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corresp

(AIG Letterhead)

June 3, 2011

VIA EDGAR CORRESPONDENCE

Mr. Jim B. Rosenberg

Senior Assistant Chief Accountant

Securities and Exchange Commission

Division of Corporation Finance

100 F Street, NE

Mail Stop 4720

Washington, D.C. 20549

    Re:

    American International Group, Inc.

Form 10-Q for the Quarterly Period Ended March 31, 2011

Filed May 5, 2011

File No. 001-8787

Dear Mr. Rosenberg:

          We are in receipt of your letter dated May 20, 2011 with respect to American International
Group, Inc.’s (“AIG”) Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2011
(“Form 10-Q”). This letter sets forth AIG’s response to the Staff’s comment contained in your
letter.

          AIG acknowledges that the adequacy and accuracy of the disclosure in the Form 10-Q is the
responsibility of AIG, that Staff comments or changes to disclosure in response to Staff comments
do not foreclose the Securities and Exchange Commission (the “Commission”) from taking any action
with respect to the Form 10-Q and that Staff comments may not be asserted by AIG as a defense in
any proceeding initiated by the Commission or any person under the Federal securities laws of the
United States.

          We have repeated your comment below to facilitate your review.

*     *     *     *     *

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of
Operations

Investments, page 141

    1.

    Please refer to the table on the top of page 142 showing credit ratings of your fixed
maturity investments. You state in the second paragraph preceding this table that your
investment decision process relies primarily on internally generated fundamental analysis
and internal risk ratings and that third party rating services’ ratings and opinions
provide one source of independent perspective for consideration in the internal analysis.
Please summarize for us the investments for which you performed this analysis and the
procedures you performed. Also, where this analysis resulted in you concluding that the
rating assigned by the third party credit rating agency at December 31, 2010 was
significantly different, provide us the

    Mr. Jim B. Rosenberg

    Page 2

    Securities and Exchange Commission

    fair value and amortized cost of those investments, as well as how and why your conclusion
differed.

AIG Response

          The credit ratings table on the top of page 142 of the Form 10-Q reflects (a) the ratings on
AIG’s fixed maturity investments by one or more of the major rating agencies in a defined hierarchy
(approximately $256.2 billion or over 99 percent of total securities) or (b) AIG’s equivalent
internal ratings where the investments have not been rated by any of the major rating agencies
(approximately $1.1 billion at March 31, 2011). The “Non-rated” category in the table consists of
fixed maturity investments that have not been rated by any of the major rating agencies or by AIG,
and represents primarily AIG’s interest in Maiden Lane III (fair value of $7.1 billion at March 31,
2011).

          AIG’s investment credit research and risk management professionals assign internal credit
ratings to substantially all issuers of non-securitized domestic and foreign fixed maturity
securities held in its investment portfolios. AIG uses a number-based (i.e., 1 through 10) rating
system that calibrates directly to the letter grade rating system used by the major rating
agencies. AIG generally bases its internal credit ratings on the issuer of the security, not on the
security itself. Those ratings may differ on occasion from the ratings of the principal rating
agencies, not unlike the rating agencies differing among themselves as to the same issuer or
security rating. Securitized fixed maturity investments are also carefully analyzed by AIG’s
investment credit research staff during and after the investment decision process, but are not
assigned explicit number-based ratings. Fair values of the securities are neither based on nor
affected by AIG’s internal credit ratings.

          AIG bases its internal ratings on an in-depth fundamental credit analysis of the issuer’s
financial disclosures and a large number of factors that influence our assessment of whether the
probability that the issuer will default over the lifetime of the security is high or low. The
procedures we perform and factors we consider include our review and analysis of the issuer’s
business outlook; the outlook for its industry and country or countries of its major operations;
its market share; the quality and performance of its management team; its cost competitiveness; its
cash flow generation capacity relative to its level of indebtedness; its financial policies, such
as dividend and stock repurchase plans; its liquidity profile; and a variety of other
considerations and financial metrics.

