Exhibit 10.1

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT (this “ Agreement ”), is entered into as of May 14, 2007, by and between 21 st  Century Insurance Group, a Delaware corporation (the “ Company ”), American International Group, Inc., a Delaware corporation (“ Parent ”) and Bruce W. Marlow (“ Executive ”).

WHEREAS, Executive is currently employed by the Company as its President and Chief Executive Officer, and is party to a Retention Agreement with the Company dated as of September 14, 2005 (the “ Retention Agreement ”) and covered by the Company’s Executive Severance Plan (the “ESP”); and

WHEREAS, the Company has entered into an Agreement and Plan of Merger with Parent, dated as of the 15th day of May, 2007, (the “ Merger Agreement ”); and

WHEREAS, in connection with the transactions contemplated by the Merger Agreement, Executive is expected to dispose of Executive’s ownership interest in the Company; and

WHEREAS, as of the date of this Agreement, the Company wishes to continue Executive’s employment as President, AIG 21 st  Direct Auto (as defined in Section 4(a) of this Agreement) under the terms of a new employment agreement on the terms set forth herein, which shall supersede the Retention Agreement and the ESP; and

WHEREAS, Executive is willing to enter into such agreement; and

NOW, THEREFORE, in consideration of the premises and mutual covenants herein and for other good and valuable consideration, the parties hereby agree as follows:

1.              Term of Employment . Subject to the provisions of Section 9 of this Agreement, this Agreement shall be effective for a term commencing as of the Effective Time as defined in the Merger Agreement (the “ Effective Date ”) and ending on December 31, 2009 (the “ Employment Term ”).  If a Closing (as defined in the Merger Agreement) and the Effective Date have not occurred by the close of business on December 31, 2007, this Agreement will be null and void and Executive will retain full rights under the Retention Agreement and the ESP.

2.              Position .

(a)            Executive shall serve as President, AIG 21 st  Direct Auto. In such position, Executive’s duties shall consist of (i) overseeing the integration of the Company and AIG Direct into AIG 21 st  Direct Auto (both as defined below); (ii) helping to design and implementing strategies designed to achieve AIG 21 st  Direct Auto’s short-term and long-term goals consistent with current Company goals; (iii) managing AIG 21 st  Direct Auto’s staff, including marketing, product management, actuarial, government affairs, sales and service, claims, IT, internal control, legal, accounting, and ancillary personnel, the hiring and firing of company personnel, all subject to reporting lines imposed generally on subsidiaries of Parent (decisions involving senior positions would include discussions with the Executive Vice President – Domestic Personal Lines of Parent ); (iv) preparing AIG 21 st  Direct Auto’s annual budgets for approval by Parent’s management (and managing to that budget and modifying the business plan as necessary); (v) maintaining controls to assure the accuracy of AIG 21 st  Direct Auto’s reported financial results and adherence to Parent’s protocols; and (vi) such other duties as the Board and Executive may agree upon from time to time.  Executive shall report to the Executive Vice President – Domestic Personal Lines of Parent, or any successor to such position.

(b)            During the Employment Term, Executive will devote his full business time and best efforts to the performance of his duties hereunder and will not engage in any other business, profession or occupation for compensation or otherwise which would conflict or interfere with the rendition of such services, either directly or indirectly, or serve on any board of directors or trustees of any business corporation or any charitable or not-for-profit organization, without the prior written consent of the Board of Directors of the Company (the “ Board ”).  Notwithstanding the foregoing, nothing in this Agreement shall preclude Executive (i) from managing his personal, financial and legal affairs, or (ii) continuing to serve as a Director of the Los Angeles Philharmonic.

(c)            The Company may require Executive to undertake reasonable business travel as necessary to implement the integration of the Company with Parent and manage the combined entity.  The Company will fully reimburse Executive for travel expenses (air travel, ground transportation, hotel, meals, etc.) incurred in the performance of Executive’s duties, in accordance with the Company’s policies.  Executive will be

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entitled to first class air travel.

(d)            The Company will: (i) reimburse Executive in accordance with the policies of the Company for any reasonable relocation expenses of Executive, if the Company requires him to relocate from his Southern California residence pursuant to his duties, and (ii) pay and/or reimburse Executive for any reasonable security expenses, consistent with past practices of the Company.

3.              Base Salary .  During the Employment Term, the Company shall pay Executive a base salary (the “ Base Salary ”) at the annual rate of $950,000, payable in regular installments in accordance with the Company’s usual payroll practices. During the Employment Term, the Company shall review the Base Salary annually and may increase the Base Salary (but may not decrease the Base Salary), and the term “Base Salary” shall refer to such increased amount.

