Server: Netscape-Enterprise/2.0c Date: Thu, 18 Dec 1997 09:54:17 GMT Accept-ranges: bytes Last-modified: Tue, 17 Jun 1997 05:07:32 GMT Content-length: 11101 Content-type: text/html RETIREMENT SERVICES SEGMENT REPORT
American General Corporation

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VALIC is a market leader in satisfying the retirement planning needs of one million customers.


Retirement Services
At A Glance

Financial Data:

Assets: $30 billion

Operating Earnings:
$225 million

Primary Markets:

Elementary and
Secondary Education

Higher Education

Health Care

Government

Principal Products:

Tax-Deferred Retirement Plans
and Annuities

Sales Network:

1,000 Retirement
Plan Specialists

Customer Base:

22,000 Employer
Organizations

1.0 million Customers

1.5 million Participant
Accounts

  ALIC, American General's retirement services company, specializes in retirement products and services for employees of not-for-profit organizations. We focus on education, health care, government, and other tax-exempt organizations.

Our financial products and services are distributed through 1,000 retirement plan specialists who provide personal, face-to-face service to our customers.

Based on assets, VALIC ranks in the top 1% of all U.S. life insurance organizations. In 1996, we accounted for 30% of American General's business segment earnings.

A Growing Market

Now more than ever, individuals are keenly interested in saving for their retirement. The percentage of the population reaching middle age is at historic levels. The increasing awareness among Americans about the importance of saving for the future is just one indication of a growing market.

As a leading provider of retirement plans, VALIC is well positioned to benefit from these trends. We offer customers the opportunity to save for retirement on a pretax basis and accumulate earnings that are not taxed until withdrawal. We also provide pension plan services, from record keeping to compliance.

VALIC sells a wide variety of retirement plans. We help employers provide the right plans for their employees, whether it's a thrift, profit sharing, or simplified employee pension plan. We also offer individual retirement accounts.

An Industry Leader

Our products, services, strong ratings, and outstanding reputation have established VALIC as a leader within our markets. We rank number one in the elementary and secondary education markets and number three in the health care and higher education markets.

VALIC is a pioneer in the variable annuity business, with more than 40 years of experience. Since 1964, we've focused on the needs of the education and health care markets, and now we're expanding our presence in a complementary market — state and local governments — which shares a similar customer profile.

In 1996, participant accounts grew 11% to 1.5 million. This year, the American Hospital Association, with a hospital network of 5,000 institutions representing four million employees, endorsed VALIC as its exclusive provider. We now hold 23 national endorsements and 36 regional endorsements, strengthening our position as a leader within the education and health care markets.

Our financial strength further enhances our market position. Consumers are concerned about the safety of their retirement savings. VALIC has earned the highest ratings for financial strength and claims-paying ability from the nation's leading rating agencies. This financial strength and stability gives our customers peace of mind.

A Reputation For Excellence

In addition to being concerned about the safety of their savings, consumers often need help in planning for their retirement. That's why VALIC's distribution system is yet another competitive advantage.

Our distribution system delivers personalized retirement planning services for our customers through a highly trained sales force. VALIC's 1,000 retirement plan specialists meet face-to-face with customers to provide individualized retirement planning that is easy and worry-free.

This commitment to personalized service helps us chart a steady course of growth and builds VALIC's reputation for excellence within our markets. As a result, annual sales growth has averaged 15% over the past five years.

VALIC's focus and specialization, financial strength, personalized service, and market responsive products will continue to strengthen our reputation as experts in retirement services.
 
Meeting Market Needs

Our market responsive products are another core strength. VALIC introduced Portfolio Director® 2 during 1996 in response to an explosive demand for mutual fund options.

With Portfolio Director 2, we are the first company to offer a variable annuity product with publicly available funds to our markets. Of the product's 20 investment options, 12 are publicly traded mutual funds, packaged to better help our clients with their single-most important retirement planning decision — the allocation of assets.

Our commitment to technology enhances our service to customers. In 1996, we introduced an electronic application process that has improved operating efficiencies. Additionally, we use state-of-the-art software to facilitate the retirement planning process. Through the use of Portfolio Optimizer®, a proprietary asset allocation software, our sales representatives can tailor a retirement plan to meet the personal savings objectives of our customers.

Portfolio Optimizer transforms the complex investment allocation process into a series of simple, easy-to-make decisions.

In 1996, the Portfolio Director product series, supported by Portfolio Optimizer, accounted for 62% of VALIC's premium.

Market Specialists

Today, most Americans realize that personal savings is an absolutely essential ingredient for a secure retirement.

We are committed to meeting the long-term retirement planning needs of our large and growing customer base. VALIC's focus and specialization, financial strength, personalized service, and market responsive products will continue to strengthen our reputation as experts in our principal markets.

Outlook

As a leader with a reputation for excellence in a growing market, VALIC is well positioned to capitalize on the increasing demand for retirement planning services.

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