          AIG’s internal ratings of issuers are generally not significantly different from the issuer
ratings of all three rating agencies. Differences arise only when our assessment of default risk
may be significantly higher or lower than the major rating agencies based on our review of the
issuer’s profile as conducted by our investment research and/or risk management professionals. The
table below shows the amounts of these differences (defined as one full rating grade or more) in
absolute and relative terms based on both fair value and amortized cost at March 31, 2011. Note
that these differences often arise from the fact that AIG’s internal ratings are generally ratings
of the issuer at the senior unsecured level, while the rating table reflects issue ratings (by the
major rating agencies), which can be different depending on the issue’s ranking in the capital
structure of the issuer (higher or lower than senior unsecured) or whether the issue benefits from
additional credit enhancement.

          As shown in the table, AIG has assigned internal issuer ratings lower than those of the rating
agencies for approximately $20.1 billion (8 percent) of the rated securities. AIG believes that the
primary reason for the lower ratings was a more conservative judgment of the creditworthiness of
the issuer than those rendered by the major rating agencies. On the other hand, AIG assigned higher
internal ratings for approximately $9.5 billion (4 percent) of securities. One of the principal
reasons for those higher ratings, as mentioned above, is that AIG’s internal ratings are generally
the ratings of the issuer at the senior unsecured level and not at the issue level; however, AIG
holds subordinated debt issues of some of those

    Mr. Jim B. Rosenberg

    Page 3

    Securities and Exchange Commission

issuers, and those issues are often rated by the major rating agencies at levels lower than ratings
of the senior unsecured issuers based on their relative position in the capital structure and not
necessarily due to credit concerns. For example, a major international bank is rated AA at the
senior unsecured level by both the major rating agencies and AIG. However, its subordinated debt
issues held by AIG and represented on the table on p. 142 are rated a full grade lower at the
single A level by one or more of the major rating agencies.

Fixed Maturity Investments at Fair Value and Amortized Cost

Recap of Ratings Differences

    USD Millions (As of March 31,

    2011)

    Internal Rating

    Total Fixed

    Rating Category per Form

    Maturity

    Percent

    10-Q (1)

    AAA

    AA

    A

    BBB

    BIG

    Total

    Investments

    of Total

    AAA

    $
    —

    $
    62

    $
    1,123

    $
    114

    $
    —

    $
    1,299

    $
    65,163

    2
    %

    AA

    —

    —

    6,314

    838

    6

    7,158

    56,990

    13
    %

    A

    23

    5,255

    —

    10,941

    —

    16,219

    55,866

    29
    %

    BBB

    4

    954

    1,926

    —

    744

    3,628

    60,155

    6
    %

    Below investment grade (BIG)

    —

    245

    411

    703

    —

    1,359

    19,105

    7
    %

    Total — all rating differences (2)

    27

    6,516

    9,774

    12,596

    750

    29,663

    257,279

    12
    %

    Non-rated securities (3)

    —

    —

    —

    —

    —

    —

    8,345

    —

    Total — fair value

    $
    27

    $
    6,516

    $
    9,774

    $
    12,596

    $
    750

    $
    29,663

    $
    265,624

    11
    %

    Total — amortized cost

    $
    21

    $
    5,974

    $
    9,434

    $
    11,913

    $
    698

    $
    28,040

    $
    258,831
    (4)

    11
    %

Notes:

    (1)

    $1,125 (0.4 percent) is based on internal ratings because no agency rating exists.

    (2)

    At March 31, 2011, AIG Analyst Risk Ratings were lower than the rating agency equivalent 8
percent of the time and higher 4 percent of the time.

    (3)

    Securities for which neither rating agencies nor AIG provided a rating, primarily AIG’s
interest in ML III of $7,055.

    (4)

    Includes $27,309 trading securities at fair value.

*    *    *    *    *

          If you have any questions or require any additional information, please do not hesitate to
contact me at (212) 770-5123.

Very truly yours,

/s/ Kathleen E. Shannon

Kathleen E. Shannon

Senior Vice President

and Deputy General Counsel