TRANSATLANTIC HOLDINGS INC, DEF 14A, 1999-04-06

TRANSATLANTIC HOLDINGS INC
DEF 14A, 1999-04-06
FIRE, MARINE & CASUALTY INSURANCE

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Section 240.14a-101 Schedule 14A.
Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:

[ ] Preliminary Proxy Statement

[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))

[X] Definitive Proxy Statement

[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12

Transatlantic Holdings, Inc.
.................................................................
(Name of Registrant as Specified In Its Charter)

.................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11

(1) Title of each class of securities to which transaction
applies:

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(2) Aggregate number of securities to which transaction
applies:

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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the amount
on which the filing fee is calculated and state how it was
determined):

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(4) Proposed maximum aggregate value of transaction:

.......................................................

(5) Total fee paid:

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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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(2) Form, Schedule or Registration Statement No.:

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TRANSATLANTIC HOLDINGS, INC.
80 PINE STREET, NEW YORK, NEW YORK 10005
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 20, 1999
------------------------

April 6, 1999

To the Stockholders of
TRANSATLANTIC HOLDINGS, INC.:

The Annual Meeting of stockholders of TRANSATLANTIC HOLDINGS, INC., a
Delaware corporation ('TRH'), will be held at 72 Wall Street, Seventh Floor, New
York, New York, on Thursday, May 20, 1999, at 11:00 o'clock A.M., for the
following purposes:

1. To elect 9 directors of TRH to hold office until the next annual
meeting of stockholders and until their respective successors are
elected and qualified;

2. To act upon a proposal to amend the Certificate of Incorporation,
as amended, to increase the authorized shares of Common Stock from
50,000,000 to 100,000,000 shares;

3. To act upon a proposal to select PricewaterhouseCoopers LLP as
independent accountants for 1999; and

4. To transact any other business that may properly come before the
meeting.

Stockholders of record at the close of business on March 26, 1999 will be
entitled to vote at the meeting. During the ten days prior to the meeting, a
list of such stockholders will be available for inspection at the offices of TRH
at 80 Pine Street, New York, New York.

Whether or not you expect to attend the meeting, please complete, date and
sign the enclosed proxy card and mail it promptly in the enclosed postage
prepaid envelope.

By Order of the Board of Directors

ELIZABETH M. TUCK
Secretary

TRANSATLANTIC HOLDINGS, INC.
80 PINE STREET, NEW YORK, N.Y. 10005
------------------------
PROXY STATEMENT
------------------------

April 6, 1999

The enclosed proxy is solicited on behalf of the Board of Directors for use
at the Annual Meeting of Stockholders of TRANSATLANTIC HOLDINGS, INC., a
Delaware corporation ('TRH' or the 'Company'), to be held on May 20, 1999, and
at any adjournment thereof. It may be revoked, by written notice or by
furnishing a proxy subsequent in time, at any time prior to its use. All shares
represented at the meeting by properly executed proxies will be voted as
specified, and, unless otherwise specified, will be voted for the election of
directors, for the amendment of the Certificate of Incorporation, as amended to
increase the authorized shares of Common Stock and for the selection of
PricewaterhouseCoopers LLP as independent accountants for 1999.

Only stockholders of record at the close of business on March 26, 1999 will
be entitled to vote at the meeting. On that date 34,693,911 shares (exclusive of
shares held by TRH) of common stock, par value $1.00 per share ('TRH Common
Stock'), were outstanding, each such share of stock having one vote.

This Proxy Statement, the attached Notice of Annual Meeting and the
enclosed proxy card are first being mailed to stockholders of TRH on or about
April 6, 1999.

BENEFICIAL OWNERSHIP

The following table lists the beneficial ownership of each person or group
who, as of March 26, 1999, owned to TRH's knowledge, more than five percent of
the outstanding TRH Common Stock.

<TABLE>
<CAPTION>
AMOUNT AND
NATURE
NAME AND ADDRESS OF BENEFICIAL PERCENT OF
OF BENEFICIAL OWNER OWNERSHIP VOTING SHARES
- ---------------------------------------------------------------- -------------- -------------

<S> <C> <C>
American International Group, Inc. ('AIG')(1) .................. 19,122,420 55.12
70 Pine Street
New York, NY 10270

Davis Selected Advisers, L.P.(2) ............................... 5,779,050 16.66
124 East Marcy Street
Santa Fe, NM 87501
</TABLE>

- ------------

(1) Includes 11,743,452 shares directly owned by American Home Assurance
Company, a wholly-owned subsidiary of AIG, which shares with AIG voting and
investment power over such shares. AIG has sole voting and investment power
over the remaining shares.

(2) Davis Selected Advisers, L.P. filed a Schedule 13G, dated January 8, 1999,
with respect to the shares of TRH Common Stock held by it, which stated that
it was an investment advisor registered under Section 203 of the Investment
Advisers Act of 1940, and that it had sole power to vote or to direct the
vote with respect to 5,779,050 shares, shared voting power with respect to
no shares, sole power to dispose or to direct the disposition with respect
to 5,779,050 shares and shared dispositive power with respect to no shares.

I. ELECTION OF DIRECTORS

Nine directors are to be elected at the meeting to hold office until the
next annual meeting of stockholders and until their respective successors are
elected and qualified. If a quorum is present at the meeting, the affirmative
vote of a plurality of the shares present in person or by proxy and entitled to
vote thereon is required to elect the directors; abstentions and broker
non-votes will have no effect on the outcome of the vote. It is the intention of
the persons named in the accompanying proxy to vote for the election of the
nominees listed below, all of whom are currently members of your Board of
Directors. John M. Fowler, who is a current member of the TRH Board, will not be
standing for re-election. It is not expected that any of the nominees will
become unavailable for election as a director, but if any nominee should become
unavailable prior to the meeting, proxies will be voted for such persons as the
TRH Board of Directors shall recommend. The nominees, and certain information
supplied by them to TRH, are as follows:

<TABLE>
<S> <C> <C>
[Photo] JAMES BALOG RETIRED CHAIRMAN, 1838 INVESTMENT ADVISORS, L.P.
Age 70 (investment management company)
Director since 1988. He has also Director, Elan, plc, Galen Partners, L.P. (technical
served as a director of advisory board), Great-West Life and Annuity Insurance
Transatlantic Reinsurance Company Company and Trustee, Zweig Series Trust, Euclid Mutual
('TRC'), a wholly- owned subsidiary Funds (Mutual Funds)
of TRH, since 1990 and of Putnam
Reinsurance Company ('Putnam'), a
wholly-owned subsidiary of TRC,
since 1988.

[Photo] C. FRED BERGSTEN DIRECTOR, INSTITUTE FOR INTERNATIONAL ECONOMICS
Age 57 (nonprofit research institution)
Director since May 21, 1998. He has
also served as a director of TRC and
of Putnam since May 21, 1998.

[Photo] IKUO EGASHIRA CHAIRMAN OF THE BOARD OF DIRECTORS, THE NICHIDO FIRE &
Age 68 MARINE INSURANCE COMPANY, LIMITED, TOKYO, JAPAN
Director since June 29, 1995. He has (insurance)
also served as a director of TRC and
of Putnam since 1995.
</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C>
[Photo] MAURICE R. GREENBERG CHAIRMAN AND CHIEF EXECUTIVE OFFICER, AIG
Age 73 (insurance and financial services holding company)
Chairman since 1986. He has also Director, AIG, Director, President and Chief Executive
served as the Chairman of TRC since Officer of C.V. Starr & Co., Inc. ('Starr'), a
1977 and of Putnam since 1986. director of Starr International Company, Inc.
('SICO'), private holding companies (see 'Ownership of
Certain Securities'), a director of International
Lease Finance Corporation ('ILFC') (a wholly owned
subsidiary of AIG) and the Chairman and a director of
20th Century Industries (a subsidiary of AIG)

[Photo] JOHN J. MACKOWSKI RETIRED CHAIRMAN AND CHIEF EXECUTIVE OFFICER, THE
Age 73 ATLANTIC MUTUAL COMPANIES (insurance)
Director since 1990. He has also Director, Venator Group and Northern Trust Company of
served as a director of TRC and of Connecticut
Putnam since 1990.

