AIG Reports 1999 Net Income Rose 18.1 Percent to Record $5.06 Billion.

Business Editors

NEW YORK--(BUSINESS WIRE)--Feb. 10, 2000

American International Group, Inc. (AIG) today reported that its net income for 1999 increased 18.1 percent to $5.06 billion from $4.28 billion in 1998. For the fourth quarter of 1999, net income totaled $1.31 billion, an increase of 17.2 percent, compared to $1.12 billion in the same period of 1998.

Following is a summary table of fourth quarter and full year information (in millions, except per share amounts).

                           FOURTH QUARTER            TWELVE MONTHS
                        1999    1998(a) Change   1999   1998(a) Change

Net income,
  as reported         $1,312.2 $1,119.8 17.2%  $5,055.4 $4,281.9 18.1%

Income, as
 adjusted(b)          $1,318.5 $1,138.0 15.9%  $4,998.6 $4,232.3 18.1%

Income, as adjusted,
  excl.catastrophe
  losses(b)           $1,356.6 $1,155.5 17.4%  $5,077.2 $4,303.8 18.0%


PER SHARE RESULTS:(c)

Diluted:
Net income,
  as reported         $   0.84 $   0.72 16.7%  $   3.23 $   2.75 17.5%

Income,
as adjusted(b)        $   0.84 $   0.73 15.1%  $   3.19 $   2.72 17.3%

Income, as adjusted,
  excl. catastrophe
  losses(b)           $   0.87 $   0.74 17.6%  $   3.24 $   2.77 17.0%

Average shares
  outstanding          1,567.5  1,551.6         1,566.8  1,553.8

(a) Restated to include SunAmerica Inc. in 1998.
(b) Adjusted to exclude realized capital gains, net of taxes.
(c) Share information reflects the five-for-four split in the form of
    a 25 percent common stock dividend, paid July 30, 1999.

     Income before income taxes and minority interest for the year
1999 increased 19.7 percent to $7.51 billion from $6.28 billion
reported last year. For the fourth quarter of 1999, income before
income taxes and minority interest amounted to $1.93 billion, an
increase of 16.4 percent over the $1.66 billion reported in 1998.
Included in these results were pretax realized capital gains of $122.0
million and losses of $9.1 million for the year and fourth quarter of
1999, respectively, compared to gains of $123.7 million and losses of
$16.7 million for the same periods in 1998.
     The following table shows the results for the quarter and twelve
months, including and excluding catastrophe losses (in millions,
except per share amounts):



                            FOURTH QUARTER            TWELVE MONTHS
                         1999    1998   Change    1999    1998  Change
Income before income
 taxes and minority
 interest,
 as reported          $1,928.0 $1,657.0 16.4%  $7,512.2 $6,277.5 19.7%

 Catastrophe losses       83.0     27.0           156.0    110.0

Income before income
 Taxes and minority
 interest, excluding
 catastrophe losses   $2,011.0 $1,684.0 19.4%  $7,668.2 $6,387.5 20.0%

Combined ratio:
 As reported             98.95    96.68           96.35    96.36

 Excluding catastrophe
 losses                  96.96    95.97           95.35    95.58

Per share:
 Income, as adjusted  $   0.84 $   0.73 15.1%  $   3.19 $   2.72 17.3%

 Income, as adjusted,
 excluding catastrophe
 losses               $   0.87 $   0.74 17.6%  $   3.24 $   2.77 17.0%


