A.M. Best Comments on AIG's Proposed Acquisition of 21st Century's Outstanding Shares.

OLDWICK, N.J. -- A.M. Best Co. has commented that following the announcement by American International Group, Inc. (AIG) (New York, NY) [NYSE:AIG] of its intention to acquire the remaining 38.1% publicly held shares of 21st Century Insurance Group (21st Century) (Woodland Hills, CA) [NYSE: TW], the transaction is a long-term positive for providing forward momentum for AIG's personal lines business segment.

The value of the proposal is approximately $690 million. 21st Century's book of private passenger automobile business--albeit concentrated in California--is profitable, maintains a competitive expense advantage and an exceptional level of customer persistency. No additional capital investment is anticipated.

The remaining publicly held shares are being acquired at a point in time where numerous strategic initiatives implemented by 21st Century management have resulted in a much improved earnings sustainability profile and positive overall market conditions. AIG, as a majority owner, currently has 21st Century's results incorporated in its financial statements, and the additional ownership and earnings will not materially affect AIG's multi-billion dollar consolidated bottom line. AIG maintains unparalleled access to the capital markets in addition to robust internal sources of funds. Financing of this acquisition--while material--will not unduly burden AIG's financial flexibility or profile.

The financial strength ratings of AIG remain unchanged by this proposed transaction.

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