0000950123-01-507928.txt : 20011128
0000950123-01-507928.hdr.sgml : 20011128
ACCESSION NUMBER: 0000950123-01-507928
CONFORMED SUBMISSION TYPE: 8-K
PUBLIC DOCUMENT COUNT: 2
CONFORMED PERIOD OF REPORT: 20011106
ITEM INFORMATION: Financial statements and exhibits
FILED AS OF DATE: 20011107
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: AMERICAN INTERNATIONAL GROUP INC
CENTRAL INDEX KEY: 0000005272
STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331]
IRS NUMBER: 132592361
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 8-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-08787
FILM NUMBER: 1776473
BUSINESS ADDRESS:
STREET 1: 70 PINE ST
CITY: NEW YORK
STATE: NY
ZIP: 10270
BUSINESS PHONE: 2127707000
MAIL ADDRESS:
STREET 1: 70 PINE STREET
CITY: NEW YORK
STATE: NY
ZIP: 10270
FORMER COMPANY:
FORMER CONFORMED NAME: AMERICAN INTERNATIONAL ENTERPRISES INC
DATE OF NAME CHANGE: 19700507
8-K
1
y54316e8-k.txt
AMERICAN INTERNATIONAL GROUP, INC.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): November 6, 2001
AMERICAN INTERNATIONAL GROUP, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 1-8787 13-2592361
(State or Other (Commission File Number) (IRS Employer
Jurisdiction of Identification No.)
Incorporation)
70 Pine Street
New York, New York 10270
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (212) 770-7000
_________________________________________________
(Former Name or Former Address, if Changed Since Last Report)
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits.
99.1 Press Release of American International Group, Inc. dated
October 25, 2001.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
AMERICAN INTERNATIONAL GROUP, INC.
(Registrant)
Date: November 6, 2001 By /s/ Kathleen E. Shannon
-----------------------------------
Name: Kathleen E. Shannon
Title: Vice President and Secretary
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
99.1 Press Release of American International Group, Inc.
dated October 25, 2001.
EX-99.1
3
y54316ex99-1.txt
PRESS RELEASE
EXHIBIT 99.1
[AIG LOGO] AMERICAN INTERNATIONAL GROUP, INC.
70 Pine Street New York, New York 10270
NEWS
For information, please contact:
Charlene M. Hamrah (Investment Community)
(212) 770-7074
Joe Norton (News Media)
(212) 770-3144
AIG'S THIRD QUARTER 2001 CORE INCOME
ROSE 14.1 PERCENT TO $1.92 BILLION
NEW YORK, NY, October 25, 2001 - American International Group, Inc. (AIG) today
reported that its core income increased 14.1 percent to $1.92 billion in the
third quarter and 13.9 percent to $5.69 billion for the first nine months of
2001. These results are in line with guidance furnished during AIG's October 9
investor conference call.
Following is a summary table of third quarter and nine months information
(in millions, except per share amounts).
THIRD QUARTER NINE MONTHS
2001 2000* Change 2001* 2000* Change
---- ---- ------ ---- ---- ------
Core income** $1,915.5 $1,678.2 14.1% $5,687.4 $4,991.5 13.9%
Net income, as reported $ 326.8 $1,704.4 (80.8)% $3,496.9 $4,836.9 (27.7)%
PER SHARE RESULTS:
Core income** $ 0.72 $ 0.63 13.4% $ 2.14 $ 1.89 13.2%
Net income, as reported $ 0.12 $ 0.65 (81.5)% $ 1.32 $ 1.84 (28.3)%
Average shares outstanding 2,651.3 2,633.5 2,652.5 2,636.6
* Restated to include American General Corporation acquired August 29, 2001.
** Adjusted to exclude the cumulative effect of accounting changes, realized
capital gains (losses), acquisition, restructuring and related charges, World
Trade Center (WTC) and related losses and the American General home services
business, which is being managed as a closed block, net of tax.
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Revenues in the third quarter of 2001 increased 12.9 percent to $15.73
billion from $13.93 billion in the year-earlier quarter. For the first nine
months, revenues totaled $46.0 billion, an increase of 10.2 percent over $41.74
billion in 2000.
At September 30, 2001, AIG's consolidated assets and shareholders' equity
are approximately $467 billion and $50.8 billion, respectively.