4.              Annual and Incentive Bonus .

(a)            During the Employment Term, Executive shall be eligible to receive an annual cash bonus in respect of each full or partial fiscal year of the Company of between 0% to 200% of Base Salary (with a STI target percentage pursuant to the Company’s Short Term Incentive Plan as in effect at the date of this Agreement (“ Target Bonus Percentage ”) of 100% of Base Salary), as determined in the sole discretion of the Company, subject to any applicable approval of the Compensation and Management Resources Committee of the Board of Directors of Parent (the “ Compensation Committee ”) (such annual cash bonus, the “ Annual Bonus ”). Notwithstanding the foregoing, the Annual Bonus received for the 2007 fiscal year will be no less than $950,000, provided that Executive is employed by the Company as of December 31, 2007.  For the 2007 fiscal year, Executive’s bonus shall be based on the performance criteria in the Company’s Short Term Incentive Plan, applied to the results of the combined entity of the Company and the profit center of Parent’s subsidiaries called “AIG Direct” (“ AIG Direct ”) that conducts the business of direct-to-consumer automobile insurance and sale of other ancillary personal lines insurance products (AIG Direct does not include Agency Auto or Private Client Group) (the combined entity, “ AIG 21 st  Direct Auto ”).  The Company will pay the Annual Bonus for 2007 described above to Executive in cash no later than March 31, 2008.  For the 2008 and 2009 fiscal years, and provided that Executive is employed by the Company at the time of payment

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of the Annual Bonus, Executive’s Target Bonus Percentage will be no less than 100% of $950,000. For the 2008 and 2009 fiscal years, Executive’s bonus shall be based on the performance criteria in the Company’s Short Term Incentive Plan as applicable at the date of this Agreement, applied to the results of AIG 21 st  Direct Auto, unless the Company’s Short Term Incentive Program is superseded by a bonus plan of Parent or as otherwise agreed between the Company and Executive.

(b)            If Executive remains employed by the Company on the first anniversary of the Effective Date, then the Company shall pay to Executive in a lump sum within ten (10) business days thereafter, an amount (the “ Retention Bonus ”) equal to the greater of (I) $2,850,000 or (II) the sum of (x) 1.5 times the Base Salary (at the rate in effect immediately prior to the first anniversary of the Effective Date) and (y) 1.5 times the last annual cash bonus paid by the Company during Executive’s employment.

5.              Long-Term and Equity-Based Incentives .

(a)           On date of the first Compensation Committee meeting following the Effective Date, the Company and Parent shall recommend that Executive be granted options with respect to such number of Parent’s shares of Parent’s common stock having a value as of the date of grant of $1,165,000, as determined in the sole discretion of the Compensation Committee (any grant of options pursuant to this Section 5(a), “ Options ”).  For the 2008 and 2009 fiscal years, the Company and Parent shall recommend that Executive be granted options with respect to such number of Parent’s shares of Parent’s common stock with a value as of the date of grant of not less than $1,165,000, as determined in the sole discretion of the Compensation Committee. Any such grant is subject to the terms and conditions of the stock option plan and the agreement governing the grant;

(b)            On the date of the first Compensation Committee meeting following the Effective Date, the Company and Parent shall recommend that Executive be granted 17,500 Performance Units with respect to Parent’s Partners Plan for the 2007-2008 performance period (any grant of Performance Units pursuant to this Section 5(b), “ Partners Units ”). The Company and Parent shall recommend that Executive be granted at least 17,500 Performance Units with respect to Parent’s Partners Plan for each of the 2008-2009 and 2009-2010 performance periods at the time when grants are made for such performance periods. Any such grant is subject to the terms and conditions of the

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applicable plan and agreement governing such grant;

(c)            On the date of the first Compensation Committee meeting following the Effective Date, the Company and Parent shall recommend that Executive be granted 250 Senior Partner units with respect to Parent’s Senior Partners Plan for the 2005-2007 performance period (any grant of Senior Partner units pursuant to this Section 5(c), “ Senior Partners Units ”). The Company and Parent shall recommend that Executive be granted at least 250 Senior Partner units with respect to Parent’s Senior Partners Plan for each of the 2006-2008 and 2007-2009 performance periods at the time when grants are made for such performance periods. Any such grant is subject to the terms and conditions of the applicable plan and agreement governing such grant; and

(d)            On the date of the first Compensation Committee meeting following the Effective Date, the Company and Parent shall recommend that Executive be granted an award of Restricted Stock Units with respect to shares of Parent’s common stock that is sufficient to replace the value (as determined by the Company in its sole discretion) of Executive’s outstanding stock options and awards of restricted stock from the Company that would, but for the Merger, have vested beyond the first anniversary of the Effective Date. Such value will be based on the fair market value of Parent’s common stock at the Effective Date, will vest three years from the date of grant and will be otherwise subject to the terms and conditions of the applicable plan and agreement governing such grant.

