AIG 2024 Annual Report
i
American International Group, Inc.
2024 Annual Report
Forward
We Go
AIG 2024 Annual Report
2024 was a year of tremendous accomplishment for
AIG. Against the backdrop of extreme natural weather
events, geopolitical tensions, economic volatility, and
rapid advancements in technology, AIG colleagues
demonstrated an unwavering commitment to providing
exceptional value to our clients and partners.
We generated tangible value for our shareholders and
invested in the future by maintaining underwriting
discipline, strategically deploying capital, and providing
creative risk solutions and superior claims service. At the
same time, we completed a multi-year transformation,
produced outstanding financial results, enhanced our
culture of underwriting and operational excellence,
significantly strengthened our balance sheet, reduced
our expense structure, and became simpler and leaner.
Today, we are a more focused, global general insurance
business with an exciting future ahead.
Our most significant accomplishment in 2024 was the
strategic deconsolidation of Corebridge Financial –
the result of four years of planning, hard work and
perseverance. We positioned Corebridge for success by
ensuring it had the capabilities to effectively operate as a
separate company and establishing a strong investment
portfolio operating model, enhanced by a strategic
relationship with Blackstone Group and a long-term
partnership with BlackRock. Since we announced the
separation of our life and retirement business, we
secured Blackstone as an anchor investor, executed the
largest US IPO of 2022, conducted five secondary market
transactions and completed the sale of a 21.6% stake in
Corebridge to Nippon Life Insurance Company, reducing
our holdings in Corebridge to 22.7% as of year-end.
The deconsolidation of Corebridge enabled us to
accelerate our progress on AIG Next, our initiative to
weave the company together. We achieved $450 million
in exit run-rate savings in 2024 and are on track to
reach a parent company expense level of 1% to 1.5%
of net premiums earned by the end of 2025. We further
connected our businesses, operations and functions
and strengthened our operational capabilities, notably
Dear AIG
Shareholder:
in underwriting and claims. We also heavily invested in
our data and digital strategies. All of these efforts have
positioned AIG for future success in a rapidly evolving
environment and sharpened our strategic direction,
culminating in the realignment of our general insurance
business into three distinct operating segments – North
America Commercial, International Commercial and
Global Personal.
Peter Zaffino
Chairman & Chief Executive Officer
American International Group, Inc. (AIG)
We have come a long way and achieved an extraordinary
amount. In 2018, we were challenged with massive
underwriting losses, an outsized debt-to-capital
ratio, limited reinsurance and significant large limit
deployment. These factors led to substantial net
exposures and the highest expense base among our
peers. We took bold action by imposing rigorous
Our Remarkable
Turnaround
Unprecedented Improvement in Underwriting Profitability1,2
($M)
We pride ourselves on executing with the highest quality, no
matter the task. I often tell my leadership team that the world
is only going to become harder to navigate, but we keep
getting better at 'hard.' Our relentless focus on excellence
positions us for a very bright future.”
underwriting discipline, divesting non-core businesses,
reducing debt, and launching strategic transformation
initiatives to focus on core business fundamentals and
modernize our operations and technology infrastructure.
The benefit of these actions has been evident in
our performance. Over the past three years, AIG has
averaged over $2 billion annually in underwriting profit
– a dramatic difference compared to the $33 billion in
underwriting losses incurred from 2008 to 20181,2. We
remain relentlessly focused on maintaining
this momentum.
Our ability to consistently deliver strong financial results
while reshaping our company is a testament to our
colleagues and the relationships they have built with
our clients, distribution partners, reinsurance partners
and regulators. We have tackled complicated challenges
over the past year and pride ourselves on executing with
the highest quality, no matter the task. I often tell my
leadership team that the world is only going to become
harder to navigate, but we keep getting better at “hard.”
Our relentless focus on excellence positions us for a very
bright future.
(683)
(2,598)
(5,448)
(3,130)
(2,987)
(373)
(730)
(4,126)
(5,605)
(4,481)
(2,911)
95
(919)
1,048
1,806
1,938
1,917
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2008 – 2018
$33B Underwriting Loss
“
Very Strong and Consistent
Underwriting Profitability
AIG 2024 Annual Report
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In an environment that has never been more dynamic
or complex, AIG is at the forefront of originating risk
solutions. The expertise and support we provide enables
businesses, institutions and individuals to overcome
uncertainty and withstand challenges. ”
Peter Zaffino (left); Claude Wade, EVP, Chief Digital Officer and Global Head of Business
Operations & Claims (center); and Charlie Fry, EVP, Reinsurance and Risk Capital
Optimization (right) join a panel discussion at AIG’s Global Town Hall in December 2024.
“
Significantly Reduced AIG Catastrophe
Losses as % of Industry Insured Losses
from Natural Disasters2,5
Outstanding Financial Results
Our 2024 full-year financial results were outstanding,
demonstrating the successful execution of our strategy
and strength of our balance sheet. We generated
excellent underwriting results, meaningful growth
in net premiums written, exceptional new business
and high retention of our portfolio. We produced an
increase of 9% in net income per diluted share from
continuing operations year over year and an increase
in adjusted after-tax income per diluted share2 of 12%,
or 28% on a comparable basis3. Our 2024 net premiums
written totaled $23.9 billion, and we continued to see
momentum in our Global Commercial business with
high retention rates and record new business of $4.5
billion. Net investment income from our well-diversified,
liability-matched portfolio increased in 2024, benefiting
from our reallocation of assets toward higher-yield
fixed maturities and loans. Notably, we achieved this
outcome even as the size of our base portfolio decreased
as a result of strategic divestures of non-core assets.
Going forward, our investment strategy will continue to
focus on reinvesting assets at higher yields, including
increasing our asset allocation to private credit at
attractive spreads.
We also continued to deliver against our disciplined
capital management strategy, providing AIG with
significant financial flexibility. We returned $8.1 billion
of capital to shareholders, including $6.6 billion of
share repurchases reducing our share count by 12%,
$1.0 billion of dividends, and $500 million in preferred
stock redemptions. We also reduced our debt by $1.6
billion, bringing our debt-to-capital ratio to 17%. We
ended 2024 with parent liquidity of $7.7 billion, and if
market conditions hold, we are on track to reduce the
number of outstanding AIG shares below our target
range of 550-600 million shares by the end of 2025. For
the second consecutive year, we increased our common
stock dividend by more than 10%, reflecting the Board’s
confidence in our earnings trajectory.
AIG’s balance sheet strength is the result of years of
disciplined work to improve our liquidity, cash flow,
leverage and reserves. We will continue to execute
on our disciplined capital management strategy and
do not anticipate taking any additional actions that
would significantly affect leverage in 2025. We remain
committed to reviewing our dividend annually and
anticipate increasing it in 2025 and 2026, subject to
market conditions. Going forward, our key focus remains
on profitable growth and allocating capital to the best
opportunities to generate attractive risk-adjusted returns.
Managing Volatility: A Strategic
Approach to the New Normal
AIG’s achievements are even more remarkable when
you consider the industry environment we navigated
as we transformed our company. Fifteen years ago, the
benchmark for an outsized catastrophe year was $100
billion. Over the last eight years, industry losses have
averaged $140 billion, with 2024 peaking at $145 billion
– 54% above the 21st-century average4. If the tragic and
heartbreaking California wildfires in January of 2025
reach the estimate of $50 billion in insured losses, and
2025 is otherwise an average catastrophe year, carriers’
total insured catastrophe losses for the year could
approach $200 billion – a level that could recalibrate the
entire insurance industry. We have consistently reduced
our volatility despite these elevated catastrophe losses
for the industry and AIG’s share of industry catastrophe
losses dropped from 3% in 2018 to below 1% for the last
three years2,5 – a very impressive result.
134
90
71
97
130
132
118
145
0%
1%
2%
3%
4%
5%
0
50
100
150
2017
2018
2019
2020
2021
2022
2023
2024
AIG Share (%)
Industry Insured Losses Nominal ($B)
Industry Insured Losses Nominal ($B)
AIG Share (%)
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AIG colleagues demonstrate the company's
Purpose & Values in action through
volunteerism related to disaster relief,
restoration and resiliency.
AIG’s ability to thrive in today’s new normal of higher
industry catastrophe losses is reflected in our
underwriting performance. Our full-year 2024 General
Insurance combined ratio was 91.8%, the third
consecutive year of a sub-92 combined ratio. When
compared to our 2017 General Insurance combined ratio
of 117.3%, our strong profitability improvement is all the
more remarkable.
Our reinsurance strategy has played a pivotal role in our
journey to establish AIG as an industry-leading global
general insurance underwriter and enabled us to
outperform the industry while also amassing the
significant financial strength and flexibility we have
today. We strategically use reinsurance to preserve and
optimize capital and enhance the quality of our earnings
through active management of our underwriting results.
AIG maintains a different philosophy regarding
reinsurance than many of our peers. Today, many
primary insurance carriers are taking on a greater share
of catastrophe losses from reinsurers. In contrast, we
focus on maintaining lower excess of loss attachment
points, including meaningful aggregate coverage to
manage frequency of loss. During the January 1, 2025
reinsurance renewal season, we maintained or lowered
our attachment points and improved or maintained our
ceding commission levels for all of our major
proportional reinsurance treaties. We are grateful for
the long-term partnership of the industry’s
leading reinsurers.
Superior Claims Service
We also are uniquely positioned to help our clients and
partners navigate through the current environment.
Behind every claim, there is a client in need of support
and a team of AIG experts working with them to solve
their challenges. This is when we are needed most, and
this is what our global network of more than 4,200 Claims
professionals does best. With weather events causing
catastrophic damage around the world, our global Claims
teams are always at the ready, providing exceptional
service and insight. Our technical experts across the
world bring deep product knowledge and industry
acumen to handling the nuances of every claim, drawing
on decades of experience navigating complex risks and
thousands of hours of training each year.
We take a proactive approach to underwriting and
claims, identifying emerging trends to help clients avoid
threats and manage their exposure long before a claim
occurs. To keep pace with the evolving risk landscape,
our Claims team provides data and feedback to the
underwriting team regarding exposures, ranging from
severe weather events to new loss trends. This close
collaboration informs future underwriting strategies and
product development initiatives. We are also increasingly
AIG 2024 Annual Report
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Our ability to consistently
deliver strong financial
results while reshaping our
company is a testament
to our colleagues and the
relationships they have built
with our clients, distribution
partners, reinsurance
partners and regulators.”
“
AIG’s average annual underwriting income
for three consecutive years
$2+ billion
AIG’s third consecutive year of a sub-92
combined ratio
91.8%
Capital returned to shareholders in 2024
$8.1 billion
Exit run-rate savings achieved in 2024
through AIG Next
$450 million
AIG’s holdings of Corebridge Financial
common stock as of year-end, following
the completion of the deconsolidation
22.7%
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This “new normal” underscores the vital importance
of insurance to society, and the uniquely pivotal role
that AIG plays in our industry. In an environment that
has never been more dynamic or complex, AIG is at the
forefront of originating risk solutions. The expertise and
support we provide enables businesses, institutions
and individuals to overcome uncertainty and withstand
challenges. Amid profound change, we help clients and
partners pursue bold ideas that can shape the future.
Meeting challenges head-on and transforming them into
opportunities is more than our promise, it’s the essence
of our Purpose.
AIG’s Purpose
Our promise protects against uncertainty and challenges
and provides the confidence for tomorrow’s opportunities.
Accelerating Our Growth
Our ability to adapt to ever-changing market conditions
to meet the evolving needs of our clients and partners is
one of our trademark attributes, enabling us to deliver on
our Purpose while driving growth. As part of our
innovation journey, we are utilizing GenAI and Large
Language Models as digital accelerators and applications
to support our core business. We are evolving our
end-to-end processes, developing an Agentic GenAI
Ecosystem, driving role clarity, and digitizing and
modernizing our infrastructure. Our GenAI Ecosystem
can ingest and integrate proprietary data from multiple
sources to give us better data quality, analysis and
outputs, in a fraction of the time it formerly would take.
It is also increasing our submission response rate while
enabling our underwriters to prioritize the business
within our risk appetite. These solutions will help drive
Unparalleled
Opportunities Ahead
growth and operating leverage as we deliver them to our
businesses at scale and will allow our underwriters to
spend more time quoting and winning business.
Maintaining the underwriter at the center of
decision-making will continue to be paramount, and a
key differentiator, for AIG. Our culture is deeply rooted in
underwriting excellence and technical expertise. We help
our clients and partners solve complex risk issues that
require judgment and a sophisticated understanding of
their needs. Our GenAI initiatives are designed to deliver
better outcomes and performance, while keeping highly
experienced underwriters at the core of our process.
In 2024, we announced that we will open an innovation
hub in Atlanta, which will support our innovation and
operational excellence journey. The hub will be the
first AIG office globally where the entire end-to-end
underwriting process will be embedded in a single
location – from distribution and sales to data insights,
underwriting, claims payments, and client servicing. By
bringing the entire insurance lifecycle together, we will
innovate in real time through in-office team interactions
and collaborations.
Driving Innovation in Portfolio Optimization
We are also extending our leadership in the reinsurance
space with the establishment of a special purpose vehicle
backed by Blackstone through Lloyd’s, Syndicate 2478.
This pioneering structure is an example of how insurance
risk can be directly connected to sophisticated investors
to generate attractive returns for both parties. The
syndicate provides AIG with a long-term, meaningful
reinsurance partner and an additional source of fee
income. We are pleased to partner on this innovative
structure with Blackstone.
Our Learn-It-All Culture
Our ability to deliver innovative global solutions is
grounded in having tremendous colleagues with a
mindset of continuous learning, curiosity and
improvement that fuels our performance-driven client
focus and leads to the high-quality outcomes and
decisions for which we are known. A Learn-It-All culture
is at the heart of AIG. Our focus on fostering a workplace
that reflects the global nature of our business and
deploying the use of GenAI and Large Language Models
to provide innovative solutions that make our processes
more rigorous and effective.
I am very proud of our global Claims team and the
excellent work they do every day to navigate challenges
with resilience and expertise.
AIG 2024 Annual Report
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Amid profound change, we help clients and partners
pursue bold ideas that can shape the future. Meeting
challenges head-on and transforming them into
opportunities is more than our promise,
it’s the essence of our Purpose.”
Championship winner Lydia Ko accepts her 2024 AIG Women’s Open trophy from Peter Zaffino.
“
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enables talent from different geographies, backgrounds
and experiences to thrive makes us a preferred employer.
Our inclusive culture is deeply connected to our global
reach. We work collaboratively around the world with
pace and a strong sense of ownership to meet and exceed
the expectations of our stakeholders. Our international
heritage has shaped our distinct perspective on risks,
enabling us to uniquely draw on the expertise of
colleagues around the globe to add value for our clients
and distribution partners.
We are focused on developing colleagues at all points in
their career and providing them with opportunities to
build skills and advance. We invest in our people through
comprehensive training programs and offer immersive
learning experiences focused on critical competencies
such as change management, problem solving,
underwriting, claims and operations. Additionally, we
prioritize leadership development to build managers’
self-awareness through assessment tools and equip them
with the capabilities needed to achieve business goals.
Colleagues participate in a dialogue with AIG leaders.
Attracting and retaining top talent is central to our
success. Our leaders are highly accomplished insurance
executives with deep expertise from across the industry.
We also provide our top talent with clear pathways to
important leadership roles, creating a strong succession
pipeline to support our long-term growth. In 2024, the
numbers of internal promotions and external hires were
roughly equal, showing our focus on the development
of our talent. More than a quarter of our external hiring
activity in 2024 was tied to building out our Atlanta
innovation hub, welcoming early career analysts
and summer interns, and strategically tapping into
talent pools through apprenticeship and career
returner programs.
Forward We Go
AIG has entered an exciting new chapter. Today, we are
a focused global general insurance company with a
culture of operational excellence. At a moment when our
industry is facing an increasing array of challenges, we
are stronger, deeply disciplined, and well positioned for
Forward We Go.
Sincerely,
Peter Zaffino
Chairman & Chief Executive Officer
American International Group, Inc. (AIG)
Our ability to deliver innovative global solutions is
grounded in having tremendous colleagues with a mindset
of continuous learning, curiosity and improvement that fuels
our performance-driven client focus and leads to the high-
quality outcomes and decisions for which we are known. A
Learn-It-All culture is at the heart of AIG.”
long-term success. Our very early forecast indicates we
are off to a strong start for 2025 and, barring unforeseen
developments, we expect to achieve meaningful organic
growth driven by our Global Commercial business and
the benefits of our enhanced reinsurance program. Our
disciplined capital management, combined with our
sustained underwriting excellence and continued focus
on expense management, puts us well on track to deliver
a 10%+ core operating ROE for the full year 2025.
I would like to express my gratitude to our dedicated
colleagues around the world for their teamwork and
contributions on behalf of our stakeholders. I also want
to thank our shareholders for their continued support
and investment in AIG. I firmly believe that past
performance is the best predictor of future success, and
I have never been more optimistic about our ability to
capitalize on the opportunities ahead.
1) Historical underwriting results presented are restated to exclude Validus Re and Crop Risk Services (CRS). For 2015 and prior, the results include Property
Casualty run-off businesses, including excess workers’ compensation, asbestos and environmental (1986 and prior), certain environmental liability businesses,
certain healthcare coverage, certain casualty and specialty coverages reported in Eaglestone Reinsurance Company, and certain long-duration business,
primarily in Japan and the U.S.
2) Refers to financial measures not calculated in accordance with generally accepted accounting principles (non-GAAP); definitions of non-GAAP measures can be
found on page 39 of the 2024 Form 10-K and page 216 of this Annual Report. The reconciliations to their closest GAAP measures can be found on pages 51-52 of
the 2024 Form 10-K and page 217 of this Annual Report.
3) Refers to comparable basis. Refer to page 217 of this Annual Report for more detail.
4) Aon. 2025 Climate and Catastrophe Risk Insight, January 22, 2025.
5) Historical CAT losses presented are restated to exclude Validus Re and CRS. Industry insured losses are sourced from Aon reports and reflect reported losses at
the time of publication, without adjustment for inflation; 2020 insured loss data for both the industry and AIG exclude COVID-19 losses.
“
AIG 2024 Annual Report
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10
AIG’s Purpose & Values
Our promise protects against
uncertainty and challenges
and provides the confidence
for tomorrow’s opportunities.
Take Ownership
We set clear expectations
We are proactive
We are accountable
Set the Standard
We deliver quality—always
We are client-centric
We lead the industry
Win Together
We are stronger together
We are aligned
We are one team
Be an Ally
We strive for inclusion
We listen and learn
We speak with our actions
Do What’s Right
We act with integrity
We lead by example
We lift up our communities
Our Values and how we
bring them to life:
AIG 2024 Annual Report
11
Board of Directors
Standing, from left: James (Jimmy) Dunne III; Linda A. Mills; John (Chris) Inglis; Peter R. Porrino; Vanessa A. Wittman; Courtney Leimkuhler
Seated, from left: Diana M. Murphy; Paola Bergamaschi; John G. Rice; Peter Zaffino; James Cole, Jr.
Not pictured: Juan Perez
Peter Zaffino
Chairman & Chief Executive Officer, AIG
Paola Bergamaschi
Former Global Banking and Capital Markets Executive at
State Street Corporation, Credit Suisse and Goldman Sachs
James Cole, Jr.
Chairman & Chief Executive Officer, The Jasco Group, LLC;
Former Delegated Deputy Secretary of Education and
General Counsel, U.S. Department of Education
James (Jimmy) Dunne III
Vice Chairman and Senior Managing Principal, Piper Sandler
John (Chris) Inglis
Senior Strategic Advisor, Paladin Capital Group;
Former National Cyber Director
Courtney Leimkuhler
Co-founder and Managing Partner, Springbank Collective
Linda A. Mills
President, Cadore Group, LLC; Former Corporate Vice President of
Operations, Northrop Grumman Corporation
Diana M. Murphy
Managing Director, Rocksolid Holdings, LLC
Juan Perez
Executive Vice President and Chief Information Officer,
Salesforce.com, Inc.
Peter R. Porrino
Former Executive Vice President & Chief Financial Officer,
XL Group Ltd
John G. Rice
Lead Independent Director, AIG; Former Non-Executive Chairman,
GE Gas Power; Former President & Chief Executive Officer,
GE Global Growth Organization
Vanessa A. Wittman
Former Chief Financial Officer, Glossier, Inc.
AIG 2024 Annual Report
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Executive Leadership Team
Standing, from left: Mia Tarpey; Keith Walsh; Christopher Flatt; Peter Zaffino; Rose Marie Glazer; Chris Schaper; Ed Dandridge
Seated, from left: Melissa Twiningdavis; Roshan Navagamuwa; Don Bailey; Claude Wade; Jon Hancock; Kelly Lafnitzegger; Charlie Fry
Peter Zaffino
Chairman & Chief Executive Officer
Don Bailey
EVP, Chief Executive Officer, North America Commercial Insurance
Ed Dandridge
EVP, Chief Marketing & Communications Officer
Christopher Flatt
EVP, Global Chief Underwriting Officer
Charlie Fry
EVP, Reinsurance and Risk Capital Optimization
Rose Marie Glazer
EVP, General Counsel
Jon Hancock
EVP, Chief Executive Officer, International Commercial
Insurance and Global Personal Insurance
Kelly Lafnitzegger
EVP, Chief Human Resources Officer
Roshan Navagamuwa
EVP, Chief Information Officer
Chris Schaper
EVP, Chief Risk Officer
Mia Tarpey
Chief of Staff to AIG Chairman & CEO Peter Zaffino
Melissa Twiningdavis
EVP, Chief Administrative Officer
Claude Wade
EVP, Chief Digital Officer and Global Head of Business
Operations & Claims
Keith Walsh
EVP, Chief Financial Officer
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
——————————
FORM 10-K
☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2024
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-8787
American International Group, Inc.
(Exact name of registrant as specified in its charter)
Delaware
13-2592361
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
1271 Avenue of the Americas, New York, New York
10020
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code: (212) 770-7000
——————————
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common Stock, Par Value $2.50 Per Share
AIG
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
——————————
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such
files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an
emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth
company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☑
Accelerated filer ☐
Non-accelerated filer ☐
Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new
or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal
control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that
prepared or issued its audit report. ☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the
filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑
As of June 30, 2024, the aggregate market value of the registrant's voting and nonvoting common equity held by nonaffiliates was approximately
$42,903,000,000.
As of February 7, 2025, 593,332,964 shares of the registrant's Common Stock, $2.50 par value per share, were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Document of the Registrant
Form 10-K Reference Locations
Portions of the registrant’s definitive proxy statement for the 2025 Annual Meeting of Shareholders
Part III, Items 10, 11, 12, 13 and 14
This page intentionally left blank.
AMERICAN INTERNATIONAL GROUP, INC.
ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2024
TABLE OF CONTENTS
FORM 10-K
Item Number
Description
Page
Part I
ITEM 1
Business
2
•
Our Global Business Overview
2
•
Operating Structure
4
•
How We Generate Revenues and Profitability
4
•
Human Capital Management
5
•
Regulation
6
•
Available Information about AIG
11
ITEM 1A
Risk Factors
12
ITEM 1B
Unresolved Staff Comments
30
ITEM 1C
Cybersecurity
31
ITEM 2
Properties
32
ITEM 3
Legal Proceedings
32
ITEM 4
Mine Safety Disclosures
32
Part II
ITEM 5
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
33
ITEM 6
[Reserved]
34
ITEM 7
Management’s Discussion and Analysis of Financial Condition and Results of Operations
35
•
Cautionary Statement Regarding Forward-Looking Information and Factors That May Affect Future Results
35
•
Use of Non-GAAP Measures
38
•
Critical Accounting Estimates
40
•
Executive Summary
47
•
Consolidated Results of Operations
48
•
Business Segment Operations
53
•
Investments
62
•
Insurance Reserves
70
•
Liquidity and Capital Resources
74
•
Enterprise Risk Management
81
•
Glossary
88
•
Acronyms
90
ITEM 7A
Quantitative and Qualitative Disclosures About Market Risk
90
ITEM 8
Financial Statements and Supplementary Data
91
Reference to Financial Statements and Schedules
91
ITEM 9
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
191
ITEM 9A
Controls and Procedures
191
ITEM 9B
Other Information
192
ITEM 9C
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
192
Part III
ITEM 10
Directors, Executive Officers and Corporate Governance
193
ITEM 11
Executive Compensation
194
ITEM 12
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
194
ITEM 13
Certain Relationships and Related Transactions, and Director Independence
194
ITEM 14
Principal Accountant Fees and Services
194
Part IV
ITEM 15
Exhibits and Financial Statement Schedules
195
ITEM 16
Form 10-K Summary
197
Signatures
198
AIG | 2024 Form 10-K
1
Part I
ITEM 1 | Business
Sustaining Industry
Leadership Momentum
Creating Value through
Profitable Growth and a
Culture of Underwriting and
Operational Excellence
American International Group, Inc. (NYSE: AIG)
is a leading global insurance organization. AIG provides insurance solutions that help
businesses and individuals in over 200 countries and jurisdictions protect their assets and
manage risks through AIG operations, licenses and authorizations as well as network partners.
AIG is building on its industry leadership and is positioned to become a top-performing
company recognized for the value it provides stakeholders in an environment of profound,
complex and dynamic risk. AIG's achievements in 2024 demonstrate continued strength in
executing multiple, complex initiatives simultaneously and with quality. With the
deconsolidation of Corebridge Financial, Inc. (Corebridge) complete, a strong underwriting
portfolio and culture, and excellent financial strength, AIG enters 2025 with strong momentum.
In this Annual Report, unless otherwise mentioned or unless the context indicates otherwise, we use the terms “AIG,” the “Company,”
“we,” “us” and “our” to refer to American International Group, Inc., a Delaware corporation, and its consolidated subsidiaries. We use
the term “AIG Parent” to refer solely to American International Group, Inc., and not to any of its consolidated subsidiaries.
About AIG
World-Class Underwriting and
Claims Expertise
executed through franchises that are
among the leaders in their geographies
and segments, providing differentiated
service.
Global Reach and Breadth of Loyal
Customers
including millions of clients in over 200
countries and jurisdictions, ranging from
individuals to small and medium-sized
businesses to multi-national Fortune 500
companies.
Broad and Long-Standing
Distribution Relationships
with brokers, agents, advisors,
marketplaces and other distributors
strengthened through AIG’s dedication to
quality.
Global Workforce
of more than 22,000 colleagues committed to taking ownership,
setting the standard, winning together, being allies and doing
what's right.
Balance Sheet Strength and Financial Flexibility
with approximately $43 billion in shareholders’ equity and AIG
Parent liquidity sources of $10.7 billion as of December 31,
2024.
2
AIG | 2024 Form 10-K
AIG's global team is both results oriented and focused on how we achieve positive outcomes. This balance creates an aligned and
inclusive culture that enables further progress. Unifying under our Purpose and Values empowers AIG colleagues to be conduits of
positive change – delivering exceptional client service, enhanced shareholder value and a better experience for all stakeholders.
AIG’s five Values guide colleagues' actions:
•
Take ownership: we set clear expectations, we are proactive, we are accountable
•
Set the standard: we deliver quality—always, we are client-centric, we lead the industry
•
Win together: we are stronger together, we are aligned, we are one team
•
Be an ally: we strive for inclusion, we listen and learn, we speak with our actions
•
Do what’s right: we act with integrity, we lead by example, we lift up our communities
2025 Priorities
Deliver Sustainable Underwriting Results and Profitability Growth - Continue to focus on a culture of underwriting
excellence and prudent expense management to support profitable growth.
Unlock the Full Potential of AIG’s Less Complex Operating Structure - Continue to refine our new operating structure to
operate efficiently as a lean, agile and high-performing company.
Invest in our Talent for the Future AIG - Foster a performance-driven culture built on quality, excellence and continuous
improvement through ongoing education and workplace learning opportunities.
Expand our Data and Digital Strategies - Responsibly scale the use of generative artificial intelligence (AI), focus on continued
enhancement of data quality to inform decision making and further strengthen workflow capabilities across the company to accelerate
our strategic business objectives.
Preserve and Harness Balance Sheet Strength and Financial Flexibility - Execute on our balanced capital management
plan in order to deliver shareholder value and support AIG's strategic flexibility.
2024 Highlights
Delivered Strong Financial Performance Driven by Underwriting Excellence
•
Produced strong combined ratio of 91.8 and accident year combined ratio, as adjusted(a) of 88.2.
•
Delivered $1.9 billion of underwriting income, which contributed to over $7 billion of cumulative underwriting income 2021-2024.
•
Generated net premiums written of $23.9 billion, supported by new business growth, strong retention and rate discipline.
•
Achieved 23 percent Net investment income growth year-over-year.
•
Expanded capabilities in the non-admitted ultra and high-net-worth market through exclusive wholesale distribution partnership
between Private Client Select (PCS) and Ryan Specialty.
Completed Multi-Year Strategies to Direct Focus to AIG’s Core Businesses
•
Deconsolidated Corebridge from AIG and reduced AIG’s ownership of Corebridge common stock to 22.7 percent as of
December 31, 2024 for aggregate gross proceeds of $6.0 billion through various sale transactions.
•
Divested global individual personal travel insurance and assistance business for $600 million plus additional earn-out
consideration, further enhancing AIG’s financial flexibility and sculpting our portfolio of businesses.
•
Led the launch of Lloyd’s syndicate 2478 through multi-year Blackstone Inc. strategic relationship as part of AIG’s outwards
reinsurance program.
Continued Balanced Capital Management Supporting Financial Strength, Growth and Shareholder Return
•
Reduced general borrowings by $1.6 billion, which resulted in a debt-to-capital ratio of 17.0 percent.
•
Repurchased $6.6 billion of AIG common stock, reducing outstanding shares by 12 percent.
•
Paid $1.0 billion in AIG common stock dividends and increased quarterly common stock dividend amount by double digit
percentage for the second consecutive year.
•
Ended 2024 with parent liquidity of $7.7 billion.
(a) Non-GAAP measure – for reconciliation of non-GAAP to GAAP measure, see Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results
of Operations (MD&A).
ITEM 1 | Business
AIG | 2024 Form 10-K
3
Operating Structure
In the fourth quarter of 2024, the Company realigned its organizational structure and the composition of its reportable segments to
reflect changes in how the Company manages its operations, specifically the level at which its chief operating decision makers
(CODMs) regularly review operating results and allocate resources.
As of December 31, 2024, AIG reports the results of its businesses through three segments and Other Operations. The three
segments are North America Commercial, International Commercial and Global Personal. Other Operations predominantly consists of
Net Investment Income from our AIG Parent liquidity portfolio, Corebridge dividend income, corporate General operating expenses,
and Interest expense. Prior years’ presentations have been recast to conform to the new reportable segments. Our General Insurance
business (General Insurance) consists of our three segments and the Net investment income related to our insurance operations.
In September 2022, AIG closed on the initial public offering of Corebridge. Since then and through June 9, 2024, AIG has sold
portions of its interests in Corebridge through secondary public offerings. On June 9, 2024, AIG held 48.4 percent of Corebridge
common stock, waived its right to majority representation on the Corebridge Board of Directors and one of AIG's designees resigned
from the Corebridge Board of Directors as of June 9, 2024 (the Deconsolidation Date). As a result, AIG met the requirements for the
deconsolidation of Corebridge. The historical financial results of Corebridge, for all periods presented, are reflected in these
Consolidated Financial Statements as discontinued operations.
For additional information on our segments, see Part II, Item 7. MD&A – Business Segment Operations and Note 3 to the
Consolidated Financial Statements, and for information regarding the separation of Life and Retirement and our global individual
personal travel insurance and assistance business, see Notes 1 and 4 to the Consolidated Financial Statements.
General Insurance
General Insurance is a leading provider of insurance products and services for commercial and personal insurance customers. It includes one
of the world’s most far-reaching property casualty networks. General Insurance offers a broad range of products to customers through a
diversified, multichannel distribution network. Customers value General Insurance’s strong capital position, extensive risk management and
claims experience and its ability to be a market leader in critical lines of the insurance business.
General Insurance includes the following major operating companies: National Union Fire Insurance Company of Pittsburgh, Pa. (National
Union); American Home Assurance Company (American Home); Lexington Insurance Company (Lexington); AIG General Insurance Company,
Ltd.; AIG Asia Pacific Insurance, Pte, Ltd.; AIG Europe S.A.; American International Group UK Ltd.; Talbot Underwriting Ltd. (Talbot); Western
World Insurance Company and Glatfelter Insurance Group (Glatfelter).
How We Generate Revenues and Profitability
We earn revenues primarily from insurance premiums and income from investments.
Our expenses consist of losses and loss adjustment expenses incurred, commissions and other costs of selling and servicing our
products, interest expense and general operating expenses.
Our profitability is dependent on our ability to properly price and manage risk on insurance products, including establishing loss
reserves, to manage our portfolio of investments effectively and to control costs through expense discipline.
For additional information on loss reserves and prior year loss development, see Part II, Item 7. MD&A – Critical Accounting
Estimates – Loss Reserves, Part II, Item 7. MD&A – Insurance Reserves – Liability for Unpaid Losses and Loss Adjustment Expenses
(Loss Reserves), and Note 13 to the Consolidated Financial Statements.
For additional information on investment strategies, see Part II, Item 7. MD&A – Investments – Investment Strategies.
ITEM 1 | Business
AIG | 2024 Form 10-K
4
Global
Personal
International
Commercial
North America
Commercial
Human Capital Management
Our talented and dedicated colleagues are our greatest asset and support our culture of underwriting expertise and excellence. To this
end, we place significant focus on human capital management; namely retaining, developing and attracting high caliber talent.
Our Compensation and Management Resources Committee of the Board of Directors (CMRC) is responsible for overseeing human
capital management practices and programs, including retention, talent development and compensation and benefits. Management
periodically reports to the CMRC on our various human capital management initiatives and metrics, including succession planning for
key roles.
At December 31, 2024, we had approximately 22,200 employees based in approximately 46 countries, of which 47 percent are
located in North America, 26 percent are in the Asia Pacific region and the remaining 27 percent are in the European, Middle East and
Africa (EMEA region) and Latin America.
We believe that we foster a constructive and healthy work environment for our employees. The key programs and initiatives that are
designed to attract, develop and retain our workforce include:
Competitive Compensation and Benefits. We seek to align compensation with individual and Company performance and provide
the appropriate market-competitive incentives to attract, retain and motivate employees to achieve outstanding results.
Management and the CMRC engage the services of third-party compensation consultants to help monitor the competitiveness of our
incentive programs. We provide a performance-driven compensation structure that consists of base salary and, for eligible
employees, short- and long-term incentives. We also offer comprehensive benefits to support the health, wellness, work-life balance
and retirement preparedness/savings needs of our employees, including, for eligible employees, subsidized health care plans, life and
disability insurance, wellness and mental health benefits, legal assistance plan, paid time off, 16 hours of paid volunteer time off, 2:1
matching grants for eligible charitable donations, parental and bonding leave and both matching and Company 401(k) contributions
for eligible employees.
Health and Wellness. The health, safety and wellness of our employees is a priority. We offer numerous benefits and wellness
programs focused on the physical, social and financial wellness of our employees. Nearly every country in which we operate has an
Employee Assistance Program (EAP), which provides employees with confidential counselling, mental health resources and
information to help employees and their dependents through times of stress and anxiety. In many countries where local market and
regulations permit, our EAP and other programs also offer work-life balance assistance, eldercare advice, bereavement support, and
legal and financial guidance.
We also maintain the AIG Compassionate Colleagues Fund (the Fund), which enables the Company and its employees to provide
direct relief to help eligible colleagues overcome unforeseen financial hardships and disasters. Since its inception in 2021, the Fund
has helped approximately 2,500 employees in 17 countries.
Talent Development. Equipping our people with the skills and capabilities to be successful and contribute to AIG is another priority.
We do this by giving our employees access to meaningful tools and resources to assist in their professional development no matter
where they are in their career paths.
We offer numerous learning opportunities to support the development of our employees. All online learning programs are accessible
through a global learning management system, Your Learning Journey. Through these programs, employees can increase their
insurance and business knowledge, build critical job skills and earn continuing education credits.
Alongside online courses, we offer a series of live, interactive learning opportunities designed to reinforce our culture of excellence.
These programs focus on providing employees with a strong foundation of core skills including communication, collaboration,
coaching, change agility and problem solving. In addition to live courses and online training, we also offer tuition and certification
training reimbursement to encourage employees to enhance their education and skills.
Additionally, we focus on building managerial capability for people managers through a series of interactive learning experiences
focused on skills needed to lead teams effectively and achieve business priorities. To assess leadership skills and capabilities, we use
distinct leadership assessment tools, including 360 degree feedback, which develops self-awareness and builds personalized
leadership development goals.
We also place significant importance on promoting internal talent and succession planning. Accordingly, we use a globally consistent
streamlined process to support succession planning and talent development. This approach helps identify a pipeline of talent for
positions at all levels of the organization and the actions needed to support their development. In 2024, 39 percent of all our open
positions were filled with internal talent.
ITEM 1 | Business
AIG | 2024 Form 10-K
5
Culture of Inclusion. We strive to create an inclusive workplace that provides equal opportunities for all colleagues. We believe in
building a culture where everyone is valued and where all perspectives are welcome.
Regulation
GENERAL
Our insurance subsidiaries are subject to extensive regulation and supervision in the jurisdictions in which our insurance businesses
are located or operate. Insurance regulatory authorities in those jurisdictions are the primary regulators for those businesses;
however, our operations are subject to regulation by many different types of regulatory authorities, including insurance, securities and
derivatives regulators in the United States and abroad.
Insurance regulators, other regulatory authorities, law enforcement agencies, and other governmental authorities from time to time
make inquiries and conduct examinations or investigations regarding our compliance, as well as compliance by other companies in
our industry, with applicable laws. In addition, regulation, legislation and administrative policies that are not limited in application solely
to the insurance market may significantly affect the insurance industry and certain of our operations, including regulation, legislation
and administrative policies related to privacy, cybersecurity, government sanctions, anti-discrimination, financial services, securities,
taxation and climate change. See Item 1A. Risk Factors – Regulation – "Our businesses are heavily regulated and changes in laws
and regulations may affect our operations, increase our insurance subsidiary capital requirements or reduce our profitability".
We expect that the U.S. and international regulations applicable to us and our regulated entities will continue to evolve for the
foreseeable future. See Item 1A. Risk Factors – Regulation – "New laws and regulations or new interpretations of current laws and
regulations, both domestically and internationally, may affect our businesses, results of operations, financial condition and ability to
compete effectively".
FINANCIAL, MARKET CONDUCT & CORPORATE GOVERNANCE OVERSIGHT
The method of insurance regulation of our insurance subsidiaries varies, but generally has its source in statutes that delegate
regulatory and supervisory powers to a state insurance official (in the United States) or another governmental agency (outside the
United States). The regulation and supervision relate primarily to the financial condition of the insurers, corporate conduct and market
conduct activities. In general, such regulation is for the protection of policyholders rather than the creditors or equity owners of these
companies. Financial, market conduct and corporate conduct oversight varies by jurisdiction, but can include activities such as:
(a)approval of policy language and rates;
(b)advertising practices;
(c) establishing minimum capital and liquidity requirements;
(d)licensing of insurers and their agents;
(e)requiring registration and periodic reporting by insurance companies that are licensed in the jurisdiction;
(f) evaluating and, in some cases, requiring regulatory approval of, certain transactions between insurance company subsidiaries and
their affiliates;
(g)imposing restrictions and limitations on the amount of dividends or other distributions payable by an insurance company;
(h)enforcing rules related to outsourcing of material functions;
(i) requiring deposits of securities for the benefit of policyholders;
(j) establishing requirements for acceptability of reinsurers and credit for reinsurance;
(k) establishing requirements for reserves; and
(l) enterprise risk management (including technology risk management) and corporate governance requirements.
Our insurance subsidiaries are generally subject to laws and regulations that prescribe the type, quality and concentration of
investments they can make and permissible investment practices, such as derivatives, securities lending and repurchase
transactions. In non-U.S. jurisdictions, our insurance subsidiaries may also be subject to laws requiring certain amounts and types of
local investment.
Insurance laws in many jurisdictions also provide that no person, corporation or other entity may acquire control of an insurance
company, or a controlling interest in (or prescribed percentage of capital of) any direct or indirect parent company of an insurance
company, without the prior approval of, or notice to, such insurance company’s domiciliary insurance regulator.
AIG | 2024 Form 10-K
6
ITEM 1 | Business
As a holding company with no significant business operations of its own, AIG Parent depends on dividends from our subsidiaries to
meet our obligations. U.S. state insurance laws typically provide that dividends in excess of certain prescribed limits are considered to
be extraordinary dividends and require prior approval or non- disapproval from the applicable insurance regulator. Outside the U.S.,
insurers, subject to certain exceptions, are permitted to pay dividends subject to maintaining prescribed capital and solvency
requirements and ensuring that dividends are made out of profits/retained earnings.
Further, as part of their regulatory oversight processes, insurance regulators conduct periodic examinations of our insurance
subsidiaries. Such examinations can cover a broad scope of the insurance subsidiary’s operations, including the financial strength of
the insurance subsidiary; sales, marketing and claims handling practices; risk management; capital and liquidity management; and
information technology operations (including emerging technology risks).
Insurance and securities regulators and other law enforcement agencies and attorneys general also, from time to time, make
inquiries, issue data calls and conduct examinations or investigations regarding compliance with insurance and other laws or for
informational purposes that can be company-specific or part of a broader industry-wide effort.
There can be no assurance that any noncompliance with such applicable laws, regulations or guidance would not have a material
adverse effect on our business or results of operations.
REGULATORY REGIMES
United States
States
At the state-level, the National Association of Insurance Commissioners (NAIC) is a standard-setting and regulatory support
organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S.
territories. The NAIC is not a regulator, but it assists state insurance regulators in establishing standards and best practices,
conducting peer reviews and coordinating regulatory oversight. Model laws and regulations promulgated by the NAIC only become
effective in a state once formally adopted by such state and are subject to revision by each state. Examples of NAIC models adopted
in substantial part by all states include:
•
The Risk-Based Capital (RBC) for Insurers Model Act, which incorporates an RBC formula calculated in accordance with
instructions updated annually by the NAIC that is designed to measure the adequacy of an insurer’s total adjusted capital, as
calculated pursuant to the RBC formula, in relation to certain risks inherent in its business, and authorizes certain regulatory
actions regarding insurers whose RBC levels fall below specific thresholds. The NAIC has adopted certain changes, and is
considering others, regarding how RBC is calculated, including initiatives aimed at a comprehensive review of the RBC investment
framework. The RBC levels of each of our U.S. domiciled insurance companies exceeded each of these specific thresholds as of
December 31, 2024. In addition to RBC requirements, the insurance laws of our domiciliary states prescribe certain minimum
capital and surplus requirements for insurance companies. If any of our insurance entities fell below prescribed levels of statutory
capital and surplus, it would be our intention to provide appropriate capital or other types of support to that entity. For additional
information, see Part II, Item 7. MD&A – Liquidity and Capital Resources – Liquidity and Capital Resources of AIG Parent and
Subsidiaries – Insurance Companies.
•
The Insurance Holding Company System Regulatory Act and the Insurance Holding Company System Model Regulation (together,
the Holding Company Models) include: provisions authorizing insurance commissioners to act as global group-wide supervisors for
internationally active insurance groups and participate in supervisory colleges; standards for transactions between a domestic
insurance company and its affiliates and regulatory approval requirements for certain of such transactions; requirements for
obtaining regulatory approval for acquiring control of a domestic insurance company; and the requirement that the ultimate
controlling person of a U.S. insurer file an annual enterprise risk report with its lead state regulator identifying risks likely to have a
material adverse effect upon the financial condition or liquidity of its licensed insurers or the insurance holding company system as
a whole, among other requirements. The New York State Department of Financial Services (NYDFS) is AIG’s lead U.S.-state
regulator, and leads AIG’s Supervisory College meetings, which consist of AIG’s key global regulators.
•
The Risk Management and Own Risk and Solvency Assessment Model Act, which requires that insurers maintain a risk
management framework, conduct an internal own risk and solvency assessment of the insurer’s material risks in normal and
stressed environments, and submit annual Own Risk and Solvency Assessment (ORSA) summary reports to the insurance group’s
lead U.S.-state regulator.
•
The Corporate Governance Annual Disclosure Model Act (CGAD), which requires insurers to submit an annual filing regarding their
corporate governance structure, policies and practices.
