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(Mark One)
þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the fiscal year ended December 31, 2007
or
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from                  to

Delaware		13-2592361
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
70 Pine Street, New York, New York (Address of principal executive offices)		10270 (Zip Code)

		Name of each exchange
Title of each class		on which registered
Common Stock, Par Value $2.50 Per Share		New York Stock Exchange
5.75% Series A-2 Junior Subordinated Debentures		New York Stock Exchange
4.875% Series A-3 Junior Subordinated Debentures		New York Stock Exchange
6.45% Series A-4 Junior Subordinated Debentures		New York Stock Exchange
7.70% Series A-5 Junior Subordinated Debentures		New York Stock Exchange
NIKKEI 225® Index Market Index Target-Term Securities® due January 5, 2011		American Stock Exchange

Title of each class
None

Large Accelerated Filer þ		Accelerated Filer o		Non-Accelerated Filer o		Smaller Reporting Company o
				(Do not check if a smaller reporting company)

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Index					Page
Part I
	Item 1.		Business			3
	Item 1A.		Risk Factors			16
	Item 1B.		Unresolved Staff Comments			19
	Item 2.		Properties			20
	Item 3.		Legal Proceedings			20
	Item 4.		Submission of Matters to a Vote of Security Holders			25
Part II
	Item 5.		Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			26
	Item 6.		Selected Financial Data			28
	Item 7.		Management’s Discussion and Analysis of Financial Condition and Results of Operations			29
	Item 7A.		Quantitative and Qualitative Disclosures About Market Risk			128
	Item 8.		Financial Statements and Supplementary Data			128
	Item 9.		Changes in and Disagreements With Accountants on Accounting and Financial Disclosure			202
	Item 9A.		Controls and Procedures			202
	Item 9B.		Other Information			204
Part III*
	Item 10.		Directors, Executive Officers and Corporate Governance			205
	Item 11.		Executive Compensation			205
	Item 12.		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			205
	Item 13.		Certain Relationships and Related Transactions, and Director Independence			205
	Item 14.		Principal Accountant Fees and Services			205
Part IV
	Item 15.		Exhibits and Financial Statement Schedules			205
Signatures						206
EX-12: STATEMENT RE COMPUTATION OF RATIOS
EX-21: SUBSIDIARIES
EX-23: CONSENT OF PRICEWATERHOUSECOOPERS LLP
EX-31: CERTIFICATIONS
EX-32: CERTIFICATIONS

*	Except for the information provided in Part I under the heading “Directors and Executive Officers of AIG,” Part III Items 10, 11, 12, 13 and 14 are included in AIG’s Definitive Proxy Statement to be used in connection with AIG’s Annual Meeting of Shareholders scheduled to be held on May 14, 2008.

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	American Home Assurance Company (American Home)
	National Union Fire Insurance Company of Pittsburgh, Pa. (National Union)
	New Hampshire Insurance Company (New Hampshire)
	Lexington Insurance Company (Lexington)
	The Hartford Steam Boiler Inspection and Insurance Company (HSB)
	Transatlantic Reinsurance Company
	United Guaranty Residential Insurance Company
	American International Underwriters Overseas, Ltd. (AIUO)
	AIU Insurance Company (AIUI)

	Domestic:
	American General Life Insurance Company (AIG American General)
	American General Life and Accident Insurance Company (AGLA)
	The United States Life Insurance Company in the City of New York (USLIFE)
	The Variable Annuity Life Insurance Company (VALIC)
	AIG Annuity Insurance Company (AIG Annuity)
	AIG SunAmerica Life Assurance Company (AIG SunAmerica)
	Foreign:
	American Life Insurance Company (ALICO)
	AIG Star Life Insurance Co., Ltd. (AIG Star Life)
	AIG Edison Life Insurance Company (AIG Edison Life)
	American International Assurance Company, Limited, together with American International Assurance Company (Bermuda) Limited (AIA)
	American International Reinsurance Company Limited (AIRCO)
	Nan Shan Life Insurance Company, Ltd. (Nan Shan)
	The Philippine American Life and General Insurance Company (Philamlife)

	International Lease Finance Corporation (ILFC)
	AIG Financial Products Corp. and AIG Trading Group Inc. and their respective subsidiaries (collectively, AIGFP)
	American General Finance, Inc. (AGF)
	AIG Consumer Finance Group, Inc. (AIGCFG)
	Imperial A.I. Credit Companies (A.I. Credit)

	AIG SunAmerica Asset Management Corp. (SAAMCo)
	AIG Global Asset Management Holdings Corp. and its subsidiaries and affiliated companies (collectively, AIG Investments)
	AIG Private Bank Ltd. (AIG Private Bank)
	AIG Global Real Estate Investment Corp. (AIG Global Real Estate)

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Years Ended December 31,
(in millions)				2007				2006(a)				2005(a)				2004(a)				2003(a)
General Insurance operations:
	Gross premiums written			$	58,798			$	56,280			$	52,725			$	52,046			$	46,938
	Net premiums written				47,067				44,866				41,872				40,623				35,031
	Net premiums earned				45,682				43,451				40,809				38,537				31,306
	Net investment income(b)				6,132				5,696				4,031				3,196				2,566
	Net realized capital gains (losses)				(106	)			59				334				228				(39	)
	Operating income(b)(c)(d)				10,526				10,412				2,315				3,177				4,502
	Year-end identifiable assets				181,708				167,004				150,667				131,658				117,511
Statutory measures(e):
	Statutory underwriting profit (loss)(c)(d)				4,073				4,408				(2,165	)			(564	)			1,559
	Loss ratio				65.6				64.6				81.1				78.8				73.1
	Expense ratio				24.7				24.5				23.6				21.5				19.6
	Combined ratio(d)				90.3				89.1				104.7				100.3				92.7
Life Insurance & Retirement Services operations:
	Premiums and other considerations				33,627				30,766				29,501				28,167				23,568
	Net investment income(b)				22,341				20,024				18,677				15,654				13,278
	Net realized capital gains (losses)(f)				(2,398	)			88				(158	)			45				362
	Operating income(b)(f)				8,186				10,121				8,965				7,968				6,970
	Year-end identifiable assets				615,386				550,957				489,331				457,071				380,126
	Gross insurance in force at end of year				2,312,045				2,070,600				1,852,833				1,858,094				1,583,031
Financial Services operations:
	Interest, lease and finance charges(g)(h)				(1,209	)			7,910				10,523				7,495				6,241
	Net realized capital gains (losses)				(100	)			(133	)			154				(45	)			123
	Operating income (loss)(g)(h)				(9,515	)			383				4,424				2,131				1,302
	Year-end identifiable assets				203,894				202,485				161,919				161,929				138,613
Asset Management operations:
	Investment income from spread-based products and management, advisory and incentive fees				6,625				4,668				4,500				4,179				3,379
	Net realized capital gains (losses)				(1,000	)			(125	)			82				60				(754	)
	Operating income				1,164				1,538				1,963				1,947				521
	Year-end identifiable assets				77,274				78,275				69,584				68,503				56,047
Other operations:
		Net realized capital gains (losses)			12				217				(71	)			(244	)			(134	)
		All other(i)			(1,430	)			(984	)			(2,383	)			(134	)			(1,254	)
Consolidated:
	Total revenues(j)(k)				110,064				113,387				108,781				97,823				79,601
	Operating income(b)(j)(k)				8,943				21,687				15,213				14,845				11,907
	Year-end total assets				1,060,505				979,410				853,048				801,007				675,602

(a)	Certain reclassifications have been made to prior period amounts to conform to the current period presentation.
(b)	In 2006, includes the effect of out of period adjustments related to the accounting for certain interests in unit investment trusts (UCITS). The effect was an increase of $490 million in both revenues and operating income for General Insurance and an increase of $240 million and $169 million in revenues and operating income, respectively, for Life Insurance & Retirement Services.
(c)	Includes current year catastrophe-related losses of $276 million, $2.89 billion and $1.05 billion in 2007, 2005 and 2004, respectively. There were no significant catastrophe-related losses in 2006 or 2003.

(d)	Operating income was reduced by fourth quarter charges of $1.8 billion and $850 million in 2005 and 2004, respectively, resulting from the annual review of General Insurance loss and loss adjustment reserves. In 2006, 2005 and 2004, changes in estimates for asbestos and environmental reserves were $198 million, $873 million and $850 million, respectively.
(e)	Calculated on the basis under which the U.S.-domiciled general insurance companies are required to report such measurements to regulatory authorities.

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(f)	In 2007, 2006, 2005, 2004 and 2003, includes other-than-temporary impairment charges of $2.8 billion, $641 million, $425 million, $441 million and $1.2 billion. See Management’s Discussion and Analysis of Financial Condition and Results of Operations — Invested Assets — Other-than-temporary impairments.
(g)	Includes gains (losses) from hedging activities that did not qualify for hedge accounting treatment under Statement of Financial Accounting Standards (FAS) No. 133, “Accounting for Derivative Instruments and Hedging Activities” (FAS 133), including the related foreign exchange gains and losses. In 2007, 2006, 2005, 2004 and 2003, respectively, the effect was $211 million, $(1.82) billion, $2.01 billion, $(122) million and $(1.01) billion in both revenues and operating income for Capital Markets. These amounts result primarily from interest rate and foreign currency derivatives that are effective economic hedges of investments and borrowings. These gains (losses) in 2007 include a $380 million out of period charge to reverse net gains recognized on transfers of available for sale securities among legal entities consolidated within AIGFP. In 2006, includes an out of period charge of $223 million related to the remediation of the material weakness in internal control over the accounting for certain derivative transactions under FAS 133. In the first quarter of 2007, AIGFP began applying hedge accounting for certain of its interest rate swaps and foreign currency forward contracts hedging its investments and borrowings.

(h)

In 2007, both revenues and operating income (loss) include an unrealized market valuation loss of $11.5 billion on AIGFP super senior credit default swap portfolio and an other-than-temporary impairment charge of $643 million on AIGFP’s available for sale investment securities. See Management’s Discussion and Analysis of Financial Condition and Results of Operations — Invested Assets — Other-than- temporary impairments.

(i)	In 2005, includes $1.6 billion of regulatory settlement costs as described under Item 3. Legal Proceedings.
(j)	In 2007, 2006, 2005, 2004 and 2003, includes other-than-temporary impairment charges of $4.7 billion, $944 million, $598 million, $684 million and $1.5 billion. Also includes gains (losses) from hedging activities that did not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange gains and losses. In 2007, 2006, 2005, 2004 and 2003, respectively, the effect was $(1.44) billion, $(1.87) billion, $2.02 billion, $385 million and $(1.50) billion in revenues and $(1.44) billion, $(1.87) billion, $2.02 billion, $671 million and $(1.22) billion in operating income. These amounts result primarily from interest rate and foreign currency derivatives that are effective economic hedges of investments and borrowings.
(k)	Represents income before income taxes, minority interest and cumulative effect of accounting changes.

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(in millions)			1997				1998				1999				2000				2001				2002				2003				2004				2005				2006				2007
Net Reserves Held			$	20,901			$	25,418			$	25,636			$	25,684			$	26,005			$	29,347			$	36,228			$	47,254			$	57,476			$	62,630			$	69,288
Discount (in Reserves Held)				619				897				1,075				1,287				1,423				1,499				1,516				1,553				2,110				2,264				2,429
Net Reserves Held (Undiscounted)				21,520				26,315				26,711				26,971				27,428				30,846				37,744				48,807				59,586				64,894				71,717
Paid (Cumulative) as of:
	One year later			5,607				7,205				8,266				9,709				11,007				10,775				12,163				14,910				15,326				14,862
	Two years later			9,754				12,382				14,640				17,149				18,091				18,589				21,773				24,377				25,152
	Three years later			12,939				16,599				19,901				21,930				23,881				25,513				28,763				31,296
	Four years later			15,484				20,263				23,074				26,090				28,717				30,757				33,825
	Five years later			17,637				22,303				25,829				29,473				32,685				34,627
	Six years later			18,806				24,114				28,165				32,421				35,656
	Seven years later			19,919				25,770				30,336				34,660
	Eight years later			21,089				27,309				31,956
	Nine years later			22,177				28,626
	Ten years later			23,096

(in millions)			1997				1998				1999				2000				2001				2002				2003				2004				2005				2006				2007
Net Reserves Held (undiscounted)			$	21,520			$	26,315			$	26,711			$	26,971			$	27,428			$	30,846			$	37,744			$	48,807			$	59,586			$	64,894			$	71,717
Undiscounted Liability as of:
	One year later			21,563				25,897				26,358				26,979				31,112				32,913				40,931				53,486				59,533				64,238
	Two years later			21,500				25,638				27,023				30,696				33,363				37,583				49,463				55,009				60,126
	Three years later			21,264				26,169				29,994				32,732				37,964				46,179				51,497				56,047
	Four years later			21,485				28,021				31,192				36,210				45,203				48,427				52,964
	Five years later			22,405				28,607				33,910				41,699				47,078				49,855
	Six years later			22,720				30,632				38,087				43,543				48,273
	Seven years later			24,209				33,861				39,597				44,475
	Eight years later			26,747				34,986				40,217
	Nine years later			27,765				35,556
	Ten years later			28,104
Net Redundancy/(Deficiency)				(6,584	)			(9,241	)			(13,506	)			(17,504	)			(20,845	)			(19,009	)			(15,220	)			(7,240	)			(540	)			656
Remaining Reserves (Undiscounted)				5,008				6,930				8,261				9,815				12,617				15,228				19,139				24,751				34,974				49,376
Remaining Discount				418				499				591				705				851				1,005				1,155				1,319				1,563				1,937
Remaining Reserves				4,590				6,431				7,670				9,110				11,766				14,223				17,984				23,432				33,411				47,439

(in millions)		1997				1998				1999				2000				2001				2002				2003				2004				2005				2006				2007
Gross Liability, End of Year		$	32,049			$	36,973			$	37,278			$	39,222			$	42,629			$	48,173			$	53,387			$	63,431			$	79,279			$	82,263			$	87,929
Reinsurance Recoverable, End of Year			10,529				10,658				10,567				12,251				15,201				17,327				15,643				14,624				19,693				17,369				16,212
Net Liability, End of Year			21,520				26,315				26,711				26,971				27,428				30,846				37,744				48,807				59,586				64,894				71,717
Reestimated Gross Liability			44,844				54,284				60,212				66,308				70,680				72,234				72,944				74,434				80,941				81,695
Reestimated Reinsurance Recoverable			16,740				18,729				19,995				21,833				22,407				22,379				19,980				18,386				20,816				17,457
Reestimated Net Liability			28,104				35,555				40,217				44,475				48,273				49,855				52,964				56,048				60,125				64,238
Cumulative Gross Redundancy/(Deficiency)			(12,795	)			(17,311	)			(22,934	)			(27,086	)			(28,051	)			(24,061	)			(19,557	)			(11,003	)			(1,662	)			568

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(in millions)			1997				1998				1999				2000				2001				2002				2003				2004				2005				2006				2007
Net Reserves Held			$	20,113			$	24,554			$	24,745			$	24,829			$	25,286			$	28,650			$	35,559			$	45,742			$	55,227			$	60,451			$	67,597
Discount (in Reserves Held)				619				897				1,075				1,287				1,423				1,499				1,516				1,553				2,110				2,264				2,429
Net Reserves Held (Undiscounted)				20,732				25,451				25,820				26,116				26,709				30,149				37,075				47,295				57,336				62,715				70,026
Paid (Cumulative) as of:
	One year later			5,467				7,084				8,195				9,515				10,861				10,632				11,999				14,718				15,047				14,356
	Two years later			9,500				12,190				14,376				16,808				17,801				18,283				21,419				23,906				24,367
	Three years later			12,618				16,214				19,490				21,447				23,430				25,021				28,129				30,320
	Four years later			14,972				19,732				22,521				25,445				28,080				29,987				32,686
	Five years later			16,983				21,630				25,116				28,643				31,771				33,353
	Six years later			18,014				23,282				27,266				31,315				34,238
	Seven years later			18,972				24,753				29,162				33,051
	Eight years later			19,960				26,017				30,279
	Nine years later			20,779				26,832
	Ten years later			21,202

(in millions)			1997				1998				1999				2000				2001				2002				2003				2004				2005				2006				2007
Net Reserves Held (undiscounted)			$	20,732			$	25,451			$	25,820			$	26,116			$	26,709			$	30,149			$	37,075			$	47,295			$	57,336			$	62,715			$	70,026
Undiscounted Liability as of:
	One year later			20,576				24,890				25,437				26,071				30,274				32,129				39,261				51,048				57,077				62,043
	Two years later			20,385				24,602				26,053				29,670				32,438				35,803				46,865				52,364				57,653
	Three years later			20,120				25,084				28,902				31,619				36,043				43,467				48,691				53,385
	Four years later			20,301				26,813				30,014				34,102				42,348				45,510				50,140
	Five years later			21,104				27,314				31,738				38,655				44,018				46,925
	Six years later			21,336				28,345				34,978				40,294				45,201
	Seven years later			21,836				30,636				36,283				41,213
	Eight years later			23,441				31,556				36,889
	Nine years later			24,261				32,113
	Ten years later			24,588
Net Redundancy/(Deficiency)				(3,856	)			(6,662	)			(11,069	)			(15,097	)			(18,492	)			(16,776	)			(13,065	)			(6,090	)			(317	)			672
Remaining Reserves (undiscounted)				3,386				5,281				6,610				8,162				10,963				13,572				17,454				23,065				33,286				47,687
Remaining Discount				418				499				591				705				851				1,005				1,155				1,319				1,563				1,937
Remaining Reserves				2,968				4,782				6,019				7,457				10,112				12,567				16,299				21,746				31,723				45,750

(in millions)		1997				1998				1999				2000				2001				2002				2003				2004				2005				2006				2007
Gross Liability, End of Year		$	29,740			$	34,474			$	34,666			$	36,777			$	40,400			$	46,036			$	51,363			$	59,790			$	73,808			$	77,111			$	83,551
Reinsurance Recoverable, End of Year			9,008				9,023				8,846				10,661				13,691				15,887				14,288				12,495				16,472				14,396				13,525
Net Liability, End of Year			20,732				25,451				25,820				26,116				26,709				30,149				37,075				47,295				57,336				62,715				70,026
Reestimated Gross Liability			35,712				45,467				51,801				58,420				63,320				65,217				66,320				68,100				75,028				76,439
Reestimated Reinsurance Recoverable			11,124				13,354				14,912				17,207				18,119				18,292				16,180				14,715				17,375				14,396
Reestimated Net Liability			24,588				32,113				36,889				41,213				45,201				46,925				50,140				53,385				57,653				62,043
Cumulative Gross Redundancy/(Deficiency)			(5,972	)			(10,993	)			(17,135	)			(21,643	)			(22,920	)			(19,181	)			(14,957	)			(8,310	)			(1,220	)			672

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			Annual Average Cash and Invested Assets
			Cash												Return on
			(including												Average Cash				Return on
Years Ended December 31,			short-term				Invested								and Invested				Average Invested
(in millions)			investments)(a)				Assets(a)				Total				Assets(b)				Assets(c)
General Insurance:
	2007		$	5,874			$	117,050			$	122,924				5.0	%			5.2	%
	2006			3,201				102,231				105,432				5.4				5.6
	2005			2,450				86,211				88,661				4.5				4.7
	2004			2,012				73,338				75,350				4.2				4.4
	2003			1,818				59,855				61,673				4.2				4.3
Life Insurance & Retirement Services:
	2007		$	25,926			$	423,473			$	449,669				5.0	%			5.3	%
	2006			13,698				392,348				406,046				4.9				5.1
	2005			11,137				356,839				367,976				5.1				5.2
	2004			7,737				309,627				317,364				4.9				5.1
	2003			4,680				247,608				252,288				5.3				5.4

(a)	Including investment income due and accrued and real estate. Also, includes collateral assets invested under the global securities lending program.
(b)	Net investment income divided by the annual average sum of cash and invested assets.
(c)	Net investment income divided by the annual average invested assets.

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						Served as
						Director or
Name		Title		Age		Officer Since
Stephen F. Bollenbach		Director		65		2008
Marshall A. Cohen		Director		72		1992
Martin S. Feldstein		Director		68		1987
Ellen V. Futter		Director		58		1999
Stephen L. Hammerman		Director		69		2005
Richard C. Holbrooke		Director		66		2001
Fred H. Langhammer		Director		64		2006
George L. Miles, Jr.		Director		66		2005
Morris W. Offit		Director		71		2005
James F. Orr III		Director		64		2006
Virginia M. Rometty		Director		50		2006
Martin J. Sullivan		Director, President and Chief Executive Officer		53		2002
Michael H. Sutton		Director		67		2005
Edmund S. W. Tse		Director, Senior Vice Chairman – Life Insurance		70		1996
Robert B. Willumstad		Director and Chairman		62		2006
Frank G. Zarb		Director		73		2001
Jacob A. Frenkel		Vice Chairman – Global Economic Strategies		64		2004
Frank G. Wisner		Vice Chairman – External Affairs		69		1997
Steven J. Bensinger		Executive Vice President and Chief Financial Officer		53		2002
Anastasia D. Kelly		Executive Vice President, General Counsel and Senior Regulatory and Compliance Officer		58		2006
Rodney O. Martin, Jr.		Executive Vice President – Life Insurance		55		2002
Kristian P. Moor		Executive Vice President – Domestic General Insurance		48		1998
Win J. Neuger		Executive Vice President and Chief Investment Officer		58		1995
Robert M. Sandler		Executive Vice President – Domestic Personal Lines		65		1980
Nicholas C. Walsh		Executive Vice President – Foreign General Insurance		57		2005
Jay S. Wintrob		Executive Vice President – Retirement Services		50		1999
William N. Dooley		Senior Vice President – Financial Services		55		1992
David L. Herzog		Senior Vice President and Comptroller		48		2005
Andrew J. Kaslow		Senior Vice President and Chief Human Resources Officer		57		2007
Robert E. Lewis		Senior Vice President and Chief Risk Officer		56		1993
Brian T. Schreiber		Senior Vice President – Strategic Planning		42		2002

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	•	Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. (S&P) affirmed its ‘AA’ counterparty credit ratings on AIG and its ‘AA+’ counterparty credit and financial strength ratings on AIG’s core subsidiaries, but revised the rating outlook to negative. In addition, S&P revised its rating outlook on ILFC’s corporate credit rating (AA-) to negative. A negative ratings outlook by S&P indicates that a rating may be lowered, but is not necessarily a precursor of a ratings change.
	•	Moody’s Investors Service (Moody’s) changed its rating outlook for AIG and its subsidiaries that have substantial exposure to the U.S. subprime mortgage market or whose ratings rely on significant explicit or implicit support from AIG to negative. Moody’s rates AIG ‘Aa2’ and nearly all of its insurance subsidiaries either ‘Aa1’ or ‘Aa2’. A negative ratings outlook by Moody’s indicates that a rating may be lowered, but is not necessarily a precursor of a ratings change.
	•	Fitch Ratings (Fitch) placed AIG’s and its subsidiaries’ long-term debt ratings (AA), including ILFC (A+) and AGF (A+), on Rating Watch Negative. Rating Watch Negative indicates that a rating has been placed on active rating watch status. Fitch indicated that it expects to resolve the Rating Watch after it reviews AIG’s 2007 audited financial statements.
	•	A.M. Best Company (A.M. Best) placed most of its financial strength and issuer credit ratings on AIG’s domestic Life Insurance and Retirement Services (A++) and Domestic General Insurance subsidiaries (including Transatlantic) (A+), as well as AIG’s issuer credit rating (AA), under review with negative implications. A.M. Best indicated that following a detailed review of AIG’s 2007 audited financial statements and further discussion with AIG management, it will re-evaluate the “under review” rating status.

	•	increasing AIG’s interest expense;
	•	reducing AIGFP’s ability to compete in the structured products and derivatives businesses;
	•	reducing the competitive advantage of AIG’s insurance subsidiaries, which may result in reduced product sales;
	•	adversely affecting relationships with agents and sales representatives;
	•	in the case of a downgrade of AGF or ILFC, increasing their interest expense and reducing their ability to compete in their respective businesses; and
	•	triggering the application of a termination provision in certain of AIG’s contracts, principally agreements entered into by AIGFP and assumed reinsurance contracts entered into by Transatlantic.

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	•	widespread claim costs associated with property, workers compensation, mortality and morbidity claims;
	•	loss resulting from the value of invested assets declining to below the amount required to meet the policy and contract liabilities; and
	•	loss resulting from actual policy experience emerging adversely in comparison to the assumptions made in the product pricing related to mortality, morbidity, termination and expenses.

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		2007												2006
										Dividends												Dividends
		High				Low				Paid				High				Low				Paid
First quarter		$	72.15			$	66.77			$	0.165			$	70.83			$	65.35			$	0.150
Second quarter			72.65				66.49				0.165				66.54				58.67				0.150
Third quarter			70.44				61.64				0.200				66.48				57.76				0.165
Fourth quarter			70.11				51.33				0.200				72.81				66.30				0.165

														Maximum Number
										Total Number				of Shares that
										of Shares				May Yet Be
		Total Number								Purchased as Part				Purchased Under the
		of Shares				Average Price				of Publicly Announced				Plans or Programs
Period		Purchased(a)(b)				Paid per Share				Plans or Programs				at End of Month(b)
October 1 - 31, 2007			13,964,098			$	66.12				13,964,098
November 1 - 30, 2007			5,709,067				61.56				5,709,067
December 1 - 31, 2007			1,584,199				55.58				1,584,199
Total			21,257,364			$	64.11				21,257,364

(a)	Reflects date of delivery. Does not include 49,583 shares delivered or attested to in satisfaction of the exercise price by holders of AIG employee stock options exercised during the three months ended December 31, 2007 or 23,300 shares purchased by ILFC to satisfy obligations under employee benefit plans.
(b)	In February 2007, AIG’s Board of Directors increased AIG’s share repurchase program by authorizing the repurchase of shares with an aggregate purchase price of $8 billion. In November 2007, AIG’s Board of Directors authorized the repurchase of an additional $8 billion in common stock. A balance of $10.9 billion remained for purchases under the program as of December 31, 2007, although $912 million of that amount has been advanced by AIG to purchase shares under the program and an additional $1 billion was required to be advanced in January 2008 to meet commitments that existed at December 31, 2007.

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		As of December 31,
		2002				2003				2004				2005				2006				2007
AIG		$	100.00			$	115.02			$	114.43			$	119.98			$	127.24			$	104.67
S&P 500			100.00				128.68				142.69				149.70				173.34				182.86
Peer Group			100.00				126.10				145.73				179.22				207.37				216.60

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Years Ended December 31,
(in millions, except per share data)				2007				2006(a)				2005(a)				2004(a)				2003(a)
Revenues(b)(c)(d):
	Premiums and other considerations			$	79,302			$	74,213			$	70,310			$	66,704			$	54,874
	Net investment income				28,619				26,070				22,584				19,007				16,024
	Net realized capital gains (losses)				(3,592	)			106				341				44				(442	)
	Unrealized market valuation losses on AIGFP super senior credit default swap portfolio				(11,472	)			—				—				—				—
	Other income				17,207				12,998				15,546				12,068				9,145
Total revenues					110,064				113,387				108,781				97,823				79,601
Benefits and expenses:
	Incurred policy losses and benefits				66,115				60,287				64,100				58,600				46,362
	Insurance acquisition and other operating expenses				35,006				31,413				29,468				24,378				21,332
Total benefits and expenses					101,121				91,700				93,568				82,978				67,694
Income before income taxes, minority interest and cumulative effect of accounting changes (b)(c)(d)(e)(f)					8,943				21,687				15,213				14,845				11,907
Income taxes					1,455				6,537				4,258				4,407				3,556
Income before minority interest and cumulative effect of accounting changes					7,488				15,150				10,955				10,438				8,351
Minority interest					(1,288	)			(1,136	)			(478	)			(455	)			(252	)
Income before cumulative effect of accounting changes					6,200				14,014				10,477				9,983				8,099
Cumulative effect of accounting changes, net of tax					—				34				—				(144	)			9
Net income					6,200				14,048				10,477				9,839				8,108
Earnings per common share:
	Basic
		Income before cumulative effect of accounting changes			2.40				5.38				4.03				3.83				3.10
		Cumulative effect of accounting changes, net of tax			—				0.01				—				(0.06	)			—
		Net income			2.40				5.39				4.03				3.77				3.10
	Diluted
		Income before cumulative effect of accounting changes			2.39				5.35				3.99				3.79				3.07
		Cumulative effect of accounting changes, net of tax			—				0.01				—				(0.06	)			—
		Net income			2.39				5.36				3.99				3.73				3.07
Dividends declared per common share					0.77				0.65				0.63				0.29				0.24
Year-end balance sheet data:
	Total assets				1,060,505				979,410				853,048				801,007				675,602
	Long-term borrowings(g)				162,935				135,316				100,314				86,653				73,881
	Commercial paper and extendible commercial notes				13,114				13,363				9,535				10,246				6,468
	Total liabilities				964,604				877,542				766,545				721,135				606,180
	Shareholders’ equity			$	95,801			$	101,677			$	86,317			$	79,673			$	69,230

(a)	Certain reclassifications have been made to prior period amounts to conform to the current period presentation.
(b)	In 2007, 2006, 2005, 2004 and 2003, includes other-than-temporary impairment charges of $4.7 billion, $944 million, $598 million, $684 million and $1.5 billion, respectively. Also includes gains (losses) from hedging activities that did not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange gains and losses. In 2007, 2006, 2005, 2004 and 2003, respectively, the effect was $(1.44) billion, $(1.87) billion, $2.02 billion, $385 million and $(1.50) billion in revenues and $(1.44) billion, $(1.87) billion, $2.02 billion, $671 million and $(1.22) billion in operating income. These amounts result primarily from interest rate and foreign currency derivatives that are effective economic hedges of investments and borrowings. These gains (losses) in 2007 include a $380 million out of period charge to reverse net gains recognized on transfers of available for sale securities among legal entities consolidated within AIGFP. The gains (losses) in 2006 include an out of period charge of $223 million related to the remediation of the material weakness in internal control over the accounting for certain derivative transactions under FAS 133. In the first quarter of 2007, AIG began applying hedge accounting for certain transactions, primarily in its Capital Markets operations. In the second quarter of 2007, AGF and ILFC began applying hedge accounting to most of their derivatives hedging interest rate and foreign exchange risks associated with their floating rate and foreign currency denominated borrowings.
(c)	In 2006, includes the effect of out of period adjustments related to the accounting for UCITS. The effect was an increase of $490 million in both revenues and operating income for General Insurance and an increase of $240 million and $169 million in revenues and operating income, respectively, for Life Insurance & Retirement Services.
(d)	In 2007, includes an unrealized market valuation loss of $11.5 billion on AIGFP’s super senior credit default swap portfolio and an other-than-temporary impairment charge of $643 million on AIGFP’s available for sale investment securities reported in other income.
(e)	Includes current year catastrophe-related losses of $276 million in 2007, $3.28 billion in 2005 and $1.16 billion in 2004. There were no significant catastrophe-related losses in 2006 and 2003.
(f)	Reduced by fourth quarter charges of $1.8 billion and $850 million in 2005 and 2004, respectively, related to the annual review of General Insurance loss and loss adjustment reserves. In 2006, 2005 and 2004, changes in estimates for asbestos and environmental reserves were $198 million, $873 million and $850 million, respectively.
(g)	Includes that portion of long-term debt maturing in less than one year. See also Note 11 to Consolidated Financial Statements.