The following table outlines the results for the third quarter and nine
months (in millions, except ratios):
THIRD QUARTER NINE MONTHS
2001 2000 Change 2001 2000 Change
---- ---- ------ ---- ---- ------
Core income before
income taxes $2,898.0 $2,549.4 13.7% $8,542.6 $7,545.7 13.2%
Acquisition related charges $1,362.8 0.0 2,016.5 315.4
WTC and related losses
(AIG's share is $820 million) 900.0* 0.0 900.0* 0.0
Home Services business 95.3 103.3 345.0 316.7
Income before income taxes,
minority interest, cumulative
effect, realized capital gains
(losses) $ 730.5 $2,652.7 (72.5)% $5,971.1 $7,547.0 (20.9)%
General Insurance
Combined ratio:
As reported 111.52 96.25 101.06 95.98
Excluding WTC
and related losses 95.65 96.25 95.68 95.98
* Includes 100 percent of Transatlantic WTC losses.
The following table outlines the impact of foreign exchange rates on
property-casualty and life insurance premiums for the third quarter 2001.
WORLDWIDE FOREIGN WORLDWIDE FOREIGN
GENERAL GENERAL LIFE LIFE
INSURANCE INSURANCE INSURANCE INSURANCE
--------- --------- --------- ---------
Premium Growth in Original Currency 19.3% 15.3% 9.4%** 10.7%**
Foreign Exchange Impact (3.2) (9.6) (4.7) (9.1)
Premium Growth as Reported in U.S. $ 16.1% 5.7% 4.7% 1.6%
**Premium income and other considerations. (See supplementary data information.)
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AIG Chairman M. R. Greenberg said, "The September 11 terrorist attacks
were a tragic and wanton loss of life and destruction of property. AIG lost two
of its employees in the World Trade Center, and 24 family members of AIG people
perished. Many well-respected insurance industry colleagues and friends also
lost their lives, as well as the heroes in uniform who rushed to the scene to
offer their help without regard to their own personal safety. While this human
tragedy is irreparable, Americans and freedom loving people around the world are
united against terrorism. There is no question of our ability to overcome this
evil.
"In the face of this tragedy, I have never been more proud of our people.
The men and women of AIG effectively safeguarded their colleagues and met the
most pressing demands of our customers. I am deeply appreciative of their
efforts. Because of them, we are moving forward as an even stronger and more
united organization and well-equipped to meet the challenges ahead.
"AIG's net pretax losses from the September 11 terrorist attacks
(including our share of majority-owned Transatlantic Holding's losses) are $820
million. While it is impossible for any company to forecast these losses with
precision, this is our best estimate. In addition, we have a high level of
confidence in the reinsurance that we have in place in connection with these
coverages. Approximately 30% is with AAA-rated, 40% with AA-rated and 29% with
A-rated companies. Clearly, AIG's strong financial condition is not impacted by
these losses.
"AIG's core earnings were on target in the third quarter. We achieved
solid growth and profitability in our major businesses, including
property-casualty, life insurance and financial services.
"In the third quarter, we consolidated American General into AIG. One-time
charges in connection with this acquisition total $1.36 billion and include
direct acquisition costs such as investment banking, legal and accounting fees,
as well as restructuring and acquisition related costs that will enhance the
effectiveness and efficiency of our combined operations. This is the largest
acquisition in our history, and it provides us a strong leadership position in
the attractive U.S. life insurance and retirement savings markets.
"Net income in the third quarter also was impacted by an accounting
change. As a result of EITF 99-20, we recorded a $125 million ($81.3 million
after tax) decrease in the carrying value of certain collateralized debt
obligations.
"Our worldwide property-casualty business had strong premium growth in the
third quarter, even as overseas growth was adversely impacted by the stronger
U.S. dollar. Our Domestic Brokerage Group again achieved record net premiums
written of $2.74 billion. Worldwide general insurance net premiums written in
the third quarter of 2001 amounted to $4.98 billion, 16.1 percent ahead of the
$4.29 billion in 2000.
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"Property-casualty pricing has been rising both in the U.S. and in our
Foreign Insurance operations. Growing demand and the flight to quality across a
wide section of our business is contributing to substantial premium growth in
our Domestic Brokerage Group as well as in a number of foreign countries.