The NAIC also provides standardized insurance industry accounting and reporting guidance through the NAIC Accounting Manual,
which establishes statutory accounting principles applicable to insurance companies. Statutory accounting principles promulgated by
the NAIC may be modified by individual state laws, regulations and permitted practices granted by our domiciliary insurance
regulators.
AIG | 2024 Form 10-K
7
ITEM 1 | Business
The NAIC has undertaken a multi-pronged effort to determine whether additional standards, safeguards or disclosures are required in
connection with certain investments by U.S. insurance companies, including related party investments, structured securities and other
complex assets.
In December 2020, the NAIC amended the Holding Company Models to incorporate a Group Capital Calculation (GCC) requirement,
which requires the ultimate controlling person of every U.S. insurer to submit GCC reports to the insurance group’s lead state
insurance regulator on an annual basis unless an exemption applies. These GCC provisions were incorporated in New York State
laws in August 2023, making AIG formally subject to the GCC beginning in 2024. The GCC is intended to serve as an analytical tool
for evaluating a firm’s capital position at the group level and is not intended as a prescribed group capital requirement.
U.S. states have state insurance guaranty associations in which insurers admitted in the state are required by law to be members.
Member insurers may be assessed by the associations for certain obligations of insolvent insurance companies to policyholders and
claimants. The aggregate assessments levied against us have not been material to our financial condition in any of the past three
years.
Federal
At the U.S. federal level, AIG is impacted by the activities of policymakers and by the laws and regulations enforced by various federal
agencies.
The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), signed into law in 2010, brought about extensive
changes to financial regulation in the United States and established the Federal Insurance Office (FIO) to serve as the central
insurance authority in the federal government. While not serving a regulatory function, FIO performs certain duties related to the
business of insurance and has authority to collect information on the insurance industry and recommend prudential standards. In
addition, FIO monitors market access issues, represents the United States in international insurance forums and has authority to
determine if certain regulations are preempted by covered agreements. FIO’s approval is required to subject a financial company
whose largest U.S. subsidiary is an insurer to the special orderly liquidation process outside the federal bankruptcy code,
administered by the FDIC pursuant to Dodd-Frank. U.S. insurance subsidiaries of any such financial company, however, would remain
subject to rehabilitation and liquidation proceedings under state insurance laws.
FIO also assists the Secretary of the Treasury in administering the U.S. Terrorism Risk Insurance Act (TRIA), enacted in 2002 to
support insurance coverage for certain terrorist acts in the U.S. The program was continued under the Terrorism Risk Insurance
Program Reauthorization Act of 2019 (TRIPRA) through December 31, 2027 and is intended to provide reinsurance coverage from
the federal government in limited circumstances for certified acts of terrorism that exceed a certain threshold of industry losses.
Title I of Dodd-Frank established the Financial Stability Oversight Council (Council), which is authorized to determine that certain
nonbank financial companies be designated as nonbank systemically important financial institutions (SIFIs) subject to supervision by
the Board of Governors of the Federal Reserve System and enhanced prudential standards. Designation by the Council of any
nonbank SIFI is subject to certain statutory and regulatory standards and to the Council’s guidance. The Council may also
recommend that state insurance regulators or other regulators apply new or heightened standards and safeguards for activities or
practices that insurers or other nonbank financial services companies engage in.
Title V of Dodd-Frank authorizes the United States to enter into covered agreements with foreign governments or regulatory entities
regarding the business of insurance and reinsurance. On September 22, 2017, the U.S. and the European Union (EU) entered into
such an agreement, and on December 18, 2018, the U.S. signed a covered agreement with the United Kingdom (UK), which is similar
to the agreement with the EU. Under the agreements, AIG is subject to consolidated group supervision by its relevant U.S. insurance
supervisors only, and generally does not have to satisfy EU Solvency II capital, reporting and governance requirements at the
consolidated group level. The covered agreements also required various U.S. reinsurance collateral reforms, which were adopted by
all U.S. states.
Title VII of Dodd-Frank provides for significantly increased regulation of, and restrictions on, derivatives markets and transactions that
have affected various activities of insurance and other financial services companies, including (i) regulatory reporting for swaps,
including security-based swaps, (ii) mandated clearing through central counterparties and execution through regulated swap
execution facilities for certain swaps (other than security-based swaps) and (iii) margin and collateral requirements.
International
In the UK, the Prudential Regulation Authority (PRA) is the lead prudential supervisor for our UK insurance operations and the
Financial Conduct Authority has oversight of AIG’s insurance operations for consumer protection and competition matters. The
Society of Lloyd’s also provides regulatory oversight of AIG’s Lloyd’s Managing Agent, Talbot Underwriting Limited.
AIG | 2024 Form 10-K
8
ITEM 1 | Business
In the EU, various Directives and Regulations affect our international insurance operations. The Luxembourg insurance regulator, the
Commissariat aux Assurances, is the insurance regulator for AIG Europe SA, which serves our European Economic Area (EEA) and
Swiss policyholders. In addition, financial companies that operate in the EU are subject to a range of regulations enforced by the
national regulators in each member state in which that firm operates. Solvency II governs the insurance industry’s solvency framework
for the EU, including minimum capital and solvency requirements, governance requirements, risk management and public reporting
standards applicable to AIG’s subsidiaries operating in the EU.
AIG’s operating insurance subsidiaries in Bermuda are regulated by the Bermuda Monetary Authority (BMA). Bermuda’s Insurance
Act 1978, the applicable Codes of Conduct and related regulations impose solvency and liquidity standards and auditing and reporting
requirements on Bermuda insurance companies and grant the BMA powers to supervise, investigate and intervene in the affairs of
insurance companies. A variety of requirements and restrictions are imposed on our Bermuda operating insurance subsidiaries
including: periodic financial reporting; corporate governance framework; solvency and financial performance; compliance with
minimum enhanced capital requirements; minimum solvency margins and liquidity ratios; and limitations on dividends and
distributions.
The Monetary Authority of Singapore (MAS) supervises AIG’s insurance subsidiary in Singapore. It has broad authority under the
Insurance Act 1966 to regulate insurance business in Singapore as well as insurers, insurance intermediaries and related institutions.
Our Singapore insurance operations are subject to minimum capital and solvency requirements as well as financial reporting,
corporate governance and conduct of business requirements. The MAS has authority to conduct inspections and investigations on
insurers and to administer sanctions for regulatory non-compliance. Our Singapore insurance subsidiary holds insurance entities in
the Asia Pacific region. The MAS holds the Chief Executive Officer of the Singapore insurance subsidiary principally responsible for
the management and conduct of the business of the subsidiary, including the business of its subsidiaries and overseas branches.
The Japan Financial Services Agency (JFSA) regulates AIG’s operating insurance subsidiaries and insurance holding company in
Japan. The JFSA has extensive authority under the Insurance Business Act and related regulations to oversee licensing, sales
practices, business conduct, investments, reserves and solvency, amongst other matters. Our Japanese insurance operations are
required to maintain a minimum solvency margin ratio (SMR), which is a measure of capital adequacy. The failure to maintain an
appropriate SMR, or comply with other similar indicators of financial health, could result in the JFSA imposing corrective actions on
our operations.
FSB and IAIS
The Financial Stability Board (FSB) consists of representatives of national financial authorities of the G20 countries. The FSB is not a
regulator but is focused primarily on promoting international financial stability. The FSB has issued a series of frameworks and
recommendations to address such issues as systemic financial risk, financial group supervision, capital and solvency standards,
effective recovery and resolution regimes, corporate governance including compensation, and a number of related issues associated
with responses to the financial crisis.
The International Association of Insurance Supervisors (IAIS) represents insurance regulators and supervisors of more than 200
jurisdictions (including regions and states) in nearly 140 countries and seeks to promote globally consistent insurance industry
supervision. The IAIS is not a regulator, but one of its activities is to develop insurance regulatory standards for use by local
authorities across the globe. For example, the IAIS has adopted a Common Framework (ComFrame) for the Supervision of
Internationally Active Insurance Groups (IAIGs). ComFrame assists regulators in addressing an IAIG’s risks by providing supervisory
standards for areas such as group supervision, governance and internal controls, enterprise risk management, and recovery and
resolution planning. We currently meet the criteria set forth to identify an IAIG, and the NYDFS, as our group-wide supervisor, has
publicly disclosed us as an IAIG on the IAIS’ register of IAIGs.
While the FSB no longer identifies global systemically important insurers (G-SIIs); in its place the IAIS has adopted an enhanced set
of supervisory policy measures for the assessment and mitigation of systemic risk in the insurance sector (Holistic Framework). The
Holistic Framework recognizes that systemic risk can emanate from specific activities and exposures arising from either sector-wide
trends or concentrations in individual insurers. The FSB has also been engaging with member jurisdictions in order to encourage
greater adherence to its “Key Attributes for Effective Resolution Regimes for the Insurance Sector” to ensure that large, internationally
active insurers can exit the market in an orderly fashion and avoid the need for taxpayer bailouts. Starting in December 2024 the FSB
began publishing an annual list of insurers, including AIG, that are subject to resolution planning requirements.
As part of ComFrame, the IAIS also developed a risk-based global Insurance Capital Standard (ICS) applicable to IAIGs. The IAIS
formally adopted the ICS at its annual general meeting in December 2024. The ICS is intended to be applied as a group-wide
prescribed capital requirement, defined as a solvency control level above which the supervisor does not intervene on capital
adequacy grounds. In parallel, the United States developed the Aggregation Method (AM) as an alternative approach to the
consolidated ICS group-capital calculation. Following a comparability assessment, the IAIS determined in November 2024 that the AM
delivers comparable outcomes to the ICS and therefore provides the basis for implementation of the ICS. The AM will be implemented
in the United States through the GCC.
AIG | 2024 Form 10-K
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ITEM 1 | Business
The standards issued by the FSB and/or the IAIS are not binding on the United States or other jurisdictions around the world unless
and until the appropriate local governmental bodies or regulators adopt laws or regulations implementing such standards.
PRIVACY, DATA PROTECTION, CYBERSECURITY AND ARTIFICIAL INTELLIGENCE REQUIREMENTS
We are subject to various laws and regulations that require financial institutions and other businesses to protect and safeguard
personal and other sensitive information and provide notice of their practices relating to the collection, disclosure and other processing
of personal information. We also are subject to U.S. federal and state laws and regulations requiring notification to affected individuals
and regulators of a data breach. Below we highlight a few key applicable privacy, data protection, cybersecurity and artificial
intelligence (AI) laws and regulations.
In the European Union, the EU Digital Operational Resilience Act (DORA) will require covered entities, including insurance
intermediaries, reinsurance intermediaries and ancillary insurance intermediaries to comply with a wide range of organizational and
technical requirements to identify, manage and mitigate operational risk arising from use of network and information systems and, in
particular, the use of third party information and communication technology service providers. Covered entities were required to
comply with DORA by January 17, 2025.
In October 2017, the NAIC adopted the Insurance Data Security Model Law (NAIC Data Security Model Law), which, among other
things, requires insurers, insurance producers and other entities required to be licensed under state insurance laws to develop and
maintain a written information security program, conduct risk assessments, and oversee the data security practices of third-party
service providers. As of December 31, 2024, more than 20 jurisdictions had adopted the NAIC Data Security Model Law. In addition,
on March 1, 2019, the NYDFS’s cybersecurity regulation became fully effective, requiring covered financial institutions, including
insurance entities licensed in New York, to, among other things, implement a cybersecurity program designed to protect information
systems. On November 1, 2023, the NYDFS published amendments to this cybersecurity regulation, which include additional
obligations for large insurers including enhanced and updated governance, risk assessment, and technology requirements, new
notification obligations, and clarifying changes regarding enforcement.
The State of California enacted the California Consumer Privacy Act of 2018 (CCPA), which went into effect as of January 1, 2020,
and imposes significant privacy obligations on businesses handling data related to California residents. The law has a number of
exceptions; it does not apply to personal information collected, processed, sold, or disclosed pursuant to the federal Gramm-Leach-
Bliley Act (GLBA) and implementing regulations or the California Financial Information Privacy Act (FIPA). The California Privacy
Rights Act (CPRA) passed in November 2020 became effective January 1, 2023 and amends the CCPA to create additional privacy
rights and obligations in California. A number of other states, including Colorado, Connecticut, Texas and Virginia also enacted
comprehensive consumer data privacy laws and many other states have proposed similar laws, albeit with similar exemptions for
entities and/or data governed by the GLBA.
These privacy laws impose requirements on covered businesses that are similar to those imposed by the CCPA with respect to
privacy notices, data subject rights and data security standards.
The Securities and Exchange Commission (SEC) requires that registrants disclose any material cybersecurity incident on Form 8-K
within four business days of determining that the incident the registrant has experienced is material. Periodic disclosures of, among
other things, (i) details on the company’s cybersecurity policies and procedures, and (ii) cybersecurity governance and oversight
policies, including the board of directors’ oversight of any material incidents (individually or in the aggregate) are also required.
The EU General Data Protection Regulation (GDPR) scope extends to entities established within the EEA (i.e., EU member states
plus Iceland, Liechtenstein and Norway) and to certain entities not established in the EEA (in certain instances, if they solicit or target
individuals in the EU by offering goods or services to EEA data subjects or monitoring the personal behavior of EEA data subjects
(e.g., in an online context)). The GDPR was also onshored in the UK through the European Union (Withdrawal) Act 2018, with
adjustments as provided in the Data Protection, Privacy and Electronic Communications (Amendments etc.) (EU Exit) Regulations
2019. Sanctions for non-compliance with the GDPR are onerous, with the potential for fines of up to 4 percent of global revenue for
the most serious infringements of the GDPR.
We have sought to address the GDPR’s requirements by demonstrating accountability for compliance with the GDPR’s principles
relating to processing of personal data, maintaining records of processing and completing mandatory Data Protection Impact
Assessments in connection with higher risk data processing activities.
The GDPR imposes requirements on the transfer of personal data outside of the EEA, including via standard contractual clauses
supplemented by an assessment and due diligence of the legal and regulatory landscape of the jurisdiction of the data importer, the
channels used to transmit personal data and the processors or subprocessors of personal data.
AIG | 2024 Form 10-K
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ITEM 1 | Business
The NAIC and certain U.S. states have adopted or are considering regulations and guidance relating to the use of “big data,” AI,
machine learning and other technology innovations in the insurance marketplace. For example, in December 2023, the NAIC adopted
a model bulletin on the use of AI by insurers that sets forth governance, risk management and other requirements that insurers using
AI are expected to establish. In addition, state insurance regulators in the United States have issued and will continue to consider
regulations or proposed guidelines in the use of external data, algorithms and AI in insurance practices, including underwriting,
marketing, and claims practices.
The EEA and the UK have also taken steps to regulate the use of data and algorithms used for the purpose of AI and automated
decision-making. The European Union Artificial Intelligence Act, which entered into force on August 1, 2024, and will be effective from
August 2, 2026, will broadly regulate the use of AI within the European Union. European countries, and supranational political
organizations like the EU and the Council of Europe, are expected to continue taking an active role in regulating AI in ways that may
impact the insurance industry.
We also are subject to other international laws and regulations that require financial institutions and other businesses to protect
personal and other sensitive information and provide notice of their practices relating to the collection, disclosure and other processing
of personal information and to obtain consent for specific processing activities. We are also subject to laws and regulations requiring
notification to affected individuals and regulators of security breaches and laws and regulations regarding data localization and the
cross-border transfer of information.
CLIMATE CHANGE
In recent years, federal- and state-level lawmakers and regulators in the United States and in other major countries in which we
operate have increased their scrutiny on financial institutions’ and other companies’ governance, risk oversight, disclosures, plans,
policies and practices in connection with climate change. There have been active and significant regulatory developments on these
issues in the form of newly proposed, issued or implemented laws, rules, regulations, guidance and frameworks regarding climate
change that impose, or will impose if and when effective, new requirements and expectations, including in connection with climate-
related governance, risk management, disclosures, stress testing and scenario analysis. Regulators in several jurisdictions are
considering the so-called protection gap as it relates to climate – instances in which populations are under-insured or there is
insufficient coverage to protect policyholders against the risks associated with climate change. In March 2024, the SEC adopted final
rules on climate-related disclosure, which have been stayed pending completion of judicial review in the U.S. Court of Appeals for the
Eighth Circuit, and which may be reconsidered by the new U.S. administration. We continue to actively monitor the regulatory
landscape surrounding these issues.
Available Information about AIG
Our corporate website is www.aig.com. We make available free of charge, through the Investors section of our corporate website, the
reports that we file or furnish with the SEC (including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current
Reports on Form 8-K, Proxy Statements on Schedule 14A, any amendments to each of those reports and filings, and other
disclosure), corporate governance information (including our Code of Business Conduct and Ethics and any amendments of or
waivers from the Code of Business Conduct and Ethics), and select press releases. Additionally, all of our reports filed with the SEC
are available on the SEC's website at sec.gov.
Except for the documents specifically incorporated by reference into this Annual Report on Form 10-K, information contained on our
website or that can be accessed through our website is not incorporated by reference into this Annual Report on Form 10-K.
Reference to our website is made as an inactive textual reference.
AIG | 2024 Form 10-K
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ITEM 1 | Business
ITEM 1A | Risk Factors
Risk Factor Summary
The following is a summary of the material risks and uncertainties that could adversely affect our business, financial condition and
results of operations. You should read this summary together with the more detailed description of each risk factor contained below.
Market Conditions
•
Deterioration of economic conditions, geopolitical tensions, changes in market conditions or weakening in global capital markets
have and may continue to materially affect our businesses, results of operations, financial condition and liquidity.
Reserves and Exposures
•
The amount and timing of insurance liability claims are difficult to predict and such claims may exceed the related liability for
unpaid losses and loss adjustment expenses.
•
Reinsurance may be unavailable or too expensive relative to its benefit and may not be adequate to protect us against losses.
•
Our consolidated results of operations, liquidity, financial condition and ratings are subject to the effects of natural and man-made
catastrophic events as well as mass torts.
•
Climate change may adversely affect our business and financial condition.
•
Concentration of our insurance, reinsurance and other risk exposures may have adverse effects.
•
Losses due to nonperformance or defaults by counterparties may materially and adversely affect the value of our investments, our
profitability and sources of liquidity.
Investment Portfolio and Concentration of Investments
•
Our investment portfolio is concentrated in certain segments of the economy, and the performance and value of our investment
portfolio are subject to a number of risks and uncertainties.
•
We rely on investment management and advisory arrangements with third-party investment managers for the majority of our
investment portfolio. The historical performance of any investment manager we engage should not be considered as indicative of
the future results of our investment portfolio, our future results or any returns expected on our Common Stock.
•
Our valuation of investments involves the application of methodologies and assumptions to derive estimates, which may differ from
actual experience and could result in changes to investment valuations that may materially adversely affect our business, results of
operations, financial condition and liquidity or lead to volatility in our net income.
Liquidity, Capital and Credit
•
AIG Parent’s ability to access funds from our subsidiaries is limited, and our sources of liquidity may be insufficient to meet our
needs, including providing capital that may be required by our subsidiaries.
•
We may not be able to generate cash to meet our needs due to the illiquidity of some of our investments.
•
A downgrade by one or more of the rating agencies in the Insurer Financial Strength ratings of our insurance companies could limit
their ability to write or prevent them from writing new business and impair their retention of customers and in-force business, and a
downgrade in our credit ratings could adversely affect our business, results of operations, financial condition and liquidity.
Business and Operations
•
Our risk management policies, standards and procedures may prove to be ineffective and leave us exposed to unidentified or
unanticipated risk, which could adversely affect our businesses, results of operations, financial condition and liquidity.
•
Pricing for our products is subject to our ability to adequately assess risks and estimate related losses.
•
We are exposed to certain risks if we are unable to maintain the availability of our critical technology systems and data and
safeguard the confidentiality and integrity of our data, which could compromise our ability to conduct business and adversely affect
our consolidated business, results of operations, financial condition and liquidity.
•
Our foreign operations expose us to risks that may affect our operations.
•
Third parties we rely upon to provide certain business and administrative services on our behalf may not perform as anticipated,
which could have an adverse effect on our business and results of operations.
ITEM 1A | Risk Factors
AIG | 2024 Form 10-K
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•
We may experience difficulty in marketing and distributing products through our current and future distribution channels and the
use of third parties may result in additional liabilities.
•
Our restructuring initiatives may not yield expected reductions in expenses and/or improvements in operational and organizational
efficiency.
•
Business or asset acquisitions and dispositions may expose us to certain risks.
•
We are subject to risks from our continuing equity market exposure to Corebridge. There can be no assurances that the anticipated
benefits of our sales of Corebridge stock will be achieved.
•
Significant legal or regulatory proceedings may adversely affect our business, results of operations or financial condition.
•
Increasing scrutiny and evolving expectations from investors, customers, regulators, policymakers and other stakeholders
regarding environmental, social, governance and sustainability matters, including governmental responses to such matters, may
adversely affect our reputation or otherwise adversely impact our business and results of operations.
•
An epidemic, pandemic or other health crisis could materially and adversely affect our business, results of operations, financial
condition or liquidity.
•
We may not be able to protect our intellectual property and may be subject to infringement claims.
Regulation
•
Our businesses are heavily regulated and changes in laws and regulations may affect our operations, increase our insurance
subsidiary capital requirements or reduce our profitability.
•
New laws and regulations or new interpretations of current laws and regulations, both domestically and internationally, may affect
our businesses, results of operations, financial condition and ability to compete effectively.
•
An “ownership change” could limit our ability to utilize tax loss and credit carryforwards to offset future taxable income.
•
New and proposed changes to tax laws could increase our corporate taxes.
Estimates and Assumptions
•
Estimates or assumptions used in the preparation of financial statements and modeled results used in various areas of our
business may differ materially from actual experience.
•
Changes in accounting principles and financial reporting requirements may impact our consolidated results of operations and
financial condition.
•
If our businesses do not perform well and/or their estimated fair values decline, we may be required to recognize an impairment of
our goodwill or establish an additional valuation allowance against the related deferred income tax assets, which could have a
material adverse effect on our results of operations and financial condition.
Employees and Competition
•
Employee error and misconduct may be difficult to detect and prevent and may result in reputational damage and significant
losses.
•
Competition for employees in our industry is intense, and managing key employee succession is critical to our success. We may
not be able to attract and retain the key employees and other highly skilled employees we need to support our businesses.
•
We face intense competition in each of our business lines, and technological changes may present new and intensified challenges
to our businesses.
AIG | 2024 Form 10-K
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ITEM 1A | Risk Factors
Risk Factors
Investing in AIG involves risk. In deciding whether to invest in AIG, you should carefully consider the following risk factors. Any of
these risk factors could have a significant or material adverse effect on our businesses, results of operations, financial condition or
liquidity. They could also cause significant fluctuations and volatility in the trading price of our securities. Readers should not consider
any descriptions of these factors to be a complete set of all potential risks that could affect AIG. These factors should be considered
carefully together with the other information contained in this report and the other reports and materials filed by us with the SEC.
Further, many of these risks are interrelated and could occur under similar business and economic conditions, and the occurrence of
certain of them may in turn cause the emergence or exacerbate the effect of others. Such a combination could materially increase the
severity of the impact of these risks on our businesses, results of operations, financial condition and liquidity above and beyond a
risk’s singular impact.
MARKET CONDITIONS
Deterioration of economic conditions, geopolitical tensions, changes in market conditions or weakening in global capital
markets have and may continue to materially affect our businesses, results of operations, financial condition and liquidity.
Our businesses are highly dependent on global economic and market conditions. Weaknesses in economic conditions, including a
recessionary environment, poor capital markets performance, market volatility, volatility in interest rate levels and inflation have in the
past led to, and may in the future lead to, among other consequences, a poor operating environment, erosion of consumer and
investor confidence, reduced business volumes, deteriorating liquidity and declines in asset valuations.
Key ways in which we have been, and could be, negatively affected by economic conditions include:
•
increased loss payments and loss costs due to inflation;
•
increased challenges to insurance policy terms and conditions, such as standard exclusions;
•
increases in costs associated with third-party reinsurance, or decreased ability to obtain reinsurance on acceptable terms;
•
the increased likelihood of, or increased magnitude of, asset impairments caused by market fluctuations, deterioration in collateral
values or credit deterioration of borrowers; and
•
reduced premiums.
Adverse economic conditions may result from a variety of factors including domestic and global economic and political developments,
including changes in interest rate levels, plateauing or decreasing economic growth and business activity, recessions, social inflation,
inflationary or deflationary pressures in developed economies, including the United States, civil unrest, pandemics, geopolitical
tensions, changes to international trade and/or tariff policies, foreign investment restrictions, or military action, such as the armed
conflict between Ukraine and Russia and corresponding sanctions imposed by the United States and other countries, or the conflict in
Israel and the surrounding areas, and new or evolving legal and regulatory requirements on business investment, hiring, migration,
labor supply and global supply chains.
These and other market, economic, regulatory and political factors, including the effects of inflation, macroeconomic uncertainty,
domestic and international political tensions, disruption to our business operations in countries exposed to geopolitical risk, natural
disasters and the increased costs associated with meeting customer needs in such regions, adverse impacts resulting from changes
to international trade and tariff policies, and any potential U.S. government shutdown, have had and could continue to have a material
adverse effect on our businesses, results of operations, financial condition, capital and liquidity in many ways, including:
•
lower levels of consumer demand for and ability to afford our products and commercial business activities that have decreased and
may continue to decrease revenues and profitability and thus impair goodwill, deferred tax assets or other long-term assets;
•
increased credit impairments, downgrades and losses across single or numerous asset classes due to lower collateral values or
deteriorating cash flow and profitability by borrowers that could lead to higher defaults on the Company’s investment portfolio,
especially in geographic, industry or investment sectors where the Company has higher concentrations of exposure, and widening
of credit spreads that could reduce investment asset valuations and increase statutory capital requirements;
•
increased market volatility and uncertainty that could decrease liquidity, increase borrowing costs and limit access to capital
markets;
•
the reduction of investment income generated by, or the market value of, our investment portfolio;
•
increased costs related to our direct and third-party support services, labor and financing, increased credit risk and decreased
sales as a result of inflationary pressures; and
•
limitations on business activities and increased compliance risks with respect to economic sanctions regulations relating to
jurisdictions in which our businesses operate or we have operations.
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ITEM 1A | Risk Factors
We are exposed to certain risks arising from or exacerbated by fluctuations in interest rates, such as the mismatch between the
expected duration of our liabilities and our assets, changes in certain statutory reserve or capital requirements that are based on
formulas or models that consider interest rates or prescribed interest rates, increased financing and refinancing costs, in particular
with respect to our corporate debt instruments; and lower investment income on our floating rate investments that will adjust to lower
coupons if short-term rates decrease. Changes in interest rates have had and could continue to have a material adverse effect on the
value of our investment portfolio. For example, increases in interest rates have impacted, and may continue to impact, our investment
portfolio by decreasing the estimated fair values of the fixed income securities that constitute a substantial portion of our investment
portfolio as well as the alternative investments in our investment portfolio. This in turn has increased and could continue to increase
the unrealized loss positions in our portfolio which could materially and adversely affect our business, results of operations, financial
condition and liquidity. Should a low interest rate environment return, it could in the future negatively affect the performance of our
investments and reduce the level of investment income earned on our investment portfolios.
In addition, if our investment managers fail to react appropriately to difficult market or economic conditions, our investment portfolio
could incur material losses.
RESERVES AND EXPOSURES
The amount and timing of insurance liability claims are difficult to predict and such claims may exceed the related liability
for unpaid losses and loss adjustment expenses.
We regularly review the adequacy of the established liability for unpaid losses and loss adjustment expenses. We also conduct
extensive analyses of our reserves during the year. Our liability for unpaid losses and loss adjustment expenses, however, has and
may develop adversely and materially impact our businesses, results of operations, financial condition and liquidity.
Estimation of ultimate net losses, loss expenses and the liability for unpaid losses and loss adjustment expenses is a complex
process, particularly for both long-tail and medium-tail liability lines of business. There is also greater uncertainty in establishing
reserves with respect to new business, particularly new business involving recently introduced product lines. In these cases, there is
less historical experience or knowledge and less data upon which the actuaries can rely. Estimating reserves is further complicated by
unexpected claims or unintended coverages that emerge due to unexpected events, such as pandemics or geopolitical conflicts.
These emerging issues may increase the size or number of claims beyond our intent at the time of underwriting and may not become
apparent for many years after a policy is issued.
While we use a number of analytical reserve development techniques to project future loss development, the liability for unpaid losses
and loss adjustment expenses has been and may continue to be significantly affected by changes in loss cost trends or loss
development factors that we relied upon in setting the liability for unpaid losses and loss adjustment expenses. These changes in loss
cost trends or loss development factors could be due to changes in actual versus expected claims and losses, difficulties in predicting
changes, such as changes in inflation, unemployment, or other social or economic factors affecting claims, including judicial and
legislative actions, and changes in the tort environment. Any deviation in loss cost trends or in loss development factors might not be
identified for an extended period of time after we record the initial loss reserve estimates for any accident year or number of years.
We review and update actuarial assumptions at least annually, typically in the third quarter for reserves. If actual experience or
revised future expectations result in projected future losses, we may be required to record additional liabilities through a charge to net
realized gains or losses in the then-current period, which could negatively affect our business, results of operations, financial condition
and liquidity. For additional information on reserve development, see Part II, Item 7. MD&A – Insurance Reserves.
For additional information on our loss reserves, see Part II, Item 7. MD&A – Critical Accounting Estimates – Loss Reserves and Note
13 to the Consolidated Financial Statements.
Reinsurance may be unavailable or too expensive relative to its benefit and may not be adequate to protect us against
losses.
Our subsidiaries are major purchasers of third-party reinsurance and we use reinsurance as part of our overall risk management
strategy. While reinsurance does not discharge our subsidiaries from their obligation to pay claims for losses insured under our
policies, it makes the reinsurer liable to our subsidiaries for the reinsured portion of the risk. Market conditions beyond our control
have impacted and may in the future impact the availability and cost of reinsurance and could have a material adverse effect on our
business, results of operations and financial condition. For example, reinsurance is typically more difficult or costly to obtain after a
year or consecutive years with a large number of major catastrophes, the severity and frequency of which have increased in recent
years, and likelihood of which may be further exacerbated by climate change. We have been and may, at certain times be, (i) forced
to incur additional costs for reinsurance, (ii) unable to obtain sufficient reinsurance on acceptable terms, or (iii) unable to obtain
reinsurance for certain parts of our business. In instances where reinsurance is more costly, insufficient on acceptable terms or
unavailable, we have had to, and will in the future have to accept an increase in exposure to risk, reduce or stop writing certain lines
of business written by our subsidiaries or seek alternatives in line with our risk limits, or a combination thereof.
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ITEM 1A | Risk Factors
Additionally, we are exposed to credit risk with respect to our subsidiaries’ reinsurers to the extent the reinsurance receivable is not
secured, or is inadequately secured by collateral or does not benefit from other credit enhancements. We also bear the risk that a
reinsurer is, or may be, unwilling to pay amounts we have recorded as reinsurance recoverables for any reason, including that (i) the
terms of the reinsurance contract do not reflect the intent of the parties to the contract or there is a disagreement between the parties
as to their intent, or (ii) the terms of the contract cannot be legally enforced. The insolvency of one or more of our reinsurers, the
inability or unwillingness of such reinsurers to make timely payments under the terms of our contracts or payments in an amount
equal to our reinsurance recoverable, or the risk that the reinsurance transaction does not operate as intended, including due to a
change in laws and regulations or on account of court or arbitration panel interpretations, could have a material adverse effect on our
results of operations and liquidity.
Moreover, the use of reinsurance placed in the capital markets or placed with alternative market reinsurers supported by capital
market institutions, like private equity houses that fund single purpose reinsurance capital vehicles, may not provide the same levels
of protection as traditional reinsurance transactions. Any disruption, volatility and uncertainty in these markets or with respect to these
capital market participants or these types of alternative reinsurance structures may impact the protection provided by this type of
reinsurance or may limit our ability to access such markets on terms favorable to us or at all. Also, to the extent that we intend to use
structures based on an industry loss index or other non-indemnity trigger rather than on actual losses incurred by us, we could be
subject to residual risk.
The availability of private sector reinsurance for terrorism is limited and we currently have limited reinsurance coverage for terrorist
attacks. While we benefit from the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA), which provides U.S. government
risk assistance to the insurance industry to manage the exposure to terrorism incidents, TRIPRA has specific program limits and does
not cover losses in certain lines of business such as personal property and personal casualty. We also rely on the government-
sponsored and government-arranged terrorism reinsurance programs, including pools, in force in applicable non-U.S. jurisdictions.
The realization of these risks may materially and adversely affect our business, results of operations and financial condition.
For additional information on our reinsurance recoverable, see Part II, Item 7. MD&A – Enterprise Risk Management – Insurance
Risks – Reinsurance Activities – Reinsurance Recoverable.
Our consolidated results of operations, liquidity, financial condition and ratings are subject to the effects of natural and
man-made catastrophic events as well as mass torts.
Events such as hurricanes, windstorms, hailstorms, flooding, earthquakes, landslides, wildfires, solar storms, earth sinking, tsunamis,
war or other military action, acts of terrorism, explosions and fires, cyberattacks, product defects, pandemics and other highly
contagious diseases, mass torts, civil unrest and other catastrophes have adversely affected our business in the past and could do so
in the future.
Catastrophic events, and legislative or regulatory responses thereto, have in the past and could in the future result in losses in any
business in which we operate, and could expose us to:
•
widespread claim costs associated with property, casualty, general liability, bodily injury, workers’ compensation, accident and
health, travel, business interruption and cyber claims, among others;
•
loss resulting from a decline in the value of our invested assets;
•
limitations on our ability to recover deferred tax assets;
•
loss resulting from actual policy experience that is adverse compared to the assumptions made in product pricing;
•
revenue loss due to decline in customer base;
•
declines in value and/or losses with respect to companies and other entities whose securities we hold and counterparties we
transact business with and have credit exposure to, including reinsurers;
•
significant disruptions to our physical infrastructure, systems and operations; and
•
widespread loss or corruption of personal or sensitive business data.
Natural and man-made catastrophic events are generally unpredictable. Our exposure to catastrophe-related loss depends on various
factors, including the frequency and severity of the catastrophes, the availability of reinsurance, the rate of inflation and the value and
geographic or other concentrations of insured companies and individuals. Vendor models and proprietary assumptions and processes
that we use to manage catastrophe exposure may prove to be ineffective due to incorrect assumptions or estimates. For example,
modeling for the more unpredictable and infrequent types of catastrophes, such as terrorism, cyber incidents and pandemics, is even
more difficult and may be less reliable.
In addition, legislative and regulatory initiatives and court decisions following major catastrophes (both natural and man-made), as
well as mass torts, have required and could in the future require us to pay the insured beyond the provisions of the original insurance
policy and may prohibit the application of a deductible, resulting in inflated and unanticipated claims; or impose other restrictions,
which would reduce our ability to mitigate exposure. These initiatives could impair our cash flows and, without regulatory relief, could
adversely impact our subsidiaries’ capital ratios.
AIG | 2024 Form 10-K
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ITEM 1A | Risk Factors
For additional information on potential catastrophic events, including a sensitivity analysis of our exposure to certain catastrophes, see
Part II, Item 7. MD&A – Enterprise Risk Management – Insurance Risks.
For information regarding the effects of climate change on our business, see “Climate change may adversely affect our business and
financial condition” below.
Climate change may adversely affect our business and financial condition.
Climate change, indicated by higher concentrations of greenhouse gases, a warming atmosphere and ocean, wildfires, diminished
snow and ice, and a rise in sea levels, appears to have contributed to an increase in the frequency and severity of natural disasters
and the creation of uncertainty as to future trends and exposures. As such, climate change presents significant financial implications
for us in areas such as underwriting, claims and investments, as well as risk capacity, financial reserving and operations.
Climate change presents challenges to our ability to effectively underwrite, model and price catastrophe risk particularly if the
frequency and severity of catastrophic events such as pandemics, hurricanes, tornadoes, heatwaves, floods, wildfires and windstorms
and other natural disasters continues to increase. For example, losses resulting from actual policy experience may be adverse as
compared to the assumptions made in product pricing and our ability to mitigate our exposure may be reduced.
Climate change-related risks may also adversely impact the value of the securities that we hold or lead to credit risk of other
counterparties we transact business with, including reinsurers. Our reputation or corporate brand could also be negatively impacted
as a result of changing customer or societal perceptions of organizations that we either insure or invest in due to their actions (or lack
thereof) with respect to climate change, as well as political initiatives or other stakeholder expectations with respect thereto.
In addition, lawmakers and regulators at the federal, state and local levels have imposed and may continue to impose new
requirements or issue new guidance aimed at addressing or mitigating climate change-related risks and efforts undertaken in
response thereto. Additional actions by foreign governments, regulators and international standard setters have and could result in
substantial expansions of the regulations, guidance or expectations to which we may be subject. It is also possible that the laws,
regulations and guidance adopted in U.S. local, state, U.S. federal or foreign jurisdictions regarding climate change-related risks will
differ from one another, and that they could be inconsistent with the laws and regulations of other jurisdictions in which we operate.
This could result in us having to comply with differing or inconsistent laws, regulations and guidance across jurisdictions.
Additionally, litigation related to climate change has increased in recent years. Many lawsuits center on enforcement or interpretation
of environmental laws and regulations, often seeking to use litigation as a tool to influence governmental and corporate climate
policies. Other cases seek damages for contribution to climate change or for insufficient disclosure around material financial risks,
which could cause us to experience increased claims under liability policies, such as casualty and directors’ and officers’ insurance
policies, increase our liabilities and affect the viability of certain of our business lines.
In addition, severe weather and other effects of climate change result in more frequent and more severe damages, leading to lawsuits
against our insureds. Indirect climate change effects are also seen in litigation over flooding, mudslides and other severe weather that
results in injury or damage, as well as in construction defect litigation, chemical release lawsuits, and workers’ compensation claims.
Litigation related to climate change may, through increased claims from our customers and adverse impacts to the value of the
securities that we hold, adversely impact our business and results of operations.
We have also faced and may continue to face business continuity risk as a result of climate change-related incidents that may disrupt
business operations, including extreme weather events. We cannot predict the long-term impacts of climate change on our business
and results of operations.
For information regarding risks associated with other catastrophic events, see Reserves and Exposures – “Our consolidated results of
operations, liquidity, financial condition and ratings are subject to the effects of natural and man-made catastrophic events” above.
Concentration of our insurance, reinsurance and other risk exposures may have adverse effects.
We are exposed to risks as a result of concentrations in our insurance policies, investments, derivatives and other obligations that we
undertake for customers and counterparties. Further, any risk management arrangements we employ to manage concentration risks,
whether directly or through third parties, may not be available on acceptable terms or may prove to be ineffective. Our risk exposures
under insurance policies, derivatives and other obligations are, from time to time, compounded by risk exposure assumed in the
management of our investment portfolio. Also, our exposure for certain single risk coverages and other coverages may be so large
that adverse experience compared to our expectations may have a material adverse effect on our consolidated results of operations
or result in additional statutory capital requirements for our subsidiaries.
In addition, the deconsolidation for accounting purposes and ongoing divestment of our stake in Corebridge, could increase the
materiality of these potential concentrations in the remaining portfolio. For additional information on risks associated with our
continuing equity market exposure to Corebridge, see Business Operations – “We are subject to risks from our continuing equity
market exposure to Corebridge. There can be no assurances that the anticipated benefits of our sales of Corebridge stock will be
achieved” below.
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ITEM 1A | Risk Factors
Also see Part II, Item 7. MD&A – Business Segment Operations – General Insurance – Business Strategy and – Industry and
Economic Factors.
Losses due to nonperformance or defaults by counterparties may materially and adversely affect the value of our
investments, our profitability and sources of liquidity.
We are exposed to credit risk arising from exposures to various counterparties related to investments, derivatives, premiums
receivable, certain businesses and reinsurance recoverables. These counterparties include, but are not limited to, issuers of fixed
income and equity securities we hold, borrowers of loans we hold, customers, plan sponsors, trading counterparties, counterparties
under swaps and other derivatives instruments, reinsurers, corporate and governmental entities whose payments or performance we
insure, joint venture partners, clearing agents, exchanges, clearing houses, custodians, brokers and dealers, commercial banks,
investment banks, intra-group counterparties with respect to derivatives and other third parties, financial intermediaries and
institutions and guarantors. These counterparties may default on their obligations to us due to bankruptcy, insolvency, receivership,
financial distress, lack of liquidity, adverse economic conditions, operational failure, fraud, government intervention and other reasons.
In addition, for exchange-traded derivatives, such as futures, options as well as "cleared" over-the-counter derivatives, we are
generally exposed to the credit risk of the relevant central counterparty clearing house and futures commission merchants through
which we clear derivatives. Defaults by these counterparties on their obligations to us could have a material adverse effect on the
value of our investments, business, financial condition, results of operations and liquidity.
An insolvency of, or the appointment of a receiver to rehabilitate or liquidate, a significant competitor could negatively impact our
business if such appointment were to impact consumer confidence in our products and services. Additionally, if the underlying assets
supporting the structured securities we invest in are expected to default or actually default on their payment obligations, our securities
may incur losses.
INVESTMENT PORTFOLIO AND CONCENTRATION OF INVESTMENTS
Our investment portfolio is concentrated in certain segments of the economy, and the performance and value of our
investment portfolio are subject to a number of risks and uncertainties.
Our results of operations and financial condition have in the past been, and may in the future be, adversely affected by the degree of
concentration in our consolidated investment portfolio. For example, we have significant holdings of real estate and real estate-related
investments, including residential mortgage- backed securities (both U.S. government-sponsored enterprise-issued and Non-Agency
issued), and commercial mortgage-backed securities and whole loans. We also have significant exposures to domestic and global
financial institutions certain industries, such as consumer discretionary and non-discretionary, the U.S. federal, state and local
government issuers and authorities, and various governments globally. Events or developments that have a negative effect on any
particular industry, asset class, group of related industries or geographic region may adversely affect the valuation of our investments
to the extent they are concentrated in such segments. Our ability to sell assets in such segments may be limited.
Our investments are also subject to market risks and uncertainties, including, in addition to interest rate risk, changes in the level of
credit spreads, currency rates, and equity prices, each of which has affected and will continue to affect the value of investments in our
investment portfolio as well as the performance of, and returns generated by, such investments. For information regarding risks
associated with interest rate volatility, see Market Conditions above.
Furthermore, our alternative investment portfolio, which is subject to volatility in equity markets, includes investments for which
changes in fair value are reported through pre-tax income. An economic downturn or decline in the capital markets has had and could
continue to have a material adverse effect on our investment income, including as a result of decreases in the fair value of alternative
investments.
We rely on investment management and advisory arrangements with third-party investment managers for the majority of our
investment portfolio. The historical performance of any investment manager we engage should not be considered as
indicative of the future results of our investment portfolio, our future results or any returns expected on our Common Stock.
We rely on external investment managers to manage the majority of our investment portfolio, consisting of liquid fixed income, certain
private placement credit, certain private equity investments, commercial real estate-related equity investments and commercial
mortgage loans.
Our investment managers are generally compensated based on the size of the investment portfolios that they manage, rather than
based on investment profits or income; as a result, these investment managers are not directly incentivized to maximize investment
returns. Our investment portfolio’s returns have benefited historically from investment opportunities and general market conditions that
may not currently exist and may not be repeated. There can be no guarantee that any investment manager we engage will be able to
achieve any particular returns or generate investment opportunities with attractive, risk-adjusted returns for our investment portfolio in
the future. If any of our investment managers becomes unable to effectively manage our portfolio investments, the concentration of
assets in our portfolio that are managed by it could adversely affect our business, results of operations, financial condition and
liquidity.
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ITEM 1A | Risk Factors
In addition, we have become more reliant on our external asset managers, and such increased dependence has and may reduce our
internal capabilities and expertise or expose us to greater risk, including the risk that external asset managers may fail to meet our
performance expectations or otherwise experience disruptions or losses.
Our valuation of investments involves the application of methodologies and assumptions to derive estimates, which may
differ from actual experience and could result in changes to investment valuations that may materially adversely affect our
business, results of operations, financial condition and liquidity or lead to volatility in our net income.
It has been and may continue to be difficult to value those of our investments or derivatives that are not actively traded. There also
may be cases where, due to the financial environment or market conditions, normally active markets become inactive or less active,
which can result in insufficient observable data. As a result, valuations may include inputs and assumptions that are less observable
or require greater estimation and judgment as well as valuation methods that are more complex. These values may not be realized in
a market transaction, may not reflect the value of the asset and may change very rapidly as market conditions change and valuation
assumptions are modified. Decreases in value and/or an inability to realize that value in a market transaction or other disposition may
have a material adverse effect on our business, results of operations, financial condition and liquidity.
