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AIG Reports Third Quarter 2012 Net Income of $1.9 Billion

  AIG Reports Third Quarter 2012 Net Income of $1.9 Billion

  *After-Tax Operating Income of $1.6 billion, $1.00 per diluted share
  *Growth in Insurance Operating Income of 87% to $1.6 billion
  *Book value per share, excluding AOCI, of $61.49, a 10% sequential increase
  *Completed $8 billion in share repurchases, $13 billion year-to-date

Business Wire

NEW YORK -- November 01, 2012

American International Group, Inc. (NYSE: AIG) today reported net income
attributable to AIG of $1.9 billion and after-tax operating income of $1.6
billion for the quarter ended September 30, 2012, compared to a net loss
attributable to AIG of $4.0 billion and an after-tax operating loss of $3.0
billion for the third quarter of 2011. Diluted earnings per share and
after-tax operating income per share were $1.13 and $1.00, respectively, for
the third quarter of 2012, compared with a diluted loss per share and an
after-tax operating loss per share of $2.10 and $1.58, respectively, for the
third quarter of 2011.

“AIG again posted a solid quarter, reflecting the continued strength of our
core insurance operations and strong investment returns,” said Robert H.
Benmosche, AIG President and Chief Executive Officer. “We are seeing continued
momentum, and we’re building for the future by creating a more streamlined,
efficient, and nimble company.

“Over the past week, our priorities have been to assist our customers affected
by Hurricane Sandy and to safeguard our employees. It is too early to provide
an estimate of the financial impact of the storm. At this time, AIG offices in
lower Manhattan, including our corporate headquarters, are without power and
our business continuity plans have enabled us to continue to serve our
customers and operate nearly without interruption. I commend our employees in
the path of the storm for their perseverance and commitment to AIG and our
customers.

“During the third quarter, our global property casualty operations benefited
from improving pricing trends, continued implementation of strategic
initiatives, and positive marks on recently acquired structured securities,
while making strategic investments to increase efficiencies. Our domestic life
and retirement operations delivered a solid quarter and also benefited from
positive marks on higher yielding investments, as well as positive alternative
investment returns. Mortgage Guaranty and Aircraft Leasing each posted
profits, and have solidified their positions as leaders in their respective
industries.

“On November 11, our core insurance segments will assume the AIG brand,
marking not just an extraordinary comeback, but also the enduring support and
confidence of so many of our clients and distribution partners over the last
several years. During the quarter, we achieved the important milestone of
making America whole on the $182 billion support provided to AIG during the
crisis, plus a combined positive return to the American taxpayers of more than
$15 billion to date. Underscoring our financial strength and liquidity, AIG
has repurchased approximately $13 billion of common stock year-to-date.”

Mr. Benmosche concluded, “Four years after the financial crisis, the people of
AIG have completed a remarkable turnaround of this company, one in which we
all take deep pride. Our employees, and so many of our partners in government
and the industry, always understood the importance of fully repaying America,
and we thank this great country for the opportunity to accomplish what many
thought impossible.”

Liquidity, Capital Management, and Other Significant Developments

  *AIG shareholders’ equity totaled $101.7 billion at September 30, 2012.
  *During the third quarter of 2012, the U.S. Department of the Treasury
    (Treasury) completed two registered public offerings of AIG common stock
    for proceeds of approximately $26.5 billion, including approximately $8.0
    billion purchased by AIG, reducing Treasury’s remaining investment in AIG
    to approximately 234.2 million shares of common stock, or approximately
    15.9 percent of outstanding shares.
  *In September 2012, AIG sold approximately 600 million ordinary shares of
    AIA Group Limited (AIA) by means of a placement to certain institutional
    investors, for gross proceeds of approximately $2.0 billion.
  *Dividends and note repayments received from insurance operations totaled
    $75 million in the third quarter of 2012, with an additional $1.25 billion
    received during October 2012.
  *AIG Parent liquidity sources amounted to approximately $11.6 billion at
    September 30, 2012.
  *On October 5, 2012, AIG entered into an amended and restated 4-year
    syndicated credit facility which provides for $4.0 billion of revolving
    loans (increased from $3.0 billion in the previous facility), and which
    includes a $2.0 billion letter of credit sublimit.