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Index			Page
Cautionary Statement Regarding Projections and Other Information About Future Events				29
Overview of Operations and Business Results				30
Outlook				30
Consolidated Results				34
Segment Results				36
Capital Resources				37
Liquidity				38
Critical Accounting Estimates				38
Operating Review				40
General Insurance Operations				40
	General Insurance Results			41
	Reserve for Losses and Loss Expenses			47
Life Insurance & Retirement Services Operations				62
	Life Insurance & Retirement Services Results			63
	Deferred Policy Acquisition Costs and Sales Inducement Assets			78
Financial Services Operations				81
Asset Management Operations				86
Other Operations				88
Capital Resources and Liquidity				88
Borrowings				89
Shareholders’ Equity				97
Liquidity				99
Invested Assets				101
Investment Strategy				102
Valuation of Invested Assets				108
Portfolio Review				109
	Other-than-temporary impairments			109
	Unrealized gains and losses			111
Risk Management				112
Overview				112
Corporate Risk Management				112
	Credit Risk Management			113
	Market Risk Management			115
	Operational Risk Management			116
	Insurance Risk Management			116
Segment Risk Management				118
	Insurance Operations			118
	Financial Services			121
	Asset Management			126
Economic Capital				126
Recent Accounting Standards				127

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														Percentage Increase/(Decrease)
Years Ended December 31,
(in millions)		2007				2006				2005				2007 vs. 2006				2006 vs. 2005
Total revenues		$	110,064			$	113,387			$	108,781				(3	)%			4	%
Income before income taxes, minority interest and cumulative effect of accounting changes			8,943				21,687				15,213				(59	)			43
Net income		$	6,200			$	14,048			$	10,477				(56	)%			34	%

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(in millions)		2007				2005
Pretax		$	276			$	3,280	*
Net of tax and minority interest		$	177				2,109

*	Includes $312 million in catastrophe-related losses from partially owned companies.

															Percentage Increase/(Decrease)
(in millions)			2007				2006(a)				2005(a)				2007 vs. 2006				2006 vs. 2005
Revenues(b):
	General Insurance(c)		$	51,708			$	49,206			$	45,174				5	%			9	%
	Life Insurance & Retirement Services(c)(d)			53,570				50,878				48,020				5				6
	Financial Services(e)(f)			(1,309	)			7,777				10,677				—				(27	)
	Asset Management			5,625				4,543				4,582				24				(1	)
	Other			457				483				344				(5	)			40
	Consolidation and eliminations			13				500				(16	)			(97	)			—
Total			$	110,064			$	113,387			$	108,781				(3	)%			4	%
Operating Income (loss)(b)(g):
	General Insurance(c)		$	10,526			$	10,412			$	2,315				1	%			350	%
	Life Insurance & Retirement Services(c)(d)			8,186				10,121				8,965				(19	)			13
	Financial Services(e)(f)			(9,515	)			383				4,424				—				(91	)
	Asset Management			1,164				1,538				1,963				(24	)			(22	)
	Other(h)			(2,140	)			(1,435	)			(2,765	)			—				—
	Consolidation and eliminations			722				668				311				8				115
Total			$	8,943			$	21,687			$	15,213				(59	)%			43	%

(a)	Certain reclassifications have been made to prior period amounts to conform to the current period presentation.
(b)	In 2007, 2006 and 2005, includes other-than-temporary impairment charges of $4.7 billion, $944 million and $598 million, respectively. Also includes gains (losses) from hedging activities that did not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange gains and losses. In 2007, 2006, and 2005, respectively, the effect was $(1.44) billion, $(1.87) billion and $2.02 billion in both revenues and operating income. These amounts result primarily from interest rate and foreign currency derivatives that are effective economic hedges of investments and borrowings. These gains (losses) in 2007 include a $380 million out of period charge to reverse net gains recognized on transfers of available for sale securities among legal entities consolidated within AIGFP. The gains (losses) in 2006 include an out of period charge of $223 million related to the remediation of the material weakness in internal control over the accounting for certain derivative transactions under FAS 133.

(c)	In 2006, includes the effect of out of period adjustments related to the accounting for UCITS. In 2006, the effect was an increase of $490 million in both revenues and operating income for General Insurance and an increase of $240 million and $169 million in revenues and operating income, respectively, for Life Insurance & Retirement Services.
(d)	In 2007, 2006 and 2005, includes other-than-temporary impairment charges of $2.8 billion, $641 million and $425 million, respectively, for Life Insurance & Retirement Services.
(e)	Includes gains (losses) from hedging activities that did not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange gains and losses. In 2007, 2006 and 2005, respectively, the effect was $104 million, $(1.97) billion, and $2.19 billion in both revenues and operating income. These amounts result primarily from interest rate and foreign currency derivatives that are effective economic hedges of investments and borrowings. The years ended December 31, 2007 and 2006 include out of period charges of $380 million and $223 million, respectively, as discussed in footnote (b). In the first quarter of 2007, AIG began applying hedge accounting for certain transactions, primarily in its Capital Markets operations. In the second quarter of 2007, AGF and ILFC began applying hedge accounting to most of their derivatives hedging interest rate and foreign exchange risks associated with their floating rate and foreign currency denominated borrowings.

(f)	In 2007, both revenues and operating income (loss) include an unrealized market valuation loss of $11.5 billion on AIGFP’s super senior credit default swap portfolio and an other-than-temporary impairment charge of $643 million on AIGFP’s available for sale investment securities recorded in other income.

(g)	Includes current year catastrophe-related losses of $276 million in 2007 and $3.28 billion in 2005. There were no significant catastrophe-related losses in 2006.
(h)	In 2005, includes current year catastrophe-related losses from unconsolidated entities of $312 million.

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•	Loss trend factors: used to establish expected loss ratios for subsequent accident years based on premium rate adequacy and the projected loss ratio with respect to prior accident years.
•	Expected loss ratios for the latest accident year: in this case, accident year 2007 for the year-end 2007 loss reserve analysis. For low-frequency, high-severity classes such as excess casualty, expected loss ratios generally are utilized for at least the three most recent accident years.
•	Loss development factors: used to project the reported losses for each accident year to an ultimate amount.
•	Reinsurance recoverable on unpaid losses: the expected recoveries from reinsurers on losses that have not yet been reported and/or settled.

•	Interest rates: which vary by geographical region, year of issuance and products.
•	Mortality, morbidity and surrender rates: based upon actual experience by geographical region modified to allow for variation in policy form, risk classification and distribution channel.

•	Recoverability: based on current and future expected profitability, which is affected by interest rates, foreign exchange rates, mortality experience and policy persistency.

•	Recoverability: based upon the current terms and profitability of the underlying insurance contracts.

•

Estimated gross profits: to be realized over the estimated duration of the contracts (investment-oriented products) affect the carrying value of DAC, unearned revenue liability and associated amortization patterns under FAS 97, “Accounting and Reporting by Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains and Losses from the Sale of Investments” (FAS 97); and Sales Inducement Assets under American Institute of Certified Public Accountants (AICPA) Statement of Position (SOP) 03-1, “Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long- Duration Contracts and for Separate Accounts” (SOP 03-1). Estimated gross profits include investment income and gains and losses on investments less required interest, actual mortality and other expenses.

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•	Trading at a significant (25 percent or more) discount to par, amortized cost (if lower) or cost for an extended period of time (nine consecutive months or longer);

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•	The occurrence of a discrete credit event resulting in (i) the issuer defaulting on a material outstanding obligation; (ii) the issuer seeking protection from creditors under the bankruptcy laws or any similar laws intended for court supervised reorganization of insolvent enterprises; or (iii) the issuer proposing a voluntary reorganization pursuant to which creditors are asked to exchange their claims for cash or securities having a fair value substantially lower than par value of their claims; or
•	AIG may not realize a full recovery on its investment, regardless of the occurrence of one of the foregoing events.

•	Historical defaults and delinquency experience: utilizing factors, such as delinquency ratio, allowance ratio, charge-off ratio, and charge-off coverage.
•	Portfolio characteristics: portfolio composition and consideration of the recent changes to underwriting criteria and portfolio seasoning.
•	External factors: consideration of current economic conditions, including levels of unemployment and personal bankruptcies.
•	Migration analysis: empirical technique measuring historical movement of similar finance receivables through various levels of repayment, delinquency, and loss categories to existing finance receivable pools.

•	Expected undiscounted future net cash flows: based upon current lease rates, projected future lease rates and estimated terminal values of each aircraft based on third-party information.

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																Percentage Increase/(Decrease)
(in millions, except ratios)				2007				2006				2005				2007 vs. 2006				2006 vs. 2005
Net premiums written:
	Domestic General Insurance
		DBG		$	24,112			$	24,312			$	23,104				(1	)%			5	%
		Transatlantic			3,953				3,633				3,466				9				5
		Personal Lines			4,808				4,654				4,653				3				—
		Mortgage Guaranty			1,143				866				628				32				38
	Foreign General Insurance				13,051				11,401				10,021				14				14
Total				$	47,067			$	44,866			$	41,872				5	%			7	%
Net premiums earned:
	Domestic General Insurance
		DBG		$	23,849			$	23,910			$	22,567				—	%			6	%
		Transatlantic			3,903				3,604				3,385				8				6
		Personal Lines			4,695				4,645				4,634				1				—
		Mortgage Guaranty			886				740				533				20				39
	Foreign General Insurance				12,349				10,552				9,690				17				9
Total				$	45,682			$	43,451			$	40,809				5	%			6	%
Net investment income(a):
	Domestic General Insurance
		DBG		$	3,879			$	3,411			$	2,403				14	%			42	%
		Transatlantic			470				435				343				8				27
		Personal Lines			231				225				217				3				4
		Mortgage Guaranty			158				140				123				13				14
		Intercompany adjustments and eliminations — net			6				1				1				500				—
	Foreign General Insurance				1,388				1,484				944				(6	)			57
Total				$	6,132			$	5,696			$	4,031				8	%			41	%
Net realized capital gains (losses)				$	(106	)		$	59			$	334				—	%			—	%
Operating income (loss)(a)(b):
	Domestic General Insurance
		DBG		$	7,305			$	5,845			$	(820	)			25	%			—	%
		Transatlantic			661				589				(39	)			12				—
		Personal Lines			67				432				195				(84	)			122
		Mortgage Guaranty			(637	)			328				363				—				(10	)
	Foreign General Insurance				3,137				3,228				2,601				(3	)			24
Reclassifications and eliminations					(7	)			(10	)			15				—				—
Total				$	10,526			$	10,412			$	2,315				1	%			350	%

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																Percentage Increase/(Decrease)
(in millions, except ratios)				2007				2006				2005				2007 vs. 2006				2006 vs. 2005
Statutory underwriting profit (loss) (b)(d):
	Domestic General Insurance
		DBG		$	3,404			$	2,322			$	(3,403	)			47	%			—	%
		Transatlantic			165				129				(434	)			28				—
		Personal Lines			(191	)			204				(38	)			—				—
		Mortgage Guaranty			(849	)			188				249				—				(24	)
	Foreign General Insurance				1,544				1,565				1,461				(1	)			7
Total				$	4,073			$	4,408			$	(2,165	)			(8	)%			—	%
Domestic General Insurance(b):
	Loss ratio				71.2				69.6				90.1
	Expense ratio				20.8				21.4				21.0
Combined ratio					92.0				91.0				111.1
Foreign General Insurance(b):
	Loss ratio				50.6				48.9				52.0
	Expense ratio(c)				34.9				33.6				31.8
Combined ratio					85.5				82.5				83.8
Consolidated(b):
	Loss ratio				65.6				64.6				81.1
	Expense ratio				24.7				24.5				23.6
Combined ratio					90.3				89.1				104.7

(a)	Includes the effect of out-of-period adjustments related to the accounting for UCITS in 2006. For DBG, the effect was an increase of $66 million, and for Foreign General Insurance, the effect was an increase of $424 million.
(b)	Catastrophe-related losses increased the consolidated General Insurance combined ratio in 2007 and 2005 by 0.60 points and 7.06 points, respectively. There were no significant catastrophe-related losses in 2006. Catastrophe-related losses in 2007 and 2005 by reporting unit were as follows:

			2007								2005
			Insurance				Net				Insurance				Net
			Related				Reinstatement				Related				Reinstatement
(in millions)			Losses				Premium Cost				Losses				Premium Cost
Reporting Unit:
	DBG		$	113			$	(13	)		$	1,811			$	136
	Transatlantic			11				(1	)			463				45
	Personal Lines			61				14				112				2
	Mortgage Guaranty			—				—				10				—
	Foreign General Insurance			90				1				229				80
Total			$	275			$	1			$	2,625			$	263

(c)	Includes amortization of advertising costs.

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(d)	Statutory underwriting profit (loss) is a measure that U.S. domiciled insurance companies are required to report to their regulatory authorities. The following table reconciles statutory underwriting profit (loss) to operating income for General Insurance for the years ended December 31, 2007, 2006 and 2005:

			Domestic																Foreign
			Brokerage								Personal				Mortgage				General				Reclassifications
(in millions)			Group				Transatlantic				Lines				Guaranty				Insurance				and Eliminations				Total
2007:
Statutory underwriting profit (loss)			$	3,404			$	165			$	(191	)		$	(849	)		$	1,544			$	—			$	4,073
	Increase in DAC			97				17				29				57				227				—				427
	Net investment income			3,879				470				231				158				1,388				6				6,132
	Net realized capital gains (losses)			(75	)			9				(2	)			(3	)			(22	)			(13	)			(106	)
Operating income (loss)			$	7,305			$	661			$	67			$	(637	)		$	3,137			$	(7	)		$	10,526
2006:
Statutory underwriting profit (loss)			$	2,322			$	129			$	204			$	188			$	1,565			$	—			$	4,408
	Increase in DAC			14				14				2				3				216				—				249
	Net investment income			3,411				435				225				140				1,484				1				5,696
	Net realized capital gains (losses)			98				11				1				(3	)			(37	)			(11	)			59
Operating income (loss)			$	5,845			$	589			$	432			$	328			$	3,228			$	(10	)		$	10,412
2005:
Statutory underwriting profit (loss)			$	(3,403	)		$	(434	)		$	(38	)		$	249			$	1,461			$	—			$	(2,165	)
	Increase (decrease) in DAC			(21	)			14				19				(8	)			111				—				115
	Net investment income			2,403				343				217				123				944				1				4,031
	Net realized capital gains (losses)			201				38				(3	)			(1	)			85				14				334
Operating income (loss)			$	(820	)		$	(39	)		$	195			$	363			$	2,601			$	15			$	2,315

		2007				2006
Growth in original currency*			3.5	%			7.4	%
Foreign exchange effect			1.4				(0.2	)
Growth as reported in U.S. dollars			4.9	%			7.2	%

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(in millions)		2007				2006(b)
Other liability occurrence		$	20,580			$	19,327
Workers compensation			15,568				13,612
Other liability claims made			13,878				12,513
Auto liability			6,068				6,070
International			7,036				6,006
Property			4,274				5,499
Reinsurance			3,127				2,979
Medical malpractice			2,361				2,347
Products liability			2,416				2,239
Accident and health			1,818				1,693
Commercial multiple peril			1,900				1,651
Aircraft			1,623				1,629
Fidelity/surety			1,222				1,148
Mortgage Guaranty/Credit			1,426				567
Other			2,203				2,719
Total		$	85,500			$	79,999

(a)	Presented by lines of business pursuant to statutory reporting requirements as prescribed by the National Association of Insurance Commissioners.
(b)	Allocations among various lines were revised based on the 2007 presentation.

(in millions)		2007				2006
DBG(a)		$	47,392			$	44,119
Transatlantic			6,900				6,207
Personal Lines(b)			2,417				2,440
Mortgage Guaranty			1,339				460
Foreign General Insurance(c)			11,240				9,404
Total Net Loss Reserve		$	69,288			$	62,630

(a)	At December 31, 2007 and 2006, respectively, DBG loss reserves include approximately $3.13 billion and $3.33 billion ($3.34 billion and $3.66 billion, respectively, before discount), related to business written by DBG but ceded to AIRCO and reported in AIRCO’s statutory filings. DBG loss reserves also include approximately $590 million and $535 million related to business included in AIUO’s statutory filings at December 31, 2007 and 2006, respectively.
(b)	At December 31, 2007 and 2006, respectively, Personal Lines loss reserves include $894 million and $861 million related to business ceded to DBG and reported in DBG’s statutory filings.
(c)	At December 31, 2007 and 2006, respectively, Foreign General Insurance loss reserves include approximately $3.02 billion and $2.75 billion related to business reported in DBG’s statutory filings.

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(in millions)		2007				2006				2005
Net reserve for losses and loss expenses at beginning of year		$	62,630			$	57,476			$	47,254
Foreign exchange effect			955				741				(628	)
Acquisitions(a)			317				55				—
Losses and loss expenses incurred:
Current year			30,261				27,805				28,426
Prior years, other than accretion of discount			(656	)			(53	)			4,680 (b	)
Prior years, accretion of discount			327				300				(15	)
Losses and loss expenses incurred			29,932				28,052				33,091
Losses and loss expenses paid:
Current year			9,684				8,368				7,331
Prior years			14,862				15,326				14,910
Losses and loss expenses paid			24,546				23,694				22,241
Net reserve for losses and loss expenses at end of year		$	69,288			$	62,630			$	57,476

(a)	Reflects the opening balance with respect to the acquisitions of WüBa and the Central Insurance Co., Ltd. in 2007 and 2006, respectively.
(b)	Includes fourth quarter charge of $1.8 billion.

(in millions)		2007				2006				2005
Prior Accident Year Development by Reporting Unit:
DBG		$	(390	)		$	175			$	4,878
Personal Lines			7				(111	)			14
UGC			(25	)			(115	)			(103	)
Foreign General Insurance			(286	)			(183	)			(378	)
Sub total			(694	)			(234	)			4,411
Transatlantic			88				181				269
Asbestos settlements*			(50	)			—				—
Prior years, other than accretion of discount		$	(656	)		$	(53	)		$	4,680

*	Represents the effect of settlements of certain asbestos liabilities.

(in millions)		2007				2006				2005
Prior Accident Year Development by Major Class of Business:
Excess casualty (DBG)		$	73			$	102			$	1,191
D&O and related management liability (DBG)			(305	)			(20	)			1,627
Excess workers compensation (DBG)			(14	)			74				983
Reinsurance (Transatlantic)			88				181				269
Asbestos and environmental (primarily DBG)			18				208				930
All other, net			(516	)			(598	)			(320	)
Prior years, other than accretion of discount		$	(656	)		$	(53	)		$	4,680

			Calendar Year
Accident Year
(in millions)			2007				2006				2005
Prior Accident Year Development by Accident Year:
	2006		$	(1,248	)
	2005			(446	)		$	(1,576	)
	2004			(428	)			(511	)		$	(3,853	)
	2003			37				(212	)			(63	)
	2002			234				373				1,360
	2001			263				29				1,749
	2000			321				338				1,323
	1999			47				382				944
	1998			154				41				605
	1997 & Prior			410				1,083				2,615
Prior years, other than accretion of discount			$	(656	)		$	(53	)		$	4,680

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•	Loss trend factors which are used to establish expected loss ratios for subsequent accident years based on the projected loss ratio for prior accident years.
•	Expected loss ratios for the latest accident year (i.e., accident year 2007 for the year-end 2007 loss reserve analysis) and, in some cases for accident years prior to the latest accident year. The expected loss ratio generally reflects the projected loss ratio from prior accident years, adjusted for the loss trend (see above) and the effect of rate changes and other quantifiable factors on the loss ratio. For low-frequency, high-severity classes such as excess casualty, expected loss ratios generally are used for at least the three most recent accident years.
•	Loss development factors which are used to project the reported losses for each accident year to an ultimate basis. Generally, the actual loss development factors observed from prior accident years would be used as a basis to determine the loss development factors for the subsequent accident years.

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•	The long latency period between asbestos exposure and disease manifestation and the resulting potential for involvement of multiple policy periods for individual claims;
•	The increase in the volume of claims by currently unimpaired plaintiffs;
•	Claims filed under the non-aggregate premises or operations section of general liability policies;
•	The number of insureds seeking bankruptcy protection and the effect of prepackaged bankruptcies;
•	Diverging legal interpretations; and
•	With respect to environmental claims, the difficulty in estimating the allocation of remediation cost among various parties.

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			2007								2006								2005
(in millions)			Gross				Net				Gross(e)				Net				Gross(e)				Net
Asbestos:
	Reserve for losses and loss expenses at beginning of year		$	4,523			$	1,889			$	4,501			$	1,840			$	2,622			$	1,060
	Losses and loss expenses incurred(a)			96				5				572				267				2,206	(b)			903	(b)
	Losses and loss expenses paid(a)			(755	)			(440	)			(550	)			(218	)			(327	)			(123	)
Reserve for losses and loss expenses at end of year			$	3,864			$	1,454			$	4,523			$	1,889			$	4,501			$	1,840
Environmental:
	Reserve for losses and loss expenses at beginning of year		$	629			$	290			$	969			$	410			$	1,018			$	451
	Losses and loss expenses incurred(a)			10				13				(231	)			(59	)			47	(c)			27	(c)
	Losses and loss expenses paid(a)			(124	)			(66	)			(109	)			(61	)			(96	)			(68	)
Reserve for losses and loss expenses at end of year			$	515			$	237			$	629			$	290			$	969			$	410
Combined:
	Reserve for losses and loss expenses at beginning of year		$	5,152			$	2,179			$	5,470			$	2,250			$	3,640			$	1,511
	Losses and loss expenses incurred(a)			106				18				341				208				2,253	(d)			930	(d)
	Losses and loss expenses paid(a)			(879	)			(506	)			(659	)			(279	)			(423	)			(191	)
Reserve for losses and loss expenses at end of year			$	4,379			$	1,691			$	5,152			$	2,179			$	5,470			$	2,250

(a)	All amounts pertain to policies underwritten in prior years, primarily to policies issued in 1984 and prior.
(b)	Includes increases to gross losses and loss expense reserves of $2.0 billion and increases to net losses and loss expense reserves of $843 million for the fourth quarter of 2005.
(c)	Includes increases to gross losses and loss expense reserves of $56 million and increases to net losses and loss expense reserves of $30 million for the fourth quarter of 2005.
(d)	Includes increases to gross losses and loss expense reserves of $2.0 billion and increases to net losses and loss expense reserves of $873 million for the fourth quarter of 2005.
(e)	Gross amounts were revised from the previous presentation to reflect the inclusion of certain reserves not previously identified as asbestos and environmental related. This revision had no effect on net reserves.

		2007								2006								2005
(in millions)		Gross				Net				Gross*				Net				Gross*				Net
Asbestos		$	2,701			$	1,145			$	3,270			$	1,469			$	3,458			$	1,465
Environmental			325				131				378				173				625				266
Combined		$	3,026			$	1,276			$	3,648			$	1,642			$	4,083			$	1,731

*	Gross amounts were revised from the previous presentation to reflect the inclusion of certain reserves not previously identified as asbestos and environmental related. This revision had no effect on net reserves.

			2007												2006												2005
			Asbestos				Environmental				Combined				Asbestos				Environmental				Combined				Asbestos				Environmental				Combined
Claims at beginning of year				6,878				9,442				16,320				7,293				9,873				17,166				7,575				8,216				15,791
Claims during year:
	Opened			656				937				1,593				643				1,383				2,026				854				5,253				6,107
	Settled			(150	)			(179	)			(329	)			(150	)			(155	)			(305	)			(67	)			(219	)			(286	)
	Dismissed or otherwise resolved			(821	)			(2,548	)			(3,369	)			(908	)			(1,659	)			(2,567	)			(1,069	)			(3,377	)			(4,446	)
Claims at end of year				6,563				7,652				14,215				6,878				9,442				16,320				7,293				9,873				17,166

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			Gross*				Net
2007
Survival ratios:
	Asbestos			7.1				5.6
	Environmental			4.7				3.7
	Combined			6.7				5.2
2006
Survival ratios:
	Asbestos			11.8				12.9
	Environmental			5.6				4.5
	Combined			10.4				10.3
2005
Survival ratios:
	Asbestos			16.0				19.8
	Environmental			7.2				6.2
	Combined			13.1				14.2

*	Gross amounts for 2006 and 2005 were revised from the previous presentation to reflect the inclusion of certain reserves not previously identified as asbestos and environmental related. This revision had no effect on net reserves.

	•	American Life Insurance Company (ALICO)
	•	AIG Star Life Insurance Co., Ltd. (AIG Star Life)
	•	AIG Edison Life Insurance Company (AIG Edison Life)

	•	American International Assurance Company, Limited, together with American International Assurance Company (Bermuda) Limited (AIA)
	•	Nan Shan Life Insurance Company, Ltd. (Nan Shan)
	•	American International Reinsurance Company Limited (AIRCO)
	•	The Philippine American Life and General Insurance Company (Philamlife)

•	American General Life Insurance Company (AIG American General)
•	The United States Life Insurance Company in the City of New York (USLIFE)

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•	American General Life and Accident Insurance Company (AGLA)

•	The Variable Annuity Life Insurance Company (VALIC)
•	AIG Annuity Insurance Company (AIG Annuity)
•	AIG SunAmerica Life Assurance Company (AIG SunAmerica)

				Premiums				Net				Net Realized
				and Other				Investment				Capital Gains				Total				Operating
(in millions)				Considerations				Income				(Losses)				Revenues				Income
2007
	Foreign Life Insurance & Retirement Services			$	26,601			$	11,849			$	(187	)		$	38,263			$	6,197
	Domestic Life Insurance				5,836				3,995				(803	)			9,028				642
	Domestic Retirement Services				1,190				6,497				(1,408	)			6,279				1,347
		Total		$	33,627			$	22,341			$	(2,398	)		$	53,570			$	8,186
2006
	Foreign Life Insurance & Retirement Services*			$	24,166			$	9,758			$	707			$	34,631			$	6,881
	Domestic Life Insurance				5,543				3,778				(215	)			9,106				917
	Domestic Retirement Services				1,057				6,488				(404	)			7,141				2,323
		Total		$	30,766			$	20,024			$	88			$	50,878			$	10,121
2005
	Foreign Life Insurance & Retirement Services			$	23,117			$	8,718			$	84			$	31,919			$	5,306
	Domestic Life Insurance				5,447				3,733				35				9,215				1,495
	Domestic Retirement Services				937				6,226				(277	)			6,886				2,164
		Total		$	29,501			$	18,677			$	(158	)		$	48,020			$	8,965
Percentage Increase/(Decrease) 2007 vs. 2006:
	Foreign Life Insurance & Retirement Services				10	%			21	%			—	%			10	%			(10	)%
	Domestic Life Insurance				5				6				—				(1	)			(30	)
	Domestic Retirement Services				13				—				—				(12	)			(42	)
		Total			9	%			12	%			—	%			5	%			(19	)%
Percentage Increase/(Decrease) 2006 vs. 2005:
	Foreign Life Insurance & Retirement Services				5	%			12	%			—	%			8	%			30	%
	Domestic Life Insurance				2				1				—				(1	)			(39	)
	Domestic Retirement Services				13				4				—				4				7
		Total			4	%			7	%			—	%			6	%			13	%

*	Included an out of period UCITS adjustment which increased net investment income by $240 million and operating income by $169 million.

(in millions)			2007				2006				2005
Foreign*			$	1,327,251			$	1,162,699			$	1,027,682
Domestic				984,794				907,901				825,151
	Total		$	2,312,045			$	2,070,600			$	1,852,833

*	Includes increases (decreases) of $55.1 billion, $41.5 billion and $(76.5) billion related to changes in foreign exchange rates at December 31, 2007, 2006 and 2005, respectively.

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					Premiums and				Net				Net Realized
					Other				Investment				Capital Gains				Total				Operating
(in millions)					Considerations				Income				(Losses)				Revenues				Income
2007
	Life insurance				$	16,630			$	7,473			$	85			$	24,188			$	3,898
	Personal accident					6,094				354				(3	)			6,445				1,457
	Group products					2,979				753				(76	)			3,656				263
	Individual fixed annuities					438				2,283				(171	)			2,550				548
	Individual variable annuities					460				986				(22	)			1,424				31
			Total		$	26,601			$	11,849			$	(187	)		$	38,263			$	6,197
2006
	Life insurance(a)				$	15,732			$	5,937			$	574			$	22,243			$	4,247
	Personal accident					5,518				285				55				5,858				1,459
	Group products					2,226				648				47				2,921				450
	Individual fixed annuities					400				2,027				31				2,458				580
	Individual variable annuities					290				861				—				1,151				145
			Total		$	24,166			$	9,758			$	707			$	34,631			$	6,881
2005
		Life insurance			$	15,643			$	4,884			$	94			$	20,621			$	3,195
		Personal accident				5,002				255				(30	)			5,227				1,292
		Group products				1,925				613				(9	)			2,529				322
		Individual fixed annuities				361				1,728				29				2,118				398
		Individual variable annuities				186				1,238				—				1,424				99
			Total		$	23,117			$	8,718			$	84			$	31,919			$	5,306
Percentage Increase/(Decrease) 2007 vs. 2006:
		Life insurance				6	%			26	%			(85	)%			9	%			(8	)%
		Personal accident				10				24				—				10				—
		Group products				34				16				—				25				(42	)
		Individual fixed annuities				10				13				—				4				(6	)
		Individual variable annuities				59				15				—				24				(79	)
			Total			10	%			21	%			—	%			10	%			(10	)%
Percentage Increase/(Decrease) 2006 vs. 2005:
		Life insurance				1	%			22	%			—	%			8	%			33	%
		Personal accident				10				12				—				12				13
		Group products				16				6				—				16				40
		Individual fixed annuities				11				17				7				16				46
		Individual variable annuities				56				(30	)			—				(19	)			46
			Total			5	%			12	%			—	%			8	%			30	%

(a)	Includes the effect of an out of period UCITS adjustment in 2006, which increased net investment income by $237 million and operating income by $166 million.

		2007				2006
Growth in original currency*			7.6	%			6.5	%
Foreign exchange effect			2.5				(2.0	)
Growth as reported in U.S. dollars			10.1	%			4.5	%

*	Computed using a constant exchange rate each period.

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				Premiums and				Net				Net Realized
				Other				Investment				Capital Gains				Total				Operating
(in millions)				Considerations				Income				(Losses)				Revenues				Income
2007
	Life insurance			$	4,999			$	2,113			$	(92	)		$	7,020			$	1,193
	Personal accident				4,225				204				(1	)			4,428				1,071
	Group products				2,318				626				1				2,945				250
	Individual fixed annuities				386				2,160				(181	)			2,365				500
	Individual variable annuities				459				980				(21	)			1,418				30
		Total		$	12,387			$	6,083			$	(294	)		$	18,176			$	3,044
2006
	Life insurance (a)			$	4,783			$	1,749			$	316			$	6,848			$	1,731
	Personal accident				3,957				162				49				4,168				1,122
	Group products				1,740				541				13				2,294				272
	Individual fixed annuities				337				1,930				28				2,295				553
	Individual variable annuities				289				857				—				1,146				143
		Total		$	11,106			$	5,239			$	406			$	16,751			$	3,821
2005
	Life insurance			$	4,864			$	1,828			$	(52	)		$	6,640			$	1,288
	Personal accident				3,788				137				(15	)			3,910				1,051
	Group products				1,473				535				(34	)			1,974				191
	Individual fixed annuities				292				1,672				29				1,993				390
	Individual variable annuities				186				1,234				—				1,420				100
		Total		$	10,603			$	5,406			$	(72	)		$	15,937			$	3,020
Percentage Increase/(Decrease) 2007 vs. 2006:
	Life insurance				5	%			21	%			—	%			3	%			(31	)%
	Personal accident				7				26				—				6				(5	)
	Group products				33				16				(92	)			28				(8	)
	Individual fixed annuities				15				12				—				3				(10	)
	Individual variable annuities				59				14				—				24				(79	)
		Total			12	%			16	%			—	%			9	%			(20	)%
Percentage Increase/(Decrease) 2006 vs. 2005:
	Life insurance				(2	)%			(4	)%			—	%			3	%			34	%
	Personal accident				4				18				—				7				7
	Group products				18				1				—				16				42
	Individual fixed annuities				15				15				(3	)			15				42
	Individual variable annuities				55				(31	)			—				(19	)			43
		Total			5	%			(3	)%			—	%			5	%			27	%

(a)	Includes the effect of an out of period UCITS adjustment in 2006, which increased both net investment income and operating income by $29 million.