LIQUIDITY, CAPITAL AND CREDIT
AIG Parent’s ability to access funds from our subsidiaries is limited, and our sources of liquidity may be insufficient to meet
our needs, including providing capital that may be required by our subsidiaries.
As a holding company, AIG Parent depends on dividends and other payments from its subsidiaries to fund operations, pay dividends,
repurchase shares, meet debt service obligations and meet the capital and liquidity needs of our subsidiaries. The majority of our
investments are held by our regulated subsidiaries. Any inability by our subsidiaries to make dividend or other payments in an amount
sufficient to enable AIG Parent to meet its cash requirements could have an adverse effect on our operations or our business, results
of operations, financial condition, capital and liquidity.
The ability of our subsidiaries to pay dividends to AIG Parent in the future will depend on their earnings, capital levels, tax
considerations, covenants contained in any financing or other agreements, applicable regulatory restrictions and rating agency
requirements. In addition, such payments could be limited as a result of claims against our subsidiaries by their creditors, including
suppliers, vendors, lessors and employees. Additionally, our insurance subsidiaries may be limited in their ability to make dividend
payments to AIG Parent in the future because of the need to meet their obligations or to support their own capital levels or because of
regulatory limits and restrictions or changes in, or interpretations of, regulatory or rating agency standards.
Our decision to pursue strategic changes or transactions in our business and operations may also subject our subsidiaries’ dividend
plans to heightened regulatory scrutiny and could make obtaining regulatory approvals for extraordinary distributions by our
subsidiaries, if required, more difficult. We are also subject to certain other restrictions on our capital from time to time.
If our liquidity is insufficient to meet our needs, we may need to have recourse to third-party financing, external capital markets or
other sources of liquidity, which may not be available or could be expensive. The availability and cost of any additional financing at
any given time depends on a variety of factors, including general market conditions, the volume of trading activities, the overall
availability of credit, regulatory actions and our credit ratings and credit capacity. It is also possible that, as a result of such recourse to
external financing, customers, lenders or investors could develop a negative perception of our long- or short-term financial prospects.
If AIG Parent is unable to satisfy a capital need of a subsidiary, the credit rating agencies could downgrade the subsidiary’s financial
strength ratings or the subsidiary could become insolvent or, in certain cases, could be seized by its regulator.
In the ordinary course of our business, we are required to post collateral for our insurance company subsidiaries from time to time. We
may be required to post additional collateral due to regulatory changes from time to time, which could adversely impact our business,
financial condition, results of operations and cash flows.
For additional information on our liquidity, see Part II, Item 7. MD&A – Liquidity and Capital Resources.
We may not be able to generate cash to meet our needs due to the illiquidity of some of our investments.
We have a diversified investment portfolio. However, economic conditions as well as adverse capital market conditions, including a
lack of buyers, the inability of potential buyers to obtain financing on reasonable terms, volatility, credit spread changes, interest rate
changes, foreign currency exchange rates and/or declines in collateral values have in the past impacted, and may in the future
impact, the liquidity and value of our investments.
We have investments in certain securities, including certain fixed income structured and privately placed securities as well as
investments in private equity funds and hedge funds, mortgage loans and real estate, that are less liquid than other investments. If it
became necessary to sell such assets in a stressed market environment, the prices achieved in any sale may be lower than their
carrying value, which could cause a material adverse effect on our business, financial condition, results of operations and cash flows.
Adverse changes in the valuation of real estate and real estate-linked assets, volatility or deterioration of capital markets and widening
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ITEM 1A | Risk Factors
credit spreads have in the past, and may in the future, materially adversely affect the liquidity and the value of our investment
portfolios.
In the event additional liquidity is required by one or more of our companies, it may be difficult for us to generate additional liquidity by
selling, pledging or otherwise monetizing these or other of our investments at reasonable prices and time frames.
A downgrade by one or more of the rating agencies in the Insurer Financial Strength ratings of our insurance companies
could limit their ability to write or prevent them from writing new business and impair their retention of customers and in-
force business, and a downgrade in our credit ratings could adversely affect our business, results of operations, financial
condition and liquidity.
Downgrades of the Insurer Financial Strength (IFS) ratings of our insurance companies could (i) prevent these companies from
selling, or make it more difficult for them to succeed in selling, products and services, (ii) make it more difficult for them to obtain new
reinsurance or obtain it on reasonable pricing terms, and/or (iii) result in increased policy cancellations or return of premiums. A
downgrade of the IFS ratings of our insurance companies could result in a downgrade of AIG Parent’s credit ratings. In the event of a
downgrade of AIG Parent’s credit ratings, our financing costs will increase and the availability of financing could be limited. A
downgrade could also cause our derivative counterparties to limit or reduce their exposure to us and thus reduce our ability to
manage our market risk exposures effectively.
These events could adversely affect our business, results of operations, financial condition and liquidity.
For additional information on rating agency actions, see Part II, Item 7. MD&A – Liquidity and Capital Resources – Credit Ratings and
– Financial Strength Ratings.
BUSINESS AND OPERATIONS
Our risk management policies, standards and procedures may prove to be ineffective and leave us exposed to unidentified
or unanticipated risk, which could adversely affect our businesses, results of operations, financial condition and liquidity.
We have developed and continue to enhance enterprise-wide risk management policies, standards and procedures to identify,
monitor and mitigate risk to which we are exposed. Our risk management policies, standards and procedures may not be sufficiently
comprehensive and may not identify or adequately protect us from every risk to which we are exposed. Many of our methods of
identifying, measuring, underwriting and managing risks are based upon our study and use of historical market, applicant, customer,
employee and bad actor behavior or statistics based on historical models. As a result, these methods may not accurately predict
future exposures from events such as a major financial market disruption as the result of a natural or man-made catastrophe, that
could be significantly different than the historical measures indicate, and which could also result in claims levels not previously
observed. We have and will continue to enhance our underwriting processes, including, from time to time, considering and integrating
newly available sources of data to confirm and refine our traditional underwriting methods. Our efforts at implementing these
improvements may not, however, be fully successful, which may adversely affect our competitive position. We have also introduced
new product features designed to limit our risk and taken actions on in-force business, which may not be fully successful in limiting or
eliminating risk. Moreover, our hedging programs and reinsurance strategies that are designed to manage risk rely on assumptions
regarding our assets, liabilities, general market factors and the creditworthiness of our counterparties that could prove to be incorrect
or inadequate. Our hedging programs utilize various derivative instruments, including but not limited to interest rate swaps, credit
default swaps and foreign exchange forwards, as well as other hedging instruments, which may not effectively or completely reduce
our risk. Assumptions underlying models used to measure accumulations and support reinsurance purchases may prove inaccurate
and could leave us exposed to larger than expected catastrophe losses in any given period. In addition, our current business
continuity and disaster recovery plans may not be sufficient to reduce the impact of pandemics, a major cyber-attack, including
ransomware, and other natural or man-made catastrophic events. Other risk management methods depend upon the evaluation of
information regarding markets, clients, or other matters that is publicly available or otherwise accessible to us, which may not always
be accurate, complete, up-to-date or properly evaluated. Management of operational, legal and regulatory risks requires, among other
things, policies and procedures to record and verify large numbers of transactions and events in each jurisdiction in which we operate.
Further, various jurisdictions have unique requirements with respect to AI and environmental, social and governance matters, which
may impact the efficacy of our standardized risk management tools and techniques; therefore, our policies and procedures may not
be fully effective. Accordingly, our risk management policies and procedures may not adequately mitigate the risks to our business,
results of operations, financial condition and liquidity.
If our risk management policies and procedures are ineffective, we may suffer unexpected losses and could be materially adversely
affected. As our businesses change and the markets in which we operate evolve, new risks emerge, including risks posed by the
rapidly developing technology associated with AI and the implementation thereof within our operations, by our third-party vendors and
by competitors, and unanticipated challenges with respect thereto. As a result, new products or new business strategies may present
risks that are not appropriately identified, monitored or managed. The effectiveness of our risk management strategies may be limited,
resulting in losses, because of market stress or unanticipated financial market movements. In addition, there can be no assurance
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ITEM 1A | Risk Factors
that we can effectively review and monitor all risks or that all of our employees will understand, follow and comply with our risk
management policies and procedures.
Pricing for our products is subject to our ability to adequately assess risks and estimate related losses.
Our business is dependent on our ability to price our products effectively and charge appropriate premiums and other charges. Pricing
adequacy depends on a number of factors and assumptions, including proper evaluation of insurance risks, our expense levels, net
investment income expected to be realized, our response to rate actions taken by competitors, legal and regulatory developments, the
ability to obtain regulatory approval for rate changes and inflation. Management establishes target returns for each product based
upon the factors described above, certain underwriting assumptions and capital requirements, including statutory, GAAP and
economic capital models. We monitor and manage pricing and sales to achieve target returns on new business, but we may not be
able to achieve those returns, including due to the factors discussed above. Additionally, the property and casualty insurance markets
are historically cyclical and experience periods of relatively strong premium rates followed by periods of increased competition that
push premium rates down. Inadequate pricing and the difference between estimated results and actual results could have a material
adverse effect on the profitability of our operations and our financial condition.
We are exposed to certain risks if we are unable to maintain the availability of our critical technology systems and data and
safeguard the confidentiality and integrity of our data, which could compromise our ability to conduct business and
adversely affect our consolidated business, results of operations, financial condition and liquidity.
We use information technology systems, infrastructure, including energy supply, and networks and other operational systems to store,
retrieve, evaluate and use customer, employee and company data and information. Our business is highly dependent on our ability to
access these systems and networks to perform necessary business functions. In the event of a natural disaster, unauthorized access,
a terrorist attack, a major cyber-attack or other disruption, our systems, networks, and data may be inaccessible to our employees,
customers or business partners for an extended period of time, and we may be unable to meet our business obligations and
regulatory requirements for an extended period of time if our data or systems are disabled, manipulated, destroyed or otherwise
compromised. Additionally, some of our technology systems are older, legacy-type systems that are less efficient and require an
ongoing commitment of significant resources to maintain or upgrade, and in some cases may not be able to be fully protected or to
implement the latest security patches. Supply chain disruptions or delays could prevent us from maintaining and implementing
changes, updates and upgrades to our systems and networks in a timely manner or at all. System and network failures or outages,
including with respect to third parties, have and could compromise our ability to perform business functions in a timely manner, which
could harm our ability to conduct business, hurt our relationships with our business partners and customers and expose us to legal
claims as well as regulatory investigations and sanctions, any of which could have a material adverse effect on our business, results
of operations, financial condition and liquidity.
Some of these technology systems also rely upon third-party systems and services, which themselves may rely on the systems and
services of other third parties. Problems caused by, or occurring in relation to, our third-party providers’ systems and services,
including those resulting from breakdowns or other disruptions in information technology services provided by our third-party providers
and the other third parties on which they rely, our inability to acquire third-party services on commercially acceptable terms, failure of a
third-party provider to perform as anticipated or in compliance with applicable laws or regulations, inability of a third-party provider to
provide the required volumes of services or our third-party providers experiencing cyberattacks or data breaches, could materially and
adversely affect our business, results of operations, financial condition and liquidity.
Like other global companies, the systems and networks we maintain and third-party systems and networks we or our vendors use are
currently, and may in the future continue to be, subject to or targets of unauthorized or fraudulent access, including physical or
electronic break-ins or unauthorized tampering, as well as attempted cybersecurity threats such as “denial of service” attacks,
phishing, automated attacks, and other disruptive attacks, including ransomware. Cyber threats are constantly evolving and the
techniques used in these attacks change, develop and evolve rapidly, including the use of emerging technologies, such as advancing
forms of artificial intelligence and quantum computing by nation state threat actors and criminal organizations. The new cyber risks
introduced by these changes in technology, such as deepfake schemes, require us to devote significant attention to identification,
assessment and analysis of the risks and implementation of corresponding preventative measures. Additionally, the frequency and
sophistication of such threats continue to increase and often become further heightened in connection with geopolitical tensions. Also,
like other global companies, we have an increasing challenge of retaining and attracting highly qualified personnel to assist us in
combatting these security threats.
There is no assurance that our cybersecurity measures, including information security and technology policies and standards,
administrative, technical and physical controls and other actions by us or contracted third-parties designed as preventative, will
provide fully effective protection from threats to our data, systems and networks, including malware and computer virus attacks,
ransomware, unauthorized access, business e-mail compromise, misuse, denial-of-service attacks, system failures and other
disruptions. We maintain insurance to cover operational risks, such as cyber risk and technology outages, but this insurance may not
cover all costs associated with the consequences of information systems or personal, confidential or proprietary information being
compromised. In the case of a successful ransomware attack in which our data and information systems are compromised and
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ITEM 1A | Risk Factors
applicable processes to restore access are not effective, our information could be held hostage until a ransom, which may be
significant, is paid. In some cases, such a compromise may not be immediately detected which may make it difficult to restore critical
services, mitigate damage to assets and maintain the integrity and security of data including our policyholder, employee, agent, and
other confidential information processed through our systems and networks.
Additionally, since we rely heavily on information technology and systems (which is expected to increasingly include the use of
artificial intelligence) and on the integrity and timeliness of data to run our businesses and service our customers, any such security
event and resulting compromise of systems or data have and may impede or interrupt our business operations and our ability to
service our customers, and may materially and adversely affect our business, results of operations, financial condition and liquidity.
There can be no assurance that any actions taken by us to evaluate and enhance our information security and technology systems
and processes, including third-party systems and services on which we rely, as well as changes designed to update and enhance our
protective measures to address new threats, will decrease the risk of a system or process failure; further, such changes may create a
gap in the associated security measures during the change period. Any such system or process failure or security measures gap
could materially and adversely affect our business, results of operations, financial condition and liquidity.
We routinely transmit, receive and store personal, confidential and proprietary information by secured email and other electronic
means. Although we attempt to keep such information confidential and secure, we have been, and in the future may be, unable to do
so in all events, especially with clients, vendors, service providers, counterparties and other third parties who may not have or use
appropriate controls to protect personal, confidential or proprietary information. Failure to secure or appropriately handle personal,
confidential or proprietary information could cause a loss of data or compromised data integrity, give rise to remediation or other
expenses, expose us to liability under U.S. and international laws and regulations, subject us to litigation, investigations, sanctions,
and regulatory and law enforcement action, and result in reputational harm and loss of business, any of which could have a material
adverse effect on our business, results of operations, financial condition and liquidity.
Furthermore, certain of our businesses are subject to compliance with laws and regulations enacted by U.S. federal and state
governments, the EU or other jurisdictions or enacted by various regulatory organizations or exchanges relating to the privacy and
security of the information of clients, employees or others. The variety of applicable privacy and information security laws and
regulations exposes us to heightened regulatory scrutiny, requires us to incur significant technical, legal and other expenses in an
effort to ensure and maintain compliance and will continue to impact our business in the future by increasing legal, operational and
compliance costs. While we have taken steps to comply with privacy and information security laws, we cannot guarantee that our
efforts will meet the evolving standards imposed by data protection authorities. If we are found not to be in compliance with these
privacy and security laws and regulations, we may be subject to additional potential private consumer, business partner or securities
litigation, regulatory inquiries, and governmental investigations and proceedings, including class-actions. Any such developments may
damage our reputation and subject us to material fines and other monetary penalties and damages, divert management’s time and
attention, and lead to further enhanced regulatory oversight, any of which could have a material adverse effect on our business,
results of operations, financial condition and liquidity. Additionally, we expect that developments in privacy and cybersecurity
worldwide will increase the financial and reputational implications in the event of a significant breach of our or our third-party suppliers’
information technology systems. For additional information on data protection and cybersecurity regulations, see Item 1. Business –
Regulation – Privacy, Data Protection, Cybersecurity and Artificial Intelligence Requirements, and Part II, Item 7. MD&A – Enterprise
Risk Management – Operational Risk Management – Cybersecurity Risk.
Our foreign operations expose us to risks that may affect our operations.
Through our operations, licenses and authorizations and network partners, we provide insurance solutions that help businesses and
individuals in approximately 200 countries and jurisdictions protect their assets and manage risks. A substantial portion of our
business is conducted outside the United States, and we intend to continue to grow our business in strategic markets. Operations
outside the United States have in the past been, and may in the future be, affected by elevated climate risks, regional economic
downturns, changes in foreign currency exchange rates and foreign interest rates, political events or upheaval, sanctions policies,
nationalization and other restrictive government or regulatory actions, which could also affect our other operations.
Our subsidiaries operating in foreign jurisdictions must satisfy local regulatory requirements and it is possible that these local licenses
may require AIG Parent to meet certain conditions. Licenses issued by foreign authorities to our subsidiaries are subject to
modification and revocation. Consequently, our insurance subsidiaries could be prevented from conducting future business in some of
the jurisdictions where they currently operate. Adverse actions from any single country could adversely affect our results of
operations, depending on the magnitude of the event and our financial exposure at that time in that country.
We are subject to myriad regulations which govern items such as sanctions, bribery and anti-money laundering, for which failure to
comply could expose us to significant penalties. Laws and regulations aimed at preventing money laundering, which in some
jurisdictions apply to insurance companies, create obligations to know certain information about clients and take steps to monitor for
suspicious activities. The Foreign Corrupt Practices Act makes it unlawful for certain classes of persons and entities to make
payments to foreign government officials to assist in obtaining or retaining business. Also, the Department of the Treasury’s Office of
Foreign Assets Control administers regulations that restrict or prohibit dealings involving certain organizations, individuals and
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ITEM 1A | Risk Factors
countries. The UK, the EU, Japan and other jurisdictions maintain similar laws and regulations. Although we have policies and
controls in place that are designed to ensure compliance with these laws and regulations, if those controls are ineffective and/or an
employee or third party fails to comply with applicable laws and regulations, we could suffer civil and criminal penalties, including
disgorgement, and our business and our reputation could be adversely affected.
Third parties we rely upon to provide certain business and administrative services on our behalf may not perform as
anticipated, which could have an adverse effect on our business and results of operations.
We have used and will continue to use outsourcing strategies and third-party providers to transform operational and back office
processes and deliver contracted services in a broad range of areas. Such areas include, but are not limited to, administration or
servicing of certain policies and contracts, finance, actuarial, information technology services related to infrastructure, and investment
advisory and management services. The implementation of any technological advancements may be comprised of multiple
workstreams that are complex and, have in the past and may in the future, require significant time and resource prioritization and
result in delays due to the lack of sufficient resources to execute on a timely basis, inefficiencies stemming from changes that may be
required to the program or sequencing, failure to meet operational and financial targets due to additional priorities or other factors.
These risks may impair our ability to achieve anticipated improvements in our businesses may disrupt or may otherwise harm our
operations which could materially and adversely affect our businesses, financial condition and operations.
Further, third-party investment managers manage the majority of our investment assets. For information regarding our reliance on
third-party investment managers, see Investment Portfolio and Concentration of Investments – “We rely on investment management
and advisory arrangements with third-party investment managers for the majority of our investment portfolio. The historical
performance of any investment manager we engage should not be considered as indicative of the future results of our investment
portfolio, our future results or any returns expected on our Common Stock” above.
Some of the third-party providers we use are located outside the U.S., which exposes us to business disruptions and political risks
inherent to conducting business outside of the U.S. We periodically negotiate the terms of the provisions and renewal of these
relationships, and there can be no assurance that such terms will remain acceptable to us, such third parties or regulators. If such
third-party providers experience disruptions, fail to meet applicable licensure requirements, do not perform as anticipated or in
compliance with applicable laws and regulations, terminate or fail to renew our relationships, or such third-party providers in turn rely
on services from another third-party provider, who experiences such disruptions, licensure failures, nonperformance or
noncompliance, termination or non- renewal of its contractual relationships, we may experience operational difficulties, an inability to
meet obligations (including, but not limited to, contractual, legal, regulatory or policyholder obligations), a loss of business, increased
costs or reputational harm, compromises to our data integrity, or suffer other negative consequences, all of which may have a material
adverse effect on our business, consolidated results of operations, liquidity and financial condition. Third parties performing regulated
activities on our behalf, such as sales and servicing of insurance products, pose a heightened risk as we may be held accountable for
third-party conduct that fails to comply with applicable law.
For information regarding cyber risk arising from third-party providers, see Business and Operations – “We are exposed to certain
risks if we are unable to maintain the availability of our critical technology systems and data and safeguard the confidentiality and
integrity of our data, which could compromise our ability to conduct business and adversely affect our consolidated business, results
of operations, financial condition and liquidity” above.
We may experience difficulty in marketing and distributing products through our current and future distribution channels
and the use of third parties may result in additional liabilities.
We maintain relationships with a number of key distributors, which results in certain distributor concentration. Distributors have in the
past, and may in the future, elect to renegotiate the terms of existing relationships, such that those terms may not remain attractive or
acceptable to us, limit the products they sell, including the types of products offered by us, or otherwise reduce or terminate their
distribution relationships with us, with or without cause. This could be due to various reasons, such as industry consolidation of
distributors or other industry changes that increase the competition for access to distributors, developments in laws or regulations that
affect our business or industry, including the marketing and sale of our products and services, adverse developments in our business,
the distribution of products with features that do not meet minimum thresholds set by the distributor, strategic decisions that impact
our business, adverse rating agency actions or concerns about market-related risks.
Alternatively, renegotiated terms may not be attractive or acceptable to distributors, or we may terminate one or more distribution
agreements due to, for example, a loss of confidence in, or a change in control of, one of the third-party distributors. An interruption or
reduction in certain key relationships could materially affect our ability to market our products and could materially and adversely
affect our business, results of operations, financial condition and liquidity.
Key distribution partners could merge, consolidate, change their business models in ways that affect how our products are sold, or
terminate their distribution contracts with us, or new distribution channels could emerge and adversely impact the effectiveness of our
distribution efforts.
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ITEM 1A | Risk Factors
Also, if we are unsuccessful in attracting, retaining and training key distribution partners, or are unable to maintain our distribution
relationships, our sales could decline, which could have a material adverse effect on our business, results of operations, financial
condition and liquidity. In addition, substantially all of our distributors are permitted to sell our competitors’ products. If our competitors
offer products that are more attractive than ours or pay higher commission rates to the distribution partners than we do or for other
reasons outside of our control, these distribution partners could concentrate their efforts in selling our competitors’ products instead of
ours.
In addition, we can, in certain circumstances, be held responsible for the actions of our third-party distributors, including registered
representatives, insurance agents and agencies, marketing organizations, and their respective employees, agents and
representatives, in connection with the marketing and sale of our products by such parties, including the security of their operations
and their handling of confidential information and personal data, in a manner that is deemed not compliant with applicable laws and
regulations. This is particularly acute with respect to unaffiliated distributors where we may not be able to directly monitor or control
the manner in which our products are sold through third-party firms despite our risk assessment, training and compliance programs.
Further, misconduct by employees and agents in the sale of our products could also result in violations of laws by us or our
subsidiaries, regulatory sanctions and serious reputational or financial harm to us. The precautions we take to prevent and detect the
foregoing activities may not be effective. If our products are distributed in a manner alleged to be inappropriate, or third-party
distributors experience a security or data breach due to deficient operational controls, we could suffer reputational and/or other
financial harm to our business.
Our restructuring initiatives may not yield expected reductions in expenses and/or improvements in operational and
organizational efficiency.
We may not be able to fully realize the anticipated expense reductions and operational and organizational efficiency improvements we
expect to result from our focus on our operating model and associated initiatives. Actual costs to implement these initiatives may
exceed our estimates or we may be unable to fully implement and execute these initiatives as planned. Our businesses and results of
operations may be negatively impacted if we are unable to realize these anticipated expense reductions and efficiency improvements
or if implementing these initiatives harms our relationships with customers or employees or our competitive position. The successful
implementation of these initiatives may continue to require us to effect business rationalizations, technology enhancements, business
process outsourcing, workforce reductions, modifications to our operating model and other actions, which depend on a number of
factors, some of which are beyond our control.
Business or asset acquisitions and dispositions may expose us to certain risks.
The completion of any business or asset acquisition or disposition is subject to certain risks, including those relating to the receipt of
required regulatory approvals, the terms and conditions of regulatory approvals including any financial accommodations required by
regulators, our ability to satisfy such terms, conditions and accommodations, the occurrence of any event, change or other
circumstances that could give rise to the termination of a transaction and the risk that parties may not be willing or able to satisfy the
conditions to a transaction. As a result, there can be no assurance that any business or asset acquisition or disposition will be
completed as contemplated, or at all, or regarding the expected timing of the completion of the acquisition or disposition.
Once we complete acquisitions or dispositions, there can be no assurance that we will realize the anticipated economic, strategic or
other benefits of any transaction. For example, the integration of businesses we acquire may not be as successful as we anticipate or
there may be undisclosed risks present in such businesses. Additionally, difficulties or delays in separating a divested business from
our existing infrastructure, systems and operations could reduce the anticipated economic, strategic or other benefits of such
transaction. Acquisitions and dispositions involve a number of risks, including operational, strategic, financial, accounting, legal,
compliance and tax risks. Difficulties integrating an acquired business may result in the acquired business performing differently than
we expected (including due to the loss of customers) or in our failure to realize anticipated expense-related efficiencies. Our existing
businesses could also be negatively impacted by acquisitions. Risks resulting from future acquisitions may have a material adverse
effect on our results of operations and financial condition. In connection with a business or asset disposition, we may also hold a
concentrated position in securities of the acquirer as part of the consideration, which subjects us to risks related to the price of equity
securities and our ability to monetize such securities. We have also provided and may provide financial guarantees and indemnities in
connection with the businesses we have sold or may sell, as described in greater detail in Note 15 to the Consolidated Financial
Statements. While we do not currently believe that claims under these indemnities will be material, it is possible that significant
indemnity claims could be made against us. If such a claim or claims were successful, it could have a material adverse effect on our
results of operations, cash flows and liquidity.
For additional information regarding the risks associated with our continuing equity market exposure to Corebridge, see Business and
Operations – “We are subject to risks from our continuing equity market exposure to Corebridge. There can be no assurances that the
anticipated benefits of our sales of Corebridge stock will be achieved” above.
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ITEM 1A | Risk Factors
We are subject to risks from our continuing equity market exposure to Corebridge. There can be no assurances that the
anticipated benefits of our sales of Corebridge stock will be achieved.
Since September of 2022 when we closed on the initial public offering of Corebridge’s common stock, we have continued to sell down
our interest in Corebridge. On June 9, 2024, we met the requirements for the deconsolidation of Corebridge for accounting purposes.
For a detailed discussion of the deconsolidation, see Note 4 to the Consolidated Financial Statements.
Although Corebridge has been deconsolidated from our consolidated financial results, we continue to hold a significant stake in
Corebridge's common stock. At the time of deconsolidation, we elected the fair value option to account for our remaining investment in
Corebridge. From that date onward, the fair value change in Corebridge’s stock, and dividends received from Corebridge, are
recognized in net investment income. As a result, a decline in the market value of Corebridge common stock may result in a decrease
in our investment income and may have a material and adverse effect on our results and financial condition. There can be no
assurances given as to the price, transaction costs, or timing of further Corebridge stock sales and, as a result, we may fail to realize
the expected benefits of our sales of such stock if there are adverse movements in its market value prior to, or at the time of, such
sales.
Further, the sale of our remaining Corebridge stock involves a number of divestment-related risks, including (i) unanticipated
developments that may delay, prevent or otherwise adversely affect our ability to continue the full divestment, including an economic
downturn or unfavorable capital markets conditions; (ii) unforeseen losses, liabilities or asset impairments arising from further
dispositions; and (iii) challenges associated with the valuation of Corebridge and the Company as we seek to fully divest our
investment in Corebridge.
In addition, the divestment of Corebridge, or a significant delay in our ability to continue to sell our Corebridge stock, has caused and
could continue to cause the emergence, or exacerbate the effects of, many of the other risks discussed herein, including changes in
our deferred tax assets and liabilities and our ability to utilize certain tax loss and credit carryforwards to offset future taxable income.
Significant legal or regulatory proceedings may adversely affect our business, results of operations or financial condition.
In the normal course of business, we face significant risk from regulatory and governmental investigations and civil actions, litigation
and other forms of dispute resolution in various domestic and foreign jurisdictions. We frequently engage in litigation and arbitration
concerning the scope of coverage under insurance and reinsurance contracts, and face litigation and arbitration in which our
subsidiaries defend or indemnify their insureds under insurance contracts.
Additionally, from time to time, various regulatory and governmental agencies review the transactions and practices of the Company
and our subsidiaries in connection with company-specific matters, or industry-wide and other inquiries into, among other matters, the
business practices of current and former operating insurance subsidiaries. Such reviews, investigations, inquiries or examinations
have and could lead to extended delays to, or prohibitions of, such transactions or practices, or develop into administrative, civil or
criminal proceedings or enforcement actions, in which remedies could include fines, penalties, restitution or alterations to our business
practices, and could result in additional expenses, limitations on certain business activities and reputational damage.
We, our subsidiaries and their respective officers and directors are also subject to, or may become subject to, a variety of additional
types of legal disputes brought by holders of our securities, customers, employees and others, alleging, among other things, breach of
contractual or fiduciary duties, bad faith, indemnification and violations of federal and state statutes and regulations. Certain of these
matters may also involve potentially significant risk of loss due to the possibility of significant jury awards and settlements, punitive
damages or other penalties. Many of these matters are also highly complex and seek recovery on behalf of a class or similarly large
number of plaintiffs. It is therefore inherently difficult to predict the size or scope of potential future losses arising from them, and
developments in these matters could have a material adverse effect on our consolidated financial condition or consolidated results of
operations.
For information regarding certain legal proceedings, see Notes 15 and 21 to the Consolidated Financial Statements.
Increasing scrutiny and evolving expectations from investors, customers, regulators, policymakers and other stakeholders
regarding environmental, social, governance and sustainability matters, including governmental responses to such matters,
may adversely affect our reputation or otherwise adversely impact our business and results of operations.
There is increasing scrutiny and evolving expectations from investors, customers, regulators, policymakers and other stakeholders on
companies’ governance, risk oversight, disclosures, plans, policies and practices regarding environmental, social, governance and
sustainability matters, including those related to environmental stewardship, climate change, racial justice and workplace conduct.
The requirements, standards and expectations of such stakeholders may also, as a whole, reflect diverging or conflicting values or
policy objectives.
Governmental actions to mitigate climate and other risks related to environmental, social, governance and sustainability matters, or,
conversely, to restrict actions companies may take in response to such risks, could have an adverse effect on our business and
results of operations. Internationally and at the U.S. federal, state and local levels, regulators have imposed and likely will continue to
impose requirements and guidance related to environmental, social, governance and sustainability matters, which will continue to
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ITEM 1A | Risk Factors
evolve and may conflict with one another, impose additional costs on us and expose us to new or additional risks, including financial,
regulatory, litigation, reputational and operational risks. See Item 1. Business – Regulation – Climate Change.
Furthermore, certain organizations that provide information to investors have developed ratings for evaluating companies on their
approach to different environmental, social and governance matters, and unfavorable ratings of our company or our industries may
lead to negative investor sentiment and the diversion of investment to other companies or industries.
We may not be able to meet the requirements, standards or expectations of our various stakeholders on environmental, social,
governance and sustainability issues, including with respect to any current or future targets, goals, plans, standards or expectations
(including any previously announced climate target, goal or plan) on these matters, whether established or set by us or third parties,
due to a variety of factors, including regulatory or other developments, changes to the methodologies, assumptions and estimates that
underlie our climate- and other sustainability-related targets, goals and strategy, or the actions of or information provided by third
parties outside of our control, who may apply standards, methodologies, practices and policies that differ from ours. If we are unable
to meet such targets, goals, plans, standards or expectations, it could result in adverse publicity, reputational harm, or loss of
customer and/ or investor confidence, which could adversely affect our business and results of operations. Conversely, actions we
may take toward meeting such targets, goals, plans, standards or expectations could expose us to negative investor sentiment,
regulatory scrutiny, adverse publicity or reputational harm.
For information on the effects of climate change on our business, see Reserves and Exposures – “Climate change may adversely
affect our business and financial condition” above.
An epidemic, pandemic or other health crisis could materially and adversely affect our business, results of operations,
financial condition or liquidity.
Public health crises and related governmental response measures, for example related to the COVID-19 pandemic, have resulted in
significant societal disruption, economic uncertainty, volatility in business and consumer confidence and global economic slowdowns,
which have adversely impacted our business and may again do so.
For example, we have experienced increased claim volumes; adverse effects resulting from our exposure to certain industries, and
difficulties in arriving at accurate valuations thereof, which has caused or may cause impairment of the estimates and assumptions
used to run our businesses or resulting in greater variability and subjectivity in our investment decisions; and increased difficulty and
cost in obtaining reinsurance coverage.
If a public health crisis emerges the markets and economies in which we operate may experience heightened stress and further
volatility, which may materially adversely affect our business, results of operations and financial condition. Legal proceedings,
including class actions, could also be filed against us, our insureds, or others, seeking coverage for epidemic or pandemic-related
losses or alleging bad faith denial of such coverage. In addition, remote or hybrid work may negatively impact our compliance efforts,
culture and employees’ morale, which could result in greater turnover, lower productivity and greater operational risks.
We may not be able to protect our intellectual property and may be subject to infringement claims.
Effective intellectual property rights protection, including in the form of contractual rights, copyright, trademark, patent and trade secret
laws, may be unavailable, limited, or subject to change in some countries where we do or plan to do business. Third parties may
infringe or misappropriate our intellectual property. We have, and may in the future, litigate to protect our intellectual property. Any
such litigation may be costly and may not be successful. Additionally, third parties may have patents or other protections that could be
infringed by our products, methods, processes or services or which could limit our ability to offer certain product features.
Consequently, we have in the past been and may in the future be subject to costly litigation in the event that another party alleges that
we infringe upon their intellectual property rights. Any such intellectual property litigation could prove to be both costly and
unsuccessful, result in significant expense, damages, and in some circumstances, we could be enjoined from providing certain
products or services to our customers. Alternatively, we could be required to enter into costly licensing arrangements with third parties
to resolve infringement or contractual disputes. The loss of intellectual property protection or the inability to secure or protect our
intellectual property assets could harm our reputation and have a material adverse effect on our business and our ability to compete.
REGULATION
Our businesses are heavily regulated and changes in laws and regulations may affect our operations, increase our
insurance subsidiary capital requirements or reduce our profitability.
Our operations generally, and our insurance subsidiaries in particular, are subject to extensive and potentially conflicting laws and
regulations in the jurisdictions in which we operate. Our business and financial condition are also subject to supervision and regulation
by authorities in the various jurisdictions in which we do business. Federal, state and foreign regulators also periodically review and
investigate our insurance businesses, including Company-specific and industry-wide practices. The primary purpose of insurance
regulation is the protection of insurance and reinsurance contract holders. The extent of regulation on our insurance business varies
across the jurisdictions in which we operate, but generally is governed by laws that delegate regulatory, supervisory and
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ITEM 1A | Risk Factors
administrative authority to insurance departments and similar regulatory agencies. The laws and regulations that apply to our
business and operations generally grant regulatory agencies and/or self-regulatory organizations broad rulemaking and enforcement
powers, including the power to regulate the issuance, marketing, sale and distribution of our products, the manner in which we
underwrite our policies, the delivery of our services, the nature or extent of disclosures that we give our customers, the compensation
of our distribution partners, the manner in which we handle claims on our policies and the administration of our policies and contracts,
as well as the power to limit or restrict our business for failure to comply with applicable laws and regulations.
We strive to comply with laws and regulations applicable to our businesses, operations and legal entities, including maintenance of all
required licenses and approvals. The application of and compliance with such laws and regulations may be subject to interpretation,
evolving industry practices and regulatory expectations that could result in increased compliance costs. The relevant authorities may
not agree with our interpretation of these laws and regulations or with our policies and procedures adopted to address evolving
industry practices or meet regulatory expectations. Such authorities’ interpretations and views may also change from time to time. It is
also possible that the laws, regulations and interpretations across various jurisdictions in which we do business may conflict with one
another, or affect how we do business beyond such jurisdictions’ borders, including in the United States and/or globally. If we are
found not to have complied with applicable legal or regulatory requirements, these authorities could preclude or temporarily suspend
us from carrying on some or all of our activities, impose substantial administrative penalties such as fines or require corrective actions,
which individually or in the aggregate could interrupt our operations and materially and adversely affect our reputation, business,
results of operations and financial condition. Additionally, in instances where such authorities’ interpretation of new or revised
requirements related to capital, accounting treatment, valuation or reserving has materially differed, or may in the future materially
differ from ours, we have incurred, and may again incur, higher operating costs, and sales of products subject to such requirements or
treatment have been and may again be affected.
Regulators in jurisdictions in which we do business have adopted RBC, solvency and liquidity standards applicable to insurers
operating in their jurisdiction. Failure to comply with such capital (including, in the U.S., RBC), solvency, liquidity and similar
requirements, or as otherwise may be agreed by us or one of our insurance company subsidiaries with an insurance regulator, would
generally permit the insurance regulator to take certain regulatory actions that could materially impact the affected company’s
operations. Those actions range from requiring an insurer to submit a plan describing how it would regain a specified RBC or solvency
ratio to a mandatory regulatory takeover of the company. The NAIC has adopted methodologies for assessing group-wide regulatory
capital, which could evolve into more formal group-wide prescribed capital requirements on certain insurance companies and/or their
holding companies that may augment jurisdictional RBC or solvency standards that apply at the legal entity level, and the basis for
such capital calculations may differ, in whole or in part, from the statutory statements of our insurance subsidiaries used to calculate
RBC. Furthermore, efforts to address systemic risks within the financial services industry, including insurance services, may lead
regulators to apply new or heightened standards and safeguards for activities or practices that we and other insurers or other nonbank
financial services companies engage in. The Financial Stability Oversight Council has authority under Dodd-Frank to determine that
certain nonbank financial companies, including insurers, be designated as nonbank SIFIs subject to supervision by the Board of
Governors of the Federal Reserve System and enhanced prudential standards, and has in place guidance and procedures intended
to govern any such designations. We cannot predict the effect that any such initiatives or heightened standards may have on our
business, results of operations, liquidity and financial condition.
There has also been increased regulatory scrutiny of the use of data, machine learning, predictive models and artificial intelligence,
including in the insurance industry. Certain insurance regulators have developed, and others are developing, regulations or guidance
applicable to insurance companies that use artificial intelligence, data analytics, machine learning and predictive models in their
operations. We cannot predict the impact of the regulatory actions that have been or may in the future be taken with regard to data
analytics, artificial intelligence, machine learning or predictive models, but any limitations or restrictions could have a material impact
on our business, processes, results of operations and financial condition.
We also cannot predict the impact that laws and regulations adopted in foreign jurisdictions may have on our businesses, results of
operations or cash flows, or on the financial markets generally. It is possible such laws, regulations or standards, including, without
limitation, Solvency II and European Data Protection Board Cross Border Data Transfer, Corporate Sustainability Reporting Directive
(CSRD), and Corporate Sustainability Due Diligence Directive (CSDDD) in the EU, and standard-setting initiatives by the FSB and the
IAIS, including, but not limited to, the IAIS’ Common Framework for the Supervision of IAIGs, its global Insurance Capital Standard,
which was recently adopted as a group-level prescribed capital requirement, and its holistic framework for the assessment and
mitigation of systemic risk, may significantly alter our business practices. For example, regulators have imposed and may continue to
impose new requirements, and regulators and other international organizations may continue to issue guidance, aimed at addressing
or mitigating climate change-related risks. They may also limit our ability to engage in capital or liability management, require us to
raise additional capital, and impose burdensome requirements and additional costs. It is also possible that the laws and regulations
adopted in foreign jurisdictions will differ from one another, and that they could be inconsistent with the laws and regulations of other
jurisdictions in which we operate, including the United States.
For additional information on our regulatory environment, see Item 1. Business – Regulation.
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ITEM 1A | Risk Factors
For information regarding the effects of regulations related to climate change on our business, see Reserves and Exposures –
“Climate change may adversely affect our business and financial condition” above.
For information regarding the regulatory response to the COVID-19 pandemic, see Business and Operations – “An epidemic,
pandemic or other health crisis could materially and adversely affect our business, results of operations, financial condition or liquidity”
above.
New laws and regulations or new interpretations of current laws and regulations, both domestically and internationally, may
affect our businesses, results of operations, financial condition and ability to compete effectively.
Legislators, regulators, self-regulatory and other organizations have in the past, and may in the future, periodically consider various
proposals that, if enacted, may affect or restrict, among other things, our business practices and activities, product designs and
distribution relationships, how we market, sell or service certain products we offer, the investment assets we hold and our investment
management practices, our capital, reserving and accounting requirements, or the profitability of certain of our businesses.
Further, new laws, regulations or guidance may affect or significantly limit our ability to conduct certain businesses at all, including
restrictions on the type of activities in which financial institutions are permitted to engage. Changes in legislation or regulation could
also impose additional taxes on a limited subset of financial institutions and insurance companies (either based on size, activities,
geography or other criteria), limit our ability to engage in capital or liability management, require us to raise additional capital, and
impose burdensome requirements and additional costs. It is uncertain whether and how these and other changes in legislation or
regulation would apply to us, those who sell or service our products, or our competitors or how they could impact our ability to
compete effectively, as well as our business, consolidated results of operations, liquidity and financial condition.
An “ownership change” could limit our ability to utilize tax loss and credit carryforwards to offset future taxable income.
Our ability to use U.S. federal net operating loss carryforwards to offset future taxable income may be significantly limited if we
experience an “ownership change” as defined in Section 382 of the Internal Revenue Code. In general, an ownership change will
occur when the percentage of AIG Parent's ownership (measured by value) by one or more “5-percent shareholders” (as defined in
Section 382 of the Internal Revenue Code) has increased by more than 50 percentage points over the lowest percentage owned by
such shareholders at any time during the prior three years (calculated on a rolling basis). An entity that experiences an ownership
change generally will be subject to an annual limitation on its utilization of pre-ownership change tax loss and credit carryforwards
equal to the equity value of the corporation immediately before the ownership change, multiplied by the long-term tax-exempt rate
posted monthly by the Internal Revenue Service (AFR) (subject to certain adjustments). The annual limitation would be increased
each year to the extent that there is an unused limitation in a prior year. The limitation on our ability to utilize tax loss and credit
carryforwards arising from an ownership change under Section 382 of the Internal Revenue Code would be dependent on the value of
our equity and the AFR at the time of any ownership change. If we were to experience an “ownership change,” it is possible that a
significant portion of our tax loss carryforwards could expire before we would be able to use them to offset future taxable income.
New and proposed changes to tax laws could increase our corporate taxes.
The Inflation Reduction Act of 2022 includes a 15 percent corporate alternative minimum tax (CAMT) on adjusted financial statement
income for corporations with average profits over $1 billion over a three-year period. While the U.S. Treasury and the Internal
Revenue Service issued proposed regulations for CAMT during the third quarter of 2024, there are still certain details regarding the
application of the CAMT that remain unclear and we continue to evaluate the impact of the proposed regulations along with any other
guidance.
New tax laws outside the U.S., in particular those enacted in response to proposals by the Organisation for Economic Co-operation
and Development, could make substantive changes to the global international tax regime. Such changes could increase our global tax
costs. We continue to monitor and assess the impact of such proposals.
Finally, it is possible that tax laws will be further changed either in a technical corrections bill or entirely new legislation. It remains
difficult to predict whether or when there will be any tax law changes or further guidance by the authorities in the U.S. or elsewhere in
the world. New or proposed changes to tax laws may have a material adverse effect on our business, consolidated results of
operations, liquidity and financial condition, as the impact of proposals on our business can vary substantially depending upon the
specific changes or further guidance made and how the changes or guidance are implemented by the authorities.
For additional information, see Note 21 to the Consolidated Financial Statements.
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ITEM 1A | Risk Factors
ESTIMATES AND ASSUMPTIONS
Estimates or assumptions used in the preparation of financial statements and modeled results used in various areas of our
business may differ materially from actual experience.
Our consolidated financial statements are prepared in conformity with U.S. GAAP, which requires the application of accounting
policies that often involve a significant degree of judgment. The accounting policies that we consider most dependent on the
application of estimates and assumptions, and therefore may be viewed as critical accounting estimates, are described in Part II, Item
7. MD&A – Critical Accounting Estimates and in Note 1 to the Consolidated Financial Statements. These accounting estimates require
the use of assumptions, some of which are highly uncertain at the time of estimation. These estimates are based on judgment, current
facts and circumstances, and, when applicable, models developed internally or with inputs from third parties. Therefore, actual results
may differ from these estimates and models, possibly in the near term, and could have a material effect on our financial statements.