COMPONENTS OF AFTER-TAX OPERATING INCOME (LOSS)

                                                            
                                                             Third Quarter
($ in millions)                                             2012    2011
Insurance Operations                                                
AIG Property Casualty                                        $786     $492
AIG Life and Retirement                                      826      471
Mortgage Guaranty (reported in Other)                       3       (98)
Total Insurance Operations                                  1,615   865
Aircraft Leasing                                             39       (1,317)
Direct Investment book                                       428      119
Global Capital Markets                                       190      (174)
Change in fair value of AIA (including realized gains in     527      (2,315)
2012)
Change in fair value of ML III                               330      (931)
Interest expense                                             (416)    (406)
Corporate expenses and eliminations                         (166)   (648)
Pre-tax operating income (loss)                             2,547   (4,807)
Income tax (expense) / benefit                               (901)    1,975
Noncontrolling interest – Treasury                           -        (145)
Other noncontrolling interest                               (5)     (19)
After-tax operating income (loss) attributable to AIG       $1,641  ($2,996)

AIG PROPERTY CASUALTY

AIG Property Casualty reported operating income of $786 million in the third
quarter of 2012, compared to $492 million in the third quarter of 2011,
reflecting lower catastrophe losses, higher net investment income due to
positive marks on recently acquired structured securities, and underwriting
improvements. AIG Property Casualty continued optimizing its mix of business
through focused risk selection, while benefiting from improving pricing
trends. As part of its focus on capital efficiency, AIG Property Casualty paid
AIG $75 million in cash dividends in the third quarter 2012 and paid an
additional $800 million of cash dividends in October 2012.

The third quarter 2012 combined ratio was 105.0, compared to 105.9 in the
third quarter of 2011. Third quarter 2012 results included catastrophe losses
of $261 million and net prior year adverse development of $145 million. The
accident year loss ratio, as adjusted, improved to 66.5 from 68.4 in the third
quarter of 2011 driven by a shift to higher value business and price
increases. The third quarter 2012 expense ratio was 33.6, a 3.3 point increase
over the third quarter of 2011. Higher acquisition costs from changes in
business mix and a greater focus on direct marketing contributed approximately
2.5 points to the expense ratio increase. The remaining increase was primarily
attributable to continued strategic investments in systems and talent, which
AIG expects to yield greater efficiencies in the future.

Third quarter 2012 net premiums written of $8.7 billion increased 0.6 percent
compared to the third quarter of 2011, or 2.4 percent, excluding the effect of
foreign currency exchange rates. Commercial Insurance premiums in original
currencies decreased 0.2 percent compared to the third quarter of 2011 due to
initiatives to improve risk selection, particularly in U.S. casualty. The
continued restructuring of loss-sensitive business to improve capital
efficiency contributed 0.7 points to the decline in Commercial Insurance net
premiums written. Growth in higher value business and in growth economy
nations partially offset the impact of these initiatives. Consumer Insurance
premiums in original currencies increased 6.2 percent compared to the third
quarter of 2011, driven by growth across its major lines of business. Consumer
Insurance continued to emphasize direct marketing as part of its multiple
distribution channel capabilities.

Commercial Insurance reported third quarter 2012 operating income of $321
million and a combined ratio of 107.1, compared to operating income of $405
million and a combined ratio of 107.2 in the third quarter of 2011. The
accident year loss ratio, as adjusted, improved to 71.7 from 74.2 in the third
quarter of 2011 due to the shift to higher value business and price increases.
The third quarter 2012 expense ratio was 27.8, a 3.5 point increase over the
third quarter of 2011. Higher acquisition costs primarily from changes in
Commercial Insurance’s business mix contributed 2.6 points to the expense
ratio increase. The remaining increase was largely related to higher bad debt
expense and strategic investments in talent.

Consumer Insurance reported third quarter 2012 operating income of $152
million and a combined ratio of 98.8, compared to operating income of $21
million and a combined ratio of 102.0 in the third quarter of 2011. The
accident year loss ratio, as adjusted, improved to 57.7 from 58.9 in the third
quarter of 2011 due to the shift to higher value business and price increases.
The third quarter 2012 expense ratio was 40.5, a 1.8 point increase over the
third quarter of 2011. The increase in the expense ratio was primarily
attributable to higher acquisition costs due to changes in Consumer
Insurance’s business mix and increased investments in direct marketing.

