AIG Reports First Quarter 2002 Income Excluding Realized Capital Gains -Losses- Increased 11.1 Percent to $2.13 Billion.

Business Editors

NEW YORK--(BUSINESS WIRE)--April 25, 2002

American International Group, Inc. (AIG) today reported that its first quarter 2002 adjusted income, excluding net realized capital gains (losses) and the cumulative effect of an accounting change in 2001, increased 11.1 percent to $2.13 billion, compared to $1.92 billion in the first quarter of 2001.

Net income increased 6.7 percent to $1.98 billion, compared to $1.86 billion in the first quarter of 2001.

Following is a summary table of first quarter information (in millions, except per share amounts):

                                      FIRST QUARTER
                                2002           2001   Change

Net income, as reported    $  1,980.3     $  1,855.3     6.7%

Income, as adjusted(a)     $  2,130.7     $  1,918.1    11.1%

PER SHARE RESULTS:

Net income, as reported    $     0.75     $     0.70     7.1%
Income, as adjusted(a)     $     0.81     $     0.72    12.5%

Average shares outstanding    2,641.0        2,651.3

(a) Adjusted to exclude realized capital gains (losses) and the
    cumulative effect of an accounting change in 2001, net of taxes.

Highlights of the first quarter of 2002 include:

-- AIG's worldwide Life Insurance operations reported first quarter 2002 pretax
income before realized capital gains (losses) of $1.36 billion, an increase of
17.4 percent, compared to $1.15 billion last year.

-- Life Insurance premium income, deposits and other considerations increased
15.4 percent in the first quarter of 2002 to $12.82 billion from $11.11 billion
in 2001.

-- Life Insurance net investment income rose 8.0 percent to $2.90 billion for
the first quarter of 2002, compared to $2.69 billion for the same period last
year.

At March 31, 2002, AIG's consolidated assets and shareholders' equity approximated $507 billion and $52.6 billion, respectively.

First quarter 2002 income before income taxes, minority interest, realized capital gains (losses) and cumulative effect of an accounting change in 2001 increased 10.6 percent to $3.19 billion from $2.89 billion reported in 2001.

The following table outlines the impact of foreign exchange on property-casualty and life insurance premiums for the first quarter 2002:

                          Worldwide   Foreign   Worldwide   Foreign
                           General    General     Life       Life
                         Insurance  Insurance  Insurance  Insurance

Premium Growth in
Original Currency          33.5%      29.2%      18.4%(a)   26.0%(a)

Foreign Exchange Impact    (3.3)     (12.0)      (3.0)      (7.2)

Premium Growth as
Reported in U.S. $         30.2%      17.2%      15.4%      18.8%

(a) Premium income, deposits and other considerations. (See
    supplementary data information.)

Commenting on the first quarter results, AIG Chairman M.R. Greenberg said: "AIG is off to a very good start in 2002. Excluding realized capital gains and losses, AIG's first quarter net income rose 11.1 percent to a record $2.13 billion. On a per share basis, income as adjusted rose 12.5 percent in the first quarter. Once again, the strength and diversity of AIG's worldwide portfolio of businesses stood out. In the property-casualty business around the world, rates are continuing to strengthen as we have indicated in prior quarters, helping to produce strong results from our General Insurance business in the quarter. AIG's Worldwide Life Insurance business is benefiting from our extremely strong distribution channels, improving economies in Asia, the flight to quality increasingly evident in key markets, our investments in new markets for life insurance, and the significant progress we have achieved in successfully integrating American General's businesses into AIG. Financial Services had another good quarter, with strong performance from International Lease Finance Corporation, AIG Financial Products Corp. and Consumer Finance. Retirement Savings & Asset Management had a satisfactory quarter, despite somewhat weaker equity markets. This business is very well positioned for the future as markets recover. Retirement savings is and will be a growth business globally.

