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HONG KONG & TAIPEI--Feb. 17, 2006--American International Group, Inc. (AIG) today announced that a wholly-owned Taiwan subsidiary has reached an agreement with Central Insurance Co., Ltd (Central Insurance) to acquire all of Central Insurance's outstanding shares by means of a statutory share swap.

The purchase value of the transaction is estimated to be between NT$5.92 billion and NT$6.05 billion.

In addition, the Taiwan subsidiary, AIG Direct Marketing Co., Ltd (AIGDMC) and one of Central Insurance's major shareholders, Polaris Securities Co. Ltd, are expected to enter into a cooperation agreement, which will become effective on the closing of the share swap transaction. Under this agreement, Polaris and AIGDMC will develop plans to distribute Central Insurance's products in the Taiwan market.

With this acquisition, AIG is bringing together some of Taiwan's strongest capabilities in general insurance product development, management and distribution. AIG established a branch of AIU Insurance Company in Taiwan (AIU Taiwan) in 1982. Since then, AIU Taiwan has been at the forefront of bringing innovative general insurance solutions as well as a wide range of professional liability insurance to the local market. Central Insurance, founded in 1962, is a leading domestic general insurer, ranked sixth in Taiwan, with more than NT$7 billion in gross written premiums and over 900 employees.

After the transaction, AIG's two general insurance operations in Taiwan together will become one of the largest general insurance practices in the market, rising to third by direct gross premiums written(1).

Ross Matthews, AIU Executive Vice President, said, "We are pleased to strengthen our commitment to Taiwan through this relationship. Central Insurance is widely recognized for the professionalism and discipline of its management team and its unrivalled distribution network. The AIG companies are known for their international expertise, global servicing capabilities and financial strength. AIG and Central Insurance already enjoy an excellent management relationship, established over many years. We expect the transaction will benefit millions of Taiwanese, providing enhanced solutions to their insurance needs while boosting the overall growth for both companies."

Charles Sung, President of Central Insurance, said, "Central Insurance has 40 business units in Taiwan and two representative offices in Guangzhou and Shanghai. Our company operations will be improved and customers will get more complete service after integrating with the worldwide insurance resources of AIG."

Under the share swap agreement, the current shareholders of Central Insurance will receive redeemable preferred shares of AIG Direct Marketing Co., Ltd (AIGDMC) in exchange for each common share of Central Insurance. The effectiveness of the share swap is subject to the approval of Central Insurance's shareholders and regulatory approvals, and is expected to take place during the third quarter of 2006.

The preferred shares of AIGDMC will have a liquidation value of NT$10 per share. The exchange ratio will begin at 1.7 preferred shares for every common share, but will increase daily at a rate of 2.5% per annum if the acquisition is not completed within 30 days after the shareholders of Central Insurance approve the transaction. The preferred shares will be redeemed within six months after issuance, at their liquidation value, plus accreted value at a rate of 2.5% per annum from the date of their issuance.

American International Group, Inc.

American International Group, Inc. (AIG), world leaders in insurance and financial services, is the leading international insurance organization with operations in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed in the U.S. on the New York Stock Exchange and ArcaEx, as well as the stock exchanges in London, Paris, Switzerland and Tokyo.

Central Insurance Co., Ltd

Founded in Taipei in 1962, Central Insurance is one of the leading general insurance companies in Taiwan. Central Insurance is known as a provider of professional services and innovative insurance products in the market. Central Insurance became an affiliate member company of Polaris Group in 2003.

Polaris Securities Co. Ltd

Polaris Financial Group is the leading financial service provider for online asset management and innovative financial products. Polaris was founded in 1988 as a stock brokerage company and then developed into a financial group. The fields of business include investment banking, asset management, investment trusts, financial engineering, futures, insurance, investment consulting, and the provision of financial information.

(1) Based on figures from the Taiwan Non-Life Insurance Association

In Hong Kong:
Esther Chan
Corporate Communications
AI Companies
Tel: +852 2832 1854
Fax: +852 2834 1753
E-mail: esther-wf.chan@aig.com

In New York:
Joe Norton
AIG Director of Public Relations
Tel: 212/770-3144
E-mail: Joseph.Norton@AIG.com