"Transatlantic Holdings, Inc., whose results are reported through both
AIG's Domestic and Foreign General insurance segments, increased premiums in the
third quarter but its underwriting results were impacted by losses from the
September 11 terrorist attacks, approximately $200 million pretax, of which
AIG's share is $120 million.
"The terrorist attacks have had a significant impact on our industry. The
demand for property-casualty insurance has soared as the risk of terrorism has
become a widespread and grave concern. Industry capacity to meet this demand is
constrained, and there has been a flight to quality as businesses and consumers
seek to purchase insurance from the strongest, most stable and capable
companies.
"AIG has been moving rapidly to meet the urgent demand for coverages that
are essential to business and the overall economy. For example, when airlines
around the world had their terrorism coverages cancelled, AIG companies quickly
assembled insurance industry coverage of $850 million in excess of $150 million
per airline. We are also working with the Administration and Congress to provide
other terrorism coverages. These initiatives demonstrate the strength of AIG and
our ability to respond quickly and effectively to industry problems.
"HSB Group, Inc., a leading provider, through its Hartford Steam Boiler
unit, of specialty insurance products, engineering and management consulting
services, continues to achieve outstanding results. In the third quarter, HSB
had solid premium growth with excellent underwriting results.
"Our Personal Lines business is also making good progress. In the third
quarter we continued to implement the rate increases required to achieve
acceptable rates of return. In those markets and lines where we are unable to
reprice appropriately, we are reducing or eliminating our market presence.
"United Guaranty Corporation, our mortgage guaranty insurance subsidiary
is a market leader. Once again in the third quarter it achieved excellent
profitability. The reduction in interest rates has increased mortgage
refinancing activity, which has contributed to strong top line growth.
"In the third quarter, worldwide life insurance premiums and other
considerations amounted to $10.46 billion, including Foreign Life Insurance
premiums in U. S. dollars of $5.21 billion (see supplementary data information).
Since the September 11 terrorist attacks, our worldwide life insurance business
has been experiencing a boost in demand.
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"The acquisition of American General substantially enhances our presence
in the domestic life insurance business and broadens our distribution through
multiple channels. While the home services network is being managed as a closed
block, it continues to be significantly profitable and generate strong cash
flow. As we reported earlier, AIG has consolidated its domestic life business
into American General following the closing of the transaction.
"The demand for fixed annuities grew rapidly in the third quarter and
should continue to do so, as some consumers seek less volatile alternatives to
equity markets. American General is the largest distributor of fixed annuities
through the bank distribution channel. American General has focused on
tax-qualified programs through its wholly-owned subsidiary, VALIC, while
SunAmerica has developed retirement savings programs in the nonqualified arena
with a variety of products.
"The integration of American General into AIG continues on target. We
expect to achieve the $400 million of annual pretax savings that we previously
estimated. In addition to cost savings, we are confident that this acquisition
will result in significant revenue enhancements as a result of new products and
cross marketing initiatives. As one example, we already have sold over 6,000
cancer insurance policies through the home services channel since the completion
of the transaction on August 29. In the near term, we expect to introduce
additional products through this channel.
"The combination of AIG, SunAmerica and American General provides us with
a very comprehensive product line and the ability to be the first to introduce
and market new products when market conditions and opportunities shift between
different products and asset classes.
"Our Foreign Life operations in the third quarter continued to benefit
from a flight to quality in markets with lingering economic concerns, such as
Japan. Premiums and profits at ALICO had good growth during the quarter and our
new AIG Star Life Insurance Co., Ltd. in Japan performed very well. Also, sales
of variable annuities in Japan increased in the third quarter.
"AIG's Financial Services Group had excellent results for the quarter.
Operating income increased 20.8 percent. Our aircraft leasing business,
International Lease Finance Corporation (ILFC), continues to be very profitable.
Because ILFC has the youngest and most efficient fleet in the industry, its
aircraft remain in high demand from its airline clients.
"AIG Financial Products Corp. had good results in spite of the slowdown in
economic activity. The Consumer Finance operations of AIG are performing
satisfactorily and are benefiting from the addition of American General's
domestic consumer finance operation, which had strong third quarter growth. AIG
Trading continues to show improvement following the restructuring that we
implemented earlier this year.