"In General Insurance, worldwide net premiums written increased 30.2 percent (33.5 percent in original currency) to a record $6.33 billion. AIG has taken a leadership role in addressing the most critical market needs of the commercial and industrial sector. AIG's underwriting capacity for large and complex risks is unique in the industry today. We are also making a market providing coverage for terrorism risks, both in the United States and internationally. The combined ratio improved to 95.76 in the first quarter of 2002, compared to 95.89 a year ago. We expect rate and coverage improvements to continue for the foreseeable future.

"In the United States, the Domestic Brokerage Group had record net premiums written of $3.45 billion, up 43.2 percent, with a combined ratio of 97.65. Lexington's surplus lines pool, the industry's largest writer of surplus lines, is off to a very strong start in 2002, with net premiums written totaling $490.1 million, up 122.5 percent over the first quarter of 2001. HSB Group, Inc., reported within the Domestic Brokerage Group, had an excellent quarter. HSB Group, Inc. is a leading provider, through its Hartford Steam Boiler unit, of specialty insurance products, engineering and management consulting services. In the first quarter net premiums written grew 25.8 percent to $128.3 million.

"Our Domestic Personal Lines business made significant progress in the first quarter. Net premiums written grew 14.4 percent over the first quarter of 2001 to $726.1 million. We have increased rates or non-renewed certain classes of business, while building new business. We expect Domestic Personal Lines to improve its profitability throughout the year.

"United Guaranty Corporation, our mortgage guaranty insurance subsidiary, continues to achieve excellent results. The U.S. housing market remains strong despite a weaker U.S. economy. Net premiums written totaled $122.2 million, and operating income was $111.6 million, an increase of 9.4 percent over first quarter 2001.

"Transatlantic Holdings, Inc., our 60 percent owned reinsurance subsidiary, had substantial growth in net premiums written of 26.4 percent to $563.6 million, and a combined ratio of 98.19.

"Foreign General Insurance also had strong net premiums written in the first quarter of 2002 of $1.48 billion, up 17.2 percent (29.2 percent in original currency) from the first quarter of 2001. The combined ratio was 91.95 in the quarter. Particularly strong results were reported in Continental Europe and the U.K./Ireland region, reflecting the better rate environment in those markets, and our Lloyds syndicate generated over $100 million of premiums. Results in Asia continue to be excellent. Despite the economic problems in Latin America, our property-casualty operations there achieved strong growth, and Foreign General continued to expand its operations in India, Egypt and China.

"AIG's minority-owned insurance and reinsurance operations in Bermuda, Allied World Assurance Company, Ltd and IPC Holdings, Ltd., are both off to very good starts in 2002.

"Net cash flow from insurance and investment operations from General Insurance was strong, amounting to $1.17 billion in the first quarter of 2002. Paid losses in the quarter included $133 million for previously reported and reserved Enron bond and World Trade Center losses. In addition, we added $127 million to General Insurance net loss and loss adjustment reserves, bringing the total of those reserves to $26.0 billion at March 31, 2002.

"In our worldwide Life Insurance business, operating income rose 17.4 percent to $1.36 billion from the first quarter of 2001. Overall Asian life operations were very satisfactory. Japan, our largest foreign life business, achieved strong performance, and results in Korea were excellent. Nan Shan Life Insurance Company in Taiwan had good results in the first quarter despite a weak economy, and recent economic trends look encouraging. Nan Shan recently received approval from the Ministry of Finance to open a representative office in China. Elsewhere, our Central European life operations had a good quarter and our recently established office in Russia is doing well. Operations in Latin America also had satisfactory results.

"Overseas, we have invested in markets with tremendous opportunity for future growth. In India, whose population exceeds one billion, our new operations are proceeding well. In China, AIG will be the first foreign company to be granted licenses to operate branches in four major cities, Beijing, Suzhou, Dongguan and Jiangmen, and we expect our new branches to be operational shortly. In Vietnam, we have established an important foothold with approximately 6,000 agents and rapidly growing operations. In Korea, where we already have a successful track record, the demand for life insurance products is experiencing strong growth. In Japan, AIG's largest overseas life market, our new AIG Star Life Insurance Co., Ltd. and ALICO are both benefiting from a flight to quality.

