Exhibit 5.1

               [Letterhead of American International Group, Inc.]

                                                                December 4, 2002

American International Group, Inc.
70 Pine Street
New York, New York  10270

Ladies and Gentlemen:

            In connection with the registration under the Securities Act of 1933
(the "Act") of $500,000,000 aggregate amount of deferred compensation
obligations (the "Obligations") of American International Group, Inc., a
Delaware corporation (the "Company"), I have examined such corporate records,
certificates and other documents, and such questions of law, as I have
considered necessary or appropriate for the purposes of this opinion.

            Upon the basis of such examination, I advise you that, in my
opinion, when the Registration Statement has become effective under the Act, the
American International Group, Inc. Executive Deferred Compensation Plan and the
American International Group, Inc. Supplemental Incentive Savings Plan, each
substantially in the form filed as an exhibit to the Registration Statement (the
"Plans"), are duly authorized and approved by the Company, the terms of the
Obligations are duly established in conformity with the Plans so as not to
violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon the Company and so as to comply with any
requirement or restriction imposed by any court or governmental body having
jurisdiction over the Company, and the Obligations are issued in accordance with
the Plans as contemplated by the Registration Statement, the Obligations will
constitute valid and legally binding obligations of the Company, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.

            The foregoing opinion is limited to the Federal laws of the United
States, the laws of the State of New York and the General Corporation Law of the
State of Delaware, and I am expressing no opinion as to the effect of the laws
of any other jurisdiction.

            I have relied as to certain matters on information obtained from
public officials, officers of the Company and other sources believed by me to be
responsible.

American International Group, Inc.
December 4, 2002
Page 2

            I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me under the heading "Interest of
Named Experts and Counsel" in the Registration Statement. In giving such
consent, I do not thereby admit that I am in the category of persons whose
consent is required under Section 7 of the Act.

                                                       Very truly yours,


                                                       /s/ Kathleen E. Shannon


                                                       Kathleen E. Shannon, Esq.
                                                       Vice President and
                                                       Deputy General Counsel