AIG LIFE AND RETIREMENT

AIG Life and Retirement reported operating income of $826 million in the third
quarter of 2012, compared to $471 million in the third quarter of 2011. Third
quarter 2012 results were positively impacted by higher net investment income,
positive equity market performance, and continued disciplined management of
interest crediting rates. Partially offsetting these improvements were an $11
million regulatory assessment and a $55 million increase to policy holder
benefit reserves in conjunction with a resolution of multi-state examinations
relating to the handling of unclaimed property and the use of the Social
Security Administration’s Death Master File to identify death claims that have
not been submitted to the company in the normal course of business, and a $110
million reserve increase related to a run-off block of guaranteed investment
contracts. Operating income for the third quarter of 2012 was also impacted by
a $20 million restructuring charge related to the planned consolidation of
certain AIG Life and Retirement’s regulated insurance companies and its life
operations and administrative systems, which are expected to result in an
improved service delivery model and a more efficient operating platform.

Net investment income in the third quarter of 2012 was $2.6 billion, a $302
million increase from the third quarter of 2011. The third quarter 2012 base
investment yield was 5.38 percent, compared to 5.49 percent in the third
quarter of 2011, reflecting lower yields on new purchases due to lower
interest rates, credit spread tightening, and higher credit quality of
purchases in the third quarter of 2012. These declines in base investment
yield were more than offset by lower interest crediting rates, which resulted
in improved base net investment spreads for group retirement products and
individual fixed annuities, as compared to the third quarter of 2011.
Additionally, base investment yield in the third quarter of 2012 declined
compared to 5.50 percent in the second quarter of 2012, reflecting lower
accretion income on credit impaired structured securities, lower income on
certain equity method investments, and lower yields on new purchases as
described above.

Premiums, deposits, and other considerations totaled $4.8 billion in the third
quarter of 2012 compared to $5.9 billion in the third quarter of 2011,
principally due to a decline in individual fixed annuity and group retirement
deposits, which have been affected by the low interest rate environment.
Individual variable annuities and retail mutual funds showed significant
growth over the third quarter of 2011, benefitting from the expansion of the
sales organization, attractive product portfolio, and positive equity market
performance. Individual variable annuity deposits totaled $1.0 billion in the
third quarter of 2012, a 27.9 percent increase over the third quarter of 2011.
Premiums, deposits, and other considerations in the third quarter of 2012
declined compared to $5.4 billion in the second quarter of 2012, principally
due to lower individual fixed annuity and group retirement deposits.
Additionally, deposits for individual variable annuities declined partially
due to product changes implemented as a result of AIG Life and Retirement’s
disciplined approach to product management.

Assets under management were $275.5 billion at the end of the third quarter of
2012 compared to $250.6 billion at the end of the third quarter of 2011.

In October 2012, AIG Life and Retirement provided approximately $454 million
of liquidity in the form of note repayments to AIG.

AIRCRAFT LEASING

International Lease Finance Corporation (ILFC) reported third quarter 2012
operating income of $39 million, compared to an operating loss of $1.3 billion
in the third quarter of 2011, which included $1.5 billion of impairment
charges and fair value adjustments. ILFC recognized impairment charges of $98
million in the third quarter of 2012.

During the third quarter of 2012, ILFC recorded rental revenues of $1.1
billion, essentially flat compared to the third quarter of 2011. The decline
in rental revenues is due to the re-lease of older aircraft at lower rates and
the impact of a higher level of aircraft repossessed early, partially offset
by a limited number of new aircraft deliveries and revenues from AeroTurbine,
which was acquired by ILFC in the fourth quarter of 2011.

ILFC raised approximately $750 million during the third quarter of 2012 for
general corporate purposes, including the repayment of existing indebtedness
and the purchase of aircraft, through the issuance of 5.875% unsecured notes
due 2022. Further, on October 9, 2012, ILFC entered into a $2.3 billion
unsecured three-year revolving credit facility with a group of 10 banks and
terminated its existing $2.0 billion revolving credit agreement originally
scheduled to expire in 2014.

MORTGAGE GUARANTY

United Guaranty Corporation (UGC), AIG’s residential mortgage guaranty
operations, reported operating income of $3 million for the third quarter of
2012, compared to an operating loss of $98 million in the third quarter of
2011.

Third quarter 2012 results reflect net favorable reserve development across
all lines of business partially offset by continued high levels of new
delinquencies in its first-lien business written in 2008 and prior.