"The domestic life business was right on target. The integration of American General is proceeding well. We are on or ahead of schedule in implementing our key productivity and cross-marketing goals, and we will meet or exceed our target of $400 million in cost savings by 2003. AIG Annuity Insurance Company (previously American General Annuity), which is the leading provider of annuities sold through banks, had an excellent quarter as a result of the strong consumer demand for fixed income investments. Looking to the future, we expect that many of the initiatives underway will increase the growth rate of our domestic life insurance operations to complement the strong growth we have had in the foreign life business. American General is successfully adopting to a profit center-focused organization that enhances both its efficiency and market responsiveness. In addition, American General's home services business, which we have been managing as a closed block, has been able to improve its persistency and is cross-marketing new products and recruiting new agents.

"Financial Services operating income was $473.9 million, up 10.2 percent over the first quarter of 2001. International Lease Finance Corporation earned $173.1 million versus $160.5 million in the first quarter of 2001, an outstanding performance in a depressed market for airline travel. AIG Financial Products Corp. also performed well, with operating income of $176.2 million versus $165.2 million last year, despite slower capital market activity in the quarter. Our consumer finance businesses, led by American General Finance, Inc., had excellent results, posting operating income of $124.4 million compared to $106.3 million in the first quarter of 2001. We are paying very careful attention to credit quality in light of continued weakness in the economy. Overseas consumer finance operations performed well, apart from our modest business in Argentina. AIG Trading Group Inc. continues to show improvement.

"Retirement Savings & Asset Management operating income was $299.7 million, compared to $269.8 million in the first quarter of 2001. The integration of SunAmerica and VALIC is proceeding well, and we expect to achieve greater operational efficiencies. By offering a full range of products, we are able to satisfy consumer demands in all stages of market and economic cycles. For example, demand for variable annuities and equity mutual funds has temporarily declined because of weak equity markets and economic uncertainty, but the sale of fixed income investments including VALIC's fixed-rate annuities has been strong. Furthermore, overall surrender activity remained basically flat with the prior year. VALIC had strong results in the quarter. Our institutional assets under management rose in the quarter, reflecting the addition of several new major accounts. At March 31, 2002, AIG's third party assets under management, including retail mutual funds and institutional accounts, totaled approximately $41 billion.

"SunAmerica Inc. investments in partnerships, high yield instruments and private equities, which historically have been very successful, had a weaker quarter. This class of investments has suffered in the past year, but we remain confident it will demonstrate superior returns over the long term. The Life Insurance segment has been restated in order to more clearly isolate within the Life Insurance segment only the income generated by the core businesses included in that segment. Income generated by the investment of capital held by SunAmerica Inc. outside of its life insurance subsidiaries is now included in restated Other Income (Deductions).

"The current global economic environment presents challenges as well as opportunities for our business. Economic growth has been increasing from the low levels of last year in most parts of the world. If interest rates rise as a result, net investment income should benefit, particularly in the light of the strong cash flow from our general insurance business. AIG continues to benefit from a flight to quality in the U.S. and around the world as businesses and individuals recognize the importance of doing business with strong and stable financial companies."

GENERAL INSURANCE

-- AIG's worldwide Life Insurance operations reported first quarter 2002 pretax
income before realized capital gains (losses) of $1.36 billion, an increase of
17.4 percent, compared to $1.15 billion last year.

-- Life Insurance premium income, deposits and other considerations increased
15.4 percent in the first quarter of 2002 to $12.82 billion from $11.11 billion
in 2001.

-- Life Insurance net investment income rose 8.0 percent to $2.90 billion for
the first quarter of 2002, compared to $2.69 billion for the same period last
year.

LIFE INSURANCE

-- AIG's worldwide Life Insurance operations reported first quarter 2002 pretax
income before realized capital gains (losses) of $1.36 billion, an increase of
17.4 percent, compared to $1.15 billion last year.