[Photo] EDWARD E. MATTHEWS VICE CHAIRMAN-INVESTMENTS AND FINANCIAL SERVICES, AIG
Age 67 Director, AIG, Starr, SICO and ILFC
Director since 1986. He has also
served as a director of TRC since
1977 and of Putnam since 1986.

[Photo] ROBERT F. ORLICH PRESIDENT AND CHIEF EXECUTIVE OFFICER, TRH, TRC AND
Age 51 PUTNAM
Director since 1994. He has also Chairman, Trans Re Zurich; Director, Transatlantic Re
served as a director of TRC and of Argentina S.A.
Putnam since 1992.

[Photo] HOWARD I. SMITH EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND
Age 54 COMPTROLLER, AIG
Director since 1994. He has also Director, AIG, Starr, SICO, ILFC, 20th Century
served as a director of TRC and of Industries (insurance) and The Kroll-O'Gara Company
Putnam since 1994.
</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C>
[Photo] THOMAS R. TIZZIO SENIOR VICE CHAIRMAN-GENERAL INSURANCE, AIG
Age 61 Director, AIG, Starr and SICO
Director since 1990. He has also
served as a director of TRC since
1979 and of Putnam since 1990.
</TABLE>

The principal occupation or affiliation of each of the nominees is shown in
bold face type. Except as hereinafter noted, each director has occupied an
executive position with his company or an affiliate thereof for at least the
prior five years. Mr. Balog was Chairman of 1838 Investment Advisors, L.P. from
1987 to 1994. Mr. Egashira served as the President of The Nichido Fire & Marine
Insurance Company, Limited from 1988 to 1995.

There were four regularly scheduled meetings of the Board of Directors
during 1998. All current directors attended at least 75% of the aggregate of all
meetings of the Board of Directors and of the committees of the Board of
Directors held during the period in which they were eligible to serve, except
Mr. Bergsten and Mr. Egashira, who each attended 50%, Mr. Fowler who attended
63% and Mr. Greenberg who attended 60% of the meetings they were each eligible
to attend. There are four regular meetings of the Board of Directors scheduled
to be held during 1999.

Messrs. Balog, Bergsten and Mackowski are the current members of the Audit
Committee, which held three meetings during 1998. There are three Audit
Committee meetings scheduled to be held during 1999. The primary function of the
Audit Committee is to give general advice to the Board of Directors and the
officers in matters relating to the audits of the records of accounts of TRH and
its subsidiaries. The Audit Committee reviews the performance and scope of the
audit and non-audit services provided by the independent accountants during the
fiscal year and recommends to the Board of Directors a firm of independent
accountants to serve as auditors during the ensuing fiscal year. In addition,
the Audit Committee reviews reports issued by TRH's internal audit division and
the independent accountants.

The Stock Option and Purchase Plan Committee administers the TRH employee
benefit plans. The current members of the Stock Option and Purchase Plan
Committee are Messrs. Balog and Mackowski. There was one Stock Option and
Purchase Plan Committee meeting during 1998. One Stock Option and Purchase Plan
Committee meeting is scheduled for 1999.

The Compensation Committee determines the cash compensation for senior
management. The current members of the Compensation Committee are Messrs. Balog,
Greenberg, Mackowski and Tizzio. There was one Compensation Committee meeting
during 1998, and one Compensation Committee meeting is scheduled for 1999.

The Board does not have a nominating committee. The full Board would
normally address matters relating to the nomination of directors, but the
Executive Committee of the Board of Directors is also empowered to address such
matters. The Executive Committee has and may exercise all the powers and
authority of the Board of Directors in the management of the business and
affairs of TRH except those powers specifically reserved to the whole Board.
Messrs. Greenberg, Matthews and Orlich are the current members of the Executive
Committee. There were 2 Executive Committee actions in 1998.

OWNERSHIP OF CERTAIN SECURITIES

The following table summarizes the ownership of equity securities of TRH,
and of entities which could be considered parents of TRH, by each of the
directors, each executive officer named in the Summary Compensation Table, and
by the directors and executive officers as a group.

<TABLE>
<CAPTION>
EQUITY SECURITIES OWNED BENEFICIALLY
AS OF JANUARY 31, 1999(1)
-----------------------------------------------------------------------------------------------------
TRH AIG STARR SICO
COMMON STOCK COMMON STOCK COMMON STOCK VOTING STOCK
------------------------- ------------------------- ---------------------- --------------------
AMOUNT AND AMOUNT AND AMOUNT AND AMOUNT AND
NATURE OF PERCENT NATURE OF PERCENT NATURE OF PERCENT NATURE OF PERCENT
BENEFICIAL OF BENEFICIAL OF BENEFICIAL OF BENEFICIAL OF
NAME OWNERSHIP(2)(3) CLASS OWNERSHIP(4)(5) CLASS OWNERSHIP(6) CLASS OWNERSHIP CLASS
- -------------------------- --------------- ------- --------------- ------- ------------ ------- ---------- -------

<S> <C> <C> <C> <C> <C> <C> <C> <C>
James Balog............... 11,750 .03 -- -- -- -- -- --
C. Fred Bergsten.......... -- -- -- -- -- -- -- --
Paul A. Bonny............. 33,960 .10 4,468 (7) -- -- -- --
Ikuo Egashira............. -- -- -- -- -- -- -- --
John M. Fowler............ -- -- -- -- -- -- -- --
M.R. Greenberg............ 51,250 .15 27,327,297 2.21 5,000 24.39 10 8.33
John J. Mackowski......... 2,750 .01 -- -- -- -- -- --
Edward E. Matthews........ 25,625 .07 908,317 .07 2,250 10.98 10 8.33
Robert V. Mucci........... 50,021 .14 9,393 (7) -- -- -- --
Robert F. Orlich.......... 118,113 .34 8,166 (7) 250 1.22 -- --
Steven S. Skalicky........ 11,239 .03 19,304 (7) -- -- -- --
Howard I. Smith........... 2,000 .01 165,944 .01 1,500 7.32 10 8.33
Thomas R. Tizzio.......... 25,625 .07 546,054 .04 1,750 8.54 10 8.33
Javier E. Vijil........... 25,269 .07 -- -- -- -- -- --
All Directors and
Executive Officers of
TRH as a Group (15
individuals)............ 357,602 1.03 28,988,943 2.34 10,750 52.45 40 33.32
</TABLE>

- ------------

(1) Unless otherwise indicated, the beneficial owners listed have sole voting
and investment power over the shares listed.

(2) Amounts of equity securities shown include shares of TRH Common Stock
subject to options which may be exercised within 60 days as follows:
Balog -- 2,000 shares, Bonny -- 33,625 shares, Greenberg -- 51,250 shares,
Mackowski -- 2,000 shares, Matthews -- 25,625 shares, Mucci -- 30,636
shares, Orlich -- 108,437 shares, Skalicky -- 10,875 shares, Smith -- 2,000
shares, Tizzio -- 25,625 shares, Vijil -- 25,000 shares, all directors and
executive officers of TRH as a group, 317,073 shares.

Amounts of equity securities shown include shares as to which the individual
shares voting and investment power as follows: Orlich -- 6,676 shares with
his wife, Skalicky -- 108 shares with his wife, all directors and executive
officers of TRH as a group -- 6,784 shares.

Amounts of equity securities also excludes the following securities owned by
members of the named individual's immediate family as to which securities
such individual has disclaimed beneficial ownership: Orlich -- 357 shares,
all directors and executive officers as a group -- 357 shares.

(3) Reflects a stock split effected as a 50 percent stock dividend on the TRH
Common Stock, paid July 18, 1997.

(4) Amounts of equity securities shown include shares of AIG Common Stock
subject to options which may be exercised within 60 days as follows:
Greenberg -- 793,125 shares, Matthews -- 298,734 shares, Orlich -- 3,164
shares, Skalicky -- 5,905 shares, Smith -- 118,266 shares, Tizzio -- 303,609
shares, all directors and executive officers of TRH as a group -- 1,522,803
shares.

(Footnotes continued on next page)

(Footnotes continued from previous page)

Amounts of equity securities shown include shares as to which the individual
shares voting and investment power as follows: Greenberg -- 22,965,085
shares with his wife and 61,632 shares with co-trustees, Orlich -- 5,002
shares with his wife, Skalicky -- 1,378 shares with his wife,
Tizzio -- 242,445 shares with his wife, all executive officers and directors
of TRH as a group -- 23,275,542 shares.