In addition, we employ models to price products, calculate reserves and value assets and execute hedging strategies, as well as to
assess risk and determine statutory capital requirements, among other uses. These models are complex and rely on estimates and
projections that are inherently uncertain, may use incomplete, outdated or incorrect data or assumptions and may not operate as
intended. To the extent that any of our operating practices and procedures do not accurately produce, or reproduce, data that we use
to conduct any or all aspects of our business, such differences may negatively impact our business, reputation, results of operations,
and financial condition. Additionally, if any of our modeling practices do not accurately produce, or reproduce, data that we use to
conduct any or all aspects of our business, such errors may negatively impact our business, reputation, results of operations and
financial condition.
Changes in accounting principles and financial reporting requirements may impact our consolidated results of operations
and financial condition.
Our consolidated financial statements are prepared in accordance with U.S. GAAP, which are periodically revised. Accordingly, from
time to time, we are required to adopt new or revised accounting standards issued by recognized authoritative bodies, including the
Financial Accounting Standards Board (FASB). The adoption of new or revised accounting standards has in the past, and may in the
future impact, our reported consolidated results of operations, liquidity and reported financial condition and may cause investors to
perceive greater volatility in our financial results, negatively impacting our level of investor interest and investment.
For information regarding the impact of accounting pronouncements that have been issued but are not yet required to be
implemented, see Note 2 to the Consolidated Financial Statements.
If our businesses do not perform well and/or their estimated fair values decline, we may be required to recognize an
impairment of our goodwill or establish an additional valuation allowance against the related deferred income tax assets,
which could have a material adverse effect on our results of operations and financial condition.
Goodwill represents the excess of the amounts we paid to acquire subsidiaries and other businesses over the fair value of their net
assets at the date of acquisition. We test goodwill at least annually for impairment and conduct interim qualitative assessments on a
periodic basis. Impairment testing is performed based upon estimates of the fair value of the “reporting unit” to which the goodwill
relates. In 2024, for substantially all of the reporting units we elected to bypass the qualitative assessment of whether goodwill
impairment may exist and, therefore, performed quantitative assessments that supported a conclusion that the fair value of all of the
reporting units tested exceeded their book value. If it is determined that goodwill has been impaired, we must write down goodwill by
the amount of the impairment, with a corresponding charge to net income (loss). These write-downs could have a material adverse
effect on our consolidated results of operations, liquidity and financial condition. For additional information on goodwill impairment,
see Part II, Item 7. MD&A – Critical Accounting Estimates – Goodwill Impairment and Note 12 to the Consolidated Financial
Statements.
Deferred income tax represents the tax effect of the differences between the book and tax basis of assets and liabilities. If, based on
available evidence, it is more likely than not that the deferred tax asset will not be realized, then a valuation allowance must be
established with a corresponding charge to net income, which such action we have taken from time to time. Such charges could have
a material adverse effect on our consolidated results of operations, liquidity and financial condition. For additional information on
deferred tax assets, see Part II, Item 7. MD&A – Critical Accounting Estimates – Income Taxes and Note 21 to the Consolidated
Financial Statements.
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ITEM 1A | Risk Factors
EMPLOYEES AND COMPETITION
Employee error and misconduct may be difficult to detect and prevent and may result in reputational damage and significant
losses.
We are exposed to the risk that employee fraud or misconduct could occur despite extensive training for employees and fraud
monitoring. Instances of fraud, illegal acts, errors, failure to document transactions properly or to obtain proper internal authorization,
misuse of customer or proprietary/confidential information, or failure to comply with regulatory requirements or our internal policies
may result in losses and/or reputational damage.
Competition for employees in our industry is intense, and managing key employee succession is critical to our success. We
may not be able to attract and retain the key employees and other highly skilled employees we need to support our
businesses.
Our success depends, in large part, on our ability to attract and retain key and other highly skilled employees. Due to the intense
competition in our industry for key employees, we may be unable to retain or hire such employees. In addition, we may experience
higher than expected employee turnover and difficulty attracting new employees as a result of uncertainty from strategic actions and
organizational and operational changes. Losing any of our key employees also could have a material adverse effect on our operations
given their skills, knowledge of our business, years of industry experience and the potential difficulty of promptly finding qualified
replacements. Our business and consolidated results of operations could be materially adversely affected if we are unsuccessful in
retaining and attracting key employees.
In addition, we would be adversely affected if we fail to adequately plan for the succession of our Chief Executive Officer, other
members of senior management and other key employees. While we have long-term compensation plans designed to retain our
employees and succession plans, our compensation plans cannot guarantee that the services of these employees will continue to be
available to us and our succession plans may not operate effectively.
We face intense competition in each of our business lines, and technological changes may present new and intensified
challenges to our businesses.
Our businesses operate in highly competitive environments, both domestically and overseas. Our principal competitors are other
property and casualty insurance organizations.
We compete through a combination of risk acceptance criteria, product pricing, and terms and conditions. Reductions of our credit
ratings or IFS ratings or negative publicity may make it more difficult to compete to retain existing customers and to maintain our
historical levels of business with existing customers, counterparties and distribution relationships. A decline in our position as to any
one or more of these factors could adversely affect our profitability.
Technological advancements and innovation in the insurance industry, including those related to evolving customer preferences, the
digitization of insurance products and services, data ingestion and exchange with trading partners, acceleration of automated
underwriting, and use of artificial intelligence and electronic processes present competitive risks. Technological advancements and
innovation are occurring in distribution, underwriting, recordkeeping, advisory, marketing, claims and operations at a rapid pace, and
that pace may increase, particularly as companies increasingly use data analytics and technology as part of their business strategy. If
we are unable to effectively implement these technological advancements in our business, including the use of artificial intelligence, in
a way that matches or exceeds our competitors, we may suffer competitive harm as a result, which could adversely impact our
reputation, results of operations and financial condition. For further discussion on regulatory developments with respect to emerging
technologies, see Regulation above.
Further, additional costs may also be incurred in order to implement changes to automate and digitize procedures critical to our
distribution channels in order to increase flexibility of access to our services and products. While we seek opportunities to leverage
technological advancements and innovation for our customers’ benefit, our business and results of operations could be materially and
adversely affected if external technological advancements or innovation, or the regulation of technological advancements or
innovation, limit our ability to retain existing business, write new business at adequate rates or on appropriate terms, or impact our
ability to adapt or deploy current products as quickly and effectively as our competitors.
ITEM 1B | Unresolved Staff Comments
There are no unresolved written comments that were received from the SEC staff 180 days or more before the end of our fiscal year
relating to periodic or current reports under the Exchange Act.
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ITEM 1A | Risk Factors
ITEM 1C | Cybersecurity
CYBERSECURITY RISK MANAGEMENT
We maintain a documented Information Security Program (the Program) that is informed by industry standards, frameworks and best
practices and is designed to protect the confidentiality, integrity, and availability of our information assets and systems that store,
process or transmit information.
Our Chief Information Security Officer (CISO) oversees and directs the Program, including implementing adjustments in response to
changes in technology, internal and external threats, business processes, and regulatory or statutory requirements and communicates
our information security risk posture to senior management and the Board of Directors (the Board).
The Program includes the following key elements:
•
Network, Systems and Data Security – Technical and organizational safeguards that are designed to protect our networks,
systems, and data from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware
functionality, and access controls.
•
Threat and Vulnerability Management – A threat and vulnerability management program that leverages continuous threat
intelligence to seek to proactively identify, assess, and mitigate evolving cybersecurity risks. This program incorporates
vulnerability scanning, remediation management, bug bounty, penetration testing, and threat response capabilities, all designed to
safeguard our information assets and ensure business continuity.
•
Cybersecurity Incident Monitoring and Response – Incident response plans that address our response to a cybersecurity incident,
utilizing a cross-functional approach.
•
Third-Party Assessment and Oversight – A third-party risk management program designed to identify and manage cybersecurity
risks from third-party service providers, including initial due diligence as well as initial and periodic re-assessments of the service
provider’s control environment.
•
Security Training and Awareness – Annual cybersecurity and awareness training for employees and contractors.
The Program is evaluated on an ongoing basis, both internally and through third-party audit firms, to address and protect against the
evolving cyber threat landscape. The Program seeks to align to industry standards such as the National Institute of Standards and
Technology Cybersecurity Framework, as well as applicable legal and regulatory guidance and mandates applicable to all of our
stakeholders, including investors, customers, and employees. Control adequacy and design are reviewed at least annually.
Independent audits and penetration tests assist in identifying areas for continued focus, improvement and/or inclusion, and are
designed to provide assurance that controls are appropriately designed and operating effectively. Additionally, our Internal Audit group
performs independent testing of our control environment, including key components of the Program. We also operate a bug bounty
program through a crowdsourced security platform to incentivize responsible disclosure of software defects. These independent
evaluations help uncover potential security vulnerabilities for remediation by our cybersecurity team.
Board Oversight
Our Board oversees the Program and the management of risks from cybersecurity threats. The Board reviews and monitors our
business and technology strategy, including the policies, processes, and practices that management implements to address risks from
cybersecurity threats. The Board believes that all directors are responsible for oversight of these matters given the increasing
importance of cybersecurity to our risk profile, as well as the significant role our technology strategy plays in our strategic priorities.
The Chief Information Officer (CIO), CISO, and Chief Risk Officer provide updates to the Board as appropriate.
Global Committees
Group Risk Committee (GRC): The GRC is a committee comprised of senior management and is responsible for assessing
significant risk issues on a global basis to protect our financial strength, optimize our intrinsic value, and protect our reputation. The
risks considered by the GRC include those relating to cybersecurity.
Technology Risk and Controls Committee (TRCC): The TRCC is used as a platform to assess risk and controls components
across the information technology (IT) landscape including cybersecurity. It manages the risk assessment process, escalation, and
implementation of risk acceptance thresholds with the help of the GRC.
In addition, there are regional and country risk and IT risk committees, including in Asia Pacific, Europe, the Middle East and Africa,
the United Kingdom, Latin America and the Caribbean. These committees engage with relevant IT leaders and functional leaders
within Enterprise Risk Management, Legal, Compliance, and Internal Audit.
ITEM 1C | Cybersecurity
AIG | 2024 Form 10-K
31
Reporting and Governance
The Board and regional and country leadership boards may receive periodic presentations and reports on cybersecurity risks. We
have an established issue escalation protocol for technology incidents, including cyber related incidents. In the event of a material
cybersecurity incident, the Board will receive prompt information and ongoing updates about the incident. Our technology incidents
and risks are tracked and rated. Items that are rated as "critical" are discussed in the TRCC, and escalated to the GRC as
appropriate. At least once each year, the Board discusses our approach to cybersecurity risk management with the CISO. The CISO
and regional/country information security officers regularly present to the Company’s regional and country leadership boards on
material cyber risks and our information security posture and strategy.
The CISO works collaboratively with business and functional colleagues to implement a program designed to protect our information
systems from cybersecurity threats and promptly respond to potential cybersecurity incidents. Multidisciplinary teams are deployed to
respond to cybersecurity incidents in accordance with our incident response plans. Through ongoing communication with these
teams, the CISO monitors the prevention, detection, mitigation and remediation of cybersecurity incidents in real time, and reports
such incidents to senior management, who escalate to the Board as appropriate.
The CISO reports to the CIO and is principally responsible for overseeing the Program, in partnership with other business leaders
across the Company including regional information security and technology officers. Our cybersecurity personnel maintain current
knowledge through specific training programs, professional certifications, and participation in industry groups (e.g., Financial Services
Sector Coordinating Council, Financial Services Information Sharing and Analysis Center, Analysis and Resilience Center, Securities
Industry and Financial Markets Association, Cybersecurity and Infrastructure Security Agency, etc.).
Our CISO has extensive cybersecurity experience, maintains multiple professional certifications and has served in various roles in
information technology and information security for over 25 years.
There have been no material cybersecurity incidents that have affected the Company for the period covered by this annual report. For
a discussion regarding risks associated with cybersecurity threats, see Part I, Item 1A. Risk Factors – Business and Operations –
"Our risk management policies, standards and procedures may prove to be ineffective and leave us exposed to unidentified or
unanticipated risk, which could adversely affect our businesses, results of operations, financial condition and liquidity" and “We are
exposed to certain risks if we are unable to maintain the availability of our critical technology systems and data and safeguard the
confidentiality and integrity of our data, which could compromise our ability to conduct business and adversely affect our consolidated
business, results of operations, financial condition and liquidity.”
ITEM 2 | Properties
We lease our corporate headquarters located at 1271 Avenue of the Americas, New York, New York. We operate from approximately
50 offices in the United States and approximately 230 offices in approximately 40 foreign countries. We own 3 offices in the United
States and 43 offices in 10 foreign countries. The remainder of the office space we use is leased. We believe that our leases and
properties are sufficient for our current purposes.
For additional information on geographic locations, see Note 3 to the Consolidated Financial Statements.
ITEM 3 | Legal Proceedings
For a discussion of legal proceedings, see Note 15 to the Consolidated Financial Statements, which is incorporated herein by
reference.
ITEM 4 | Mine Safety Disclosures
Not applicable.
AIG | 2024 Form 10-K
32
ITEM 1C | Cybersecurity
Part II
ITEM 5 | Market for Registrant’s Common Equity, Related
Stockholder Matters and Issuer Purchases of Equity Securities
AIG’s common stock, par value $2.50 per share (AIG Common Stock), is listed on the New York Stock Exchange (NYSE: AIG). There
were approximately 17,624 shareholders of record of AIG Common Stock as of February 7, 2025.
Equity Compensation Plans
See Part III, Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Purchases of Equity Securities
The following table provides information about purchases made by or on behalf of AIG or any “affiliated purchaser” (as
defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934 (the Exchange Act)) of AIG Common Stock during
the three months ended December 31, 2024:
Period
Total Number
of Shares
Repurchased
Average Price
Paid per
Share*
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs
Approximate Dollar Value
of Shares that May Yet Be
Purchased Under the Plans
or Programs (in millions)
October 1-31
6,851,580
$
76.29
6,851,580
$
6,934
November 1-30
7,260,664
75.91
7,260,664
6,382
December 1-31
10,166,225
73.15
10,166,225
5,639
Total
24,278,469
$
74.86
24,278,469
$
5,639
*
Excludes excise tax of $69 million due to the Inflation Reduction Act of 2022 for the year ended December 31, 2024.
On April 30, 2024, the Board of Directors authorized the repurchase of $10.0 billion of AIG Common Stock (inclusive of the
approximately $3.9 billion remaining under the Board's prior share repurchase authorization). As of December 31, 2024,
approximately $5.6 billion remained under the authorization.
For additional information on our share purchases, see Note 16 to the Consolidated Financial Statements.
ITEM 5 | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
AIG | 2024 Form 10-K
33
Common Stock Performance Graph
The following performance graph compares the cumulative total shareholder return on AIG Common Stock for a five-year period
(December 31, 2019 to December 31, 2024) with the cumulative total return of the S&P’s 500 stock index (which includes AIG) and
the S&P Property and Casualty Insurance Index.
Value of $100 Invested on December 31, 2019
(All $ as of December 31st)
Dividend reinvestment has been assumed and returns have been weighted to reflect relative stock market capitalization.
As of December 31,
2019
2020
2021
2022
2023
2024
AIG
$
100.00
$
76.75
$
118.13
$
134.37
$
147.43
$
161.81
S&P 500
100.00
118.40
152.39
124.79
157.59
197.02
S&P 500 Property & Casualty Insurance Index
100.00
106.96
127.58
151.65
168.05
227.67
ITEM 6 | [Reserved]
AIG | 2024 Form 10-K
34
AMERICAN INTERNATIONAL GROUP
S&P 500 INDEX
S&P 500 Property & Casualty Insurance Index
2019
2020
2021
2022
2023
2024
$0
$50
$100
$150
$200
$250
ITEM 5 | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
ITEM 7 | Management’s Discussion and Analysis of Financial
Condition and Results of Operations
Cautionary Statement Regarding Forward-Looking Information and Factors That
May Affect Future Results
This Annual Report on Form 10-K and other publicly available documents may include, and members of management may from time
to time make and discuss, statements which, to the extent they are not statements of historical or present fact, may constitute
“forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking
statements are intended to provide management’s current expectations or plans for future operating and financial performance, based
on assumptions currently believed to be valid and accurate. Forward-looking statements are often preceded by, followed by or include
words such as “will,” “believe,” “anticipate,” “expect,” “expectations,” “intend,” “plan,” “strategy,” “prospects,” “project,” “anticipate,”
“should,” “guidance,” “outlook,” “confident,” “focused on achieving,” “view,” “target,” “goal,” “estimate” and other words of similar
meaning in connection with a discussion of future operating or financial performance. These statements may include, among other
things, projections, goals and assumptions that relate to future actions, prospective services or products, future performance or results
of current and anticipated services or products, sales efforts, expense reduction efforts, the outcome of contingencies such as legal
proceedings, anticipated organizational, business or regulatory changes, the effect of catastrophic events, both natural and man-
made, and macroeconomic and/or geopolitical events, anticipated dispositions, monetization and/or acquisitions of businesses or
assets, the successful integration of acquired businesses, management succession and retention plans, exposure to risk, trends in
operations and financial results, and other statements that are not historical facts.
AIG | 2024 Form 10-K
35
All forward-looking statements involve risks, uncertainties and other factors that may cause actual results and financial condition to
differ, possibly materially, from the results and financial condition expressed or implied in the forward-looking statements. Factors that
could cause actual results to differ, possibly materially, from those in specific projections, targets, goals, plans, assumptions and other
forward-looking statements include, without limitation:
•
the impact of adverse developments affecting economic
conditions in the markets in which we operate in the U.S. and
globally, including financial market conditions, macroeconomic
trends, fluctuations in interest rates and foreign currency
exchange rates, inflationary pressures, including social
inflation, pressures on the commercial real estate market, and
an economic slowdown or recession and geopolitical events or
conflicts;
•
the occurrence of catastrophic events, both natural and man-
made, which may be exacerbated by the effects of climate
change;
•
disruptions in the availability or accessibility of our or a third
party’s information technology systems, including hardware
and software, infrastructure or networks, and the inability to
safeguard the confidentiality and integrity of customer,
employee or company data due to cyberattacks, data security
breaches or infrastructure vulnerabilities;
•
our ability to effectively implement technological
advancements, including the use of artificial intelligence (AI),
and respond to competitors' AI and other technology initiatives;
•
the effects of changes in laws and regulations, including those
relating to privacy, data protection, cybersecurity and AI, and
the regulation of insurance, in the U.S. and other countries in
which we operate;
•
our ability to successfully dispose of, monetize and/or acquire
businesses or assets or successfully integrate acquired
businesses, and the anticipated benefits thereof;
•
concentrations in our investment portfolios, including our
continuing equity market exposure to Corebridge Financial,
Inc. (Corebridge);
•
our reliance on third-party investment managers;
•
changes in the valuation of our investments;
•
our reliance on third parties to provide certain business and
administrative services;
•
availability of adequate reinsurance or access to reinsurance
on acceptable terms;
•
our ability to adequately assess risk and estimate related
losses as well as the effectiveness of our enterprise risk
management policies and procedures;
•
changes in judgments or assumptions concerning insurance
underwriting and insurance liabilities;
•
concentrations of our insurance, reinsurance and other risk
exposures;
•
nonperformance or defaults by counterparties;
•
the effectiveness of strategies to retain and recruit key
personnel and to implement effective succession plans;
•
difficulty in marketing and distributing products through current
and future distribution channels;
•
actions by rating agencies with respect to our credit and
financial strength ratings as well as those of its businesses and
subsidiaries;
•
changes in judgments concerning the recognition of deferred
tax assets and the impairment of goodwill;
•
our ability to address evolving global stakeholder expectations
and regulatory requirements with respect to environmental,
social and governance matters;
•
the effects of sanctions and the failure to comply with those
sanctions;
•
our ability to effectively implement restructuring initiatives and
potential cost-savings opportunities;
•
changes to sources of or access to liquidity;
•
changes in accounting principles and financial reporting
requirements or their applicability to us;
•
changes to tax laws in the U.S. and other countries in which
we operate;
•
the outcome of significant legal, regulatory or governmental
proceedings;
•
our ability to effectively execute on sustainability targets and
standards;
•
the impact of epidemics, pandemics and other public health
crises and responses thereto; and
•
such other factors discussed in:
–
Part I, Item 1A. Risk Factors of this Annual Report;
–
this Part II, Item 7. Management's Discussion and Analysis
of Financial Condition and Results of Operations (MD&A) of
this Annual Report; and
–
our other filings with the Securities and Exchange
Commission (SEC).
Forward-looking statements speak only as of the date of this report, or in the case of any document incorporated by reference, the
date of that document. We are not under any obligation to publicly update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except as required by applicable law. Additional information as to factors that
may cause actual results to differ materially from those expressed or implied in any forward-looking statements is disclosed from time
to time in other filings with the SEC.
36
AIG | 2024 Form 10-K
INDEX TO ITEM 7
Page
Use of Non-GAAP Measures
38
Critical Accounting Estimates
40
Executive Summary
47
Overview
47
Regulatory, Industry and Economic Factors
47
Consolidated Results of Operations
48
Business Segment Operations
53
General Insurance
54
Other Operations
61
Investments
62
Overview
62
Investment Highlights in 2024
62
Investment Strategies
62
Credit Ratings
68
Insurance Reserves
70
Loss Reserves
70
Liquidity and Capital Resources
74
Overview
74
Liquidity and Capital Resources Highlights
74
Analysis of Sources and Uses of Cash
75
Liquidity and Capital Resources of AIG Parent and Subsidiaries
76
Credit Facilities
77
Contractual Obligations
77
Off-Balance Sheet Arrangements and Commercial Commitments
78
Debt
79
Credit Ratings
79
Financial Strength Ratings
80
Regulation and Supervision
80
Dividends
80
Repurchases of AIG Common Stock
80
Dividend Restrictions
81
Enterprise Risk Management
81
Overview
81
Risk Governance Structure
81
Risk Appetite, Limits, Identification and Measurement
81
Credit Risk Management
82
Market Risk Management
82
Liquidity Risk Management
84
Operational Risk Management
84
Business and Strategy Risks
84
Insurance Risks
85
Glossary
88
Acronyms
90
Throughout the MD&A, we use certain terms and abbreviations, which are summarized in the Glossary and Acronyms.
We have incorporated into this discussion a number of cross-references to additional information included throughout this Annual
Report to assist readers seeking additional information related to a particular subject.
AIG | 2024 Form 10-K
37
Use of Non-GAAP Measures
Throughout this MD&A, we present our financial condition and results of operations in the way we believe will be most meaningful and
representative of our business results. Some of the measurements we use are “non-GAAP financial measures” under SEC rules and
regulations. GAAP is the acronym for “generally accepted accounting principles” in the United States. The non-GAAP financial
measures we present may not be comparable to similarly-named measures reported by other companies.
We use the following operating performance measures because we believe they enhance the understanding of the underlying
profitability of continuing operations and trends of our segments. We believe they also allow for more meaningful comparisons with
our insurance competitors. When we use these measures, reconciliations to the most comparable GAAP measure are provided on a
consolidated basis in the Consolidated Results of Operations section of this MD&A.
Book value per share, excluding investments related cumulative unrealized gains and losses recorded in Accumulated other
comprehensive income (loss) (AOCI) adjusted for the cumulative unrealized gains and losses related to Fortitude Re funds
withheld assets (collectively, Investments AOCI) (Adjusted book value per share) is used to show the amount of our net worth
on a per share basis after eliminating the fair value of investments that can fluctuate significantly from period to period due to changes
in market conditions. In addition, we adjust for the cumulative unrealized gains and losses related to Fortitude Re funds withheld
assets held by AIG in support of Fortitude Re’s reinsurance obligations to AIG (Fortitude Re funds withheld assets) since these fair
value movements are economically transferred to Fortitude Re. Adjusted book value per share is derived by dividing total AIG
common shareholders’ equity, excluding Investments AOCI (AIG adjusted common shareholders' equity) by total common shares
outstanding.
Book Value per share, excluding Goodwill, Value of business acquired (VOBA), Value of distribution channel acquired
(VODA) and Other intangible assets (Tangible book value per share) is used to provide a useful measure of the realizable
shareholder value on a per share basis. Tangible book value per share is derived by dividing Total AIG common shareholders’ equity,
excluding intangible assets (AIG tangible common shareholders’ equity) by total common shares outstanding.
Book Value per share, excluding Investments AOCI, Goodwill, VOBA, VODA and Other intangible assets (Adjusted tangible
book value per share) is used to provide a useful measure of the realizable shareholder value on a per share basis after eliminating
the fair value of investments that can fluctuate significantly from period to period due to changes in market conditions and Fortitude
Re funds withheld assets since these fair value movements are economically transferred to Fortitude Re. Adjusted tangible book
value per share is derived by dividing AIG adjusted common equity, excluding intangible assets, (AIG adjusted tangible common
shareholders’ equity) by total common shares outstanding.
Book value per share, excluding Investments AOCI, deferred tax assets (DTA) and AIG’s ownership interest in Corebridge
(Core operating book value per share) is used to show the amount of our net worth on a per share basis after eliminating
Investments AOCI, DTA and AIG’s ownership interest in Corebridge. We believe this measure is useful to investors because it
eliminates the fair value of investments that can fluctuate significantly from period to period due to changes in market conditions. We
also exclude the portion of DTA representing U.S. tax attributes related to net operating loss carryforwards (NOLs), corporate
alternative minimum tax credits (CAMTCs) and foreign tax credits (FTCs) that have not yet been utilized. Amounts for interim periods
are estimates based on projections of full-year attribute utilization. As NOLs, CAMTCs and FTCs are utilized, the corresponding
portion of the DTA utilized is included. We exclude AIG’s ownership interest in Corebridge since it is not a core long-term investment
for AIG. Core operating book value per share is derived by dividing total AIG common shareholders’ equity, excluding Investments
AOCI, DTA and AIG’s ownership interest in Corebridge (AIG core operating shareholders’ equity) by total common shares
outstanding.
Return on equity – Adjusted after-tax income excluding Investments AOCI (Adjusted return on equity) is used to show the rate
of return on common shareholders’ equity excluding Investments AOCI. We believe this measure is useful to investors because it
eliminates the fair value of investments which can fluctuate significantly from period to period due to changes in market conditions.
Adjusted return on equity is derived by dividing actual or, for interim periods, annualized adjusted after-tax income attributable to AIG
common shareholders by average AIG adjusted common shareholders’ equity.
Return on Equity – Adjusted After-tax Income, Excluding Goodwill, VOBA, VODA and Other Intangible assets (Return on
tangible equity) is used to show the return on AIG tangible common shareholder’s equity, which we believe is a useful measure of
realizable shareholder value. We exclude Goodwill, VOBA, VODA and Other intangible assets from AIG common shareholders’ equity
to derive AIG tangible common shareholders’ equity. Return on AIG tangible common equity is derived by dividing actual or, for interim
periods, annualized adjusted after-tax income attributable to AIG common shareholders by average AIG tangible common
shareholders' equity.
ITEM 7 | Use of Non-GAAP Measures
38
AIG | 2024 Form 10-K
Return on equity – Adjusted after-tax income excluding Investments AOCI, DTA and AIG’s ownership interest in Corebridge
(Core operating return on equity) is used to show the rate of return on common shareholders’ equity excluding Investments AOCI,
DTA and AIG’s ownership interest in Corebridge. We believe this measure is useful to investors because it eliminates the fair value of
investments that can fluctuate significantly from period to period due to changes in market conditions. We also exclude the portion of
DTA representing U.S. tax attributes related to NOLs, CAMTCs and FTCs that have not yet been utilized. Amounts for interim periods
are estimates based on projections of full-year attribute utilization. As NOLs, CAMTCs and FTCs are utilized, the corresponding
portion of the DTA utilized is included. We exclude AIG’s ownership interest in Corebridge since it is not a core long-term investment
for AIG. We believe this metric will provide investors with greater insight as to the underlying profitability of our property and casualty
business. Core operating return on equity is derived by dividing actual or, for interim periods, annualized adjusted after-tax income
attributable to AIG common shareholders by average AIG core operating shareholders’ equity.
Adjusted pre-tax income (APTI) is derived by excluding the items set forth below from income from continuing operations before
income tax:
•
changes in the fair values of equity securities, AIG's
investment in Corebridge and gain on sale of shares;
•
net investment income on Fortitude Re funds withheld assets;
•
net realized gains and losses on Fortitude Re funds withheld
assets;
•
loss (gain) on extinguishment of debt;
•
all net realized gains and losses except earned income
(periodic settlements and changes in settlement accruals) on
derivative instruments used for non-qualifying (economic)
hedging or for asset replication. Earned income on such
economic hedges is reclassified from net realized gains and
losses to specific APTI line items based on the economic risk
being hedged (e.g. net investment income);
•
income or loss from discontinued operations;
•
net loss reserve discount benefit (charge);
•
net results of businesses in run-off;
•
pension expense related to lump sum payments to former
employees;
•
net gain or loss on divestitures and other;
•
non-operating litigation reserves and settlements;
•
restructuring and other costs related to initiatives designed to
reduce operating expenses, improve efficiency and simplify
our organization;
•
the portion of favorable or unfavorable prior year reserve
development for which we have ceded the risk under
retroactive reinsurance agreements and related changes in
amortization of the deferred gain;
•
integration and transaction costs associated with acquiring or
divesting businesses;
•
losses from the impairment of goodwill;
•
non-recurring costs associated with the implementation of non-
ordinary course legal or regulatory changes or changes to
accounting principles; and
•
income from elimination of the international reporting lag.
Adjusted after-tax income attributable to AIG common shareholders is derived by excluding the tax effected APTI adjustments
described above, dividends on preferred stock and preferred stock redemption premiums, noncontrolling interest on net realized gains
(losses), other non-operating expenses and the following tax items from net income attributable to AIG:
•
deferred income tax valuation allowance releases and charges;
•
changes in uncertain tax positions and other tax items related to legacy matters having no relevance to our current businesses or
operating performance; and
•
net tax charge related to the enactment of the Tax Cuts and Jobs Act.
Ratios: We, along with most property and casualty insurance companies, use the loss ratio, the expense ratio and the combined ratio
as measures of underwriting performance. These ratios are relative measurements that describe, for every $100 of net premiums
earned, the amount of losses and loss adjustment expenses (which for General Insurance excludes net loss reserve discount), and
the amount of other underwriting expenses that would be incurred. A combined ratio of less than 100 indicates underwriting income
and a combined ratio of over 100 indicates an underwriting loss. Our ratios are calculated using the relevant segment information
calculated under GAAP, and thus may not be comparable to similar ratios calculated for regulatory reporting purposes. The
underwriting environment varies across countries and products, as does the degree of litigation activity, all of which affect such ratios.
In addition, investment returns, local taxes, cost of capital, regulation, product type and competition can have an effect on pricing and
consequently on profitability as reflected in underwriting income and associated ratios.
AIG | 2024 Form 10-K
39
ITEM 7 | Use of Non-GAAP Measures
Accident year loss and accident year combined ratios, as adjusted (Accident year loss ratio, ex-CAT and Accident year
combined ratio, ex-CAT): both the accident year loss and accident year combined ratios, as adjusted, exclude catastrophe losses
and related reinstatement premiums, prior year development, net of premium adjustments, and the impact of reserve discounting.
Natural catastrophe losses are generally weather or seismic events, in each case, having a net impact on AIG in excess of $10 million
and man-made catastrophe losses, such as terrorism and civil disorders that exceed the $10 million threshold. We believe that as
adjusted ratios are meaningful measures of our underwriting results on an ongoing basis as they exclude catastrophes and the impact
of reserve discounting which are outside of management’s control. We also exclude prior year development to provide transparency
related to current accident year results.
Results from discontinued operations, including Corebridge, are excluded from all of these measures.
Critical Accounting Estimates
The preparation of financial statements in accordance with GAAP requires the application of accounting policies that often involve a
significant degree of judgment.
The accounting policies that we believe are most dependent on the application of estimates and assumptions,
which are critical accounting estimates, are related to the determination of:
•
loss reserves;
•
reinsurance assets, including the allowance for credit losses and disputes;
•
allowance for credit losses on certain investments, primarily on loans and available for sale fixed maturity securities;
•
fair value measurements of certain financial assets and financial liabilities;
•
income taxes, in particular the recoverability of our deferred tax asset and establishment of provisions for uncertain tax
positions; and
•
goodwill impairment.
These accounting estimates require the use of assumptions about matters, some of which are highly uncertain at the time of
estimation. To the extent actual experience differs from the assumptions used, our consolidated financial condition, results of
operations and cash flows could be materially affected.
LOSS RESERVES
Loss reserves represent the accumulation of estimates of unpaid claims, including estimates for claims incurred but not reported and
loss adjustment expenses, less applicable discount. We regularly review and update the methods used to determine loss reserve
estimates. Because these estimates are subject to the outcome of future events and because loss trends vary and time is often
required for changes in trends to be recognized and confirmed, changes in estimates are common.
The estimate of loss reserves relies on several key judgments:
•
the determination of the actuarial methods used as the basis for these estimates;
•
the relative weights given to these models by product line;
•
the underlying assumptions used in these models; and
•
the determination of the appropriate groupings of similar product lines and, in some cases, the disaggregation of dissimilar losses
within a product line.
Numerous assumptions are made in determining the best estimate of reserves for each line of business, in consideration of expected
ultimate losses, loss cost trends and loss development factors, where appropriate. The importance of any one assumption can vary by
both line of business and accident year. Because such assumptions may differ from actual experience, there is potential for significant
variation in the development of loss reserves. This estimation uncertainty is particularly relevant for long-tail lines of business.
All of our methods to calculate net reserves include assumptions about estimated reinsurance recoveries and their collectability.
Reinsurance collectability is evaluated independently of the reserving process and appropriate allowances for uncollectible
reinsurance are established.
AIG | 2024 Form 10-K
40
ITEM 7 | Use of Non-GAAP Measures
Overview of Loss Reserving Process and Methods
Our loss reserves can generally be categorized into two distinct groups: short-tail reserves and long-tail reserves. Short-tail reserves
consist principally of U.S. Property and Special Risks, UK/Europe Property and Special Risks, U.S. Personal Insurance, and UK/
Europe and Japan Personal Insurance. Long-tail reserves include U.S. Workers’ Compensation, U.S. Excess Casualty, U.S. Other
Casualty, U.S. Financial Lines, and UK/Europe Casualty and Financial Lines.
Short-Tail Reserves
In short-tail lines of business, such as property or personal insurance, where the nature of these claims tends to be higher frequency
with short reporting periods, with volatility arising from occasional severe events, the actual losses reported make up a greater
proportion of the ultimate loss estimate. During the first few development quarters of an accident year, the expected ultimate losses
generally reflect the average loss costs from a period of preceding accident quarters that have been adjusted for changes in rate and
loss cost trends, mix of business, known exposure to unreported losses, or other factors affecting the particular line of business. For
more mature quarters, specific loss development methods and/or frequency/severity methods may be used to determine the incurred
but not reported (IBNR). IBNR for claims arising from catastrophic events or events of unusual severity would be determined taking
into account information known by the claims department, using alternative techniques or expected percentages of ultimate loss
emergence based on historical emergence of similar events or claim types.
Long-Tail Reserves
Estimation of loss reserves for our long-tail business is a complex process and depends on a number of factors, including the product
line and volume of business, as well as estimates of reinsurance recoveries. Experience in more recent accident years generally
provides limited statistical credibility of reported net losses on long-tail business. That is because in the more recent accident years, a
relatively low proportion of estimated ultimate net incurred losses are reported or paid. Therefore, IBNR reserves constitute a
relatively high proportion of loss reserves.
For our long-tail lines, we generally make actuarial and other assumptions with respect to the following:
•
Loss cost trend factors, which are used to establish expected loss ratios for subsequent accident years based on the projected
loss ratios for prior accident years.
•
Expected loss ratios, which are used for the latest accident year and, in some cases, for accident years prior to the latest accident
year. The expected loss ratio also generally reflects the average loss ratio from prior accident years, adjusted for the loss cost
trend and the effect of rate changes and other quantifiable factors on the loss ratio.
•
Loss development factors, which are used to project the reported losses for each accident year to an ultimate basis. Generally, the
actual loss development factors observed from prior accident years would be used as a basis to determine the loss development
factors for the subsequent accident years.
•
Tail factors, which are development factors used for certain long-tail lines of business to project future loss development for periods
that extend beyond the available development data. The development of losses to the ultimate loss for a given accident year for
these lines may take decades and the projection of ultimate losses for an accident year is very sensitive to the tail factors selected
beyond a certain age.
We record quarterly changes in loss reserves for each product line of business. The overall change in our loss reserves is based on
the sum of the changes for all product lines of business. The quarterly loss reserve changes are based on the estimated current loss
ratio for each subset of coverage less any amounts paid. Also, any change in estimated ultimate losses from prior accident years
deemed to be necessary based on the results of our latest detailed valuation reviews, large loss analyses, or other analytical
techniques, either positive or negative, is reflected in the loss reserve and incurred losses for the current quarter. Differences between
actual loss emergence in a given period and our expectations based on prior loss reserve estimates are used to monitor reserve
adequacy between detailed valuation reviews and may also influence our judgment with respect to adjusting reserve estimates.
Details of the Loss Reserving Process
The process of determining the current loss ratio for each product line of business is based on a variety of factors. These include
considerations such as: prior accident year and policy year loss ratios; rate changes; and changes in coverage, reinsurance, or mix of
business. Other considerations include actual and anticipated changes in external factors such as trends in loss costs, inflation,
employment rates or unemployment duration or in the legal and claims environment. The current loss ratio for each product line of
business is intended to represent our best estimate after reflecting all relevant factors. At the close of each quarter, the assumptions
and data underlying the loss ratios are reviewed to determine whether they remain appropriate. This process includes a review of the
actual loss experience in the quarter, actual rate changes achieved, actual changes in reinsurance, quantifiable changes in coverage
or mix of business, and changes in other factors that may affect the loss ratio. The loss ratio is changed to reflect the revised estimate
if this review suggests that the previously determined loss ratio is no longer appropriate and, generally, shorter tailed lines of business
are more likely to experience changes than longer tailed lines for immature accident years unless the information is directionally
unfavorable.
ITEM 7 | Critical Accounting Estimates
AIG | 2024 Form 10-K
41
We conduct a comprehensive loss reserve detailed valuation review at least annually for each product line of business in accordance
with Actuarial Standards of Practice. These standards provide that the unpaid loss estimate may be presented in a variety of ways,
such as a point estimate, a range of estimates, a point estimate based on the expected value of several reasonable estimates, or a
probability distribution of the unpaid loss amount. Our actuarial best estimate for each product line of business represents an
expected value generally considering a range of reasonably possible outcomes.
The reserve analysis, globally, for each product line of business is performed by a credentialed actuarial team in collaboration with
claims, underwriting, business unit management, risk management and senior management. Our actuaries consider the ongoing
applicability of prior data groupings and update numerous assumptions, including the analysis and selection of loss development and
loss trend factors. They also determine and select the appropriate actuarial or other methods used to develop our best estimate for
each business product line, and may employ multiple methods and assumptions for each product line. These data groupings, accident
year weights, method selections and assumptions necessarily change over time as business mix changes, development factors
mature and become more credible and loss characteristics evolve. We consult with third-party specialists to help inform our
judgments as needed. Through the execution of these detailed valuation reviews an actuarial best estimate of the loss reserve is
determined. The sum of these estimates for each product line of business yields an overall actuarial best estimate for that line of
business.
A critical component of our detailed valuation reviews is an internal peer review of our reserving analyses and conclusions, where
actuaries independent of the initial review evaluate the reasonableness of assumptions used, methods selected, and weightings given
to different methods. In addition, each detailed valuation review is subjected to a review and challenge process by specialists in our
Enterprise Risk Management (ERM) group.
For certain product lines, we measure sensitivities and determine explicit ranges around the actuarial best estimate using multiple
methodologies and varying assumptions. Where we have ranges, we use them to inform our selection of best estimates of loss
reserves by product line of business. Our range of reasonable estimates is not intended to cover all possibilities or extreme values
and is based on known data and facts at the time of estimation.
Actuarial and Other Methods for Our Lines of Business
Our actuaries determine the appropriate actuarial methods and segmentation. This determination is based on a variety of
factors including the nature of the losses associated with the product line of business, such as the frequency or severity of the claims.
In addition to determining the actuarial methods, the actuaries determine the appropriate loss reserve groupings of data. This
determination is a judgmental, dynamic process and refinements to the groupings are made every year. The groupings may change to
reflect observed or emerging patterns within and across product lines, or to differentiate risk characteristics (for example, size of
deductibles and extent of third-party claims specialists used by our insureds). As an example of reserve segmentation, we write many
unique subsets of professional liability insurance, which cover different products, industry segments, and coverage structures. While
for pricing or other purposes, it may be appropriate to evaluate the profitability of each subset individually, we believe it is appropriate
to combine the subsets into larger groups for reserving purposes to produce a greater degree of credibility in the loss experience. This
determination of data segmentation and related actuarial methods is assessed, reviewed and updated at least annually.
The actuarial methods we use most commonly include paid and incurred loss development methods, expected loss ratio
methods, including “Bornhuetter Ferguson” and “Cape Cod,” and frequency/severity models. Loss development methods
utilize the actual loss development patterns from prior accident years updated through the current year to project the reported losses
to an ultimate basis for all accident years. We also use this information to update our current accident year loss selections. Loss
development methods are generally most appropriate for lines of business that exhibit a stable pattern of loss development from one
accident year to the next, and for which the components of the product line have similar development characteristics. Expected loss
ratio methods rely on the application of an expected loss ratio to the earned premium for the product line of business to
determine the liability for loss reserves and loss adjustment expenses. We generally use expected loss ratio methods in cases
where the reported loss data lacked sufficient credibility to utilize loss development methods, such as for new product lines of
business or for long-tail product lines at early stages of loss development. Frequency/severity models may be used where sufficient
frequency counts are available to apply such approaches.
A key advantage of loss development methods is that they respond more quickly to any actual changes in loss costs for the product
line of business. Therefore, if loss experience is unexpectedly deteriorating or improving, the loss development method gives full
credibility to the changing experience. Expected loss ratio methods would be slower to respond to the change, as they would continue
to give more weight to a prior expected loss ratio, until enough evidence emerged to modify the expected loss ratio to reflect the
changing loss experience. On the other hand, loss development methods have the disadvantage of overreacting to changes in
reported losses if the loss experience is anomalous due to the various key factors described above and the inherent volatility in some
of the lines. For example, the presence or absence of large losses at the early stages of loss development could cause the loss
development method to overreact to the favorable or unfavorable experience by assuming it is a fundamental shift in the development
pattern. In these instances, expected loss ratio methods such as Bornhuetter Ferguson have the advantage of recognizing large
losses without extrapolating unusual large loss activity onto the unreported portion of the losses for the accident year.
AIG | 2024 Form 10-K
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ITEM 7 | Critical Accounting Estimates
The Cape Cod method is a hybrid between the loss development and Bornhuetter Ferguson methods, where the historic loss data
and loss development factor assumptions are used to determine the expected loss ratio estimate in the Bornhuetter Ferguson
method.
Where appropriate, supplemental analysis for the given line of business may be performed in addition to the above described
techniques such as Shareholder Class Action suit analysis for Directors and Officers (D&O) coverages.
Frequency/severity methods generally rely on the determination of an ultimate number of claims and an average severity for
each claim for each accident year. Multiplying the estimated ultimate number of claims for each accident year by the expected
average severity of each claim produces the estimated ultimate loss for the accident year. Frequency/severity methods generally
require a sufficient volume of claims in order for the average severity to be predictable. Average severity for subsequent accident
years is generally determined by applying an estimated annual loss cost trend to the estimated average claim severity from prior
accident years. In certain cases, a structural approach may also be used to predict the ultimate loss cost. Frequency/severity methods
have the advantage that ultimate claim counts can generally be estimated more quickly and accurately than can ultimate losses.
Thus, if the average claim severity can be accurately estimated, these methods can more quickly respond to changes in loss
experience than other methods. However, for average severity to be predictable, the product line of business must consist of
homogenous types of claims for which loss severity trends from one year to the next are reasonably consistent and where there are
limited changes to deductible levels or limits. Generally these methods work best for high frequency, low severity product lines of
business such as personal auto. However, frequency and severity metrics are also used to test the reasonability of results for other
product lines of business and provide indications of underlying trends in the data. In addition, ultimate claim counts can be used as an
alternative exposure measure to earned premiums in the Cape Cod method.