     Revenues for the year 1999 rose 13.8 percent to $40.66 billion
from $35.72 billion in 1998. Fourth quarter revenues totaled $11.00
billion, an increase of 13.9 percent over $9.66 billion in the year
earlier quarter.
     At December 31, 1999, AIG's consolidated assets approximated $267
billion, an increase of 14 percent, compared to $234 billion at the
prior year-end. In 1999, shareholders' equity increased to
approximately $33 billion, a 10 percent increase over the $30 billion
reported at December 31, 1998.
     Commenting on the fourth quarter and full year results, AIG
Chairman M.R. Greenberg said, &uot;AIG had a good fourth quarter and a
strong year overall. Our net income for 1999 rose 18.1 percent to a
record $5.06 billion. Catastrophe losses in the fourth quarter were a
more significant factor for the industry and for AIG than in previous
quarters. In particular, the European storms, which are expected to
produce insured losses of approximately $6 billion for the industry,
were especially severe. AIG's net catastrophe losses in the fourth
quarter of $83.0 million impacted adjusted net income by $38 million
or $0.03 a share, principally reflecting the net catastrophe losses
($60 million) of AIG's majority-owned reinsurance subsidiary
Transatlantic Holdings, Inc. Excluding these losses and realized
capital losses, AIG's income as adjusted for the fourth quarter
increased 17.4 percent to $1.36 billion, or $0.87 per share.
     &uot;Worldwide general insurance net premiums written rose 4.7
percent in the fourth quarter and 11.2 percent for the full year 1999.
All of these results include the consolidation of Transatlantic
Holdings, Inc. and 21st Century Insurance Group in 1999 and in the
third and fourth quarters of 1998. We achieved an underwriting profit
of $122.2 million in the quarter, and a record $669.2 million for
1999. Excluding catastrophe losses, our combined ratio for the fourth
quarter was 96.96, compared to 95.97 in last year's quarter.
     &uot;In the domestic commercial property-casualty market, we are
continuing to see price increases on a broader scale. While commercial
rates have increased, they still have a considerable distance to go,
given the levels to which many classes had fallen. In AIG's case, our
specialty lines continued to post good underwriting results, and we
have introduced a wide array of new specialty products in the Domestic
Brokerage Group during the past few months. The upswing in global
catastrophe losses for the industry, which intensified in the fourth
quarter, should result in firmer pricing for both the primary and
reinsurance markets worldwide. AIG continues our disciplined
underwriting approach, canceling or non-renewing $80 million of
inadequately priced business in the quarter and $450 million for the
full year 1999.
     &uot;Our Domestic Personal Lines business had a reasonable quarter.
For the year, domestic personal lines produced $2.16 billion in net
premiums written, a 52.0 percent increase over the prior year, and a
combined ratio of 96.29. The combined ratio deteriorated somewhat in
the fourth quarter due to an increase in claims frequency and
severity. (Results for 21st Century Insurance Group, our
majority-owned personal lines direct marketing company in the Western
United States, are included for the second half of 1998 and the full
year in 1999.) 21st Century had a difficult fourth quarter in view of
the continued rate pressures in the personal auto market in
California. Our Mass Marketing operation continued its strong growth,
and new auto insurance business resulting from our joint venture with
MBNA is developing well. There are signs that price weakness in
personal auto is bottoming out, and we anticipate price increases will
be required in 2000 to maintain acceptable underwriting results.
     &uot;United Guaranty Corporation, our mortgage guaranty insurance
company, reported outstanding results, with a gain in operating income
in the quarter of 50.6 percent and 35.7 percent for the full year.
     &uot;The Foreign General Insurance Group reported good results in
virtually all areas of the world. The economic recovery taking place
in Asia is having a positive impact on this business. There were,
however, significant catastrophe losses throughout the year, which
added 2.4 points to the combined ratio. Also included in Foreign
General results is the foreign business of Transatlantic, which as
reported had $60 million of catastrophe losses in the quarter. As with
the domestic market, the unusual number and severity of foreign
catastrophe losses should result in rate increases in those lines of
business affected by these catastrophes.
     &uot;The continued strong recovery in many Asian economies helped
AIG's worldwide Life business have a very strong quarter, as premium
income rose 15.7 percent and operating income gained 23.8 percent.
Japan had an excellent quarter, as did Taiwan and Southeast Asia. For
the year 1999, life operating income increased 22.8 percent and
surpassed $3 billion for the first time. Shortly after year-end, we
opened our new life and general insurance branch office in Shenzhen,
China, marking the fourth Chinese metropolitan area where AIG has
established wholly-owned, full-service insurance operations. During
the fourth quarter, we also entered into an agreement to purchase a 70
percent equity interest in a subsidiary of Lippo Life, Indonesia's
leading life insurance company. The new joint venture, renamed AIG
Lippo Life, is the largest life company in Indonesia, marketing life,
pension and health products through a multi-channel distribution
network. AIG's Domestic Life Companies, including the life business of
SunAmerica Inc., had a strong fourth quarter and full year, with
operating income gaining 39.0 percent and 35.7 percent, respectively.
     &uot;SunAmerica Inc., whose results are reported through both the
Life Insurance and Asset Management segments, made a major
contribution to AIG in 1999. It reported excellent results in the
fourth quarter and had an outstanding full year. Operating income for
1999 rose 43.4 percent to $1.12 billion. Subsidiaries of AIG are
working with SunAmerica on a number of key initiatives, including the
introduction of SunAmerica annuity products into overseas markets, and
the integration of the AIG and SunAmerica mutual fund businesses in
the United States. We are extremely pleased with the progress made
over the past year in bringing SunAmerica into the AIG family.
     &uot;AIG's Financial Services Group reported an outstanding fourth
quarter, with both International Lease Finance Corporation (ILFC) and
AIG Financial Products Corp. (AIGFP) achieving record results. ILFC's
aircraft leasing business continues to be very strong with both
established and new customers. AIGFP's record quarter included a
significant increase in transactions and strong contributions from all
business lines. AIG Trading Group, Inc., which has experienced soft
conditions in its markets in recent quarters, had improved performance
in the fourth quarter and solid results for the full year. AIG
Consumer Finance Group reported excellent progress and a very
successful launch for its new credit card in Hong Kong. For the full
year, Financial Services operating income rose 24.4 percent to in
excess of $1 billion, a record.
     &uot;The Asset Management Group, including the investment management
businesses of AIG, SunAmerica and John McStay Investment Counsel, as
well as AIG's direct investment funds, had a strong quarter, with
operating income rising 88.7 percent to $96.2 million. For the full
year, the Asset Management Group reported operating income of $314.1
million. During the quarter, we successfully launched our latest
direct equity fund, the AIG Developed Markets Private Equity Fund,
with committed capital of $187 million. At year-end 1999, AIG's third
party assets under management, including both retail mutual funds and
institutional accounts, totaled approximately $34 billion, including
over $8 billion of direct equity funds.
     &uot;Looking back on 1999, it was an eventful year, one in which AIG
launched a number of important new initiatives, including a variety of
e-commerce businesses targeted to brokers, smaller and medium-sized
customers, more intensive advertising programs to support our direct
personal lines businesses, significant investments in new technology,
and an expansion of our distribution channels and capabilities both in
the United States and overseas. While the soft markets conditions that
have existed for some time in the domestic market have not
disappeared, there are increased signs of more disciplined
underwriting and other factors that should produce a stronger pricing
environment in both the primary and reinsurance markets in 2000. Our
global network has never been stronger, and there has not been a
period when AIG had more new business initiatives underway than we do
today.&uot;