Amounts of equity securities also excludes the following securities owned by
members of the named individual's immediate family as to which securities
such individual has disclaimed beneficial ownership: Matthews -- 11,500
shares, Tizzio -- 29,929 shares, all directors and executive officers as a
group -- 41,429 shares.

Amount of shares shown for Mr. Greenberg does not include 10,633,774 shares
held as trustee for the Starr Trust, as to which Mr. Greenberg disclaims
beneficial ownership. Inclusion of these shares would increase Mr.
Greenberg's total ownership by .86 percent. Amount of shares shown for Mr.
Greenberg also excludes 3,569,087 shares owned directly by Starr
(representing 24.39 percent of the shares owned directly by Starr) as to
which Mr. Greenberg disclaims beneficial ownership.

(5) Reflects stock splits effected as a 50 percent stock dividend on the AIG
Common Stock, paid July 25, 1997 and July 31, 1998.

(6) As of January 31, 1999, Starr also had outstanding 5,000 shares of Common
Stock Class B, a non-voting stock and 3,838 shares of Preferred Stock Series
X-1. None of the nominees hold such shares. Shares of Starr's Series A
through Series Q Preferred Stock, and its 5% Subordinated Preferred Stock
were held by the nominees as follows on January 31, 1999: Preferred Stock,
Series A -- Greenberg (5,000), Matthews (1,500); Preferred Stock, Series
B -- Greenberg (5,000), Matthews (1,750); Preferred Stock, Series
C -- Greenberg (5,000), Matthews (1,750), Tizzio (125); Preferred Stock,
Series D -- Greenberg (5,000), Matthews (1,750), Tizzio (375); Preferred
Stock, Series E -- Greenberg (5,000), Matthews (2,000), Smith (125), Tizzio
(625); Preferred Stock, Series F -- Greenberg (5,000), Matthews (2,000),
Smith (250), Tizzio (1,000); Preferred Stock, Series G -- Greenberg (5,000),
Matthews (2,250), Smith (375), Tizzio (1,000); Preferred Stock, Series H --
Greenberg (5,000), Matthews (2,250), Smith (500), Tizzio (1,000); Preferred
Stock, Series I -- Greenberg (5,000), Matthews (2,250), Smith (500), Tizzio
(1,000); Preferred Stock, Series J -- Greenberg (5,000), Matthews (2,250),
Smith (625), Tizzio (1,000); Preferred Stock, Series K -- Greenberg (5,000),
Matthews (2,250), Smith (625), Tizzio (1,250); Preferred Stock, Series L --
Greenberg (5,000), Matthews (2,250), Smith (625), Tizzio (1,250); Preferred
Stock, Series M -- Greenberg (5,000), Matthews (2,250), Smith (750), Tizzio
(1,500); Preferred Stock, Series N -- Greenberg (5,000), Matthews (2,250),
Smith (1,000), Tizzio (1,500); Preferred Stock, Series O -- Greenberg
(5,000), Matthews (2,250), Smith (1,000), Tizzio (1,500); Preferred Stock
Series P -- Greenberg (5,000), Matthews (2,250), Orlich (125), Smith
(1,000), Tizzio (1,500); Preferred Stock, Series Q -- Greenberg (5,000),
Matthews (2,250), Orlich (250), Smith (1,250), Tizzio (1,750) and 5%
Subordinated Preferred Stock -- Greenberg (100). The total outstanding
shares were: Preferred Stock, Series A (8,490), Preferred Stock, Series B
(8,305), Preferred Stock, Series C (7,750), Preferred Stock, Series D
(8,500), Preferred Stock, Series E (9,750), Preferred Stock, Series F
(11,125), Preferred Stock, Series G (11,875), Preferred Stock, Series H
(12,500), Preferred Stock, Series I (12,875), Preferred Stock, Series J
(13,875), Preferred Stock, Series K (14,625), Preferred Stock, Series L
(14,625), Preferred Stock, Series M (16,125), Preferred Stock, Series N
(17,625), Preferred Stock, Series O (17,625), Preferred Stock, Series P
(18,500), Preferred Stock, Series Q (22,250) and 5% Subordinated Preferred
Stock (100).

(7) Less than .01%.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities and Exchange Act of 1934 (the 'Exchange
Act') requires TRH's directors, officers and persons who own more than ten
percent of a registered class of TRH's equity securities, to file with the
Securities and Exchange Commission ('SEC') and the New York Stock Exchange
initial reports of ownership and reports of changes in beneficial ownership of
TRH Common

Stock. Directors, officers and greater than ten percent stockholders are
required by SEC regulation to furnish TRH with copies of all Section 16(a) forms
they file. To TRH's knowledge, all Section 16(a) filing requirements applicable
to its directors, officers and ten percent stockholders have been complied with,
except for Mr. Balog who failed to timely report the sale by his wife of 450
shares of TRH Common Stock and Messrs. Skalicky and Vijil who inadvertently
failed to timely report the right to purchase 115 and 78 shares, respectively,
of TRH Common Stock pursuant to the TRH Employee Stock Purchase Plan and the
subsequent acquisition of such shares, and AIG which failed to timely file Form
4's with respect to the acquisition of 236,500 shares of TRH Common Stock
between November, 1998 and December, 1998. All of these late filings have now
been made. In making these statements, TRH has relied on written representations
of its directors, officers and ten percent stockholders, and copies of reports
that they have filed with the SEC.

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

All directors, except those who are TRH employees, receive an annual
retainer of $17,500 and a fee of $700 for each meeting of the Board or any
committee of TRH or its subsidiaries attended, except for the Chairman, who
receives an annual retainer of $75,000. In addition, certain directors may be
granted stock options in recognition of extraordinary service to the Company. On
December 1, 1998, the Stock Option and Purchase Plan Committee granted a total
of 22,000 options to purchase TRH Common Stock to Messrs. Greenberg (10,000
options), Matthews (5,000 options), Smith (2,000 options) and Tizzio (5,000
options). Additionally, on December 1, 1998, the full Board of Directors granted
2,000 options to purchase TRH Common Stock to each of Messrs. Balog and
Mackowski. These options were granted pursuant to the TRH 1995 Stock Option
Plan. The options were granted at fair market value on the date of grant
($75.438 per share) and first become exercisable at a rate of 25% per year
commencing in December, 1999.

The following table sets forth the compensation, for services in all
capacities to TRH and its subsidiaries during 1998, of each of the President and
Chief Executive Officer and the four most highly compensated executive officers
of TRH.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
ANNUAL ------------------------
COMPENSATION(1) SECURITIES SICO
------------------ UNDERLYING LTIP ALL OTHER
NAME PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS PAYOUTS(2) COMPENSATION(3)
- ------------------------- ----------------------- ---- -------- -------- ---------- ---------- ---------------

<S> <C> <C> <C> <C> <C> <C> <C>
Robert F. Orlich......... President and CEO 1998 $502,885 $320,000 25,000 $1,705,701 $10,000
1997 403,847 295,000 25,000 130,181 9,500
1996 327,885 220,000 30,000(4) 568,313 7,750

Paul A. Bonny............ Exec. Vice President 1998 $317,092 $112,000 10,000 $ 406,334 $41,222
Sr. Vice President 1997 267,112 82,000 10,000 79,179 33,389
1996 191,807 74,000 11,250(4) 162,375 18,701

Steven S. Skalicky....... Exec. V.P. and CFO 1998 $290,000 $ 88,000 10,000 $ 420,918 $10,000
Sr. Vice President 1997 251,538 68,000 6,000 122,573 9,500
and Controller 1996 203,981 63,000 7,500(4) 189,438 9,500

Javier E. Vijil.......... Exec. Vice President 1998 $281,731 $ 89,000 10,000 $ 231,900 $ 4,153
Sr. Vice President 1997 241,538 64,000 10,000 -- 3,166
1996 196,731 52,000 11,250(4) 81,188 3,167

Robert V. Mucci.......... Sr. Vice President 1998 $271,347 $ 72,000 7,500 $ 432,951 $10,000
and Actuary 1997 241,154 62,000 6,000 100,876 9,500
1996 220,770 57,000 11,250(4) 216,500 9,500
</TABLE>

(Footnotes on next page)

(Footnotes from previous page)

(1) With respect to each executive officer named in the table, the aggregate
amount of perquisites and other personal benefits, securities or property
was less than either $50,000 or 10% of the total annual salary and bonuses
reported for such executive officer.

