group
insurance, and facilitate corporate financial services for multinational companies. That same year International
Healthcare and Jurgovan & Blair were merged to form American International Healthcare, Inc., an international
consulting and management company for healthcare services.

From 1987 into the mid-1990s AIG continued its diversification into financial services. In 1987 a joint venture, AIG
Financial Products Corp., was established to structure complex financial transactions, including interest rate and
currency swaps. In 1988 AIG acquired ownership of 30 percent of A.B. Asesores Bursatiles, a Spanish brokerage,
and invested in certain investment management and venture capital operations in the United Kingdom and Hong
Kong. AIG Trading Corporation, a joint venture engaging in commodity transactions, was established in early 1990,
and later that year AIG acquired International Lease Finance Corporation, which was engaged primarily in the
acquisition of new and used commercial jet aircraft and the leasing of such aircraft to domestic and foreign airlines
(it later became the leader in such leasing). In 1994 AIG Combined Risks Ltd. was formed as a London-based
investment bank providing risk management solutions involving corporate finance, reinsurance, and derivative
instruments. All of these companies were placed under the umbrella of AIG's Financial Services Group. By 1994
operating income for the group had climbed to $404.9 million.

During 1990 Transatlantic Holdings, Inc., a holding company formed to hold Transatlantic Reinsurance Company
and another reinsurer, Putnam Reinsurance Company, went public in a secondary offering. AIG continued to hold
approximately 41 percent of Transatlantic Holdings after the public offering.

In June 1990 AIG agreed to buy Fischbach Corporation for $43 million. Fischbach, a Florida-based contractor, was
an AIG performance-bond customer that had begun to experience financial difficulties. If Fischbach had failed, AIG
could have been forced to pay hundreds of millions of dollars to companies with which Fischbach had contracted.
After the purchase, AIG sold 51 percent of Fischbach to contractor Peter Kiewit Sons' Inc.

In 1992 AIG garnered much bad publicity over a memo written by Jeffrey Greenberg, who by then had become an
executive vice-president of AIG. Issued on the day that Hurricane Andrew reached the coast of Florida, the memo,
sent to presidents of AIG subsidiary companies, seemed to suggest that AIG underwriters should be encouraged to
push for premium increases in the wake of the hurricane: "Begin by calling your underwriters together and
explaining the significance of the hurricane. This is an opportunity to get price increases now. We must be the first
and it begins by establishing the psychology with our own people. Please get it moving today." When the memo was
made public it prompted investigations in both Florida and Louisiana, and denunciations from insurance watchdog
groups, as well as consumer activist Ralph Nader who accused AIG of trying to start a cycle of "price gouging."
Maurice Greenberg maintained, however, that the contents of the memo were taken out of context and were part of a
larger AIG discussion of long-needed rate increases for commercial insurance.

During the early 1990s AIG continued to expand outside the United States, thereby increasing its non-U.S. revenue
to 52 percent of the total by 1994. Asia and the states of the former Soviet Union were particular targets during this
period. Led by Maurice Greenberg's son Evan, AIG's Asia-Pacific Division reentered the Chinese market in 1992
when it became the first insurer to receive a license there since the Communist revolution in 1949. Two years later
AIG also became the first insurer to return to Pakistan when it formed a subsidiary of ALICO to sell life and related
types of insurance (the Pakistani government had nationalized all insurance companies in 1972). In early 1995, AIG
reached an agreement with the Tata Group of India to jointly operate a life and nonlife insurance business in India
once these insurance markets were opened to private and foreign investment. Meanwhile, AIG continued to be the

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largest foreign insurer in Japan.

To the west, Russia and Uzbekistan were added to the AIG empire in 1994. Through joint ventures with local firms,
AIG established commercial insurance and political risk insurance operations in Uzbekistan. Later in 1994 AIG
received a license for its joint venture in Russia, the Russian American Insurance Company, which would offer
commercial insurance to Russian companies and foreign firms operating in Russia.

During 1994 AIG also branched out into additional insurance lines within the U.S. market. AIG made an initial $216
million investment in 20th Century Industries, a private auto insurer in California that had incurred heavy losses as a
result of the Northridge earthquake and was on the brink of insolvency. AIG pledged to invest additional capital if
certain conditions were met. AIG also stepped in to rescue Alexander & Alexander Services, Inc. (A&A), a New
York-based independent insurance broker. AIG's $200 million investment was intended to allow A&A to reorganize
itself and improve profitability.

In the 27 years since Maurice Greenberg had taken over as CEO from the company founder, Greenberg had guided
AIG into position as a leader in its field with total assets reaching $114.35 billion in 1994. In an industry that had
been rocked by several huge natural disasters in the late 1980s and early 1990s, AIG's return on equity remained
remarkably stable throughout the period, ranging from 11.75 percent to 18.83 percent, thanks largely to the
geographic and operational diversity engineered by Greenberg.