Net premiums written were $219 million for the third quarter of 2012, compared
to $206 million in the third quarter of 2011. Domestic first-lien new
insurance written totaled $10.7 billion for the quarter compared to $5.7
billion for the same period in 2011, driven primarily by increased mortgage
originations and higher private mortgage penetration in the third quarter of
2012 over the same quarter in 2011, along with an expanded UGC sales force,
new lenders, added distribution channels, and the exit of two competitors in
the second half of 2011. Quality remained high, with an average FICO score of
758 and an average loan-to-value of 91 percent on new business.

OTHER OPERATIONS

AIG’s Other Operations reported third quarter 2012 operating income of $844
million, compared to an operating loss of $4.2 billion in the third quarter of
2011, driven primarily by changes in the fair value of AIG’s investments in
AIA and Maiden Lane III, which were gains of $857 million in the third quarter
of 2012 compared to aggregate losses of $3.2 billion in the corresponding 2011
quarter.

Conference Call

AIG will host a conference call tomorrow, November 2, 2012, at 8:00 a.m. ET to
review these results. The call is open to the public and can be accessed via a
live listen-only webcast at http://www.aig.com. A replay will be available
after the call at the same location.

                                    # # #

Additional supplementary financial data is available in the Investor
Information section at www.aig.com.

The conference call (including the conference call presentation material), the
earnings release and the financial supplement may include projections, goals,
assumptions, and statements that may constitute “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act of 1995.
These projections, goals, assumptions, and statements are not historical facts
but instead represent only AIG’s belief regarding future events, many of
which, by their nature, are inherently uncertain and outside AIG’s control.
These projections, goals, assumptions, and statements include statements
preceded by, followed by or including words such as “believe,” “anticipate,”
“expect,” “intend,” “plan,” “view,” “target,” or “estimate.” These
projections, goals, assumptions, and statements may address, among other
things: the timing of the disposition of the remaining ownership position of
the Treasury in AIG; the monetization of AIG’s interests in ILFC; AIG’s
exposures to subprime mortgages, monoline insurers, the residential and
commercial real estate markets, state and municipal bond issuers, and
sovereign bond issuers; AIG’s exposure to European governments and European
financial institutions; AIG’s strategy for risk management; AIG’s generation
of deployable capital; AIG’s return on equity and earnings per share long-term
aspirational goals; AIG’s strategies to grow net investment income,
efficiently manage capital and reduce expenses; AIG’s strategies for customer
retention, growth, product development, market position, financial results and
reserves; and the revenues and combined ratios of AIG’s subsidiaries. It is
possible that AIG’s actual results and financial condition will differ,
possibly materially, from the results and financial condition indicated in
these projections, goals, assumptions, and statements. Factors that could
cause AIG’s actual results to differ, possibly materially, from those in the
specific projections, goals, assumptions, and statements include: changes in
market conditions; the occurrence of catastrophic events, both natural and
man-made; significant legal proceedings; the timing and applicable
requirements of any new regulatory framework to which AIG is subject as a
savings and loan holding company, and if such a determination is made, as a
systemically important financial institution; concentrations in AIG’s
investment portfolios, including its municipal bond portfolio; actions by
credit rating agencies; judgments concerning casualty insurance underwriting
and reserves; judgments concerning the recognition of deferred tax assets;
judgments concerning deferred policy acquisition costs (DAC) recoverability;
judgments concerning the recoverability of aircraft values in ILFC’s fleet;
and such other factors as are discussed in Part I, Item 2. Management's
Discussion and Analysis of Financial Condition and Results of Operations
(MD&A) and in Part II, Item IA. Risk Factors in AIG's Quarterly Report on Form
10-Q for the quarter ended September 30, 2012, in Part II, Item 1A. Risk
Factors in AIG’s Quarterly Report on Form 10-Q for the quarter ended June 30,
2012, and in Part I, Item 1A. Risk Factors and in Part II, Item 7. MD&A in
AIG’s Annual Report on Form 10-K for the year ended December 31, 2011, as
amended by Amendment No. 1 and Amendment No. 2 on Forms 10-K/A filed on
February 27, 2012 and March 30, 2012, respectively, and Exhibit 99.2, MD&A of
AIG’s Current Report on Form 8-K filed on May 4, 2012. AIG is not under any
obligation (and expressly disclaims any obligation) to update or alter any
projections, goals, assumptions, or other statements, whether written or oral,
that may be made from time to time, whether as a result of new information,
future events or otherwise.