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				Premiums				Net				Net Realized								Operating
				and Other				Investment				Capital Gains				Total				Income
(in millions)				Considerations				Income				(Losses)				Revenues				(Loss)
2007
	Life insurance			$	11,631			$	5,360			$	177			$	17,168			$	2,705
	Personal accident				1,869				150				(2	)			2,017				386
	Group products				661				127				(77	)			711				13
	Individual fixed annuities				52				123				10				185				48
	Individual variable annuities				1				6				(1	)			6				1
		Total		$	14,214			$	5,766			$	107			$	20,087			$	3,153
2006
	Life insurance(a)			$	10,949			$	4,188			$	258			$	15,395			$	2,516
	Personal accident				1,561				123				6				1,690				337
	Group products				486				107				34				627				178
	Individual fixed annuities				63				97				3				163				27
	Individual variable annuities				1				4				—				5				2
		Total		$	13,060			$	4,519			$	301			$	17,880			$	3,060
2005
	Life insurance			$	10,779			$	3,056			$	146			$	13,981			$	1,907
	Personal accident				1,214				118				(15	)			1,317				241
	Group products				452				78				25				555				131
	Individual fixed annuities				69				56				—				125				8
	Individual variable annuities				—				4				—				4				(1	)
		Total		$	12,514			$	3,312			$	156			$	15,982			$	2,286
Percentage Increase/(Decrease) 2007 vs. 2006:
	Life insurance				6	%			28	%			(31	)%			12	%			8	%
	Personal accident				20				22				—				19				15
	Group products				36				19				—				13				(93	)
	Individual fixed annuities				(17	)			27				233				13				78
	Individual variable annuities				—				50				—				20				(50	)
		Total			9	%			28	%			(64	)%			12	%			3	%
Percentage Increase/(Decrease) 2006 vs. 2005:
	Life insurance				2	%			37	%			77	%			10	%			32	%
	Personal accident				29				4				—				28				40
	Group products				8				37				36				13				36
	Individual fixed annuities				(9	)			73				—				30				238
	Individual variable annuities				—				—				—				25				—
		Total			4	%			36	%			93	%			12	%			34	%

(a)	Includes the effect of an out of period UCITS adjustment in 2006, which increased net investment income and operating income by $208 million and $137 million, respectively.

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				Premiums and				Net				Net Realized								Operating
				Other				Investment				Capital Gains				Total				Income
(in millions)				Considerations				Income				(Losses)				Revenues				(Loss)
2007
	Life insurance			$	2,352			$	1,528			$	(584	)		$	3,296			$	226
	Home service				767				640				(100	)			1,307				216
	Group life/health				842				200				(16	)			1,026				67
	Payout annuities(a)				1,820				1,153				(67	)			2,906				74
	Individual fixed and runoff annuities				55				474				(36	)			493				59
		Total		$	5,836			$	3,995			$	(803	)		$	9,028			$	642
2006
	Life insurance			$	2,127			$	1,377			$	(83	)		$	3,421			$	654
	Home service				790				630				(38	)			1,382				282
	Group life/health				995				213				(8	)			1,200				(159	)
	Payout annuities(a)				1,582				1,004				(51	)			2,535				76
	Individual fixed and runoff annuities				49				554				(35	)			568				64
		Total		$	5,543			$	3,778			$	(215	)		$	9,106			$	917

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				Premiums and				Net				Net Realized								Operating
				Other				Investment				Capital Gains				Total				Income
(in millions)				Considerations				Income				(Losses)				Revenues				(Loss)
2005
	Life insurance			$	2,041			$	1,352			$	98			$	3,491			$	874
	Home service				801				605				(2	)			1,404				282
	Group life/health				1,079				201				(1	)			1,279				69
	Payout annuities(a)				1,473				912				(34	)			2,351				128
	Individual fixed and runoff annuities				53				663				(26	)			690				142
		Total		$	5,447			$	3,733			$	35			$	9,215			$	1,495
Percentage Increase/(Decrease) 2007 vs. 2006:
	Life insurance				11	%			11	%			—	%			(4	)%			(65	)%
	Home service				(3	)			2				—				(5	)			(23	)
	Group life/health				(15	)			(6	)			—				(15	)			—
	Payout annuities				15				15				—				15				(3	)
	Individual fixed and runoff annuities				12				(14	)			—				(13	)			(8	)
		Total			5	%			6	%			—	%			(1	)%			(30	)%
Percentage Increase/(Decrease) 2006 vs. 2005:
	Life insurance				4	%			2	%			—	%			(2	)%			(25	)%
	Home service				(1	)			4				—				(2	)			—
	Group life/health				(8	)			6				—				(6	)			—
	Payout annuities				7				10				—				8				(41	)
	Individual fixed and runoff annuities				(8	)			(16	)			—				(18	)			(55	)
		Total			2	%			1	%			—	%			(1	)%			(39	)%

(a)	Premiums and other considerations include structured settlements, single premium immediate annuities and terminal funding annuities.

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															Percentage Increase/(Decrease)
(in millions)			2007				2006				2005				2007 vs. 2006				2006 vs. 2005
Periodic Premium Sales By Product*:
	Universal life		$	230			$	334			$	271				(31	)%			23	%
	Variable universal life			55				56				44				(2	)			27
	Term life			219				240				229				(9	)			5
	Whole life/other			9				13				10				(31	)			30
	Total		$	513			$	643			$	554				(20	)%			16	%

*	Periodic premium represents premium from new business expected to be collected over a one-year period.

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				Premiums and				Net				Net Realized
				Other				Investment				Capital Gains				Total				Operating
(in millions)				Considerations				Income				(Losses)				Revenues				Income
2007
	Group retirement products			$	446			$	2,280			$	(451	)			2,275			$	696
	Individual fixed annuities				96				3,664				(829	)			2,931				530
	Individual variable annuities				627				166				(45	)			748				122
	Individual annuities — runoff*				21				387				(83	)			325				(1	)
		Total		$	1,190			$	6,497			$	(1,408	)		$	6,279			$	1,347
2006
	Group retirement products			$	386			$	2,279			$	(144	)		$	2,521			$	1,017
	Individual fixed annuities				122				3,581				(257	)			3,446				1,036
	Individual variable annuities				531				202				5				738				193
	Individual annuities — runoff*				18				426				(8	)			436				77
		Total		$	1,057			$	6,488			$	(404	)		$	7,141			$	2,323
2005
	Group retirement products			$	351			$	2,233			$	(67	)		$	2,517			$	1,055
	Individual fixed annuities				97				3,346				(214	)			3,229				858
	Individual variable annuities				467				217				4				688				189
	Individual annuities — runoff*				22				430				—				452				62
		Total		$	937			$	6,226			$	(277	)		$	6,886			$	2,164
Percentage Increase/(Decrease) 2007 vs. 2006:
	Group retirement products				16	%			—	%			—	%			(10	)%			(32	)%
	Individual fixed annuities				(21	)			2				—				(15	)			(49	)
	Individual variable annuities				18				(18	)			—				1				(37	)
	Individual annuities — runoff				17				(9	)			—				(25	)			—
		Total			13	%			—	%			—	%			(12	)%			(42	)%
Percentage Increase/(Decrease) 2006 vs. 2005:
	Group retirement products				10	%			2	%			—	%			—	%			(4	)%
	Individual fixed annuities				26				7				—				7				21
	Individual variable annuities				14				(7	)			25				7				2
	Individual annuities — runoff				(18	)			(1	)			—				(4	)			24
		Total			13	%			4	%			—	%			4	%			7	%

*	Primarily represents runoff annuity business sold through discontinued distribution relationships.

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(in millions)			2007				2006
Group retirement products
Balance at beginning of year			$	64,357			$	59,312
	Deposits — annuities			5,898				5,464
	Deposits — mutual funds			1,633				1,361
	Total Deposits			7,531				6,825
	Surrenders and other withdrawals			(6,551	)			(6,106	)
	Death benefits			(262	)			(252	)
	Net inflows (outflows)			718				467
	Change in fair value of underlying investments, interest credited, net of fees			3,034				4,578
Balance at end of year			$	68,109			$	64,357
Individual fixed annuities
Balance at beginning of year			$	52,685			$	53,331
	Deposits			5,085				5,331
	Surrenders and other withdrawals			(7,565	)			(6,379	)
	Death benefits			(1,667	)			(1,649	)
	Net inflows (outflows)			(4,147	)			(2,697	)
	Change in fair value of underlying investments, interest credited, net of fees			1,970				2,051
Balance at end of year			$	50,508			$	52,685
Individual variable annuities
Balance at beginning of year			$	31,093			$	28,267
	Deposits			4,472				4,266
	Surrenders and other withdrawals			(4,158	)			(3,894	)
	Death benefits			(497	)			(486	)
	Net inflows (outflows)			(183	)			(114	)
	Change in fair value of underlying investments, interest credited, net of fees			2,198				2,940
Balance at end of year			$	33,108			$	31,093
Total Domestic Retirement Services
Balance at beginning of year			$	148,135			$	140,910
	Deposits			17,088				16,422
	Surrenders and other withdrawals			(18,274	)			(16,379	)
	Death benefits			(2,426	)			(2,387	)
	Net inflows (outflows)			(3,612	)			(2,344	)
	Change in fair value of underlying investments, interest credited, net of fees			7,202				9,569
	Balance at end of year, excluding runoff			151,725				148,135
	Individual annuities runoff			5,690				6,326
Balance at end of year			$	157,415			$	154,461
General and separate account reserves and mutual funds
	General account reserve		$	88,801			$	92,070
	Separate account reserve			60,461				55,988
Total general and separate account reserves				149,262				148,058
	Group retirement mutual funds			8,153				6,403
Total reserves and mutual funds			$	157,415			$	154,461

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			Group				Individual				Individual
2007			Retirement				Fixed				Variable
(in millions)			Products*				Annuities				Annuities
No surrender charge			$	49,770			$	11,316			$	13,014
0% – 2%				3,284				3,534				5,381
Greater than 2% – 4%				3,757				7,310				5,133
Greater than 4%				2,280				24,956				9,492
Non-Surrenderable				865				3,392				88
	Total Reserves		$	59,956			$	50,508			$	33,108
Surrender rates				9.8	%			14.6	%			12.8	%

			Group				Individual				Individual
2006			Retirement				Fixed				Variable
(in millions)			Products*				Annuities				Annuities
No surrender charge			$	42,741			$	10,187			$	11,467
0% – 2%				6,921				4,503				4,869
Greater than 2% – 4%				4,573				6,422				4,830
Greater than 4%				2,842				28,109				9,836
Non-Surrenderable				877				3,464				91
	Total Reserves		$	57,954			$	52,685			$	31,093
Surrender rates				9.9	%			12.0	%			13.3	%

*	Excludes mutual funds of $8.2 billion and $6.4 billion in 2007 and 2006, respectively.

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(in millions)			2007				2006				2005
Foreign Life Insurance & Retirement Services:
	Fixed maturities, including short-term investments		$	7,846			$	6,820			$	6,059
	Equity securities			135				80				51
	Interest on mortgage and other loans			466				454				447
	Partnership income			128				94				57
	Unit investment trusts(a)			439				259				4
	Other(b)			275				301				357
	Total investment income before policyholder income and trading gains			9,289				8,008				6,975
	Policyholder investment income and trading gains (c)			2,899				2,017				2,021
	Total investment income			12,188				10,025				8,996
	Investment expenses			339				267				278
	Net investment income		$	11,849			$	9,758			$	8,718
Domestic Life Insurance:
	Fixed maturities, including short-term investments		$	3,528			$	3,444			$	3,481
	Equity securities			(4	)			(6	)			(3	)
	Interest on mortgage and other loans			418				349				327
	Partnership income — excluding Synfuels			123				80				135
	Partnership loss — Synfuels			(101	)			(107	)			(143	)
	Unit investment trusts			3				5				—
	Other(b)			77				67				(4	)
	Total investment income before policyholder income and trading gains			4,044				3,832				3,793
	Policyholder investment income and trading gains(c)			4				—				—
	Total investment income			4,048				3,832				3,793
	Investment expenses			53				54				60
	Net investment income		$	3,995			$	3,778			$	3,733
Domestic Retirement Services:
	Fixed maturities, including short-term investments		$	5,376			$	5,645			$	5,579
	Equity securities			30				38				13
	Interest on mortgage and other loans			539				449				401
	Partnership income			572				425				224
	Other(b)			42				(18	)			60
Total investment income				6,559				6,539				6,277
	Investment expenses			62				51				51
	Net investment income		$	6,497			$	6,488			$	6,226

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(in millions)			2007				2006				2005
Total:
	Fixed maturities, including short-term investments		$	16,750			$	15,909			$	15,119
	Equity securities			161				112				61
	Interest on mortgage and other loans			1,423				1,252				1,175
	Partnership income — excluding Synfuels			823				599				416
	Partnership loss — Synfuels			(101	)			(107	)			(143	)
	Unit investment trusts(a)			442				264				4
	Other(b)			394				350				413
Total investment income before policyholder income and trading gains				19,892				18,379				17,045
	Policyholder investment income and trading gains(c)			2,903				2,017				2,021
	Total investment income			22,795				20,396				19,066
	Investment expenses			454				372				389
	Net investment income(d)		$	22,341			$	20,024			$	18,677

(a)	Includes the effect of an out of period UCITS adjustment in 2006, which increased net investment income by $240 million and operating income by $169 million.

(b)	Includes real estate income, income on non-partnership invested assets, securities lending and Foreign Life Insurance & Retirement Services’ equal share of the results of AIG Credit Card Company (Taiwan).
(c)	Relates principally to assets held in various trading securities accounts that do not qualify for separate account treatment under SOP 03-1. These amounts are principally offset by an equal change included in incurred policy losses and benefits.
(d)	Includes call and tender income.

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(in millions)				2007				2006				2005
Foreign Life Insurance & Retirement Services:
	Sales of fixed maturities			$	(187	)		$	(209	)		$	191
	Sales of equity securities				697				459				281
	Other:
		Other-than-temporary impairments(a)			(1,026	)			(81	)			(39	)
		Foreign exchange transactions(b)			435				106				40
		Derivatives instruments			(135	)			276				(599	)
		Other(c)			29				156				210
Total Foreign Life Insurance & Retirement Services				$	(187	)		$	707			$	84
Domestic Life Insurance:
	Sales of fixed maturities			$	(114	)		$	(33	)		$	65
	Sales of equity securities				5				17				18
	Other:
		Other-than-temporary impairments(a)			(585	)			(192	)			(119	)
		Foreign exchange transactions			11				(6	)			11
		Derivatives instruments			(186	)			25				65
		Other			66				(26	)			(5	)
Total Domestic Life Insurance				$	(803	)		$	(215	)		$	35
Domestic Retirement Services:
	Sales of fixed maturities			$	(192	)		$	1			$	(106	)
	Sales of equity securities				29				31				115
	Other:
		Other-than-temporary impairments(a)			(1,187	)			(368	)			(267	)
		Foreign exchange transactions			27				(13	)			—
		Derivatives instruments			(60	)			(33	)			(12	)
		Other			(25	)			(22	)			(7	)
Total Domestic Retirement Services				$	(1,408	)		$	(404	)		$	(277	)
Total:
	Sales of fixed maturities			$	(493	)		$	(241	)		$	150
	Sales of equity securities				731				507				414
	Other:
		Other-than-temporary impairments(a)			(2,798	)			(641	)			(425	)
		Foreign exchange transactions(b)			473				87				51
		Derivatives instruments			(381	)			268				(546	)
		Other(c)			70				108				198
Total				$	(2,398	)		$	88			$	(158	)

(a)	See Invested Assets — Other-than-temporary impairments for additional information.
(b)	Includes a positive out-of-period adjustment of $158 million in 2007 related to foreign exchange remediation activities.
(c)	Includes gains (losses) of $(16) million, $88 million and $109 million in 2007, 2006 and 2005, respectively, allocated to participating policyholders.

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				2007												2006
(in millions)				DAC/VOBA				SIA				Total				DAC/VOBA				SIA				Total
Foreign Life Insurance & Retirement Services
Balance at beginning of year				$	21,153			$	404			$	21,557			$	17,638			$	192			$	17,830
Acquisition costs deferred					5,640				241				5,881				4,991				112				5,103
Amortization (charged) or credited to operating income:
	Related to net realized capital gains (losses)				117				1				118				5				(3	)			2
	Related to unlocking future assumptions				(17	)			(2	)			(19	)			102				2				104
	All other amortization(a)				(1,979	)			11				(1,968	)			(2,399	)			(4	)			(2,403	)
Change in unrealized gains (losses) on securities					301				16				317				(132	)			(6	)			(138	)
Increase due to foreign exchange					831				10				841				948				13				961
Other(b)					129				—				129				—				98				98
Balance at end of year(a)				$	26,175			$	681			$	26,856			$	21,153			$	404			$	21,557
Domestic Life Insurance
Balance at beginning of year				$	6,006			$	46			$	6,052			$	5,184			$	31			$	5,215
Acquisition costs deferred					895				15				910				1,115				18				1,133
Amortization (charged) or credited to operating income:
	Related to net realized capital gains (losses)				13				—				13				23				—				23
	Related to unlocking future assumptions				6				(1	)			5				(42	)			(1	)			(43	)
		All other amortization(a)			(671	)			(7	)			(678	)			(671	)			(2	)			(673	)
Change in unrealized gains (losses) on securities					162				—				162				398				—				398
Increase (decrease) due to foreign exchange					85				—				85				(1	)			—				(1	)
Other(b)					(64	)			—				(64	)			—				—				—
Balance at end of year				$	6,432			$	53			$	6,485			$	6,006			$	46			$	6,052
Domestic Retirement Services
Balance at beginning of year				$	5,651			$	887			$	6,538			$	5,284			$	871			$	6,155
Acquisition costs deferred					741				201				942				717				231				948
Amortization (charged) or credited to operating income:
	Related to net realized capital gains (losses)				161				41				202				62				19				81
	Related to unlocking future assumptions				(7	)			(18	)			(25	)			(3	)			—				(3	)
	All other amortization(a)				(990	)			(174	)			(1,164	)			(789	)			(143	)			(932	)
Change in unrealized gains (losses) on securities					282				54				336				380				(91	)			289
Balance at end of year				$	5,838			$	991			$	6,829			$	5,651			$	887			$	6,538
Total Life Insurance & Retirement Services
Balance at beginning of year				$	32,810			$	1,337			$	34,147			$	28,106			$	1,094			$	29,200
Acquisition costs deferred					7,276				457				7,733				6,823				361				7,184
Amortization (charged) or credited to operating income:
	Related to net realized capital gains (losses)				291				42				333				90				16				106
	Related to unlocking future assumptions				(18	)			(21	)			(39	)			57				1				58
	All other amortization(a)				(3,640	)			(170	)			(3,810	)			(3,859	)			(149	)			(4,008	)
Change in unrealized gains (losses) on securities					745				70				815				646				(97	)			549
Increase due to foreign exchange					916				10				926				947				13				960
Other(b)					65				—				65				—				98				98
Balance at end of year				$	38,445			$	1,725			$	40,170			$	32,810			$	1,337			$	34,147

(a)	In 2007, Foreign Life Insurance & Retirement Services includes lower amortization of $836 million related to changes in actuarial estimates, mostly offset in incurred policy losses and benefits. Domestic Retirement Services includes a higher amortization of $104 million related to changes in actuarial estimates.
(b)	In 2007, includes $(118) million for the cumulative effect of adoption of SOP 05-1 and $189 million related to balance sheet reclassifications. In 2006, primarily represents a balance sheet reclassification.

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•	variable separate account products which do not contain interest rate guarantees,
•	participating products which contain very low implied interest rate guarantees, and
•	accident and health policies and riders.

•	Observed historical mortality improvement trends have been projected to 2014;
•	Morbidity, expense and termination rates have been updated to reflect recent experience;
•	Taiwan government bond rates are expected to remain at current levels for 10 years and gradually increase to best estimate assumptions of a market consensus view of long-term interest rate expectations;
•	Foreign assets are assumed to comprise 35 percent of invested assets, resulting in a composite long-term investment assumption of approximately 4.9 percent; and
•	The currently permitted practice of offsetting positive mortality experience with negative interest margins, thus eliminating the need for mortality dividends, will continue.

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															Percentage Increase/(Decrease)
(in millions)			2007				2006				2005				2007 vs. 2006				2006 vs. 2005
Revenues:
	Aircraft Leasing(a)		$	4,694			$	4,082			$	3,668				15	%			11	%
	Capital Markets(b)			(9,979	)			(186	)			3,260				—				—
	Consumer Finance(c)			3,655				3,587				3,563				2				1
	Other, including intercompany adjustments			321				294				186				9				58
Total			$	(1,309	)		$	7,777			$	10,677				—	%			(27	)%
Operating income (loss):
	Aircraft Leasing(a)		$	873			$	578			$	769				51	%			(25	)%
	Capital Markets(b)			(10,557	)			(873	)			2,661				—				—
	Consumer Finance(c)			171				668				922				(74	)			(28	)
	Other, including intercompany adjustments			(2	)			10				72				—				(86	)
Total			$	(9,515	)		$	383			$	4,424				—	%			(91	)%

(a)	Both revenues and operating income include gains (losses) from hedging activities that did not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange gains and losses. In 2007, 2006 and 2005, the effect was $(37) million, $(73) million and $93 million, respectively. These amounts result primarily from interest rate and foreign currency derivatives that are effective economic hedges of borrowings. In the second quarter of 2007, ILFC began applying hedge accounting to most of its derivatives hedging interest rate and foreign exchange risks associated with its floating rate and foreign currency denominated borrowings.
(b)	Revenues, shown net of interest expense of $4.6 billion, $3.2 billion and $3.0 billion in 2007, 2006 and 2005, respectively, were primarily from hedged financial positions entered into in connection with counterparty transactions. Both revenues and operating income include gains (losses) from hedging activities that did not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange gains and losses. In 2007, 2006 and 2005, the effect was $211 million, $(1.8) billion and $2.0 billion, respectively. The year ended December 31, 2007 includes a $380 million out of period charge to reverse net gains recognized on transfers of available for sale securities among legal entities consolidated within AIGFP. The year ended December 31, 2006 includes an out of period charge of $223 million related to the remediation of the material weakness in internal control over the accounting for certain derivative transactions under FAS 133. In the first quarter of 2007, AIGFP began applying hedge accounting for certain of its interest rate swaps and foreign currency forward contracts hedging its investments and borrowings. In 2007, both revenues and operating income (loss) include an unrealized market valuation loss of $11.5 billion on AIGFP’s super senior credit default swap portfolio and an other-than-temporary impairment charge of $643 million on AIGFP’s available for sale investment securities recorded in other income.
(c)	Both revenues and operating income include gains (losses) from hedging activities that did not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange gains and losses. In 2007, 2006 and 2005, the effect was $(20) million, $(94) million and $75 million, respectively. These amounts result primarily from interest rate and foreign currency derivatives that are effective economic hedges of borrowings. In the second quarter of 2007, AGF began applying hedge accounting to most of its derivatives hedging interest rate and foreign exchange risks associated with its floating rate and foreign currency denominated borrowings. In 2007, includes a pre-tax charge of $178 million in connection with domestic consumer finance’s mortgage banking activities.

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		Three months ended				Year ended
(in millions)		December 31, 2007				December 31, 2007
Multi-sector CDO			$10,894				$11,246
Corporate Debt/CLOs			226				226
Total			$11,120				$11,472

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															Percentage Increase/ (Decrease)
(in millions)			2007				2006				2005				2007 vs. 2006				2006 vs. 2005
Revenues:
	Spread-Based Investment business		$	2,023			$	2,713			$	2,973				(25	)%			(9	)%
	Institutional Asset Management*			2,900				1,240				1,026				134				21
	Brokerage Services and Mutual Funds			322				293				257				10				14
	Other Asset Management			380				297				326				28				(9	)
Total			$	5,625			$	4,543			$	4,582				24	%			(1	)%
Operating income:
	Spread-Based Investment business		$	(89	)		$	732			$	1,194				—	%			(39	)%
	Institutional Asset Management*			784				438				387				79				13
	Brokerage Services and Mutual Funds			100				87				66				15				32
	Other Asset Management			369				281				316				31				(11	)
Total			$	1,164			$	1,538			$	1,963				(24	)%			(22	)%

*	Includes the effect of consolidating the revenues and operating loss of warehoused investments totaling $778 million and $164 million, respectively, in 2007, a portion of which is offset in minority interest expense.

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		Less Than				1-3				3+-5				Over Five
(in billions)		One Year				Years				Years				Years				Total
Domestic GICs		$	9.4			$	6.4			$	2.7			$	6.8			$	25.3

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(in millions)		2007				2006				2005
Other Operating Income (Loss):
Equity earnings in partially owned companies		$	157			$	193			$	(124	)
Interest expense			(1,223	)			(859	)			(541	)
Unallocated corporate expenses*			(560	)			(517	)			(413	)
Compensation expense — SICO Plans			(39	)			(108	)			(205	)
Compensation expense — Starr tender offer			—				(54	)			—
Net realized capital gains (losses)			(409	)			(37	)			269
Regulatory settlement costs			—				—				(1,644	)
Other miscellaneous, net			(66	)			(53	)			(107	)
Total Other		$	(2,140	)		$	(1,435	)		$	(2,765	)

*	Includes expenses of corporate staff not attributable to specific business segments, expenses related to efforts to improve internal controls, corporate initiatives and certain compensation plan expenses.

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(in millions)			2007				2006
Borrowings issued by AIG:
	Notes and bonds payable		$	14,588			$	8,915
	Junior subordinated debt			5,809				—
	Loans and mortgages payable			729				841
	MIP matched notes and bonds payable			14,267				5,468
	Series AIGFP matched notes and bonds payable			874				72
	Total AIG borrowings			36,267				15,296
Borrowings guaranteed by AIG:
AIGFP
	GIAs			19,908				20,664
	Notes and bonds payable			36,676				37,528
	Loans and mortgages payable			1,384				—
	Hybrid financial instrument liabilities(a)			7,479				8,856
	Total AIGFP borrowings			65,447				67,048
AIG Funding, Inc. commercial paper				4,222				4,821
AIGLH notes and bonds payable				797				797
Liabilities connected to trust preferred stock				1,435				1,440
Total borrowings issued or guaranteed by AIG				108,168				89,402
Borrowings not guaranteed by AIG:
ILFC
	Commercial paper			4,483				2,747
	Junior subordinated debt			999				999
	Notes and bonds payable(b)			25,737				25,592
	Total ILFC borrowings			31,219				29,338
AGF
	Commercial paper and extendible commercial notes			3,801				4,662
	Junior subordinated debt			349				—
	Notes and bonds payable			22,369				19,261
	Total AGF borrowings			26,519				23,923
AIGCFG
	Commercial paper			287				227
	Loans and mortgages payable			1,839				1,453
	Total AIGCFG borrowings			2,126				1,680
AIG Finance Taiwan Limited commercial paper				—				26
Other subsidiaries				775				672
Borrowings of consolidated investments:
	A.I. Credit(c)			321				880
	AIG Investments(d)			1,636				193
	AIG Global Real Estate Investment(d)			5,096				2,307
	AIG SunAmerica			186				203
	ALICO			3				55
	Total borrowings of consolidated investments			7,242				3,638
Total borrowings not guaranteed by AIG				67,881				59,277
Consolidated:
	Total commercial paper and extendible commercial notes		$	13,114			$	13,363
	Total long-term borrowings			162,935				135,316
	Total borrowings		$	176,049			$	148,679

(a)	Represents structured notes issued by AIGFP that are accounted for using the fair value option.
(b)	Includes borrowings under Export Credit Facility of $2.5 billion and $2.7 billion at December 31, 2007 and 2006, respectively.
(c)	Represents commercial paper issued by a variable interest entity secured by receivables of A.I. Credit.
(d)	In 2007, increases in borrowings compared to 2006 were principally attributable to warehousing activities.

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(in millions)			2007				2006
AIG’s total borrowings			$	176,049			$	148,679
Less:
	Junior subordinated debt			5,809				—
	Liabilities connected to trust preferred stock			1,435				1,440
	MIP matched notes and bonds payable			14,267				5,468
	Series AIGFP matched notes and bonds payable			874				72
	AIGFP
	GIAs			19,908				20,664
	Notes and bonds payable			36,676				37,528
	Loans and mortgages payable			1,384				—
	Hybrid financial instrument liabilities*			7,479				8,856
	Borrowings not guaranteed by AIG			67,881				59,277
AIG’s net borrowings			$	20,336			$	15,374

*	Represents structured notes issued by AIGFP that are accounted for at fair value.

			Balance at								Maturities				Effect of								Balance at
			December 31,								and				Foreign				Other				December 31,
(in millions)			2006				Issuances				Repayments				Exchange				Changes				2007
AIG
	Notes and bonds payable		$	8,915			$	5,591			$	(165	)		$	122			$	125			$	14,588
	Junior subordinated debt			—				5,590				—				218				1				5,809
	Loans and mortgages payable			841				600				(724	)			12				—				729
	MIP matched notes and bonds payable			5,468				8,092				—				(4	)			711				14,267
	Series AIGFP matched notes and bonds payable			72				810				(10	)			—				2				874
AIGFP
	GIAs			20,664				8,830				(10,172	)			43				543				19,908
	Notes and bonds payable and hybrid financial instrument liabilities			46,384				50,854				(53,540	)			321				136				44,155
	Loans and mortgages payable			—				1,388				(9	)			9				(4	)			1,384
AIGLH notes and bonds payable				797				—				—				—				—				797
Liabilities connected to trust preferred stock				1,440				—				—				—				(5	)			1,435
ILFC notes and bonds payable				25,592				3,783				(3,938	)			295				5				25,737
ILFC junior subordinated debt				999				—				—				—				—				999
AGF notes and bonds payable				19,261				7,481				(4,824	)			255				196				22,369
AGF junior subordinated debt				—				349				—				—				—				349
AIGCFG loans and mortgages payable				1,453				3,941				(3,647	)			98				(6	)			1,839
Other subsidiaries				672				189				(189	)			3				100				775
Total			$	132,558			$	97,498			$	(77,218	)		$	1,372			$	1,804			$	156,014

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One-Year

Available

Term-Out

Facility

Size

Borrower(s)

Amount

Expiration

Option

AIG:

364-Day Syndicated Facility

$2,125

AIG/AIG Funding(a) AIG Capital Corporation(a)

$

2,125

July 2008

Yes

5-Year Syndicated Facility

1,625

AIG/AIG Funding(a) AIG Capital Corporation(a)

1,625

July 2011

No

364-Day Bilateral Facility (b)

3,200

AIG/AIG Funding

210

December 2008

Yes

364-Day Intercompany Facility(c)

5,335

AIG

5,335

September 2008

Yes

Total AIG

$12,285

$

9,295

ILFC:

5-Year Syndicated Facility

$2,500

ILFC

$

2,500

October 2011

No

5-Year Syndicated Facility

2,000

ILFC

2,000

October 2010

No

5-Year Syndicated Facility

2,000

ILFC

2,000

October 2009

No

Total ILFC

$6,500

$

6,500

AGF:

364-Day Syndicated Facility

$2,625

American General Finance Corporation American General Finance, Inc.(d)

$

2,625

July 2008

Yes

5-Year Syndicated Facility

2,125

American General Finance Corporation

2,125

July 2010

No

Total AGF

$4,750

$

4,750

(a)	Guaranteed by AIG.
(b)	This facility can be drawn in the form of loans or letters of credit. All drawn amounts shown above are in the form of letters of credit.
(c)	Subsidiaries of AIG are the lenders on this facility.
(d)	American General Finance, Inc. is an eligible borrower for up to $400 million only.

