Greenberg: GE deal will boost AIG's, profile in Japan.

Maurice R. Greenberg, AIG's chairman And chief executive officer, said in a conference call that his company's acquisition of GE Edison Life Insurance Co. in Japan is expected to contribute to the earnings of AIG's two current businesses in that country within the first year. In addition, it is likely to contribute as much as $50 million in cost savings within the next few years.

AIG plans to pursue cost-saving measures between its two current Japanese operations--AIG Star Life and American Life insurance Co., or Alico--and the GE Edison unit, said Greenberg. "There is a new holding-company law in Japan that will allow us to consolidate backroom functions for all three companies," he said. "We have no plans to merge the acquired company into AIG Life or Alico."

In addition, the 4,000-plus sales agents of GE Edison will boost AIG's agency force in Japan to more than 12,000. "It gives us a lot of muscle in Japan," said Greenberg. GE Edison "will be accretive to earnings in the first year" and is expected to earn about $200 million a year for AIG, he said.

Greenberg, who said he had just returned from Japan, remarked that the Japanese life industry "is not growing rapidly." AIG's Alico unit is growing "at double digits," he said. "We are doing well because our products are good, and there is a flight to quality."

Products that are selling well in Japan include hospitalization, traditional life and protection products. "Dollar-based fixed annuities are growing rapidly," he said. "With the new products we can produce and the cross-marketing we can do, there will be more growth opportunities."