American International Group, Inc. (AIG) is a leading international insurance
organization serving customers in more than 130 countries. AIG companies serve
commercial, institutional, and individual customers through one of the most
extensive worldwide property-casualty networks of any insurer. In addition,
AIG companies are leading providers of life insurance and retirement services
in the United States. AIG Common Stock is listed on the New York Stock
Exchange and the Tokyo Stock Exchange.

                                    # # #

Comment on Regulation G

Throughout this press release, including the financial highlights, AIG
presents its operations in the way it believes will be most meaningful,
representative and most transparent. That presentation includes the use of
certain non-GAAP financial measures. The reconciliations of such measures to
the most comparable GAAP measures in accordance with Regulation G are included
within the relevant tables or in the Third Quarter 2012 Financial Supplement
available in the Investor Information section of AIG’s website, www.aig.com.

AIG believes that After-tax operating income (loss) permits a better
assessment and enhanced understanding of the operating performance of its
businesses by highlighting the results from ongoing operations and the
underlying profitability of its businesses. After-tax operating income (loss)
excludes (income) loss from discontinued operations, net loss on sale of
divested businesses, income from divested businesses, legacy FIN 48 items,
changes in certain litigation reserves, deferred income tax valuation
allowance charges and releases, amortization of the FRBNY prepaid commitment
fee asset, changes in fair value of AIG Life and Retirement’s fixed income
securities designated to hedge living benefit liabilities, AIG Life and
Retirement’s change in benefit reserves and DAC, value of business acquired
and sales inducement assets related to net realized capital (gains) losses,
net realized capital (gains) losses, and non-qualifying derivative hedging
activities, excluding net realized capital (gains) losses. See page 9 for the
reconciliation of Net income attributable to AIG to After-tax operating
income.

Additionally, in some cases, revenues, net income, operating income and
related rates of performance are shown exclusive of the effect of tax benefits
not obtained for losses incurred, the recognition of other-than-temporary
impairments restructuring-related activities, partnership income, other
enhancements to income, credit valuation adjustments, unrealized market
valuation gains (losses), the effect of catastrophe-related losses and prior
year loss development, change in discount, asbestos losses, returned or
additional premiums related to prior year development, foreign exchange rates,
and aircraft impairments.

In all such instances, AIG believes that excluding these items permits
investors to better assess the operating performance of each of AIG’s
underlying businesses by highlighting the results from ongoing operations and
the underlying profitability of its businesses. AIG believes that providing
information in a non-GAAP manner is more useful to investors and analysts and
more meaningful than the GAAP presentation. When such measures are disclosed,
reconciliations to the comparable GAAP measure are provided.

Although the investment of premiums to generate investment income (or loss)
and realized capital gains or losses is an integral part of both life and
general insurance operations, the determination to realize capital gains or
losses is independent of the insurance underwriting process. Moreover, under
applicable GAAP accounting requirements, losses can be recorded as the result
of other-than-temporary declines in value without actual realization. In sum,
investment income and realized capital gains or losses for any particular
period are not indicative of underlying business performance for such period.

Life and retirement services production (premiums, deposits and other
considerations and life insurance continuous pay profit equivalency (CPPE)
sales) is a non-GAAP measure which includes life insurance premiums, deposits
on annuity contracts and mutual funds. AIG uses this measure because it is a
standard measure of performance used in the insurance industry and thus allows
for more meaningful comparisons with AIG’s insurance competitors.

In the second quarter of 2012, After-tax operating income excluded certain
litigation charges, primarily related to certain existing corporate litigation
matters, and certain provisions for uncertain tax positions (under FIN 48)
that are not reflective of AIG’s ongoing operating results. During the first
quarter of 2012, AIG revised its definition of After-tax operating income
(loss) to exclude changes in the fair value of AIG Life and Retirement’s fixed
income securities designated to hedge living benefit liabilities and increased
benefit reserves related to net realized capital gains (losses). AIG believes
that this revised measure of After-tax operating income (loss) permits a
better assessment and enhanced understanding of the operating performance of
its AIG Life and Retirement business by excluding from operating results the
volatility associated with these hedging and capital gains taking activities.
AIG believes this revised definition of After-tax operating income (loss) is a
better measure of how AIG assesses the operating performance of AIG Life and
Retirement’s operations.