Major Acquisitions at the Turn of the Millennium

In the late 1990s AIG made a number of significant acquisitions and investments as part of Greenberg's continuing
expansion drive. In 1996 the firm spent more than $100 million to acquire SPC Credit Ltd., a medium-size Hong
Kong company specializing in consumer and commercial finance. Two years later AIG spent $150 million for a 7
percent stake in the Blackstone Group, a leveraged buyout firm, and also agreed to invest $1.2 billion in future
Blackstone buyout funds. Also in 1998 AIG gained majority control of 20th Century Industries and also took control
of the company board as its influence at the company increased. Two years later 20th Century changed its name to
21st Century Insurance Group.

Having maintained prominent positions in two key business areas--general insurance and life insurance--over the
decades and having more recently built up a significant financial services business, AIG next sought to add a fourth
leg to its operations in the area of retirement savings and asset management. The first major move toward this end
came at the beginning of 1999 when SunAmerica Inc. was acquired for $18.3 billion. Based in Los Angeles,
SunAmerica was a major player in the hot area of variable annuities, a retirement savings product similar to a mutual
fund but with insurance features and tax advantages. SunAmerica was also involved in the more traditional area of
fixed annuities as well as in managing mutual funds. In 1997 it had $2.1 billion in revenue, $379 million in net
income, and $40 billion in assets. The synergies that could be gained through the acquisition were quite apparent:
AIG would gain access to SunAmerica's network of more than 9,000 U.S. brokers who could sell AIG life insurance
and other products, while SunAmerica's retirement savings products could be sold through AIG's huge life insurance
sales force in Asia, Europe, and South America.

In November 2000 AIG acquired HSB Group Inc. for about $1.2 billion. HSB was the parent company of the
Hartford Steam Boiler Inspection and Insurance Company, which specialized in insuring steam boilers and other
mechanical and electrical equipment. Also in 2000 AIG became the first U.S. insurance company to receive a license
to establish a subsidiary in Vietnam. Early the following year, a bankruptcy court in Japan named AIG to be the
exclusive sponsor of the reorganization of the troubled Chiyoda Mutual Life Insurance Company, the 12th largest
insurer in Japan. This led later in the year to the acquisition of Chiyoda, which was renamed AIG Star Life Insurance
Co., Ltd., a move that further added to AIG's already strong position in Japan.

In August 2001 AIG completed the largest acquisition in its history--in fact, the largest insurance takeover ever--the
$23 billion purchase of American General Corporation. This deal was a logical follow-up to the SunAmerica
acquisition as Houston-based American General had a strong position in fixed and variable annuities and in mutual
funds. But American General, which had total assets in excess of $120 billion, was also a major player in the U.S.
life insurance and consumer finance markets, and the acquisition resulted in AIG becoming the number two life
insurance firm in the United States, trailing only Prudential Financial, Inc. Life insurance was also now by far AIG's
largest business segment, accounting for 48.3 percent of 2001 pretax income, with general insurance contributing

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25.5 percent; financial services, 17.1 percent; and retirement savings and asset management, 9.1 percent.

In December 2001, with insurance rates surging in the aftermath of the events of September 11, and with the
insurance industry facing in excess of $50 billion in claims--by far the largest insurance event in history--AIG joined
with Chubb Corporation, a unit of Goldman, Sachs & Co., and other investors to form Allied World Assurance
Company Holdings, Ltd. Based in Bermuda, the new firm was created to provide additional commercial property
and casualty insurance and reinsurance capacity to meet the needs of clients with large and complex risks. For
insurance companies, joint ventures such as this one--and there were several others formed around this same time--
provided a way for the firms to pool risks.

Despite suffering $820 million in losses related to September 11 and taking a special charge of $1.36 billion in
connection with the acquisition and integration of American General, AIG still managed to post net income for 2001
of $5.36 billion, which was only a slight decline over the $5.64 billion figure for the preceding year. Revenues
increased 9.4 percent for the year, to $62.4 billion, and total assets grew 15.5 percent, to $492.98 billion. Return on
equity was 11.9 percent, an uncharacteristically low figure for a company that had reported four straight years of
return on equity in excess of 15 percent.

It was clear that AIG was continuing its remarkable period of stellar performance under Maurice Greenberg's
leadership, and Greenberg during his more than 30 years in charge had become a legend in the insurance industry.
One question that kept recurring year after year in regard to AIG's future was who would succeed Greenberg (he
turned 76 in 2001) and become only the third leader in AIG history. Over the years several potential successors had
left AIG to head up other firms, not willing to wait for Greenberg to retire. A new and louder round of speculation
arose in mid-1995 when Jeffrey Greenberg, who had been widely rumored to be the latest heir apparent, abruptly
resigned from the firm. Some observers then raised the possibility that Jeffrey's brother Evan was the new heir
apparent, using his recent promotion to executive vice-president to support their theory. Evan remained the assumed
heir until September 2000 when he too resigned suddenly. This latest departure led to expressions of concern from
certain analysts, but Maurice Greenberg continued to state that he had no plans to retire and that a succession plan
was in place--although he refused to provide any details about it.