GENERAL INSURANCE

     General insurance pretax income before realized capital gains for
the year 1999 was $3.19 billion, 17.0 percent above the $2.72 billion
reported last year. For the fourth quarter of 1999, general insurance
pretax income before realized capital gains was $769.5 million, an
increase of 5.4 percent compared to $730.3 million in 1998.
     Worldwide general insurance net premiums written for the year
1999 amounted to $16.22 billion, 11.2 percent ahead of the $14.59
billion in 1998. In the fourth quarter, general insurance net premiums
written were $4.01 billion, an increase of 4.7 percent, compared to
$3.83 billion last year.
     General insurance net investment income rose 14.8 percent to
$2.52 billion in 1999 and 7.1 percent to $647.3 million in the fourth
quarter.
     All of these results include the consolidation of Transatlantic
Holdings, Inc. and 21st Century Insurance Group in 1999 and in the
third and fourth quarters of 1998.

LIFE INSURANCE

     AIG's worldwide life insurance operations reported pretax income
before realized capital losses of $3.01 billion in the year 1999, an
increase of 22.8 percent, compared to $2.45 billion in 1998. For the
fourth quarter, life insurance pretax income before realized capital
losses increased 23.8 percent to $807.4 million, compared to $652.3
million last year.
     For the year 1999 life insurance premium income rose 16.0 percent
to $11.94 billion from $10.29 billion in 1998. Fourth quarter premium
income amounted to $3.32 billion, a gain of 15.7 percent, compared to
$2.87 billion in 1998.
     Life insurance net investment income rose 19.3 percent to $6.21
billion for the year 1999, compared to $5.20 billion last year. For
the fourth quarter, net investment income amounted to $1.66 billion,
an increase of 17.4 percent, compared to $1.41 billion in the same
period last year.

FINANCIAL SERVICES

     Financial services pretax operating income amounted to $1.08
billion for the year 1999, compared to $868.9 million last year, an
increase of 24.4 percent. For the fourth quarter, financial services
operating income increased 21.9 percent to $325.5 million, compared to
$266.9 million in 1998.

ASSET MANAGEMENT

     Asset management pretax operating income amounted to $314.1
million for the year 1999, compared to $191.2 million last year, an
increase of 64.3 percent. For the fourth quarter, asset management
operating income increased 88.7 percent to $96.2 million, compared to
$51.0 million in 1998.

     AIG is the leading U.S.-based international insurance
organization and the largest underwriter of commercial and industrial
insurance in the United States. Its member companies write property,
casualty, marine, life and financial lines insurance in approximately
130 countries and jurisdictions, and are engaged in a range of
financial services and investment management businesses. American
International Group, Inc.'s common stock is listed on the New York
Stock Exchange, as well as the stock exchanges in London, Paris,
Switzerland and Tokyo.