                                    # # #

 American International Group, Inc.
  Financial Highlights*
  (in millions, except share data)
  
                    Three Months Ended September       Nine Months Ended September 30,
                     30,
                                          % Inc.                               % Inc.
                     2012      2011      (Dec.)         2012       2011       (Dec.)
AIG Property
Casualty
Operations:
  Net Premiums     $ 8,712    $ 8,659     0.6      %   $ 26,627    $ 26,992    (1.4   ) %
  Written
  Net Premiums       8,752       9,043      (3.2   )       26,260       26,727     (1.7   )
  Earned
  Claims and
  claims
  adjustment         6,252       6,838      (8.6   )       18,240       21,274     (14.3  )
  expenses
  incurred
  Underwriting       2,941      2,737     7.5            8,858       7,947     11.5
  expenses
  Underwriting       (441  )     (532   )   17.1           (838   )     (2,494 )   66.4
  loss
  Net Investment   1,227    1,024    19.8       3,603     3,345    7.7    
  Income
  Operating        786      492      59.8       2,765     851      224.9  
  Income
  Net Realized
  Capital Gains      161         60         168.3          49           153        (68.0  )
  (a)
  Other income       2          (1     )   -              6           (1     )   -
  (Loss)
  Pre-tax Income   $ 949       $ 551        72.2         $ 2,820      $ 1,003      181.2
                                                                  
  Loss Ratio         71.4        75.6                      69.5         79.6
  Expense Ratio      33.6       30.3                     33.7        29.7   
  Combined Ratio   105.0    105.9               103.2     109.3    
                                                                                            
AIG Life and
Retirement
Operations:
  Premiums         $ 575       $ 591        (2.7   )     $ 1,802      $ 1,874      (3.8   )
  Policy fees        691         658        5.0            2,056        2,024      1.6
  Net Investment     2,597      2,295     13.2           8,003       7,510     6.6
  Income
  Total revenues     3,863       3,544      9.0            11,861       11,408     4.0
  Benefits and     3,037    3,073    (1.2   )    8,791     9,043    (2.8   )
  expenses
  Operating        826      471      75.4       3,070     2,365    29.8   
  Income
  Changes in
  fair value of
  fixed income
  securities
  designated to
  hedge living
  benefit
  liabilities,
  net of             (3    )     -          -              48           -          -
  interest
  expense
  Change in
  benefit
  reserves and
  DAC, VOBA, and
  SIA related
  to net
  realized           (604  )     (163   )   (270.6 )       (1,120 )     (195   )   (474.4 )
  capital gains
  (losses)
  Net Realized
  Capital Gains      670        38        -              530         (91    )   -
  (Losses) (a)
  Pre-tax Income     889         346        156.9          2,528        2,079      21.6
                                                                                            
Aircraft Leasing
Operations:
  Revenues           1,145       1,118      2.4            3,421        3,374      1.4
  Expenses         1,106    2,435    (54.6  )    3,175     4,488    (29.3  )
  Operating        39       (1,317 )  -          246       (1,114 )  -      
  Income (Loss)
  Net Realized
  Capital Gains      1          (12    )   -              -           (8     )   -
  (Losses) (a)
  Pre-tax Income     40         (1,329 )   -              246         (1,122 )   -
  (Loss)
                                                                 