6.              Employee Benefits . During the Employment Term, Executive shall be entitled to participate in the Company’s employee benefit plans (other than any severance or change-in-control plan) pursuant to the terms and conditions of the applicable plans.

7.              Vacation . Executive shall be entitled to four (4) weeks annual paid vacation in accordance with the vacation policy of the Company.

8.              Business Expenses .  During the Employment Term, reasonable business expenses incurred by Executive in the performance of his duties hereunder shall be reimbursed by the Company in accordance with Company policy.

9.              Termination . Notwithstanding any other provision of the Agreement:

(a)            For Cause by the Company . Executive’s employment may be

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terminated at any time prior to the end of the Employment Term by the Company for Cause upon delivery of a “Notice of Termination” (as defined in Section 9(f)) by the Company to Executive.  For purposes of this Agreement, “ Cause ” shall mean, whether occurring prior to, or on or after the Effective Date, (i) Executive’s continued failure to perform substantially his duties with the Company (other than any such failure resulting from Executive’s incapacity due to physical or mental illness) for a period of ten (10) days after a written demand for substantial performance of duties is delivered to Executive by the Board, which specifically (x) identifies the manner in which the Board believes that Executive has not substantially performed Executive’s duties and (y) suggests corrective action, (ii) Executive’s intentional misconduct or gross negligence in connection with Executive’s duties, or an act of fraud or material act of dishonesty by Executive, (iii) Executive’s material violation of a material provision of Parent’s Code of Conduct, as such code of conduct or its equivalent policies may be in effect from time to time, (iii) conviction of, or entry of a plea of guilty or no contest by Executive with respect to, a felony or any lesser crime of which fraud or dishonesty is a material element, or (iv) any material failure by Executive to comply with a material provision of Section 10 of this Agreement.

If Executive is terminated for Cause pursuant to this Section 9(a), he shall be entitled to receive his Base Salary through the date of termination and reimbursement for any unreimbursed business expenses properly incurred by Executive in accordance with Company policy through the date of Executive’s termination. If Executive is terminated for Cause pursuant to Section 9(a)(i), he shall be entitled to continued health and life insurance benefits for Executive and his spouse and dependents, if any, for a thirty-six (36) month period following the date of Executive’s termination of employment, on the same basis as such benefits were provided during Executive’s employment with the Company; provided, that Executive shall reimburse the Company for the COBRA-equivalent costs of such coverage and the Company’s obligation to provide such health and life insurance benefits shall cease with respect to such benefits at the time Executive becomes eligible for such benefits from another employer, and he shall have no further rights to any compensation (including any Base Salary, Annual Bonus (including any Annual Bonus that has been declared but not yet paid), Retention Bonus, Options, Partners Units, Senior Partners Units or any long-term or equity-based compensation awards or any other benefits under this Agreement). For purposes of this Agreement, “ COBRA ” means the Consolidated Omnibus Budget Reconciliation Act. All

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other benefits, if any, due Executive following Executive’s termination of employment for Cause pursuant to this Section 9(a) shall be determined in accordance with the plans, policies and practices of Parent; provided, however, that Executive shall not participate in any severance plan, policy or program of the Company or Parent.

(b)            Disability or Death . Executive’s employment prior to the end of the Employment Term shall terminate immediately upon Executive’s death or following delivery of a Notice of Termination by the Company to Executive if Executive becomes physically or mentally incapacitated and is therefore unable for a period of ninety (90) consecutive days or one-hundred twenty (120) days during any consecutive six (6) month period to perform his duties with substantially the same level of quality as immediately prior to such incapacity (such incapacity is hereinafter referred to as “ Disability ”). Upon termination of Executive’s employment hereunder for either Disability or death, Executive or Executive’s estate (as the case may be) shall be entitled to receive (i) his Base Salary through the last day of the payroll period during which such termination occurs; (ii) any unpaid Annual Bonus for any fiscal year preceding the year in which the termination occurs; and (iii) reimbursement for any unreimbursed business expenses properly incurred by Executive in accordance with Company policy through the date of Executive’s termination (the sum of (i), (ii) plus (iii), the “ Accrued Obligations ”), and (iv) continued health and life insurance benefits for Executive and his spouse and dependents, if any, for a thirty-six (36) month period following the date of Executive’s termination of employment, on the same basis as such benefits were provided during Executive’s employment with the Company; provided, that Executive shall reimburse the Company for the COBRA-equivalent costs of such coverage and the Company’s obligation to provide such health and life insurance benefits shall cease with respect to such benefits at the time Executive becomes eligible for such benefits from another employer. Other than as set forth in the immediately following sentence, Executive or Executive’s estate (as the case may be) shall have no further rights to any compensation (including any Base Salary, Annual Bonus, Retention Bonus, Options, Partners Units, Senior Partners Units or any long-term or equity-based compensation awards) or any other benefits under this Agreement. All other benefits, if any, due Executive following Executive’s termination for Disability or death shall be determined in accordance with the equity compensation plans of Parent; provided, however, that Executive (or his estate, as the case may be) shall not participate in any severance plan, policy or program of the Company or Parent.