                  American International Group, Inc.
                         Financial Highlights
               (in thousands, except per share amounts)

                                      Three Months Ended December 31,
                                        1999(a)     1998(a)(b) Change
General Insurance Operations:
   Net Premiums Written             $  4,006,876 $  3,827,254    4.7 %
   Net Premiums Earned                 4,165,616    3,778,746   10.2
   Adjusted Underwriting Profit          122,249      125,818   (2.8)
   Net Investment Income                 647,266      604,480    7.1
   Income before Realized
      Capital Gains                      769,515      730,298    5.4
   Realized Capital Gains                 83,710       35,876      -
   Operating Income                 $    853,225 $    766,174   11.4 %

           Loss Ratio                      76.69        74.50
           Expense Ratio                   22.26        22.18
           Combined Ratio                  98.95        96.68

Life Insurance Operations:
   Premium Income                   $  3,318,189 $  2,868,169   15.7 %
   Net Investment Income               1,657,313    1,411,508   17.4
   Income before Realized
      Capital Losses                     807,427      652,320   23.8
   Realized Capital Losses               (86,063)     (57,396)     -
   Operating Income                      721,364      594,924   21.3

Financial Services Operating Income      325,470      266,898   21.9

Asset Management Operating Income         96,156       50,964   88.7

Equity in Income of Minority-Owned
   Insurance Operations                        0            0      -

Other Realized Capital Gains (Losses)     (6,731)       4,776      -

Other Income (Deductions) - net          (57,438)     (25,310)     -

Foreign Exchange Losses                   (4,057)      (1,411)     -

Income before Income Taxes
   and Minority Interest               1,927,989    1,657,015   16.4

Income Taxes                             578,210      458,295      -

Income before Minority Interest        1,349,779    1,198,720   12.6

Minority Interest, after tax: (c)
   Operating Income                      (37,142)     (72,003)     -
   Capital Gains                            (397)      (6,877)     -

Net Income                             1,312,240    1,119,840   17.2
   Per Common Share (d) - Basic             0.85         0.73   16.4
                        - Diluted   $       0.84 $       0.72   16.7 %

Average Common Shares Outstanding (d)
                        - Basic        1,548,788    1,518,870
                        - Diluted      1,567,537    1,551,582


                                     Twelve Months Ended December 31,
                                       1999(a)     1998(a)(b) Change
General Insurance Operations:
   Net Premiums Written             $ 16,223,885 $ 14,586,110   11.2 %
   Net Premiums Earned                15,543,807   14,097,974   10.3
   Adjusted Underwriting Profit          669,245      530,738   26.1
   Net Investment Income               2,516,691    2,191,817   14.8
   Income before Realized
      Capital Gains                    3,185,936    2,722,555   17.0
   Realized Capital Gains                294,694      205,227      -
   Operating Income                 $  3,480,630 $  2,927,782   18.9 %

           Loss Ratio                      75.51        75.59
           Expense Ratio                   20.84        20.77
           Combined Ratio                  96.35        96.36

Life Insurance Operations:
   Premium Income                   $ 11,941,864 $ 10,293,412   16.0 %
   Net Investment Income               6,205,924    5,201,211   19.3
   Income before Realized
      Capital Losses                   3,005,509    2,447,087   22.8
   Realized Capital Losses              (147,656)     (74,759)     -
   Operating Income                    2,857,853    2,372,328   20.5

Financial Services Operating Income    1,081,315      868,950   24.4

Asset Management Operating Income        314,069      191,213   64.3

Equity in Income of Minority-Owned
   Insurance Operations                        0       57,127      -

Other Realized Capital Losses            (25,019)      (6,780)     -

Other Income (Deductions) - net         (186,952)    (133,400)     -

Foreign Exchange Gains (Losses)           (9,702)         339      -

Income before Income Taxes
   and Minority Interest               7,512,194    6,277,559   19.7

Income Taxes                           2,218,381    1,784,924      -

Income before Minority Interest        5,293,813    4,492,635   17.8

Minority Interest, after tax: (c)
   Operating Income                     (215,606)    (181,260)     -
   Capital Gains                         (22,772)     (29,472)     -

Net Income                             5,055,435    4,281,903   18.1
   Per Common Share (d) - Basic             3.27         2.81   16.4
                        - Diluted   $       3.23 $       2.75   17.5 %

Average Common Shares Outstanding (d)
                        - Basic        1,548,292    1,518,355
                        - Diluted      1,566,768    1,553,832

(a) Includes the consolidation of Transatlantic Holdings, Inc. and

21st Century Insurance Group in 1999 and in the third and fourth

quarters of 1998.

(b) Restated Life Insurance, Financial Services and Asset Management

Operations to include SunAmerica Inc. in 1998.

(c) Represents minority shareholders' equity in operating income and

capital gains of certain consolidated subsidiaries, including

Transatlantic Holdings, Inc. and 21st Century Insurance Group.

(d) Share information reflects the five-for-four split in the form of

a 25 percent common stock dividend, paid July 30, 1999.