The estimation of liability for loss reserves and loss adjustment expenses relating to asbestos and environmental pollution
losses on insurance policies written many years ago is typically subject to greater uncertainty than other types of losses.
This is due to inconsistent court decisions, as well as judicial interpretations and legislative actions that in some cases have tended to
broaden coverage beyond the original intent of such policies or have expanded theories of liability. In addition, reinsurance
recoverable balances relating to asbestos and environmental loss reserves are subject to greater uncertainty due to the underlying
age of the claim, underlying legal issues surrounding the nature of the coverage, and determination of proper policy period. For these
reasons, these balances tend to be subject to increased levels of disputes and legal collection activity when actually billed. The
insurance industry as a whole is engaged in extensive litigation over these coverage and liability issues and is thus confronted with a
continuing uncertainty in its efforts to quantify these exposures.
We continue to receive claims asserting injuries and damages from toxic waste, hazardous substances, and other environmental
pollutants and alleged claims to cover the cleanup costs of hazardous waste dump sites, referred to collectively as environmental
claims, and indemnity claims asserting injuries from asbestos. The vast majority of these asbestos and environmental losses emanate
from policies written in 1984 and prior years. Commencing in 1985, standard policies contained absolute exclusions for pollution-
related damage and asbestos. The current environmental policies that we specifically price and underwrite for environmental risks on
a claims-made basis have been excluded from the analysis. Nevertheless, most of these legacy exposures have been heavily
reinsured with very highly rated reinsurers.
The majority of our remaining exposures for asbestos and environmental losses are related to excess casualty coverages, not primary
coverages. The litigation costs are treated in the same manner as indemnity amounts, with litigation expenses included within the
limits of the liability we incur. Individual significant loss reserves, where future litigation costs are reasonably determinable, are
established on a case-by-case basis.
AIG | 2024 Form 10-K
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ITEM 7 | Critical Accounting Estimates
Key Assumptions of our Actuarial Methods by Line of Business
U.S. Workers’
Compensation
We generally use a combination of loss development and expected loss ratio methods for U.S. Workers’
Compensation as this is a long-tail line of business.
The tail factor is typically the most critical assumption, and small changes in the selected tail factor can have a material
effect on our carried reserves. For example, the tail factors beyond twenty years for guaranteed cost business could
vary by 1 percentage point below to 2.5 percentage points above those indicated in the 2024 detailed valuation review.
For excess of deductible business, in our judgment, it is reasonably possible that tail factors beyond twenty years
could vary by 1.5 percentage points below to 3 percentage points above those indicated in the 2024 detailed valuation
review.
U.S. Excess Casualty
We utilize various loss cost trend assumptions for different segments of the portfolio. In our judgment, after evaluating
the historical loss cost trends from prior accident years since the early 1990s, it is reasonably possible that actual loss
cost trends applicable to the year-end 2024 detailed valuation review for U.S. Excess Casualty may range 5
percentage points lower or higher than this estimated loss trend. The loss cost trend assumption is critical for the U.S.
Excess Casualty line of business due to the long-tail nature of the losses, and it is applied across many accident
years. Thus, there is the potential for the loss reserves with respect to a number of accident years (the expected loss
ratio years) to be significantly affected by changes in loss cost trends that were initially relied upon in setting the loss
reserves. These changes in loss trends could be attributable to changes in inflation or in the judicial environment, or in
other social or economic conditions affecting losses.
U.S. Excess Casualty is a long-tail line of business and any deviation in loss development factors might not be
discernible for an extended period of time subsequent to the recording of the initial loss reserve estimates for any
accident year. Mass tort claims in particular may develop over a very extended period and impact multiple accident
years, so we usually select a separate pattern for them. Thus, there is the potential for the loss reserves with respect
to a number of accident years to be significantly affected by changes in loss development factors that were initially
relied upon in setting the reserves.
In our judgment, after evaluating the historical loss development factors from prior accident years since the early
1990s, it is reasonably possible that the actual loss development factors could vary by an amount equivalent to a six
month shift from those actually utilized in the year-end 2024 detailed valuation review. This would impact projections
both for accident years where the selections were directly based on loss development methods as well as the a priori
loss ratio assumptions for accident years with selections based on Bornhuetter Ferguson or Cape Cod methods.
Similar to loss cost trends, these changes in loss development factors could be attributable to changes in inflation or in
the judicial environment, or in other social or economic conditions affecting losses.
Given the very long-tail nature of this business, the tail factor selection can also have material impact on our carried
reserves. The sensitivity around tail selection may also be a proxy for the sensitivity of a calendar year impact of
monetary inflation on unpaid losses. It is reasonably possible for the tail factors for Excess Casualty could vary by 2
percentage points below to 3.5 percentage points above those indicated in the 2024 detailed valuation review.
U.S. Other Casualty
The key assumptions for other casualty lines are similar to U.S. Excess Casualty, as the underlying business is long-
tailed and can be subject to variability in loss cost trends and changes in loss development factors. These may differ
significantly by line of business as coverages such as general liability, medical malpractice and environmental may be
subject to different risk drivers.
U.S. Financial Lines
The loss cost trends for U.S. D&O liability business vary by year and subset. After evaluating the historical loss cost
levels from prior accident years since the early 1990s, including the potential effect of losses relating to the credit
crisis, in our judgment, it is reasonably possible that the actual variation in loss cost levels for these subsets could vary
by approximately 10 percentage points lower or higher on a year-over-year basis than the assumptions actually
utilized in the year-end 2024 reserve review. Because the U.S. D&O business has exhibited highly volatile loss trends
from one accident year to the next, there is the possibility of an exceptionally high deviation. In our analysis, the effects
of loss cost trend assumptions affect the results through the a priori loss ratio assumptions used for the Bornhuetter
Ferguson and Cape Cod methods, which impact the projections for the more recent accident years.
The selected loss development factors are also an important assumption, but are less critical than for U.S. Excess
Casualty. Because these lines are written on a claims made basis, the loss reporting and development tail is much
shorter than for U.S. Excess Casualty. However, the high severity nature of the losses does create the potential for
significant deviations in loss development patterns from one year to the next. Similar to U.S. Excess Casualty, after
evaluating the historical loss development factors from prior accident years since the early 1990s, in our judgment, it is
reasonably possible that actual loss development factors could change by an amount equivalent to a shift by six
months from those actually utilized in the year-end 2024 reserve review.
UK/Europe Casualty and
Financial Lines
Similar to U.S. business, UK/Europe Casualty and Financial Lines can be significantly impacted by loss cost trends
and changes in loss development factors. The variation in such factors can differ significantly by product and region,
however the range of potential impacts is much lower than that of other lines of business noted above.
U.S. and UK/Europe
Property and Special
Risks
For shorter-tail lines such as Property and Special Risks, variance in outcomes for individual large claims or events
typically has a greater impact on results than does changes in actuarial assumptions or methodology. This is because
a greater proportion of the ultimate loss, at any stage of development, is composed of reported losses than IBNR
reserves. These outcomes generally relate to unique characteristics of events such as catastrophes or losses with
significant business interruption claims.
U.S., UK/Europe and
Japan Personal Insurance
Personal Insurance is short-tailed in nature similar to Property and Special Risks but less volatile. Variance in
estimates can result from unique events such as catastrophes. In addition, some subsets of this business, such as
auto liability, can be impacted by changes in loss development factors and loss cost trends.
Line of Business or Category Key Assumptions
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ITEM 7 | Critical Accounting Estimates
The following sensitivity analysis table summarizes the effect on the loss reserve position of using certain alternative loss
cost trend (for accident years where we use expected loss ratio methods) or loss development factor assumptions rather
than the assumptions actually used in determining our estimates in the year-end loss reserve analyses in 2024:
December 31, 2024
Increase
(Decrease) to
Loss Reserves
Increase
(Decrease) to
Loss Reserves
(in millions)
Loss cost trends:
Loss development factors:
U.S. Excess Casualty:
U.S. Excess Casualty:
5.0 percentage points increase
$
850
3.5 percentage points tail factor increase
$
1,200
5.0 percentage points decrease
(600)
2.0 percentage points tail factor decrease
(750)
U.S. Excess Casualty:
6-months slower
600
6-months faster
(550)
U.S. Financial Lines (D&O)
U.S. Financial Lines (D&O)
10.0 percentage points increase
850
6-months slower
600
10.0 percentage points decrease
(600)
6-months faster
(500)
U.S. Workers' Compensation:
Tail factor increase(a)
900
Tail factor decrease(b)
(550)
(a) Tail factor increase of 2.5 percentage points for guaranteed cost business and 3 percentage points for deductible business.
(b) Tail factor decrease of 1 percentage point for guaranteed cost business and 1.5 percentage points for deductible business.
For additional information on our reserving process and methodology, see Note 13 to the Consolidated Financial Statements.
REINSURANCE ASSETS
In the ordinary course of business, our insurance companies may use both treaty and facultative reinsurance to minimize their net
loss exposure to any single catastrophic loss event or to an accumulation of losses from a number of smaller events or to provide
greater diversification of our businesses. Reinsurance assets include the balances due from reinsurance and insurance companies
under the terms of our reinsurance agreements for paid and unpaid losses and loss adjustment expenses incurred, ceded unearned
premiums and ceded future policy benefits for life and accident and health insurance contracts and benefits paid and unpaid. The
estimation of reinsurance recoverables involves a significant amount of judgment. Reinsurance assets include reinsurance
recoverables on unpaid losses and loss adjustment expenses that are estimated as part of our loss reserving process and,
consequently, are subject to similar judgments and uncertainties as the estimation of gross loss reserves. For additional information
on reinsurance, see Note 8 to the Consolidated Financial Statements.
ALLOWANCE FOR CREDIT LOSSES ON CERTAIN INVESTMENTS
We maintain an allowance for the expected lifetime credit losses of commercial and residential mortgage loans and available for sale
securities. The sufficiency of this allowance is reviewed quarterly using both quantitative and qualitative considerations, which are
subject to risks and uncertainties. These considerations and the overall methodology used to estimate the allowance for credit losses
are discussed in more detail in Note 6 and Note 7 to the Consolidated Financial Statements for available for sale securities and
Commercial and residential loans, respectively.
FAIR VALUE MEASUREMENTS OF CERTAIN FINANCIAL ASSETS AND FINANCIAL LIABILITIES
Assets and liabilities recorded at fair value in the Consolidated Balance Sheets are measured and classified in a hierarchy for
disclosure purposes consisting of three levels based on the observability of inputs available in the marketplace used to measure the
fair value. We classify fair value measurements for certain assets and liabilities as Level 3 when they require significant unobservable
inputs in their valuation. We consider unobservable inputs to be those for which market data is not available. Our assessment of the
significance of a particular input to the fair value measurement of an asset or liability requires judgment.
For additional information about the valuation methodologies of financial instruments measured at fair value, see Note 5 to the
Consolidated Financial Statements.
AIG | 2024 Form 10-K
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ITEM 7 | Critical Accounting Estimates
INCOME TAXES
Deferred income taxes represent the tax effect of the differences between the amounts recorded in our Consolidated Financial
Statements and the tax basis of assets and liabilities. Our assessment of net deferred income taxes represents management’s best
estimate of the tax consequences of various events and transactions, which can themselves be based on other accounting estimates,
resulting in incremental uncertainty in the estimation process.
Deferred Tax Asset Recoverability
The evaluation of the recoverability of our deferred tax asset and the need for a valuation allowance requires us to weigh all positive
and negative evidence to reach a conclusion that it is more likely than not that all or some portion of the deferred tax asset will not be
realized. The weight given to the evidence is commensurate with the extent to which it can be objectively verified. As such, changes in
tax laws in countries where we transact business can impact our deferred tax asset valuation allowance. We consider multiple factors
to reliably estimate future taxable income so we can determine the extent of our ability to realize net operating losses, foreign tax
credits, realized capital loss and other carryforwards. These factors include forecasts of future income for each of our businesses,
which incorporate forecasts of future statutory income for our insurance companies, and actual and planned business and operational
changes, both of which include assumptions about future macroeconomic and AIG-specific conditions and events. We subject the
forecasts to stresses of key assumptions and evaluate the effect on tax attribute utilization. We also apply stresses to our
assumptions about the effectiveness of relevant prudent and feasible tax planning strategies. In performing our assessment of
recoverability, we consider tax laws governing the utilization of net operating loss, capital loss and foreign tax credit carryforwards in
each applicable jurisdiction. These tax laws are subject to change, resulting in incremental uncertainty in our assessment of
recoverability.
Uncertain Tax Positions
Uncertain tax positions represent AIG’s liability for income taxes on tax years subject to review by the Internal Revenue Service (IRS)
or other tax authorities. We determine whether it is more likely than not that a tax position will be sustained, based on technical merits,
upon examination by the relevant taxing authorities before any part of the benefit can be recognized in the financial statements. A tax
position is measured at the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement. The
completion of review, or the expiration of federal statute of limitations for a given audit period could result in an adjustment to the
liability for income taxes.
For a discussion of our framework for assessing the recoverability of our deferred tax asset and other tax topics, see Note 21 to the
Consolidated Financial Statements.
GOODWILL IMPAIRMENT
Goodwill represents the future economic benefits arising from assets acquired in a business combination that are not individually
identified and separately recognized. Goodwill is tested for impairment annually, or more frequently if circumstances indicate an
impairment may have occurred. A qualitative assessment may be performed, considering whether events or circumstances exist that
lead to a determination that it is not more likely than not that the fair value of a segment is less than its carrying value. If management
elects to perform a quantitative assessment to determine recoverability of carrying value or is compelled to do so based on the results
of a qualitative assessment, the estimate of fair value involves applying one or a combination of common valuation approaches.
These include discounted expected future cash flows, market-based earnings multiples and external appraisals, among other
methods, all of which require management judgment and are subject to uncertainty, primarily as it relates to assumptions around
business growth, earnings projections, and cost of capital.
For additional information on goodwill impairment, see Part I, Item 1A. Risk Factors – Estimates and Assumptions and Note 12 to the
Consolidated Financial Statements.
AIG | 2024 Form 10-K
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ITEM 7 | Critical Accounting Estimates
Executive Summary
OVERVIEW
This overview of the MD&A highlights selected information and may not contain all of the information that is important to current or
potential investors in our securities. You should read this Annual Report in its entirety for a more detailed description of events, trends,
uncertainties, risks and critical accounting estimates affecting us.
REGULATORY, INDUSTRY AND ECONOMIC FACTORS
Regulatory Environment
Our operations around the world are subject to regulation by many different types of regulatory authorities, including insurance and
securities regulators in the United States and abroad. The insurance and financial services industries are generally subject to close
regulatory scrutiny and supervision.
For information regarding our regulation and supervision by different regulatory authorities in the United States and abroad, see Part I,
Item 1. Business – Regulation and Part I, Item 1A. Risk Factors – Regulation and Note 21 to the Consolidated Financial Statements.
Impact of Changes in the Interest Rate Environment
Certain U.S. benchmark rates continued to fluctuate in 2024 as markets reacted to change in inflation trends, geopolitical risk and the
decisions of the Board of Federal Reserve System. Our Net investment income is impacted by market interest rates as well as the
deployment of asset allocation strategies to enhance yield, manage duration and interest rate risk. The changes in interest rates and
credit spreads impact our ability to reinvest future cash flows at rates equal or greater than the rates on sales and maturities. For
additional information on our investment and asset-liability management strategies, see Investments.
Impact of Currency Volatility
Currency volatility remains acute. Strengthening of the U.S. dollar against the Euro, British pound and the Japanese yen (the Major
Currencies) impacts income for our businesses with substantial international operations. In particular, growth trends in net premiums
written reported in U.S. dollars can differ significantly from those measured in original currencies. The net effect on underwriting
results, however, is significantly mitigated, as both revenues and expenses are similarly affected.
These currencies may continue to fluctuate, especially as a result of central bank responses to inflation, concerns regarding future
economic growth and other macroeconomic factors, and such fluctuations will affect net premiums written growth trends reported in
U.S. dollars, as well as financial statement line item comparability.
General Insurance businesses are transacted in most major foreign currencies. The following table presents the average of
the quarterly weighted average exchange rates of the Major Currencies, which have the most significant impact on our
businesses:
Years Ended December 31,
Percentage Change
Rate for 1 USD
2024
2023
2022
2024 vs 2023
2023 vs 2022
Major Currency:
GBP
0.78
0.81
0.81
(4) %
— %
EUR
0.92
0.93
0.95
(1) %
(2) %
JPY
150.61
139.79
129.67
8 %
8 %
Unless otherwise noted, references to the effects of foreign exchange in the General Insurance discussion of results of operations are
with respect to movements in the Major Currencies included in the preceding table.
ITEM 7 | Executive Summary
AIG | 2024 Form 10-K
47
Consolidated Results of Operations
The following section provides a comparative discussion of our consolidated results of operations on a reported basis for the three-
year period ended December 31, 2024. Factors that relate primarily to a specific business are discussed in more detail within the
business segment operations section.
For information regarding the critical accounting estimates that affect our results of operations, see Critical Accounting Estimates
above.
The following table presents our consolidated results of operations and other key financial metrics:
(in millions)
2024
2023
2022
2024 vs 2023
2023 vs 2022
Revenues:
Premiums
$ 23,537
$ 25,564
$ 26,765
(8) %
(4) %
Net investment income:
Net investment income - excluding Fortitude Re funds withheld assets
4,111
3,266
2,317
26
41
Net investment income - Fortitude Re funds withheld assets
144
180
53
(20)
240
Total net investment income
4,255
3,446
2,370
23
45
Net realized gains (losses):
Net realized losses - excluding Fortitude Re funds withheld assets
and embedded derivative
(434)
(734)
(207)
41
(255)
Net realized losses on Fortitude Re funds withheld assets
(39)
(71)
(99)
45
28
Net realized gains (losses) on Fortitude Re funds withheld
embedded derivative
(75)
(273)
1,133
73
NM
Total net realized gains (losses)
(548)
(1,078)
827
49
NM
Other income
7
6
34
17
(82)
Total revenues
27,251
27,938
29,996
(2)
(7)
Benefits, losses and expenses:
Losses and loss adjustment expenses incurred
14,567
15,393
15,461
(5)
—
Amortization of deferred policy acquisition costs
3,425
3,771
3,545
(9)
6
General operating and other expenses
5,529
5,399
6,159
2
(12)
Interest expense
462
516
603
(10)
(14)
(Gain) loss on extinguishment of debt
14
(37)
303
NM
NM
Net (gain) loss on divestitures and other
(616)
29
153
NM
(81)
Total benefits, losses and expenses
23,381
25,071
26,224
(7)
(4)
Income from continuing operations before income tax expense
3,870
2,867
3,772
35
(24)
Income tax expense:
Current
657
176
(452)
273
NM
Deferred
513
(50)
1,334
NM
NM
Income tax expense
1,170
126
882
NM
(86)
Income from continuing operations
2,700
2,741
2,890
(1)
(5)
Income (loss) from discontinued operations, net of income taxes
(3,626)
1,137
8,383
NM
(86)
Net income (loss)
(926)
3,878
11,273
NM
(66)
Less: Net income attributable to noncontrolling interests
478
235
1,046
103
(78)
Net income (loss) attributable to AIG
(1,404)
3,643
10,227
NM
(64)
Less: Dividends on preferred stock and preferred stock redemption
premiums
22
29
29
(24)
—
Net income (loss) attributable to AIG common shareholders
$ (1,426)
$
3,614
$ 10,198
NM %
(65) %
Years Ended December 31,
Percentage Change
Years Ended December 31,
2024
2023
2022
Return on equity
(3.2) %
8.6 %
20.7 %
Adjusted return on equity
6.6
5.6
3.6
Return on tangible equity
8.1
8.5
N/A
Core operating return on equity
9.1
9.6
N/A
ITEM 7 | Consolidated Results of Operations
AIG | 2024 Form 10-K
48
(in millions, except per share data)
December 31, 2024
December 31, 2023
Balance sheet data:
Total assets
$
161,322
$
539,306
Long-term debt
8,764
10,375
Debt of consolidated investment entities
158
231
Total AIG shareholders’ equity
42,521
45,351
Book value per share
70.16
65.14
Adjusted book value per share
73.79
78.50
Tangible book value per share
63.98
59.60
Adjusted tangible book value per share
67.62
72.96
Core operating book value per share
61.75
52.74
NET INCOME (LOSS) ATTRIBUTABLE TO AIG COMMON SHAREHOLDERS
Years Ended December 31, 2024 and 2023 Comparison
Net income (loss) attributable to AIG common shareholders decreased $5.0 billion due to the following:
•
a decrease in Income (loss) from discontinued operations, net of income taxes of $4.8 billion as a result of the deconsolidation of
Corebridge;
•
a decrease in underwriting income driven by unfavorable prior year reserve development of $254 million, which does not reflect the
benefit of recoveries under a retroactive adverse development cover, as well as the sales of AIG Re and Crop Risk Services, Inc.
(CRS), partially offset by improved portfolio performance and growth;
•
an increase in net income attributable to noncontrolling interest of $243 million primarily driven by Corebridge; and
•
an increase in income tax expense of $1.0 billion as a result of higher income before taxes and discrete tax benefits in the prior
year primarily related to a reduction in the valuation allowance and developments related to the potential resolution of an IRS audit
matter.
The decrease in Net income (loss) attributable to AIG common shareholders was partially offset by the following:
•
an increase in Net investment income of $809 million primarily driven by dividends received from Corebridge of $162 million and
changes in its stock price and gain on sale of shares of $439 million, higher income on available for sale fixed maturity securities of
$121 million and an increase in the fair value of equity securities of $96 million; and
•
an increase in Net realized gains excluding Fortitude Re funds withheld assets and embedded derivative of $300 million, primarily
driven by a $85 million decrease in losses from sales of securities, lower derivative and hedge activity losses of $103 million and a
$132 million increase in foreign exchange gains, partially offset by lower sales on alternative investments of $45 million.
Years Ended December 31, 2023 and 2022 Comparison
Net income (loss) attributable to AIG common shareholders decreased $6.6 billion due to the following:
•
decrease in Income (loss) from discontinued operations, net of income taxes of $7.2 billion as a result of the decrease in net
income of Corebridge;
•
decrease in Net realized gains on Fortitude Re funds withheld embedded derivative of $1.4 billion driven by interest rate
movements;
•
decrease in Net realized gains excluding Fortitude Re funds withheld assets and embedded derivative of $527 million, driven by
$324 million decrease in other derivative and hedge accounting, $142 million decrease in foreign exchange transactions and
losses on sales of securities of $103 million; and
•
decrease in Income tax expense of $756 million primarily attributable to lower income from continuing operations.
The decrease in Net income (loss) attributable to AIG common shareholders was partially offset by the following:
•
higher net investment income of $1.1 billion primarily driven by higher income on available for sale fixed maturity securities of
$884 million and an increase in fair value of fixed maturity securities where we elected the fair value option of $420 million as a
result of the higher rate environment;
•
lower income attributable to noncontrolling interest of $811 million driven by the decline in net income at Corebridge; and
•
higher underwriting income in General Insurance of $387 million, including $86 million attributable to eliminating the international
reporting lag, reflecting the continued earn-in of positive rate change, strong renewal retentions and new business production, as
well as increased favorable prior year development and lower catastrophe losses. Underwriting income was negatively impacted
by unfavorable movements in foreign exchange. For additional information on the elimination of the international reporting lag, see
Note 1 to the to the Consolidated Financial Statements.
AIG | 2024 Form 10-K
49
ITEM 7 | Consolidated Results of Operations
INCOME TAX EXPENSE ANALYSIS
For the years ended December 31, 2024, 2023 and 2022, the effective tax rate on income (loss) from continuing operations was
30.2 percent, 4.4 percent and 23.4 percent, respectively.
For additional information, see Note 21 to the Consolidated Financial Statements.
NON-GAAP RECONCILIATIONS
The following table presents reconciliations of Book value per share to Adjusted book value per share, Tangible book value
per share and Core operating book value per share, which are non-GAAP measures. For additional information, see Use of
Non-GAAP Measures.
(in millions, except per share data)
2024
2023
2022
Total AIG shareholders' equity
$
42,521
$
45,351
$
40,970
Preferred equity
—
485
485
Total AIG common shareholders' equity
42,521
44,866
40,485
Less: Investments related AOCI
(2,872)
(10,994)
(20,811)
Add: Cumulative unrealized gains and losses related to Fortitude Re funds withheld assets
(667)
(1,791)
(2,862)
Subtotal: Investments AOCI
(2,205)
(9,203)
(17,949)
AIG adjusted common shareholders' equity
$
44,726
$
54,069
$
58,434
Total AIG common shareholders' equity
$
42,521
$
44,866
$
40,485
Less Intangible Assets:
Goodwill
3,373
3,422
3,751
Value of distribution channel acquired
127
145
273
Other intangibles
243
249
415
Total intangibles assets
3,743
3,816
4,439
AIG tangible common shareholders' equity
$
38,778
$
41,050
$
36,046
AIG adjusted common shareholders' equity
$
44,726
$
54,069
$
58,434
Total intangibles assets
3,743
3,816
4,439
AIG adjusted tangible common shareholders' equity
$
40,983
$
50,253
$
53,995
Total AIG common shareholders' equity
$
42,521
$
44,866
$
40,485
Less: AIG's ownership interest in Corebridge
3,810
6,738
8,690
Less: Investments related AOCI - AIG
(2,872)
(3,084)
(1,693)
Add: Cumulative unrealized gains and losses related to Fortitude Re funds withheld assets -
AIG
(667)
(573)
(682)
Subtotal: Investments AOCI - AIG
(2,205)
(2,511)
(1,011)
Less: Deferred tax assets
3,489
4,313
4,518
AIG core operating shareholders' equity
$
37,427
$
36,326
$
28,288
Total common shares outstanding
606.1
688.8
734.1
Book value per share
$
70.16
$
65.14
$
55.15
Adjusted book value per share
73.79
78.50
79.60
Tangible book value per share
63.98
59.60
49.10
Adjusted tangible book value per share
67.62
72.96
73.55
Core operating book value per share
61.75
52.74
38.53
December 31,
AIG | 2024 Form 10-K
50
ITEM 7 | Consolidated Results of Operations
The following table presents reconciliations of Return on equity to Adjusted return on equity, Tangible return on equity and
Core operating return on equity, which are non-GAAP measures. For additional information, see Use of Non-GAAP
Measures.
Years Ended December 31,
(dollars in millions)
2024
2023
2022
Actual or annualized net income (loss) attributable to AIG common shareholders
$
(1,426)
$
3,614
$
10,198
Actual or annualized adjusted after-tax income attributable to AIG common shareholders
$
3,254
$
3,205
$
2,121
Average AIG common shareholders' equity
$
44,051
$
41,930
$
49,338
Less: Average investments AOCI
(5,132)
(14,836)
(9,003)
Average AIG adjusted common shareholders' equity
$
49,183
$
56,766
$
58,341
Average AIG common shareholders' equity
$
44,051
$
41,930
Less: Average intangibles
3,797
4,070
Average AIG tangible common shareholders' equity
$
40,254
$
37,860
Average AIG common shareholders' equity
$
44,051
$
41,930
Less: Average AIG's ownership interest in Corebridge
6,770
7,376
Less: Average Investments AOCI - AIG
(2,351)
(3,254)
Less: Average deferred tax assets
3,998
4,322
Average AIG core operating shareholders' equity
$
35,634
$
33,486
Return on equity
(3.2) %
8.6 %
20.7 %
Adjusted return on equity
6.6
5.6
3.6
Return on tangible equity
8.1
8.5
N/A
Core operating return on equity
9.1
9.6
N/A
The following table presents a reconciliation of pre-tax income (loss)/net income (loss) attributable to AIG to adjusted pre-
tax income (loss)/adjusted after-tax income (loss) attributable to AIG:
Pre-tax income/net income (loss),
including noncontrolling interests
$ 3,870 $ 1,170 $
— $
(926)
$ 2,867 $
126 $
— $ 3,878
$ 3,772 $
882 $
— $ 11,273
Noncontrolling interests(a)
(478)
(478)
(235)
(235)
(1,046)
(1,046)
Pre-tax income/net income (loss)
attributable to AIG - including
discontinued operations
$ 3,870 $ 1,170 $
(478) $ (1,404)
$ 2,867 $
126 $
(235) $ 3,643
$ 3,772 $
882 $ (1,046) $ 10,227
Dividends on preferred stock and preferred
stock redemption premiums
22
29
29
Net income (loss) attributable to AIG
common shareholders
$ (1,426)
$ 3,614
$ 10,198
Changes in uncertain tax positions and
other tax adjustments
(239)
—
239
176
—
(176)
(147)
—
147
Deferred income tax valuation allowance
releases(b)
30
—
(30)
365
—
(365)
174
—
(174)
Changes in the fair values of equity
securities, AIG's investment in
Corebridge and gain on sale of shares
(586)
(123)
—
(463)
(53)
(11)
—
(42)
(29)
(6)
—
(23)
(Gain) loss on extinguishment of debt and
preferred stock redemption premiums
14
3
—
26
(37)
(8)
—
(29)
303
64
—
239
Net investment income on Fortitude Re
funds withheld assets
(144)
(30)
—
(114)
(180)
(38)
—
(142)
(53)
(11)
—
(42)
Net realized losses on Fortitude Re funds
withheld assets
39
8
—
31
71
15
—
56
99
21
—
78
Net realized losses on Fortitude Re funds
withheld embedded derivative
75
16
—
59
273
57
—
216
(1,133)
(238)
—
(895)
Net realized losses(c)
428
95
—
333
743
128
—
615
268
56
—
212
(Income) loss from discontinued operations
3,626
(1,137)
(8,383)
Net gain on divestitures and other
(616)
(128)
—
(488)
29
149
—
(120)
153
32
—
121
Non-operating litigation reserves and
settlements
—
—
—
—
1
—
—
1
(16)
(3)
—
(13)
Unfavorable (favorable) prior year
development and related amortization
changes ceded under retroactive
reinsurance agreements
105
22
—
83
(62)
(13)
—
(49)
(160)
(34)
—
(126)
Net loss reserve discount (benefit) charge
226
47
—
179
195
41
—
154
(703)
(148)
—
(555)
Net results of businesses in run-off(d)
111
24
—
87
31
7
—
24
(25)
(5)
—
(20)
Years Ended December 31,
2024
2023
2022
(in millions, except per common share data)
Pre-tax
Total Tax
(Benefit)
Charge
Non-
controlling
Interests(a)
After
Tax
Pre-tax
Total Tax
(Benefit)
Charge
Non-
controlling
Interests(a)
After
Tax
Pre-tax
Total Tax
(Benefit)
Charge
Non-
controlling
Interests(a)
After
Tax
AIG | 2024 Form 10-K
51
ITEM 7 | Consolidated Results of Operations
Pension expense related to lump sum
payments to former employees
—
—
—
—
71
15
—
56
59
12
—
47
Integration and transaction costs
associated with acquiring or divesting
businesses
39
8
—
31
6
1
—
5
12
3
—
9
Restructuring and other costs(e)
745
156
—
589
356
75
—
281
423
89
—
334
Non-recurring costs related to regulatory or
accounting changes
18
4
—
14
22
5
—
17
26
5
—
21
Net impact from elimination of international
reporting lag(f)
—
—
—
—
(12)
(3)
—
(9)
(127)
(27)
—
(100)
Noncontrolling interests(a)
478
478
235
235
1,046
1,046
Adjusted pre-tax income/Adjusted after-
tax income attributable to AIG
common shareholders
$ 4,324 $ 1,063 $
— $ 3,254
$ 4,321 $ 1,087 $
— $ 3,205
$ 2,869 $
719 $
— $ 2,121
Weighted average diluted shares
outstanding
657.3
725.2
787.9
Income (loss) per common share
attributable to AIG common
shareholders (diluted)
$ (2.17)
$
4.98
$ 12.94
Adjusted after-tax income per common
share attributable to AIG common
shareholders (diluted)
$
4.95
$
4.42
$ 2.69
Years Ended December 31,
2024
2023
2022
(in millions, except per common share data)
Pre-tax
Total Tax
(Benefit)
Charge
Non-
controlling
Interests(a)
After
Tax
Pre-tax
Total Tax
(Benefit)
Charge
Non-
controlling
Interests(a)
After
Tax
Pre-tax
Total Tax
(Benefit)
Charge
Non-
controlling
Interests(a)
After
Tax
(a) Noncontrolling interest primarily relates to Corebridge and is the portion of Corebridge earnings that AIG did not own. Corebridge is consolidated until June 9, 2024. The
historical results of Corebridge owned by AIG are reflected in the Income (loss) from discontinued operations, net of income taxes.
(b) The year ended December 31, 2023 includes a valuation allowance release related to a portion of certain tax attribute carryforwards of AIG's U.S. federal consolidated
income tax group, as well as valuation allowance changes in certain foreign jurisdictions.
(c) Includes all net realized gains and losses except earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-
qualifying (economic) hedging or for asset replication and net realized gains and losses on Fortitude Re funds withheld assets.
(d) In the fourth quarter of 2024, AIG realigned and began excluding the net results of run-off businesses previously reported in Other Operations from Adjusted pre-tax
income. Historical results have been recast to reflect these changes.
(e) In the year ended December 31, 2024, Restructuring and other costs increased primarily as a result of employee-related costs, including severance, and real estate
impairment charges.
(f)
For additional information, see Note 1 to the Consolidated Financial Statements.
PRE-TAX INCOME (LOSS) COMPARISON
Pre-tax income (loss) was $3.9 billion, $2.9 billion and $3.8 billion in the years ended December 31, 2024, 2023 and 2022,
respectively.
For the main drivers impacting AIG’s results of operations, see – Net Income (Loss) Attributable to AIG Common Shareholders above.
ADJUSTED PRE-TAX INCOME (LOSS) COMPARISON
Adjusted pre-tax income (loss) was $4.3 billion, $4.3 billion and $2.9 billion in the years ended December 31, 2024, 2023 and 2022,
respectively.
For the main drivers impacting AIG’s adjusted pre-tax income (loss), see Business Segment Operations.
AIG | 2024 Form 10-K
52
ITEM 7 | Consolidated Results of Operations
The following table presents a reconciliation of General Insurance and Other Operations Net investment income and other/
pre-tax income (loss) to Net investment income and other, APTI basis/adjusted pre-tax income (loss):
(in millions)
Net
Investment
Income
and Other
Pre-tax
Income
(Loss)
Net
Investment
Income
and Other
Pre-tax
Income
(Loss)
Net
Investment
Income
and Other
Pre-tax
Income
(Loss)
Net
Investment
Income
and Other
Pre-tax
Income
(Loss)
Net
Investment
Income
and Other
Pre-tax
Income
(Loss)
Net
Investment
Income
and Other
Pre-tax
Income
(Loss)
Net investment income and other/Pre-
tax income (loss)
$
3,215 $ 4,474
$
1,047 $ (604) $
3,150 $ 4,308
$
302 $ (1,441) $
2,474 $ 5,175
$
(70) $ (1,403)
Consolidation and Eliminations
—
—
—
—
—
—
13
—
—
—
(14)
—
Other income (expense) - net
(31)
—
18
—
(49)
—
39
—
(51)
—
1
—
Changes in the fair values of equity
securities, AIG's investment in
Corebridge and gain on sale of shares
(73)
(73)
(513)
(513)
(84)
(84)
31
31
(9)
(9)
(20)
(20)
(Gain) loss on extinguishment of debt
—
—
—
14
—
—
—
(37)
—
—
—
303
Net investment income on Fortitude Re
funds withheld assets
(44)
(44)
(100)
(100)
(4)
(4)
(176)
(176)
(6)
(6)
(47)
(47)
Net realized losses on Fortitude Re funds
withheld assets
—
8
—
31
—
1
—
70
—
—
—
99
Net realized (gains) losses on Fortitude
Re funds withheld embedded derivative
—
—
—
75
—
(18)
—
291
—
(70)
— (1,063)
Net realized (gains) losses
(7)
330
(1)
98
10
731
2
12
15
136
46
132
Net loss (gain) on divestitures and other
—
(522)
—
(94)
—
18
—
11
—
15
—
138
Non-operating litigation reserves and
settlements
—
—
—
—
—
—
—
1
—
(14)
—
(2)
Unfavorable (favorable) prior year
development and related amortization
changes ceded under retroactive
reinsurance agreements
—
101
—
4
—
(42)
—
(20)
—
(197)
—
37
Net loss reserve discount (benefit) charge
—
226
—
—
—
195
—
—
—
(703)
—
—
Net results of businesses in run-off
—
—
(17)
111
—
—
(21)
31
—
—
(6)
(25)
Pension expense related to lump sum
payments to former employees
—
—
—
—
—
60
—
11
—
31
—
28
Integration and transaction costs
associated with acquiring or divesting
businesses
—
—
—
39
—
1
—
5
—
1
—
11
Restructuring and other costs
—
459
—
286
—
195
—
161
—
172
—
251
Non-recurring costs related to regulatory
or accounting changes
—
18
—
—
—
22
—
—
—
26
—
—
Net impact from elimination of
international reporting lag
—
—
—
—
(1)
(12)
—
—
(41)
(127)
—
—
Net investment income and other,
APTI basis/Adjusted pre-tax income
(loss)
$
3,060 $ 4,977
$
434 $ (653) $
3,022 $ 5,371
$
190 $ (1,050) $
2,382 $ 4,430
$
(110) $ (1,561)
Years Ended December 31,
2024
2023
2022
General Insurance
Other Operations
General Insurance
Other Operations
General Insurance
Other Operations
Business Segment Operations
In the fourth quarter of 2024, the Company realigned its organizational structure and the composition of its reportable segments to
reflect changes in how the Company manages its operations, specifically the level at which its chief operating decision makers
(CODMs) regularly review operating results and allocate resources. Our CODMs are the chief executive officer (CEO) and chief
financial officer (CFO). The CODMs evaluate performance of the segments based on underwriting income (loss). The CODMs use
this measure to benchmark AIG’s performance, assessing performance of the segments and in establishing management’s
compensation.
As of December 31, 2024, AIG reports the results of its businesses through three segments and Other Operations. The three
segments are North America Commercial, International Commercial and Global Personal. Other Operations predominantly consists of
Net Investment Income from our AIG Parent liquidity portfolio, Corebridge dividend income, corporate General operating expenses,
and Interest expense. Prior years’ presentations have been recast to conform to the new reportable segments. Our General Insurance
business (General Insurance) consists of our three segments and the Net investment income related to our insurance operations.
AIG | 2024 Form 10-K
53
ITEM 7 | Consolidated Results of Operations
General Insurance
Commercial Lines is managed by our geographic markets of North America and International, while
Personal Insurance is managed globally. Our global presence is underpinned by our multinational
capabilities to provide Commercial Lines and Personal Insurance products within these geographic
markets.
PRODUCTS AND DISTRIBUTION
North America Commercial consists of
insurance businesses in the United States,
Canada and Bermuda.
International Commercial consists of
insurance businesses in Japan, the United
Kingdom, Europe, Middle East and Africa
(EMEA region), Asia Pacific, Latin America
and Caribbean, and China. International
Commercial also includes the results of
Talbot Holdings Ltd. (Talbot) as well as
AIG’s Global Specialty business.
Global Personal consists primarily of
insurance businesses in the United States
as well as Japan, the United Kingdom,
Europe, Middle East and Africa (EMEA
region), Asia Pacific, Latin America and
Caribbean, and China.
Commercial Lines
Property & Short Tail: Products include commercial and industrial property, including business interruption, as well as package
insurance products and services that cover exposures to man-made and natural disasters.
Casualty: Products include general liability, environmental, commercial automobile liability, workers’ compensation, excess casualty
and crisis management insurance products. Casualty also includes risk-sharing and other customized structured programs for large
corporate and multinational customers.
Financial Lines: Products include professional liability insurance for a range of businesses and risks, including directors and officers,
mergers and acquisitions, fidelity, employment practices, fiduciary liability, cyber risk, kidnap and ransom, and errors and omissions
insurance.
Global Specialty: Products include marine, energy-related property insurance products, aviation, political risk, trade credit, trade
finance and portfolio solutions.
On July 3, 2023, AIG completed the sale of CRS to American Financial Group, Inc. and in substance, AIG exited the crop business.
For periods prior to the sale of CRS, the underwriting results are included in adjusted pre-tax income of General Insurance – North
America Commercial.
On November 1, 2023, AIG completed the sale of Validus Reinsurance, Ltd. (Validus Re), including AlphaCat Managers Ltd. and
Talbot Treaty reinsurance business to RenaissanceRe Holdings Ltd. (RenaissanceRe). For periods prior to the sale of Validus Re, the
underwriting results are included in adjusted pre-tax income of General Insurance – North America Commercial.
For additional information, see Note 1 to the Consolidated Financial Statements.
Personal Insurance
Global Accident & Health: Products include group personal accident and business travel products for employees, associations and
other organizations, and voluntary and sponsor-paid personal accident and supplemental health products for individuals.
On December 2, 2024, AIG completed the sale of its global individual personal travel insurance and assistance business to Zurich
Insurance Group. The agreement includes the Travel Guard business and its servicing capabilities, excluding our travel insurance
businesses in Japan and our AIG joint venture arrangement in India. Travel coverages offered through AIG’s Global Accident & Health
business are also excluded from this agreement. For additional information, see Note 4 to the Consolidated Financial Statements.
ITEM 7 | Business Segment Operations | General Insurance
AIG | 2024 Form 10-K
54
Global
Personal
International
Commercial
North America
Commercial
Personal Lines: Products include personal auto and homeowners in selected markets, comprehensive extended warranty, device
protection insurance, home warranty and related services, and insurance for high net-worth individuals offered through Private Client
Select (PCS) in the U.S. that covers auto, homeowners, umbrella, yacht, fine art and collections.
General Insurance products in North America and International markets are distributed through various channels, including captive
and independent agents, brokers, affinity partners, airlines and travel agents, and retailers. Our global platform enables writing
multinational and cross-border risks in both Commercial Lines and Personal Insurance.
BUSINESS STRATEGY
Profitable Growth: Build on our high-quality portfolio by focusing on targeted growth through continued underwriting discipline,
improved retentions and new business development. Deploy capital efficiently to act opportunistically and achieve growth in profitable
lines, geographies and customer segments, while taking a disciplined underwriting approach to exposure management, terms and
conditions and rate change to achieve our risk/return hurdles. Continue to be open to inorganic growth opportunities in profitable
markets and segments to expand our capabilities and footprint.
Underwriting Excellence: Continue to enhance portfolio optimization through strength of underwriting framework and guidelines as
well as clear communication of risk appetite and rate adequacy. Empower and increase accountability of the underwriter and continue
to integrate underwriting, claims and actuarial to enable better decision making. Focus on enhancing risk selection, driving consistent
underwriting best practices and building robust monitoring standards to improve underwriting results.
Reinsurance Optimization: Strategically partner with reinsurers to effectively manage exposure to losses arising from frequency of
large catastrophic events and severity from individual risk losses. We strive to optimize our reinsurance program to manage volatility
and protect the balance sheet from tail events and unpredictable net losses in support of our profitable growth objectives.
COMPETITION AND CHALLENGES
General Insurance operates in a highly competitive industry against global, national and local insurers and reinsurers and
underwriting syndicates in specific market areas and product types. Insurance companies compete through a combination of risk
acceptance criteria, product pricing, service levels and terms and conditions. We serve our business and individual customers on a
global basis – from the largest multinational corporations to local businesses and individuals. General Insurance seeks to
differentiate itself in the markets where we participate by providing leading expertise and insight to clients, distribution partners and
other stakeholders, delivering underwriting excellence and value-driven insurance solutions and providing high quality, tailored
end-to-end support to stakeholders. In doing so, we leverage our world-class global franchise, multinational capabilities, balance
sheet strength and financial flexibility.
Our challenges include:
•
ensuring adequate business pricing given passage of time to reporting and settlement for insurance business, particularly with
respect to long-tail Commercial Lines exposures;
•
impact of social and economic inflation on claim frequency and severity; and
•
volatility in claims arising from natural and man-made catastrophes and other aggregations of risk exposure.
INDUSTRY AND ECONOMIC FACTORS
The results of General Insurance for the year ended December 31, 2024 reflect continued strong performance from our Commercial
Lines portfolio and focused execution on our portfolio management strategies within Personal Insurance. Across North America
Commercial and International Commercial we have seen increased demand for our insurance products and strong growth in new
business. We continue to monitor the impact of inflation and other economic factors on rate adequacy and loss cost trends. Similarly,
we are monitoring monetary policy actions taken or anticipated to be taken by central banks and the corresponding impact on market
interest rates.