Short-term Debt

Senior Long-term Debt

Moody’s

S&P

Fitch

Moody’s(a)

S&P(b)

Fitch(c)

AIG

P-1 (1st of 3)

A-1+ (1st of 6)

F1+ (1st of 5)

Aa2(e) (2nd of 9)

AA (2nd of 8) (f)

AA (2nd of 9)(h)

AIG Financial Products Corp.(d)

P-1

A-1+

—

Aa2(e)

AA(f)

—

AIG Funding, Inc. (d)

P-1

A-1+

F1+

—

—

—

ILFC

P-1

A-1+

F1 (1st of 5)

A1 (3rd of 9)

AA- (2nd of 8) (g)

A+ (3rd of 9)(h)

American General Finance Corporation

P-1

A-1 (1st of 6)

F1

A1

A+ (3rd of 8)

A+(h)

American General Finance, Inc.

P-1

A-1

F1

—

—

A+(h)

(a)	Moody’s Investors Service (Moody’s) appends numerical modifiers 1, 2 and 3 to the generic rating categories to show relative position within rating categories.
(b)	Standard & Poor’s, a division of the McGraw-Hill Companies (S&P) ratings may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories.
(c)	Fitch Ratings (Fitch) ratings may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories.
(d)	AIG guarantees all obligations of AIG Financial Products Corp. and AIG Funding, Inc.
(e)	Negative rating outlook on Senior Unsecured Debt Ratings. A negative outlook by Moody’s indicates that a rating may be lowered but is not necessarily a precursor of a ratings change.

(f)	Negative rating outlook on Counterparty Credit Ratings. A negative outlook by S&P indicates that a rating may be lowered but is not necessarily a precursor of a ratings change.

(g)	Negative rating outlook on Corporate Credit Rating. A negative outlook by S&P indicates that a rating may be lowered but is not necessarily a precursor of a ratings change.
(h)	Issuer Default and Senior Unsecured Debt Ratings on Rating Watch Negative. Rating Watch Negative indicates that a rating has been placed on active rating watch status.

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						Payments due by Period
		Total				Less Than				1-3				3+-5				Over Five
(in millions)		Payments				One Year				Years				Years				Years
Borrowings(a)		$	156,014			$	43,891			$	32,261			$	26,032			$	53,830
Interest payments on borrowings			83,551				5,326				8,899				7,073				62,253
Loss reserves(b)			85,500				23,513				26,078				12,397				23,512
Insurance and investment contract liabilities (c)			645,583				32,359				42,768				42,282				528,174
GIC liabilities(d)			29,797				9,266				8,052				3,458				9,021
Aircraft purchase commitments			20,104				4,174				3,852				2,095				9,983
Operating leases			4,426				747				1,041				693				1,945
Other purchase obligations(e)			1,091				1,056				35				—				—
Total(f)		$	1,026,066			$	120,332			$	122,986			$	94,030			$	688,718

(a)	Excludes commercial paper and borrowings incurred by consolidated investments and includes hybrid financial instrument liabilities recorded at fair value.
(b)	Represents future loss and loss adjustment expense payments estimated based on historical loss development payment patterns. Due to the significance of the assumptions used, the periodic amounts presented could be materially different from actual required payments.
(c)	Insurance and investment contract liabilities include various investment-type products with contractually scheduled maturities, including periodic payments of a term certain nature. Insurance and investment contract liabilities also include benefit and claim liabilities, of which a significant portion represents policies and contracts that do not have stated contractual maturity dates and may not result in any future payment obligations. For these policies and contracts (i) AIG is currently not making payments until the occurrence of an insurable event, such as death or disability, (ii) payments are conditional on survivorship, or (iii) payment may occur due to a surrender or other non-scheduled event out of AIG’s control. AIG has made significant assumptions to determine the estimated undiscounted cash flows of these contractual policy benefits, which assumptions include mortality, morbidity, future lapse rates, expenses, investment returns and interest crediting rates, offset by expected future deposits and premium on in-force policies. Due to the significance of the assumptions used, the periodic amounts presented could be materially different from actual required payments. The amounts presented in this table are undiscounted and therefore exceed the future policy benefits and policyholder contract deposits included in the balance sheet.
(d)	Represents guaranteed maturities under GICs.
(e)	Includes a $1.0 billion commitment to purchase shares under AIG’s share repurchase program which was paid in January 2008 and options to acquire aircraft.

(f)	Does not reflect unrecognized tax benefits of $1.3 billion, the timing of which is uncertain. However, it is reasonably possible that $50 million to $150 million may become payable during 2008. See Note 21 to Consolidated Financial Statements for a discussion on unrecognized tax benefits.

							Amount of Commitment Expiration
			Total Amounts				Less Than				1-3				3+-5				Over Five
(in millions)			Committed				One Year				Years				Years				Years
Guarantees:
	Liquidity facilities(a)		$	2,495			$	8			$	8			$	1,503			$	976
	Standby letters of credit			1,713				1,485				42				38				148
	Construction guarantees(b)			687				—				—				—				687
	Guarantees of indebtedness			1,124				106				83				500				435
	All other guarantees			767				249				8				35				475
Commitments:
	Investment commitments(c)			9,071				3,527				3,604				1,684				256
	Commitments to extend credit			1,325				496				591				238				—
	Letters of credit			1,196				910				6				121				159
	Investment protection agreements(d)			11,991				3,088				2,094				855				5,954
	Maturity shortening puts(e)			2,333				1,234				1,099				—				—
	Other commercial commitments			1,269				114				111				83				961
Total(f)			$	33,971			$	11,217			$	7,646			$	5,057			$	10,051

(a)	Primarily liquidity facilities provided in connection with certain municipal swap transactions and collateralized bond obligations.
(b)	Primarily AIG SunAmerica construction guarantees connected to affordable housing investments.
(c)	Includes commitments to invest in limited partnerships, private equity, hedge funds and mutual funds and commitments to purchase and develop real estate in the United States and abroad.
(d)	Written generally with respect to investments in hedge funds and funds of hedge funds.
(e)	Represents obligations under 2a-7 Puts to purchase certain multi-sector CDOs at pre-determined contractual prices.

(f)	Excludes commitments with respect to pension plans. The annual pension contribution for 2008 is expected to be approximately $118 million for U.S. and non-U.S. plans.

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			Primary								Significant Variable
			Beneficiary								Interest Holder*
(As of December 31,)
															Maximum
											Total				Exposure
			Total Assets								Assets				to Loss
(in billions)			2007				2006				2007				2007
Description
	Real estate and investment funds		$	21.7			$	6.1			$	139.0			$	18.5
	Tax planning VIEs			0.5				1.4				12.1				6.3
	CLOs/ CDOs/ CBOs			0.4				—				107.8				9.7
	Affordable housing partnerships			2.7				—				0.9				0.9
	Other			1.7				1.6				15.3				9.2
Total			$	27.0			$	9.1			$	275.1			$	44.6

*	Includes $2.4 billion of assets held in an unconsolidated SIV sponsored by AIGFP in 2007. As of December 31, 2007, AIGFP’s invested assets included $1.7 billion of securities purchased under agreements to resell, commercial paper and medium-term and capital notes issued by this entity.

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(in millions)			2007				2006
Beginning of year			$	101,677			$	86,317
	Net income			6,200				14,048
	Unrealized appreciation (depreciation) of investments, net of tax			(5,708	)			1,735
	Cumulative translation adjustment, net of tax			1,185				936
	Dividends to shareholders			(1,964	)			(1,690	)
	Payments advanced to purchase shares, net			(912	)			—
	Share purchases			(5,104	)			—
	Other*			427				331
End of year			$	95,801			$	101,677

*	Reflects the effects of employee stock transactions and cumulative effect of accounting changes.

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							Life
							Insurance &
			General				Retirement				Financial				Asset
(in millions)			Insurance				Services				Services				Management				Other				Total
2007
Fixed maturities:
	Bonds available for sale, at fair value		$	74,057			$	294,162			$	1,400			$	27,753			$	—			$	397,372
	Bonds held to maturity, at amortized cost			21,355				1				—				225				—				21,581
	Bond trading securities, at fair value			—				9,948				—				34				—				9,982
Equity securities:
	Common stocks available for sale, at fair value			5,599				11,616				—				609				76				17,900
	Common and preferred stocks trading, at fair value			321				21,026				—				29				—				21,376
	Preferred stocks available for sale, at fair value			1,885				477				8				—				—				2,370
Mortgage and other loans receivable, net of allowance				13				24,851				1,365				7,442				56				33,727
Financial services assets:
	Flight equipment primarily under operating leases, net of accumulated depreciation			—				—				41,984				—				—				41,984
	Securities available for sale, at fair value			—				—				40,305				—				—				40,305
	Trading securities, at fair value			—				—				4,197				—				—				4,197
	Spot commodities			—				—				238				—				—				238
	Unrealized gain on swaps, options and forward transactions			—				—				17,134				—				(692	)			16,442
	Trade receivables			—				—				6,467				—				—				6,467
	Securities purchased under agreements to resell, at contract value			—				—				20,950				—				—				20,950
	Finance receivables, net of allowance			—				5				31,229				—				—				31,234
Securities lending invested collateral, at fair value				5,031				57,471				148				13,012				—				75,662
Other invested assets				11,895				19,015				3,663				17,261				6,989				58,823
Short-term investments, at cost				7,356				25,236				12,249				4,919				1,591				51,351
Total investments and financial services assets as shown on the balance sheet				127,512				463,808				181,337				71,284				8,020				851,961
Cash				497				1,000				389				269				129				2,284
Investment income due and accrued				1,431				4,728				29				401				(2	)			6,587
Real estate, net of accumulated depreciation				349				976				17				89				231				1,662
Total invested assets*			$	129,789			$	470,512			$	181,772			$	72,043			$	8,378			$	862,494

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							Life
							Insurance &
			General				Retirement				Financial				Asset
(in millions)			Insurance				Services				Services				Management				Other				Total
2006
Fixed maturities:
	Bonds available for sale, at fair value		$	67,994			$	288,018			$	1,357			$	29,500			$	—			$	386,869
	Bonds held to maturity, at amortized cost			21,437				—				—				—				—				21,437
	Bond trading securities, at fair value			1				10,835				—				—				—				10,836
Equity securities:
	Common stocks available for sale, at fair value			4,245				8,705				—				226				80				13,256
	Common stocks trading, at fair value			350				14,505				—				—				—				14,855
	Preferred stocks available for sale, at fair value			1,884				650				5				—				—				2,539
Mortgage and other loans receivable, net of allowance				17				21,043				2,398				4,884				76				28,418
Financial services assets:
	Flight equipment primarily under operating leases, net of accumulated depreciation			—				—				39,875				—				—				39,875
	Securities available for sale, at fair value			—				—				47,205				—				—				47,205
	Trading securities, at fair value			—				—				5,031				—				—				5,031
	Spot commodities			—				—				220				—				—				220
	Unrealized gain on swaps, options and forward transactions			—				—				19,607				—				(355	)			19,252
	Trade receivables			—				—				4,317				—				—				4,317
	Securities purchased under agreements to resell, at contract value			—				—				30,291				—				—				30,291
	Finance receivables, net of allowance			—				—				29,573				—				—				29,573
Securities lending invested collateral, at fair value				5,376				50,099				76				13,755				—				69,306
Other invested assets				9,207				13,962				2,212				13,198				3,532				42,111
Short-term investments, at cost				3,281				15,192				2,807				6,198				5				27,483
Total investments and financial services assets as shown on the balance sheet				113,792				423,009				184,974				67,761				3,338				792,874
Cash				334				740				390				118				8				1,590
Investment income due and accrued				1,363				4,378				23				326				1				6,091
Real estate, net of accumulated depreciation				570				698				17				75				26				1,386
Total invested assets(a)(b)			$	116,059			$	428,825			$	185,404			$	68,280			$	3,373			$	801,941

(a)	Certain reclassifications and format changes have been made to prior period amounts to conform to the current period presentation.
(b)	At December 31, 2006, approximately 68 percent and 32 percent of invested assets were held in domestic and foreign investments, respectively.

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				December 31, 2007*																December 31, 2006
				Amortized				Gross				Gross								Amortized				Gross				Gross
				Cost or				Unrealized				Unrealized				Fair				Cost or				Unrealized				Unrealized				Fair
(in millions)				Cost				Gains				Losses				Value				Cost				Gains				Losses				Value
Available for sale:*
	U.S. government and government sponsored entities			$	7,956			$	333			$	37			$	8,252			$	7,667			$	221			$	140			$	7,748
	Obligations of states, municipalities and political subdivisions				46,087				927				160				46,854				59,785				1,056				210				60,631
	Non-U.S. governments				67,023				3,920				743				70,200				62,860				5,461				437				67,884
	Corporate debt				239,822				6,216				4,518				241,520				257,383				7,443				2,536				262,290
	Mortgage-backed, asset- backed and collateralized				140,982				1,221				7,703				134,500				104,687				502				362				104,827
Total bonds				$	501,870			$	12,617			$	13,161			$	501,326			$	492,382			$	14,683			$	3,685			$	503,380
Equity securities					15,188				5,545				463				20,270				13,147				2,807				159				15,795
Total				$	517,058			$	18,162			$	13,624			$	521,596			$	505,529			$	17,490			$	3,844			$	519,175
Held to maturity:*
		Bonds — Obligations of states, municipalities and political subdivisions		$	21,581			$	609			$	33			$	22,157			$	21,437			$	731			$	14			$	22,154

*	At December 31, 2007 and 2006, fixed maturities held by AIG that were below investment grade or not rated totaled $27.0 billion and $26.6 billion, respectively.

Rating			2007				2006
	AAA			38	%			37	%
	AA			28				26
	A			18				20
	BBB			11				12
	Below investment grade			4				4
	Non-rated			1				1
Total				100	%			100	%

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Industry Category			Percentage
Industrials				47	%
Financial Institutions				42
Utilities/Other				11
	Total*			100	%

*	At December 31, 2007 approximately 95% of these investments were rated investment grade.

			December 31, 2007
							Gross				Gross
			Amortized				Unrealized				Unrealized				Fair
(in millions)			Cost				Gains				Losses				Value
AIG, excluding AIGFP:
	RMBS		$	89,851			$	433			$	5,504			$	84,780
	CMBS			23,918				237				1,156				22,999
	CDO/ ABS			10,844				196				593				10,447
Subtotal, excluding AIGFP				124,613				866				7,253				118,226
Total AIGFP investments in mortgage-backed, asset-backed and collateralized securities				16,369				355				450				16,274
Total			$	140,982			$	1,221			$	7,703			$	134,500

			December 31, 2007
							Gross				Gross
			Amortized				Unrealized				Unrealized								Percent
(in millions)			Cost				Gains				Losses				Fair Value				of Total
Residential mortgage-backed securities:
	U.S. agencies		$	14,575			$	320			$	70			$	14,825				17	%
	Prime non-agency(a)			21,552				72				550				21,074				25
	Alt-A			25,349				17				1,620				23,746				28
	Other housing-related(b)			4,301				2				357				3,946				5
	Subprime			24,074				22				2,907				21,189				25
Total			$	89,851			$	433			$	5,504			$	84,780				100	%

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			Year of Vintage
(in millions)			Prior				2003				2004				2005				2006				2007				Total
Rating:
	AAA		$	4,053			$	6,202			$	7,070			$	16,011			$	25,392			$	18,937			$	77,665
	AA			63				785				555				1,092				2,117				512				5,124
	A			46 —				242				345				480				248				138				1,499
	BBB and below							53				74				214				114				37				492
Total			$	4,162			$	7,282			$	8,044			$	17,797			$	27,871			$	19,624			$	84,780

			Year of Vintage
(in millions)			Prior				2003				2004				2005				2006				2007				Total
Rating:
	AAA			$208				$623				$  960				$4,899				$9,301				$6,512				$22,503
	AA			23				199				150				391				117				11				891
	A			1 —				37				51				137				48				6 —				280
	BBB and below							11				19				36				6								72
Total				$232				$870				$1,180				$5,463				$9,472				$6,529				$23,746

			Year of Vintage
(in millions)			Prior				2003				2004				2005				2006				2007				Total
Rating:
	AAA			$127				$362				$557				$5,403				$7,926				$4,081				$18,456
	AA			6				35				116				277				1,562				357				2,353
	A			10 —				82 —				100 —				120				34 —				26 —				372
	BBB and below															8												8
Total				$143				$479				$773				$5,808				$9,522				$4,464				$21,189

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		Gross				Gross
		Unrealized				Unrealized
(in millions)		Gains				Losses
Securities available for sale, at fair value		$	939			$	777
Unrealized gain/loss on swaps, options and forward transactions*			17,134				22,982

*	These amounts are also presented as the respective balance sheet amounts.

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														BBB/Not				Short-
(in millions)		AAA				AA				A				Rated				Term				Total
Corporate debt		$	1,191			$	9,341			$	3,448			$	160			$	—			$	14,140
Mortgage-backed, asset-backed and collateralized			47,180				2,226				22				82								49,510
Cash and short-term investments			—				—				—				—				12,012				12,012
Total		$	48,371			$	11,567			$	3,470			$	242			$	12,012			$	75,662

		Percent
		Participation
Domestic Life Insurance and Retirement Services			79	%
Foreign Life Insurance			10
Domestic General Insurance			3
Foreign General Insurance			4
Asset Management			4
Total			100.0	%

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•	securities which AIG does not intend to hold until recovery;
•	declines due to foreign exchange;
•	issuer-specific credit events;
•	certain structured securities impaired under EITF No. 99-20; and
•	other impairments, including equity securities and partnership investments.

(in millions)			2007				2006				2005
	Sales of fixed maturities		$	(468	)		$	(382	)		$	372
	Sales of equity securities			1,087				813				643
	Sales of real estate and other assets			619				303				88
	Other-than-temporary impairments			(4,072	)			(944	)			(598	)
	Foreign exchange transactions			(643	)			(382	)			701
	Derivative instruments			(115	)			698				(865	)
Total			$	(3,592	)		$	106			$	341
AIGFP other-than-temporary impairments*			$	(643	)		$	—			$	—

*	Reported as part of other income.

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(in millions)			2007				2006				2005
Impairment type:
	Severity*		$	2,200			$	—			$	—
	Lack of intent to hold to recovery			1,054				619				335
	Foreign currency declines			500				—				—
	Issuer-specific credit events			515				279				257
	Adverse projected cash flows on structured securities (EITF 99-20)			446				46				6
Total			$	4,715			$	944			$	598

*	Includes $643 million related to AIGFP reported in other income.

							Life
							Insurance &
			General				Retirement				Financial				Asset
(in millions)			Insurance				Services				Services				Management				Other				Total
Impairment Type:
	Severity		$	71			$	1,070			$	643			$	416			$	—			$	2,200
	Lack of intent to hold to recovery			91				885				7				71				—				1,054
	Foreign currency declines			—				500				—				—				—				500
	Issuer-specific credit events			113				177				—				69				156				515
	Adverse projected cash flows on structured securities			1				166				—				279				—				446
Total			$	276			$	2,798			$	650			$	835			$	156			$	4,715

Rating:		RMBS				CDO				CMBS				Other Securities				Total
AAA		$	168			$	621			$	—			$	—			$	789
AA			870				53				6				—				929
A			66				32				77				—				175
BBB and below			28				—				52				—				80
Nonrated			—				—				—				227				227
Total		$	1,132			$	706			$	135			$	227			$	2,200

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																											Greater than 50%
			Less than or equal to												Greater than 20% to												of Cost(e)
			20% of Cost(e)												50% of Cost(e)																								Total
Aging(d)			Unrealized												Unrealized												Unrealized												Unrealized
(dollars in millions)			Cost(a)				Loss				Items				Cost(a)				Loss				Items				Cost(a)				Loss				Items				Cost(a)				Loss(b)				Items
Investment grade bonds
	0-6 months		$	124,681			$	5,099				16,539			$	2,588			$	681				633			$				$								$	127,269			$	5,780				17,172
	7-12 months			53,515				3,078				7,174				3,219				859				1,110				—				—				—				56,734				3,937				8,284
	>12 months			63,146				2,966				9,598				699				180				119																63,845				3,146				9,717
Total			$	241,342			$	11,143				33,311			$	6,506			$	1,720				1,862			$	—			$	—				—			$	247,848			$	12,863				35,173
Below investment grade bonds
	0-6 months		$	5,909			$	147				1,611			$	68			$	18				24			$	—			$	—				—			$	5,977			$	165				1,635
	7-12 months			782				45				246				47				8				14				—				—				—				829				53				260
	>12 months			1,222				61				204				70				19				9				—				—				—				1,292				80				213
Total			$	7,913			$	253				2,061			$	185			$	45				47			$	—			$	—				—			$	8,098			$	298				2,108
Total bonds
	0-6 months		$	130,590			$	5,246				18,150			$	2,656			$	699				657			$	—			$	—				—			$	133,246			$	5,945				18,807
	7-12 months			54,297				3,123				7,420				3,266				867				1,124				—				—				—				57,563				3,990				8,544
	>12 months			64,368				3,027				9,802				769				199				128				—				—				—				65,137				3,226				9,930
Total(c)			$	249,255			$	11,396				35,372			$	6,691			$	1,765				1,909			$	—			$	—				—			$	255,946			$	13,161				37,281
Equity securities
	0-6 months		$	3,603			$	297				2,051			$	262			$	69				39			$				$								$	3,865			$	366				2,090
	7-12 months			283				33				181				285				64				36																568				97				217
	>12 months			—				—				—				—				—				—				—				—				—				—				—				—
Total			$	3,886			$	330				2,232			$	547			$	133				75			$	—			$	—				—			$	4,433			$	463				2,307

(a)	For bonds, represents amortized cost.
(b)	The effect on net income of unrealized losses after taxes will be mitigated upon realization because certain realized losses will be charged to participating policyholder accounts, or realization will result in current decreases in the amortization of certain DAC.
(c)	Includes securities lending invested collateral.
(d)	Represents the number of continuous months that fair value has been less than cost by any amount.
(e)	Represents the percentage by which fair value is less than cost at the balance sheet date.

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•	These securities were valued, in the aggregate, at approximately 95 percent of their current amortized cost.
•	Less than three percent of these securities were valued at less than 20 percent of their current cost, or amortized cost.
•	Less than four percent of the fixed income securities had issuer credit ratings which were below investment grade.

(in millions)		Amortized Cost				Fair Value
Due in one year or less		$	9,408			$	9,300
Due after one year through five years			36,032				35,267
Due after five years through ten years			54,198				52,394
Due after ten years			56,557				53,578
Mortgage-backed, asset-backed and collateralized			99,751				92,246
Total		$	255,946			$	242,785

•	Credit risk — the potential loss arising from an obligor’s inability or unwillingness to meet its obligations to AIG.
•	Market risk — the potential loss arising from adverse fluctuations in interest rates, foreign currencies, equity and commodity prices, and their levels of volatility.
•	Operational risk — the potential loss resulting from inadequate or failed internal processes, people, and systems, or from external events.
•	Liquidity risk — the potential inability to meet all payment obligations when they become due.
•	General insurance risk — the potential loss resulting from inadequate premiums, insufficient reserves and catastrophic exposures.
•	Life insurance risk — the potential loss resulting from experience deviating from expectations for mortality, morbidity and termination rates in the insurance-oriented products and insufficient cash flows to cover contract liabilities in the retirement savings products.

•

The Financial Risk Committee (FRC) oversees AIG’s market risk exposures to interest rates, foreign exchange and fair values of shares, partnership interests, real estate and other equity investments and provides strategic direction for AIG’s asset-liability management. The FRC meets monthly and acts as a central mechanism for AIG senior management to review comprehensive information on AIG’s financial exposures and to exercise broad control over these exposures. There are two subcommittees of the FRC.

	•	The Foreign Exchange Committee monitors trends in foreign exchange rates, reviews AIG’s foreign exchange exposures, and provides recommendations on foreign currency asset allocation and remittance hedging.

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	•	The Liquidity Risk Committee is responsible for liquidity policy and implementation at AIG Parent and exercises oversight and control of liquidity policies at each AIG entity. See Capital Resources and Liquidity herein.

•	The CRC is responsible for the following:

	•	approving credit risk policies and procedures for use throughout AIG;
	•	delegating credit authority to business unit credit officers and select business unit managers;
	•	approving transaction requests and limits for corporate, sovereign and cross-border credit exposures that exceed the delegated authorities;
	•	establishing and maintaining AIG’s risk rating process for corporate, financial and sovereign obligors; and
	•	conducting regular reviews of credit risk exposures in the portfolios of all credit-incurring business units.

•	The Derivatives Committee (DC) reviews any proposed derivative transaction or program not otherwise managed by AIGFP. The DC examines, among other things, the nature and purpose of the derivative transaction, its potential credit exposure, if any, and the estimated benefits.
•	The CSFTC has the authority and responsibility to review and approve any proposed CSFT. A CSFT is any transaction or product that may involve a heightened legal, regulatory, accounting or reputational risk that is developed, marketed or proposed by AIG or a third party. The CSFTC provides guidance to and monitors the activities of transaction review committees (TRCs) which have been established in all major business units. TRCs have the responsibility to identify, review and refer CSFTs to the CSFTC.

•	Manage the approval process for all requests for credit limits, program limits and transactions.
•	Approve delegated credit authorities to CRM credit executives and business unit credit officers.
•	Aggregate globally all credit exposure data by counterparty, country and industry and report risk concentrations regularly to the CRC and the Finance Committee of the Board of Directors.
•	Administer regular in-depth portfolio credit reviews of all investment, derivative and credit-incurring business units and recommend any corrective actions where required.
•	Develop methodologies for quantification and assessment of credit risks, including the establishment and maintenance of AIG’s internal risk rating process.
•	Approve appropriate credit reserves and methodologies at the business unit and enterprise levels.

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							Credit Exposure
							as a Percentage of Total
Category			Risk Rating(a)				Shareholders’ Equity
Investment Grade:
	10 largest combined			A+ (weighted average	) (b)			84.8	%
	Single largest non-sovereign (financial institution)			AA	-			8.4
	Single largest corporate			AAA				5.4
	Single largest sovereign			A				15.7
Non-Investment Grade:
	Single largest sovereign			BB	-			1.8
	Single largest non-sovereign			B	+			0.5

(a)	Risk rating is based on external ratings, or equivalent, based on AIG’s internal risk rating process.
(b)	Six of the ten largest credit exposures are to highly-rated financial institutions and three are to investment-grade rated sovereigns; none is rated lower than BBB+ or its equivalent.

•	AIG’s single largest industry credit exposure is to the highly-rated global financial institutions sector, accounting for 87 percent of total shareholders’ equity at December 31, 2007.
•	Excluding the U.S. residential and commercial mortgage sectors, AIG’s other industry credit concentrations in excess of 10 percent of total shareholders’ equity at December 31, 2007 are to the following industries (in descending order by approximate size):

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•	AIG is a globally diversified enterprise with capital deployed in a variety of currencies. Capital deployed in AIG’s overseas businesses, when converted into U.S. dollars for financial reporting purposes, constitutes a “long foreign currency/short U.S. dollar” market exposure on AIG’s balance sheet. Similarly, overseas earnings denominated in foreign currency also represent a “long foreign currency/short U.S. dollar” market exposure on AIG’s income statement.
•	Much of AIG’s domestic capital is invested in U.S. fixed income or equity securities, leading to exposures to U.S. yields and equity markets.
•	Several of AIG’s Foreign Life Insurance subsidiaries operate in developing markets where maturities on longer-term life insurance liabilities exceed the maximum maturities of available local currency assets.

		U.S. dollar up				U.S. dollar down
(in millions)		10 percent				10 percent
Shareholders’ equity			$(466	)			$466
Net income			$(220	)			$220

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			2007																2006
							For the Year Ended																For the Year Ended
							December 31,																December 31,
(in millions)			As of December 31				Average				High				Low				As of December 31				Average				High				Low
Total AIG Non-Trading Market Risk:
	Diversified		$	5,593			$	5,316			$	5,619			$	5,073			$	5,073			$	5,209			$	5,783			$	4,852
	Interest rate			4,383				4,600				4,757				4,383				4,577				4,962				5,765				4,498
	Currency			785				729				785				685				686				641				707				509
	Equity			2,627				2,183				2,627				1,873				1,873				1,754				1,873				1,650
General Insurance:
	Diversified		$	1,363			$	1,637			$	1,892			$	1,363			$	1,717			$	1,697			$	1,776			$	1,617
	Interest rate			1,117				1,492				1,792				1,117				1,541				1,635				1,717				1,541
	Currency			255				222				255				205				212				162				212				119
	Equity			835				659				835				573				573				551				573				535
Life Insurance & Retirement Services:
	Diversified		$	5,180			$	4,848			$	5,180			$	4,574			$	4,574			$	4,672			$	5,224			$	4,307
	Interest rate			4,405				4,465				4,611				4,287				4,471				4,563				5,060				4,229
	Currency			649				621				678				568				568				538				592				459
	Equity			1,810				1,512				1,810				1,293				1,293				1,228				1,299				1,133
Non-Trading Financial Services:
	Diversified		$	99			$	117			$	170			$	85			$	125			$	165			$	252			$	125
	Interest rate			95				116				168				76				127				166				249				127
	Currency			13				12				13				11				11				8				11				7
	Equity			1				1				1				1				1				1				2				1
Asset Management:
	Diversified		$	38			$	49			$	74			$	26			$	64			$	144			$	190			$	64
	Interest rate			32				45				72				22				63				145				192				63
	Currency			2				3				5				2				3				4				7				3
	Equity			13				11				13				8				8				9				13				8

•	increased U.S. equity investment allocation in the General Insurance and Life Insurance & Retirement Services segments,
•	increased volatility in U.S. equity prices, and
•	rising correlations between U.S. equities and AIG’s structural duration exposures in Asia.

•	facultative to cover large individual exposures;
•	quota share treaties to cover specific books of business;
•	excess of loss treaties to cover large losses;
•	excess or surplus automatic treaties to cover individual life risks in excess of stated per-life retention limits; and
•	catastrophe treaties to cover specific catastrophes including earthquake, windstorm and flood.

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•	balances due from reinsurers for indemnity losses and loss expenses billed to, but not yet collected from, reinsurers (Paid Losses Recoverable);
•	ultimate ceded reserves for indemnity losses and expenses includes reserves for claims reported but not yet paid and estimates for IBNR (collectively, Ceded Loss Reserves); and
•	Ceded Reserves for Unearned Premiums.

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								Gross				Percent of								Uncollateralized
						A.M.		General				General								General
		S&P				Best		Reinsurance				Reinsurance				Collateral				Reinsurance
(in millions)		Rating(a)				Rating(a)		Assets				Assets, Net				Held(b)				Assets
Reinsurer:
Swiss Reinsurance Group			AA-			A+		$	1,818				8.5%			$	372			$	1,446
Berkshire Hathaway Insurance Group			AAA			A++		$	1,618				7.5%			$	212			$	1,406
Munich Reinsurance Group			AA-			A+		$	1,200				5.6%			$	430			$	770
Lloyd’s Syndicates — Lloyd’s of London(c)			A+			A		$	1,089				5.1%			$	113			$	976

(a)	Rating designations as of February 19, 2008.
(b)	Excludes collateral held in excess of applicable treaty balances.
(c)	Excludes Equitas gross reinsurance assets that are unrated, which are less than five percent of AIG’s general reinsurance assets.

•	General Insurance — risks covered include property, casualty, fidelity/surety, management liability and mortgage insurance. Risks in the general insurance segment are managed through aggregations and limitations of concentrations at multiple levels: policy, line of business, correlation and catastrophic risk events.
•	Life Insurance & Retirement Services — risks include mortality and morbidity in the insurance-oriented products and insufficient cash flows to cover contract liabilities in the retirement savings-oriented products. Risks are managed through product design, sound medical underwriting, external traditional reinsurance programs and external catastrophe reinsurance programs.

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										Net After				% of Consolidated
						Net of 2008				Income				Shareholders’ Equity at
(in millions)		Gross				Reinsurance				Tax				December 31, 2007
Natural Peril:
Earthquake		$	5,625			$	3,397				$2,208				2.3%
Tropical Cyclone*		$	5,802			$	3,430				$2,230				2.3%

*	Includes hurricanes, typhoons and other wind-related events.