-- Life Insurance premium income, deposits and other considerations increased
15.4 percent in the first quarter of 2002 to $12.82 billion from $11.11 billion
in 2001.

-- Life Insurance net investment income rose 8.0 percent to $2.90 billion for
the first quarter of 2002, compared to $2.69 billion for the same period last
year.

FINANCIAL SERVICES

-- Financial Services pretax operating income rose 10.2 percent

to $473.9 million in the first quarter of 2002, compared to

$429.9 million in the same period last year.

RETIREMENT SAVINGS & ASSET MANAGEMENT

-- Retirement Savings & Asset Management pretax operating income

in the first quarter of 2002 amounted to $299.7 million, an

increase of 11.1 percent, compared to $269.8 million in 2001.

American International Group, Inc. (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 the second-largest U.S. life insurer. 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.

A conference call for the investment community will be held today at 9:00 a.m. EDT. The call will be broadcast live on the internet at:

www.aigcorporate.com/corpsite/webcast1.htm

The call will be archived at the same URL through Friday, May 3, 2002.

Caution concerning forward-looking statements

This press release may contain forward-looking statements. Please refer to AIG's Annual Report on Form 10-K for the year ended December 31, 2001 for a description of the business environment in which AIG operates and the important factors that may affect its business. AIG is not under any obligation to (and expressly disclaims any such obligations to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.

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

                                        Three Months Ended March 31,
                                         2002       2001(a)   Change
General Insurance Operations:
   Net Premiums Written             $  6,334,283 $  4,864,753   30.2 %
   Net Premiums Earned                 5,506,528    4,721,733   16.6
   Adjusted Underwriting Profit          309,701      256,404   20.8
   Net Investment Income                 745,366      715,913    4.1
   Income before Realized
      Capital Gains (Losses)           1,055,067      972,317    8.5
   Realized Capital Gains (Losses)      (121,758)     (20,863)     -
   Operating Income                 $    933,309 $    951,454   (1.9)%

           Loss Ratio                      75.24        75.64
           Expense Ratio                   20.52        20.25
           Combined Ratio                  95.76        95.89

Life Insurance Operations:
   Premium Income, Deposits and
      Other Considerations (b)      $ 12,817,182 $ 11,110,195   15.4 %
   Net Investment Income               2,902,586    2,688,511    8.0
   Income before Realized
      Capital Gains (Losses)           1,355,391    1,154,314   17.4
   Realized Capital Gains (Losses)       (28,761)     (17,822)     -
   Operating Income                    1,326,630    1,136,492   16.7

Financial Services Operating Income      473,914      429,935   10.2

Retirement Savings & Asset
      Management Operating Income        299,678      269,758   11.1

Other Realized Capital Gains (Losses)    (81,320)     (47,166)     -

Other Income (Deductions) - net            6,492       59,059  (89.0)

Income before Income Taxes, Minority
   Interest and Cumulative Effect
   of an Accounting Change             2,958,703    2,799,532    5.7

Income Taxes                             891,828      825,755      -

Income before Minority Interest
   and Cumulative Effect of an
   Accounting Change                   2,066,875    1,973,777    4.7

Minority Interest, after tax -
   Operating Income                      (87,024)    (111,122)     -

Minority Interest, after tax -
   Realized Capital Gains (Losses)           449       (1,155)     -

Income before Cumulative Effect
   of an Accounting Change             1,980,300    1,861,500    6.4

Cumulative Effect of an Accounting
   Change, net of tax (c)                      0       (6,246)     -

Net Income, as reported                1,980,300    1,855,254    6.7

Income, as adjusted (d)             $  2,130,695 $  1,918,058   11.1 %

Per Share - Diluted:
Net Income, as reported             $       0.75 $       0.70    7.1 %
Income, as adjusted (d)             $       0.81 $       0.72   12.5 %


Average Diluted Common
   Shares Outstanding                  2,640,990    2,651,260


(a) Restated to include American General Corporation acquired August
    29, 2001 and to conform to the presentation with respect to 2002.
(b) GAAP premium income was $4,783,447 for the first quarter 2002,
    compared to $4,369,431 in the first quarter 2001.
(c) Represents the cumulative effect of an accounting change, net of
    tax, related to FASB 133 "Accounting for Derivative Instruments
    and Hedging Activities."
(d) Adjusted to exclude realized capital gains (losses) and the
    cumulative effect of an accounting change, net of taxes.