(2) The LTIP payouts will be made by SICO pursuant to its Deferred Compensation
Profit Participation Plan (the 'SICO Plan') and will not be paid by or
charged to TRH. Amounts shown represent the value of shares of AIG Common
Stock allocated and/or paid out under the SICO Plan. Amounts shown in 1996
represent the value, based on the closing sale price of AIG Common Stock on
December 31, 1996 ($48.11), of shares of AIG Common Stock allocated with
respect to the January 1, 1995 to December 31, 1996 period but not
distributed under the SICO Plan. The SICO Plan came into being in 1975 when
the voting shareholders and Board of Directors of SICO, a private holding
company whose principal asset consists of AIG Common Stock, decided that a
portion of the capital value of SICO should be used to provide an incentive
plan for the current and succeeding managements of all American
International companies, including TRH. Participation in the SICO Plan by
any person, and the amount of such participation, is at the sole discretion
of SICO's Board of Directors, and none of the costs of the various benefits
provided under such plan is charged to or absorbed by TRH. The SICO Plan
provides that shares may be set aside by SICO for the benefit of the
participant and distributed upon retirement. The SICO Board of Directors may
permit an early pay-out of units under certain circumstances, and certain of
the individuals named in the Summary Compensation Table are eligible for
such early pay-out with respect to units awarded to them for the periods
shown. In September, 1997 and September, 1998 Messrs. Orlich, Bonny,
Skalicky and Mucci received a partial payout relating to the 1991-1992 and
1993-1994 SICO Plans. The amounts received by the participants in 1997
represented the market value of shares of AIG Common Stock distributed by
SICO at September 15, 1997, were as follows: Orlich -- $130,181;
Bonny -- $79,179; Skalicky -- $122,573; Mucci -- $100,876. The amounts
distributed by SICO to the participants in 1998, and included in the value
shown in the table, represented the market value of shares of AIG Common
Stock at September 15, 1998, as follows: Orlich -- $159,701; Bonny --
$97,134; Skalicky -- $150,368; Mucci -- $123,751. Prior to pay-out, the
participant is not entitled to vote, dispose of or receive dividends with
respect to such shares, and shares are subject to forfeiture under certain
conditions, including but not limited to the participant's voluntary
termination of employment with TRH or AIG prior to normal retirement age. In
addition, SICO's Board of Directors may elect to pay a participant cash in
lieu of shares of AIG Common Stock. In March, 1997, a determination was made
as to the number of AIG shares allocable to the accounts of the participants
in the SICO Plan with respect to units awarded in December, 1994 with
respect to the January 1, 1995 to December 31, 1996 period. The values shown
for the year 1996 represent the number of AIG shares allocated to named
executive officers as follows: Orlich -- 11,813 shares; Bonny -- 3,375
shares; Skalicky -- 3,938 shares; Vijil -- 1,688 shares; Mucci -- 4,500
shares. All 1996 share amounts and sale prices are adjusted to reflect the
stock splits effected as 50 percent stock dividends on the AIG Common Stock,
in July, 1997 and July, 1998. In March, 1999, a determination was made as to
the number of AIG shares allocable to the accounts of the participants in
the SICO Plan with respect to units awarded in December, 1996 with respect
to the January 1, 1997 to December 31, 1998 period. The values shown for the
year 1998 also include an amount representing the number of AIG shares,
based on the closing sale price of AIG Common Stock on December 31, 1998 of
$96.625, allocated as follows: Orlich -- 16,000 shares; Bonny -- 3,200
shares; Skalicky -- 2,800 shares; Vijil -- 2,400 shares; Mucci -- 3,200
shares.

(3) Amounts shown for Messrs. Orlich, Skalicky, Vijil and Mucci represent
matching contributions under TRH's 401(k) Plan. Amounts shown for Mr. Bonny
reflect contributions by TRH to The AIG Retirement Savings Plan (United
Kingdom.)

(4) Adjusted to reflect a stock split effected as a 50 percent stock dividend on
the TRH Common Stock, paid July 18, 1997.

Messrs. Greenberg, Matthews, Orlich, Smith, and Tizzio or certain of them,
are directors and officers of SICO, directors and members of the Starr
Foundation and directors and officers of Starr. These individuals also receive
compensation as officers of Starr for services rendered to Starr as well as
compensation from SICO for services rendered to SICO. These services are not
considered to detract materially from the business time of these individuals
available for TRH matters and such compensation is not included in the
compensation for services to TRH shown in the Summary Compensation Table above.

TRH maintains policies of directors and officers liability insurance for
itself, its directors and officers, its subsidiaries, and their directors and
officers. In 1998, the premiums for this coverage approximated $252,000. In
August, 1998, with the increased ownership of TRH by AIG, TRH, as a subsidiary
of AIG, became covered under AIG's D&O policy. Included in the amount above are
premiums paid to an AIG subsidiary, National Union Insurance Company of
Pittsburgh, Pa., which approximated $131,000.

The following table summarizes certain information with respect to benefits
that the proxy rules classify as granted under Long-Term Incentive Plans which
were granted during 1998 (with respect to the 1999-2000 period) to the five
individuals named in the Summary Compensation Table.

SICO LONG-TERM INCENTIVE PLANS -- AWARDS IN 1998(1)

<TABLE>
<CAPTION>
NUMBER OF
NAME UNITS PERFORMANCE PERIOD ESTIMATED FUTURE PAYOUTS
- ------------------------------------------------------ --------- ------------------- ------------------------

<S> <C> <C> <C>
Orlich................................................ 1,200 Two years 19,200 shares
Bonny................................................. 500 Two years 4,000 shares
Skalicky.............................................. 500 Two years 4,000 shares
Vijil................................................. 450 Two years 3,600 shares
Mucci................................................. 450 Two years 3,600 shares
</TABLE>

- ------------

(1) Awards represent grants of units under the SICO Plan described in Note 2 to
the Summary Compensation Table with respect to the two-year period from
January 1, 1999 through December 31, 2000. The SICO Plan contains neither
threshold amounts nor maximum payout limitations. The number of shares of
AIG Common Stock allocated to a unit upon payout is based on a percentage
selected by SICO's Board of Directors of between 20 percent and 100 percent
of the increase of SICO's retained earnings attributable to the AIG Common
Stock held by SICO over the two-year period. As a result, the number of
shares to be allocated with respect to units held for the 1999-2000 period
and the value of such shares cannot be determined at this time. The number
of shares shown under 'Estimated Future Payouts' represent the number of
shares allocable to the named individuals based upon the units awarded to
them for the 1999-2000 period, assuming the percentage selected by the SICO
Board of Directors and the increase in SICO's retained earnings for the
1999-2000 period were the same as those used to allocate the shares of AIG
Common Stock for the 1997-1998 period. As noted in the description of the
SICO Plan in Note 2 to the Summary Compensation Table, prior to pay-out, the
participant is not entitled to vote, dispose of or receive dividends with
respect to such shares, and the shares are subject to forfeiture under
certain conditions, including but not limited to the participant's voluntary
termination of employment with TRH or AIG prior to normal retirement age.

------------------------

The following tables set forth information for each of the five individuals
named in the Summary Compensation Table as to (i) grants of options to purchase
TRH Common Stock under the TRH 1995 Stock Option Plan during 1998, and (ii)
option exercises during 1998, and option values as of December 31, 1998, with
respect to options to purchase TRH Common Stock granted under the TRH 1995 Stock
Option Plan and the TRH 1990 Stock Option Plan.

OPTION GRANTS IN THE LAST FISCAL YEAR(1)

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------
% OF POTENTIAL REALIZABLE
NUMBER OF TOTAL VALUE(4) AT ASSUMED
SECURITIES OPTIONS ANNUAL RATES OF STOCK
UNDERLYING GRANTED TO PRICE FOR OPTION TERM
OPTIONS EMPLOYEES EXERCISE ------------------------
NAME GRANTED IN 1998 PRICE EXPIRATION DATE 5%(2) 10%(3)
- -------------------------- ---------- ---------- ------- ------------------ ---------- ----------

<S> <C> <C> <C> <C> <C> <C>
Orlich.................... 25,000 16.40 $75.438 December 1, 2008 $1,188,050 $2,998,550
Bonny..................... 10,000 6.56 75.438 December 1, 2008 475,220 1,199,420
Skalicky.................. 10,000 6.56 75.438 December 1, 2008 475,220 1,199,420
Vijil..................... 10,000 6.56 75.438 December 1, 2008 475,220 1,199,420
Mucci..................... 7,500 4.92 75.438 December 1, 2008 356,415 899,565
</TABLE>

- ------------

(1) The options reflected in the table were granted in December 1998 and will
become exercisable at a rate of 25% per year, commencing in December 1999.

