1. The Evolution of Providing Quality Employee Benefits James Galli Chief Marketing Officer Voluntary Benefits June 12, 2004

2. 1 1 Agenda Today’s Business Challenges Evolution of the Benefit Selection Process Employer and Employee Benefit Needs Voluntary Benefits Value Proposition AIG - Company Highlights

3. 2 2 Business Challenges Diminished profits and soaring expenses Increased global competition Increased utilization of outsourcing Pervasive productivity issues Double-digit increases in health care costs Attracting and retaining top talent

4. 3 3 3 Early to Mid 20th Century Industrial economy/unionization Employer paid health/welfare: Employer as purchaser Standardized benefits/communication Employee entitlement/loyalty Healthcare costs manageable Emergence of Voluntary Benefit Carriers

5. 4 4 4 Late 20th Century Service economy Employees as “commodity” Demographic shifts Rising costs/shifting by employer Benefit choices more complex Standardized employer communication Employee perception of value declines Emergence of voluntary benefits in small groups

6. 5 5 5 21st Century and Beyond Employer & employee cost sharing Continued demographic shift/aging population & over-utilization of healthcare system Healthcare costs skyrocket Traditional employer paid ancillary become voluntary Voluntary Benefits in middle-market Employer “facilitator” rather than purchaser

7. 6 6 The Paradigm Shift The Employer as Purchaser The Employer as Facilitator 19502020 Perception of Control The role employers play in the benefits process:

8. 7 7 The Role of Facilitator Screen carriers and benefits Benefit choices Delivery options Ease of implementation Cost Service Facilitate communication process Provide “mechanism” Payroll deduction Administration Service

9. 8 8 The Employee, now the Purchaser New role in benefits process Have increased need for protection Need enhanced education and communication

10. 9 9 9 Employee Needs: The Total Solution Access Choice Convenience Affordability Portability

11. 10 Employer Needs Choice - portfolio of quality products Facilitation - depth and breadth of communication, full-service enrollment Service - ease of administration, ongoing support Value - fair price, complimentary services

12. 11 AIG American General Voluntary Benefits Value Proposition “ We provide our customers with innovative benefits solutions, effective communication and enrollment programs, and turnkey administrative services - from one of the most highly rated and trusted names in the industry”

13. 12 Voluntary Benefits Value Proposition A consultative approach to employer benefits Full-service enrollment and communication programs Customer-focused service and administration Innovative benefits solutions featuring: Competitive, affordable products that meet customer needs Unique program features that enhance value to the customer AIG American General

14. 13 Voluntary Benefits Facilitate Fulfillment of Employees’ Long-Term Needs Guarantee of income protection Protection against loss of life Protection from uncovered medical expenses

15. 14 Kenya Nigeria South Africa Uganda Zimbabwe Australia New Zealand Papua New Guinea Azerbaijam Bulgaria Czech Republic Estonia Finland Hungary Kazakhstan Latvia Lithuania Poland Romania Russia Slovakia Ukraine Uzbekistan China Austria Belgium Denmark France Germany Greece Italy Liechtenstein Luxembourg Norway Portugal Netherlands Spain Sweden Switzerland Japan South Korea Argentina Aruba Bolivia Brazil Chile Columbia Ecuador El Salvador Guatemala Honduras Jamaica Mexico Panama Paraguay Peru Puerto Rico Trinidad, W.I. Uruguay Venezuela Curacao Canada United States Bangladesh 130 Countries $81 Billion in Revenue* Total Assets $724 Billion** Shareholders’ Equity $77 Billion** American International Group, Inc. (AIG) * Year-ended 12/31/03 ** As of 3/31/04

16. 15 AIG: A Snapshot World’s leading international insurance and financial services organization - depth and breadth of resources and solutions to serve clients’ needs Highest financial ratings - unsurpassed financial strength provides the foundation for reliability, consistency and responsibility #3 in Forbes 2003 “Global 2000” ranking of the world’s largest public corporations (based on a composite ranking of sales, profits, assets and market value) #10 on the 2003 Fortune 500 list of the largest U.S. corporations, based on revenue

17. 16 AIG: A Snapshot World’s largest writer of life insurance - unparalleled experience servicing commercial, institutional and individual customers 50 million customers - Eighty-five year legacy spent fostering long-term relationships Broad product portfolio - innovative and comprehensive array of products to meet policyholders’ in all stages of their lives One of only 8 AAA-rated companies

18. 17 Source: Moody’s Aaa-rated U.S. Corporations (Credit Ratings)

19. 18 AIG Our Strength + Our Focus + Our Commitment = Your Future