						Net of 2008
(in millions)		Gross				Reinsurance
Natural Peril:
San Francisco Earthquake		$	6,236			$	3,809
Miami Hurricane		$	5,829			$	3,280
Northeast Hurricane		$	5,287			$	3,739
Los Angeles Earthquake		$	5,375			$	3,297
Gulf Coast Hurricane		$	3,730			$	2,088
Japanese Earthquake		$	1,109			$	406
European Windstorm		$	252			$	89
Japanese Typhoon		$	177			$	103

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•	underwriting, which represents the exposure to loss resulting from the actual policy experience emerging adversely in comparison to the assumptions made in the product pricing associated with mortality, morbidity, termination and expenses; and
•	investment risk which represents the exposure to loss resulting from the cash flows from the invested assets being less than the cash flows required to meet the obligations of the expected policy and contract liabilities and the necessary return on investments.

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(in millions)			2007				2006
Rating:
	AAA		$	5,069			$	5,465
	AA			5,166				8,321
	A			4,796				3,690
	BBB			1,801				2,032
	Below investment grade			302				99
Total			$	17,134			$	19,607

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		Notional				Unrealized Market
		Amount				Valuation Loss
		(in billions)				(in millions)
Corporate loans(a)		$	230			$	—
Prime residential mortgages(a)			149				—
Corporate Debt/CLOs			70				226
Multi-sector CDO(b)			78				11,246
Total		$	527			$	11,472

(a)	Predominantly represent transactions written to facilitate regulatory capital relief.
(b)	Approximately $61.4 billion in notional amount of the multi-sector CDO pools include some exposure to U.S. subprime mortgages.

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							For the Year Ended																For the Year Ended
							December 31, 2007																December 31, 2006
(in millions)			As of December 31				Average				High				Low				As of December 31				Average				High				Low
Total AIG trading market risk:
	Diversified			$5				$5				$8				$4				$4				$4				$7				$3
	Interest rate			3				2				3				2				2				2				3				1
	Currency			1				1				2				1				1				1				3				1
	Equity			3				3				5				2				3				3				4				2
	Commodity			3				3				7				2				5				3				5				2

*	The VaR calculation has been changed from a 3-year time series to a 5-year time series. The December 31, 2006 VaR reflects this change.

•	the risk that there will be no market for the aircraft acquired;
•	the risk that aircraft cannot be placed with lessees;
•	the risk of nonperformance by lessees; and
•	the risk that aircraft and related assets cannot be disposed of at the time and in a manner desired.

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Page
Report of Independent Registered Public Accounting Firm			129
Consolidated Balance Sheet at December 31, 2007 and 2006			130
Consolidated Statement of Income for the years ended December 31, 2007, 2006 and 2005			132
Consolidated Statement of Shareholders’ Equity for the years ended December 31, 2007, 2006 and 2005			133
Consolidated Statement of Cash Flows for the years ended December 31, 2007, 2006 and 2005			134
Consolidated Statement of Comprehensive Income for the years ended December 31, 2007, 2006 and 2005			136
Notes to Consolidated Financial Statements			137
Schedules:
I  – Summary of Investments — Other Than Investments in Related Parties at December 31, 2007			226
II  – Condensed Financial Information of Registrant at December 31, 2007 and 2006 and for the years ended December 31, 2007, 2006 and 2005			227
III  – Supplementary Insurance Information at December 31, 2007, 2006 and 2005 and for the years then ended			229
IV – Reinsurance at December 31, 2007, 2006 and 2005 and for the years then ended			230
V  – Valuation and Qualifying Accounts at December 31, 2007, 2006 and 2005 and for the years then ended			231

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December 31,
(in millions)					2007				2006
Assets:
	Investments and financial services assets:
		Fixed maturities:
			Bonds available for sale, at fair value (amortized cost: 2007 — $393,170; 2006 — $377,163)		$	397,372			$	386,869
			Bonds held to maturity, at amortized cost (fair value: 2007 — $22,157; 2006 — $22,154)			21,581				21,437
			Bond trading securities, at fair value (includes hybrid financial instruments: 2007 — $555; 2006 — $522)			9,982				10,836
		Equity securities:
			Common stocks available for sale, at fair value (cost: 2007 — $12,588; 2006 — $10,662)			17,900				13,256
			Common and preferred stocks trading, at fair value			21,376				14,855
			Preferred stocks available for sale, at fair value (cost: 2007 — $2,600; 2006 — $2,485)			2,370				2,539
		Mortgage and other loans receivable, net of allowance (2007 — $77; 2006 — $64) (includes loans held for sale: 2007 — $399)				33,727				28,418
		Financial services assets:
			Flight equipment primarily under operating leases, net of accumulated depreciation (2007 — $10,499; 2006 — $8,835)			41,984				39,875
			Securities available for sale, at fair value (cost: 2007 — $40,157; 2006 — $45,912)			40,305				47,205
			Trading securities, at fair value			4,197				5,031
			Spot commodities			238				220
			Unrealized gain on swaps, options and forward transactions			16,442				19,252
			Trade receivables			6,467				4,317
			Securities purchased under agreements to resell, at contract value			20,950				30,291
			Finance receivables, net of allowance (2007 — $878; 2006 — $737) (includes finance receivables held for sale: 2007 — $233; 2006 — $1,124)			31,234				29,573
		Securities lending invested collateral, at fair value (cost: 2007 — $80,641; 2006 — $69,306)				75,662				69,306
		Other invested assets				58,823				42,111
		Short-term investments, at cost (approximates fair value)				51,351				27,483
		Total investments and financial services assets				851,961				792,874
	Cash					2,284				1,590
	Investment income due and accrued					6,587				6,091
	Premiums and insurance balances receivable, net of allowance (2007 — $662; 2006 — $756)					18,395				17,789
	Reinsurance assets, net of allowance (2007 — $520; 2006 — $536)					23,103				23,355
	Deferred policy acquisition costs					43,150				37,235
	Investments in partially owned companies					654				1,101
	Real estate and other fixed assets, net of accumulated depreciation (2007 — $5,446; 2006 — $4,940)					5,518				4,381
	Separate and variable accounts					78,684				70,277
	Goodwill					9,414				8,628
	Other assets					20,755				16,089
Total assets					$	1,060,505			$	979,410

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December 31,
(in millions, except share data)				2007				2006
Liabilities:
	Reserve for losses and loss expenses			$	85,500			$	79,999
	Unearned premiums				28,022				26,271
	Future policy benefits for life and accident and health insurance contracts				136,068				121,004
	Policyholders’ contract deposits				258,459				248,264
	Other policyholders’ funds				12,599				10,986
	Commissions, expenses and taxes payable				6,310				5,305
	Insurance balances payable				4,878				3,789
	Funds held by companies under reinsurance treaties				2,501				2,602
	Income taxes payable				3,823				9,546
	Financial services liabilities:
		Securities sold under agreements to repurchase, at contract value			8,331				19,677
		Trade payables			10,568				6,174
		Securities and spot commodities sold but not yet purchased, at fair value			4,709				4,076
		Unrealized loss on swaps, options and forward transactions			20,613				11,401
		Trust deposits and deposits due to banks and other depositors			4,903				5,249
	Commercial paper and extendible commercial notes				13,114				13,363
	Long-term borrowings				162,935				135,316
	Separate and variable accounts				78,684				70,277
	Securities lending payable				81,965				70,198
	Minority interest				10,422				7,778
	Other liabilities (includes hybrid financial instruments at fair value: 2007 — $47; 2006 — $111)				30,200				26,267
Total liabilities					964,604				877,542
Preferred shareholders’ equity in subsidiary companies					100				191
Commitments, Contingencies and Guarantees (See Note 12)
Shareholders’ equity:
	Common stock, $2.50 par value; 5,000,000,000 shares authorized; shares issued 2007 and 2006 — 2,751,327,476				6,878				6,878
	Additional paid-in capital				2,848				2,590
	Payments advanced to purchase shares				(912	)			—
	Retained earnings				89,029				84,996
	Accumulated other comprehensive income (loss)				4,643				9,110
	Treasury stock, at cost; 2007 — 221,743,421; 2006 — 150,131,273 shares of common stock (including 119,293,487 and 119,278,644 shares, respectively, held by subsidiaries)				(6,685	)			(1,897	)
Total shareholders’ equity					95,801				101,677
Total liabilities, preferred shareholders’ equity in subsidiary companies and shareholders’ equity				$	1,060,505			$	979,410

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Years Ended December 31,
(in millions, except per share data)				2007				2006				2005
Revenues:
	Premiums and other considerations			$	79,302			$	74,213			$	70,310
	Net investment income				28,619				26,070				22,584
	Net realized capital gains (losses)				(3,592	)			106				341
	Unrealized market valuation losses on AIGFP super senior credit default swap portfolio				(11,472	)			—				—
	Other income				17,207				12,998				15,546
	Total revenues				110,064				113,387				108,781
Benefits and expenses:
	Incurred policy losses and benefits				66,115				60,287				64,100
	Insurance acquisition and other operating expenses				35,006				31,413				29,468
	Total benefits and expenses				101,121				91,700				93,568
Income before income taxes, minority interest and cumulative effect of accounting changes					8,943				21,687				15,213
Income taxes (benefits):
	Current				3,219				5,489				2,587
	Deferred				(1,764	)			1,048				1,671
	Total income taxes				1,455				6,537				4,258
Income before minority interest and cumulative effect of accounting changes					7,488				15,150				10,955
Minority interest					(1,288	)			(1,136	)			(478	)
Income before cumulative effect of accounting changes					6,200				14,014				10,477
Cumulative effect of accounting changes, net of tax					—				34				—
Net income				$	6,200			$	14,048			$	10,477
Earnings per common share:
	Basic
		Income before cumulative effect of accounting changes		$	2.40			$	5.38			$	4.03
		Cumulative effect of accounting changes, net of tax			—				0.01				—
		Net income		$	2.40			$	5.39			$	4.03
	Diluted
		Income before cumulative effect of accounting changes		$	2.39			$	5.35			$	3.99
		Cumulative effect of accounting changes, net of tax			—				0.01				—
		Net income		$	2.39			$	5.36			$	3.99
Average shares outstanding:
	Basic				2,585				2,608				2,597
	Diluted				2,598				2,623				2,627

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							Amounts												Shares
Years Ended December 31,
(in millions, except share and per share data)							2007				2006				2005				2007				2006				2005
Common stock:
		Balance, beginning and end of year					$	6,878			$	6,878			$	6,878				2,751,327,476				2,751,327,476				2,751,327,476
Additional paid-in capital:
		Balance, beginning of year						2,590				2,339				2,094
			Excess of cost over proceeds of common stock issued under stock plans					(98	)			(128	)			(91	)
	Other							356				379				336
		Balance, end of year						2,848				2,590				2,339
Payments advanced to purchase shares:
		Balance, beginning of year						—				—				—
			Payments advanced					(6,000	)			—				—
			Shares purchased					5,088				—				—
		Balance, end of year						(912	)			—				—
Retained earnings:
		Balance, beginning of year						84,996				72,330				63,468
			Cumulative effect of accounting changes, net of tax					(203	)			308				—
			Adjusted balance, beginning of year					84,793				72,638				63,468
			Net income					6,200				14,048				10,477
			Dividends to common shareholders ($0.77,$0.65 and $0.63 per share, respectively)					(1,964	)			(1,690	)			(1,615	)
		Balance, end of year						89,029				84,996				72,330
Accumulated other comprehensive income (loss):
		Unrealized appreciation (depreciation) of investments, net of tax:
			Balance, beginning of year					10,083				8,348				10,326
				Unrealized appreciation (depreciation) of investments, net of reclassification adjustments				(8,046	)			2,574				(3,577	)
					Income tax benefit (expense)			2,338				(839	)			1,599
			Balance, end of year					4,375				10,083				8,348
		Foreign currency translation adjustments, net of tax:
			Balance, beginning of year					(305	)			(1,241	)			(701	)
				Translation adjustment				1,325				1,283				(926	)
				Income tax benefit (expense)				(140	)			(347	)			386
			Balance, end of year					880				(305	)			(1,241	)
		Net derivative gains (losses) arising from cash flow hedging activities:
			Balance, beginning of year					(27	)			(25	)			(53	)
				Net deferred gains on cash flow hedges, net of reclassification adjustments				(133	)			13				35
				Deferred income tax expense				73				(15	)			(7	)
			Balance, end of year					(87	)			(27	)			(25	)
		Retirement plan liabilities adjustment, net of taxes:
			Balance, beginning of year					(641	)			(115	)			(128	)
			Net actuarial loss					197				—				—
			Prior service credit					(24	)			—				—
			Minimum pension liability adjustment					—				80				81
				Deferred income tax benefit (expense)				(57	)			(74	)			(68	)
				Adjustment to initially apply FAS 158, net of tax				—				(532	)			—
			Balance, end of year					(525	)			(641	)			(115	)
		Accumulated other comprehensive income (loss), end of year						4,643				9,110				6,967
Treasury stock, at cost:
		Balance, beginning of year						(1,897	)			(2,197	)			(2,211	)			(150,131,273	)			(154,680,704	)			(154,904,286	)
			Cost of shares acquired					(5,104	)			(20	)			(176	)			(76,519,859	)			(288,365	)			(2,654,272	)
			Issued under stock plans					305				291				173				4,958,345				4,579,913				2,625,227
			Other					11				29				17				(50,634	)			257,883				252,627
		Balance, end of year						(6,685	)			(1,897	)			(2,197	)			(221,743,421	)			(150,131,273	)			(154,680,704	)
Total shareholders’ equity, end of year							$	95,801			$	101,677			$	86,317

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Years Ended December 31,
(in millions)				2007				2006				2005
Summary:
	Net cash provided by operating activities			$	35,171			$	6,287			$	23,413
	Net cash used in investing activities				(68,007	)			(67,952	)			(61,459	)
	Net cash provided by financing activities				33,480				61,244				38,097
	Effect of exchange rate changes on cash				50				114				(163	)
	Change in cash				694				(307	)			(112	)
	Cash at beginning of year				1,590				1,897				2,009
	Cash at end of year			$	2,284			$	1,590			$	1,897
Cash flows from operating activities:
	Net income			$	6,200			$	14,048			$	10,477
	Adjustments to reconcile net income to net cash provided by operating activities:
	Noncash revenues, expenses, gains and losses included in income:
		Unrealized market valuation losses on AIGFP super senior credit default swap portfolio			11,472				—				—
		Net gains on sales of securities available for sale and other assets			(1,349	)			(763	)			(1,218	)
		Foreign exchange transaction (gains) losses			(104	)			1,795				(3,330	)
		Net unrealized (gains) losses on non-AIGFP derivative assets and liabilities			116				(713	)			878
		Equity in income of partially owned companies and other invested assets			(4,760	)			(3,990	)			(1,421	)
		Amortization of deferred policy acquisition costs			11,602				11,578				10,693
		Amortization of premium and discount on securities and long-term borrowings			580				699				207
		Depreciation expenses, principally flight equipment			2,790				2,374				2,200
		Provision for finance receivable losses			646				495				435
		Other-than-temporary impairments			4,715				944				598
	Changes in operating assets and liabilities:
		General and life insurance reserves			16,242				12,930				27,045
		Premiums and insurance balances receivable and payable — net			(207	)			(1,214	)			192
		Reinsurance assets			923				1,665				(5,365	)
		Capitalization of deferred policy acquisition costs			(15,846	)			(15,363	)			(14,454	)
		Investment income due and accrued			(401	)			(249	)			(171	)
		Funds held under reinsurance treaties			(151	)			(1,612	)			770
		Other policyholders’ funds			1,374				(498	)			811
		Income taxes payable			(3,709	)			2,003				1,543
		Commissions, expenses and taxes payable			989				408				140
		Other assets and liabilities — net			3,657				(77	)			2,863
		Bonds, common and preferred stocks trading			(3,667	)			(9,147	)			(5,581	)
		Trade receivables and payables — net			2,243				(197	)			2,272
		Trading securities			835				1,339				(3,753	)
		Spot commodities			(18	)			(128	)			442
		Net unrealized (gain) loss on swaps, options and forward transactions			1,413				(1,482	)			934
		Securities purchased under agreements to resell			9,341				(16,568	)			9,953
		Securities sold under agreements to repurchase			(11,391	)			9,552				(12,534	)
		Securities and spot commodities sold but not yet purchased			633				(1,899	)			571
		Finance receivables and other loans held for sale — originations and purchases			(5,145	)			(10,786	)			(13,070	)
		Sales of finance receivables and other loans — held for sale			5,671				10,602				12,821
		Other, net			477				541				(1,535	)
		Total adjustments			28,971				(7,761	)			12,936
Net cash provided by operating activities				$	35,171			$	6,287			$	23,413

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Years Ended December 31,
(in millions)			2007				2006				2005
Cash flows from investing activities:
Proceeds from (payments for)
	Sales and maturities of fixed maturity securities available for sale and hybrid investments		$	132,320			$	112,894			$	140,076
	Sales of equity securities available for sale			9,616				12,475				11,661
	Proceeds from fixed maturity securities held to maturity			295				205				46
	Sales of flight equipment			303				697				573
	Sales or distributions of other invested assets			14,109				14,084				14,899
	Payments received on mortgage and other loans receivable			9,062				5,165				3,679
	Principal payments received on finance receivables held for investment			12,553				12,586				12,461
	Purchases of fixed maturity securities available for sale and hybrid investments			(139,184	)			(146,465	)			(175,657	)
	Purchases of equity securities available for sale			(10,933	)			(14,482	)			(13,273	)
	Purchases of fixed maturity securities held to maturity			(266	)			(197	)			(3,333	)
	Purchases of flight equipment			(4,772	)			(6,009	)			(6,193	)
	Purchases of other invested assets			(25,327	)			(16,040	)			(15,059	)
	Acquisitions, net of cash acquired			(1,361	)			—				—
	Mortgage and other loans receivable issued			(12,439	)			(7,438	)			(5,310	)
	Finance receivables held for investment — originations and purchases			(15,271	)			(13,830	)			(17,276	)
	Change in securities lending invested collateral			(12,303	)			(9,835	)			(10,301	)
	Net additions to real estate, fixed assets, and other assets			(870	)			(1,097	)			(941	)
	Net change in short-term investments			(23,484	)			(10,620	)			1,801
	Net change in non-AIGFP derivative assets and liabilities			(55	)			(45	)			688
Net cash used in investing activities			$	(68,007	)			(67,952	)			(61,459	)
Cash flows from financing activities:
Proceeds from (payments for)
	Policyholders’ contract deposits		$	64,829				57,197				51,699
	Policyholders’ contract withdrawals			(58,675	)			(43,413	)			(36,339	)
	Change in other deposits			(182	)			1,269				(957	)
	Change in commercial paper and extendible commercial notes			(338	)			2,960				(702	)
	Long-term borrowings issued			103,210				71,028				67,061
	Repayments on long-term borrowings			(79,738	)			(36,489	)			(51,402	)
	Change in securities lending payable			11,757				9,789				10,437
	Redemption of subsidiary company preferred stock			—				—				(100	)
	Issuance of treasury stock			206				163				82
	Payments advanced to purchase treasury stock			(6,000	)			—				—
	Cash dividends paid to shareholders			(1,881	)			(1,638	)			(1,421	)
	Acquisition of treasury stock			(16	)			(20	)			(176	)
	Other, net			308				398				(85	)
Net cash provided by financing activities			$	33,480			$	61,244			$	38,097
Supplementary disclosure of cash flow information:
Cash paid during the period for:
	Interest		$	8,818			$	6,539			$	4,883
	Taxes		$	5,163			$	4,693			$	2,593
Non-cash financing activities:
	Interest credited to policyholder accounts included in financing activities		$	11,628			$	10,746			$	9,782
	Treasury stock acquired using payments advanced to purchase shares		$	5,088			$	—			$	—
Non-cash investing activities:
	Debt assumed on acquisitions and warehoused investments		$	791			$	—			$	—

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Years Ended December 31,
(in millions)				2007				2006				2005
	Net income			$	6,200			$	14,048			$	10,477
Other comprehensive income (loss):
	Unrealized (depreciation) appreciation of investments — net of reclassification adjustments				(8,046	)			2,574				(3,577	)
		Deferred income tax benefit (expense) on above changes			2,338				(839	)			1,599
	Foreign currency translation adjustments				1,325				1,283				(926	)
		Deferred income tax benefit (expense) on above changes			(140	)			(347	)			386
	Net derivative gains arising from cash flow hedging activities — net of reclassification adjustments				(133	)			13				35
		Deferred income tax expense on above changes			73				(15	)			(7	)
	Change in pension and postretirement unrecognized periodic benefit (cost)				173				80				81
		Deferred income tax benefit (expense) on above changes			(57	)			(74	)			(68	)
Other comprehensive income (loss)					(4,467	)			2,675				(2,477	)
Comprehensive income (loss)				$	1,733			$	16,723			$	8,000

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				Page
Note 1.		Summary of Significant Accounting Policies			138
Note 2.		Segment Information			147
Note 3.		Investments			153
Note 4.		Lending Activities			156
Note 5.		Reinsurance			157
Note 6.		Deferred Policy Acquisition Costs			159
Note 7.		Variable Interest Entities			159
Note 8.		Derivatives and Hedge Accounting			163
Note 9.		Reserve for Losses and Loss Expenses and Future Life Policy Benefits and Policyholders’ Contract Deposits			167
Note 10.		Variable Life and Annuity Contracts			167
Note 11.		Debt Outstanding			170
Note 12.		Commitments, Contingencies and Guarantees			173
Note 13.		Preferred Shareholders’ Equity in Subsidiary Companies			180
Note 14.		Shareholders’ Equity and Earnings Per Share			180
Note 15.		Statutory Financial Data			182
Note 16.		Fair Value of Financial Instruments			182
Note 17.		Share-based Employee Compensation Plans			184
Note 18.		Employee Benefits			188
Note 19.		Benefits Provided by Starr International Company, Inc. and C.V. Starr & Co., Inc.			193
Note 20.		Ownership and Transactions with Related Parties			193
Note 21.		Federal Income Taxes			194
Note 22.		Quarterly Financial Information (Unaudited)			197
Note 23.		Information Provided in Connection With Outstanding Debt			198
Note 24.		Cash Flows			201

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•	Interest income and related expenses, including amortization of premiums and accretion of discounts on bonds with changes in

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	the timing and the amount of expected principal and interest cash flows reflected in the yield, as applicable.
•	Dividend income and distributions from common and preferred stock and other investments when receivable.
•	Realized and unrealized gains and losses from investments in trading securities accounted for at fair value.
•	Earnings from hedge funds and limited partnership investments accounted for under the equity method.
•	The difference between the carrying amount of a life settlement contract and the life insurance proceeds of the underlying life insurance policy recorded in income upon the death of the insured.

•	Sales of fixed maturity securities and equity securities (except trading securities accounted for at fair value), real estate, investments in joint ventures and limited partnerships and other types of investments.
•	Reductions to the cost basis of fixed maturity securities and equity securities (except trading securities accounted for at fair value) and other invested assets for other-than-temporary impairments.
•	Changes in fair value of derivatives that are not involved in qualifying hedging activities.
•	Exchange gains and losses resulting from foreign currency transactions.

•	Interest income and related expenses, including amortization of premiums and accretion of discounts on bonds with changes in the timing and the amount of expected principal and interest cash flows reflected in the yield, as applicable.
•	Dividend income and distributions from common and preferred stock and other investments when receivable.
•	Changes in the fair value of derivatives (excluding the super senior credit default swap portfolio). In certain instances, no initial gain or loss is recognized in accordance with Emerging Issues Task Force Issue (EITF) 02-3, “Issues Involved in Accounting for Derivative Contracts Held for Trading Purposes and Contracts Involved in Energy Trading and Risk Management Activities” (EITF 02-3). The initial gain or loss is recognized in income over the life of the transaction or when observable market data becomes available.
•	Realized and unrealized gains and losses from trading securities and spot commodities sold but not yet purchased, futures and hybrid financial instruments.
•	Realized gains and losses from the sale of available for sale securities and investments in private equities, joint ventures, limited partnerships and other investments.
•	Exchange gains and losses resulting from foreign currency transactions.
•	Reductions to the cost basis of securities available for sale for other-than-temporary impairments.
•	Earnings from hedge funds and limited partnership investments accounted for under the equity method.

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•	Trading at a significant (25 percent or more) discount to par, amortized cost (if lower) or cost for an extended period of time (nine consecutive months or longer);
•	The occurrence of a discrete credit event resulting in (i) the issuer defaulting on a material outstanding obligation; (ii) the issuer seeking protection from creditors under the bankruptcy laws or any similar laws intended for court supervised reorganization of insolvent enterprises; or (iii) the issuer proposing a voluntary reorganization pursuant to which creditors are asked to exchange their claims for cash or securities having a fair value substantially lower than par value of their claims; or
•	AIG may not realize a full recovery on its investment regardless of the occurrence of one of the foregoing events.

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		Operating Segments
						Life
						Insurance																				Consolidation
		General				& Retirement				Financial				Asset												and
(in millions)		Insurance				Services(a)				Services(a)				Management(a)				Other(a)(b)				Total				Eliminations(a)				Consolidated
2007
Total revenues (c)(d)(e)		$	51,708			$	53,570			$	(1,309	)		$	5,625			$	457			$	110,051			$	13			$	110,064
Interest expense			29				128				7,794				567				1,170				9,688				—				9,688
Operating income (loss) before minority interest(d)(e)			10,526				8,186				(9,515	)			1,164				(2,140	)			8,221				722				8,943
Income taxes (benefits)			2,393				1,494				(3,260	)			334				537				1,498				(43	)			1,455
Depreciation expense			300				392				1,831				88				179				2,790				—				2,790
Capital expenditures			354				532				4,569				3,557				271				9,283				—				9,283
Year-end identifiable assets			181,708				615,386				203,894				77,274				126,874				1,205,136				(144,631	)			1,060,505
2006
Total revenues (c)(d)		$	49,206			$	50,878			$	7,777			$	4,543			$	483			$	112,887			$	500			$	113,387
Interest expense			23				74				6,005				105				744				6,951				—				6,951
Operating income (loss) before minority interest(d)			10,412				10,121				383				1,538				(1,435	)			21,019				668				21,687
Income taxes (benefits)			2,351				2,892				(26	)			575				719				6,511				26				6,537
Depreciation expense			274				268				1,655				13				164				2,374				—				2,374
Capital expenditures			375				711				6,278				835				244				8,443				—				8,443
Year-end identifiable assets			167,004				550,957				202,485				78,275				107,517				1,106,238				(126,828	)			979,410
2005
Total revenues (c)(d)		$	45,174			$	48,020			$	10,677			$	4,582			$	344			$	108,797			$	(16	)		$	108,781
Interest expense			7				83				5,164				11				408				5,673				—				5,673
Operating income (loss) before minority interest(d)			2,315				8,965				4,424				1,963				(2,765	)(f)			14,902				311				15,213
Income taxes (benefits)			169				2,407				1,418				723				(587	)			4,130				128				4,258
Depreciation expense			273				268				1,447				43				169				2,200				—				2,200
Capital expenditures			417				590				6,300				25				194				7,526				—				7,526
Year-end identifiable assets			150,667				489,331				161,919				69,584				94,047				965,548				(112,500	)			853,048

(a)	Beginning in 2007, revenues and operating income related to certain foreign investment contracts, which were historically reported as a component of the Asset Management segment, are now reported in the Life Insurance & Retirement Services segment, net realized capital gains and losses; including derivative gains and losses and foreign exchange transaction gains and losses for Financial Services entities other than AIGFP and Asset Management entities, which were previously reported as part of AIG’s Other category, are now included in Asset Management and Financial Services revenues and operating income; and revenues and operating income related to consolidated managed partnerships and funds, which were historically reported in the Asset Management segment, are now being reported in Consolidation and eliminations. All prior periods have been revised to conform to the current presentation.
(b)	Includes AIG Parent and other operations that are not required to be reported separately. The following table presents the operating loss for AIG’s Other category for the years ended December 31, 2007, 2006 and 2005:

For the Years Ended December 31,
(in millions)			2007				2006				2005
Operating income (loss):
	Equity earnings in partially owned companies*		$	157			$	193			$	(124	)
	Interest expense			(1,223	)			(859	)			(541	)
	Unallocated corporate expenses			(560	)			(517	)			(413	)
	Compensation expense — SICO Plans			(39	)			(108	)			(205	)
	Compensation expense — Starr tender offer			—				(54	)			—
	Net realized capital gains (losses)			(409	)			(37	)			269
	Regulatory settlement costs			—				—				(1,644	)
	Other miscellaneous, net			(66	)			(53	)			(107	)
Total Other			$	(2,140	)		$	(1,435	)		$	(2,765	)

	*	Includes current year catastrophe-related losses from unconsolidated entities of $312 million in 2005. There were no significant catastrophe-related losses from unconsolidated entities in 2007 and 2006.

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(c)	Represents the sum of General Insurance net premiums earned, Life Insurance & Retirement Services premiums and other considerations, net investment income, Financial Services interest, lease and finance charges, Asset Management investment income from spread-based products and management, advisory and incentive fees, and realized capital gains (losses).
(d)	In 2007, 2006 and 2005, includes other-than-temporary impairment charges of $4.7 billion, $944 million and $598 million, respectively.
(e)	Both revenues and operating income (loss) include an unrealized market valuation loss of $11.5 billion on AIGFP’s super senior credit default swap portfolio and an other-than-temporary impairment charge of $643 million on AIGFP’s available for sale investment securities reported in other income.

(f)	Includes settlement costs of $1.64 billion as described in Note 12(a) Litigation and Investigations herein.

		General Insurance
		Domestic																Foreign				Total				Consolidation				Total
		Brokerage								Personal				Mortgage				General				Reportable				and				General
(in millions)		Group				Transatlantic				Lines				Guaranty				Insurance				Segment				Eliminations				Insurance
2007
Total revenues		$	27,653			$	4,382			$	4,924			$	1,041			$	13,715			$	51,715			$	(7	)		$	51,708
Losses & loss expenses incurred			15,948				2,638				3,660				1,493				6,243				29,982				—				29,982
Underwriting expenses			4,400				1,083				1,197				185				4,335				11,200				—				11,200
Operating income (loss)(a)			7,305				661				67				(637	)			3,137				10,533				(7	)			10,526
Depreciation expense			97				2				70				6				125				300				—				300
Capital expenditures			93				4				81				21				155				354				—				354
Year-end identifiable assets			112,675				15,484				5,930				4,550				48,728				187,367				(5,659	)			181,708
2006
Total revenues(b)		$	27,419			$	4,050			$	4,871			$	877			$	11,999			$	49,216			$	(10	)		$	49,206
Losses & loss expenses incurred			16,779				2,463				3,306				349				5,155				28,052				—				28,052
Underwriting expenses			4,795				998				1,133				200				3,616				10,742				—				10,742
Operating income(a)(b)			5,845				589				432				328				3,228				10,422				(10	)			10,412
Depreciation expense			100				2				52				5				115				274				—				274
Capital expenditures			125				2				94				11				143				375				—				375
Year-end identifiable assets			104,866				14,268				5,391				3,604				43,879				172,008				(5,004	)			167,004
2005
Total revenues		$	25,171			$	3,766			$	4,848			$	655			$	10,719			$	45,159			$	15			$	45,174
Losses & loss expenses incurred			21,466				2,877				3,566				139				5,043				33,091				—				33,091
Underwriting expenses			4,525				928				1,087				153				3,075				9,768				—				9,768
Operating income (loss) (a)(c)			(820	)(d)			(39	)			195				363				2,601				2,300				15				2,315
Depreciation expense			114				2				48				4				105				273				—				273
Capital expenditures			119				2				94				6				196				417				—				417
Year-end identifiable assets			95,829				12,365				5,245				3,165				39,044				155,648				(4,981	)			150,667

(a)	Catastrophe-related losses in 2007 and 2005 by reporting unit were as follows. There were no significant catastrophe-related losses in 2006.