(2) The appreciated price would be $122.96 per share.

(3) The appreciated price would be $195.38 per share.

(4) The assumed 5% and 10% annual rates of stock price appreciation used in the
table are prescribed by the proxy rules and are not intended to forecast
possible future appreciation in the price of TRH Common Stock. Options would
have no realized value if there were no appreciation or if there were a
depreciation from the price at which the options were granted.

AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR
AND YEAR-END OPTION VALUES(1)

TRANSATLANTIC HOLDINGS, INC. AND AMERICAN INTERNATIONAL GROUP, INC.

<TABLE>
<CAPTION>
TOTAL NUMBER OF TOTAL VALUE OF UNEXERCISED,
UNEXERCISED OPTIONS HELD IN-THE-MONEY OPTIONS HELD
NUMBER OF AT FISCAL YEAR END(2)(3) AT FISCAL YEAR END(5)(6)
SHARES ACQUIRED VALUE ---------------------------- ----------------------------
NAME ON EXERCISE(1)(2)(3) REALIZED(4) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------- -------------------- ----------- ----------- ------------- ----------- -------------

<S> <C> <C> <C> <C> <C> <C>
Orlich............... 6,553 $ 444,067 111,601 65,313 $ 4,146,991 $ 629,714
Bonny................ 1,897 141,214 33,625 25,000 1,191,822 220,622
Skalicky............. 0 0 16,780 20,125 680,848 164,129
Vijil................ 0 0 25,000 25,000 770,939 220,622
Mucci................ 18,676 883,657 30,636 20,438 1,009,150 236,978
</TABLE>

The following tables break out the options exercises and year-end option
values shown in the table above for each of TRH Common Stock and AIG Common
Stock separately.

TRANSATLANTIC HOLDINGS, INC.

<TABLE>
<CAPTION>
TOTAL NUMBER OF TOTAL VALUE OF UNEXERCISED,
UNEXERCISED OPTIONS HELD IN-THE-MONEY OPTIONS HELD
NUMBER OF AT FISCAL YEAR END(3) AT FISCAL YEAR END(5)
SHARES ACQUIRED VALUE ---------------------------- ----------------------------
NAME ON EXERCISE(1)(3) REALIZED(4) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------- -------------------- ----------- ----------- ------------- ----------- -------------

<S> <C> <C> <C> <C> <C> <C>
Orlich............... 4,656 $ 298,664 108,437 65,313 $ 3,889,268 $ 629,714
Bonny................ 0 0 33,625 25,000 1,191,822 220,622
Skalicky............. 0 0 10,875 20,125 262,681 164,129
Vijil................ 0 0 25,000 25,000 770,939 220,622
Mucci................ 18,676 883,657 30,636 20,438 1,009,150 236,978
</TABLE>

AMERICAN INTERNATIONAL GROUP, INC.

<TABLE>
<CAPTION>
TOTAL NUMBER OF TOTAL VALUE OF UNEXERCISED,
UNEXERCISED OPTIONS HELD IN-THE-MONEY OPTIONS HELD
NUMBER OF AT FISCAL YEAR END(2) AT FISCAL YEAR END(6)
SHARES ACQUIRED VALUE ---------------------------- ----------------------------
NAME ON EXERCISE(1)(2) REALIZED(4) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------- ----------------- ----------- ----------- ------------- ----------- -------------

<S> <C> <C> <C> <C> <C> <C>
Orlich...................... 1,897 $ 145,403 3,164 0 $ 257,723 $ 0
Bonny....................... 1,897 141,214 0 0 0 0
Skalicky.................... 0 0 5,905 0 418,167 0
Vijil....................... 0 0 0 0 0 0
Mucci....................... 0 0 0 0 0 0
</TABLE>

- ------------

(1) TRH options are granted with respect to TRH Common Stock and AIG options are
granted with respect to AIG Common Stock.

(2) Adjusted for 50 percent AIG Common Stock splits in July 1993, July 1995,
July 1997 and July 1998.

(3) Reflects a stock split effected as a 50 percent stock dividend on the TRH
Common Stock, paid July 18, 1997.

(4) Aggregate market value on date of exercise less aggregate option price.

(5) Total value of vested and unvested options based on a fair market value of
TRH Common Stock of $75.5625 per share, as of December 31, 1998.

(6) Total value of vested and unvested options based on a fair market value of
AIG Common Stock of $96.625 per share, as of December 31, 1998.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee of the Board of Directors consists of Messrs.
Balog, Greenberg, Mackowski and Tizzio. No member of the Compensation Committee
is a current officer or employee of the Company (or any of its subsidiaries) or
was such an officer or employee at any time subsequent to June 1990, when the
Company became a reporting company under the Exchange Act. Mr. Greenberg is a
director and Chairman and Chief Executive Officer of AIG and Mr. Tizzio is a
director and Senior Vice Chairman-General Insurance of AIG. Mr. Greenberg and
Mr. Tizzio are stockholders, directors and/or executive officers of SICO and
Starr. AIG owns 55.12% of the outstanding TRH Common Stock and engages in
reinsurance and retrocession transactions with TRH, and provides certain
administrative and advisory services to TRH, in the ordinary course of TRH's
business. Approximately $167 million (11%) of gross premiums written by TRH in
1998 was attributable to reinsurance purchased by the AIG Group (AIG, together
with its subsidiaries, is referred to herein as the 'AIG Group'), for the
production of which TRH paid ceding commissions to the AIG Group of
approximately $31 million in such year. TRH retroceded approximately $93.4
million of gross premiums written to the AIG Group in 1998 and received ceding
commissions of approximately $12.4 million for the production of such business.
Pursuant to service and expense agreements, the AIG Group furnishes to TRH
certain office space, data processing, payroll processing and certain other
administrative services. TRH paid approximately $3.7 million to the AIG Group
for these services in 1998. Pursuant to an investment management contract, AIG
Global Investment Corp., an AIG subsidiary, acts as investment manager for TRH.
In addition, during 1998, AIG Capital Management Corp., an AIG subsidiary,
provided investment advisory and management services for substantially all TRH's
assets held as cash equivalents. TRH paid an aggregate of approximately $6.1
million to AIG Global Investment Corp. and AIG Capital Management Corp. for such
investment management services in 1998. TRH receives services for the
maintenance of certain computer equipment from A.I. Credit Corp., an AIG
subsidiary. TRH paid approximately $3,100 for such services in 1998. TRH
maintains policies of directors and officers liability insurance for itself, its
directors and officers, its subsidiaries, and their directors and officers. In
1998, the premiums for this coverage approximated $252,000. In August, 1998,
with the increased ownership of TRH by AIG, TRH, as a subsidiary of AIG, became
covered under AIG's D&O policy. Included in the amount above are premiums paid
to an AIG subsidiary, National Union Insurance Company of Pittsburgh, Pa., which
approximated $131,000. SICO and Starr owned 13.67%

and 2.04%, respectively, of AIG Common Stock at January 31, 1999. Certain of
Starr's subsidiaries operate as insurance agencies or brokers and in such
capacity produce business for TRH. Commissions paid by TRH to Starr for these
services approximated $856,000 in 1998. From these payments, which constituted
less than 0.8% of Starr's gross revenues in 1998, Starr is required to pay its
operating expenses and commissions due originating brokers. The amounts
represented less than 0.06% of TRH's gross revenues in 1998. The members of the
Stock Option and Purchase Plan Committee are Messrs. Balog and Mackowski, each
of whom is a 'non-employee director' within the meaning of Rule 16b-3 under the
Exchange Act.