Other
Operations,        844      (4,242 )  -          3,830     (1,991 )  -      
Operating Income
(Loss)
Other
Operations,
Pre-tax Income
(Loss) before        844         (4,244 )   -              3,108        (5,694 )   -
Net Realized
Capital Gains
(Losses)
Other
Operations, Net
Realized Capital     47          299        (84.3  )       403          (161   )   -
Gains (Losses)
(a)
Consolidation
and Elimination      (174  )     107       -              (175   )     109       -
Adjustments (a)
Income (Loss)
from Continuing
Operations
before Income
Tax
Expense              2,595       (4,270 )   -              8,930        (3,786 )   -
(Benefit)
Income Tax
Expense              735        (665   )   -              1,290       (1,187 )   -
(Benefit)
Income (Loss)
from Continuing      1,860       (3,605 )   -              7,640        (2,599 )   -
Operations
Income (Loss)
from
Discontinued         1          (221   )   -              9           2,327     (99.6  )
Operations, net
of tax
Net Income           1,861       (3,826 )   -              7,649        (272   )   -
(Loss)
Less:
Net Income from
Continuing
Operations
Attributable
  to
  Noncontrolling
  Interests:
Noncontrolling
Nonvoting,
Callable, Junior
and Senior
Preferred
Interests            -           145        -              208          538        (61.3  )
Other                5          19        (73.7  )       45          28        60.7
Total Net Income
from Continuing
Operations
Attributable
  to
  Noncontrolling     5           164        (97.0  )       253          566        (55.3  )
  interests
  Net Income
  from
  Discontinued
  Operations
  Attributable
  to
  Noncontrolling     -          -         -              -           19        -
  interests
  Total net
  income
  attributable       5          164       (97.0  )       253         585       (56.8  )
  to
  noncontrolling
  interests
Net Income
(Loss)               1,856      (3,990 )   -              7,396       (857   )   -
Attributable to
AIG
Net Income
(Loss)
Attributable to    $ 1,856    $ (3,990 )   N/M      %   $ 7,396     $ (1,669 )   N/M      %
AIG Common
Shareholders

Financial Highlights -continued
                                                                   
                 Three Months Ended September 30,   Nine Months Ended September 30,
                                          % Inc.                              % Inc.
                  2012      2011      (Dec.)      2012       2011       (Dec.)
                                                                                      
Net income
(loss)           $ 1,856     $ (3,990 )   -     %   $ 7,396      $ (857   )   -       %
attributable
to AIG
Adjustments to
arrive at
After-tax
operating
income
attributable
to AIG
(amounts net
of tax):
(Income) loss
from               (1    )     221        -           (9     )     (2,308 )   99.6
discontinued
operations
Net loss on
sale of            -           1          -           2            49         (95.9 )
divested
businesses
Income from
divested           -           -          -           -            (16    )   -
businesses
Legacy Fin 48      12          -          -           343          -          -
items
Change in
litigation         -           -          -           467          -          -
reserves
Deferred
income tax
valuation          (229  )     1,162      -           (1,795 )     1,103      -
allowance
charge /
(release)
Amortization
of FRBNY
prepaid            -           -          -           -            2,358      -
commitment fee
asset
Changes in
fair value of
AIG Life and
Retirement
fixed income
securities
designated to
hedge living       2           -          -           (31    )     -          -
benefit
liabilities
Change in
benefit
reserves and                                                                  -
DAC, VOBA and
SIA related
to net
realized           393         102        285.3       729          119        -
capital
(gains) losses
Net realized
capital            (387  )     (430   )   10.0        (488   )     (40    )   -
(gains) losses
Non-qualifying
derivative
hedging
activities,
excluding net
realized
capital            (5    )     (62    )   91.9        (18    )     (75    )   76.0
(gains) losses
After-tax
operating
income (loss)    $ 1,641    $ (2,996 )   -         $ 6,596     $ 333       -
attributable
to AIG
                                                                                      
Income (loss)
per common
share -
diluted:
Net income
(loss)
attributable     $ 1.13     $ (2.10  )   -         $ 4.21      $ (0.95  )   -
to AIG common
shareholders
After-tax
operating
income (loss)    $ 1.00     $ (1.58  )   -         $ 3.75      $ 0.19      -
attributable
to AIG common
shareholders
                                                                                      
Book Value Per
Common Share
on AIG                                              $ 68.87      $ 42.60      61.7    %
Shareholders'
Equity (b)
                                                                                      
Return on
equity -
After-tax          7.0   %     N/M                    9.2    %     0.6    %   -
operating
income (c)
                                                                                      
                                                                                      
Financial Highlights - Notes
                                                                                      
*       Including reconciliation in accordance with Regulation G.
(a)     Includes gains (losses) from hedging activities that did not qualify for hedge
        accounting treatment, including the related foreign exchange gains and losses.
(b)     Represents total AIG shareholders' equity divided by common shares issued and
        outstanding.
(c)     Computed using adjusted shareholders' equity, which excludes Accumulated other
        comprehensive income.

Contact:

American International Group, Inc.
Liz Werner (Investment Community)
(O): (212) 770-7074
or
Jim Ankner (News Media)
(O): (212) 770-3277
(C): (917) 882-7677
 
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