A.M. Best Affirms Ratings of AIG Following Offer to Acquire American General

Business Wire, April 4, 2001

Business Editors

OLDWICK, N.J.--(BUSINESS WIRE)--April 4, 2001

A.M. Best Co. has affirmed the A (Superior) financial strength ratings of American International Group's (NYSE: AIG) property/casualty and life/health subsidiaries. This affirmation follows the recent announcement by AIG that it has offered to acquire American General Corporation (NYSE: AGC) in an all-stock transaction valued at approximately $23 billion. Under terms of the offer, shareholders of American General would receive shares of AIG equal to $46 per share, subject to AIG's share price trading within a 5% range to be specified prior to closing date.

On March 12, 2001, A.M. Best had placed the A (Superior) financial strength ratings of American General Corporation's principal life insurance subsidiaries under review with developing implications, following the announcement by Prudential plc, U.K. that it would acquire AGC in an all-stock transaction. As of April 3, 2001, the value of Prudential's offer stood at $20.6 billion, down from the original value of $26.5 billion as of March 12, 2001. A.M Best continues to maintain its under review rating status on the operating subsidiaries of AGC's principal insurance subsidiaries; however, should AIG be successful with its offer, A.M. Best would revise the rating implication from developing to positive.

A.M. Best believes the combination of AIG and AGC would enhance AIG's near-term growth and earnings prospects providing for top line growth through multiple distribution channels, cross marketing opportunities and expense synergies. As one of the fastest growing providers of retirement savings and investment products in the U.S., AGC would further complement AIG's life and retirement savings businesses, as well as provide AIG the opportunity to leverage AGC's consumer finance expertise internationally.

The transaction is subject to board and shareholder approvals as well as the customary regulatory approvals, and is expected to close before the end of the third quarter of 2001.

The following A (Superior) financial strength ratings for American International Group's insurance operating subsidiaries are affirmed:

Property Casualty:

- Commerce and Industry Ins

- American Intl South Ins Co

- National Union Fire Ins Co

- American Home Assurance Co

- Commerce and Industry Ins Co

- Insurance Co of the State PA

- Birmingham Fire Ins Co of PA

- New Hampshire Insurance Co

- AIU Insurance Company

- Granite State Insurance Co

- AIG Global Trade & Political Risk

- Audubon Insurance Company

- National Union Fire Ins of LA

- Audubon Indemnity Company

- American Intl Pacific Ins Co

- Illinois National Insurance Co

- American Intl Ins Co of PR

- China America Ins Co Ltd

- American Intl Specialty Lines

Life:

- Anchor National Life Insurance Company

- AIG Life Insurance Company of Puerto Rico

- First SunAmerica Life Insurance Company

- AIG Life Insurance Company of Canada

- Delaware American Life Insurance Company

- American International Life Assurance Company of New York

- SunAmerica Life Insurance Company

- AIG Life Insurance Company

The following A (Superior) financial strength ratings are under review with developing implications for American General group of companies:

- All American Life Insurance Co

- Merit Life Insurance Co

- American General Life & Accident

- Old Line Life Insurance Co of America

- American General Assurance Co

- American General Life of PA

- United States Life Insurance of NY

- Variable Annuity Life Insurance Co

- American General Annuity Insurance

- American General Life Insurance Co

- Franklin Life Insurance Co

- American General Life Insurance Co NY

- American Franklin Life Insurance

- North Central Life Insurance Co

A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.