AIG

American International Group

Operations for Financial Services

Warren Berey – Nicole Boone

15 December 2003

AIG

Company Structure

AIG

GeneralInsurance

LifeInsurance

FinancialServices

RetirementPlanning

ClaimServices

DomesticGeneral

Foreign General Personal Lines United GuarantyTransatlantic

Holdings

National Union American Home Environmental LexingtonRisk

ManagementHartford Steam

Boiler

ManagementLiability

ProfessionalLiability

FinancialInstitutions

Bonding

AIG

Domestic Structure

• Product Innovation / Offerings– Segmentation by company / business unit

• Marketing (segregated by size)– Middle Market (Revenue <= $100m)

• Small Business (Revenue <= $10m)

– Commercial (Revenue >$100m and <= $700m)– National (Revenue > $700m)

• Operations (10 regional offices)

AIG

Product Offerings

Unit GL Prop. X/S Fin. Enviro A&H

RMG X

Lex. X X

AH X

NU X

C&I x X

Life X

NAD X x

Other X X

AIG

Distribution

• Distribution via independent brokers– Alpha– 2nd Tier– Regional

• Limited agent distribution– Risk Specialists Offices

• Very limited direct distribution

AIG

AIG Access Points

• Underwriting Direct (via broker)

• AIG Mail Rooms

• Info Exchange– aig.infoexchange@aig.com– (U.S.) 1-877-638-4244– (Worldwide) +1-908-679-3150

• accessaig.com

AIG

DBG Access Points

• Customer Care Center (C3)– 1-877-TO SERVE– c3@aig.com

• eUnderwriting– eWriter (Management Liability)– EXS (Umbrella)– PEGA (Workers Compensation)– e-Worldrisk (Multinational GL)– XML (Managing General Agents)

AIG

Business Development Process

• Renewals– Solicitation letters– Deadline letters– Impact of service levels

• New Business– Cross sales

• Costs of new lines v. new customers• Exit costs for clients• Limitations on spans of expertise

– New Accounts

• Claims Processing

AIG

Productivity & Efficiency

• Management Accounting– Income Statements

• By Unit, Product, Market Segment, Region

– Cash Flows (by same divisions)

• Current Efficiency Metrics– Timeliness– Accuracy

• Possible Future Metrics...

AIG

Operational Risks

• Risk Aggregation• Adequate Reserving• Data Integrity / Controls

– Sarbanes-Oxley– Attrition / Information Leakage– Legacy systems

• Claim Servicing• Technology Dependability / Reliance

AIG

Future Recommendations

• Distribution Operations Design– Alternative Channels– Cross Selling– System Uniformity

• Mitigating Operational Risk– Improve Data Quality– Lessen Administrative Burden

• Align Evaluation with Business Objectives– Balanced Scorecard– DEA

AIG

Q & A