American International Group, Inc.
Supplementary Data
(in thousands)

                                         Three Months Ended March 31,
                                         2002        2001(a)   Change
General Insurance Operations:
   Net Premiums Written
      Domestic Brokerage Group      $  3,446,162 $   2,406,654  43.2 %
      Personal Lines                     726,100       634,502  14.4
      Mortgage Guaranty                  122,222       118,519   3.1
      Transatlantic Holdings             563,555       445,679  26.4
      Foreign General (b)(c)           1,476,244     1,259,399  17.2
      Total                            6,334,283     4,864,753  30.2

      Total Domestic (d)               4,612,427     3,402,873  35.5
      Total Foreign (d)                1,721,856     1,461,880  17.8

   Operating Income (e)
      Domestic Brokerage Group           531,088       491,044   8.2
      Personal Lines                      23,136        12,461  85.7
      Mortgage Guaranty                  111,649       102,044   9.4
      Transatlantic Holdings              72,048        59,873  20.3
      Foreign General (b)                311,463       301,065   3.5
      Intercompany Adjustments             5,683         5,830     -
      Total                            1,055,067       972,317   8.5

      Total Domestic (d)                 727,457       673,127   8.1
      Total Foreign (d)             $    327,610 $     299,190   9.5 %

   Combined Ratio:
      Domestic Brokerage Group             97.65         98.63
      Personal Lines                      101.08        103.47
      Mortgage Guaranty                    41.49         35.96
      Transatlantic Holdings               98.19         99.63
      Foreign General (b)                  91.95         90.98

      Total Domestic (d)                   96.39         96.93
      Total Foreign (d)                    93.28         93.14

   Losses and Loss Expenses Paid    $  4,016,317 $   3,508,840  14.5 %
   Change in Loss and
      Loss Expense Reserve               126,966        62,780 102.2
   Losses and Loss Expenses Incurred   4,143,283     3,571,620  16.0

   Net Loss and Loss Expense Reserve  26,022,478    25,014,376   4.0

   GAAP Underwriting Profit              309,701       256,404  20.8

Life Insurance Operations:
   Premium Income, Deposits and
    Other Considerations
      Domestic
        Life                           1,116,934     1,065,082   4.9
        Fixed Annuities, Pension
         and Investment Products       6,154,716     5,298,269  16.2
        Accident & Health (f)                  0        77,495     -
        Total                          7,271,650     6,440,846  12.9

      Foreign
        Life                           4,453,534     3,773,191  18.0
        Personal Accident                563,469       479,364  17.5
        Group Life/Medical               288,796       247,152  16.8
        Fixed Annuity/Pension            239,733       169,642  41.3
        Total (g)                      5,545,532     4,669,349  18.8

   Net Investment Income
      Domestic
        Life                             527,326       524,678   0.5
        Fixed Annuities, Pension
         and Investment Products       1,425,012     1,307,986   8.9
        Accident & Health (f)                  0         2,230     -
        Intercompany Adjustments             (57)          (50)    -
        Total                          1,952,281     1,834,844   6.4

      Foreign
        Life                             844,463       752,754  12.2
        Personal Accident                 33,057        32,658   1.2
        Group Life/Medical                10,473        11,375  (7.9)
        Fixed Annuity/Pension             65,069        59,309   9.7
        Intercompany Adjustments          (2,757)       (2,429)    -
        Total                            950,305       853,667  11.3

