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American International Group

(AIG) - Get American International Group, Inc. Report

is arguably the world's most legendary mess: a bailed-out, runaway, overleveraged insurer that appears, on the surface, to be all but worthless. Still, peel back the many layers of this insurance behemoth, and one finds not only a massive breadth of holdings -- but a number of surprises and hidden gems, as well.

In the first of an ongoing series of articles peering into the endless scrap-heap that is AIG, we focus today on one of those surprising assets:

The Philippine American Life and General Insurance Company

, the largest insurer in the Philippines.

Known locally as Philamlife, the company was recently lumped into

American International Assurance Company

, which is it slated to go public in Asia in 2010. Prior to the deal it was speculated that AIG would unload Philamlife along with all or part of its stake in Asia.

And while for AIG, Philamlife may be an afterthought, it bears noting that this company is essential to more than a million Philippine customers that utilize its life insurance, retirement planning, accident and health insurance and wealth management programs.

Indeed, Philamlife is not just an insurance company. It's also a major contributor to the country's development in the form of infrastructure projects in telecommunications and power.

Its Philam Foundation has spent $550,000 since 1997 to assist in social development in health, education, arts and culture and livelihood. The organization is also training 6,000 teachers and students in English to combat the problem of declining English proficiency.

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The real estate arm, Philam Properties, is responsible for the construction and management of Philamlife's 34 office buildings, including the 48-story Philamlife Tower in Makati City. It is also the owner of the exclusive membership club, Tower Club.

It's assets like these that make AIG such a complex business to unwind, and one of the many reasons why the notion of allowing the the insurer cannot to simply disappear is not only unwise -- it's all-but impossible.

Here's more: In 2008, Philamlife recorded a profit of $69.3 million, a 187% surge from 2007. The company reported a 10.9% jump in investment income during the year to $214.2 million, even as gross premiums dropped 21% to $376.1 million.

Total revenue for the company last year reached $726.9 million.

The revenue from Philamlife's bancassurance arm, Philam Equitable Life Assurance, soared 70.6% from the year prior, generating $44.1 million.

The company's investment income was $2.14 billion, while its consolidated assets came in at $3.33 billion. Paid-out benefit and claims amounted to $153.4 million.

And despite all the drama surrounding its parent company, it's worth noting that 99% of policy-holders stuck with the insurance firm.

Placing a dollar figure on the international subsidiary is, of course, tricky, but one report had the company worth about $581.9 million in 2008 -- which was roughly half of its value from 2007. Still, it's also believed Philamlife that gave AIG up to $500 million to help the parent company ride out its bankruptcy.

"Certainly, in order for AIG to decide to keep it as a subsidiary means they believe it's valuable to their portfolio," says Dan Weedin, of Toro Consulting. "As far as a global strategy for them, this would seem to be an important player, especially as Asia continues to grow as an economic power."

"AIG has to brand itself as an insurance leader and move away from the credit mess they created," says Weedin. "Their financial strength is still in the insurance part, but perception of the company is in need of rejuvenation. Global subsidiaries like Philamlife go a long way toward rebuilding credibility."

More articles in this series:

AIG Deconstructed: Stowe Mountain


AIG Deconstructed: AIG Rules Iraq