AIG | 2024 Form 10-K
55
ITEM 7 | Business Segment Operations | General Insurance
General Insurance – North America Commercial
North America Commercial continues to pursue profitable growth. While market discipline continues to support price increases across
most lines, we are seeing capacity move back into the market in certain segments given pricing levels which is putting pressure on
rates. We have focused on retaining our best accounts which has led to strong retention across the portfolio. These retention rates
are often coupled with an exposure limit management strategy to reduce volatility within the portfolio. We continue to proactively
identify segment growth areas as market conditions warrant through effective portfolio management, while non-renewing unprofitable
business.
General Insurance – International Commercial
We are continuing to pursue growth in our most profitable lines of business and diversify our portfolio across all regions by expanding
key business lines while remaining a market leader in key developed and developing markets. We are maintaining our underwriting
discipline, reducing gross and net limits where appropriate, utilizing reinsurance to reduce volatility, as well as continuing our risk
selection strategy to improve profitability.
General Insurance – Global Personal
Global Personal serves individuals as well as group and corporate clients across a broad range of products, markets, and client
profiles. Amid competitive market conditions, we continue to benefit from improved underwriting quality and portfolio diversity, as well
as investment in expanded capabilities and strategic distribution partnerships.
GENERAL INSURANCE RESULTS
Years Ended December 31,
Change
(in millions)
2024
2023
2022
2024 vs 2023
2023 vs 2022
Underwriting results:
Net premiums written
$ 23,902 $ 26,719 $ 25,512
(11) %
5 %
Increase in unearned premiums
(445)
(1,628)
(172)
73
NM
Net premiums earned
23,457
25,091
25,340
(7)
(1)
Losses and loss adjustment expenses incurred(a)
14,038
14,775
15,407
(5)
(4)
Acquisition expenses:
Amortization of deferred policy acquisition costs
3,413
3,623
3,533
(6)
3
Other acquisition expenses
1,137
1,279
1,365
(11)
(6)
Total acquisition expenses
4,550
4,902
4,898
(7)
—
General operating expenses
2,952
3,065
2,987
(4)
3
Underwriting income
1,917
2,349
2,048
(18)
15
Net investment income
3,060
3,022
2,382
1
27
Adjusted pre-tax income
$
4,977 $
5,371 $
4,430
(7) %
21 %
Loss ratio(a)
59.8
58.9
60.8
0.9
(1.9)
Acquisition ratio
19.4
19.5
19.3
(0.1)
0.2
General operating expense ratio
12.6
12.2
11.8
0.4
0.4
Expense ratio
32.0
31.7
31.1
0.3
0.6
Combined ratio(a)
91.8
90.6
91.9
1.2
(1.3)
Adjustments for accident year loss ratio, as adjusted and
accident year combined ratio, as adjusted:
Catastrophe losses and reinstatement premiums
(5.0)
(4.3)
(5.0)
(0.7)
0.7
Prior year development, net of reinsurance and prior year
premiums
1.4
1.4
1.8
—
(0.4)
Accident year loss ratio, as adjusted
56.2
56.0
57.6
0.2
(1.6)
Accident year combined ratio, as adjusted
88.2
87.7
88.7
0.5
(1.0)
(a) Consistent with our definition of APTI, excludes net loss reserve discount and the portion of favorable or unfavorable prior year reserve development for which we have
ceded the risk under retroactive reinsurance agreements and related changes in amortization of the deferred gain.
AIG | 2024 Form 10-K
56
ITEM 7 | Business Segment Operations | General Insurance
The following table presents General Insurance net premiums written by segment, showing change on both reported and
constant dollar basis:
Years Ended December 31,
Percentage Change in
U.S. dollars
Percentage Change in
Original Currency
(in millions)
2024
2023
2022
2024 vs 2023
2023 vs 2022
2024 vs 2023
2023 vs 2022
North America Commercial
$
8,452 $ 11,432 $ 10,899
(26) %
5 %
(26) %
5 %
International Commercial
8,364
8,168
7,877
2
4
3
5
Global Personal
7,086
7,119
6,736
—
6
2
10
Total net premiums written
$ 23,902 $ 26,719 $ 25,512
(11) %
5 %
(10) %
6 %
The following tables present General Insurance accident year catastrophes(a) by segment and number of events:
(dollars in millions)
# of Events
North America
Commercial
International
Commercial
Global
Personal
Total
Years Ended December 31, 2024
Flooding, rainstorms and other
3
$
2
$
98
$
—
$
100
Windstorms and hailstorms
17
700
133
135
968
Winter storms
2
44
1
7
52
Wildfires
1
41
—
—
41
Earthquakes
1
—
7
—
7
Reinstatement premiums
12
(2)
—
10
Total catastrophe-related charges
24
$
799
$
237
$
142
$
1,178
Years Ended December 31, 2023
Flooding, rainstorms and other
3
$
10
$
72
$
20
$
102
Windstorms and hailstorms
26
396
186
126
708
Winter storms
2
24
4
17
45
Wildfires
2
131
19
13
163
Earthquakes
1
20
29
—
49
Reinstatement premiums
31
(1)
1
31
Total catastrophe-related charges
34
$
612
$
309
$
177
$
1,098
Years Ended December 31, 2022
Flooding, rainstorms and other
3
$
53
$
103
$
2
$
158
Windstorms and hailstorms
18
484
137
116
737
Winter storms
5
141
21
45
207
Earthquakes
1
—
16
3
19
Russia / Ukraine
N/A (b)
10
97
—
107
Reinstatement premiums
51
31
2
84
Total catastrophe-related charges
27
$
739
$
405
$
168
$
1,312
(a) Natural catastrophe losses are generally weather or seismic events, in each case, having a net impact on AIG in excess of $10 million and man-made catastrophe
losses, such as terrorism and civil unrest that exceed the $10 million threshold.
(b) As the Russia/Ukraine conflict continues to evolve the number of events is yet to be determined.
NORTH AMERICA COMMERCIAL RESULTS
Underwriting results:
Net premiums written
$
8,452 $ 11,432 $ 10,899
(26) %
5 %
Increase in unearned premiums
(280)
(1,199)
(455)
77
(164)
Net premiums earned
8,172
10,233
10,444
(20)
(2)
Losses and loss adjustment expenses incurred(a)
5,713
6,323
7,218
(10)
(12)
Acquisition expenses:
Amortization of deferred policy acquisition costs
824
1,371
1,381
(40)
(1)
Other acquisition expenses
222
231
174
(4)
33
Total acquisition expenses
1,046
1,602
1,555
(35)
3
General operating expenses
865
953
927
(9)
3
Underwriting income
$
548 $
1,355 $
744
(60) %
82 %
Years Ended December 31,
Change
(in millions)
2024
2023
2022
2024 vs 2023
2023 vs 2022
AIG | 2024 Form 10-K
57
ITEM 7 | Business Segment Operations | General Insurance
Loss ratio(a)
69.9
61.8
69.1
8.1
(7.3)
Acquisition ratio
12.8
15.7
14.9
(2.9)
0.8
General operating expense ratio
10.6
9.3
8.9
1.3
0.4
Expense ratio
23.4
25.0
23.8
(1.6)
1.2
Combined ratio(a)
93.3
86.8
92.9
6.5
(6.1)
Adjustments for accident year loss ratio, as adjusted and
accident year combined ratio, as adjusted:
Catastrophe losses and reinstatement premiums
(9.7)
(5.9)
(6.9)
(3.8)
1.0
Prior year development, net of reinsurance and prior year premiums
1.5
3.7
0.7
(2.2)
3.0
Accident year loss ratio, as adjusted
61.7
59.6
62.9
2.1
(3.3)
Accident year combined ratio, as adjusted
85.1
84.6
86.7
0.5
(2.1)
Years Ended December 31,
Change
(in millions)
2024
2023
2022
2024 vs 2023
2023 vs 2022
(a) Consistent with our definition of APTI, excludes net loss reserve discount and the portion of favorable or unfavorable prior year reserve development for which we have
ceded the risk under retroactive reinsurance agreements and related changes in amortization of the deferred gain.
Business and Financial Highlights
Net Premiums Written Comparison for the Years Ended December 31, 2024 and 2023
Net premiums written decreased by $3.0 billion driven by the sales of AIG Re and CRS, partially offset by growth in Casualty.
Net Premiums Written Comparison for the Years Ended December 31, 2023 and 2022
Net premiums written increased by $533 million, particularly in AIG Re and Property driven by continued positive rate change, higher
renewal retentions and strong new business production, partially offset by decreases in Crop as a consequence of the CRS sale and
Financial Lines.
Underwriting Income (Loss) Comparison for the Years Ended December 31, 2024 and 2023
Underwriting income decreased by $807 million primarily due to:
•
lower net favorable prior year development (2.2 points or $252 million), primarily from Casualty which turned unfavorable driven by
a large settlement of a legacy mass tort claim with most of the gross loss in accident years covered under the adverse
development cover, partially offset by Financial Lines which turned favorable and higher favorable development in Property;
•
higher Catastrophe losses (3.8 points or $187 million); and
•
the sales of AIG Re and CRS.
This decrease was partially offset by a lower expense ratio (1.6 points) reflecting a lower acquisition ratio (2.9 points), partially offset
by an increase in general operating expense ratio (1.3 points), primarily driven by changes in business mix including the impact from
the sales of AIG Re and CRS.
Underwriting Income (Loss) Comparison for the Years Ended December 31, 2023 and 2022
Underwriting income increased by $611 million primarily due to:
•
improvement in the accident year loss ratio, as adjusted (3.3 points) primarily driven by changes in business mix along with
continued positive rate change, focused risk selection and improved terms and conditions;
•
higher net favorable prior year reserve development (3.0 points or $327 million), primarily due to lower unfavorable development in
Financial Lines, partially offset by lower favorable development in Casualty; and
•
lower catastrophe losses (1.0 points or $127 million).
This increase was partially offset by:
•
a higher expense ratio (1.2 points) reflecting a higher acquisition ratio (0.8 points) primarily driven by changes in business mix as
well as an increase in general operating expense ratio (0.4 points).
AIG | 2024 Form 10-K
58
ITEM 7 | Business Segment Operations | General Insurance
INTERNATIONAL COMMERCIAL RESULTS
Underwriting results:
Net premiums written
$
8,364 $
8,168 $
7,877
2 %
4 %
Increase in unearned premiums
(219)
(204)
(176)
(7)
(16)
Net premiums earned
8,145
7,964
7,701
2
3
Losses and loss adjustment expenses incurred
4,463
4,641
4,301
(4)
8
Acquisition expenses:
Amortization of deferred policy acquisition costs
1,018
943
938
8
1
Other acquisition expenses
342
350
378
(2)
(7)
Total acquisition expenses
1,360
1,293
1,316
5
(2)
General operating expenses
1,095
1,028
945
7
9
Underwriting income
$
1,227 $
1,002 $
1,139
22 %
(12) %
Loss ratio
54.8
58.3
55.8
(3.5)
2.5
Acquisition ratio
16.7
16.2
17.1
0.5
(0.9)
General operating expense ratio
13.4
12.9
12.3
0.5
0.6
Expense ratio
30.1
29.1
29.4
1.0
(0.3)
Combined ratio
84.9
87.4
85.2
(2.5)
2.2
Adjustments for accident year loss ratio, as adjusted
and accident year combined ratio, as adjusted:
Catastrophe losses and reinstatement premiums
(2.9)
(3.9)
(5.0)
1.0
1.1
Prior year development, net of reinsurance and prior year
premiums
1.0
(1.8)
1.6
2.8
(3.4)
Accident year loss ratio, as adjusted
52.9
52.6
52.4
0.3
0.2
Accident year combined ratio, as adjusted
83.0
81.7
81.8
1.3
(0.1)
Years Ended December 31,
Change
(in millions)
2024
2023
2022
2024 vs 2023
2023 vs 2022
Business and Financial Highlights
Net Premiums Written Comparison for the Years Ended December 31, 2024 and 2023
Net premiums written, excluding the unfavorable impact of foreign exchange ($16 million), increased by $212 million primarily due to
growth in Property, Specialty and Casualty driven by strength of renewal retentions and new business production, partially offset by
the sale of AIG Re and lower production in Financial Lines.
Net Premiums Written Comparison for the Years Ended December 31, 2023 and 2022
Net premiums written, excluding the unfavorable impact of foreign exchange ($79 million), increased by $370 million primarily due to
growth in Property and Specialty driven by continued positive rate change and strong new business production, partially offset by a
decrease in Financial Lines.
Underwriting Income (Loss) Comparison for the Years Ended December 31, 2024 and 2023
Underwriting income increased by $225 million primarily due to:
•
net favorable prior year reserve development of $73 million in 2024 compared to net unfavorable prior year reserve development of
$140 million in 2023 (2.8 points or $213 million), primarily as a result of Specialty and Property which turned favorable and lower
unfavorable development within Casualty, partially offset by Financial Lines development which turned unfavorable; and
•
lower catastrophe losses (1.0 points or $72 million).
This increase was partially offset by:
•
a higher expense ratio (1.0 points) reflecting an acquisition ratio (0.5 points) and general operating expense ratio (0.5 points)
primarily driven by changes in business mix; and
•
a higher accident year loss ratio, as adjusted (0.3 points) due to changes in business mix.
Underwriting Income (Loss) Comparison for the Years Ended December 31, 2023 and 2022
Underwriting income decreased by $137 million primarily due to:
•
net unfavorable prior year reserve development of $140 million in 2023 compared to net favorable development in 2022 of
$135 million (3.4 points or $275 million), primarily as a result of lower favorable development in Specialty, unfavorable development
in Property and higher unfavorable development in Casualty, partially offset by favorable development in Financial Lines; and
•
a higher accident year loss ratio, as adjusted (0.2 points) due to changes in business mix.
AIG | 2024 Form 10-K
59
ITEM 7 | Business Segment Operations | General Insurance
This decrease was partially offset by:
•
lower catastrophe losses (1.1 points or $96 million); and
•
a lower expense ratio (0.3 points) reflecting a lower acquisition ratio (0.9 points) primarily driven by changes in business mix and
improved commission terms, partially offset by an increase in the general operating expense ratio (0.6 points).
GLOBAL PERSONAL RESULTS
Underwriting results:
Net premiums written
$
7,086 $
7,119 $
6,736
— %
6 %
(Increase) decrease in unearned premiums
54
(225)
459
NM
NM
Net premiums earned
7,140
6,894
7,195
4
(4)
Losses and loss adjustment expenses incurred
3,862
3,811
3,888
1
(2)
Acquisition expenses:
Amortization of deferred policy acquisition costs
1,571
1,309
1,214
20
8
Other acquisition expenses
573
698
813
(18)
(14)
Total acquisition expenses
2,144
2,007
2,027
7
(1)
General operating expenses
992
1,084
1,115
(8)
(3)
Underwriting income (loss)
$
142 $
(8) $
165
NM %
NM %
Loss ratio
54.1
55.3
54.0
(1.2)
1.3
Acquisition ratio
30.0
29.1
28.2
0.9
0.9
General operating expense ratio
13.9
15.7
15.5
(1.8)
0.2
Expense ratio
43.9
44.8
43.7
(0.9)
1.1
Combined ratio
98.0
100.1
97.7
(2.1)
2.4
Adjustments for accident year loss ratio, as adjusted
and accident year combined ratio, as adjusted:
Catastrophe losses and reinstatement premiums
(2.0)
(2.6)
(2.3)
0.6
(0.3)
Prior year development, net of reinsurance and prior year
premiums
1.6
1.8
3.8
(0.2)
(2.0)
Accident year loss ratio, as adjusted
53.7
54.5
55.5
(0.8)
(1.0)
Accident year combined ratio, as adjusted
97.6
99.3
99.2
(1.7)
0.1
Years Ended December 31,
Change
(in millions)
2024
2023
2022
2024 vs 2023
2023 vs 2022
Business and Financial Highlights
Net Premiums Written Comparison for the Years Ended December 31, 2024 and 2023
Net premiums written, excluding the unfavorable impact of foreign exchange ($199 million), increased by $166 million primarily due to
Personal Auto and PCS, partially offset by lower production in Warranty.
Net Premiums Written Comparison for the Years Ended December 31, 2023 and 2022
Net premiums written, excluding the unfavorable impact of foreign exchange ($240 million), increased by $623 million primarily due to
PCS resulting from changes in our reinsurance program.
Underwriting Income (Loss) Comparison for the Years Ended December 31, 2024 and 2023
Underwriting income increased by $150 million primarily due to:
•
improvement in the accident year loss ratio, as adjusted (0.8 points) primarily driven by changes in business mix along with
continued positive rate change;
•
a lower expense ratio (0.9 points) reflecting a lower general operating expense ratio (1.8 points), partially offset by higher
acquisition ratio (0.9 points) primarily driven by change in business mix; and
•
lower catastrophe losses (0.6 points or $35 million).
Underwriting Income (Loss) Comparison for the Years Ended December 31, 2023 and 2022
Underwriting income decreased by $173 million primarily due to:
•
lower net favorable prior year reserve development (2.0 points or $156 million), primarily in Personal Auto;
•
a higher expense ratio of (1.1 points) reflecting a higher acquisition ratio (0.9 points) as well as increase in general operating
expense ratio (0.2 points) primarily driven by changes in business mix; and
•
higher catastrophe losses (0.3 points or $9 million).
AIG | 2024 Form 10-K
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ITEM 7 | Business Segment Operations | General Insurance
This decrease was partially offset by:
•
improvement in the accident year loss ratio, as adjusted (1.0 points) primarily driven by changes in business mix along with
continued positive rate change, focused risk selection and improved terms and conditions.
Other Operations
Other Operations predominantly consists of Net Investment Income from our AIG Parent liquidity portfolio, Corebridge
dividend income, corporate General operating expenses, and Interest expense.
OTHER OPERATIONS RESULTS
Years Ended December 31,
Change
(in millions)
2024
2023
2022
2024 vs 2023
2023 vs 2022
Net investment income and other
$
434 $
190 $
(110)
128 %
NM %
Benefits, losses and expenses:
Corporate and other general operating expenses
623
698
850
(11)
(18)
Amortization of intangible assets
18
27
40
(33)
(33)
Interest expense
445
498
624
(11)
(20)
Total benefits, losses and expenses
1,086
1,223
1,514
(11)
(19)
Adjusted pre-tax loss before consolidation and eliminations
(652)
(1,033)
(1,624)
37
36
Consolidation and eliminations
(1)
(17)
63
94
NM
Adjusted pre-tax loss*
$
(653) $
(1,050) $ (1,561)
38 %
33 %
*
In the fourth quarter of 2024, AIG realigned and began excluding the net results of run-off businesses previously reported in Other Operations from Adjusted pre-tax
income. Historical results have been recast to reflect these changes.
YEARS ENDED DECEMBER 31, 2024 AND 2023 COMPARISON
Adjusted pre-tax loss before consolidation and eliminations was $652 million in 2024 compared to $1.0 billion in 2023, a decrease of
$381 million, primarily due to:
•
higher net investment income and other of $244 million due to dividend income from Corebridge in 2024 compared to $0 in 2023
and on AIG Parent portfolio due to higher yields and higher average balance;
•
lower corporate general operating expenses of $75 million primarily driven by employee related costs and other operating
expenses; and
•
lower interest expense of $53 million primarily driven by interest savings from $3.5 billion debt repurchases, through cash tender
offers and debt redemption and maturity in 2023 and 2024, offset by interest expense of $10 million on $750 million Senior
unsecured debt issued in the first quarter of 2023.
YEARS ENDED DECEMBER 31, 2023 AND 2022 COMPARISON
Adjusted pre-tax loss before consolidation and eliminations of $1.0 billion in 2023 compared to $1.6 billion in 2022, a decrease of
$591 million, was primarily due to:
•
higher net investment income and other of $300 million primarily driven by AIG Parent portfolio due to higher yields and higher
average balance;
•
lower corporate general operating expenses of $152 million primarily driven by a reduction in employee related costs and other
operating expenses; and
•
lower interest expense of $126 million primarily driven by interest savings from $11.0 billion debt repurchases, through cash tender
offers and debt redemption and maturity in 2022 and 2023.
AIG | 2024 Form 10-K
61
ITEM 7 | Business Segment Operations | General Insurance
Investments
OVERVIEW
Our investment strategies are tailored to the specific business needs of each segment by targeting an asset allocation mix that
supports estimated cash flow needs of our outstanding liabilities and provides diversification from an asset class, sector, issuer, and
geographic perspective. The primary objectives are generation of investment income, preservation of capital, liquidity management
and growth of surplus. The majority of assets backing our insurance liabilities consist of fixed maturity securities.
Our Investment Management Agreements with BlackRock, Inc.
Since April 2022, AIG insurance company subsidiaries have entered into separate investment management agreements with
BlackRock, Inc. and its investment advisory affiliates (BlackRock). As of December 31, 2024, BlackRock manages $62 billion of our
investment portfolio, consisting of liquid fixed income, certain private placements and private equity assets. In addition, liquid fixed
income assets associated with the Fortitude Re funds withheld asset portfolio were separately transferred to BlackRock for
management in 2022.
INVESTMENT HIGHLIGHTS IN 2024
•
Blended investment yields on new investments are higher than blended rates on investments that were sold, matured or called
during this period. We continued to make investments in structured securities and other fixed maturity securities with attractive
risk-adjusted return characteristics to improve yields and increase net investment income.
•
Total Net investment income increased for the year ended December 31, 2024 compared to the same period in the prior year,
primarily due to dividend income from AIG's equity in Corebridge, higher income on available for sale fixed maturity securities and
short term instruments, partially offset by mortgage loans.
INVESTMENT STRATEGIES
Investment strategies are assessed at the segment level and involve considerations that include local and general market and
economic conditions, duration and cash flow management, risk appetite and volatility constraints, rating agency and regulatory capital
considerations, tax, regulatory and legal investment limitations, and, as applicable, environmental, social and governance
considerations.
Some of our key investment strategies are as follows:
•
Our fundamental strategy across the portfolios is to seek investments with similar duration and cash flow characteristics to the
associated insurance liabilities to the extent practicable.
•
We seek to purchase investments that offer enhanced yield through illiquidity premiums, such as private placements and
commercial mortgage loans, which also add portfolio diversification. These assets typically afford credit protections through
covenants, ability to customize structures that meet our insurance liability needs, and deeper due diligence given information
access.
•
Given our global presence, we seek investments that provide diversification from investments available in local markets. To the
extent we purchase these investments, we generally hedge any currency risk using derivatives, which could provide opportunities
to earn higher risk adjusted returns compared to investments in the functional currency.
•
AIG Parent, included in Other Operations, actively manages its assets and liabilities, counterparties and duration. AIG Parent’s
liquidity sources are held primarily in the form of cash and short-term investments. This strategy allows us to both diversify our
sources of liquidity and reduce the cost of maintaining sufficient liquidity.
•
Within the U.S., General Insurance investments are generally split between reserve backing and surplus portfolios.
–
Insurance reserves are backed mainly by investment grade fixed maturity securities that meet our duration, risk-return, capital,
tax, liquidity, credit quality and diversification objectives. We assess asset classes based on their fundamental underlying risk
factors, including credit (public and private), commercial real estate and residential real estate, regardless of whether such
investments are bonds, loans, or structured products.
–
Surplus investments seek to enhance portfolio returns and are generally comprised of a mix of fixed maturity investment grade
and below investment grade securities and various alternative asset classes, including private equity, real estate equity, and
hedge funds. Over the past few years, hedge fund investments have been reduced.
ITEM 7 | Investments
AIG | 2024 Form 10-K
62
•
Outside of the U.S., fixed maturity securities held by our insurance companies consist primarily of investment-grade securities
generally denominated in the currencies of the countries in which we operate.
•
We also utilize derivatives to manage our asset and liability duration as well as currency exposures.
Asset-Liability Management
The investment strategy within the General Insurance companies focuses on growth of surplus, maintenance of sufficient liquidity for
unanticipated insurance claims, and preservation of capital. General Insurance invests primarily in fixed maturity securities issued by
corporations, municipalities and other governmental agencies; structured securities collateralized by, among other assets, residential
and commercial real estate; and commercial mortgage loans. Fixed maturity securities of the General Insurance companies have an
average duration of 3.8 years, with an average of 4.2 years for North America and 3.0 years for International.
While invested assets backing reserves of the General Insurance companies are primarily invested in conventional liquid fixed
maturity securities, we have continued to allocate to asset classes that offer higher yields through structural and illiquidity premiums,
particularly in our North America operations. In addition, we continue to invest in both fixed rate and floating rate asset-backed
investments to manage our exposure to potential changes in interest rates and inflation. We seek to diversify the portfolio across
asset classes, sectors and issuers to mitigate idiosyncratic portfolio risks.
In addition, a portion of the surplus of General Insurance companies is invested in a diversified portfolio of alternative investments that
seek to balance liquidity, volatility and growth of surplus. Although these alternative investments are subject to periodic earnings
fluctuations, they have historically achieved yields in excess of the fixed maturity portfolio yields and have provided added
diversification to the broader portfolio.
Available-for-Sale Investments
The following table presents the fair value of our available-for-sale securities:
(in millions)
December 31, 2024
December 31, 2023
Bonds available for sale:
U.S. government and government sponsored entities
$
3,267
$
4,395
Obligations of states, municipalities and political subdivisions
3,143
4,833
Non-U.S. governments
8,107
8,396
Corporate debt
31,826
32,346
Mortgage-backed, asset-backed and collateralized:
RMBS
8,604
6,207
CMBS
3,926
4,147
CLO/ABS
5,133
4,918
Total mortgage-backed, asset-backed and collateralized
17,663
15,272
Total bonds available for sale*
$
64,006
$
65,242
*
At December 31, 2024 and 2023, the fair value of bonds available for sale held by us that were below investment grade or not rated totaled $3.6 billion and $5.2 billion,
respectively.
The following table presents the fair value of our aggregate credit exposures to non-U.S. governments for our fixed maturity
securities:
(in millions)
December 31, 2024
December 31, 2023
Canada
$
1,384
$
1,340
Germany
834
929
Japan
555
699
United Kingdom
416
478
France
360
430
Australia
335
314
Israel
312
201
Korea, Republic of
268
293
Malaysia
220
183
Denmark
205
227
Other
3,242
3,326
Total
$
8,131
$
8,420
AIG | 2024 Form 10-K
63
ITEM 7 | Investments
The following table presents the fair value of our aggregate European credit exposures by major sector for our fixed
maturity securities:
Euro-Zone countries:
France
$
360 $
1,136 $
481 $
12 $
1,989
$
2,068
Germany
834
223
750
56
1,863
2,042
Netherlands
164
448
297
26
935
940
Ireland
9
57
112
406
584
231
Italy
21
88
260
—
369
420
Spain
9
149
110
53
321
353
Denmark
205
45
7
—
257
297
Belgium
33
123
73
13
242
276
Luxembourg
17
60
80
—
157
227
Finland
9
63
6
1
79
95
Other Euro-Zone
226
24
35
14
299
194
Total Euro-Zone
$
1,887 $
2,416 $
2,211 $
581 $
7,095
$
7,143
Remainder of Europe:
United Kingdom
$
416 $
1,228 $
1,379 $
239 $
3,262
$
3,696
Switzerland
15
186
283
—
484
589
Sweden
117
144
30
—
291
342
Norway
64
37
9
—
110
150
Jersey (Channel Islands)
3
11
9
71
94
5
Other - Remainder of Europe
37
3
8
2
50
31
Total - Remainder of Europe
$
652 $
1,609 $
1,718 $
312 $
4,291
$
4,813
Total
$
2,539 $
4,025 $
3,929 $
893 $
11,386
$
11,956
December 31, 2024
December 31,
2023
Total
(in millions)
Sovereign
Financial
Institution
Non-Financial
Corporates
Structured
Products
Total
Investments in Municipal Bonds
At December 31, 2024, the U.S. municipal bond portfolio was composed primarily of essential service revenue bonds and high-quality
tax-exempt bonds with 98 percent of the portfolio rated A or higher.
The following table presents the fair values of our available for sale U.S. municipal bond portfolio by state and municipal
bond type:
December 31, 2024
(in millions)
State
General
Obligation
Local
General
Obligation
Revenue
Total
Fair
Value
December 31, 2023
Total Fair Value
California
$
196 $
135 $
385 $
716 $
903
New York
37
72
313
422
746
Texas
1
138
126
265
490
Massachusetts
50
13
136
199
209
Florida
1
—
142
143
227
Pennsylvania
51
—
82
133
203
Connecticut
42
3
80
125
109
Illinois
5
33
72
110
301
Georgia
50
4
25
79
159
Hawaii
68
—
6
74
89
Oregon
13
41
17
71
83
Washington
5
11
45
61
140
New Jersey
1
2
55
58
200
All other states
54
20
613
687
974
Total
$
574 $
472 $
2,097 $
3,143 $
4,833
AIG | 2024 Form 10-K
64
ITEM 7 | Investments
Investments in Corporate Debt Securities
The following table presents the fair value of our available for sale corporate debt securities by industry categories:
Financial institutions:
Money center/Global bank groups
$
3,642
$
5,153
Regional banks – other
2,129
222
Life insurance
728
617
Securities firms and other finance companies
669
296
Insurance non-life
494
938
Regional banks – North America
1,314
2,029
Other financial institutions
4,116
3,152
Utilities
2,659
2,989
Communications
1,844
2,111
Consumer noncyclical
2,715
3,436
Capital goods
1,715
1,552
Energy
1,702
1,672
Consumer cyclical
3,284
3,049
Basic materials
1,838
1,141
Other
2,977
3,989
Total*
$
31,826
$
32,346
Industry Category
(in millions)
December 31, 2024
December 31, 2023
*
At December 31, 2024 and 2023, approximately 88 percent and 90 percent, respectively, of these investments were rated investment grade.
Investments in RMBS
The following table presents the fair value of AIG’s RMBS available for sale securities:
(in millions)
December 31, 2024
December 31, 2023
Agency RMBS
$
4,978
$
2,827
Alt-A RMBS
1,620
1,338
Subprime RMBS
291
323
Prime non-agency
850
580
Other housing related
865
1,139
Total RMBS(a)(b)
$
8,604
$
6,207
(a) Includes approximately $1.3 billion at both December 31, 2024 and 2023, of certain RMBS that had experienced deterioration in credit quality since their origination.
This excludes impact of U.S. debt downgrade of Fannie Mae and Freddie Mac. For additional information on purchased credit deteriorated securities, see Note 6 to the
Consolidated Financial Statements.
(b) The weighted average expected life was six years and seven years at December 31, 2024 and December 31, 2023, respectively.
Our investments guidelines for investing in RMBS, collateralized loan obligations (CLO) and other asset-backed securities (ABS) take
into consideration the quality of the originator, the manager, the servicer, security credit ratings, underlying characteristics of the
mortgages, borrower characteristics, and the level of credit enhancement in the transaction.
Investments in CMBS
The following table presents the fair value of our CMBS available for sale securities:
(in millions)
December 31, 2024
December 31, 2023
CMBS (traditional)
$
3,102
$
3,604
Agency
574
488
Other
250
55
Total
$
3,926
$
4,147
The fair value of CMBS holdings remained stable during the year ended December 31, 2024. The majority of our investments in
CMBS are in tranches that contain substantial credit protection features through collateral subordination. The majority of CMBS
holdings are traditional conduit transactions, broadly diversified across property types and geographical areas.
AIG | 2024 Form 10-K
65
ITEM 7 | Investments
Investments in CLO/ABS
The following table presents the fair value of our CLO/ABS available for sale securities by collateral type:
(in millions)
December 31, 2024
December 31, 2023
Collateral Type:
ABS
$
2,445
$
1,827
Bank loans
2,688
3,090
Other
—
1
Total
$
5,133
$
4,918
Unrealized Losses of Fixed Maturity Securities
The following table shows the aging of the unrealized losses of fixed maturity securities, the extent to which the fair value is
less than amortized cost or cost, and the number of respective items in each category:
Investment grade bonds
0-6 months
$ 19,725 $
343
5,027 $
100 $
26
5 $
— $
—
1 $ 19,825 $
369 5,033
7-11 months
399
13
159
29
7
4
—
—
—
428
20
163
12 months or more
17,254
1,537
4,879
2,970
854
537
294
171
24
20,518
2,562 5,440
Total
$ 37,378 $ 1,893 10,065 $ 3,099 $
887
546 $
294 $
171
25 $ 40,771 $
2,951 10,636
Below investment grade
bonds
0-6 months
$ 2,078 $
36
1,179 $
3 $
1
7 $
2 $
2
11 $
2,083 $
39 1,197
7-11 months
57
3
34
2
1
5
1
1
2
60
5
41
12 months or more
998
79
572
121
32
38
8
7
6
1,127
118
616
Total
$ 3,133 $
118
1,785 $
126 $
34
50 $
11 $
10
19 $
3,270 $
162 1,854
Total bonds
0-6 months
$ 21,803 $
379
6,206 $
103 $
27
12 $
2 $
2
12 $ 21,908 $
408 6,230
7-11 months
456
16
193
31
8
9
1
1
2
488
25
204
12 months or more
18,252
1,616
5,451
3,091
886
575
302
178
30
21,645
2,680 6,056
Total
$ 40,511 $ 2,011 11,850 $ 3,225 $
921
596 $
305 $
181
44 $ 44,041 $
3,113 12,490
December 31, 2024
Less Than or Equal
Greater Than 20%
Greater Than 50%
to 20% of Cost(b)
to 50% of Cost(b)
of Cost(b)
Total
Aging(a)
Unrealized
Unrealized
Unrealized
Unrealized
(dollars in millions)
Cost(c)
Loss
Items(d)
Cost(c)
Loss
Items(d)
Cost(c)
Loss
Items(d)
Cost(c)
Loss
Items(d)
(a) Represents the number of consecutive months that fair value has been less than cost by any amount.
(b) Represents the percentage by which fair value is less than cost.
(c) For bonds, represents amortized cost net of allowance.
(d) Item count is by CUSIP by subsidiary.
The allowance for credit losses was $4 million for investment grade bonds and $34 million for below investment grade bonds as of
December 31, 2024.
Commercial Mortgage Loans
At December 31, 2024, we had direct commercial mortgage loan exposure of $3.3 billion.
The following table presents the commercial mortgage loan exposure by location and class of loan based on amortized
cost:
December 31, 2024
State:
California
21 $
97 $
247 $
30 $
56 $
32 $
— $
462
14 %
New York
19
43
217
70
20
32
—
382
12
Texas
19
78
201
2
31
22
—
334
10
Massachusetts
9
94
156
49
7
—
—
306
9
Florida
11
68
—
62
8
38
—
176
5
New Jersey
18
78
—
43
—
10
131
4
Number
of Loans
Class
Percent
of Total
(dollars in millions)
Apartments
Offices
Retail
Industrial
Hotel
Others
Total
AIG | 2024 Form 10-K
66
ITEM 7 | Investments
Pennsylvania
10
18
52
29
18
—
117
4
Illinois
6
88
20
—
—
—
—
108
3
Ohio
5
62
—
29
—
—
—
91
3
Washington
5
49
—
—
—
11
—
60
2
Other states
31
134
33
63
49
6
—
285
8
Foreign
36
278
182
98
69
117
109
853
26
Total*
190 $
1,087 $
1,108 $
432 $
301 $
258 $
119 $
3,305
100 %
Number
of Loans
Class
Percent
of Total
(dollars in millions)
Apartments
Offices
Retail
Industrial
Hotel
Others
Total
December 31, 2023
State:
California
21 $
89 $
277 $
32 $
58 $
33 $
— $
489
13 %
New York
19
43
208
77
20
32
—
380
10
Texas
21
77
255
2
44
—
—
378
10
Massachusetts
9
96
128
50
7
—
—
281
7
New Jersey
21
111
8
20
55
—
10
204
5
Florida
11
60
—
64
9
38
—
171
4
Illinois
6
88
26
—
—
—
—
114
3
Ohio
6
63
3
30
—
—
—
96
4
Pennsylvania
8
14
39
36
5
—
—
94
2
Colorado
7
17
32
32
—
6
—
87
2
Other states
37
206
20
64
40
16
—
346
9
Foreign
47
403
227
111
222
122
111
1,196
31
Total*
213 $
1,267 $
1,223 $
518 $
460 $
247 $
121 $
3,836
100 %
*
Does not reflect allowance for credit losses.
For additional information on commercial mortgage loans, see Note 7 to the Consolidated Financial Statements.
Net Realized Gains and Losses
The following table presents the components of Net realized gains (losses):
Years Ended December 31,
2024
2023
2022
(in millions)
Excluding
Fortitude
Re Funds
Withheld
Assets
Fortitude
Re
Funds
Withheld
Assets
Total
Excluding
Fortitude
Re Funds
Withheld
Assets
Fortitude
Re
Funds
Withheld
Assets
Total
Excluding
Fortitude
Re Funds
Withheld
Assets
Fortitude
Re
Funds
Withheld
Assets
Total
Sales of fixed maturity securities
$ (583) $
(36) $ (619)
$ (668) $
(67) $ (735)
$ (565) $
(83) $ (648)
Intent to sell
—
—
—
—
—
—
(66)
—
(66)
Change in allowance for credit losses on
fixed maturity securities
(25)
—
(25)
(44)
—
(44)
(72)
—
(72)
Change in allowance for credit losses on
loans
(23)
—
(23)
(28)
3
(25)
19
(3)
16
Foreign exchange transactions
256
(9)
247
124
5
129
266
(10)
256
All other derivatives and hedge accounting
(62)
7
(55)
(165)
(8)
(173)
159
(3)
156
Sales of alternative investments
(16)
—
(16)
29
—
29
15
—
15
Other
19
(1)
18
18
(4)
14
37
—
37
Net realized losses – excluding Fortitude
Re funds withheld embedded derivative
(434)
(39)
(473)
(734)
(71)
(805)
(207)
(99)
(306)
Net realized gains (losses) on Fortitude Re
funds withheld embedded derivative
—
(75)
(75)
—
(273)
(273)
—
1,133
1,133
Net realized gains (losses)
$ (434) $ (114) $ (548)
$ (734) $ (344) $ (1,078)
$ (207) $ 1,034 $
827
Lower Net realized losses excluding Fortitude Re funds withheld assets in the year ended December 31, 2024 compared to 2023
were primarily due to lower losses on sales of fixed maturity securities and lower derivatives losses compared to the prior year period.
Higher Net realized losses excluding Fortitude Re funds withheld assets in the year ended December 31, 2023 compared to 2022
were primarily due to lower derivative gains in 2023 compared to 2022.
AIG | 2024 Form 10-K
67
ITEM 7 | Investments
Net realized gains (losses) on Fortitude Re funds withheld assets primarily reflect changes in the valuation of the modified
coinsurance and funds withheld assets. Increases in the valuation of these assets result in losses to AIG as the appreciation on the
assets under those reinsurance arrangements must be transferred to Fortitude Re. Decreases in valuation of the assets result in
gains to AIG as the depreciation on the assets under those reinsurance arrangements must be transferred to Fortitude Re. For
additional information on the impact of the funds withheld arrangements with Fortitude Re, see Note 8 to the Consolidated Financial
Statements.
For additional information on our investment portfolio, see Note 6 to the Consolidated Financial Statements.
Change in Unrealized Gains and Losses on Investments
The change in net unrealized gains and losses on investments in the year ended December 31, 2024 was primarily attributable to a
change in the fair value of fixed maturity securities. For the year ended December 31, 2024, net unrealized gains were $692 million
due to lower interest rates and narrowing of credit spreads.
The change in net unrealized gains and losses on investments in the year ended December 31, 2023 was primarily attributable to a
change in the fair value of fixed maturity securities. For the year ended December 31, 2023, net unrealized gains were $2.5 billion
primarily due to widening of credit spreads.
For additional information on our investment portfolio, see Note 6 to the Consolidated Financial Statements.
CREDIT RATINGS
At December 31, 2024, approximately 61 percent of our fixed maturity securities were held by our U.S. entities. Approximately 90
percent of these securities were rated investment grade by one or more of the principal rating agencies.
Moody’s Investors Service Inc. (Moody’s), Standard & Poor’s Financial Services LLC, a subsidiary of S&P Global Inc. (S&P), or
similar foreign rating services rate a significant portion of our foreign entities’ fixed maturity securities portfolio. Rating services are not
available for some foreign-issued securities. We closely monitor the credit quality of the foreign portfolio’s non-rated fixed maturity
securities. At December 31, 2024, approximately 94 percent of such investments were either rated investment grade or, on the basis
of analysis of our investment managers, were equivalent from a credit standpoint to securities rated investment grade. Approximately
24 percent of the foreign entities’ fixed maturity securities portfolio is comprised of sovereign fixed maturity securities supporting policy
liabilities in the country of issuance.
Composite AIG Credit Ratings
With respect to our fixed maturity securities, the credit ratings in the table below and in subsequent tables reflect: (i) a composite of
the ratings of the three major rating agencies, or when agency ratings are not available, the NAIC Designation assigned by the NAIC
SVO (96 percent of total fixed maturity securities), or (ii) our internal ratings when these investments have not been rated by any of
the major rating agencies or the NAIC. The “Non-rated” category in those tables consists of fixed maturity securities that have not
been rated by any of the major rating agencies, the NAIC or us.
For information regarding credit risks associated with Investments, see Enterprise Risk Management – Credit Risk Management.
The following table presents the composite AIG credit ratings of our fixed maturity securities calculated on the basis of their
fair value:
Rating:
Other fixed maturity securities
AAA
$
5,254 $
5,625 $
13 $
16 $
5,267 $
5,641
AA
9,599
12,775
80
145
9,679
12,920
A
14,420
14,758
114
73
14,534
14,831
BBB
12,839
12,992
145
96
12,984
13,088
Below investment grade
4,171
3,653
4
—
4,175
3,653
Non-rated
60
167
—
—
60
167
Total
$
46,343 $
49,970 $
356 $
330 $
46,699 $
50,300
Mortgage-backed, asset-backed
and collateralized
AAA
$
8,757 $
6,650 $
134 $
77 $
8,891 $
6,727
AA
6,765
6,065
89
108
6,854
6,173
A
482
614
49
29
531
643
Available for Sale
Other
Total
(in millions)
December 31,
2024
December 31,
2023
December 31,
2024
December 31,
2023
December 31,
2024
December 31,
2023
AIG | 2024 Form 10-K
68
ITEM 7 | Investments
BBB
470
517
88
81
558
598
Below investment grade
1,189
1,426
29
30
1,218
1,456
Non-rated
—
—
—
8
—
8
Total
$
17,663 $
15,272 $
389 $
333 $
18,052 $
15,605
Total
AAA
$
14,011 $
12,275 $
147 $
93 $
14,158 $
12,368
AA
16,364
18,840
169
253
16,533
19,093
A
14,902
15,372
163
102
15,065
15,474
BBB
13,309
13,509
233
177
13,542
13,686
Below investment grade
5,360
5,079
33
30
5,393
5,109
Non-rated
60
167
—
8
60
175
Total
$
64,006 $
65,242 $
745 $
663 $
64,751 $
65,905
Available for Sale
Other
Total
(in millions)
December 31,
2024
December 31,
2023
December 31,
2024
December 31,
2023
December 31,
2024
December 31,
2023
National Association of Insurance Commissioners (NAIC) Designations of Fixed Maturity Securities
The Securities Valuation Office (SVO) of the NAIC evaluates the investments of U.S. insurers for statutory reporting purposes and
assigns fixed maturity securities to one of six categories called NAIC Designations. In general, NAIC Designations of ‘1’ highest
quality, or ‘2’ high quality, include fixed maturity securities considered investment grade, while NAIC Designations of ‘3’ through ‘6’
generally include fixed maturity securities referred to as below investment grade. NAIC Designations for non-agency Residential
Mortgage Backed Securities (RMBS) and Commercial Mortgage Backed Securities (CMBS) are calculated using third party modeling
results provided through the NAIC. These methodologies result in an improved NAIC Designation for such securities compared to the
rating typically assigned by the three major rating agencies. The following tables summarize the ratings distribution of AIG
subsidiaries’ fixed maturity security portfolio by NAIC Designation, and the distribution by composite AIG credit rating, which is
generally based on ratings of the three major rating agencies. For fixed maturity securities where no NAIC Designation is assigned or
able to be calculated using third-party data, the NAIC Designation category used in the first table below reflects an internal rating.
