granted a licence by the Chinese government to operate a life and non-life insurance business in Shanghai.

It is the first such licence to be granted to a foreign insurance organisation in more than 40 years.

AIG traces its corporate roots to an insurance agency formed in Shanghai in 1919 by an American entrepreneur, Mr. C.V. Starr, and has now grown into the largest international insurance organisation in the world.

AIG will operate in Shanghai through a branch of its 100 percent-owned affiliate, American International Assurance Company Ltd.

AIG chairman Mr. M. R. Greenberg said: "Our roots are in Asia. We have great confidence in the future of China and its role in Asia and the world community.

"We will focus on building our staff and developing products tailored to the needs of this market.'' AIG was the first international company with a physical presence in Bermuda, setting up on the Island in 1947.

Although now no longer domiciled in Bermuda, the company has been active on the Island for 45 years.

The group's vice chairman, Mr. Ernest Stempel, has lived in Bermuda since 1953, commuting weekly to his office in New York.