			2007								2005
			Insurance				Net Reinstatement				Insurance				Net Reinstatement
(in millions)			Related Losses				Premium Cost				Related Losses				Premium Cost
Reporting Unit:
	DBG		$	113			$	(13	)		$	1,811			$	136
	Transatlantic			11				(1	)			463				45
	Personal Lines			61				14				112				2
	Mortgage Guaranty			—				—				10				—
	Foreign General Insurance			90				1				229				80
Total			$	275			$	1			$	2,625			$	263

(b)	Includes the effect of out of period adjustments related to the accounting for certain interests in unit investment trusts (UCITS). For DBG, the effect was an increase of $66 million in both revenues and operating income and for Foreign General Insurance, the effect was an increase of $424 million in both revenues and operating income.
(c)	Includes the fourth quarter 2005 increase in net reserves of approximately $1.8 billion resulting from the annual review of General Insurance loss and loss adjustment reserves.

(d)	Includes $291 million of expenses related to changes in estimates for uncollectible reinsurance and other premium balances, and $100 million of accrued expenses in connection with certain workers compensation insurance policies written between 1985 and 1996.

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			Life Insurance & Retirement Services
																																							Total Life
															Domestic						Domestic						Total						Consolidation						Insurance &
			Japan												Life						Retirement						Reportable						and						Retirement
(in millions)			and Other						Asia						Insurance						Services						Segment						Eliminations						Services
2007
Total revenues (a)(b):
	Insurance-oriented products		$	14,393					$	19,896					$	8,535					$	—					$	42,824					$	—					$	42,824
	Retirement savings products			3,783						191						493						6,279						10,746						—						10,746
	Total revenues			18,176						20,087						9,028						6,279						53,570						—						53,570
Operating income (a)(b)				3,044						3,153						642						1,347						8,186						—						8,186
Depreciation expense				110						84						85						113						392						—						392
Capital expenditures				166						232						53						81						532						—						532
Year-end identifiable assets				177,413						132,521						108,908						203,441						622,283						(6,897	)					615,386
2006
Total revenues (a)(c):
	Insurance-oriented products		$	13,310					$	17,712					$	8,538					$	—					$	39,560					$	—					$	39,560
	Retirement savings products			3,441						168						568						7,141						11,318						—						11,318
	Total revenues			16,751						17,880						9,106						7,141						50,878						—						50,878
Operating income (a)(c)				3,821						3,060						917						2,323						10,121						—						10,121
Depreciation expense				101						70						63						34						268						—						268
Capital expenditures				342						260						71						38						711						—						711
Year-end identifiable assets				152,409						108,850						103,624						192,885						557,768						(6,811	)					550,957
2005
Total revenues (a):
	Insurance-oriented products		$	12,524					$	15,853					$	8,525					$	—					$	36,902					$	—					$	36,902
	Retirement savings products			3,413						129						690						6,886						11,118						—						11,118
	Total revenues			15,937						15,982						9,215						6,886						48,020						—						48,020
Operating income (a)				3,020						2,286						1,495						2,164						8,965						—						8,965
Depreciation expense				91						81						65						31						268						—						268
Capital expenditures				153						340						71						26						590						—						590
Year-end identifiable assets				124,524						87,491						99,594						185,383						496,992						(7,661	)					489,331

(a)	In 2007, 2006 and 2005, includes other-than-temporary impairment charges of $2.8 billion, $641 million and $425 million, respectively.
(b)	Includes a positive out-of-period adjustment of $158 million related to foreign exchange remediation activities.
(c)	Includes the effect of out-of-period adjustments related to the accounting for UCITS in 2006, which increased revenues by $240 million and operating income by $169 million.

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		Financial Services
																		Total				Consolidation				Total
		Aircraft				Capital				Consumer								Reportable				and				Financial
(in millions)		Leasing(a)				Markets(b)				Finance(c)				Other				Segment				Elimination				Services
2007
Total revenues (d)(e)(f)(g)		$	4,694			$	(9,979	)		$	3,655			$	1,471			$	(159	)		$	(1,150	)		$	(1,309	)
Interest expense(e)			1,650				4,644				1,437				63				7,794				—				7,794
Operating income (loss)(e)(f)(g)			873				(10,557	)			171				(2	)			(9,515	)			—				(9,515	)
Depreciation expense			1,751				24				41				15				1,831				—				1,831
Capital expenditures			4,164				21				62				322				4,569				—				4,569
Year-end identifiable assets			44,970				115,487				36,822				17,357				214,636				(10,742	)			203,894
2006
Total revenues (d)(e)		$	4,082			$	(186	)		$	3,587			$	320			$	7,803			$	(26	)		$	7,777
Interest expense(e)			1,442				3,215				1,303				108				6,068				(63	)			6,005
Operating income (loss)			578				(873	)			668				10				383				—				383
Depreciation expense			1,584				19				41				11				1,655				—				1,655
Capital expenditures			6,012				15				52				199				6,278				—				6,278
Year-end identifiable assets			41,975				121,243				32,702				12,368				208,288				(5,803	)			202,485
2005
Total revenues (d)(e)		$	3,668			$	3,260			$	3,563			$	206			$	10,697			$	(20	)		$	10,677
Interest expense(e)			1,125				3,033				1,005				201				5,364				(200	)			5,164
Operating income			769				2,661				922				72				4,424				—				4,424
Depreciation expense			1,384				20				38				5				1,447				—				1,447
Capital expenditures			6,193				3				54				50				6,300				—				6,300
Year-end identifiable assets			37,515				90,090				30,704				7,984				166,293				(4,374	)			161,919

(a)	Both revenues and operating income include gains (losses) from hedging activities that did not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange gains and losses. In 2007, 2006 and 2005, the effect was $(37) million, $(73) million and $93 million, respectively. These amounts result primarily from interest rate and foreign currency derivatives that are effective economic hedges of borrowings. In the second quarter of 2007, ILFC began applying hedge accounting to most of its derivatives hedging interest rate and foreign exchange risks associated with its floating rate and foreign currency denominated borrowings.
(b)	Both revenues and operating income include gains (losses) from hedging activities that did not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange gains and losses. In 2007, 2006 and 2005, the effect was $211 million, $(1.82) billion and $2.01 billion, respectively. The year ended December 31, 2007 includes a $380 million out of period charge to reverse net gains recognized on transfers of available for sale securities among legal entities consolidated within AIGFP. The year ended December 31, 2006 includes an out of period charge of $223 million related to the remediation of the material weakness in internal control over the accounting for certain derivative transactions under FAS 133. In the first quarter of 2007, AIGFP began applying hedge accounting for certain of its interest rate swaps and foreign currency forward contracts hedging its investments and borrowings.
(c)	Both revenues and operating income include gains (losses) from hedging activities that did not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange gains and losses. In 2007, 2006 and 2005, the effect was $(20) million, $(94) million and $75 million, respectively. These amounts result primarily from interest rate and foreign currency derivatives that are effective economic hedges of borrowings. In the second quarter of 2007, AGF began applying hedge accounting to most of its derivatives hedging interest rate and foreign exchange risks associated with its floating rate and foreign currency denominated borrowings.
(d)	Represents primarily the sum of aircraft lease rentals from ILFC, AIGFP hedged financial positions entered into in connection with counterparty transactions, the effect of hedging activities that did not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange gains and losses, and finance charges from consumer finance operations.

(e)	Interest expense for the Capital Markets business is included in Revenues above and in Other income in the consolidated statement of income.

(f)	Both revenues and operating income (loss) include an unrealized market valuation loss of $11.5 billion on AIGFP’s super senior credit default swap portfolio and an other-than-temporary impairment charge of $643 million on AIGFP’s available for sale investment securities reported in other income.

(g)	Includes a pre-tax charge of $178 million in connection with domestic consumer finance’s mortgage banking activities.

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		Geographic Segments
										Other
(in millions)		Domestic(a)				Far East				Foreign				Consolidated
2007
Total revenues		$	46,402			$	36,512			$	27,150			$	110,064
Real estate and other fixed assets, net of accumulated depreciation			3,202				1,404				912				5,518
Flight equipment primarily under operating leases, net of accumulated depreciation(b)			41,984				—				—				41,984
2006
Total revenues		$	57,984			$	33,883			$	21,520			$	113,387
Real estate and other fixed assets, net of accumulated depreciation			2,432				1,082				867				4,381
Flight equipment primarily under operating leases, net of accumulated depreciation(b)			39,875				—				—				39,875
2005
Total revenues		$	59,858			$	32,076			$	16,847			$	108,781
Real estate and other fixed assets, net of accumulated depreciation			1,905				929				807				3,641
Flight equipment primarily under operating leases, net of accumulated depreciation(b)			36,245				—				—				36,245

(a)	Including revenues from insurance operations in Canada of $1.3 billion, $1.1 billion and $968 million in 2007, 2006 and 2005, respectively.
(b)	Approximately 90 percent of ILFC’s fleet is operated by foreign airlines.

Years Ended December 31,
(in millions)		2007				2006				2005
Fixed maturities(a)		$	22,330			$	20,393			$	18,690
Equities			2,361				1,733				1,716
Interest on mortgage and other loans			1,423				1,253				1,177
Partnerships			1,986				1,596				1,056
Mutual funds			650				845				4
Other invested assets(b)			941				1,293				820
Total investment income			29,691				27,113				23,463
Investment expenses			1,072				1,043				879
Net investment income		$	28,619			$	26,070			$	22,584

(a)	Includes short-term investments.
(b)	Includes net investment income from securities lending activities, representing interest earned on securities lending invested collateral offset by interest expense on securities lending payable.

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(in millions)			2007				2006				2005
Net realized capital gains (losses):
	Sales of fixed maturities		$	(468	)		$	(382	)		$	372
	Sales of equity securities			1,087				813				643
	Sales of real estate and other assets			619				303				88
	Other-than-temporary impairments			(4,072	)			(944	)			(598	)
	Foreign exchange transactions			(643	)			(382	)			701
	Derivative instruments			(115	)			698				(865	)
Total			$	(3,592	)		$	106			$	341
Increase (decrease) in unrealized appreciation of investments:
	Fixed maturities		$	(5,504	)		$	(198	)		$	(4,656	)
	Equity securities			2,440				432				850
	Other investments			(3,842	)			986				2,138
	AIGFP investments			(1,140	)			1,354				(1,909	)
Increase (decrease) in unrealized appreciation			$	(8,046	)		$	2,574			$	(3,577	)

		2007								2006								2005
		Gross				Gross				Gross				Gross				Gross				Gross
		Realized				Realized				Realized				Realized				Realized				Realized
(in millions)		Gains				Losses				Gains				Losses				Gains				Losses
Fixed maturities		$	680			$	1,148			$	711			$	1,093			$	1,586			$	1,214
Equity securities			1,368				291				1,111				320				930				354
Preferred stocks			10				—				22				—				101				34
Total		$	2,058			$	1,439			$	1,844			$	1,413			$	2,617			$	1,602

				December 31, 2007*																December 31, 2006
				Amortized				Gross				Gross								Amortized				Gross				Gross
				Cost or				Unrealized				Unrealized				Fair				Cost or				Unrealized				Unrealized				Fair
(in millions)				Cost				Gains				Losses				Value				Cost				Gains				Losses				Value
Available for sale:*
	U.S. government and government sponsored entities			$	7,956			$	333			$	37			$	8,252			$	7,667			$	221			$	140			$	7,748
	Obligations of states, municipalities and political subdivisions				46,087				927				160				46,854				59,785				1,056				210				60,631
	Non-U.S. governments				67,023				3,920				743				70,200				62,860				5,461				437				67,884
	Corporate debt				239,822				6,216				4,518				241,520				257,383				7,443				2,536				262,290
	Mortgage-backed, asset- backed and collateralized				140,982				1,221				7,703				134,500				104,687				502				362				104,827
Total bonds				$	501,870			$	12,617			$	13,161			$	501,326			$	492,382			$	14,683			$	3,685			$	503,380
Equity securities					15,188				5,545				463				20,270				13,147				2,807				159				15,795
Total				$	517,058			$	18,162			$	13,624			$	521,596			$	505,529			$	17,490			$	3,844			$	519,175
Held to maturity:*
		Bonds — Obligations of states, municipalities and political subdivisions		$	21,581			$	609			$	33			$	22,157			$	21,437			$	731			$	14			$	22,154

*	At December 31, 2007 and 2006, fixed maturities held by AIG that were below investment grade or not rated totaled $27.0 billion and $26.6 billion, respectively.

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		Available for Sale								Held to Maturity
		Amortized								Amortized
(in millions)		Cost				Fair Value				Cost				Fair Value
Due in one year or less		$	25,844			$	25,994			$	72			$	69
Due after one year through five years			95,494				97,466				284				277
Due after five years through ten years			121,961				123,196				1,511				1,547
Due after ten years			117,589				120,170				19,714				20,264
Mortgage-backed, asset-backed and collateralized			140,982				134,500				—				—
Total available for sale		$	501,870			$	501,326			$	21,581			$	22,157

				Fair Value
(in millions)				2007				2006
	Bonds available for sale			$	397,372			$	386,869
		Common stocks available for sale			17,900				13,256
		Preferred stocks available for sale			2,370				2,539
		Financial Services securities available for sale			40,305				47,205
		Securities lending invested collateral			63,649				69,306
Total				$	521,596			$	519,175

(f)	Gross Unrealized Losses and Estimated Fair Values on Investments:

		12 Months or less								More than 12 Months								Total
						Unrealized								Unrealized								Unrealized
(in millions)		Cost(a)				Losses				Cost(a)				Losses				Cost(a)				Losses
2007
Bonds(b)		$	190,809			$	9,935			$	65,137			$	3,226			$	255,946			$	13,161
Equity securities			4,433				463				—				—				4,433				463
Total		$	195,242			$	10,398			$	65,137			$	3,226			$	260,379			$	13,624
2006
Bonds(b)		$	69,656			$	1,257			$	84,040			$	2,428			$	153,696			$	3,685
Equity securities			2,734				159				—				—				2,734				159
Total		$	72,390			$	1,416			$	84,040			$	2,428			$	156,430			$	3,844

(a)	For bonds, represents amortized cost.
(b)	Primarily relates to the corporate debt category.

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(g)	Other Invested Assets:

At December 31,
(in millions)		2007				2006
Partnerships(a)		$	28,938			$	21,657
Mutual funds			4,891				4,892
Investment real estate(b)			9,877				5,694
Aircraft asset investments(c)			1,689				1,784
Life settlement contracts(d)			1,627				1,090
Consolidated managed partnerships and funds(e)			6,614				2,923
All other investments			5,187				4,071
Other invested assets		$	58,823			$	42,111

(a)	Includes private equity partnerships and hedge funds.
(b)	Net of accumulated depreciation of $548 million and $585 million in 2007 and 2006, respectively.
(c)	Consist primarily of Life Insurance & Retirement Services investments in aircraft equipment.

(d)	See paragraph (h) below for additional information.
(e)	Represents AIG managed partnerships and funds that are consolidated.

(dollars in millions)
Remaining Life
Expectancy of			Number of				Carrying				Face Value
Insureds			Contracts				Value				(Death Benefits)
0 – 1 year				11			$	7			$	9
1 – 2 years				34				34				47
2 – 3 years				79				61				98
3 – 4 years				151				111				210
4 – 5 years				176				130				277
Thereafter				2,181				1,284				5,400
	Total			2,632			$	1,627			$	6,041

Years Ended December 31,
(in millions)		2007				2006
Mortgages – commercial		$	17,105			$	15,219
Mortgages – residential*			2,153				1,903
Life insurance policy loans			8,099				7,501
Collateral, guaranteed, and other commercial loans			6,447				3,859
Total mortgage and other loans receivable			33,804				28,482
Allowance for losses			(77	)			(64	)
Mortgage and other loans receivable, net		$	33,727			$	28,418

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*	Primarily consists of foreign mortgage loans.

Years Ended December 31,
(in millions)		2007				2006
Real estate loans		$	20,023			$	20,321
Non-real estate loans			5,447				4,506
Retail sales finance			3,659				3,092
Credit card loans			1,566				1,413
Other loans			1,417				978
Total finance receivables			32,112				30,310
Allowance for losses			(878	)			(737	)
Finance receivables, net		$	31,234			$	29,573

		As				Net of
(in millions)		Reported				Reinsurance
2007
Reserve for losses and loss expenses		$	(85,500	)		$	(69,288	)
Future policy benefits for life and accident and health insurance contracts			(136,068	)			(134,461	)
Reserve for unearned premiums			(28,022	)			(24,029	)
Reinsurance assets*			21,811				—
2006
Reserve for losses and loss expenses		$	(79,999	)		$	(62,630	)
Future policy benefits for life and accident and health insurance contracts			(121,004	)			(119,430	)
Reserve for unearned premiums			(26,271	)			(22,759	)
Reinsurance assets*			22,456				—

*	Represents gross reinsurance assets, excluding allowances and reinsurance recoverable on paid losses.

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Years Ended December 31,
(in millions)			2007				2006				2005
Premiums written:
	Direct		$	52,055			$	49,609			$	46,689
	Assumed			6,743				6,671				6,036
	Ceded			(11,731	)			(11,414	)			(10,853	)
Total			$	47,067			$	44,866			$	41,872
Premiums earned:
	Direct		$	50,403			$	47,973			$	45,794
	Assumed			6,530				6,449				5,921
	Ceded			(11,251	)			(10,971	)			(10,906	)
Total			$	45,682			$	43,451			$	40,809

Years Ended December 31,
(in millions)		2007				2006				2005
Gross premiums		$	34,585			$	32,247			$	30,818
Ceded premiums			(1,778	)			(1,481	)			(1,317	)
Premiums		$	32,807			$	30,766			$	29,501

At December 31,
(in millions)		2007				2006				2005
Life Insurance in force ceded		$	402,654			$	408,970			$	365,082

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Years Ended December 31,
(in millions)			2007				2006				2005
General Insurance operations:
	Balance at beginning of year		$	4,355			$	4,048			$	3,998
	Acquisition costs deferred			8,661				8,115				7,480
	Amortization expense			(8,235	)			(7,866	)			(7,365	)
	Increase (decrease) due to foreign exchange and other			(138	)			58				(65	)
	Balance at end of year		$	4,643			$	4,355			$	4,048
Life Insurance & Retirement Services operations:
	Balance at beginning of year		$	32,810			$	28,106			$	25,080
	Acquisition costs deferred			7,276				6,823				6,513
	Amortization expense(a)			(3,367	)			(3,712	)			(3,328	)
	Change in net unrealized gains (losses) on securities			745				646				977
	Increase (decrease) due to foreign exchange			916				947				(1,136	)
	Other(b)			65				—				—
Subtotal			$	38,445			$	32,810			$	28,106
Consolidation and eliminations				62				70				—
Balance at end of year(c)			$	38,507			$	32,880			$	28,106
Total deferred policy acquisition costs			$	43,150			$	37,235			$	32,154

(a)	In 2007, amortization expense was reduced by $733 million related to changes in actuarial estimates, which was mostly offset in incurred policy losses and benefits.
(b)	In 2007, includes the cumulative effect of the adoption of SOP 05-1 of $(118) million and a balance sheet reclassification of $189 million.
(c)	Includes $5 million and $(720) million at December 31, 2007 and 2006, respectively, related to the effect of net unrealized gains and losses on available for sale securities.

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			Remaining Life of Notional Amount*
			One				Two Through				Six Through				After Ten				Total				Total
(in millions)			Year				Five Years				Ten Years				Years				2007				2006
	Interest rate swaps		$	441,801			$	554,917			$	156,634			$	14,112			$	1,167,464			$	1,058,279
	Credit default swaps			184,924				286,069				85,792				5,028				561,813				483,648
	Currency swaps			38,384				135,187				41,675				9,029				224,275				218,091
	Swaptions, equity and commodity swaps			57,709				62,849				35,270				23,139				178,967				180,040
Total			$	722,818			$	1,039,022			$	319,371			$	51,308			$	2,132,519			$	1,940,058

*	Notional amount is not representative of either market risk or credit risk and is not recorded in the consolidated balance sheet.

		Remaining Life
		One				Two Through				Six Through				After Ten				Total				Total
(in millions)		Year				Five Years				Ten Years				Years				2007				2006
Exchange traded futures and options contracts contractual amount		$	27,588			$	1,359			$	—			$	—			$	28,947			$	27,271
Over the counter forward contracts contractual amount			485,332				5,864				1,850				—				493,046				492,913
Total		$	512,920			$	7,223			$	1,850			$	—			$	521,993			$	520,184

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		Notional				Unrealized Market
		Amount				Valuation Loss
		(in billions)				(in millions)
Corporate loans(a)		$	230			$	—
Prime residential mortgages(a)			149				—
Corporate Debt/CLOs			70				226
Multi-sector CDO(b)			78				11,246
Total		$	527			$	11,472

(a)	Predominantly represent transactions written to facilitate regulatory capital relief.
(b)	Approximately $61.4 billion, in notional amount, of the multi-sector CDO pools includes some exposure to U.S. subprime mortgages.

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Years Ended December 31,
(in millions)			2007				2006				2005
At beginning of year:
	Reserve for losses and loss expenses		$	79,999			$	77,169			$	61,878
	Reinsurance recoverable			(17,369	)			(19,693	)			(14,624	)
Total				62,630				57,476				47,254
Foreign exchange effect				955				741				(628	)
Acquisitions(a)				317				55				—
Losses and loss expenses incurred:
	Current year			30,261				27,805				28,426
	Prior years, other than accretion of discount			(656	)			(53	)			4,680	(b)
	Prior years, accretion of discount			327				300				(15	)
Total				29,932				28,052				33,091
Losses and loss expenses paid:
	Current year			9,684				8,368				7,331
	Prior years			14,862				15,326				14,910
Total				24,546				23,694				22,241
At end of year:
	Net reserve for losses and loss expenses			69,288				62,630				57,476
	Reinsurance recoverable			16,212				17,369				19,693
Total			$	85,500			$	79,999			$	77,169

(a)	Reflects the opening balance with respect to the acquisition of WüBa and the Central Insurance Co., Ltd. in 2007 and 2006, respectively.
(b)	Includes a fourth quarter charge of $1.8 billion resulting from the annual review of General Insurance loss and loss adjustment reserves.

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At December 31,
(in millions)			2007				2006
Future policy benefits:
	Long duration contracts		$	135,202			$	120,138
	Short duration contracts			866				866
Total			$	136,068			$	121,004
Policyholders’ contract deposits:
	Annuities		$	140,444			$	141,826
	Guaranteed investment contracts			25,321				33,054
	Universal life products			27,114				22,497
	Variable products			46,407				34,821
	Corporate life products			2,124				2,083
	Other investment contracts			17,049				13,983
Total			$	258,459			$	248,264

•	Interest rates (exclusive of immediate/terminal funding annuities), which vary by territory, year of issuance and products, range from 1.0 percent to 12.5 percent within the first 20 years. Interest rates on immediate/terminal funding annuities are at a maximum of 11.5 percent and grade to not greater than 6.0 percent.
•	Mortality and surrender rates are based upon actual experience by geographical area modified to allow for variations in policy form. The weighted average lapse rate, including surrenders, for individual and group life approximated 5.7 percent.
•	The portions of current and prior net income and of current unrealized appreciation of investments that can inure to the benefit of AIG are restricted in some cases by the insurance contracts and by the local insurance regulations of the jurisdictions in which the policies are in force.
•	Participating life business represented approximately 12 percent of the gross insurance in force at December 31, 2007 and 25 percent of gross premiums and other considerations in 2007. The amount of annual dividends to be paid is determined locally by the boards of directors. Provisions for future dividend payments are computed by jurisdiction, reflecting local regulations.

•	Interest rates credited on deferred annuities, which vary by territory and year of issuance, range from 1.4 percent to, including bonuses, 13.0 percent. Less than 1.0 percent of the liabilities are credited at a rate greater than 9.0 percent. Current declared interest rates are generally guaranteed to remain in effect for a period of one year though some are guaranteed for longer periods. Withdrawal charges generally range from zero percent to 20.0 percent grading to zero over a period of zero to 19 years.
•	Domestically, guaranteed investment contracts (GICs) have market value withdrawal provisions for any funds withdrawn other than benefit responsive payments. Interest rates credited generally range from 2.8 percent to 9.0 percent. The vast majority of these GICs mature within five years.
•	Interest rates on corporate life insurance products are guaranteed at 4.0 percent and the weighted average rate credited in 2007 was 5.2 percent.
•	The universal life funds have credited interest rates of 1.0 percent to 7.0 percent and guarantees ranging from 1.0 percent to 5.5 percent depending on the year of issue. Additionally, universal life funds are subject to surrender charges that amount to 12.0 percent of the aggregate fund balance grading to zero over a period not longer than 20 years.
•	For variable products and investment contracts, policy values are expressed in terms of investment units. Each unit is linked to an asset portfolio. The value of a unit increases or decreases based on the value of the linked asset portfolio. The current liability at any time is the sum of the current unit value of all investment units plus any liability for guaranteed minimum death or withdrawal benefits.

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		Net Deposits
		Plus a Minimum				Highest Contract
(dollars in billions)		Return				Value Attained
2007
Account value(a)			$66				$17
Amount at risk(b)			5				1
Average attained age of contract holders by product			38-69 years				55-72 years
Range of guaranteed minimum return rates			3-10%
2006
Account value(a)			$64				$15
Amount at risk(b)			6				1
Average attained age of contract holders by product			38-70 years				56-71 years
Range of guaranteed minimum return rates			0-10%

(a)	Included in Policyholders’ contract deposits in the consolidated balance sheet.
(b)	Represents the amount of death benefit currently in excess of Account value.

(in millions)		2007				2006
Balance at January 1		$	406			$	442
Reserve increase			111				35
Benefits paid			(54	)			(71	)
Balance at December 31		$	463			$	406

•	Data used was up to 1,000 stochastically generated investment performance scenarios.
•	Mean investment performance assumptions ranged from three percent to approximately ten percent depending on the block of business.
•	Volatility assumptions ranged from eight percent to 23 percent depending on the block of business.
•	Mortality was assumed at between 50 percent and 102 percent of various life and annuity mortality tables.
•	For domestic contracts, lapse rates vary by contract type and duration and ranged from zero percent to 40 percent. For

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	Japan, lapse rates ranged from zero percent to 20 percent depending on the type of contract.
•	For domestic contracts, the discount rate ranged from 3.25 percent to 11 percent. For Japan, the discount rate ranged from two percent to seven percent.

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(in millions)		2007				2006
Total long-term borrowings		$	162,935			$	135,316
Commercial paper and extendible commercial notes			13,114				13,363
Total borrowings		$	176,049			$	148,679

(in millions)			Total				2008				2009				2010				2011				2012				Thereafter
AIG:
	Notes and bonds payable		$	14,588			$	1,591			$	1,441			$	1,349			$	450			$	27			$	9,730
	Junior subordinated debt			5,809				—				—				—				—				—				5,809
	Loans and mortgages payable			729				627				—				—				—				—				102
	MIP matched notes and bonds payable			14,267				200				1,218				2,309				3,188				2,039				5,313
	Series AIGFP matched notes and bonds payable			874				65				77				32				25				56				619
Total AIG				36,267				2,483				2,736				3,690				3,663				2,122				21,573
AIGFP:
	GIAs			19,908				6,370				1,831				1,127				581				660				9,339
	Notes and bonds payable			36,676				23,670				4,522				431				403				3,885				3,765
	Loans and mortgages payable			1,384				—				—				—				—				160				1,224
	Hybrid financial instrument liabilities(a)			7,479				1,581				425				1,739				693				332				2,709
Total AIGFP				65,447				31,621				6,778				3,297				1,677				5,037				17,037
AIGLH notes and bonds payable				797				—				—				499				—				—				298
Liabilities connected to trust preferred stock				1,435				—				—				—				—				—				1,435
ILFC(b):
	Notes and bonds payable			22,111				4,065				2,978				3,808				4,021				3,531				3,708
	Junior subordinated debt			999				—				—				—				—				—				999
	Export credit facility(c)			2,542				522				470				356				266				237				691
	Bank financings			1,084				25				471				103				160				325				—
Total ILFC				26,736				4,612				3,919				4,267				4,447				4,093				5,398
AGF(b):
	Notes and bonds payable			22,369				4,085				4,108				2,200				2,902				2,073				7,001
	Junior subordinated debt			349				—				—				—				—				—				349
Total AGF				22,718				4,085				4,108				2,200				2,902				2,073				7,350
AIGCFG Loans and mortgages payable (b)				1,839				1,000				542				225				11				7				54
Other subsidiaries(b)				775				90				—				—				—				—				685
Total			$	156,014			$	43,891			$	18,083			$	14,178			$	12,700			$	13,332			$	53,830

(a)	Represents structured notes issued by AIGFP that are accounted for at fair value.
(b)	AIG does not guarantee these borrowings.
(c)	Reflects future minimum payment for ILFC’s borrowing under Export Credit Facilities.

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						Unamortized								Weighted				Weighted
		Net				Discount								Average				Average
		Book				and Accrued				Face				Interest				Maturity
(dollars in millions)		Value				Interest				Amount				Rate				in Days
ILFC		$	4,483			$	16			$	4,499				4.63	%			28
AGF			3,607				10				3,617				4.85				25
AIG Funding			4,222				15				4,237				4.81				29
AIGCC — Taiwan(a)			151				—				151				2.81				42
AIGF — Thailand(a)			136				1				137				3.36				50
Total(b)		$	12,599			$	42			$	12,641				—				—

(a)	Issued in local currencies at prevailing local interest rates.
(b)	Excludes $321 million of borrowings of consolidated investments and $194 million of extendible commercial notes.

Range of								U.S. Dollar
Maturities				Range of				Carrying
(dollars in millions)		Currency		Interest Rates				Value
2008 - 2054		U.S. dollar			0.26 - 9.00	%		$	29,490
2008 - 2049		Euro			1.25 - 6.53				8,819
2008 - 2012		United Kingdom pound			4.67 - 6.31				3,936
2008 - 2037		Japanese Yen			0.01 - 2.9				2,025
2008 - 2024		Swiss francs			0.25				512
2008		New Zealand dollar			8.35				386
2009 - 2017		Australian dollar			1.14 - 2.65				177
2008 - 2017		Other			4.39 - 4.95				194
Total								$	45,539

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		Uncollateralized				Collateralized
		Notes/Bonds/Loans				Loans and
(in millions)		Payable				Mortgages Payable
AIGCFG		$	1,839			$	—
AIG			729				—
Other subsidiaries			600				175
Total		$	3,168			$	175

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(in millions)
2008		$	4,142
2009			3,783
2010			3,274
2011			2,726
2012			2,075
Remaining years after 2012			4,921
Total		$	20,921

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(in millions)
2008		$	747
2009			581
2010			460
2011			371
2012			322
Remaining years after 2012			1,945
Total		$	4,426

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Years Ended December 31,
(in millions, except per share data)			2007				2006				2005
Numerator for earnings per share:
Income before cumulative effect of an accounting change			$	6,200			$	14,014			$	10,477
Cumulative effect of an accounting change, net of tax				—				34				—
Net income applicable to common stock for basic EPS				6,200				14,048				10,477
Interest on contingently convertible bonds, net of tax				—				10				11
Net income applicable to common stock for diluted EPS				6,200				14,058				10,488
Cumulative effect of an accounting change, net of tax				—				(34	)			—
Income before cumulative effect of an accounting change applicable to common stock for diluted EPS			$	6,200			$	14,024			$	10,488
Denominator for earnings per share:
Weighted average shares outstanding used in the computation of EPS:
	Common stock issued			2,751				2,751				2,751
	Common stock in treasury			(179	)			(153	)			(155	)
	Deferred shares			13				10				1
Weighted average shares outstanding — basic				2,585				2,608				2,597
Incremental shares from potential common stock:
Weighted average number of shares arising from outstanding employee stock plans (treasury stock method)*				13				7				21
Contingently convertible bonds				—				8				9
Weighted average shares outstanding — diluted*				2,598				2,623				2,627
Earnings per share:
Basic:
	Income before cumulative effect of an accounting change		$	2.40			$	5.38			$	4.03
	Cumulative effect of an accounting change, net of tax			—				0.01				—
Net income			$	2.40			$	5.39			$	4.03
Diluted:
	Income before cumulative effect of an accounting change		$	2.39			$	5.35			$	3.99
	Cumulative effect of an accounting change, net of tax			—				0.01				—
Net income			$	2.39			$	5.36			$	3.99

*	Certain shares arising from employee stock plans were not included in the computation of diluted earnings per share if the exercise price of the options exceeded the average market price and were antidilutive. The number of shares excluded were 8 million, 13 million and 19 million for the years ended December 31, 2007, 2006 and 2005, respectively.