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"Going forward, the U.S. and global economy face serious challenges that
are exacerbated by the uncertainties posed by the terrorist threat. In this
environment, business, governments and individuals are seeking the strongest and
most capable financial partners. AIG is well positioned, probably as well as, or
better than we ever have been in our 83-year history. We have over $50 billion
of shareholders equity, at the top of our industry. We have an unrivalled global
network, a comprehensive product portfolio and an outstanding team of people who
are dedicated to being the first in the market with the best solutions for their
customers' most pressing financial requirements. We are firmly committed to
putting these fundamental AIG strengths to work on behalf of our shareholders."
GENERAL INSURANCE
General insurance pretax income before realized capital gains (losses) for
the third quarter of 2001 excluding World Trade Center and related losses, rose
11.8 percent to $970.5 million, compared to $868.3 million last year. Including
these losses, general insurance operating income was $201.5 million. For the
first nine months of 2001, general insurance pretax income before realized
capital gains (losses) and World Trade Center and related losses rose 9.8
percent to $2.89 billion, compared to $2.63 billion in 2000. Including these
losses, operating income was $2.12 billion for the first nine months of 2001.
Worldwide general insurance net premiums written in the third quarter of
2001 amounted to $4.98 billion, 16.1 percent ahead of the $4.29 billion in 2000.
For the first nine months of 2001, general insurance net premiums written were
$14.90 billion, an increase of 14.4 percent, compared to $13.02 billion last
year.
General insurance net investment income rose 7.2 percent to $724.3 million
in the third quarter and 7.4 percent to $2.15 billion in the first nine months
of 2001.
LIFE INSURANCE
AIG's core worldwide life insurance operations had third quarter 2001
pretax income before realized capital gains (losses) of $1.36 billion, up 17.0
percent, compared to $1.16 billion in 2000. For the first nine months of 2001,
core life insurance pretax income before realized capital gains (losses) was
$3.91 billion, up 15.8 percent, compared to $3.38 billion last year. Core
worldwide life insurance results exclude World Trade Center and related losses
and American General's home service business. Including World Trade Center and
related losses and American General's home service business, AIG's worldwide
life insurance operations reported pretax income in the third quarter of 2001 of
$1.32 billion, compared to $1.26 billion last year, and $4.13 billion and $3.70
billion in the nine months of 2001 and 2000, respectively.
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Life insurance premium income and other considerations of $10.46 billion
was 4.7 percent above third quarter 2000 premium income and other considerations
of $9.99 billion. For the first nine months, premium income and other
considerations amounted to $33.67 billion, a gain of 15.0 percent, compared to
$29.28 billion in 2000.
Life insurance net investment income rose 10.2 percent to $2.94 billion in
the third quarter of 2001, compared to $2.66 billion for the same period last
year. For the first nine months, net investment income amounted to $8.69
billion, an increase of 11.3 percent, compared to $7.81 billion in 2000.
FINANCIAL SERVICES
Financial services pretax operating income during the third quarter of
2001 increased 20.8 percent to $490.1 million, compared to $405.8 million in
2000. For the first nine months of 2001, financial services operating income was
$1.41 billion, a 19.5 percent increase, compared to $1.18 billion in 2000.
ASSET MANAGEMENT
Asset management pretax operating income for the third quarter of 2001
amounted to $246.6 million, compared to $281.6 million in 2000. For the first
nine months of 2001, pretax operating income was $816.6 million, compared to
$831.6 million last year.
# # # #
AIG is the leading U.S.-based international insurance and financial
services organization and the largest underwriter of commercial and industrial
insurance in the United States. Its member companies write a wide range of
commercial, personal and life insurance products through a variety of
distribution channels in approximately 130 countries and jurisdictions
throughout the world. AIG's global businesses also include financial services
and asset management, including aircraft leasing, financial products, trading
and market making, consumer finance, institutional, retail and direct investment
fund asset management, real estate investment management, and retirement savings
products. American International Group, Inc.'s common stock is listed on the New
York Stock Exchange, as well as the stock exchanges in London, Paris,
Switzerland and Tokyo.
# # # #
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CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
This press release may contain forward-looking statements. Please refer to
AIG's Quarterly Report on Form 10-Q for the quarter ended June 30, 2001, as
supplemented by the Current Report on Form 8-K dated October 9, 2001 which
restates AIG's financial statements to reflect the acquisition of American
General Corporation, and its past and future filings and reports filed with the
United States Securities and Exchange Commission, for a description of the
business environment in which AIG operates and the important factors that may
affect its business. AIG is not under any obligation to (and expressly disclaims
any such obligations to) update or alter its forward-looking statements whether
as a result of new information, future events or otherwise.
