American International Group Inc., the insurer that earlier this month paid more than $1 billion to settle state and federal probes, has had a lot of cleaning up to do in the last 11 months, chief executive Martin Sullivan says, but there hasn?t been a moment when the day-to-day running of the business was not his first priority.

?There was no stopping to focus on the issues, we had a business to run and we were running it,? he said from his suite at the Fairmont Southampton yesterday. Mr. Sullivan, 51, became AIG president and chief executive last March after his former boss, Maurice (Hank) Greenberg, 80, was ousted by the company?s board amid official probes of earnings manipulation and questionable sales practices.

Mr. Sullivan, a Briton who started with AIG at age 17, was able to juggle the running of the world?s biggest insurer, while also ironing out the details of one of the biggest ever business settlements at $1.64 billion, by moving swiftly. He also oversaw an intensive internal investigation leading to the company?s May 31 announcement it would restate five years of past profit by $3.9 billion to fix problems discovered in its own probe.

?We want to maintain the very best of AIG?s entrepreneurial culture ? I?ve spent 34 years in that culture ? but we need to do it with the best governance and compliance possible,? he said. Those that saw it differently were asked to pack their bags.

Less than two weeks after his March 14 appointment, Mr. Sullivan fired AIG?s Bermuda-based legal counsel, L. Michael Murphy, for refusing to cooperate with company lawyers conducting the internal investigation.

He also dispatched a security detail from AIG?s New York headquarters at 70 Pine Street to Bermuda to make sure no documents were removed by anyone handling the affairs of a lucrative private company, Starr International Co. Ltd. that remained under the control of Mr. Greenberg.

Along with Murphy, four other AIG employees in Bermuda quit, joining Mr. Murphy at Starr International Co. Ltd., the closely-held investment firm that had administered a deferred compensation programme for AIG?s most promising employees.

Mr. Sullivan won?t discuss issues surrounding SICo, with the two companies now caught up in a legal battle over the $20 billion in shares held by Starr. Both sides are also in arbitration over a longstanding business arrangement between AIG and C.V. Starr & Co., a New York-based company also controlled by Mr. Greenberg, that has long acted as a managing general agency selling AIG policies.

Some of the contracts with C.V. Starr entities were recently cancelled by AIG, something that the Starr companies say can?t be done without six months notice.

With the regulatory investigation largely behind it, Mr. Sullivan says he can now turn an eye to larger industry issues.

He?s set to do that this morning in a panel discussion at the World Insurance Forum with Michael Butt, chairman, Axis Capital; Lord Levene, chairman of Lloyd?s of London; Nikolaus von Bomhard, chief executive, Munich Re; and Brian Storms, chairman and CEO of Marsh Inc.

?Now that we have emerged (from the investigation) I?m looking at some of the more macro issues,? Mr. Sullivan said. That is, when there is a moment?s break from ?driving AIG forward? which he says takes ?every minute of every day?.

Looking around his temporary Bermuda accommodations ? a luxurious two-storey suite with expansive views of the South Shore from two balconies ? he laments that he?s staying just one night, not a week.

But there?s business to be done ? all around the world. AIG, with operations in more than 130 countries, recently agreed to acquire Taiwanese non-life insurer Central Insurance. It will make AIG, which already has a large life operation in the Asian territory, the third largest general insurer on the island.

The purchase, a stock swap expected to close in the third quarter and valued up to 6.05 billion Taiwanese dollars, or $186 million, will also give AIG two representative offices in China, in Guangzhou and Shanghai.

?Our belief is that from small acorns grow big trees,? he said.

In mid-December, AIG also became the first foreign insurer to be licensed to sell both life and non-life insurance policies in Vietnam. ?We are very optimistic about our opportunities there,? Mr. Sullivan said. ?There are 80 million people in Vietnam and as they get more net disposable income, we are well positioned to respond to their needs.?

AIG?s operations were developed from the insurance agency operations of C.V. Starr ? named for founder Cornelius Vander Starr ? which got its start in Shanghai, China 87 years ago. And Mr. Greenberg, over his tenure, became synonymous with AIG in the minds of many Asian business contacts. He was reputed to have an intimate knowledge of all of AIG?s operations, particularly in China.

Mr. Sullivan isn?t breaking with history ? AIG continues to have a keen interest in doing business in Asia.

He?s been to China three times in the last three months, and he?s set to visit again in March.

?When I go out to Asia, I never cease to be amazed by the opportunities that exist in that part of the world.?

Mr. Sullivan?s visiting China to improve relations with regulators, in the interest of expanding its Chinese presence.

It already has wholly-owned life operations in eight Chinese cities.

It is the only foreign insurer to have 100 percent ownership. Other insurers have only been allowed to enter the market through joint ventures.

And Mr. Sullivan says AIG?s reception in Asia hasn?t cooled since his predecessor?s departure. He?s visited with numerous heads of states from across the region in recent months, and added being chairman of the US Association of Southeast Asian National Business Counsel in recent months.

But AIG?s interests are not only in the Asian market. Since Mr. Sullivan took over the chief executive?s suite, the company has also won licences to do business in Latvia, Lithuania and the Republic of Georgia.

He said AIG?s looking to grow a combination of ways: organically, through acquisitions and by setting up new companies.

What conditions does he look for? The opportunity should be a good fit for AIG?s existing business, and there needs to be a demonstrated ability to make an adequate return on capital, he said.

AIG has six subsidiaries in Bermuda, according to its annual filing with the US Securities and Exchange Commission last year, and holds more than 20 percent in Bermuda insurance companies IPC Re and Allied World Assurance Company.

Both companies sustained losses following last year?s costly hurricanes (see related story, page 22), but that hasn?t taken the shine off the investment for AIG.

?We are happy with our investments in all of our entities in Bermuda,? Mr. Sullivan said. AWAC said in November that third-quarter storms claims totalled $203.5 million. IPC, which reported earnings last night, suffered $863.8 million in third quarter losses, and a further $112.8 million from fourth-quarter hurricane, Wilma.

Mr. Sullivan has reason not to be overly concerned.

AIG, in total, saw its balance sheet hit by after-tax catastrophe losses in the third quarter of $1.57 billion, or 60 cents a share. Despite the losses, it posted $1.72 billion, or 65 cents a share, in net income. Its strong results meant it didn?t have to raise any capital, Mr. Sullivan points out.

Most of its peers didn?t fare so well.

AIG?s fourth-quarter earnings are due on or before March 16.

While AIG has previously invested in new Bermuda insurers that came to market after catastrophes created a capacity void ? IPC was established after 1992?s Hurricane Andrew, and AWAC after the September 11, 2001 terrorist attacks ? the company didn?t line up with other investors putting $10 billion into the Island?s insurance market late last year to back nine new companies.

The string of new insurers entered the market to take advantage of an expected increase in pricing when 2006 policies were renewed.

Mr. Sullivan said AIG feels it is already well represented in the Bermuda market, through its AIG operations, AWAC and IPC.

?That is not to say we are not going to invest (in the future) but we are looking opportunistically around the world. If it makes sense in Bermuda, we will do so.?