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Years Ended December 31,
(in millions)			2007				2006				2005
Statutory surplus(a):
	General Insurance		$	37,705			$	32,665			$	24,508
	Life Insurance & Retirement Services			33,212				35,058				30,739
Statutory net income(a)(b):
	General Insurance(c)			8,018				8,010				1,713
	Life Insurance & Retirement Services(a)			4,465				5,088				4,762

(a)	Statutory surplus and net income with respect to foreign operations are estimated at November 30. The basis of presentation for branches of AIA is the Hong Kong statutory filing basis. The basis of presentation for branches of ALICO is the U.S. statutory filing basis. AIG Star Life, AIG Edison Life, Nan Shan and Philamlife are estimated based on their respective local country filing basis.
(b)	Includes realized capital gains and losses and taxes.
(c)	Includes catastrophe losses, net of tax, of $177 million and $1.9 billion in 2007 and 2005, respectively.

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			2007								2006
			Carrying				Fair				Carrying				Fair
(in millions)			Value(a)				Value				Value(a)				Value
Assets:
	Fixed maturities		$	428,935			$	429,511			$	419,142			$	419,859
	Equity securities			41,646				41,646				30,650				30,650
	Mortgage and other loans receivable			33,727				34,123				28,418				28,655
	Securities available for sale			40,305				40,305				47,205				47,205
	Trading securities			4,197				4,197				5,031				5,031
	Spot commodities			238				238				220				220
	Unrealized gain on swaps, options and forward transactions			16,442				16,442				19,252				19,252
	Trade receivables			6,467				6,467				4,317				4,317
	Securities purchased under agreements to resell			20,950				20,950				30,291				30,291
	Finance receivables, net of allowance			31,234				28,693				29,573				26,712
	Securities lending invested collateral			75,662				75,662				69,306				69,306
	Other invested assets(b)			57,134				57,979				42,111				42,418
	Short-term investments			51,351				51,351				27,483				27,483
	Cash			2,284				2,284				1,590				1,590
Liabilities:
	Policyholders’ contract deposits			258,459				259,045				248,264				243,570
	Securities sold under agreements to repurchase			8,331				9,048				19,677				19,677
	Trade payables			10,568				10,568				6,174				6,174
	Securities and spot commodities sold but not yet purchased			4,709				4,709				4,076				4,076
	Unrealized loss on swaps, options and forward transactions			20,613				20,613				11,401				11,401
	Trust deposits and deposits due to banks and other depositors			4,903				4,986				5,249				5,261
	Commercial paper and extendible commercial notes			13,114				13,114				13,363				13,363
	Long-term borrowings			162,935				165,064				135,316				135,605
	Securities lending payable			81,965				81,965				70,198				70,198

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		2007				2006				2005
Expected annual dividend yield(a)			1.39%				0.92%				0.71%
Expected volatility(b)			32.82%				23.50%				27.30%
Risk-free interest rate(c)			4.08%				4.61%				4.17%
Expected term(d)			7  years				7  years				7  years

(a)	The dividend yield is determined at the grant date.
(b)	In 2007, expected volatility is the average of historical volatility (based on seven years of daily stock price changes) and the implied volatility of actively traded options on AIG shares.
(c)	The interest rate curves used in the valuation model were the U.S. Treasury STRIP rates with terms from 3 months to 10 years.
(d)	The contractual term of the option is generally 10 years with an expected term of 7 years calculated based on an analysis of historical employee exercise behavior and employee turnover (post-vesting terminations). The early exercise rate is a function of time elapsed since the grant. Fifteen years of historical data were used to estimate the early exercise rate.

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										Weighted
										Average
										Remaining				Aggregate
						Weighted Average				Contractual				Intrinsic Values
Options:		Shares				Exercise Price				Life				(in millions)
Outstanding at beginning of year			47,655,720			$	57.99
Granted			1,738,530			$	57.43
Exercised*			(12,308,493	)		$	40.00
Forfeited or expired			(721,988	)		$	69.00
Outstanding at end of year			36,363,769			$	63.83				4.81			$	59
Options exercisable at end of year			30,703,527			$	63.98				4.10			$	57
Weighted average fair value per share of options granted						$	20.97

*	Includes options with respect to 8,489,584 shares exercised with delivery deferred, resulting in obligations to issue 4,138,713 shares.

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		Number of Shares																				Weighted Average Grant-Date Fair Value
														Total				Total																Total				Total
		Time-vested				AIG				Partners				AIG				SICO				Time-vested				AIG				Partners				AIG				SICO
		RSUs				DCPPP				Plan				Plan				Plans				RSUs				DCPPP				Plan				Plans				Plans
Unvested at January 1, 2007			7,181,595				4,590,622				3,607,040				15,379,257				11,443,772				$66.56				$52.09				$56.50			$	59.88			$	61.72
Granted			4,752,738				—				2,547,620				7,300,358				—				57.90				—				53.93				56.51				—
Vested			(168,214	)			(196,690	)			(550	)			(365,454	)			(1,691,306	)			63.82				61.44				66.97				62.55				64.18
Forfeited			(422,431	)			(173,472	)			(1,212,585	)			(1,808,488	)			(282,657	)			65.34				53.25				56.83				58.47				59.93
Unvested at December 31, 2007			11,343,688				4,220,460				4,941,525				20,505,673				9,469,809				$63.01				$54.53				$55.08			$	59.36			$	61.27

*	Options and DSUs awarded under the 2007 Plan are not included. For the AIG DCPPP, includes all incremental shares granted or to be granted.

							Blended
			Unrecognized				Weighted-
			Compensation				Average
			Cost				Period
(in millions)
Time-vested RSUs - 2002 Plan				$218				1.35  years
Time-vested RSUs - 2007 Plan				$209				2.05  years
	AIG DCPPP			$146				5.47  years
Total AIG Plans				$573				2.65  years
Total SICO Plans				$249				5.93  years

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			Pension																Postretirement(a)
			Non-U.S. Plans(b)								U.S. Plans(c)								Non-U.S. Plans								U.S. Plans
(in millions)			2007				2006				2007				2006				2007				2006				2007				2006
Change in projected benefit obligation:
	Benefit obligation, beginning of year		$	1,578			$	1,351			$	3,079			$	3,131			$	53			$	43			$	252			$	205
	Service cost			90				78				135				130				5				4				11				6
	Interest cost			50				36				186				169				3				2				15				11
	Participant contributions			4				1				—				—				—				—				—				—
	Actuarial (gain) loss			(12	)			(40	)			(159	)			(245	)			(2	)			5				(3	)			(1	)
	Plan amendments and mergers			(2	)			—				17				—				—				—				—				47
	Benefits paid:
	AIG assets			(36	)			(28	)			(11	)			(10	)			(1	)			(1	)			(18	)			(16	)
	Plan assets			(43	)			(27	)			(91	)			(84	)			—				—				—				—
	Effect of foreign currency fluctuation			78				71				—				—				4				—				—				—
	Other			38				136				—				(12	)			17				—				—				—
Projected benefit obligation, end of year			$	1,745			$	1,578			$	3,156			$	3,079			$	79			$	53			$	257			$	252
Change in plan assets:
	Fair value of plan assets, at beginning of year		$	850			$	699			$	2,760			$	2,561			$	—			$	—			$	—			$	—
	Actual return on plan assets, net of expenses			36				33				162				282				—				—				—				—
	AIG contributions			87				69				309				11				1				1				18				16
	Participant contributions			4				1				—				—				—				—				—				—
	Benefits paid:
	AIG assets			(36	)			(28	)			(11	)			(10	)			(1	)			(1	)			(18	)			(16	)
	Plan assets			(43	)			(27	)			(91	)			(84	)			—				—				—				—
	Effect of foreign currency fluctuation			51				41				—				—				—				—				—				—
	Other			3				62				—				—				—				—				—				—
Fair value of plan assets, end of year			$	952			$	850			$	3,129			$	2,760			$	—			$	—			$	—			$	—
Funded status, end of year			$	(793	)		$	(728	)		$	(27	)		$	(319	)		$	(79	)		$	(53	)		$	(257	)		$	(252	)
Amounts recognized in the consolidated balance sheet:
	Assets		$	28			$	18			$	228			$	—			$	—			$	—			$	—			$	—
	Liabilities			(821	)			(746	)			(255	)			(319	)			(79	)			(53	)			(257	)			(252	)
	Total amounts recognized		$	(793	)		$	(728	)		$	(27	)		$	(319	)		$	(79	)		$	(53	)		$	(257	)		$	(252	)
Amounts recognized in Accumulated other comprehensive income (loss):
	Net loss		$	242			$	256			$	513			$	687			$	6			$	7			$	(5	)		$	3
	Prior service cost (credit)			(67	)			(72	)			(2	)			(20	)			—				—				23				22
	Total amounts recognized		$	175			$	184			$	511			$	667			$	6			$	7			$	18			$	25

(a)	AIG does not currently fund postretirement benefits.
(b)	Includes unfunded plans for which the aggregate pension benefit obligation was $559 million and $494 million at December 2007, and 2006, respectively. For 2007 and 2006, approximately 83% pertain to Japanese plans, which are not required by local regulation to be funded. The projected benefit obligation for these plans total $464 million and $414 million, respectively.
(c)	Includes non-qualified unfunded plans, for which the aggregate projected benefit obligation was $240 million and $228 million at December 2007 and 2006, respectively.

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(in millions)		2007				2006
Non-U.S. pension benefit plans		$	1,504			$	1,384
U.S. pension benefit plans		$	2,752			$	2,689

		PBO exceeds fair value of plan assets																ABO exceeds fair value of plan assets
		Non-U.S. Plans								U.S. Plans								Non-U.S. Plans								U.S. Plans
(in millions)		2007				2006				2007				2006				2007				2006				2007				2006
Projected benefit obligation		$	1,676			$	1,486			$	368			$	3,079			$	1,415			$	1,465			$	240			$	240
Accumulated benefit obligation			1,462				1,323				317				2,689				1,277				1,311				206				204
Fair value of plan assets			855				740				113				2,760				652				723				—				11

			Pension																								Postretirement
			Non-U.S. Plans												U.S. Plans												Non-U.S. Plans												U.S. Plans
(in millions)			2007				2006				2005				2007				2006				2005				2007				2006				2005				2007				2006				2005
Components of net periodic benefit cost:
Service cost			$	90			$	78			$	71			$	135			$	130			$	111			$	5			$	4			$	4			$	11			$	6			$	5
	Interest cost			50				36				32				186				169				153				3				2				2				15				11				11
	Expected return on assets			(36	)			(28	)			(21	)			(216	)			(201	)			(180	)			—				—				—				—				—				—
	Amortization of prior service cost			(10	)			(9	)			(10	)			(3	)			(3	)			(3	)			—				—				—				(2	)			(6	)			(6	)
	Amortization of transitional obligation			1				1				1				—				—				—				—				—				—				—				—				—
	Recognition of net actuarial (gains)/losses			9				16				21				43				75				55				—				—				—				—				—				—
	Other			1				1				7				14				6				1				—				—				—				—				—				—
Net periodic benefit cost			$	105			$	95			$	101			$	159			$	176			$	137			$	8			$	6			$	6			$	24			$	11			$	10
Total recognized in Accumulated other comprehensive income (loss)			$	(10	)		$	38				—			$	(155	)		$	24				—			$	(2	)		$	—				—			$	(7	)		$	—			$	—
Total recognized in net periodic benefit cost and other comprehensive income			$	95			$	133			$	101			$	4			$	200			$	137			$	6			$	6			$	6			$	17			$	11			$	10

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			Pension								Postretirement
			Non-U.S. Plans				U.S. Plans				Non-U.S. Plans				U.S. Plans
2007
	Discount rate			2.00 - 11.00%				6.50%				2.75 - 6.50%				6.50	%
	Rate of compensation increase			1.50 -  9.00%				4.25%				3.00 - 3.50%				4.25	%
2006
	Discount rate			2.25 - 10.75%				6.00%				4.00 - 5.75%				6.00	%
	Rate of compensation increase			1.50 - 10.00%				4.25%				3.00%				4.25	%

			2007				2006
Following year:
	Medical (before age 65)			9.00%				8.00%
	Medical (age 65 and older)			7.00%				6.70%
Ultimate rate to which cost increase is assumed to decline				5.00%				5.00%
Year in which the ultimate trend rate is reached:
	Medical (before age 65)			2015				2013
	Medical (age 65 and older)			2015				2013

		One Percent								One Percent
		Increase								Decrease
(in millions)		2007				2006				2007				2006
Non-U.S. plans		$	12			$	10			$	(8	)		$	(7	)
U.S. plans		$	6			$	3			$	(5	)		$	(3	)

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			Pension								Postretirement
			Non-U.S. Plans*				U.S. Plans				Non-U.S. Plans*				U.S. Plans
2007
	Discount rate			2.25 - 10.75%				6.00%				4.00 - 5.75%				6.00	%
	Rate of compensation increase			1.50 - 10.00%				4.25%				3.00%				4.25	%
	Expected return on assets			2.50 - 10.50%				8.00%				N/A				N/A
2006
	Discount rate			1.75 - 12.00%				5.50%				4.50 - 5.50%				5.50	%
	Rate of compensation increase			1.50 - 10.00%				4.25%				2.50 - 3.00%				4.25	%
	Expected return on assets			2.50 - 13.50%				8.00%				N/A				N/A
2005
	Discount rate			1.75 - 12.00%				5.75%				4.50 - 6.00%				5.75	%
	Rate of compensation increase			1.50 - 10.00%				4.25%				3.00%				4.25	%
	Expected return on assets			2.15 - 13.50%				8.00%				N/A				N/A

*	The benefit obligations for non-U.S. plans reflect those assumptions that were most appropriate for the local economic environments of the subsidiaries providing such benefits.

			Non-U.S. Plans-Allocation												U.S. Plans-Allocation
			Target				Actual				Actual				Target				Actual				Actual
			2008				2007				2006				2008				2007				2006
Asset class:
	Equity securities			50	%			50	%			47	%			42	%			56	%			64	%
	Debt securities			28				28				32				32				30				26
	Other			22				22				21				26				14				10
Total				100	%			100	%			100	%			100	%			100	%			100	%

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		Pension								Postretirement
		Non-U.S.				U.S.				Non-U.S.				U.S.
(in millions)		Plans				Plans				Plans				Plans
2008		$	74			$	135			$	1			$	17
2009			79				130				1				17
2010			79				139				1				18
2011			85				150				1				18
2012			85				163				2				19
2013-2017			474				1,022				10				102

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(in millions)		2007				2006				2005
U.S.		$	(3,957	)		$	9,862			$	6,103
Foreign			12,900				11,825				9,110
Total		$	8,943			$	21,687			$	15,213

Years Ended December 31,
(in millions)			2007				2006				2005
Foreign and U.S. components of actual income tax expense:
Foreign:
	Current		$	3,157			$	2,725			$	974
	Deferred			461				933				426
U.S.:
	Current			62				2,764				1,613
	Deferred			(2,225	)			115				1,245
Total			$	1,455			$	6,537			$	4,258

2007 2006 2005
								Percent								Percent								Percent
Years Ended December 31,								of Pretax								of Pretax								of Pretax
(dollars in millions)				Amount				Income				Amount				Income				Amount				Income
U.S. federal income tax at statutory rate				$	3,130				35.0	%		$	7,591				35.0	%		$	5,325				35.0	%
	Adjustments:
		Tax exempt interest			(823	)			(9.2	)			(718	)			(3.3	)			(566	)			(3.7	)
		Partnerships and joint ventures			(312	)			(3.5	)			(265	)			(1.2	)			(85	)			(0.5	)
		Synthetic fuel and other tax credits			(127	)			(1.4	)			(196	)			(0.9	)			(296	)			(1.9	)
		Effect of foreign operations			(294	)			(3.3	)			(132	)			(0.6	)			(253	)			(1.7	)
		Dividends received deduction			(129	)			(1.4	)			(102	)			(0.5	)			(117	)			(0.8	)
		State income taxes			45				0.5				59				0.3				86				0.6
		Nondeductible compensation			41				0.5				61				0.3				83				0.5
		SICO benefit			(194	)			(2.2	)			—				—				—				—
		Other			118				1.3				239				1.0				81				0.5
Actual income tax expense				$	1,455				16.3	%		$	6,537				30.1	%		$	4,258				28.0	%

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(in millions)			2007				2006
Deferred tax assets:
	Loss reserve discount		$	2,249			$	1,969
	Unearned premium reserve reduction			1,743				1,352
	Unrealized depreciation of investments			104				—
	Loan loss and other reserves			1,408				1,054
	Investments in foreign subsidiaries and joint ventures			1,121				420
	Adjustment to life policy reserves			3,213				3,584
	NOL’s and tax attributes			1,814				222
	Accruals not currently deductible, and other			1,305				1,209
Deferred tax assets*				12,957				9,810
Valuation allowance				(223	)			(11	)
Net deferred tax assets				12,734				9,799
Deferred tax liabilities:
	Deferred policy acquisition costs			11,716				10,396
	Flight equipment, fixed assets and intangible assets			5,239				4,377
	Unrealized appreciation of investments			—				3,370
	Other			1,041				508
Total deferred tax liabilities				17,996				18,651
Net deferred tax liability			$	5,262			$	8,852

*

AIG has recorded deferred tax assets for alternative minimum tax credit carry forwards of $101 million and $222 million at December 31, 2007 and 2006, respectively. In 2007, AIG generated net operating loss carryforwards, unused foreign tax credits and general business tax credits in the amount of $4.2 billion, $130 million and $125 million, respectively. Net operating loss carryforwards and general business tax credits may be carried forward for twenty years while foreign tax credits may be carried forward for ten years. Unused minimum tax credits are available for future use without expiration.

(in millions)				2007
Gross unrecognized tax benefits at January 1, 2007				$	1,138
	Agreed audit adjustments with taxing authorities
		included in the beginning balance			(188	)
	Increases in tax positions for prior years				646
	Decreases in tax positions for prior years				(189	)
	Increases in tax positions for current year				82
	Lapse in statute of limitations				(1	)
	Settlements				(178	)
Gross unrecognized tax benefits at December 31, 2007				$	1,310

Major Tax Jurisdictions		Open Tax Years
United States			1997-2006
United Kingdom			2003-2006
Hong Kong			1997-2006
Malaysia			1999-2006
Singapore			1993-2006
Thailand			2001-2006
Taiwan			2000-2006
Japan			2000-2006
Korea			2001-2006
France			2003-2006

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				Three Months Ended
				March 31,								June 30,								September 30,								December 31,
(in millions, except per share data)				2007				2006				2007				2006				2007*				2006				2007*				2006
Total revenues				$	30,645			$	27,278			$	31,150			$	26,854			$	29,836			$	29,247			$	18,433			$	30,008
Income (loss) before income taxes, minority interest and cumulative effect of an accounting change					6,172				4,793				6,328				5,241				4,879				6,301				(8,436	)			5,352
Income (loss) before cumulative effect of an accounting change					4,130				3,161				4,277				3,190				3,085				4,224				(5,292	)			3,439
Net income (loss)				$	4,130			$	3,195			$	4,277			$	3,190			$	3,085			$	4,224			$	(5,292	)		$	3,439
Earnings per common share:
	Basic
		Income (loss) before cumulative effect of an accounting change		$	1.58			$	1.21			$	1.64			$	1.23			$	1.20			$	1.62			$	(2.08	)		$	1.32
		Cumulative effect of an accounting change, net of tax			—				0.01				—				—				—				—				—				—
	Net income (loss)			$	1.58			$	1.22			$	1.64			$	1.23			$	1.20			$	1.62			$	(2.08	)		$	1.32
	Diluted
		Income (loss) before cumulative effect of an accounting change		$	1.58			$	1.21			$	1.64			$	1.21			$	1.19			$	1.61			$	(2.08	)		$	1.31
		Cumulative effect of an accounting change, net of tax			—				0.01				—				—				—				—				—				—
		Net income (loss)		$	1.58			$	1.22			$	1.64			$	1.21			$	1.19			$	1.61			$	(2.08	)		$	1.31
Average shares outstanding:
	Basic				2,612				2,605				2,602				2,606				2,576				2,607				2,550				2,610
	Diluted				2,621				2,624				2,613				2,625				2,589				2,626				2,550				2,622

*	Both revenues and operating income include (i) an unrealized market valuation loss of $352 million and $11.1 billion in the third quarter and fourth quarter of 2007, respectively, on AIGFP’s super senior credit default swap portfolio and (ii) other-than-temporary impairment charges of $3.3 billion in the fourth quarter of 2007.

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•	AIGLH, formerly known as American General Corporation, is a holding company and a wholly owned subsidiary of AIG. AIG provides a full and unconditional guarantee of all outstanding debt of AIGLH.
•	AIG Liquidity Corp. is a wholly owned subsidiary of AIG. AIG provides a full and unconditional guarantee of all obligations of AIG Liquidity Corp.
•	AIG Program Funding, Inc. is a wholly owned subsidiary of AIG. AIG provides a full and unconditional guarantee of all obligations of AIG Program Funding, Inc., which was established in 2007.

			American
			International								AIG				AIG
			Group, Inc.								Liquidity				Program				Other								Consolidated
(in millions)			(As Guarantor)				AIGLH				Corp.				Funding, Inc.				Subsidiaries				Eliminations				AIG
December 31, 2007
Assets:
	Investments and financial services assets		$	14,648			$	40			$	—			$	—			$	859,063			$	(21,790	)		$	851,961
	Cash			84				1				—				—				2,199				—				2,284
	Carrying value of subsidiaries and partially owned companies, at equity			111,714				24,396				—				—				18,542				(153,998	)			654
	Other assets			9,414				2,592				—				—				193,445				155				205,606
Total assets			$	135,860			$	27,029			$	—			$	—			$	1,073,249			$	(175,633	)		$	1,060,505
Liabilities:
	Insurance liabilities		$	43			$	—			$	—			$	—			$	534,369			$	(75	)		$	534,337
	Debt			36,045				2,136				—				—				156,003				(18,135	)			176,049
	Other liabilities			3,971				2,826				—				—				250,506				(3,085	)			254,218
Total liabilities				40,059				4,962				—				—				940,878				(21,295	)			964,604
Preferred shareholders’ equity in subsidiary companies				—				—				—				—				100				—				100
Total shareholders’ equity				95,801				22,067				—				—				132,271				(154,338	)			95,801
Total liabilities, preferred shareholders’ equity in subsidiary companies and shareholders’ equity			$	135,860			$	27,029			$	—			$	—			$	1,073,249			$	(175,633	)		$	1,060,505
December 31, 2006
Assets:
	Investments and financial services assets		$	7,346			$	—			$	*			$	—			$	800,350			$	(14,822	)		$	792,874
	Cash			76				—				*				—				1,514				—				1,590
	Carrying value of subsidiaries and partially owned companies, at equity			109,125				27,967				—				—				8,436				(144,427	)			1,101
	Other assets			3,989				2,622				*				—				179,183				(1,949	)			183,845
Total assets			$	120,536			$	30,589			$	*			$	—			$	989,483			$	(161,198	)		$	979,410
Liabilities:
	Insurance liabilities		$	21			$	—			$	—			$	—			$	498,263			$	(64	)		$	498,220
	Debt			15,157				2,136				*				—				146,206				(14,820	)			148,679
	Other liabilities			3,681				3,508				*				—				224,936				(1,482	)			230,643
Total liabilities				18,859				5,644				*			$	—				869,405				(16,366	)			877,542
Preferred shareholders’ equity in subsidiary companies				—				—				—				—				191				—				191
Total shareholders’ equity				101,677				24,945				*				—				119,887				(144,832	)			101,677
Total liabilities, preferred shareholders’ equity in subsidiary companies and shareholders’ equity			$	120,536			$	30,589			$	*			$	—			$	989,483			$	(161,198	)		$	979,410

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		American
		International								AIG				AIG
		Group, Inc.								Liquidity				Program				Other								Consolidated
(in millions)		Guarantor				AIGLH				Corp.				Funding, Inc.				Subsidiaries				Eliminations				AIG
Year Ended December 31, 2007
Operating income (loss)		$	(2,379	)		$	(152	)		$	*			$	—			$	11,474			$	—			$	8,943
Equity in undistributed net income of consolidated subsidiaries			3,121				(27	)			—				—				—				(3,094	)			—
Dividend income from consolidated subsidiaries			4,685				1,358				—				—				—				(6,043	)			—
Income taxes (benefits)			(773	)			248				*				—				1,980				—				1,455
Minority interest			—				—				—				—				(1,288	)			—				(1,288	)
Net income (loss)		$	6,200			$	931			$	*			$	—			$	8,206			$	(9,137	)		$	6,200
Year Ended December 31, 2006
Operating income (loss)		$	(786	)		$	122			$	*			$	—			$	22,351			$	—			$	21,687
Equity in undistributed net income of consolidated subsidiaries			13,308				1,263				—				—				—				(14,571	)			—
Dividend income from consolidated subsidiaries			1,689				602				—				—				—				(2,291	)			—
Income taxes (benefits)			197				(131	)			*				—				6,471				—				6,537
Minority interest			—				—				—				—				(1,136	)			—				(1,136	)
Cumulative effect of an accounting change			34				—				—				—				—				—				34
Net income (loss)		$	14,048			$	2,118			$	*			$	—			$	14,744			$	(16,862	)		$	14,048
Year Ended December 31, 2005
Operating income (loss)		$	(1,569	)		$	(200	)		$	*			$	—			$	16,982			$	—			$	15,213
Equity in undistributed net income of consolidated subsidiaries			10,156				2,530				—				—				—				(12,686	)			—
Dividend income from consolidated subsidiaries			1,958				—				—				—				—				(1,958	)			—
Income taxes (benefits)			68				(92	)			*				—				4,282				—				4,258
Minority interest			—				—				—				—				(478	)			—				(478	)
Net income (loss)		$	10,477			$	2,422			$	*			$	—			$	12,222			$	(14,644	)		$	10,477

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			American
			International								AIG				AIG
			Group, Inc.								Liquidity				Program				Other				Consolidated
(in millions)			Guarantor				AIGLH				Corp.				Funding, Inc.				Subsidiaries				AIG
Year Ended December 31, 2007
Net cash provided by (used in) operating activities			$	(770	)		$	214			$		*		$	—			$	35,727			$	35,171
Cash flows from investing:
	Invested assets disposed			3,057				—				—				—				175,201				178,258
	Invested assets acquired			(9,666	)			—				—				—				(235,729	)			(245,395	)
	Other			(4,128	)			—					*			—				3,258				(870	)
Net cash used in investing activities				(10,737	)			—					*			—				(57,270	)			(68,007	)
Cash flows from financing activities:
	Issuance of debt			20,582				—				—				—				82,628				103,210
	Repayments of debt			(1,253	)			—				—				—				(78,823	)			(80,076	)
	Payments advanced to purchase shares			(6,000	)			—				—				—				—				(6,000	)
	Cash dividends paid to shareholders			(1,881	)			—				—				—				—				(1,881	)
	Other			67				(213)					*			—				18,373				18,227
Net cash provided by (used in) financing activities				11,515				(213)					*			—				22,178				33,480
Effect of exchange rate changes on cash				—				—				—				—				50				50
Change in cash				8				1					*			—				685				694
Cash at beginning of year				76				—				—				—				1,514				1,590
Cash at end of year			$	84			$	1			$		*		$	—			$	2,199			$	2,284
Year Ended December 31, 2006
Net cash provided by (used in) operating activities			$	(590	)		$	258			$		*		$	—			$	6,619			$	6,287
Cash flows from investing:
	Invested assets disposed			3,402				—				—				—				154,704				158,106
	Invested assets acquired			(8,298	)			—				—				—				(216,663	)			(224,961	)
	Other			(2,747	)			(67)					*			—				1,717				(1,097	)
Net cash used in investing activities				(7,643	)			(67)					*			—				(60,242	)			(67,952	)
Cash flows from financing activities:
	Issuance of debt			12,038				—				—				—				61,950				73,988
	Repayments of debt			(2,417	)			—				—				—				(34,072	)			(36,489	)
	Cash dividends paid to shareholders			(1,638	)			—				—				—				—				(1,638	)
	Other			136				(191)					*			—				25,438				25,383
Net cash provided by (used in) financing activities				8,119				(191)					*			—				53,316				61,244
Effect of exchange rate changes on cash				—				—				—				—				114				114
Change in cash				(114	)			—					*			—				(193	)			(307	)
Cash at beginning of year				190				—				—				—				1,707				1,897
Cash at end of year			$	76			$	—			$		*		$	—			$	1,514			$	1,590
Year Ended December 31, 2005
Net cash provided by operating activities			$	1,854			$	805			$		*		$	—			$	20,754			$	23,413
Cash flows from investing:
	Invested assets disposed			—				—				—				—				185,884				185,884
	Invested assets acquired			(598	)			—				—				—				(245,804	)			(246,402	)
	Other			(1,083	)			(247)					*			—				389				(941	)
Net cash used in investing activities				(1,681	)			(247)					*			—				(59,531	)			(61,459	)
Cash flows from financing activities:
	Issuance of debt			2,101				—				—				—				64,960				67,061
	Repayments of debt			(607	)			(398)				—				—				(51,099	)			(52,104	)
	Cash dividends paid to shareholders			(1,421	)			—				—				—				—				(1,421	)
	Other			(73	)			(160)					*			—				24,794				24,561
Net cash provided by (used in) financing activities				—				(558)					*			—				38,655				38,097
Effect of exchange rate changes on cash				—								—				—				(163	)			(163	)
Change in cash				173				—					*			—				(285	)			(112	)
Cash at beginning of year				17				—				—				—				1,992				2,009
Cash at end of year			$	190			$	—			$		*		$	—			$	1,707			$	1,897

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		For the Years Ended
		December 31,
(in millions)		2006				2005
Cash flows from operating activities — As previously reported		$	6,829			$	25,382
Revisions			(542	)			(1,969	)
Cash flows from operating activities — As revised		$	6,287			$	23,413
Cash flows from investing activities — As previously reported		$	(67,040	)		$	(62,500	)
Revisions			(912	)			1,041
Cash flows from investing activities — As revised		$	(67,952	)		$	(61,459	)
Cash flows from financing activities — As previously reported		$	59,790			$	37,169
Revisions			1,454				928
Cash flows from financing activities — As revised		$	61,244			$	38,097

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•	Implemented standard key controls to review and monitor the income tax provision and related income tax balances at applicable AIG business units globally and parent company, and conducted testing of these controls to verify their effectiveness,
•	Completed the evaluation and reconciliation of certain historical balance sheet income tax accounts at applicable AIG business units globally and parent company, as well as a more detailed financial statement exposure analysis of income tax balances,
•	Hired additional qualified staff, including Tax Directors and Tax Accountants, at designated business units globally and parent company, and
•	Continued the development and dissemination of income tax accounting training and education programs at parent company and business unit levels through site visits and training conferences.

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	AMERICAN INTERNATIONAL GROUP, INC.