AMERICAN INTERNATIONAL GROUP, INC.
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Nine Months Ended September 30, Three Months Ended September 30,
2001 2000(a) Change 2001 2000(a) Change
----------- ----------- ------ ----------- ----------- ------
General Insurance Operations:
Net Premiums Written $14,903,184 $13,023,420 14.4% $ 4,983,284 $4,293,706 16.1%
Net Premiums Earned 14,308,992 12,621,333 13.4 4,845,179 4,112,496 17.8
Adjusted Underwriting Profit (Loss) (27,127) 632,118 -- (522,837) 192,732 --
Adjusted Underwriting Profit excluding WTC Losses 741,873 632,118 17.4 246,163 192,732 27.7
Net Investment Income 2,147,189 1,998,477 7.4 724,349 675,566 7.2
Income before Realized Capital Gains (Losses) 2,120,062 2,630,595 (19.4) 201,512 868,298 (76.8)
Income before Realized Capital Gains (Losses)
excluding WTC Losses 2,889,062 2,630,595 9.8 970,512 868,298 11.8
Realized Capital Gains (Losses) (147,120) 42,321 -- (89,419) 33,283 --
Operating Income (includes WTC Losses) $ 1,972,942 $ 2,672,916 (26.2)% $ 112,093 $ 901,581 (87.6)%
--------------------------------------------------------------------------------------------- ------------------------------------
Loss Ratio 79.82 74.95 89.37 74.56
Expense Ratio 21.24 21.03 22.15 21.69
Combined Ratio 101.06 95.98 111.52 96.25
Combined Ratio excluding WTC Losses 95.68 95.98 95.65 96.25
--------------------------------------------------------------------------------------------- ------------------------------------
Life Insurance Operations:
Premium Income and Other Considerations(b) $33,671,407 $29,277,073 15.0% $10,461,224 $9,986,941 4.7%
Net Investment Income 8,687,450 7,806,627 11.3 2,935,516 2,664,586 10.2
Income before Realized Capital Gains (Losses) 4,127,773 3,695,580 11.7 1,320,269 1,262,752 4.6
Income before Realized Capital Gains (Losses)
excluding WTC Losses 4,258,773 3,695,580 15.2 1,451,269 1,262,752 14.9
Realized Capital Gains (Losses) (4,233) (123,378) -- 16,668 (65,187) --
Operating Income (includes WTC Losses) 4,123,540 3,572,202 15.4 1,336,937 1,197,565 11.6
Financial Services Operating Income 1,410,575 1,180,057 19.5 490,080 405,825 20.8
Asset Management Operating Income 816,591 831,602 (1.8) 246,607 281,582 (12.4)
Other Realized Capital Losses (397,848) (139,654) -- (41,010) (24,284) --
Other Income (Deductions) - net (487,347) (475,396) -- (165,176) (165,791) --
Acquisition, Restructuring and Related Charges (2,016,529) (315,421) -- (1,362,783) 0 --
Income before Income Taxes, Minority Interest
and Cumulative Effect of Accounting Changes 5,421,924 7,326,306 (26.0) 616,748 2,596,478 (76.2)
Income Taxes 1,535,129 2,183,708 -- 163,388 784,510 --
Income before Minority Interest and Cumulative
Effect of Accounting Changes 3,886,795 5,142,598 (24.4) 453,360 1,811,968 (75.0)
Minority Interest, after tax - Operating Income (250,580) (295,623) -- (43,843) (104,624) --
Minority Interest, after tax - Capital Gains (3,064) (10,091) -- (1,517) (2,940) --
Income before Cumulative Effect of Accounting Changes 3,633,151 4,836,884 (24.9) 408,000 1,704,404 (76.1)
Cumulative Effect of Accounting Changes, net of tax(c) (136,203) 0 -- (81,250) 0 --
Net Income, as reported 3,496,948 4,836,884 (27.7) 326,750 1,704,404 (80.8)
Income, as adjusted excluding Acquisition,
Restructuring and Related Charges(d) 5,378,721 5,197,395 3.5 1,444,467 1,745,320 (17.2)
Core Income(e) $ 5,687,439 $ 4,991,500 13.9% $ 1,915,535 $1,678,165 14.1%
--------------------------------------------------------------------------------------------- ------------------------------------
Per Share - Diluted:
Net Income, as reported $ 1.32 $ 1.84 (28.3)% $ 0.12 $ 0.65 (81.5)%
Income, as adjusted excluding Acquisition,
Restructuring and Related Charges(d) 2.03 1.97 3.0 0.55 0.66 (16.7)
Core Income(e) $ 2.14 $ 1.89 13.2% $ 0.72 $ 0.63 13.4%
--------------------------------------------------------------------------------------------- ------------------------------------
Average Diluted Common Shares Outstanding 2,652,501 2,636,592 2,651,303 2,633,474
(a) Restated to include American General Corporation acquired August 29, 2001.