   Operating Income (e)
      Domestic
        Life                             276,144       250,086  10.4
        Fixed Annuities, Pension
         and Investment Products         356,138       307,307  15.9
        Accident & Health (f)                  0         3,708     -
        Intercompany Adjustments             (57)          (50)    -
        Total                            632,225       561,051  12.7

      Foreign
        Life                             533,928       423,524  26.1
        Personal Accident                153,586       138,636  10.8
        Group Life/Medical                30,102        23,815  26.4
        Fixed Annuity/Pension              8,307         9,717 (14.5)
        Intercompany Adjustments          (2,757)       (2,429)    -
        Total                            723,166       593,263  21.9

      Total Operating Income           1,355,391     1,154,314  17.4

      Total Operating Income excluding
           Home Services Business      1,260,001     1,059,524  18.9

Financial Services:
   Revenues
      International Lease
           Finance Corp.                 640,842       621,605   3.1
      AIG Financial Products Corp.       272,095       247,691   9.9
      Consumer Finance                   612,937       615,565  (0.4)
      AIG Trading Group Inc.              43,221        38,892  11.1
      Other                               (2,604)       (8,784)    -
      Total                            1,566,491     1,514,969   3.4

   Operating Income
      International Lease
           Finance Corp.                 173,088       160,490   7.8
      AIG Financial Products Corp.       176,172       165,244   6.6
      Consumer Finance                   124,371       106,324  17.0
      AIG Trading Group Inc.              10,115         6,517  55.2
      Other (h)                           (9,832)       (8,640)    -
      Total                              473,914       429,935  10.2

   Retirement Savings & Asset Management:
      Revenues
           VALIC (i)                     534,495       526,796   1.5
           SunAmerica (j)                153,932       172,849 (10.9)
           Other Asset Management and
              Annuity Operations (k)     176,392       168,768   4.5
           Total                         864,819       868,413  (0.4)

      Operating Income
           VALIC (i)                     191,535       163,246  17.3
           SunAmerica (j)                 38,825        62,445 (37.8)
           Other Asset Management and
              Annuity Operations (k)      69,318        44,067  57.3
           Total                         299,678       269,758  11.1

      Variable Annuity Net Sales
           Sales
             VALIC                       772,019       784,966  (1.6)
             SunAmerica                  704,838       882,761 (20.2)
           Surrenders
             VALIC                       296,675       281,677   5.3
             SunAmerica                  414,725       447,987  (7.4)
           Total
             VALIC                       475,344       503,289  (5.6)
             SunAmerica                  290,113       434,774 (33.3)
           Total Net Sales          $    765,457 $     938,063 (18.4)%


Effective Tax Rates:
   Excluding Realized Capital
      Gains (Losses)                       30.49%        29.67%
   Realized Capital
      Gains (Losses) Alone                 34.94%        35.47%
   As Reported                             30.14%        29.50%


(a) Restated to include American General Corporation acquired August
    29, 2001 and to conform to the presentation with respect to 2002.
(b) Foreign general insurance excludes the foreign operations of
    Transatlantic Holdings, Inc.
(c) The growth in Foreign General net premiums written in original
    currency was 29.2 percent for the first quarter 2002.
(d) Total domestic and total foreign include the domestic and foreign
    operations of Transatlantic Holdings, Inc., respectively.
(e) Operating income excludes realized capital gains (losses).
(f) Accident & Health is now reported in Domestic Brokerage Group.
(g) The growth in foreign premium income, deposits and other
    considerations in original currency was 26.0 percent in the
    quarter.
(h) Includes Other Financial Services Companies and Intercompany
    Reclassifications.
(i) VALIC's revenues and operating income include the sale of both
    variable and fixed annuity products.
(j) Includes variable annuity, mutual fund and broker-dealer
    operations.
(k) Includes AIG Global Investment Group, AIG Private Bank, John
    McStay Investment Counsel and certain overseas variable annuity
    operations.