Capital from an Insurance Company Perspective

This morning, I would like to give a few practical commentson capital adequacy from an insurance companyperspective. In doing so, I will present two views on capitaladequacy and capital allocation in the insurance industry.The first view is the regulatory perspective, that is, themotivations behind regulatory capital requirements in theinsurance industry, the structure of those requirements,and the relationship between regulatory capital amountsand the actual risks facing insurance companies. The secondview is an insurance company perspective, in particular, theapproach taken by the American International Group (AIG)to determine adequate capital allocations for our variousbusinesses and for the firm overall.[...]