(b) GAAP premium income was $4,872,986 and $14,065,998 for the third quarter and
nine months 2001, respectively, compared to $4,139,851 and $12,632,804 for
the third quarter and nine months 2000, respectively.
(c) Represents the cumulative effect of an accounting change, net of tax,
related to FASB 133 "Accounting for Derivative Instruments and Hedging
Activities" and EITF 99-20 "Recognition of Interest Income and Impairment on
Purchased and Retained Beneficial Interests in Securitized Financial
Assets".
(d) Adjusted to exclude the cumulative effect of accounting changes and realized
capital gains (losses), net of taxes.
(e) Adjusted to exclude the cumulative effect of accounting changes, realized
capital gains (losses), acquisition, restructuring and related charges,
World Trade Center and related losses and the American General home services
business, which is being managed as a closed block, net of tax.
AMERICAN INTERNATIONAL GROUP, INC.
SUPPLEMENTARY DATA
(IN THOUSANDS)
Nine Months Ended September 30, Three Months Ended September 30,
2001 2000(a) Change 2001 2000(a) Change
----------- ----------- ------ ----------- ----------- ------
General Insurance Operations:
Net Premiums Written
Brokerage Division $ 8,212,119 $ 6,409,443 28.1% $ 2,744,380 $ 2,120,030 29.5%
Personal Lines 1,858,499 1,867,798 (0.5) 612,011 634,876 (3.6)
Mortgage Guaranty 363,597 335,327 8.4 124,634 116,999 6.5
----------- ----------- ----------- -----------
Total Domestic General 10,434,215 8,612,568 21.2 3,481,025 2,871,905 21.2
Foreign General(b) 4,468,969 4,410,852 1.3 1,502,259 1,421,801 5.7
----------- ----------- ----------- -----------
Total 14,903,184 13,023,420 14.4 4,983,284 4,293,706 16.1
Operating Income(c)(d)
Brokerage Division 1,658,086 1,498,732 10.6 574,128 524,347 9.5
Personal Lines 48,176 82,290 (41.5) 29,004 17,581 65.0
Mortgage Guaranty 321,165 273,640 17.4 108,406 93,718 15.7
Intercompany Adjustments 17,485 63,588 -- 5,827 22,372 --
----------- ----------- ----------- -----------
Total Domestic General 2,044,912 1,918,250 6.6 717,365 658,018 9.0
Foreign General 844,150 712,345 18.5 253,147 210,280 20.4
----------- ----------- ----------- -----------
Total $ 2,889,062 $ 2,630,595 9.8% $ 970,512 $ 868,298 11.8%
---------------------------------------------------------------------------------- -------------------------------------
Combined Ratio:(d)
Brokerage Division 98.48 99.58 98.49 98.55
Personal Lines 102.49 99.18 99.58 101.30
Mortgage Guaranty 33.11 39.52 33.15 40.82
Total Domestic General 96.86 97.08 96.35 96.68
Foreign General 92.68 93.83 94.03 95.77
---------------------------------------------------------------------------------- -------------------------------------
Losses and Loss Expenses Paid $10,617,853 $ 9,449,483 12.4% $ 3,639,005 $ 3,125,031 16.4%
Change in Loss and LAE Reserve 803,006 10,247 -- 691,217 (58,939) --
----------- ----------- ----------- -----------
Losses and Loss Expenses Incurred 11,420,859 9,459,730 20.7 4,330,222 3,066,092 41.2
Net Loss and LAE Reserve 25,754,602 24,609,919 4.7
GAAP Underwriting Profit(d) 741,873 632,118 17.4 246,163 192,732 27.7
Life Insurance Operations:
Premium Income and Other Considerations
Domestic
Life(e) 3,342,453 3,212,838 4.0 969,713 1,039,941 (6.8)
Annuities, Pension and