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(c)            Without Cause by the Company or for Good Reason by Executive .  Executive’s employment may be terminated prior to the end of the Employment Term by the Company without Cause (other than by reason of Executive’s Disability) following the delivery by the Company of a Notice of Termination to Executive, or by Executive for Good Reason following the delivery by Executive of a Notice of Termination to the Company. The expiration of the Employment Term on December 31, 2009 shall not be considered a termination without Cause under this Agreement or otherwise result in the payment of severance or post-employment benefits pursuant to Section 9(c) of this Agreement if Executive is not otherwise terminated pursuant to Section 9(c) of this Agreement prior to such date. If Executive’s employment is terminated by the Company without Cause (other than by reason of Disability) or by Executive for Good Reason within the period commencing on the first anniversary of the Effective Date and ending on December 31, 2009, Executive shall be entitled to receive:

(i)             within five (5) business days following termination, a lump sum payment in an amount equal to the Accrued Obligations;

(ii)            subject to Executive’s continued compliance with Section 10 of this Agreement, an amount (as “Severance”) equal to the greater of (I) $2,850,000 or (II) the sum of (x) 1.5 times the Base Salary (at the rate in effect immediately prior to termination) and (y) 1.5 times the last annual cash bonus paid by the Company during Executive’s employment.  The Severance shall be payable in equal monthly installments (each, a “ Severance Installment ”) over the twelve (12) month period commencing no earlier than the second of the Company’s standard payroll dates falling after such termination; provided, however, that, if necessary to avoid the application of Section 409A of the Code to the Severance, Executive shall not receive any installment payment until the first scheduled payroll date that occurs more than six months following the date of termination of employment (the “ First Payment Date ”), and, on the First Payment Date, the Company will pay Executive an amount equal to the sum of all Severance Installments that would have been payable in respect of the period preceding the First Payment Date but for the delay imposed on account of the aforementioned Section 409A; and

(iii)           continued health and life insurance benefits for Executive and his

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spouse and dependents, if any, for a thirty-six (36) month period following the date of Executive’s termination of employment, on the same basis as such benefits were provided during Executive’s employment with the Company; provided, that Executive shall reimburse the Company for the COBRA-equivalent costs of such coverage and the Company’s obligation to provide such health and life insurance benefits shall cease with respect to such benefits at the time Executive becomes eligible for such benefits from another employer.

If Executive’s employment is terminated by the Company without Cause (other than by reason of Disability) or by Executive for Good Reason during the period commencing on the Effective Date and ending on the date preceding the first anniversary of the Effective Date, Executive shall be entitled to receive:

(i)             within five (5) business days following termination, a lump sum payment in an amount equal to the Accrued Obligations;

(ii)            subject to Executive’s continued compliance with Section 10 of this Agreement, an amount (as “Severance”) equal to the greater of (I) $5,700,000 or (II) the sum of (x) 3 times the Base Salary (at the rate in effect immediately prior to termination) and (y) 3 times the last annual cash bonus paid by the Company during Executive’s employment.  The Severance Installments shall be payable in equal monthly installments over the twelve (12) month period commencing no earlier than the second of the Company’s standard payroll dates falling after such termination; provided, however, that, if necessary to avoid the application of Section 409A of the Code to the Severance, Executive shall not receive any installment payment until the First Payment Date and, on the First Payment Date, the Company will pay Executive an amount equal to the sum of all Severance Installments that would have been payable in respect of the period preceding the First Payment Date but for the delay imposed on account of the aforementioned Section 409A; and

(iii)           continued health and life insurance benefits for Executive and his spouse and dependents, if any, for a thirty-six (36) month period following the date of Executive’s termination of employment, on the same basis as such benefits were provided during Executive’s employment with the Company; provided, that Executive shall reimburse the Company for the COBRA-equivalent

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costs of such coverage and the Company’s obligation to provide such health and life insurance benefits shall cease with respect to such benefits at the time Executive becomes eligible for such benefits from another employer.

Notwithstanding anything to the contrary in this Agreement, no further payments or benefits shall be due under this Section 9(c) if, at any time after Execut