The NAIC Designations presented below do not reflect the added granularity to the designation categories adopted by the NAIC in
2020, which further subdivide each category of fixed maturity securities by appending letter modifiers to the numerical designations.
The following table presents the fixed maturity security portfolio categorized by NAIC Designation, at fair value:
December 31, 2024
(in millions)
NAIC Designation
1
2
Total
Investment
Grade
3
4
5
6
Total Below
Investment
Grade
Total
Other fixed maturity securities
$ 29,357 $ 13,063 $
42,420 $ 2,430 $ 1,552 $
171 $
65 $
4,218 $ 46,638
Mortgage-backed, asset-backed and collateralized
17,249
535
17,784
102
128
—
38
268
18,052
Total*
$ 46,606 $ 13,598 $
60,204 $ 2,532 $ 1,680 $
171 $
103 $
4,486 $ 64,690
*
Excludes $61 million of fixed maturity securities for which no NAIC Designation is available.
The following table presents the fixed maturity security portfolio categorized by composite AIG credit rating, at fair value:
December 31, 2024
(in millions)
Composite AIG Credit Rating
AAA/AA/A
BBB
Total
Investment
Grade
BB
B
CCC and
Lower
Total Below
Investment
Grade
Total
Other fixed maturity securities
$
29,481 $ 12,983 $
42,464 $ 2,208 $ 1,765 $
201 $
4,174 $ 46,638
Mortgage-backed, asset-backed and collateralized
16,275
558
16,833
48
103
1,068
1,219
18,052
Total*
$
45,756 $ 13,541 $
59,297 $ 2,256 $ 1,868 $
1,269 $
5,393 $ 64,690
*
Excludes $61 million of fixed maturity securities for which no NAIC Designation is available.
AIG | 2024 Form 10-K
69
ITEM 7 | Investments
Insurance Reserves
LIABILITY FOR UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES (LOSS RESERVES)
The following table presents the components of our gross and net loss reserves by segment and major lines of business(a):
General Insurance:
North America Commercial:
U.S. Workers' Compensation (net of discount)
$
2,293
$
3,916
$
6,209
$
2,655
$
4,099
$
6,754
U.S. Excess Casualty
3,208
3,139
6,347
3,321
3,272
6,593
U.S. Other Casualty
4,387
3,416
7,803
4,112
3,676
7,788
U.S. Financial Lines
5,422
1,614
7,036
5,672
1,622
7,294
U.S. Property and Special Risks
4,297
1,233
5,530
4,403
1,494
5,897
Other product lines(b)
3,747
2,947
6,694
2,776
2,656
5,432
Total North America Commercial
23,354
16,265
39,619
22,939
16,819
39,758
International Commercial:
UK/Europe Casualty and Financial Lines
7,280
1,952
9,232
7,447
1,951
9,398
UK/Europe Property and Special Risks
2,355
1,761
4,116
2,913
1,665
4,578
Other product lines(b)
1,630
1,230
2,860
1,726
1,652
3,378
Total International Commercial
11,265
4,943
16,208
12,086
5,268
17,354
Global Personal:
U.S. Personal Insurance
836
2,048
2,884
767
2,163
2,930
UK/Europe and Japan Personal Insurance
1,269
670
1,939
1,483
671
2,154
Other product lines(b)
983
776
1,759
914
874
1,788
Total Global Personal
3,088
3,494
6,582
3,164
3,708
6,872
Unallocated loss adjustment expenses(b)
1,804
744
2,548
1,298
841
2,139
Total General Insurance
39,511
25,446
64,957
39,487
26,636
66,123
Other Operations
631
3,580
4,211
617
3,653
4,270
Total
$
40,142
$
29,026
$
69,168
$
40,104
$
30,289
$
70,393
December 31, 2024
December 31, 2023
(in millions)
Net Loss
Reserves
Reinsurance
Recoverable
Gross Loss
Reserves
Net Loss
Reserves
Reinsurance
Recoverable
Gross Loss
Reserves
(a) Includes net loss reserve discount of $1.2 billion and $1.2 billion at December 31, 2024 and 2023, respectively. For information regarding loss reserve discount, see
Note 13 to the Consolidated Financial Statements.
(b) Other product lines and Unallocated loss adjustment expenses includes Gross liability for unpaid losses and loss adjustment expense and Reinsurance recoverable on
unpaid losses and loss adjustment expense for the Fortitude Re reinsurance of $2.7 billion and $2.9 billion at December 31, 2024 and 2023, respectively.
Prior Year Development
The following table summarizes incurred (favorable) unfavorable prior year development net of reinsurance by segment and
major lines of business:
General Insurance:
North America Commercial:
U.S. Workers' Compensation
$
(261) $
(190) $
(419)
U.S. Excess Casualty
228
(48)
(8)
U.S. Other Casualty
(25)
(134)
(167)
U.S. Financial Lines
(43)
37
658
U.S. Property and Special Risks
8
(7)
(106)
Other Product Lines
(63)
(65)
(94)
Total North America Commercial
$
(156) $
(407) $
(136)
International Commercial:
UK/Europe Casualty and Financial Lines
$
170 $
165 $
82
UK/Europe Property and Special Risks
(35)
81
(153)
Other Product Lines
(234)
(98)
(38)
Total International Commercial
$
(99) $
148 $
(109)
Years Ended December 31,
(in millions)
2024
2023
2022
ITEM 7 | Insurance Reserves
AIG | 2024 Form 10-K
70
Global Personal:
U.S. Personal Insurance
$
(27) $
(66) $
(33)
UK/Europe and Japan Personal Insurance
(47)
(57)
(111)
Other Product Lines
(39)
(9)
(129)
Total Global Personal
$
(113) $
(132) $
(273)
Total General Insurance*
$
(368) $
(391) $
(518)
Other Operations Run-Off
1
(7)
(5)
Total prior year favorable development
$
(367) $
(398) $
(523)
Years Ended December 31,
(in millions)
2024
2023
2022
*
Includes the amortization attributed to the deferred gain at inception from the National Indemnity Company (NICO) adverse development reinsurance agreement of
$136 million, $164 million and $167 million for the years ended December 31, 2024, 2023 and 2022, respectively. Consistent with our definition of APTI, the amount
excludes the portion of (favorable)/unfavorable prior year reserve development for which we have ceded the risk under the NICO reinsurance agreements of
$289 million, $(158) million and $(174) million for the years ended December 31, 2024, 2023 and 2022, respectively. Also excludes the related changes in amortization
of the deferred gain, which were $268 million, $(83) million and $85 million over those same periods.
Net Loss Development – 2024
In the year ended December 31, 2024, we recognized favorable prior year loss reserve development of $367 million. The key
components of this development were:
North America Commercial
•
Favorable development on our U.S. Workers' Compensation reflecting continued favorable loss experience.
•
Adverse development on U.S. Excess Casualty driven by a large settlement of a legacy mass tort claim with the gross loss in
accident years covered under the Adverse Development Cover and increased reserves related to claims emergence.
•
Adverse development on U.S. Property and Special Risks reflecting development on prior year catastrophes offset by favorable
loss experience in Retail and Wholesale Property.
•
Favorable development on U.S. Financial Lines, reflecting favorable experience across most reserving classes, offset by
unfavorable development in M&A and High Excess classes.
•
Favorable development on U.S. Other Casualty, reflecting favorability across numerous Casualty reserving classes, partially offset
by unfavorable development on Commercial Auto and Wholesale Primary General Liability.
•
Amortization benefit related to the deferred gain on the adverse development cover.
International Commercial
•
Favorable development on Other Product Lines, primarily driven by Global Specialty which saw favorable development across
multiple lines.
•
Adverse development on UK/Europe Casualty and Financial Lines driven by unfavorable development in UK Financial Lines
partially offset by favorable development in EMEA Financial Lines, and unfavorable development in European Excess Casualty
driven by claim-specific emergence on accident year 2016.
•
Favorable development on UK/Europe Property and Special Risks reflecting favorable development across most segments and
geographies.
Global Personal
•
Favorable development on UK/Europe and Japan Personal Insurance primarily driven by Japan A&H and Auto, partially offset by
unfavorable development in Personal Auto in EMEA.
•
Favorable development in U.S. Personal Insurance and Other Product Lines due to favorable development on prior year
catastrophes across several events, primarily in the 2019-2023 accident years.
Our analyses and conclusions about prior year reserves also help inform our judgments about the current accident year loss and loss
adjustment expense ratios we selected.
For additional information on prior year development by line of business, see Note 13 to the Consolidated Financial Statements. For
information regarding actuarial methods employed for major classes of business, see Critical Accounting Estimates.
Net Loss Development – 2023
In the year ended December 31, 2023, we recognized favorable prior year loss reserve development of $398 million. The key
components of this development were:
AIG | 2024 Form 10-K
71
ITEM 7 | Insurance Reserves
North America Commercial
•
Favorable development on U.S. Workers' Compensation business reflecting a continuation of favorable loss cost trends in
guaranteed cost and excess segments across most accident years.
•
Favorable development in U.S. Excess Casualty driven by favorable development on the Excess Construction Runoff Portfolio.
•
Favorable development in U.S. Other Casualty reflecting favorable experience in construction defect and construction wraps as
well as guaranteed cost auto and general liability.
•
Favorable development in U.S. Property and Special risks reflecting favorable development on prior year catastrophes in the
2017-2021 accident years, offset by adverse development on prior year catastrophes in the 2022 accident year.
•
Unfavorable development in U.S. Financial Lines due to unfavorable development on High Attaching Excess D&O, M&A, Primary
National D&O, Cyber data privacy claims, and Architects & Engineers, partially offset by favorable development on Primary Private
Not for Profit D&O and Financial Institutions D&O.
•
Amortization benefit related to the deferred gain on the adverse development cover.
International Commercial
•
Unfavorable development in UK/Europe Casualty and Financial Lines reflecting unfavorable development in auto liability in Europe
and UK and in UK D&O and Commercial Professional Indemnity business, partially offset by favorable development in Financial
Institutions Professional Indemnity and D&O in Europe and UK and Cyber and Commercial Personal Indemnity in Europe.
•
Unfavorable development in UK/Europe Property and Special Risks driven by unfavorable development on prior year
catastrophes.
•
Favorable development in Other product lines driven primarily by Global Specialty.
Global Personal
•
Favorable development, primarily in U.S. Personal Insurance, due to favorable development on prior year catastrophes across
several events, primarily in the 2017-2020 accident years.
•
Favorable development on Japan Personal Insurance driven by personal auto and A&H business.
Net Loss Development – 2022
In the year ended December 31, 2022, we recognized favorable prior year loss reserve development of $523 million. The key
components of this development were:
North America Commercial
•
Favorable development in U.S Workers' Compensation reflecting continued favorable loss experience across most accident years
particularly for excess and guaranteed cost segments.
•
Favorable development in U.S. Excess Casualty particularly in lead and mid-excess retail segments.
•
Favorable development in U.S. Other Casualty in the Commercial Auto, General Liability and Construction Wraps business.
•
Amortization benefit related to the deferred gain on the adverse development cover.
•
Unfavorable development driven by U.S. Financial Lines driven by unfavorable severity trends in Excess and Primary D&O and
Excess and Financial Institutions Errors and Omissions (E&O), partially offset by favorable results in Employment Practices
Liability Insurance (EPLI).
International Commercial
•
Favorable development on Global Specialty across all products in all regions.
•
Unfavorable development in Casualty in Europe Excess Casualty and French Auto as well as large loss experience in the UK,
partially offset by favorable experience in Asia Pacific Casualty.
•
Unfavorable development in Financial Lines primarily in the UK for M&A, Commercial PI and Commercial D&O.
Global Personal
•
Favorable development in International Personal Lines, particularly with Auto and A&H coverages in Japan, as well as favorable
experience recognized in Europe and the UK.
•
Favorable development, primarily in U.S. Personal Insurance, due to favorable development on prior year catastrophes across
several events, primarily in the 2017-2019 accident years.
We note that for certain categories of claims (e.g., construction defect claims and environmental claims) and for reinsurance
recoverable, losses may sometimes be reclassified to an earlier or later accident year as more information about the date of
occurrence becomes available to us.
AIG | 2024 Form 10-K
72
ITEM 7 | Insurance Reserves
Significant Reinsurance Agreements
In the first quarter of 2017, we entered into an adverse development reinsurance agreement with NICO, under which we transferred to
NICO 80 percent of the reserve risk on substantially all of our U.S. Commercial long-tail exposures for accident years 2015 and prior.
Under this agreement, we ceded to NICO 80 percent of the losses on subject business paid on or after January 1, 2016 in excess of
$25 billion of net paid losses, up to an aggregate limit of $25 billion. We account for this transaction as retroactive reinsurance. This
transaction resulted in a gain, which under GAAP retroactive reinsurance accounting is deferred and amortized into income over the
settlement period. NICO created a collateral trust account as security for their claim payment obligations to us, into which they
deposited the consideration paid under the agreement, and Berkshire Hathaway Inc. has provided a parental guarantee to secure
NICO’s obligations under the agreement.
For a description of AIG’s catastrophe reinsurance protection for 2024, see Part II, Item 7. MD&A – Enterprise Risk Management –
Insurance Risks – Natural Catastrophe Risk.
The table below shows the calculation of the deferred gain on the adverse development reinsurance agreement, the effect of
discounting of loss reserves and amortization of the deferred gain.
(in millions)
December 31, 2024
December 31, 2023
December 31, 2022
Gross Covered Losses
Covered reserves before discount
$
9,823
$
10,849
$
12,537
Inception to date losses paid
31,545
30,157
28,667
Attachment point
(25,000)
(25,000)
(25,000)
Covered losses above attachment point
$
16,368
$
16,006
$
16,204
Deferred Gain Development
Covered losses above attachment ceded to NICO (80%)
$
13,094
$
12,805
$
12,963
Consideration paid including interest
(10,188)
(10,188)
(10,188)
Pre-tax deferred gain before discount and amortization
2,906
2,617
2,775
Discount on ceded losses(a)
(936)
(1,104)
(1,254)
Pre-tax deferred gain before amortization
1,970
1,513
1,521
Inception to date amortization of deferred gain at inception
(1,564)
(1,428)
(1,264)
Inception to date amortization attributed to changes in deferred gain(b)
(122)
64
(52)
Deferred gain liability reflected in AIG's balance sheet
$
284
$
149
$
205
(a) The accretion of discount and a reduction in effective interest rates is offset by changes in estimates of the amount and timing of future recoveries.
(b) Excluded from APTI.
The following table presents the rollforward of activity in the deferred gain from the adverse development reinsurance
agreement:
Years Ended December 31,
(in millions)
2024
2023
2022
Balance at beginning of year, net of discount
$
149 $
205 $
869
(Favorable) unfavorable prior year reserve development ceded to NICO(a)
289
(158)
(174)
Amortization attributed to deferred gain at inception(b)
(136)
(164)
(167)
Amortization attributed to changes in deferred gain(c)
(186)
116
(22)
Changes in discount on ceded loss reserves
168
150
(301)
Balance at end of year, net of discount
$
284 $
149 $
205
(a) Prior year reserve development ceded to NICO under the retroactive reinsurance agreement is deferred under GAAP.
(b) Represents amortization of the deferred gain recognized in APTI.
(c) Excluded from APTI.
The lines of business subject to this agreement include those with longer tails, which carry a higher degree of uncertainty. Since
inception, there have been periods of both favorable and unfavorable prior year development. This agreement will continue to reduce
the impact of volatility in the development on our ultimate loss estimates over time.
Fortitude Re was established during the first quarter of 2018 in a series of reinsurance transactions related to our run-off operations.
Those reinsurance transactions were designed to consolidate most of our insurance run-off lines into a single legal entity. As of
December 31, 2024, $3.4 billion of reserves related to business written by multiple wholly-owned AIG subsidiaries, had been ceded to
Fortitude Re under these reinsurance transactions.
AIG | 2024 Form 10-K
73
ITEM 7 | Insurance Reserves
Liquidity and Capital Resources
OVERVIEW
Liquidity refers to the ability to generate sufficient cash resources to meet the cash requirements of our business operations and
payment obligations.
Capital refers to the long-term financial resources available to support the operation of our businesses, fund business growth and
cover financial and operational needs that arise from adverse circumstances. Our primary source of ongoing capital generation is
derived from the profitability of our insurance subsidiaries. We must comply with numerous constraints on our capital positions. These
constraints drive the requirements for capital adequacy at AIG and the individual businesses and are based on internally defined risk
tolerances, regulatory requirements, rating agency and creditor expectations and business needs.
For information regarding our liquidity risk framework, see Enterprise Risk Management – Liquidity Risk Management.
We believe that we have sufficient liquidity and capital resources to satisfy future requirements and meet our obligations to
policyholders, customers, creditors and debt-holders, including those arising from reasonably foreseeable contingencies or events.
Nevertheless, some circumstances may cause our cash or capital needs to exceed projected liquidity or readily deployable capital
resources.
For information regarding risks associated with our liquidity and capital resources, see Part I, Item 1A. – Risk Factors – Liquidity,
Capital and Credit.
Depending on market conditions, regulatory and rating agency considerations and other factors, we may take various liability and
capital management actions. Liability management actions may include, but are not limited to, repurchasing or redeeming outstanding
debt, issuing new debt or engaging in debt exchange offers. Capital management actions may include, but are not limited to, issuing
preferred stock, paying dividends to our shareholders on AIG Common Stock, par value $2.50 per share (AIG Common Stock) and
repurchases of AIG Common Stock.
LIQUIDITY AND CAPITAL RESOURCES HIGHLIGHTS
SOURCES
Liquidity to AIG Parent from Subsidiaries
During the year ended December 31, 2024, our General Insurance companies distributed dividends of $4.1 billion to AIG Parent or
applicable intermediate holding companies.
Sales of Corebridge Shares by AIG
In June and July 2024, we sold an aggregate of approximately 31.9 million shares of Corebridge common stock in a secondary
offering at a public offering price of $29.20 per share, which included 30 million shares initially offered and the partial exercise by
the underwriters of their option to purchase additional shares. The aggregate gross proceeds to AIG Parent were approximately
$932 million.
In August 2024, we sold approximately 8 million shares of Corebridge common stock to Corebridge at the per share purchase price
of $24.90. The aggregate proceeds to AIG Parent were $200 million.
In September 2024, we sold 5 million shares of Corebridge common stock in a Rule 144 transaction at the per share purchase
price of $26.86. The aggregate proceeds to AIG Parent were approximately $134 million.
In November 2024, we sold 30 million shares of Corebridge common stock in a secondary offering at a public offering price of
$31.20 per share. The aggregate gross proceeds to AIG Parent were approximately $936 million.
In December 2024, we sold approximately 120 million shares of Corebridge common stock to Nippon Life Insurance Company at
the per share purchase price of $31.47 per share. The aggregate proceeds to AIG Parent were approximately $3.8 billion.
Senior Notes Offering
In November 2024, AIG issued ¥77.1 billion aggregate principal amount of 1.580% Notes Due 2028, ¥10.3 billion aggregate
principal amount of 1.757% Notes Due 2029 and ¥12.6 billion aggregate principal amount of 2.137% Notes Due 2034, which was
equivalent to approximately $660 million at the time of the offering.
Sale of AIG's Travel Business
On December 2, 2024, AIG completed the sale of its global individual personal travel insurance and assistance business to Zurich
Insurance Group and received $600 million cash, plus additional earn-out consideration.
ITEM 7 | Liquidity and Capital Resources
AIG | 2024 Form 10-K
74
USES
General Borrowings
During the year ended December 31, 2024, $2.0 billion of debt categorized as general borrowings matured, was repaid or
redeemed, including:
•
Repayment of $459 million aggregate principal amount of our 4.125% Notes due February 15, 2024.
•
Redemption of €41.55 million aggregate principal amount of our Series A-3 Junior Subordinated Debentures, equivalent to
approximately $46 million at the time of repayment.
•
Redemption of $400 million face amount of our Zero Coupon Callable Notes Due 2047, for a redemption price of 135.631
percent of the face amount, which totaled approximately $543 million.
•
Repurchased, through cash tender offers, approximately $1.13 billion aggregate principal amount of certain notes and
debentures issued by AIG for an aggregate purchase price of approximately $1.14 billion.
We made interest payments on our general borrowings totaling $611 million during the year ended December 31, 2024.
Dividends
During the year ended December 31, 2024:
•
We made a cash dividend payment of $365.625 per share on our Series A 5.85% Non-Cumulative Perpetual Preferred Stock
(Series A Preferred Stock) for the three months ended March 31, 2024 totaling $7 million.
•
We made cash dividend payments in the amount of $0.40 per share on AIG Common Stock for each of the three month periods
ended December 31, 2024, September 30, 2024 and June 30, 2024 (an increase of 11 percent from prior dividend payments),
and $0.36 per share for the three months ended March 31, 2024, totaling $1.0 billion.
Repurchases of Common Stock(a) and Redemption of Preferred Stock
During the year ended December 31, 2024, AIG Parent repurchased approximately 89 million shares of AIG Common Stock, for an
aggregate purchase price of approximately $6.6 billion.
On March 15, 2024, we redeemed all 20,000 outstanding shares of our Series A Preferred Stock and all 20,000,000 of the
corresponding Depositary Shares, each representing a 1/1,000th interest in a share of Series A Preferred Stock for an aggregate
redemption price of $500 million, paid in cash.
(a) Pursuant to a Securities Exchange Act of 1934 (the Exchange Act) Rule 10b5-1 repurchase plan, from January 1, 2025 to February 7, 2025, AIG Parent repurchased
approximately 13 million shares of AIG Common Stock for an aggregate purchase price of approximately $952 million.
ANALYSIS OF SOURCES AND USES OF CASH
Operating Cash Flow Activities
Insurance companies generally receive most premiums in advance of the payment of claims or policy benefits. The ability of
insurance companies to generate positive cash flow is affected by the frequency and severity of losses under their insurance policies,
policy retention rates, effective management of their investment portfolio and operating expense discipline.
Interest payments totaled $858 million, $1.1 billion and $1.1 billion in the years ended December 31, 2024, 2023 and 2022,
respectively. Excluding interest payments, AIG had operating cash inflows of $4.1 billion, $7.3 billion and $5.3 billion in the years
ended December 31, 2024, 2023 and 2022, respectively, including outflows of $104 million, $710 million and $488 million from
discontinued operations in the years ended December 31, 2024, 2023 and 2022, respectively.
Investing Cash Flow Activities
Net cash provided by investing activities in the year ended December 31, 2024 was $1.7 billion, including $4.2 billion used in
discontinued operations, compared to net cash used in investing activities of $7.0 billion, including $4.5 billion from discontinued
operations, in 2023 and $3.6 billion, including $6.5 billion from discontinued operations, in 2022.
Financing Cash Flow Activities
Net cash used in financing activities in the year ended December 31, 2024 totaled $5.1 billion, reflecting:
•
$1.0 billion to pay dividends of $0.40 per share in each of the three month periods ended December 31, 2024, September 30, 2024
and June 30, 2024, and $0.36 per share for the three months ended March 31, 2024 on AIG Common Stock;
•
$22 million to pay a first quarter dividend of $365.625 per share on AIG’s Series A Preferred Stock and redemption premiums;
•
$6.7 billion to repurchase approximately 90 million shares of AIG Common Stock;
•
$1.4 billion in net outflows from the issuance and repayment of long-term debt; and
AIG | 2024 Form 10-K
75
ITEM 7 | Liquidity and Capital Resources
•
$3.9 billion in net inflows from discontinued operations.
Net cash provided by financing activities in the year ended December 31, 2023 totaled $782 million reflecting:
•
$997 million to pay dividends of $0.36 per share in the three months ended December 31, 2023, September 30, 2023 and June 30,
2023, and $0.32 per share for the three months ended March 31, 2023 on AIG Common Stock;
•
$29 million to pay quarterly dividends of $365.625 per share on AIG’s Series A Preferred Stock;
•
$3.0 billion to repurchase approximately 51 million shares of AIG Common Stock;
•
$1.6 billion in net outflows from the issuance and repayment of long-term debt;
•
$45 million in net outflows from the issuance and repayment of debt of consolidated investment entities; and
•
$3.5 billion in net inflows from discontinued operations.
Net cash used in financing activities in the year ended December 31, 2022 totaled $602 million reflecting:
•
$982 million to pay quarterly dividends of $0.32 per share on AIG Common Stock;
•
$29 million to pay quarterly dividends of $365.625 per share on AIG’s Series A Preferred Stock;
•
$5.2 billion to repurchase approximately 90 million shares of AIG Common Stock;
•
$9.4 billion in net outflows from the issuance, repayment and cash tender of long-term debt;
•
$234 million in net outflows from the issuance and repayment of debt of consolidated investment entities; and
•
$13.9 billion in net inflows from discontinued operations.
LIQUIDITY AND CAPITAL RESOURCES OF AIG PARENT AND SUBSIDIARIES
AIG Parent
As of December 31, 2024 and 2023, respectively, AIG Parent and applicable intermediate holding companies had approximately
$10.7 billion and $12.1 billion in liquidity sources held in the form of cash, short-term investments and AIG Parent's committed,
revolving syndicated credit facility of $3.0 billion as of December 31, 2024 and $4.5 billion as of December 31, 2023. AIG Parent’s
primary sources of liquidity are dividends, distributions, loans and other payments from subsidiaries and credit facilities. AIG Parent’s
primary uses of liquidity are for debt service, capital and liability management, operating expenses and dividends on AIG Common
Stock.
We expect to access the debt and preferred equity markets from time to time to meet funding requirements as needed.
We utilize our capital resources to support our businesses, with the majority of capital allocated to our insurance operations. Should
we have or generate more capital than is needed to support our business strategies (including organic or inorganic growth
opportunities) or mitigate risks inherent to our business, we may develop plans to distribute such capital to shareholders via dividends
or AIG Common Stock repurchase authorizations or deploy such capital towards liability management.
Insurance Companies
We expect that our insurance companies will be able to continue to satisfy reasonably foreseeable future liquidity requirements and
meet their obligations, including those arising from reasonably foreseeable contingencies or events, through cash from operations
and, to the extent necessary, monetization of invested assets.
Our insurance companies’ liquidity resources are primarily held in the form of cash, short-term investments and publicly traded,
investment grade rated fixed maturity securities. Each of our material insurance companies’ liquidity is monitored through various
internal liquidity risk measures. The primary sources of liquidity are premiums, fees, reinsurance recoverables and investment income
and maturities. Certain of our insurance companies have access to Federal Home Loan Bank (FHLB) borrowings as an additional
source of funding. The primary uses of liquidity are paid losses, reinsurance payments, interest payments, dividends, expenses,
investment purchases and collateral requirements.
Our insurance companies may require additional funding to meet capital or liquidity needs under certain circumstances. For example,
large catastrophes may require us to provide additional support to the affected operations of our insurance companies.
We are party to several letter of credit agreements with various financial institutions, which issue letters of credit from time to time in
support of our insurance companies. These letters of credit are subject to reimbursement by us in the event of a drawdown of these
letters of credit. Letters of credit issued in support of our insurance companies totaled approximately $2.3 billion at December 31,
2024.
AIG | 2024 Form 10-K
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ITEM 7 | Liquidity and Capital Resources
CREDIT FACILITIES
We maintain a syndicated, multicurrency revolving credit facility as a potential source of liquidity for general corporate purposes. On
September 27, 2024, we amended and restated the five-year syndicated credit facility that was entered into on November 19, 2021
(the Previous Facility). The amended and restated five-year syndicated credit facility (the Facility) provides for aggregate
commitments by the bank syndicate to provide AIG Parent with unsecured revolving loans and/or standby letters of credit of up to
$3.0 billion (the Previous Facility was up to $4.5 billion). The Facility is scheduled to expire in September 2029 (the Previous Facility
was scheduled to expire in November 2026).
Our ability to utilize the Facility is conditioned on the satisfaction of certain legal, operating, administrative and financial covenants and
other requirements contained in the Facility. These include covenants relating to our maintenance of a specified total consolidated net
worth and total consolidated debt to total consolidated capitalization. Failure to satisfy these and other requirements contained in the
Facility would restrict our access to the Facility and could have a material adverse effect on our financial condition, results of
operations and liquidity.
As of December 31, 2024, a total of $3.0 billion remained available under the Facility.
CONTRACTUAL OBLIGATIONS
The following table summarizes material contractual obligations in total, and by remaining maturity:
December 31, 2024
Payments due by Period
(in millions)
Total Payments
2025
2026 - 2027
Thereafter
Loss reserves(a)
$
71,279 $
19,667 $
20,308 $
31,304
Long-term debt(b)
8,764
398
1,120
7,246
Interest payments on long-term debt
4,924
369
697
3,858
Total
$
84,967 $
20,434 $
22,125 $
42,408
(a) Represents loss reserves, undiscounted and gross of reinsurance.
(b) Does not reflect $158 million of debt of consolidated investment entities, for which recourse is limited to the assets of the respective investment entities and for which
there is no recourse to the general credit of AIG.
Loss Reserves
Loss reserves relate to our General Insurance companies and represent estimates of future loss and loss adjustment expense
payments based on historical loss development payment patterns. The amounts presented in the above table are undiscounted and
therefore exceed the liability for unpaid losses and loss adjustment expenses, including allowance for credit losses, as presented on
the Consolidated Balance Sheets. Due to the significance of the assumptions used, the payments by period presented above could
be materially different from actual required payments. We believe that our General Insurance companies maintain adequate financial
resources to meet the actual required payments under these obligations.
For additional information on loss reserves, see Critical Accounting Estimates – Loss Reserves and Note 13 to the Consolidated
Financial Statements.
Long-Term Debt and Interest Payments on Long-Term Debt
The amounts presented in the above table represent AIG's total long-term debt outstanding and associated future interest payments
due on such debt.
For additional information on outstanding debt, see – Debt.
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ITEM 7 | Liquidity and Capital Resources
OFF-BALANCE SHEET ARRANGEMENTS AND COMMERCIAL COMMITMENTS
In the normal course of business, AIG and our subsidiaries enter into commitments under which we may be required to make
payments in the future on a contingent basis.
The following table summarizes Off-Balance Sheet Arrangements and Commercial Commitments in total, and by remaining
maturity:
December 31, 2024
Total Amounts
Committed
(in millions)
2025
2026 - 2027
Thereafter
Commitments:
Investment commitments
$
1,773
$
1,084
$
592
$
97
Commitments to extend credit
258
125
102
31
Letters of credit
295
91
—
204
Total(a)(b)
$
2,326
$
1,300
$
694
$
332
(a) Excludes guarantees, CMAs or other support arrangements between AIG consolidated entities.
(b) Excludes commitments with respect to pension plans. The annual pension contribution for 2025 is expected to be approximately $53 million.
Investment commitments
We enter into investment commitments in the normal course of business that are aligned with and support our investment strategies.
These represent commitments to investment in private equity funds as well as commitments to purchase and develop real estate in
the United States and abroad. The commitments to invest are called at the discretion of each fund, as needed for funding new
investments or expenses of the fund, the timing of which is estimated based on the expected life cycle of the related funds, consistent
with past trends of requirements for funding. These commitments are primarily made by insurance subsidiaries of the Company.
We also enter into arrangements with variable interest entities (VIEs) and consolidate a VIE when we are the primary beneficiary of
the entity.
For additional information on investment commitments and VIEs, see Note 10 to the Consolidated Financial Statements.
Commitments to extend credit
As part of our normal course of business lending operations, we enter into commitments to fund mortgage loans at certain interest
rates and various other terms, within a stated period of time. Such commitments are legally binding and generally made by insurance
subsidiaries of the Company.
Letters of credit
AIG is party to several letter of credit agreements with various financial institutions, which issue letters of credit from time to time for
the benefit of third parties in support of our businesses. These letters of credit are subject to reimbursement by AIG in the event of a
drawdown.
Indemnification agreements
For information regarding our indemnification agreements, see Note 15 to the Consolidated Financial Statements.
AIG | 2024 Form 10-K
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ITEM 7 | Liquidity and Capital Resources
DEBT
We expect to service and repay general borrowings through maturing investments and dispositions of invested assets, future cash
flows from operations, cash flows generated from invested assets, future debt or preferred stock issuances and other financing
arrangements.
The following table provides the rollforward of our total debt outstanding:
General borrowings:
Notes and bonds payable
$ 9,079 $
660 $
(1,653) $
(85) $
(116)
$
7,885
Junior subordinated debt
992
—
(393)
—
3
602
AIG Japan Holdings Kabushiki Kaisha
267
—
—
(28)
—
239
Total general borrowings
10,338
660
(2,046)
(113)
(113)
8,726
Borrowings supported by assets
37
—
(1)
—
1
37
Other subsidiaries' notes, bonds, loans and mortgages
payable - not guaranteed by AIG
—
1
—
—
—
1
Total long-term debt
$ 10,375 $
661 $
(2,047) $
(113) $
(112)
$
8,764
Debt of consolidated investment entities - not guaranteed
by AIG(a)
$
231 $
—
(1)
—
(72) (b) $
158
Year Ended December 31, 2024
Balance,
Beginning
of Year
Issuances
Maturities
and
Repayments
Effect of
Foreign
Exchange
Other
Changes
Balance,
End of
Year
(in millions)
(a) At December 31, 2024, includes debt of consolidated investment entities primarily related to real estate investments of $158 million. At December 31, 2023, includes
debt of consolidated investment entities related to real estate investments of $79 million and other securitization vehicles of $152 million.
(b) Includes the effect of consolidating previously unconsolidated partnerships.
Debt Maturities
The following table summarizes maturing long-term debt at December 31, 2024 of AIG for the next four quarters:
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
(in millions)
2025
2025
2025
2025
Total
General borrowings
$
239 $
146 $
— $
—
$
385
Borrowings supported by assets
—
—
—
12
12
Other subsidiaries' notes, bonds, loans and mortgages payable
—
—
—
1
1
Total
$
239 $
146 $
— $
13
$
398
CREDIT RATINGS
Credit ratings estimate a company’s ability to meet its obligations and may directly affect the cost and availability of
financing to that company. The following table presents the credit ratings of AIG Parent as of the date of this filing. Figures in
parentheses indicate the relative ranking of the ratings within the agency’s rating categories; that ranking refers only to the major
rating category and not to the modifiers assigned by the rating agencies.
Short-Term Debt
Senior Long-Term Debt
Moody's
S&P
Moody's(a)
S&P(b)
Fitch(c)
American International Group, Inc.
P-2 (2nd of 4)
A-2 (2nd of 5)
Baa 2 (4th of 9) /
Positive
BBB+ (4th of 9) /
Positive
BBB+ (4th of 9) /
Stable
(a) Moody’s appends numerical modifiers 1, 2 and 3 to the generic rating categories to show relative position within the rating categories.
(b) S&P ratings may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories.
(c) Fitch Ratings Inc. (Fitch) ratings may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories.
These credit ratings are current opinions of the rating agencies. They may be changed, suspended or withdrawn at any time by the
rating agencies as a result of changes in, or unavailability of, information or based on other circumstances. Ratings may also be
withdrawn at our request.
We are party to some agreements that contain “ratings triggers.” Depending on the ratings maintained by one or more rating
agencies, these triggers could result in (i) the termination or limitation of credit availability or a requirement for accelerated repayment,
(ii) the termination of business contracts or (iii) a requirement to post collateral for the benefit of counterparties.
AIG | 2024 Form 10-K
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ITEM 7 | Liquidity and Capital Resources
In the event of a downgrade of our long-term senior debt ratings, certain AIG entities would be required to post additional collateral
under some derivative and other transactions, or certain of the counterparties of such entities would be permitted to terminate such
transactions early.
The actual amount of collateral that we would be required to post to counterparties in the event of such downgrades, or the aggregate
amount of payments that we could be required to make, depends on market conditions, the fair value of outstanding affected
transactions and other factors prevailing at the time of the downgrade.
FINANCIAL STRENGTH RATINGS
Financial Strength ratings estimate an insurance company’s ability to pay its obligations under an insurance policy. The
following table presents the ratings of our significant insurance subsidiaries as of the date of this filing.
A.M. Best
S&P
Fitch
Moody’s
National Union Fire Insurance Company of Pittsburgh, Pa.
A
A+
A+
A2
Lexington Insurance Company
A
A+
A+
A2
American Home Assurance Company
A
A+
A+
A2
AIG Europe S.A.
NR
A+
NR
A2
American International Group UK Ltd.
A
A+
NR
A2
AIG General Insurance Co. Ltd.
NR
A+
NR
NR
In February 2024, S&P revised its outlook on AIG Parent and its core General Insurance subsidiaries to positive from stable and
affirmed the ‘BBB+/A-2’ issuer credit ratings on AIG Parent and ‘A+’ financial strength ratings on the core General Insurance entities.
On January 26, 2024, A.M. Best upgraded the Long-Term Issuer Credit Ratings (Long-Term ICR) of AIG General Insurance
subsidiaries to ‘a+’ from ‘a’, the Long-Term ICR of AIG Parent to ‘bbb+’ from ‘bbb’, and revised the outlook of the Long-Term ICRs to
stable from positive. A.M. Best also affirmed the 'A' Financial Strength Rating of the AIG General Insurance subsidiaries with stable
outlook.
These financial strength ratings are current opinions of the rating agencies. They may be changed, suspended or withdrawn at any
time by the rating agencies as a result of changes in, or unavailability of, information or based on other circumstances.
For information regarding the effects of downgrades in our credit ratings and financial strength ratings, see Part I, Item 1A. Risk
Factors – Liquidity, Capital and Credit – “A downgrade by one or more of the rating agencies in the Insurer Financial Strength ratings
of our insurance or reinsurance companies could limit their ability to write or prevent them from writing new business and impair their
retention of customers and in-force business, and a downgrade in our credit ratings could adversely affect our business, results of
operations, financial condition and liquidity” and Note 11 to the Consolidated Financial Statements.
REGULATION AND SUPERVISION
For a discussion of our regulation and supervision by different regulatory authorities in the United States and abroad, including with
respect to our liquidity and capital resources, see Part I, Item 1. Business – Regulation and Part I, Item 1A. Risk Factors – Regulation.
DIVIDENDS
On February 11, 2025, our Board of Directors declared a cash dividend on AIG Common Stock of $0.40 per share, payable on
March 31, 2025 to shareholders of record on March 17, 2025.
The payment of any future dividends will be at the discretion of our Board of Directors and will depend on various factors. For further
detail on our dividends, see Note 16 to the Consolidated Financial Statements.
REPURCHASES OF AIG COMMON STOCK
Our Board of Directors has authorized the repurchase of shares of AIG Common Stock through a series of actions. On April 30, 2024,
the Board of Directors authorized the repurchase of $10.0 billion of AIG Common Stock (inclusive of the approximately $3.9 billion
remaining under the Board's prior share repurchase authorization). During the year ended December 31, 2024, AIG Parent
repurchased approximately 89 million shares of AIG Common Stock for an aggregate purchase price of $6.6 billion. Pursuant to an
Exchange Act Rule 10b5-1 repurchase plan, from January 1, 2025 to February 7, 2025, we repurchased approximately 13 million
shares of AIG Common Stock for an aggregate purchase price of approximately $952 million. As of February 7, 2025, $4.7 billion
remained under the Board's authorization.
The timing of any future share repurchases will depend on market conditions, our business and strategic plans, financial condition,
results of operations, liquidity and other factors, as discussed further in Note 16 to the Consolidated Financial Statements.
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ITEM 7 | Liquidity and Capital Resources
DIVIDEND RESTRICTIONS
Payments of dividends to AIG Parent or intermediate holding companies by insurance subsidiaries are subject to certain restrictions
imposed by regulatory authorities.
For information regarding restrictions on payments of dividends by our subsidiaries, see Note 16 to the Consolidated Financial
Statements.
Enterprise Risk Management
OVERVIEW
Risk management is an integral part of our business strategy and a key element of our approach to corporate governance. We have
an integrated process for managing risks throughout our organization in accordance with our firm-wide risk appetite. Our Board of
Directors has oversight responsibility for the management of risk. Our ERM Department oversees and integrates the risk management
functions in our business entities and embeds risk management in our day-to-day business processes, providing senior management
with a consolidated view of AIG’s major risk positions. Nevertheless, our risk management efforts may not always be successful and
material adverse effects on our business, results of operations, cash flows, liquidity or financial condition may occur. For further
information regarding the risks associated with our business and operations, see Part I, Item 1A. Risk Factors.
AIG employs a Three Lines model. AIG’s business leaders assume full accountability for the risks and controls in their segments, and
ERM performs a review, challenge and oversight function. The third line consists of our Internal Audit Group that provides
independent assurance to AIG’s Board of Directors.
RISK GOVERNANCE STRUCTURE
Our risk governance structure is designed to foster the development and maintenance of a risk and control culture that encompasses
all significant risk categories impacting our lines of business and functions. Accountability for the implementation and oversight of risk
policies is aligned with individual business leaders, with the risk committees' oversight.
Our Board of Directors oversees the management of risk through its Risk Committee and Audit Committee. Our Chief Risk Officer
(CRO), a member of the Executive Leadership team, reports to both the Risk Committee and our Chairman and Chief Executive
Officer. The AIG CRO chairs the Group Risk Committee (GRC), the senior management group responsible for assessing all significant
risks on a global basis. The GRC is supported by management committees and Legal Entity Risk Committees.
RISK APPETITE, LIMITS, IDENTIFICATION AND MEASUREMENT
Risk Appetite Framework
Approved by our Board of Directors, AIG’s Risk Appetite Framework integrates stakeholder interests, strategic business goals and
available financial resources. We balance these by seeking to take measured risks that are expected to generate repeatable,
sustainable earnings and create long-term value for our shareholders. Our risk tolerances take into consideration regulatory
requirements, rating agency expectations, and business needs.
Risk Limits
A key component of our Risk Appetite Framework is the establishment and maintenance of tolerances and limits on material risks to
meet AIG’s objectives. As part of AIG's Risk Appetite Framework, AIG has defined, where relevant, a set of risk tolerances to ensure
appropriate support of aggregate risk-taking. This includes identifying the appropriate set of metrics, and calibrating a specific
tolerance level for each metric, as appropriate.
Risk Identification and Measurement
We conduct risk identification through multiple processes at the business entity and corporate level focused on capturing our material
risks. A key initiative is our integrated bottom-up risk identification and assessment process which is conducted down to the product-
line level. In addition, we perform an annual top-down risk assessment to identify top risks and assign owners to ensure these risks
are appropriately addressed and managed. These processes are used as critical input to enhance and develop our analytics for
measuring and assessing risks across the organization.
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ITEM 7 | Liquidity and Capital Resources
The internal capital framework quantifies our aggregate economic risk at a given confidence interval, after considering diversification
benefits between risk factors and business lines. The stress testing framework assesses our aggregate exposure to our most
significant financial and insurance risks. We use this information to support the assessment of resources needed by us to support our
subsidiaries and capital resources required to maintain consolidated company target capitalization levels.
We evaluate and manage risk in material topics as discussed below.
•
Credit Risk Management
•
Liquidity Risk Management
•
Business and Strategy Risks
•
Market Risk Management
•
Operational Risk Management
•
Insurance Risks
CREDIT RISK MANAGEMENT
Credit risk is defined as the risk that our customers or counterparties are unable or unwilling to repay their contractual obligations
when they become due. Credit risk may also result from a downgrade of a counterparty’s credit ratings or a widening of its credit
spreads.
Direct and indirect credit exposures may arise from, but are not limited to, fixed income investments, equity securities, deposits,
commercial paper investments, securities purchased under agreements to resell and repurchase agreements, corporate and
consumer loans, leases, reinsurance and retrocessional insurance recoverables, counterparty risk arising from derivatives activities,
collateral extended to counterparties, insurance risk cessions to third parties, financial guarantees, letters of credit, and certain
General Insurance businesses. AIG's credit risk management framework defines credit risk processes to identify, evaluate, risk rate,
measure, manage and govern credit risk across the enterprise and to ensure the consistency of those processes.
We monitor and control our company-wide credit risk concentrations and attempt to avoid unwanted or excessive risk accumulations,
whether funded or unfunded. To minimize the level of credit risk in some circumstances, we may require mitigants, such as parental or
third-party guarantees, simultaneous payment provisions or collateral, including commercial bank-issued letters of credit, funds
withheld accounts and cash or securities held in trust collateral accounts.
For additional information on our credit concentrations and credit exposures, see Investments – Investment Strategies – Available-for-
Sale Investments.
