American International Group Chairman Robert B. Willumstad, speaking to analysts today after suddenly taking over the duties of chief executive officer this weekend, said he will work to improve AIG's balance sheet and has reached out to the insurer's angry ex-boss and major shareholder, Maurice Greenberg.

Mr. Willumstad, who promised to reveal a "strong game plan" sometime after Labor Day, became CEO after the board abruptly accepted the resignation of Martin J. Sullivan on Sunday.

Mr. Sullivan was installed in 2005, replacing Mr. Greenberg, who left after the company's accounting practices came under regulatory scrutiny.

AIG eventually reached a $1.64 billion settlement of civil charges related to its accounting practices brought by then New York Attorney General Eliot Spitzer. Mr. Greenberg has remained a defendant in the case, and in legal action against his former company has accused executives of accounting blunders.

AIG is suing Mr. Greenberg personally for over $1 billion, and is suing Starr International Company Inc.--the company Mr. Greenberg now heads--for over $15 billion.

Mr. Willumstad--a former chairman and CEO of Citigroup Global Consumer Group, who arrived at AIG after Mr. Greenberg had left the company--in response to a question about ending bad blood and having a "interactive relationship" with Mr. Greenberg, revealed he had spoken to Mr. Greenberg last night.

"I would expect we would get together this week," Mr. Willumstad added. "I'm encouraged by the conversation we had last evening."

Mr. Greenberg--who, with Starr (which was formerly associated with AIG), holds a huge chunk of the insurer's shares--is one of several major stockholders who have been pressing for a change in management at the company over the past several months and criticizing its operations.

Mr. Greenberg; C.V. Starr & Co. Inc.; the Maurice R. and Corinne P. Greenberg Family Foundation, Inc.; Maurice R. and Corinne P. Greenberg Joint Tenancy Company, LLC.; Edward E. Matthews; Starr International Company, Inc.; Universal Foundation Inc.; C.V. Starr & Co. Inc. Trust (collectively the Starr Group) are listed on the AIG proxy statement as holding 13.6 percent of the company's shares.

AIG has seen a steady decline in stock price--over the past 52 weeks going from a high of $72.91, to close Friday at $34.18. Much of that drop has been related to the company's involvement in investments impacted by the drop in the subprime mortgage securities market.

Mr. Willumstad said the company needs to take a hard look at some of its operations that heavily exposed it to real estate market woes. He said he intended to recruit a new chief financial officer as quickly as possible, and will embark on a top-to-bottom operational review.

The new CEO said the review of the global insurer's businesses will include making sure the right people are in the right positions, He said he will be visiting key locations, meeting employees, customers, shareholders and regulators in major markets.

His study, he said, will see him "dig into the numbers" and work to learn AIG's strength and weaknesses "at a real operating level."

Mr. Willumstad said his intent is to make sure the company's balance sheet is strong and able to withstand volatility.

He said he felt good about the company's recent successful capital-raising effort, which added $20 billion, and did not anticipate any moves to break up any of the company's insurance businesses.

George Miles, chairman of the AIG board's nominating committee, called Mr. Willumstad a strong, decisive leader who could rebuild shareholder values. Regarding Mr. Willumstad being named CEO, Mr. Miles said, "this is not...an interim appointment."

Both he and Mr. Willumstad praised Mr. Sullivan for bringing stability to the company after Mr. Greenberg left, but Mr. Willumstad said that after record earnings in 2006 and part of 2007, the company experienced a gap between expectations and results delivered that was "simply not satisfactory."

Reacting to Mr. Willumstad's comments Standard & Poor's said it is maintaining a "hold" recommendation for AIG stock

S&P said it expects the company "to de-lever its balance sheet through asset sales, with a focus on preserving and strengthening its core insurance franchise." It also noted his comments about "a more interactive relationship" with Mr. Greenberg.

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