COMMITTEE REPORTS ON EXECUTIVE COMPENSATION

REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION

The Compensation Committee ('Committee') met on December 1, 1998. The
Committee is composed solely of non-employee directors. The Committee is
responsible for developing and making recommendations to the Board of Directors
with respect to executive officer compensation policies and determines the cash
compensation to be paid to the President and Chief Executive Officer and each of
the other executive officers of the Company. The objectives of the Committee in
determining the amount and type of cash compensation for each executive officer
are to (i) provide a level of base compensation which would allow the Company to
attract, retain and reward superior talent, and (ii) align the executive
officers' interest with the success of the Company through the payment of
bonuses based on the Company's performance. The Committee reviews the actions of
the Stock Option and Purchase Plan Committee and addresses the mix of
compensation forms (salary, bonus, stock options) to foster long-term management
motivation, development and stability.

The Company's compensation policies continue to be subjective, and no
specific formulas are applied in making compensation decisions. Before making
any compensation recommendations, the Committee reviewed and compared the
compensation of each of the senior executive officers of the Company to data
from a special cut of the 1998 Sibson Reinsurance Survey ('Sibson'). The Sibson
special cut is comprised of companies in the New York area against which the
Company competes for personnel. The Committee also reviewed the 1997
compensation of the highest paid executive officers of selected competitors from
publicly available information, as well as financial data such as return on
equity, expense ratio, combined ratio, change in reserves, and the value today
of $100 invested in June 1990. The Committee believes that the Company's
continued strong performance in 1998 was largely attributable to the leadership
of senior management. It was agreed that it would be in the best interest of the
Company and its shareholders to compensate these individuals in a manner
commensurate with their contributions to the Company's success. Accordingly,
based solely on a subjective review, Robert F. Orlich, the Company's President
and Chief Executive Officer, was given an increase in base salary to $575,000
from $500,000 in 1998. Mr. Orlich was also given a year-end 1998 bonus.
Management's recommendations with respect to the other executives of the Company
were also reviewed, considered and approved, based upon a subjective review of
their respective responsibilities and contributions to the Company.

The Committee noted the fact that certain of the Company's executive
officers participate in the SICO Plan. The Company does not have any ownership
interest in, or right to control SICO. Accordingly, the SICO Board makes
determinations about participation in the SICO Plan independently of the Company
and of the Committee.

The Compensation Committee has considered the tax deductibility of
compensation to its executive officers in light of Section 162(m) of the
Internal Revenue Code of 1986. No executive officer's cash compensation that was
deductible by the Company in 1998 exceeded $1 million. No executive officer's
cash compensation which may be deductible by the Company in 1999 is expected to
exceed $1 million. The Company has structured the TRH 1990 and 1995 Stock Option
Plans with the intention that the compensation resulting from such plans would
be deductible in light of Section 162(m).

COMPENSATION COMMITTEE
JAMES BALOG, M.R. GREENBERG, JOHN J. MACKOWSKI,
THOMAS R. TIZZIO
DECEMBER 1, 1998

REPORT OF THE STOCK OPTION AND PURCHASE PLAN COMMITTEE ON EXECUTIVE COMPENSATION

The Stock Option and Purchase Plan Committee ('Committee') met on December
1, 1998. The Committee is composed solely of non-employee directors. The
Committee is responsible for administering the TRH employee benefit plans. The
Committee's philosophy is that stock options are a particularly important part
of the compensation that inherently correlates long-term individual motivation
and reward to Company performance. The Committee's approach is subjective. The
Committee does not use specific criteria or formula to calculate the aggregate
number of options granted or the grants to each individual. As part of its
general discussion, the Committee considered the past and potential contribution
to the Company of its executive officers, the amount of options awarded in prior
years, the option grants awarded by other reinsurers as disclosed in publicly
available materials as described above, the successful financial performance of
the Company, the Company's long-term compensation goals and the cash
compensation paid to the Company's executive officers. The Committee reviewed,
considered and approved management's recommendation to grant 174,450 stock
options under the TRH 1995 Stock Option Plan at an exercise price of $75.438 per
share, the market price on the date of grant, which includes 25,000 options
granted to the Company's President and Chief Executive Officer, Robert F.
Orlich; 10,000 options granted to the Company's Executive Vice
President/President International Operations, Paul A. Bonny; 10,000 options
granted to the Company's Executive Vice President and Chief Financial Officer,
Steven S. Skalicky; 10,000 options granted to the Company's Executive Vice
President/President Latin American Division, Javier E. Vijil and 7,500 options
granted to the Company's Senior Vice President and Actuary, Robert V. Mucci.
Management's recommendations are based on a subjective assessment of the
individuals, the nature of their responsibilities and their contribution to the
Company. Included in the option grant are a total of 22,000 stock options to the
following Directors: M.R. Greenberg -- 10,000 options, Thomas R. Tizzio -- 5,000
options, Edward E. Matthews -- 5,000 options and Howard I. Smith -- 2,000
options. The option grants to directors were made after reviewing and approving
management's recommendations, which were based on a subjective assessment of
each individual's past and prospective contribution to the Company.

STOCK OPTION AND PURCHASE PLAN COMMITTEE
JAMES BALOG, JOHN J. MACKOWSKI
DECEMBER 1, 1998

PERFORMANCE GRAPH

The following Performance Graph compares the cumulative total stockholder
return on TRH Common Stock (assuming reinvestment of dividends) from December
31, 1993 through December 31, 1998, with the cumulative total return of the
Standard & Poor's Midcap 400 Index and the cumulative total return of the
Insurance (PPTY-CAS)-500 Index which was formerly called Standard & Poor's
Property-Casualty Insurance Index.

CUMULATIVE TOTAL RETURN TO STOCKHOLDERS
VALUE OF $100 INVESTED IN DECEMBER, 1993

[PERFORMANCE GRAPH]

<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Dec-93 Dec-94 Dec-95 Dec-96 Dec-97 Dec-98
Transatlantic Holdings, Inc. $100 $107.44 $141.93 $156.77 $210.06 $223.20
Insurance (PPTY-CAS)-500 100 104.90 142.02 172.58 251.04 233.59
S&P Midcap 400 Index 100 96.42 126.25 150.49 199.03 237.05
</TABLE>

PENSION BENEFITS

TRH employees are eligible to participate in or have participated in
various AIG benefit plans.

Through March 31, 1985, when such plan was terminated, employees of AIG and
its subsidiaries, including TRH and its subsidiaries, who are citizens of the
United States or non-citizens working in the United States were covered under
the American International Group, Inc. Pension Plan, a contributory, qualified,
defined benefit plan ('Original Pension Plan'). The annual pension for a
participant was equal to 1.75% of Average Final Compensation multiplied by years
of credited service as a participant (up to 40 years) less 1.4286% of his Social
Security Benefit multiplied by years of credited service (limited to 35 years).
Average Final Compensation was defined as the average annual compensation of a
participant during the 3 consecutive years in the last 10 years of his credited
service affording the highest such average, or during all of the years of his
credited service if less than 3 years. Benefits were paid monthly during the
life of the participant, or, if applicable, during the joint lives of the
participant and his contingent annuitant. The annual retirement allowance for
participants with at least 10 years of credited service was not less than 50% of
1.75% of Average Final Compensation, multiplied by years of credited service, or
$1,200, whichever was greater. On April 1, 1985, a new non-contributory,
qualified, defined benefit plan ('Current Retirement Plan') was established,
with provisions substantially the same as the Original Pension Plan, except for
the non contributory feature and except that in the annual pension formula
described above, 1.25% of Average Final Compensation is multiplied by years of
credited service as a participant (up to 44 years) less 1.25% of his Social
Security Benefit multiplied by years of credited service (limited to 35 years).
The 1.25% of Average Final Compensation is also used in the determination of the
minimum retirement allowance. Effective January 1, 1989, the Current Retirement
Plan formula changed in accordance with government mandated regulations from a
Social Security offset to a Social Security integration method of computation
where the offset is the average of the final three years' compensation but no
greater than 150% of the employee's 'covered compensation' (the average of the
Social Security Wage bases during the 35 years preceding the Social Security
retirement age) times credited service up to 35 years, multiplied by an
applicable Social Security retirement age factor. For employees terminating from
active service after January 1, 1993, the benefit formula for credited service
on and after April 1, 1985 changed from 1.25% to 1.35% of Average Final
Compensation. Effective January 1, 1996, the Current Retirement Plan formula now
equals 1.25% times Average Final Compensation up to 150% of the employee's
'covered compensation' plus 1.75% times Average Final Compensation in excess of
150% of 'covered compensation' times years of credited service prior to April 1,
1985 (up to 35 years) plus 1.75% times Average Final Compensation times years of
credited service in excess of 35 years but limited to 40 years; plus .925% times
Average Final Compensation up to 150% of the employee's 'covered compensation'
plus 1.425% times Average Final Compensation in excess of 150% of 'covered
compensation' times years of credited service after April 1, 1985 (up to 35
years) plus 1.425% times Average Final Compensation times years of credited
service in excess of 35 years but limited to 44 years.