	By	/s/ Martin J. Sullivan

	(Martin J. Sullivan, President and Chief Executive Officer)

Signature				Title
/s/ Martin J. Sullivan   (Martin J. Sullivan)				President, Chief Executive Officer and Director (Principal Executive Officer)
/s/ Steven J. Bensinger   (Steven J. Bensinger)				Executive Vice President and Chief Financial Officer (Principal Financial Officer)
/s/ David L. Herzog   (David L. Herzog)				Senior Vice President and Comptroller (Principal Accounting Officer)
/s/ Stephen F. Bollenbach   (Stephen F. Bollenbach)				Director
/s/ Marshall A. Cohen   (Marshall A. Cohen)				Director
/s/ Martin S. Feldstein   (Martin S. Feldstein)				Director
/s/ Ellen V. Futter   (Ellen V. Futter)				Director
/s/ Stephen L. Hammerman   (Stephen L. Hammerman)				Director
/s/ Richard C. Holbrooke   (Richard C. Holbrooke)				Director

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Signature				Title
/s/ Fred H. Langhammer   (Fred H. Langhammer)				Director
/s/ George L. Miles, Jr.   (George L. Miles, Jr.)				Director
/s/ Morris W. Offit   (Morris W. Offit)				Director
/s/ James F. Orr III   (James F. Orr III)				Director
/s/ Virginia M. Rometty   (Virginia M. Rometty)				Director
/s/ Michael H. Sutton   (Michael H. Sutton)				Director
/s/ Edmund S.W. Tse   (Edmund S.W. Tse)				Director
/s/ Robert B. Willumstad   (Robert B. Willumstad)				Director
/s/ Frank G. Zarb   (Frank G. Zarb)				Director

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Exhibit
Number		Description							Location
2		Plan of acquisition, reorganization, arrangement, liquidation or succession
		Agreement and Plan of Merger, dated as of May 11, 2001, among American International Group, Inc., Washington Acquisition Corporation and American General Corporation							Incorporated by reference to Exhibit 2.1(i)(a) to AIG’s Registration Statement on Form S-4 (File No. 333-62688).
3(i)(a)		Restated Certificate of Incorporation of AIG							Incorporated by reference to Exhibit 3(i) to AIG’s Annual Report on Form 10-K for the year ended December 31, 1996 (File No. 1-8787).
3(i)(b)		Certificate of Amendment of Certificate of Incorporation of AIG, filed June 3, 1998							Incorporated by reference to Exhibit 3(i) to AIG’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1998 (File No. 1-8787).
3(i)(c)		Certificate of Merger of SunAmerica Inc. with and into AIG, filed December 30, 1998 and effective January 1, 1999							Incorporated by reference to Exhibit 3(i) to AIG’s Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-8787).
3(i)(d)		Certificate of Amendment of Certificate of Incorporation of AIG, filed June 5, 2000							Incorporated by reference to Exhibit 3(i)(c) to AIG’s Registration Statement on Form S-4 (File No. 333-45828).
3(ii)		Amended and Restated By-laws of AIG							Incorporated by reference to Exhibit 3(i) to AIG’s Current Report on Form 8-K filed with the SEC on January 17, 2008 (File No. 1-8787).
4		Instruments defining the rights of security holders, including indentures							Certain instruments defining the rights of holders of long- term debt securities of AIG and its subsidiaries are omitted pursuant to Item 601(b)(4)(iii) of Regulation S-K. AIG hereby undertakes to furnish to the Commission, upon request, copies of any such instruments.
9		Voting Trust Agreement							None.
10		Material contracts*
			(1)		AIG 1969 Employee Stock Option Plan and Agreement Form				Filed as exhibit to AIG’s Registration Statement (File No. 2-44043) and incorporated herein by reference.
			(2)		AIG 1972 Employee Stock Option Plan				Filed as exhibit to AIG’s Registration Statement (File No. 2-44702) and incorporated herein by reference.
			(3)		AIG 1972 Employee Stock Purchase Plan				Filed as exhibit to AIG’s Registration Statement (File No. 2-44043) and incorporated herein by reference.
			(4)		AIG 1984 Employee Stock Purchase Plan				Filed as exhibit to AIG’s Registration Statement (File No. 2-91945) and incorporated herein by reference.
			(5)		AIG Amended and Restated 1996 Employee Stock Purchase Plan				Filed as exhibit to AIG’s Definitive Proxy Statement dated April 4, 2003 (File No. 1-8787) and incorporated herein by reference.
			(6)		AIG 2003 Japan Employee Stock Purchase Plan				Incorporated by reference to Exhibit 4 to AIG’s Registration Statement on Form S-8 (File No. 333-111737).
			(7)		AIG 1977 Stock Option and Stock Appreciation Rights Plan				Filed as exhibit to AIG’s Registration Statement (File No. 2-59317) and incorporated herein by reference.
			(8)		AIG 1982 Employee Stock Option Plan				Filed as exhibit to AIG’s Registration Statement (File No. 2-78291) and incorporated herein by reference.
			(9)		AIG 1987 Employee Stock Option Plan				Filed as exhibit to AIG’s Definitive Proxy Statement dated April 6, 1987 (File No. 0-4652) and incorporated herein by reference.
			(10)		AIG 1991 Employee Stock Option Plan				Filed as exhibit to AIG’s Definitive Proxy Statement dated April 4, 1997 (File No. 1-8787) and incorporated herein by reference.

*	All material contracts are management contracts or compensatory plans or arrangements, except items (66), (67), (68) and (69).

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Exhibit
Number		Description						Location
		(11)		AIG Amended and Restated 1999 Stock Option Plan				Filed as exhibit to AIG’s Definitive Proxy Statement dated April 4, 2003 (File No. 1-8787) and incorporated herein by reference.
		(12)		Form of Stock Option Grant Agreement under the AIG Amended and Restated 1999 Stock Option Plan				Incorporated by reference to Exhibit 10(a) to AIG’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004 (File No. 1-8787).
		(13)		AIG Amended and Restated 2002 Stock Incentive Plan				Incorporated by reference to Exhibit 4(a) to AIG’s Registration Statement on Form S-8 (File No. 333-101967).
		(14)		Form of Restricted Stock Unit Award Agreement under the AIG Amended and Restated 2002 Stock Incentive Plan				Incorporated by reference to Exhibit 10(b) to AIG’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004 (File No. 1-8787).
		(15)		AIG Executive Deferred Compensation Plan				Incorporated by reference to Exhibit 4(a) to AIG’s Registration Statement on Form S-8 (File No. 333-101640).
		(16)		AIG Supplemental Incentive Savings Plan				Incorporated by reference to Exhibit 4(b) to AIG’s Registration Statement on Form S-8 (File No. 333-101640).
		(17)		AIG Director Stock Plan				Filed as an exhibit to AIG’s Definitive Proxy Statement dated April 5, 2004 (File No. 1-8787) and incorporated herein by reference.
		(18)		AIG Chief Executive Officer Annual Compensation Plan				Filed as an exhibit to AIG’s Definitive Proxy Statement dated April 5, 2004 (File No. 1-8787) and incorporated herein by reference.
		(19)		AIRCO 1972 Employee Stock Option Plan				Incorporated by reference to AIG’s Joint Proxy Statement and Prospectus (File No. 2-61994).
		(20)		AIRCO 1977 Stock Option and Stock Appreciation Rights Plan				Incorporated by reference to AIG’s Joint Proxy Statement and Prospectus (File No. 2-61994).
		(21)		Purchase Agreement between AIA and Mr. E.S.W. Tse				Incorporated by reference to Exhibit 10(l) to AIG’s Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 1-8787).
		(22)		Retention and Employment Agreement between AIG and Jay S. Wintrob				Incorporated by reference to Exhibit 10(m) to AIG’s Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-8787).
		(23)		SunAmerica Inc. 1988 Employee Stock Plan				Incorporated by reference to Exhibit 4(a) to AIG’s Registration Statement on Form S-8 (File No. 333-70069).
		(24)		SunAmerica 1997 Employee Incentive Stock Plan				Incorporated by reference to Exhibit 4(b) to AIG’s Registration Statement on Form S-8 (File No. 333-70069).
		(25)		SunAmerica Nonemployee Directors’ Stock Option Plan				Incorporated by reference to Exhibit 4(c) to AIG’s Registration Statement on Form S-8 (File No. 333-70069).
		(26)		SunAmerica 1995 Performance Stock Plan				Incorporated by reference to Exhibit 4(d) to AIG’s Registration Statement on Form S-8 (File No. 333-70069).
		(27)		SunAmerica Inc. 1998 Long-Term Performance-Based Incentive Plan For the Chief Executive Officer				Incorporated by reference to Exhibit 4(e) to AIG’s Registration Statement on Form S-8 (File No. 333-70069).
		(28)		SunAmerica Inc. Long-Term Performance-Based Incentive Plan Amended and Restated 1997				Incorporated by reference to Exhibit 4(f) to AIG’s Registration Statement on Form S-8 (File No. 333-70069).
		(29)		SunAmerica Five Year Deferred Cash Plan				Incorporated by reference to Exhibit 4(a) to AIG’s Registration Statement on Form S-8 (File No. 333-31346).
		(30)		SunAmerica Executive Savings Plan				Incorporated by reference to Exhibit 4(b) to AIG’s Registration Statement on Form S-8 (File No. 333-31346).

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Exhibit
Number		Description						Location
		(31)		HSB Group, Inc. 1995 Stock Option Plan				Incorporated by reference to Exhibit 10(iii)(f) to HSB’s Annual Report on Form 10-K for the year ended December 31, 1999 (File No. 1-13135).
		(32)		HSB Group, Inc. 1985 Stock Option Plan				Incorporated by reference to Exhibit 10(iii)(a) HSB’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1998 (File No. 1-13135).
		(33)		HSB Group, Inc. Employee’s Thrift Incentive Plan				Incorporated by reference to Exhibit 4(i)(c) to The Hartford Steam Boiler Inspection and Insurance Company’s Registration Statement on Form S-8 (File No. 33-36519).
		(34)		American General Corporation 1984 Stock and Incentive Plan				Incorporated by reference to Exhibit 10.1 to American General Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1998 (File No. 1-7981).
		(35)		Amendment to American General Corporation 1984 Stock and Incentive Plan (January 2000)				Incorporated by reference to Exhibit 10.2 to American General Corporation’s Annual Report on Form 10-K for the year ended December 31, 1999 (File No. 1-7981).
		(36)		American General Corporation 1994 Stock and Incentive Plan (January 2000)				Incorporated by reference to Exhibit 10.2 to American General Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1998 (File No. 1-7981).
		(37)		Amendment to American General Corporation 1994 Stock and Incentive Plan (January 1999)				Incorporated by reference to Exhibit 10.4 to American General Corporation’s Annual Report on Form 10-K for the year ended December 31, 1999 (File No. 1-7981).
		(38)		Amendment to American General Corporation 1994 Stock and Incentive Plan (January 2000)				Incorporated by reference to Exhibit 10.5 to American General Corporation’s Annual Report on Form 10-K for the year ended December 31, 1999 (File No. 1-7981).
		(39)		Amendment to American General Corporation 1994 Stock and Incentive Plan (November 2000)				Incorporated by reference to Exhibit 10.1 to American General Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2000 (File No. 1-7981).
		(40)		American General Corporation 1997 Stock and Incentive Plan				Incorporated by reference to Exhibit 10.3 to American General Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1998 (File No. 1-7981).
		(41)		Amendment to American General Corporation 1997 Stock and Incentive Plan (January 1999)				Incorporated by reference to Exhibit 10.7 to American General Corporation’s Annual Report on Form 10-K for the year ended December 31, 1999 (File No. 1-7981).
		(42)		Amendment to American General Corporation 1997 Stock and Incentive Plan (November 2000)				Incorporated by reference to Exhibit 10.2 to American General Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2000 (File No. 1-7981).
		(43)		American General Corporation 1999 Stock and Incentive Plan				Incorporated by reference to Exhibit 10.4 to American General Corporation’s Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-7981).
		(44)		Amendment to American General Corporation 1999 Stock and Incentive Plan (January 1999)				Incorporated by reference to Exhibit 10.9 to American General Corporation’s Annual Report on Form 10-K for the year ended December 31, 1999 (File No. 1-7981).
		(45)		Amendment to American General Corporation 1999 Stock and Incentive Plan (November 2000)				Incorporated by reference to Exhibit 10.3 to American General Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2000 (File No. 1-7981).
		(46)		Amended and Restated American General Corporation Deferred Compensation Plan (12/11/00)				Incorporated by reference to Exhibit 10.13 to American General Corporation’s Annual Report on Form 10-K for the year ended December 31, 2000 (File No. 1-7981).

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Exhibit
Number		Description						Location
		(47)		Amended and Restated Restoration of Retirement Income Plan for Certain Employees Participating in the Restated American General Retirement Plan (Restoration of Retirement Income Plan) (12/31/98)				Incorporated by reference to Exhibit 10.14 to American General Corporation’s Annual Report on Form 10-K for the year ended December 31, 2000 (File No. 1-7981).
		(48)		Amended and Restated American General Supplemental Thrift Plan (12/31/98)				Incorporated by reference to Exhibit 10.15 to American General Corporation’s Annual Report on Form 10-K for the year ended December 31, 2000 (File No. 1-7981).
		(49)		American General Employees’ Thrift and Incentive Plan (restated July 1, 2001)				Incorporated by reference to Exhibit 4(a) to AIG’s Registration Statement on Form S-8 (File No. 333-68640).
		(50)		American General Agents’ and Managers’ Thrift and Incentive Plan (restated July 1, 2001)				Incorporated by reference to Exhibit 4(b) to AIG’s Registration Statement on Form S-8 (File No. 333-68640).
		(51)		CommLoCo Thrift Plan (restated July 1, 2001)				Incorporated by reference to Exhibit 4(c) to AIG’s Registration Statement on Form S-8 (File No. 333-68640).
		(52)		Western National Corporation 1993 Stock and Incentive Plan, as amended				Incorporated by reference to Exhibit 10.18 to Western National Corporation’s Annual Report on Form 10-K for the year ended December 31, 1995 (File No. 1-12540).
		(53)		USLIFE Corporation 1991 Stock Option Plan, as amended				Incorporated by reference to USLIFE Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1995 (File No. 1-5683).
		(54)		Employment Agreement, Amendment to Employment Agreement, and Split-Dollar Agreement, including Assignment of Life Insurance Policy as Collateral, with Rodney O. Martin, Jr.				Incorporated by reference to Exhibit 10(xx) to AIG’s Annual Report on Form 10-K for the year ended December 31, 2002 (File No. 1-8787).
		(55)		Employment Arrangements with Richard W. Scott
				(a) Employment Agreement				Incorporated by reference to Exhibit 10.3 to American General Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2000 (File No. 1-7981).
				(b) Change in Control Severance Agreement				Incorporated by reference to Exhibit 10.32 to American General Corporation’s Annual Report on Form 10-K for the year ended December 31, 1999 (File No. 1-7981).
				(c) Amendment to Employment Arrangements				Incorporated by reference to Exhibit 10(zz)(iii) to AIG’s Annual Report on Form 10-K for the year ended December 31, 2003 (File No. 1-8787).
		(56)		Letter from AIG to Martin J. Sullivan, dated March 16, 2005				Incorporated by reference to Exhibit 10.1 to AIG’s Current Report on Form 8-K filed with the SEC on March 17, 2005 (File No. 1-8787).
		(57)		Letter from AIG to Steven J. Bensinger, dated March 16, 2005				Incorporated by reference to Exhibit 10.3 to AIG’s Current Report on Form 8-K filed with the SEC on March 17, 2005 (File No. 1-8787).
		(58)		Employment Agreement between AIG and Martin J. Sullivan, dated as of June 27, 2005				Incorporated by reference to Exhibit 10(1) to AIG’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 (File No. 1-8787).
		(59)		Employment Agreement between AIG and Steven J. Bensinger, dated as of June 27, 2005				Incorporated by reference to Exhibit 10(3) to AIG’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 (File No. 1-8787).
		(60)		Executive Severance Plan, effective as of June 27, 2005				Incorporated by reference to Exhibit 10(4) to AIG’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 (File No. 1-8787).

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Exhibit
Number		Description						Location
		(61)		Assurance Agreement, by AIG in favor of eligible employees, dated as of June 27, 2005, relating to certain obligations of Starr International Company, Inc.				Incorporated by reference to Exhibit 10(6) to AIG’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 (File No. 1-8787).
		(62)		2005/2006 Deferred Compensation Profit Participation Plan				Incorporated by reference to Exhibit 10.1 to AIG’s Current Report on Form 8-K filed with the SEC on September 26, 2005 (File No. 1-8787).
		(63)		Summary of Director Compensation				Incorporated by reference to Exhibit 10.1 to AIG’s Quarterly Report on Form 10-Q filed with the SEC on August 8, 2007 (File No. 1-8787).
		(64)		AIG 2005 Senior Partners Plan				Incorporated by reference to Exhibit 10.1 to AIG’s Current Report on Form 8-K filed with the SEC on December 20, 2005 (File No. 1-8787).
		(65)		AIG Special Restricted Stock Unit Award Agreement with Steven J. Bensinger, dated January 6, 2006				Incorporated by reference to Exhibit 10.1 to AIG’s Current Report on Form 8-K filed with the SEC on January 9, 2006 (File No. 1-8787).
		(66)		Agreement with the United States Department of Justice, dated February 7, 2006				Incorporated by reference to Exhibit 10.1 to AIG’s Current Report on Form 8-K filed with the SEC on February 9, 2006 (File No. 1-8787).
		(67)		Final Judgment and Consent with the Securities and Exchange Commission, including the related complaint, dated February 9, 2006				Incorporated by reference to Exhibit 10.2 to AIG’s Current Report on Form 8-K filed with the SEC on February 9, 2006 (File No. 1-8787).
		(68)		Agreement between the Attorney General of the State of New York and AIG and its Subsidiaries, dated January 18, 2006				Incorporated by reference to Exhibit 10.3 to AIG’s Current Report on Form 8-K filed with the SEC on February 9, 2006 (File No. 1-8787).
		(69)		Stipulation with the State of New York Insurance Department, dated January 18, 2006				Incorporated by reference to Exhibit 10.4 to AIG’s Current Report on Form 8-K filed with the SEC on February 9, 2006 (File No. 1-8787).
		(70)		AIG Senior Partners Plan (amended and restated)				Incorporated by reference to Exhibit 10.1 to AIG’s Current Report on Form 8-K filed with the SEC on July 21, 2006 (File No. 1-8787).
		(71)		AIG Partners Plan				Incorporated by reference to Exhibit 10.2 to AIG’s Current Report on Form 8-K filed with the SEC on May 22, 2006 (File No. 1-8787).
		(72)		AIG Executive Incentive Plan				Incorporated by reference to Exhibit 10.1 to AIG’s Current Report on Form 8-K filed with the SEC on May 22, 2006 (File No. 1-8787).
		(73)		AIG Amended and Restated 2007 Stock Incentive Plan				Incorporated by reference to Exhibit 4 to AIG’s Registration Statement on Form S-8 (File No. 333-148148).
		(74)		AIG Form of Stock Option Award Agreement				Incorporated by reference to Exhibit 10.A to AIG’s Registration Statement on Form S-8 (File No. 333- 148148).
		(75)		AIG Form of Performance RSU Award Agreement				Incorporated by reference to Exhibit 10.B to AIG’s Registration Statement on Form S-8 (File No. 333- 148148).
		(76)		AIG Form of Time-Vested RSU Award Agreement				Incorporated by reference to Exhibit 10.C to AIG’s Registration Statement on Form S-8 (File No. 333- 148148).
		(77)		AIG Form of Time-Vested RSU Award Agreement with Four-Year Pro Rata Vesting				Incorporated by reference to Exhibit 10.D to AIG’s Registration Statement on Form S-8 (File No. 333- 148148).
		(78)		AIG Form of Time-Vested RSU Award Agreement with Three-Year Pro Rata Vesting				Incorporated by reference to Exhibit 10.E to AIG’s Registration Statement on Form S-8 (File No. 333- 148148).
		(79)		AIG Form of Non-Employee Director Deferred Stock Units Award Agreement				Incorporated by reference to Exhibit 10.F to AIG’s Registration Statement on Form S-8 (File No. 333- 148148).
11				Statement re computation of per share earnings				Included in Note 14 to Consolidated Financial Statements.

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Exhibit
Number		Description						Location
12				Computation of Ratios of Earnings to Fixed Charges				Filed herewith.
13				Annual report to security holders				Not required to be filed.
18				Letter re change in accounting principles				None.
21				Subsidiaries of Registrant				Filed herewith.
23				Consent of PricewaterhouseCoopers LLP				Filed herewith.
24				Power of attorney				Included on the signature page hereof.
31				Rule 13a-14(a)/15d-14(a) Certifications				Filed herewith.
32				Section 1350 Certifications				Filed herewith.
99				Additional exhibits				None.

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											Amount at
At December 31, 2007											which shown in
(in millions)			Cost*				Fair Value				the Balance Sheet
Fixed maturities:
	U.S. government and government-sponsored entities		$	4,291			$	4,492				$   4,492
	Obligations of states, municipalities and political subdivisions			67,414				68,770				68,182
	Non U.S. governments			67,373				70,510				70,514
	Public utilities			8,581				8,743				8,743
	All other corporate			277,162				276,996				277,004
Total fixed maturities				424,821				429,511				428,935
Equity securities and mutual funds:
	Common stocks:
	Public utilities			443				562				562
	Banks, trust and insurance companies			1,920				3,725				3,725
	Industrial, miscellaneous and all other			8,909				12,045				12,045
	Total common stocks			11,272				16,332				16,332
	Preferred stocks			2,599				2,370				2,370
	Mutual Funds			21,012				22,944				22,944
Total equity securities and mutual funds				34,883				41,646				41,646
Mortgage and other loans receivable				33,727				34,123				33,727
Financial services assets:
	Securities available for sale, at fair value			40,157				40,305				40,305
	Trading securities, at fair value			—				4,197				4,197
	Spot commodities			—				238				238
	Unrealized gain on swaps, options and forward transactions			—				16,442				16,442
	Trade receivables			6,467				6,467				6,467
	Securities purchased under agreements to resell, at contract value			20,950				20,950				20,950
	Finance receivables, net of allowance			31,234				28,693				31,234
Securities lending invested collateral, at fair value				80,641				75,662				75,662
Other invested assets				57,000				59,668				58,823
Short-term investments, at cost (approximates fair value)				51,351				51,351				51,351
Total investments				—				—				$809,977

*	Original cost of equity securities and fixed maturities are reduced by other-than-temporary impairment charges, and, as to fixed maturities, reduced by repayments and adjusted for amortization of premiums or accrual of discounts.

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December 31,
(in millions)			2007				2006
Assets:
	Cash		$	84			$	76
	Invested assets			14,648				7,346
	Carrying value of subsidiaries and partially owned companies, at equity			111,714				109,125
	Premiums and insurance balances receivable — net			311				222
	Other assets			9,103				3,767
Total assets				135,860				120,536
Liabilities:
	Insurance balances payable			43				21
	Due to affiliates — net			3,916				1,841
	Notes and bonds payable			20,397				8,917
	Loans payable			500				700
	AIG MIP matched notes and bonds payable			14,274				5,468
	Series AIGFP matched notes and bonds payable			874				72
	Other liabilities			55				1,840
Total liabilities				40,059				18,859
Shareholders’ equity:
	Common stock			6,878				6,878
	Additional paid-in capital			1,936				2,590
	Retained earnings			89,029				84,996
	Accumulated other comprehensive income			4,643				9,110
	Treasury stock			(6,685	)			(1,897	)
Total shareholders’ equity				95,801				101,677
Total liabilities and shareholders’ equity			$	135,860			$	120,536

Years Ended December 31,
(in millions)		2007				2006				2005
Agency income (loss)		$	10			$	9			$	3
Financial services income			69				531				507
Asset management income (loss)			99				34				(3	)
Cash dividend income from consolidated subsidiaries			4,685				1,689				1,958
Dividend income from partially-owned companies			9				11				127
Equity in undistributed net income of consolidated subsidiaries and partially owned companies			3,121				13,308				10,156
Other expenses, net			(2,566	)			(1,371	)			(2,203	)
Cumulative effect of an accounting change			—				34				—
Income before income taxes			5,427				14,245				10,545
Income taxes (benefits)			(773	)			197				68
Net income		$	6,200			$	14,048			$	10,477

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Years Ended December 31,
(in millions)			2007				2006				2005
Cash flows from operating activities:
	Net income		$	6,200			$	14,048			$	10,477
Adjustments to reconcile net income to net cash provided by operating activities:
	Noncash revenues, expenses, gains and losses included in income:
	Equity in undistributed net income of consolidated subsidiaries and partially owned companies			(9,941	)			(13,308	)			(10,156	)
	Foreign exchange transaction (gains) losses			333				232				—
Changes in operating assets and liabilities:
	Change in premiums and insurance balances receivable and payable			(44	)			(423	)			15
	Loan receivables held for sale — purchases			(404	)			—				—
	Sales of loan receivables — held for sale			40				—				—
	Other, net			3,046				(1,139	)			1,518
	Total adjustments			(6,970	)			(14,638	)			(8,623	)
Net cash provided by (used in) operating activities				(770	)			(590	)			1,854
Cash flows from investing activities:
	Purchase of investments			(7,640	)			(7,875	)			—
	Sale of investments			3,057				3,402				—
	Change in short-term investments			(3,631	)			414				(598	)
	Contributions to subsidiaries and investments in partially owned companies			(755	)			(3,017	)			(966	)
	Mortgage and other loan receivables — originations and purchases			(2,026	)			(423	)			—
	Payments received on mortgages and other loan receivables			498				15				—
	Other, net			(240	)			(159	)			(117	)
Net cash used in investing activities				(10,737	)			(7,643	)			(1,681	)
Cash flows from financing activities:
	Notes, bonds and loans issued			20,582				12,038				2,101
	Repayments of notes, bonds and loans			(1,253	)			(2,417	)			(607	)
	Issuance of treasury stock			217				163				82
	Cash dividends paid to shareholders			(1,881	)			(1,638	)			(1,421	)
	Payments advanced to purchase shares			(6,000	)			—				—
	Acquisition of treasury stock			(16	)			(20	)			(176	)
	Other, net			(134	)			(7	)			21
Net cash (used in) provided by financing activities				11,515				8,119				—
Change in cash				8				(114	)			173
Cash at beginning of year				76				190				17
Cash at end of year			$	84			$	76			$	190

(1)	Agency operations conducted in New York through the North American Division of AIU are included in the financial statements of the parent company.
(2)	Certain prior period amounts have been reclassified to conform to the current period presentation.
(3)	“Equity in undistributed net income of consolidated subsidiaries and partially owned companies” in the accompanying Statement of Income — Parent Company Only — includes equity in income of the minority-owned insurance operations.

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							Reserves
							for Losses																				Losses				Amortization
			Deferred				and Loss				Reserve				Policy				Premiums								and Loss				of Deferred
			Policy				Expenses,				for				and				and Other				Net				Expenses				Policy				Other				Net
			Acquisition				Future Policy				Unearned				Contract				Considerations				Investment				Incurred,				Acquisition				Operating				Premiums
Segment (in millions)			Costs				Benefits(a)				Premiums				Claims(b)				Revenue				Income				Benefits				Costs				Expenses				Written
2007
	General Insurance		$	4,643			$	85,500			$	28,022			$	—			$	45,682			$	6,132			$	29,982			$	8,235			$	2,965			$	47,067
	Life Insurance & Retirement Services			38,445				136,068				—				3,123				33,627				22,341				36,188				3,367				5,829				—
	Other			62				—				—				—				(4	)			(11	)			(55	)			—				—				—
			$	43,150			$	221,568			$	28,022			$	3,123			$	79,305			$	28,462			$	66,115			$	11,602			$	8,794			$	47,067
2006
	General Insurance		$	4,355			$	79,999			$	26,271			$	—			$	43,451			$	5,696			$	28,052			$	7,866			$	2,876			$	44,866
	Life Insurance & Retirement Services			32,810				121,004				—				2,788				30,766				20,024				32,086				3,712				4,959				—
	Other			70				—				—				—				(4	)			350				149				—				—				—
			$	37,235			$	201,003			$	26,271			$	2,788			$	74,213			$	26,070			$	60,287			$	11,578			$	7,835			$	44,866
2005
	General Insurance		$	4,048			$	77,169			$	24,243			$	—			$	40,809			$	4,031			$	33,091			$	7,365			$	2,403			$	41,872
	Life Insurance & Retirement Services			28,106				107,825				—				2,473				29,501				18,677				31,009				3,328				4,718				—
	Other			—				—				—				—				—				(124	)			—				—				—				—
			$	32,154			$	184,994			$	24,243			$	2,473			$	70,310			$	22,584			$	64,100			$	10,693			$	7,121			$	41,872

(a)	Reserves for losses and loss expenses with respect to the General Insurance operations are net of discounts of $2.43 billion, $2.26 billion and $2.11 billion at December 31, 2007, 2006 and 2005, respectively.
(b)	Reflected in insurance balances payable on the accompanying consolidated balance sheet.

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																			Percent of
							Ceded to				Assumed								Amount
			Gross				Other				from Other								Assumed
(dollars in millions)			Amount				Companies				Companies				Net Amount				to Net
2007
Life Insurance in-force			$	2,311,022			$	402,654			$	1,023			$	1,909,391				0.1	%
Premiums:
	General Insurance		$	52,055			$	11,731			$	6,743			$	47,067				14.3	%
	Life Insurance & Retirement Services			34,555				1,778				30				32,807	*			0.1
Total premiums			$	86,610			$	13,509			$	6,773			$	79,874				8.5	%
2006
Life Insurance in-force			$	2,069,617			$	408,970			$	983			$	1,661,630				0.1	%
Premiums:
	General Insurance		$	49,609			$	11,414			$	6,671			$	44,866				14.9	%
	Life Insurance & Retirement Services			32,227				1,481				20				30,766	*			0.1
Total premiums			$	81,836			$	12,895			$	6,691			$	75,632				8.8	%
2005
Life Insurance in-force			$	1,838,337			$	365,082			$	14,496			$	1,487,751				1.0	%
Premiums:
	General Insurance		$	46,689			$	10,853			$	6,036			$	41,872				14.4	%
	Life Insurance & Retirement Services			30,738				1,317				80				29,501	*			0.3
Total premiums			$	77,427			$	12,170			$	6,116			$	71,373				8.6	%

*	Includes accident and health premiums of $6.76 billion, $7.11 billion and $6.51 billion in 2007, 2006 and 2005, respectively.

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							Additions
			Balance,				Charged to
			Beginning				Costs and								Other				Balance,
(in millions)			of Year				Expenses				Charge offs				Changes(a)				End of Year
2007
	Allowance for mortgage and other loans receivable		$	64			$	22			$	(7	)		$	(2	)		$	77
	Allowance for finance receivables			737				646				(632	)			127				878
	Allowance for premiums and insurances balances receivable			756				114				(216	)			8				662
	Allowance for reinsurance assets			536				131				(62	)			(85	)			520
	Overhaul reserve(b)			245				290				—				(163	)			372
2006
	Allowance for mortgage and other loans receivable		$	64			$	17			$	(11	)		$	(6	)		$	64
	Allowance for finance receivables			670				495				(534	)			106				737
	Allowance for premiums and insurances balances receivable			871				240				(481	)			126				756
	Allowance for reinsurance assets			999				147				(381	)			(229	)			536
	Overhaul reserve(b)			127				264				—				(146	)			245
2005
	Allowance for mortgage and other loans receivable		$	83			$	1			$	(26	)		$	6			$	64
	Allowance for finance receivables			571				435				(414	)			78				670
	Allowance for premiums and insurances balances receivable			561				418				(104	)			(4	)			871
	Allowance for reinsurance assets			846				185				(49	)			17				999
	Overhaul reserve(b)			68				245				—				(186	)			127

(a)	Includes recoveries of amounts previously charged off and reclassifications to/from other accounts.
(b)	Amounts for Overhaul reserve represent reimbursements to lessees for overhauls performed and amounts transferred to buyers for aircraft sold and is included in Other liabilities in the consolidated balance sheet.