Principal Subsidiaries: AIG Annuity Insurance Company; AIG Financial Products Corp.; AIG Global Investment
Group, Inc.; AIG SunAmerica Life Insurance Company; American General Finance, Inc.; American General Life
Companies; American Home Assurance Company; American Life Insurance Company; The Hartford Steam Boiler
Inspection and Insurance Company; International Lease Finance Corporation; Lexington Insurance Company;
National Union Fire Insurance Company of Pittsburgh, Pa.; New Hampshire Insurance Company; SunAmerica Asset
Management Corp.; SunAmerica Life Insurance Company; Transatlantic Reinsurance Company; United Guaranty
Residential Insurance Company; The Variable Annuity Life Insurance Company; American International Assurance
Company (Bermuda) Limited; American International Reinsurance Company Limited (Bermuda); American
International Underwriters Overseas, Ltd. (Bermuda); American International Assurance Company, Limited (Hong
Kong); AIG Star Life Insurance Co., Ltd. (Japan); Nan Shan Life Insurance Company, Ltd. (Taiwan).

Principal Competitors: Allianz AG; AXA; ING Groep N.V.; Zurich Financial Services; Prudential Financial, Inc.;
Metropolitan Life Insurance Company; State Farm Insurance Companies; The Allstate Corporation; Travelers
Property Casualty Corp.

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Further Reading:

Brady, Diane, "Like Father, Like Sons," Business Week, March 1, 1999, pp. 112-13.

Campanella, Frank W., "Global Insurer: American International Group's Heavy Foreign Stake Proves Sound

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American International Group, Inc. -- Company History Page 9 of 9

Policy," Barron's, September 27, 1982, pp. 50+.

Chen, Kathy, Tom Hamburger, and Christopher Oster, "AIG's Chief Executive Gets His Way in Washington:
Greenberg Uses Personal Touch for Airline and Insurance Bills, China Trade," Wall Street Journal, December
7, 2001, p. A20.

History of AIG, New York: American International Group, Inc., 1985.

Jennings, John P., "AIG Moves to Make It a Smaller World," National Underwriter, June 22, 1987, pp. 15+.

Laing, Jonathan R., "A Father-Son Rift," Barron's, September 25, 2000, p. 15.

------, "Mr. Irreplaceable: Hank Greenberg Made AIG a Powerhouse; Could Any Successor Do As Well?,"
Barron's, November 29, 1999, pp. 33-34, 36, 38.

Lipin, Steven, and Deborah Lohse, "AIG to Buy SunAmerica for $18 Billion," Wall Street Journal, August
20, 1998, p. A3.

"Local Hero: AIG," Economist, July 4, 1992, pp. 71-72.

Lohse, Deborah, "AIG's Deal for SunAmerica Signals Faith in Annuities," Wall Street Journal, August 21,
1998, p. A3.

Loomis, Carol J., "AIG: Aggressive. Inscrutable. Greenberg.," Fortune, April 27, 1998, pp. 106-08+.

Mack, Toni, "The Vince Lombardi of Insurance," Forbes, October 24, 1983, pp. 60+.

McLeod, Douglas, "Heir Apparent Leaves AIG," Business Insurance, June 12, 1995, p. 1.

Meakin, Thomas K., "AIG Hits Home Run with 20th Century, Analysts Say," National Underwriter Property
and Casualty-Risk & Benefits, October 17, 1994, pp. 29-30.

Milligan, John W., "Can Hank Greenberg Keep the Magic Alive at AIG?," Institutional Investor, January
1986, pp. 286+.

------,"Maurice Greenberg, Chairman, American International Group," Institutional Investor, June 1987, pp.
206+.

"Risky Business," Chief Executive, June 1993, pp. 34-37.

Scism, Leslie, and Christopher Oster, "AIG Heir Apparent Abruptly Quits Posts," Wall Street Journal,
September 20, 2000, p. A3.

Scism, Leslie, and Deborah Lohse, "AIG's Steady Chief at Last Kicks Up Heels with a Deal: SunAmerica Fits
with Greenberg's Aim of Making Firm a Household Name," Wall Street Journal, August 25, 1998, p. B4.

Treaster, Joseph B., "Warren Buffett Gets All the Attention, but Hank Greenberg Is Posting Better Returns,"
New York Times, July 23, 2000, sec. 3, p. 1.

Wells, Chris, "Insurers Under Siege," Business Week, August 21, 1989, pp. 72-79.

Source: International Directory of Company Histories, Vol. 47. St. James Press, 2002.

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