As a result of the termination of the Original Pension Plan, all benefits
accruing to the termination date became vested regardless of an employee's years
of service and annuities were purchased for benefits payable under that plan.
AIG was entitled to receive the surplus remaining in the Original Pension Plan,
other than the portion of the surplus attributable to employee contributions.

The AIG savings plan ('401(k) Plan') for employees, including employees of
TRH and its subsidiaries, provides for salary reduction contributions by
employees and matching contributions by TRH. The retirement benefits for most
employees who participate in both the Current Retirement Plan and the 401(k)
Plan will be substantially greater than the benefits which would have been
received under the Original Pension Plan.

Annual amounts of normal retirement pension commencing at normal retirement
age of 65 based upon Average Final Compensation and credited service under the
Current Retirement Plan and a supplemental plan ('the Supplemental Plan') are
illustrated in the following table:

ESTIMATED ANNUAL PENSION AT AGE 65

<TABLE>
<CAPTION>
3 YEAR TOTAL YEARS OF CREDITED SERVICE AS A PLAN PARTICIPANT
AVERAGE FINAL --------------------------------------------------------------------------
COMPENSATION 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS 40 YEARS
- ------------------------------------ -------- -------- -------- -------- -------- -------- --------

With respect to the individuals named in the Summary Compensation Table on
page 7, other than Mr. Bonny, their respective years of credited service (under
both plans) through December 31, 1998 are as follows: Orlich 12.17 years,
Skalicky 12.42 years, Vijil 4.92 years, Mucci 15.67 years. Pensionable salary
includes only the regular salary paid by TRH and its subsidiaries and does not
include amounts attributable to bonuses or overtime pay. For such named
individuals, pensionable salary during 1998 was as follows: Orlich -- $502,885;
Skalicky -- $290,000; Vijil -- $281,731; Mucci -- $271,347.

Effective January 1, 1991 a Supplemental Plan was provided to pay a benefit
to Current Retirement Plan participants in an amount equal to the reduction in
the benefit payable as a result of the Federal limitation. Messrs. Orlich,
Skalicky, Vijil and Mucci were participants in the Supplemental Plan at
December 31, 1998.

During 1993, 1994 and up to June 1, 1995, Mr. Bonny participated in The AIG
Pension Plan (United Kingdom), a defined benefit plan, in which the TRH
contributions were calculated by the actuaries for that plan. Mr. Bonny
currently participates in The AIG Retirement Savings Plan (United Kingdom), a
defined contribution plan, to which he contributed 2 percent of his pensionable
salary in 1998. Contributions to this plan by TRH vary based on employee age,
pensionable service and the employee's voluntary contributions. During 1998, TRH
contributed approximately 13 percent of Mr. Bonny's pensionable salary of
$317,092 to the plan based on his age, voluntary contribution and his 16.9 years
of pensionable service.

RELATIONSHIP WITH AIG

AIG is a holding company which, through its subsidiaries, is primarily
engaged in a broad range of insurance and insurance-related activities in the
United States and abroad. U.S.-based property and casualty insurance
subsidiaries of AIG currently have a group rating of 'A++ (Superior)', the
highest rating classification, by A.M. Best Company. The AIG Group is one of the
largest purchasers of reinsurance in the insurance industry based on premiums
ceded.

AIG owns 55.12% of the outstanding TRH Common Stock. Four of TRH's 10
current directors, including the Chairman, are executive officers of AIG and
hold the following positions with AIG: Mr. Greenberg is a Director and the
Chairman and Chief Executive Officer; Mr. Matthews is a Director and Vice
Chairman -- Investments and Financial Services; Mr. Smith is a Director,
Executive Vice President, Chief Financial Officer and Comptroller and Mr. Tizzio
is a Director and Senior Vice Chairman -- General Insurance.

AIG GROUP REINSURANCE

TRH, through its wholly-owned subsidiaries TRC, Putnam and Trans Re Zurich
either accepts or rejects the AIG Group reinsurance offered based upon TRH's
assessment of risk selection, pricing, terms and conditions. Historically, and
with few exceptions, TRH has generally not set terms and conditions as lead
underwriter with respect to the AIG Group treaty reinsurance; however, TRH may
in the future set terms and conditions with respect to such business as a lead
underwriter and intends that

the terms and conditions of any such reinsurance will be negotiated on an arms'
length basis. The Underwriting Committee of the Board of Directors of TRH, which
includes directors of TRH who are not employees of the AIG Group, monitor TRH's
underwriting policies. (See 'Compensation Committee Interlocks and Insider
Participation').

Approximately $167 million (11%), $181 million (12%) and $232 million (18%)
of gross premiums written by TRH in the years 1998, 1997 and 1996, respectively,
were attributable to reinsurance purchased by the AIG Group, for the production
of which TRH paid ceding commissions to the AIG Group of approximately $31
million, $32 million and $33 million, respectively, in such years. TRH has no
goal with respect to the portion of AIG Group versus non-AIG Group business it
accepts. TRH's objective in determining its business mix is to evaluate each
underwriting opportunity individually with a view to maximizing overall
underwriting results.

TRH retroceded approximately $93.4 million of gross premiums written to the
AIG Group in 1998 and received ceding commissions of approximately $12.4 million
for the production of such business.

CERTAIN TRANSACTIONS WITH THE AIG GROUP

Pursuant to service and expense agreements, the AIG Group furnishes to TRH
certain office space, data processing, payroll processing and certain other
administrative services. TRH may terminate the agreements by giving six months'
written notice to AIG. TRH paid approximately $3.7 million to the AIG Group for
these services in 1998. (See 'Compensation Committee Interlocks and Insider
Participation').

Pursuant to an investment management contract, AIG Global Investment Corp.,
an AIG subsidiary, acts as investment manager for TRH. Under the terms of this
agreement, AIG Global Investment Corp. has discretion to manage all the
investment activities of TRH, except with respect to its cash equivalents,
subject to the directions of TRH's Board of Directors and within the limits
imposed by the New York Insurance Law. The agreement may be terminated by either
party at any time. AIG Global Investment Corp. also provides investment
management services for other clients. In addition, during 1998, AIG Capital
Management Corp., an AIG subsidiary, provided investment advisory and management
services for substantially all TRH's cash equivalents. TRH paid an aggregate of
approximately $6.1 million to AIG Global Investment Corp. and AIG Capital
Management Corp. for such investment management services in 1998.

TRH receives services for the maintenance of certain computer equipment
from A.I. Credit Corp., an AIG subsidiary. TRH paid approximately $3,100 for
such services in 1998.

These services have been obtained at a cost which, in the opinion of TRH,
has not exceeded the cost of obtaining such services from unaffiliated sources.
The cost of certain of these services may increase or decrease in the future,
subject to negotiation, but in any event are expected not to exceed the cost of
obtaining such services from unaffiliated sources.

RELATIONSHIP WITH SICO AND STARR

SICO and Starr owned 13.67% and 2.04%, respectively of AIG's outstanding
common stock at January 31, 1999. Messrs. Greenberg, Matthews, Orlich, Smith and
Tizzio, directors of TRH, are also stockholders, executive officers or directors
of SICO or Starr. (See 'Ownership of Certain Securities').

Certain of Starr's subsidiaries operate as insurance agencies or brokers
and in such capacity produce business for TRH. Commissions paid by TRH to Starr
for these services approximated $856,000 in 1998. From these payments, which
constituted less than 0.8% of Starr's gross revenues in 1998, Starr is required
to pay its operating expenses and commissions due originating brokers. The

amounts are paid on terms available to unaffiliated parties and represent less
than 0.6% of TRH's gross revenues in 1998.

