|AIG STATEMENT ON MOODY'S PRESS RELEASE AND SPECIAL COMMENT REPORT|
NEW YORK, Aug 13, 2002 -- American International Group, Inc. (NYSE:AIG) has issued the following statement regarding the Moody's Investors Service Press Release and "Special Comment" report issued on August 9, 2002:
In a news release ("U.S. LIFE INSURERS' INVESTMENT EXPOSURE TO 10 TROUBLED COMPANIES IS APPROXIMATELY $23 BILLION", August 9, 2002) Moody's lists insurance groups with the largest exposure to ten high profile problem credits, showing AIG's direct exposure to these credits at $1.8 billion. Many news organizations have reported on the release.
Moody's entire report on this exposure entitled "Troubled Credits: Pressure on the U.S. Life Insurance Industry and Its Ratings Increases" presents a more complete picture. The report notes that "it is not surprising" that the companies mentioned, including AIG, have the largest exposure because they are "some of the largest insurance groups with the largest general accounts in the industry."
In the case of AIG, the exposure to these credits amounts to less than 1 percent of its consolidated domestic life insurance invested assets and less than 0.5 percent of its total consolidated invested assets. Moreover, as previously reported, AIG has already taken significant write-downs of its Enron and WorldCom exposures. A substantial portion of AIG's exposure to the remaining troubled credits is to subsidiaries of those credits with different credit profiles than their troubled parents. Moody's also goes on to note, "many of the U.S. life insurance groups are part of much larger insurance groups that have either substantial non-U.S., non-life insurance or other operations with additional capital resources available." This is certainly true for AIG with its highly diversified worldwide operations and $55 billion shareholders' equity.
AIG is the world's leading U.S.-based international insurance and financial services organization, the largest underwriter of commercial and industrial insurance in the United States, and among the top-ranked U.S. life insurers. Its member companies write a wide range of general insurance and life insurance products for commercial, institutional and individual customers through a variety of distribution channels in approximately 130 countries and jurisdictions throughout the world. AIG's global businesses also include financial services, retirement savings and asset management. AIG's financial services businesses include aircraft leasing, financial products, trading and market making, and consumer finance. AIG has one of the largest retirement savings businesses in the United States and is a leader in asset management for the individual and institutional markets, with specialized investment management capabilities in equities, fixed income, alternative investments and real estate. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in London, Paris, Switzerland and Tokyo.
CONTACT: American International Group, Inc., New York Investment Community: Charlene Hamrah, 212/770-7074 News Media: Joe Norton, 212/770-3144