Investment Products(f) 15,347,897 11,066,198 38.7 4,284,804 3,820,370 12.2
----------- ----------- ----------- -----------
Total 18,690,350 14,279,036 30.9 5,254,517 4,860,311 8.1
Foreign(g)
Life(e) 10,982,583 9,379,505 17.1 3,762,437 3,050,219 23.3
Annuities, Pension and
Investment Products(f) 3,998,474 5,618,532 (28.8) 1,444,270 2,076,411 (30.4)
----------- ----------- ----------- -----------
Total $14,981,057 $14,998,037 (0.1)% $ 5,206,707 $ 5,126,630 1.6%
SUPPLEMENTARY DATA CONTINUED
Nine Months Ended September 30, Three Months Ended September 30,
2001 2000 Change 2001 2000 Change
----------- ----------- ------ ----------- ----------- ------
Life Insurance Operations continued
Net Investment Income
Domestic $ 6,025,656 $ 5,476,890 10.0% $ 2,008,576 $ 1,866,923 7.6%
Foreign 2,661,794 2,329,737 14.3 926,940 797,663 16.2
----------- ----------- ----------- -----------
Total 8,687,450 7,806,627 11.3 2,935,516 2,664,586 10.2
Operating Income(c)(d)
Domestic
Other than Home Services 1,929,374 1,733,402 11.3 667,384 595,580 12.1
Home Services 345,050 316,762 8.9 95,280 103,315 (7.8)
Foreign 1,984,349 1,645,416 20.6 688,605 563,857 22.1
----------- ----------- ----------- -----------
Total 4,258,773 3,695,580 15.2 1,451,269 1,262,752 14.9
Financial Services:
Revenues
International Lease Finance Corp. 1,936,937 1,786,132 8.4 658,744 629,342 4.7
AIG Financial Products Corp. 802,402 711,250 12.8 283,135 260,324 8.8
Consumer Finance Group 1,903,143 1,717,914 10.8 652,853 595,548 9.6
AIG Trading Group Inc. 107,835 190,199 (43.3) 49,084 55,369 (11.4)
Other (22,244) (95,443) -- (11,492) (32,494) --
----------- ----------- ----------- -----------
Total 4,728,073 4,310,052 9.7 1,632,324 1,508,089 8.2
Operating Income
International Lease Finance Corp. 530,952 476,406 11.4 186,996 166,474 12.3
AIG Financial Products Corp. 524,493 432,793 21.2 170,411 154,218 10.5
Consumer Finance Group 385,695 294,225 31.1 148,998 101,299 47.1
AIG Trading Group Inc. 21,016 40,577 (48.2) 7,111 5,351 32.9
Other(h) (51,581) (63,944) -- (23,436) (21,517) --
----------- ----------- ----------- -----------
Total $ 1,410,575 $ 1,180,057 19.5% $ 490,080 $ 405,825 20.8%
Effective Tax Rates:
Excluding Capital Gains (Losses) 28.92% 29.96% 27.66% 30.26%
Capital Gains (Losses) Alone 34.87% 35.02% 34.01% 32.41%
As Reported 28.31% 29.81% 26.49% 30.21%
(a) Restated to include American General Corporation acquired August 29, 2001.
(b) The growth in foreign net premiums written in original currency was 15.3
percent and 10.4 percent for the third quarter and nine months of 2001,
respectively.
(c) Operating income excludes realized capital gains (losses).
(d) Excludes World Trade Center and related losses. Includes traditional life,
interest sensitive and variable life (e) products.
(f) Quarterly fluctuations in the sale of investment products do not represent a
trend for the year.
(g) The growth in foreign life premiums in original currency was 34.7 percent in
the quarter and 26.7 percent for the nine months. Foreign annuities, pension
and investment products in original currency declined 24.6 percent for the
quarter and 22.2 percent for the nine months, impacted by a decline in sales
of tax-driven Guaranteed Income Bonds in the U. K.
(h) Includes Other Financial Services Companies and Intercompany
Reclassifications.