II. APPROVAL OF A PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION,
AS AMENDED, TO INCREASE THE AUTHORIZED NUMBER OF SHARES
OF COMMON STOCK

Your Board of Directors recommends that the shareholders approve a proposal
to amend the Certificate of Incorporation, as amended, of TRH (the
'Certificate') to increase the authorized shares of TRH Common Stock from
50,000,000 shares to 100,000,000 shares.

At January 31, 1999, there were 34,683,862 shares of TRH Common Stock
outstanding, and an additional 800,000 shares of TRH Common Stock were held in
TRH's treasury. If the amendment is adopted, approximately 64,500,000 shares of
TRH Common Stock would be authorized and unissued. At December 31, 1998, there
were 1,725,517 shares of TRH Common Stock reserved for issuance pursuant to
exercise of stock options under the various TRH option plans and exercise of
purchase privileges under the TRH Employee Stock Purchase Plan. There are no
pre-emptive rights relating to the TRH Common Stock. Except to the extent that
TRH may issue the shares of TRH Common Stock reserved therefor pursuant to its
stock purchase and stock option plans, TRH has not entered into any agreements
or understandings, and has no present plans, for the issuance of additional
shares of TRH Common Stock, but wishes to have such shares available for future
issuances as the need may arise. No further stockholder approval would be
required prior to the issuance of the additional shares authorized by this
amendment, except as may otherwise be required by law or the New York Stock
Exchange in connection with a specific transaction.

The Board's purpose in proposing the increase in the number of authorized
shares of TRH Common Stock is to have shares available for future issuances from
time to time as and when the Board determines that such issuances may be
desirable. The SEC requires TRH to discuss how such shares could be used to make
it more difficult to effect a change in control of TRH. For example, the
additional shares of TRH Common Stock could be used to dilute the stock
ownership of a person seeking to obtain control of TRH or could be privately
placed with purchasers who would support the Board in opposing a hostile
takeover attempt. This proposal to amend the Certificate is not in response to
any effort of which TRH is aware to accumulate TRH Common Stock or obtain
control of TRH, nor is it part of a plan by management to recommend a series of
similar amendments to the Board of Directors and stockholders. The Board does
not presently contemplate recommending the adoption of any other amendments to
the Certificate which could be construed to affect the ability of third parties
to acquire or change control of TRH.

In addition to TRH Common Stock, under the current Certificate, TRH is
authorized to issue 5,000,000 shares of Preferred Stock, par value $1.00 per
share. As of the date of this Proxy Statement, there were no shares of such
Preferred Stock outstanding.

Approval of this amendment of the Certificate requires approval by a
majority of the outstanding shares of TRH Common Stock entitled to vote thereon.
As a result, any shares not voted (whether by abstention, broker non-vote or
otherwise) will have the same effect as a vote against the proposal. AIG has
informed TRH that it intends to vote its shares of TRH Common Stock in favor of
the amendment to the Certificate.

Your Board of Directors recommends a vote FOR the proposal to approve this
amendment to the Certificate.

III. SELECTION OF INDEPENDENT ACCOUNTANTS

The Audit Committee and the Board of Directors have recommended the
employment of PricewaterhouseCoopers LLP as independent accountants of TRH for
1999. The firm, and its predecessors, has served as TRC's independent
accountants since 1977 and TRH's since 1986. The firm has no direct or indirect
financial interest in TRH or any of its parents or subsidiaries. Representatives
of the firm are expected to be present at the Annual Meeting with an opportunity
to make a statement if they desire to do so and to be available to respond to
appropriate questions.

Your Board of Directors recommends a vote FOR the proposal to employ
PricewaterhouseCoopers LLP.

IV. STOCKHOLDER PROPOSALS FOR 2000 ANNUAL MEETING

All suggestions from stockholders are given careful attention. Proposals
intended to be presented at the 2000 annual meeting, and included in the Proxy
Statement, should be sent to the TRH Secretary at 80 Pine Street, New York, New
York 10005 and must be received by December 8, 1999. In addition, under TRH's
By-laws, stockholders must comply with specified procedures to nominate
directors or introduce an item of business at an annual meeting. Nominations or
an item of business to be introduced at an annual meeting must be submitted in
writing and received by TRH generally not less than 90 days nor more than 120
days in advance of an annual meeting. To be in proper written form, a
stockholder's notice must contain the specific information required by TRH's
By-laws. A copy of TRH's By-laws which describes the advance notice procedures
can be obtained from the TRH Secretary.

V. OTHER MATTERS

While management knows of no other issues, if any other matters properly
come before the meeting, it is the intention of the persons named in the
accompanying proxy form to vote the proxy in accordance with their judgment on
such matters.

INCORPORATION BY REFERENCE

To the extent that this Proxy Statement has been or will be specifically
incorporated by reference into any other filing by TRH under the Securities Act
of 1933, as amended, or the Securities Exchange Act of 1934, as amended, the
sections of this Proxy Statement entitled 'Committee Reports on Executive
Compensation' and 'Performance Graph' shall not be deemed to be so incorporated,
unless specifically otherwise provided in such filing.

PROXY SOLICITATION

TRH will bear the cost of this solicitation of proxies. Proxies may be
solicited by mail, personal interview, telephone and telegraph by directors,
their associates and approximately five officers and regular employees of TRH
and its subsidiaries without receiving additional compensation. In addition to
the foregoing, TRH has retained W.F. Doring & Co., Inc. to assist in the
solicitation of proxies for a fee of approximately $3,000 plus reasonable
out-of-pocket expenses and disbursements of that firm. TRH will also reimburse
brokers and others holding stock in their names, or in the names of nominees,
for forwarding proxy materials to their principals.

APPENDIX I

PROXY TRANSATLANTIC HOLDINGS, INC. PROXY
Proxy Solicited on behalf of the Board of Directors
Annual Meeting of Stockholders -- May 20, 1999

Maurice R. Greenberg and Robert F. Orlich, and each of them with full
power of substitution, are hereby authorized to represent and vote all shares
of common stock of Transatlantic Holdings, Inc., held of record on March 26,
1999 by the undersigned at the Annual Meeting of Stockholders to be held on
May 20, 1999 and at any adjournment thereof.

The undersigned hereby revokes any proxy or proxies heretofore given to
vote such stock, and hereby ratifies and confirms all that said attorneys and
proxies, or their substitutes, may do by virtue hereof. If only one attorney
and proxy shall be present and acting, then that one shall have and may
exercise all of the powers of said attorneys and proxies.

The undersigned hereby acknowledges receipt of the notice of said Annual
Meeting of Stockholders, the Proxy Statement relating thereto and the Annual
Report for 1998.

The shares represented by this proxy will be voted in accordance with the
specifications made herein. If no specifications are made, such shares will
be voted FOR the election of directors and FOR the proposals described in items
2 and 3, and in their discretion to vote upon any other matters that may
properly come before the meeting.

Management urges you to sign and return this Proxy immediately to ensure its
vote at the Annual Meeting to be held on May 20, 1999.

No postage is required if returned in the enclosed envelope
and mailed in the United States.

(Continued and to be signed on other side.)

TRANSATLANTIC HOLDINGS, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. /X/

The Board of Directors Recommends a Vote FOR Proposals 1, 2 and 3.

<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
FOR WITHHOLD FOR ALL
ALL ALL (EXCEPT NOMINEE(S) WRITTEN BELOW)
1. Election of Directors --
Nominees: James Balog, / / / / / / 2. Approval of Amendment of Certificate
C. Fred Bergsten, Ikuo of Incorporation, as amended, to For Against Abstain
Egashira, Maurice R. Greenberg, increase authorized shares of Common Stock: / / / / / /
John J. Mackowski, Edward E. ------------------------------------------------------------------------
Matthews, Robert F. Orlich, 3. Proposal to select PricewaterhouseCoopers LLP For Against Abstain
Howard I. Smith and Thomas as independent accountants. / / / / / /
R. Tizzio

Dated: 1999
---------------------------------------
Signature(s) ---------------------------------------------------------

----------------------------------------------------------------------
Signature of stockholder should correspond exactly with the name
stenciled hereon. Joint owners should both sign individually. When
signing as attorney, executor, administrator, trustee or guardian,
please give your full title as such. If a corporation, please sign
full corporate name by a duly authorized officer. If a partnership,
please sign partnership name by an authorized person.

</TABLE>

- --------------------------------------------------------------------------------
^ FOLD AND DETACH HERE ^

YOUR VOTE IS IMPORTANT.

PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE

<PAGE>