Derivative Transactions
We utilize derivatives principally to enable us to hedge exposure associated with changes in levels of interest rates, currencies, credit,
commodities, equity prices and other risks. Credit risk associated with derivative counterparties exists for a derivative contract when
that contract has a positive fair value to us. All derivative transactions must be transacted within counterparty limits that have been
approved by ERM. We evaluate counterparty credit quality via an internal analysis that is consistent with the AIG Credit Policy and,
where necessary, we require credit enhancements for certain transactions and enter into offsetting and netting arrangements.
For additional information related to derivative transactions, see Note 11 to the Consolidated Financial Statements.
MARKET RISK MANAGEMENT
Market risk is defined as the risk of adverse impact due to systemic movements in one or more of the following market risk drivers:
interest rates, credit spreads, foreign exchange, equity and commodity prices, residential and commercial real estate values, inflation,
and their respective levels of uncertainty. It can also be brought on by political turmoil, natural disasters, and terrorist attacks. We are
exposed to market risks primarily within our insurance and capital markets activities, on both the asset and the liability sides of our
balance sheet through on- and off-balance sheet exposures.
Market risk is overseen at the corporate level within ERM through the CRO. Market risk is managed by our finance, treasury and
investment management corporate functions, collectively, and in partnership with ERM. The scope and magnitude of our market risk
exposures is monitored through multiple lenses that include economic, GAAP and statutory reporting frameworks at various levels of
business consolidation, in a manner consistent with our risk appetite statement. This process aims to establish a comprehensive
coverage of potential implications from adverse market risk developments. We use a number of approaches to measure market risk
exposure including sensitivity analysis, scenario analysis and stress testing.
ITEM 7 | Enterprise Risk Management
AIG | 2024 Form 10-K
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Market Risk Sensitivities
Most of our fixed income portfolio is reported as available-for-sale. Therefore, fair value changes will have a direct impact on
Accumulated Other Comprehensive Income (Loss) (AOCI), but do not impact our net investment income revenue unless the assets
are sold. Our short-term and long-term debt is reported at amortized cost and thus changes in interest rates do not impact the debt
values reported on our financial statements. Their fair value, however, is sensitive to interest rates.
The following table provides estimates of sensitivity to changes in yield curves, equity prices and foreign exchange (FX)
rates on our financial instruments. We aim to manage interest rate exposure of the investment portfolio such that valuation
changes from interest rates are partially offset by changes in the economic value of insurance reserves. These exposures
are regularly reviewed as part of AIG’s governance structure and limits are set accordingly. The table excludes $3.1 billion of
interest rate sensitive assets supporting the Fortitude Re funds withheld arrangements as the contractual returns related to
the assets are transferred to Fortitude Re, as well as $3.2 billion of related funds withheld payables.
Sensitivity factor
100 bps parallel increase in all yield curves
Interest rate sensitive assets:
Fixed maturity securities
$
61,408 $
62,522
$
(2,248) $
(2,246)
Mortgage and other loans receivable(a)
3,057
3,670
(61)
(87)
Total interest rate sensitive assets(b)
$
64,465 $
66,192
$
(2,309) $
(2,333)
Interest rate sensitive liabilities:
Long-term debt(a)(c)
(8,525)
(10,108)
628
840
Total interest rate sensitive liabilities
$
(8,525) $
(10,108)
$
628 $
840
Sensitivity factor
20% decline in equity prices and alternative investments
Equity and alternative investments:
Real estate investments
$
259 $
211
$
(52) $
(42)
Private equity
3,586
3,723
(717)
(745)
Hedge funds
187
411
(37)
(82)
Common equity
704
665
(141)
(133)
Other investments
5,796
2,022
(1,159)
(404)
Total equity and alternative investments
$
10,532 $
7,032
$
(2,106) $
(1,406)
Sensitivity factor
10% depreciation of all FX rates against the U.S. dollar
Foreign currency-denominated net asset position:
British pound
$
1,233 $
1,350
$
(123) $
(135)
Japan Yen
627
1,105
(63)
(110)
Euro
1,165
1,101
(116)
(110)
All other foreign currencies
2,941
2,328
(294)
(233)
Total foreign currency-denominated net asset
position(d)
$
5,966 $
5,884
$
(596) $
(588)
Balance Sheet Exposure
Economic Effect
(dollars in millions)
December 31,
2024
December 31,
2023
December 31,
2024
December 31,
2023
(a) The economic effect is the difference between the estimated fair value with and without a 100 bps parallel increase in all yield curves. The estimated fair values for
Mortgage and other loans receivable and Long-term debt, excluding assets supporting Fortitude Re funds withheld assets, were $2.8 billion and $8.2 billion at
December 31, 2024, respectively. The estimated fair values for Mortgage and other loans receivable and Long-term debt, excluding assets supporting Fortitude Re
funds withheld assets, were $4.1 billion and $9.6 billion at December 31, 2023, respectively.
(b) At December 31, 2024, $568 million of Fixed maturity securities and $492 million of Mortgage and other loans receivable were excluded due to modeling limitations. At
December 31, 2023, this amount was $566 million for Fixed maturity securities and $459 million for Mortgage and other loans receivable.
(c) At December 31, 2024 and 2023 the analysis excluded $239 million and $267 million, respectively, of AIG Japan Holdings Kabushiki Kaisha loans.
(d) Most of the foreign currency exposure is reported on a one quarter lag. Foreign currency-denominated net asset position reflects our aggregated non-U.S. dollar assets
less our aggregated non-U.S. dollar liabilities on a GAAP basis.
Interest rate sensitivity is defined as the change in value with respect to a 100 basis point parallel shift up in the interest rate
environment, calculated as: scenario value minus base value, where base value is the value under the yield curves as of the period
end and scenario value is the value reflecting a 100 basis point parallel increase in all yield curves. The hypothetical change is
assumed to be instantaneous. This therefore also assumes that the interest rate risk profile of the company remains constant and
doesn't reflect the impact of any potential portfolio duration repositioning while interest rates rise.
As a global company, AIG conducts business in multiple currencies. In general, we aim to match liabilities with assets of the same
currency. For regulated insurance subsidiaries, we also try to mitigate statutory surplus or capital injection risk and capital surplus
volatility in accordance with the entity’s statutory accounting framework. This often requires us to allocate capital in the liability’s
currency mix or the functional currency of the entity. Derivatives may also be used.
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ITEM 7 | Enterprise Risk Management
For additional information on our three-tiered hierarchy of limits, see – Risk Appetite, Limits, Identification and Measurement – Risk
Limits.
LIQUIDITY RISK MANAGEMENT
Liquidity risk is defined as the risk that our financial condition will be adversely affected by the inability or perceived inability to meet
our short-term cash, collateral or other financial obligations as they come due.
AIG and its legal entities seek to maintain sufficient liquidity both during the normal course of business and under defined liquidity
stress scenarios to ensure that sufficient cash will be available to meet the obligations as they come due.
Liquidity risk drivers include market/monetization risk, cash flow mismatch risk, event funding risk, and financing risk.
Liquidity risk is monitored through comprehensive cash flow projections over varying time horizons that incorporate all relevant
liquidity sources and uses and include known and likely cash inflows and outflows. We use several approaches to measure liquidity
risk exposure including coverage flow forecasts and stress testing.
OPERATIONAL RISK MANAGEMENT
Operational risk is defined as the risk of loss, or other adverse consequences, resulting from inadequate or failed internal processes,
people, systems, or from external events. Operational risk includes legal, regulatory, technology, compliance, third-party and business
continuity risks, but excludes business and strategy risks.
Operational risk is inherent in our business entities and can have many impacts, including but not limited to, unexpected economic
losses or gains, reputational harm due to negative publicity, regulatory action from supervisory agencies and operational and business
disruptions, and/or damage to customer relationships.
ERM, working together with other control and assurance functions and first line Risk Control Owners through the risk and control
framework, provides an independent view of operational risks for each of the business areas.
Cybersecurity Risk
AIG, like other global companies, continues to witness the increased sophistication and activities of unauthorized parties attempting
cyber and other computer-related penetrations such as “denial of service” attacks, phishing, untargeted but sophisticated and
automated attacks, and other disruptive software in an effort to compromise systems, networks and obtain sensitive information.
ERM works closely with and supports the risk management practices of Information Technology, the Information Security Office and
the business units and functions that form the lines of defense against the cybersecurity risks that we face.
For additional information regarding the privacy data protection and cybersecurity regulations to which we are subject, see Part I,
Item 1. Business – Regulation – Privacy, Data Protection, Cybersecurity and Artificial Intelligence Requirements. For additional
discussion of cybersecurity risks, see Part I, Item 1A. Risk Factors – Business and Operations. For additional information regarding
our cybersecurity risk management as well as strategy and governance, please see Part 1, Item 1C. Cybersecurity.
BUSINESS AND STRATEGY RISKS
Business and strategy risk encompasses those risks that stem from strategy risk, risk of legal and regulatory actions, risk of rating
agency actions, reputational risk and intercompany dependencies. The major AIG strategy risks capture risk of losses due to the
inability to implement appropriate business plans and strategies, make decisions, allocate resources or adapt to changes in the
business environment. These risks include, but are not limited to pricing, distribution channels, acquisitions, and dispositions. The risk
of legal and regulatory actions is defined as the risk that legal action or a change in regulation in the regions in which AIG does
business will materially impact business operations, financial performance, and/or capital requirements. Risk drivers include, but are
not limited to, adverse actions in legal or regulatory environment, and adverse actions or added complexity of accounting/tax
standards. A downgrade by one or more of the rating agencies in the Insurer Financial Strength ratings of AIG’s insurance companies
could limit their ability to write or prevent them from writing new business and impair their retention of customers and in-force
business, and a downgrade in our credit ratings could adversely affect our business, results of operations, financial condition, and
liquidity. Reputational risk events are typically linked to risk incidents, whether internal (e.g., data privacy breaches, fraud, etc.) or
external (e.g., non-AIG insurance losses). The reputational impact may magnify the financial consequences of the original risk event
(e.g., reduced sales in addition to fines).
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ITEM 7 | Enterprise Risk Management
AIG generates multiple connections and dependencies among its affiliates and legal entities. Financial interconnections are utilized by
AIG to support the funding requirements of the business units, optimize group capital deployment within the organization, offer
comfort to policyholders, regulators, and rating agencies, provide credit support for higher financial strength ratings, manage
exposures, distribute risk appropriately, and meet client or regulatory requirements. To conduct its businesses, AIG relies on
operational capabilities of several AIG affiliates and corporate functions. The operational interconnections can be categorized as
employees, management information systems, real estate, shared services, and intellectual property.
AIG monitors and reports on the above-mentioned risks through ongoing risk reporting to various committees, monitoring of capital
positions, regular interaction with AIG businesses and functions, regulators, and rating agencies. AIG reputational risk protocols are
incorporated into the overall risk management framework. On a regular basis, ERM performs Second Line Review and Challenge on
many of these processes and approaches, including, but not limited to, budget and expense assumptions, pricing and reserving
models, assumptions, and results. The Internal Audit Group performs audits on key processes and provides continuous monitoring on
remediation of audit findings. Processes and controls are designed to respond proactively and in some cases, reactively, in an
effective and consistent way.
INSURANCE RISKS
Insurance risk is defined as the risk of actual claims experience and/or policyholder behavior being materially different than initially
expected at the inception of an insurance contract. Uncertainties related to insurance risk can lead to deviations in magnitude and/or
timing of prospective cash flows associated with our liabilities compared to what we expected.
We manage our business risk oversight activities through our insurance operations. A primary goal in managing our insurance
operations is to achieve an acceptable risk-adjusted return on equity. To achieve this goal, we must be disciplined in risk selection,
premium adequacy, and appropriate terms and conditions to cover the risk accepted.
We operate our insurance businesses on a global basis, and we are exposed to a wide variety of risks with different time horizons. We
manage these risks throughout the organization, both centrally and locally, through a number of processes and procedures, including
but not limited to, pricing and risk selection models, pricing approval processes, pre-launch approval of product design, development,
and distribution, underwriting approval processes and authorities, modeling and reporting of aggregations and limit concentrations at
multiple levels, model risk management framework and validation processes, risk transfer tools, review and challenge of reserves,
actuarial profitability and reserve reviews, management of the relationship between assets and liabilities, and experience monitoring
and assumption updates.
Risks primarily include loss reserves, underwriting, catastrophe exposure, single risk loss exposure, and reinsurance. The potential
inadequacy of the liabilities we establish for unpaid losses and loss adjustment expenses is a key risk faced by the General Insurance
companies, which we manage through internal controls and oversight of the loss reserve setting process, as well as reviews by
external experts. For further information, see Critical Accounting Estimates – Loss Reserves.
The potential inadequacy of premiums charged for future risk periods on risks underwritten in our portfolios can impact the General
Insurance companies’ ability to achieve an underwriting profit. We develop pricing based on our estimates of losses and expenses,
but factors such as market pressures and the inherent uncertainty and complexity in estimating losses may result in premiums that
are inadequate to generate underwriting profit.
Our business is exposed to various catastrophic events, including natural disasters, man-made catastrophes, or pandemic disease, in
which multiple losses can occur and affect multiple lines of business in any calendar year, adversely affecting our business and
operating results. Concentration of exposure in certain industries or geographies may cause us to suffer disproportionate losses.
Our business is exposed to loss events, such as fires or explosions, that have the potential to generate losses from a single insured
client. The net risk to us is managed to acceptable limits established by the Chief Underwriting Officer through a combination of
internal underwriting standards and external reinsurance.
Since we use reinsurance to limit our losses, we are exposed to risks associated with reinsurance including the recoverability of
expected payments from reinsurers due to either an inability or unwillingness to pay, contracts that do not respond properly to the
event or actual reinsurance coverage that is different than anticipated, which is monitored through our credit risk management
framework.
We closely manage insurance risk by monitoring and controlling the nature and geographic location of the risks in each underwritten
line of business, concentrations in industries, the terms and conditions of the underwriting and the premiums we charge for taking on
the risk. We analyze concentrations of risks using various modeling techniques, including both probability distributions (stochastic)
and/or single-point estimates (deterministic) approaches.
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ITEM 7 | Enterprise Risk Management
Risk Measurement, Monitoring and Limits
We use several approaches to measure our insurance risk exposure including sensitivity and scenario analyses, stochastic methods,
and experience studies. Additionally, there are risk-specific assessment tools in place to appropriately manage the variety of
insurance risks to which we are exposed.
For additional information on our three-tiered hierarchy of limits, see – Risk Appetite, Limits, Identification and Measurement – Risk
Limits.
Natural Catastrophe Risk
We manage catastrophe exposure with multiple approaches such as setting risk limits based on aggregate Probable Maximum Loss
(PML) modeling, monitoring overall exposures and risk accumulations, modifying our gross underwriting standards, and purchasing
catastrophe reinsurance through both the traditional reinsurance and capital markets in addition to other reinsurance protections.
We use third-party catastrophe risk models and other tools to evaluate and simulate frequency and severity of catastrophic events
and associated losses to our portfolios of exposures with adjustments applied to modeled losses to account for loss adjustment
expenses, model biases, data quality and non-modeled risks.
We recognize that climate change has implications for insurance industry exposure to natural catastrophe risk. With multiple levels of
risk management processes in place, we actively analyze the latest climate science and policies to anticipate potential changes to our
risk profile, pricing models and strategic planning and will continue to adapt to and evolve with the developing risk exposures
attributed to climate change. In addition, we provide insurance products and services to help our clients be proactive against the
threat of climate change.
The table below details our modeled estimates of PML, net of reinsurance, on an annual aggregate basis. The 1-in-100 and 1-in-250
PMLs are the annual aggregate probable maximum losses with probability of 1 percent and 0.4 percent in a year, respectively.
Estimates as of December 31, 2024 reflect our in-force portfolio for exposures as of July 1, 2024, and all inuring reinsurance covers
as of December 31, 2024, except for the catastrophe reinsurance programs, which are as of January 1, 2025 and reflected as of such
date.
The following table presents an overview of annual aggregate modeled losses for world-wide all perils and exposures
arising from our largest primarily modeled perils:
At December 31, 2024
Net of
Reinsurance
Net of Reinsurance,
After Tax(f)
Percent of Total
Shareholders' Equity
Percent of Total
Shareholders' Equity
Excluding AOCI
(in millions)
Exposures:
World-wide all peril (1-in-250)(a)
$
2,535
$
2,002
4.7 %
4.0 %
U.S. Hurricane (1-in-100)(b)
932
736
1.7
1.5
U.S. Earthquake (1-in-250)(c)
830
655
1.5
1.3
Japanese Typhoon (1-in-100)(d)
278
220
0.5
0.4
Japanese Earthquake (1-in-250)(e)
242
191
0.4
0.4
(a) The world-wide all peril loss estimate includes wildfire exposure.
(b) The U.S. hurricane loss estimate includes losses to Commercial and Personal Property from hurricane hazards of wind and storm surge.
(c) The U.S. earthquake loss estimates represent exposure to Commercial and Personal Property, U.S. Workers’ Compensation and A&H lines of business.
(d) Japan Typhoon loss estimate represents exposure to Commercial and Personal Property.
(e) Japan Earthquake loss estimate represents exposure to Commercial and Personal Property and A&H lines of business.
(f)
Taxed at the statutory tax rate of 21 percent for both the U.S. and Japanese modeled losses. The majority of Japan exposures are ceded to our U.S. Pool.
AIG, along with other property casualty insurance and reinsurance companies, uses industry-recognized catastrophe models and
applies proprietary modeling processes and assumptions to arrive at loss estimates. The use of different methodologies and
assumptions could materially change the projected losses, and our modeled losses may not be comparable to estimates made by
other companies.
Also, the modeled results are based on the assumption that all reinsurers fulfill their obligations to us under the terms of the
reinsurance arrangements. These estimates are inherently uncertain and may not accurately reflect our net exposure, inclusive of
credit risk, to these events.
Our 2025 property catastrophe reinsurance program is a worldwide program providing both aggregate and per occurrence protection,
with differing per occurrence and aggregate retentions for North America, Japan, and rest of world. In 2025, for North America
Commercial portfolio, we maintained the $500 million retention and increased the vertical limit purchased by $500 million. For the
North America Personal Lines portfolio, as a consequence of increasing the US personal lines portfolio’s contribution to the aggregate
cover, we increased the retention to $200 million. We also increased vertical limit purchased and achieved several coverage
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ITEM 7 | Enterprise Risk Management
enhancements. For the International portfolio, we retained our core attachment points for Japan of $200 million and $125 million for
rest of world.
We have also purchased property per risk covers that provide protection against large losses globally, which include those emanating
from non-critical catastrophe events (all events except for named windstorm and earthquake) globally as well as critical catastrophe
events (named windstorm and earthquake) outside North America.
Actual results in any period are likely to vary, perhaps materially, from the modeled scenarios. The occurrence of one or more severe
events could have a material adverse effect on our financial condition, results of operations and liquidity. For additional information,
see also Part 1, Item 1A. Risk Factors – Reserves and Exposures.
Terrorism Risk
We actively monitor terrorism risk and manage exposures to losses from terrorist attacks. Terrorism risks are modeled using a third-
party vendor model for various terrorism attack modes and scenarios. Adjustments are made to account for vendor model gaps and
the nature of the General Insurance companies’ exposures.
Our largest terrorism concentrations are in New York City, and estimated losses are largely driven by the Property and Workers’
Compensation lines of business. Our exposure to terrorism risk in the U.S. is mitigated by the Terrorism Risk Insurance Program
Reauthorization Act (TRIPRA) in addition to limited private reinsurance protections. TRIPRA covers certified terrorist attacks within the
U.S. or U.S. missions and against certain U.S. carriers or vessels and excludes certain lines of business as specified by applicable
law.
We offer terrorism coverage in many other countries through various insurance products and participate in country terrorism pools
when applicable. International terrorism exposure is estimated using scenario-based modeling and exposure concentration is
monitored routinely. Targeted reinsurance purchases are made for some lines of business to cover potential losses due to terrorist
attacks. We also rely on the government-sponsored and government-arranged terrorism reinsurance programs, including pools, in
force in applicable non-U.S. jurisdictions.
Reinsurance Activities
We purchase reinsurance for our insurance and reinsurance operations. Reinsurance facilitates insurance risk management
(retention, volatility, concentrations) and capital planning. We may purchase reinsurance on a pooled basis.
Reinsurance is used primarily to manage overall capital adequacy and mitigate the insurance loss exposure related to certain events,
such as natural and man-made catastrophes, death events, or single policy level events. Our subsidiaries operate worldwide primarily
by underwriting and accepting risks for their direct account on a gross basis and reinsuring a portion of the exposure on either an
individual risk or an aggregate basis to the extent those risks exceed the desired retention level. In addition, as a condition of certain
direct underwriting transactions, we may be required by clients, agents or regulation to cede all or a portion of risks to specified
reinsurance entities, such as captives, other insurers, local reinsurers and compulsory pools.
Reinsurance contracts do not relieve our subsidiaries from their direct obligations to insureds. However, an effective reinsurance
program substantially mitigates our exposure to potentially significant losses.
Reinsurance Recoverable
AIG’s reinsurance recoverable assets are comprised of paid losses recoverable, ceded loss reserves, ceded reserves for unearned
premiums, and Life and Annuity reinsurance recoverables (ceded policy and claim reserves and policyholder contract deposits).
At December 31, 2024, total reinsurance recoverable assets were $38.0 billion. These assets include general reinsurance paid losses
recoverable of $3.8 billion, ceded loss reserves of $29.1 billion including reserves for IBNR claims, and ceded reserves for unearned
premiums of $4.3 billion, as well as life reinsurance recoverable of $0.8 billion. The methods used to estimate IBNR and to establish
the resulting ultimate losses involve projecting the frequency and severity of losses over multiple years. These methods are
continually reviewed and updated by management. Any adjustments are reflected in income. We believe that the amount recorded for
ceded loss reserves at December 31, 2024 reflects a reasonable estimate of the ultimate losses recoverable. Actual losses may,
however, differ from the reserves currently ceded.
At December 31, 2024, we held $20.1 billion of collateral, in the form of funds withheld, securities in reinsurance trust accounts and/or
irrevocable letters of credit, in support of reinsurance recoverable assets from unaffiliated reinsurers.
At December 31, 2024, we had no significant reinsurance recoverable due from any individual reinsurer that was financially troubled.
Reduced profitability associated with lower interest rates, market volatility and catastrophe losses (including COVID-19), could
potentially result in reduced capacity or rating downgrades for some reinsurers. The Reinsurance Credit Department, in conjunction
with the credit executives within ERM, reviews these developments, monitors compliance with credit triggers that may require AIG's
reinsurer to post collateral, and seeks to use other appropriate means to mitigate any material risks arising from these developments.
For additional information on reinsurance recoverable, see Critical Accounting Estimates – Reinsurance Assets.
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ITEM 7 | Enterprise Risk Management
Glossary
Accident year The annual calendar accounting period in which loss events occurred, regardless of when the losses are actually
reported, booked or paid.
Accident year combined ratio, as adjusted (Accident year combined ratio, ex-CAT) The combined ratio excluding catastrophe
losses and related reinstatement premiums, prior year development, net of premium adjustments, and the impact of reserve
discounting.
Accident year loss ratio, as adjusted (Accident year loss ratio, ex-CAT) The loss ratio excluding catastrophe losses and related
reinstatement premiums, prior year development, net of premium adjustments, and the impact of reserve discounting.
Acquisition ratio Acquisition costs divided by net premiums earned. Acquisition costs are those costs incurred to acquire new and
renewal insurance contracts and also include the amortization of VOBA and DAC. Acquisition costs vary with sales and include, but
are not limited to, commissions, premium taxes, direct marketing costs and certain costs of personnel engaged in sales support
activities such as underwriting.
Attritional losses are losses recorded in the current accident year, which are not catastrophe losses.
Book Value per share, excluding Goodwill, Value of business acquired (VOBA), Value of distribution channel acquired
(VODA) and Other intangible assets (Tangible book value per share) is used to provide a useful measure of the realizable
shareholder value on a per share basis. Tangible book value per share is derived by dividing Total AIG common shareholders’ equity,
excluding intangible assets (AIG tangible common shareholders’ equity) by total common shares outstanding.
Book value per share, excluding Investments AOCI, deferred tax assets (DTA) and AIG’s ownership interest in Corebridge
(Core operating book value per share) is used to show the amount of our net worth on a per share basis after eliminating
Investments AOCI, DTA and AIG’s ownership interest in Corebridge. We believe this measure is useful to investors because it
eliminates the fair value of investments that can fluctuate significantly from period to period due to changes in market conditions. We
also exclude the portion of DTA representing U.S. tax attributes related to net operating loss carryforwards (NOLs), corporate
alternative minimum tax credits (CAMTCs) and foreign tax credits (FTCs) that have not yet been utilized. Amounts for interim periods
are estimates based on projections of full-year attribute utilization. As NOLs, CAMTCs and FTCs are utilized, the corresponding
portion of the DTA utilized is included. We exclude AIG’s ownership interest in Corebridge since it is not a core long-term investment
for AIG. Core operating book value per share is derived by dividing total AIG common shareholders’ equity, excluding Investments
AOCI, DTA and AIG’s ownership interest in Corebridge (AIG core operating shareholders’ equity) by total common shares
outstanding.
Book Value per share, excluding Investments AOCI, Goodwill, VOBA, VODA and Other intangible assets (Adjusted tangible
book value per share) is used to provide a useful measure of the realizable shareholder value on a per share basis after eliminating
the fair value of investments that can fluctuate significantly from period to period due to changes in market conditions and Fortitude
Re funds withheld assets since these fair value movements are economically transferred to Fortitude Re. Adjusted tangible book
value per share is derived by dividing AIG adjusted common equity, excluding intangible assets, (AIG adjusted tangible common
shareholders’ equity) by total common shares outstanding.
Book value per share, excluding investments related cumulative unrealized gains and losses recorded in Accumulated other
comprehensive income (loss) (AOCI) adjusted for the cumulative unrealized gains and losses related to Fortitude Re funds
withheld assets (collectively, Investments AOCI) (Adjusted book value per share) is used to show the amount of our net worth
on a per share basis after eliminating the fair value of investments that can fluctuate significantly from period to period due to changes
in market conditions. In addition, we adjust for the cumulative unrealized gains and losses related to Fortitude Re funds withheld
assets held by AIG in support of Fortitude Re’s reinsurance obligations to AIG (Fortitude Re funds withheld assets) since these fair
value movements are economically transferred to Fortitude Re. Adjusted book value per share is derived by dividing total AIG
common shareholders’ equity, excluding Investments AOCI (AIG adjusted common shareholders' equity) by total common shares
outstanding.
Casualty insurance Insurance that is primarily associated with the losses caused by injuries to third persons, i.e., not the insured,
and the legal liability imposed on the insured as a result.
Combined ratio Sum of the loss ratio and the acquisition and general operating expense ratios.
Credit Support Annex A legal document generally associated with an ISDA Master Agreement that provides for collateral postings
which could vary depending on ratings and threshold levels.
DAC Deferred Policy Acquisition Costs Deferred costs that are incremental and directly related to the successful acquisition of new
business or renewal of existing business.
Glossary
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Deferred gain on retroactive reinsurance Retroactive reinsurance is a reinsurance contract in which an assuming entity agrees to
reimburse a ceding entity for liabilities incurred as a result of past insurable events. If the amount of premium paid by the ceding
reinsurer is less than the related ceded loss reserves, the resulting gain is deferred and amortized over the settlement period of the
reserves. Any related development on the ceded loss reserves recoverable under the contract would increase the deferred gain if
unfavorable, or decrease the deferred gain if favorable.
Expense ratio Sum of acquisition expenses and general operating expenses, divided by net premiums earned.
General operating expense ratio General operating expenses divided by net premiums earned. General operating expenses are
those costs that are generally attributed to the support infrastructure of the organization and include but are not limited to personnel
costs, projects and bad debt expenses. General operating expenses exclude losses and loss adjustment expenses incurred,
acquisition expenses, and investment expenses.
IBNR Incurred But Not Reported Estimates of claims that have been incurred but not reported to us.
ISDA Master Agreement An agreement between two counterparties, which may have multiple derivative transactions with each
other governed by such agreement, that generally provides for the net settlement of all or a specified group of these derivative
transactions, as well as pledged collateral, through a single payment, in a single currency, in the event of a default on, or affecting any,
one derivative transaction or a termination event affecting all, or a specified group of, derivative transactions.
Loan-to-value ratio Principal amount of loan amount divided by appraised value of collateral securing the loan.
Loss Adjustment Expenses The expenses directly attributed to settling and paying claims of insureds and include, but are not
limited to, legal fees, adjuster’s fees and the portion of general expenses allocated to claim settlement costs.
Loss ratio Losses and loss adjustment expenses incurred divided by net premiums earned.
Loss reserve development The increase or decrease in incurred losses and loss adjustment expenses related to prior years as a
result of the re-estimation of loss reserves at successive valuation dates for a given group of claims.
Loss reserves Liability for unpaid losses and loss adjustment expenses. The estimated ultimate cost of settling claims relating to
insured events that have occurred on or before the balance sheet date, whether or not reported to the insurer at that date.
Master netting agreement An agreement between two counterparties who have multiple derivative contracts with each other that
provides for the net settlement of all contracts covered by such agreement, as well as pledged collateral, through a single payment, in
a single currency, in the event of default on or upon termination of any one such contract.
Natural catastrophe losses are generally weather or seismic events having a net impact on AIG in excess of $10 million each and
man-made catastrophe losses, such as terrorism and civil disorders that exceed the $10 million threshold.
Net premiums written represent the sales of an insurer, adjusted for reinsurance premiums assumed and ceded, during a given
period. Net premiums earned are the revenue of an insurer for covering risk during a given period. Net premiums written are a
measure of performance for a sales period, while net premiums earned are a measure of performance for a coverage period.
Noncontrolling interests The portion of equity ownership in a consolidated subsidiary not attributable to the controlling parent
company.
Pool A reinsurance arrangement whereby all of the underwriting results of the pool members are combined and then shared by each
member in accordance with its pool participation percentage.
Prior year development See Loss reserve development.
RBC Risk-Based Capital A formula designed to measure the adequacy of an insurer’s statutory surplus compared to the risks
inherent in its business.
Reinstatement premiums Premiums on an insurance policy over and above the initial premium imposed at the beginning of the
policy payable to reinsurers or receivable from insurers to restore coverage limits that have been reduced or exhausted as a result of
reinsured losses under certain excess of loss reinsurance contracts.
Reinsurance The practice whereby one insurer, the reinsurer, in consideration of a premium paid to that insurer, agrees to indemnify
another insurer, the ceding company, for part or all of the liability of the ceding company under one or more policies or contracts of
insurance which it has issued.
Reinsurance recoverables are comprised of paid losses recoverable, ceded loss reserves, ceded reserves for unearned premiums.
Retroactive reinsurance See Deferred gain on retroactive reinsurance.
Return on Equity – Adjusted After-tax Income, Excluding Goodwill, VOBA, VODA and Other Intangible assets (Return on
tangible equity) is used to show the return on AIG tangible common shareholder’s equity, which we believe is a useful measure of
realizable shareholder value. We exclude Goodwill, VOBA, VODA and Other intangible assets from AIG common shareholders’ equity
to derive AIG tangible common shareholders’ equity. Return on AIG tangible common equity is derived by dividing actual or, for interim
periods, annualized adjusted after-tax income attributable to AIG common shareholders by average AIG tangible common
shareholders' equity.
Glossary
AIG | 2024 Form 10-K
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Return on equity – Adjusted after-tax income excluding Investments AOCI (Adjusted return on equity) is used to show the rate
of return on common shareholders’ equity excluding Investments AOCI. We believe this measure is useful to investors because it
eliminates the fair value of investments which can fluctuate significantly from period to period due to changes in market conditions.
Adjusted return on equity is derived by dividing actual or, for interim periods, annualized adjusted after-tax income attributable to AIG
common shareholders by average AIG adjusted common shareholders’ equity.
Return on equity – Adjusted after-tax income excluding Investments AOCI, DTA and AIG’s ownership interest in Corebridge
(Core operating return on equity) is used to show the rate of return on common shareholders’ equity excluding Investments AOCI,
DTA and AIG’s ownership interest in Corebridge. We believe this measure is useful to investors because it eliminates the fair value of
investments that can fluctuate significantly from period to period due to changes in market conditions. We also exclude the portion of
DTA representing U.S. tax attributes related to NOLs, CAMTCs and FTCs that have not yet been utilized. Amounts for interim periods
are estimates based on projections of full-year attribute utilization. As NOLs, CAMTCs and FTCs are utilized, the corresponding
portion of the DTA utilized is included. We exclude AIG’s ownership interest in Corebridge since it is not a core long-term investment
for AIG. We believe this metric will provide investors with greater insight as to the underlying profitability of our property and casualty
business. Core operating return on equity is derived by dividing actual or, for interim periods, annualized adjusted after-tax income
attributable to AIG common shareholders by average AIG core operating shareholders’ equity.
Subrogation The amount of recovery for claims we have paid our policyholders, generally from a negligent third party or such party’s
insurer.
Unearned premium reserve Liabilities established by insurers and reinsurers to reflect unearned premiums, which are usually
refundable to policyholders if an insurance or reinsurance contract is canceled prior to expiration of the contract term.
VOBA Value of Business Acquired Present value of future pre-tax profits from in-force policies of acquired businesses discounted at
yields applicable at the time of purchase. VOBA is reported in DAC in the Consolidated Balance Sheets.
Acronyms
A&H
Accident and Health Insurance
ISDA
International Swaps and Derivatives Association, Inc.
ABS
Asset-Backed Securities
Moody's
Moody's Investors' Service Inc.
APTI
Adjusted pre-tax income
NAIC
National Association of Insurance Commissioners
CDS
Credit Default Swap
NM
Not Meaningful
CLO
Collateralized Loan Obligations
ORR
Obligor Risk Ratings
CMBS
Commercial Mortgage-Backed Securities
RMBS
Residential Mortgage-Backed Securities
ERM
Enterprise Risk Management
S&P
Standard & Poor's Financial Services LLC
FASB
Financial Accounting Standards Board
SEC
Securities and Exchange Commission
GAAP
Accounting Principles Generally Accepted in the
United States of America
VIE
Variable Interest Entity
ITEM 7A | Quantitative and Qualitative Disclosures About Market
Risk
The information required by this item is set forth in the Enterprise Risk Management section of Item 7. Management’s Discussion and
Analysis of Financial Condition and Results of Operations and is incorporated herein by reference.
Glossary
AIG | 2024 Form 10-K
90
Part II
ITEM 8 | Financial Statements and Supplementary Data
AMERICAN INTERNATIONAL GROUP, INC.
REFERENCE TO FINANCIAL STATEMENTS AND SCHEDULES
Page
FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm (PCAOB ID 238)
92
Consolidated Balance Sheets at December 31, 2024 and 2023
94
Consolidated Statements of Income (Loss) for the years ended December 31, 2024, 2023 and 2022
95
Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2024, 2023 and 2022
96
Consolidated Statements of Equity for the years ended December 31, 2024, 2023 and 2022
97
Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022
98
Notes to Consolidated Financial Statements
Note 1.
Basis of Presentation
100
Note 2.
Summary of Significant Accounting Policies
102
Note 3.
Segment Information
104
Note 4.
Discontinued Operations Presentation
107
Note 5.
Fair Value Measurements
110
Note 6.
Investments
122
Note 7.
Lending Activities
131
Note 8.
Reinsurance
134
Note 9.
Deferred Policy Acquisition Costs
138
Note 10.
Variable Interest Entities
139
Note 11.
Derivatives and Hedge Accounting
140
Note 12.
Goodwill and Other Intangible Assets
143
Note 13.
Insurance Liabilities
144
Note 14.
Debt
167
Note 15.
Contingencies, Commitments and Guarantees
169
Note 16.
Equity
171
Note 17.
Earnings Per Common Share (EPS)
174
Note 18.
Statutory Financial Data and Restrictions
175
Note 19.
Share-Based Compensation Plans
176
Note 20.
Employee Benefits
179
Note 21.
Income Taxes
186
Note 22.
Quarterly Financial Information (Unaudited)
190
Note 23.
Subsequent Events
190
Schedules
SCHEDULE I
Summary of Investments – Other than Investments in Related Parties at December 31, 2024
199
SCHEDULE II
Condensed Financial Information of Registrant at December 31, 2024 and 2023 and for the years ended
December 31, 2024, 2023 and 2022
200
SCHEDULE III
Supplementary Insurance Information at December 31, 2024 and 2023 and for the years ended
December 31, 2024, 2023 and 2022
204
SCHEDULE IV
Reinsurance for the years ended December 31, 2024, 2023 and 2022
205
SCHEDULE V
Valuation and Qualifying Accounts for the years ended December 31, 2024, 2023 and 2022
205
AIG | 2024 Form 10-K
91
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of American International Group, Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of American International Group, Inc. and its subsidiaries (the
"Company") as of December 31, 2024 and 2023, and the related consolidated statements of income (loss), of comprehensive income
(loss), of equity and of cash flows for each of the three years in the period ended December 31, 2024, including the related notes and
financial statement schedules listed in the accompanying index (collectively referred to as the “consolidated financial statements”). We
also have audited the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in
Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of
the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the
period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America. Also in
our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31,
2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over
financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s
Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the
Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We
are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules
and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether
due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the
consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as
well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial
reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness
exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits
also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide
a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements
in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only
in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material
effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes
in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
ITEM 8 | Report of Independent Registered Public Accounting Firm
AIG | 2024 Form 10-K
92
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements
that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are
material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a
whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on
the accounts or disclosures to which it relates.
Valuation of Insurance Liabilities - Unpaid Losses and Loss Adjustment Expenses (Loss Reserves), Net of Reinsurance
As described in Note 13 to the consolidated financial statements, loss reserves represent the accumulation of estimates of unpaid
claims, including estimates for claims incurred but not reported and loss adjustment expenses, less applicable discount. As of
December 31, 2024, the Company’s net liability for unpaid losses and loss adjustment expenses was $40.1 billion. As disclosed by
management, the estimate of the loss reserves relies on several key judgments, including (i) actuarial methods, (ii) relative weights
given to these methods by product line, (iii) underlying actuarial assumptions, and (iv) groupings of similar product lines. Actuarial
assumptions include (i) expected loss ratios and (ii) loss development factors. During management’s actuarial reviews, various factors
are considered, including economic conditions; the legal, regulatory, judicial and social environment; medical cost trends; policy
pricing, terms and conditions; changes in the claims handling process; and the impact of reinsurance. As described in Note 13 to the
consolidated financial statements, management uses a combination of actuarial methods to project ultimate losses for both long-tail
and short-tail exposures.
The principal considerations for our determination that performing procedures relating to the valuation of insurance liabilities - loss
reserves, net of reinsurance is a critical audit matter are (i) the significant judgment by management when developing their estimate,
which in turn led to a high degree of auditor subjectivity and judgment in performing the audit procedures related to the estimate, (ii)
the significant audit effort and judgment in evaluating the audit evidence related to the actuarial methods, weights given to these
methods by product line, groupings of similar product lines, and the aforementioned actuarial assumptions, and (iii) the audit effort
involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on
the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the valuation of the
net liability for unpaid losses and loss adjustment expense, including controls over the selection of actuarial methods and
development of significant assumptions, as well as controls designed to identify and address management bias and contrary
evidence. These procedures also included, among others, the involvement of professionals with specialized skill and knowledge to
assist in performing one or a combination of procedures for a sample of product lines, including (i) independently estimating reserves
using actual historical data and loss development patterns, as well as industry data and other benchmarks, and comparing
management’s actuarially determined reserves to these independent estimates and (ii) evaluating management’s actuarial reserving
methods and aforementioned factors, including actuarial assumptions and judgments impacting loss reserves and the consistency of
management’s approach period-over-period. Performing these procedures involved testing the completeness and accuracy of data
used by management on a sample basis.
/s/ PricewaterhouseCoopers LLP
New York, New York
February 13, 2025
We have served as the Company’s auditor since 1980.
AIG | 2024 Form 10-K
93
ITEM 8 | Report of Independent Registered Public Accounting Firm
American International Group, Inc.
Consolidated Balance Sheets
(in millions, except for share data)
December 31,
2024
December 31,
2023
Assets:
Investments:
Fixed maturity securities:
Bonds available for sale, at fair value, net of allowance for credit losses of $38 in 2024 and $34 in 2023 (amortized cost: 2024 -
$66,195; 2023 - $68,119)*
$
64,006
$
65,242
Other bond securities, at fair value (See Note 6)
745
663
Equity securities, at fair value (See Note 6)
704
665
Mortgage and other loans receivable, net of allowance for credit losses of $37,800 in 2024 and $37,776 in 2023*
3,868
4,441
Other invested assets (portion measured at fair value: 2024 - $7,384; 2023 - $4,175)
9,828
6,368
Short-term investments, including restricted cash of $55 in 2024 and $1 in 2023 (portion measured at fair value: 2024 - $9,789;
2023 - $9,363)*
14,462
12,865
Total investments
93,613
90,244
Cash
1,302
1,540
Accrued investment income*
599
580
Premiums and other receivables, net of allowance for credit losses and disputes of $127 in 2024 and $138 in 2023
10,463
9,967
Reinsurance assets - Fortitude Re, net of allowance for credit losses and disputes of $0 in 2024 and $0 in 2023
3,427
3,839
Reinsurance assets - other, net of allowance for credit losses and disputes of $220 in 2024 and $206 in 2023
34,618
35,293
Deferred income tax assets
4,956
6,186
Deferred policy acquisition costs
2,065
2,117
Goodwill
3,373
3,422
Deposit accounting assets, net of allowance for credit losses of $49 in 2024 and $49 in 2023
2,171
1,915
Other assets, including restricted cash of $15 in 2024 and $32 in 2023 (portion measured at fair value: 2024 - $179; 2023 - $374)*
4,735
5,425
Assets held for sale
—
30
Assets of discontinued operations
—
378,748
Total assets
$
161,322
$
539,306
Liabilities:
Liability for unpaid losses and loss adjustment expenses, including allowance for credit losses of $14 in 2024 and $14 in 2023
$
69,168
$
70,393
Unearned premiums
17,232
17,375
Future policy benefits
1,317
1,467
Other policyholder funds
418
495
Fortitude Re funds withheld payable (portion measured at fair value: 2024 - $(128); 2023 - $(148))
3,207
3,527
Premiums and other related payables
6,052
6,219
Deposit accounting liabilities
3,005
2,612
Commissions and premium taxes payable
1,522
1,351
Current and deferred income tax liabilities
426
347
Other liabilities (portion measured at fair value: 2024 - $251; 2023 - $482)
7,503
7,496
Long-term debt
8,764
10,375
Debt of consolidated investment entities*
158
231
Liabilities held for sale
—
28
Liabilities of discontinued operations
—
366,089
Total liabilities
118,772
488,005
Contingencies, commitments and guarantees (See Note 15)
AIG shareholders’ equity:
Series A non-cumulative preferred stock and additional paid in capital, $5.00 par value; 100,000,000 shares authorized; shares
issued: 2024 - 0 and 2023 - 20,000; liquidation preference $500
—
485
Common stock, $2.50 par value; 5,000,000,000 shares authorized; shares issued: 2024 - 1,906,671,492 and 2023 - 1,906,671,492
4,766
4,766
Treasury stock, at cost; 2024 - 1,300,512,040 shares; 2023 - 1,217,831,721 shares of common stock
(65,573)
(59,189)
Additional paid-in capital
75,348
75,810
Retained earnings
35,079
37,516
Accumulated other comprehensive loss
(7,099)
(14,037)
Total AIG shareholders’ equity
42,521
45,351
Non-redeemable noncontrolling interests
29
5,950
Total equity
42,550
51,301
Total liabilities and equity
$
161,322
$
539,306
*
See Note 10 for details of balances associated with variable interest entities.
See accompanying Notes to Consolidated Financial Statements.
94
AIG | 2024 Form 10-K
American International Group, Inc.
Consolidated Statements of Income (Loss)
Years Ended December 31,
(dollars in millions, except per common share data)
2024
2023
2022
Revenues:
Premiums
$
23,537 $
25,564 $
26,765
Net investment income:
Net investment income - excluding Fortitude Re funds withheld assets
4,111
3,266
2,317
Net investment income - Fortitude Re funds withheld assets
144
180
53
Total net investment income
4,255
3,446
2,370
Net realized gains (losses):
Net realized losses - excluding Fortitude Re funds withheld assets and embedded derivative
(434)
(734)
(207)
Net realized losses on Fortitude Re funds withheld assets
(39)
(71)
(99)
Net realized gains (losses) on Fortitude Re funds withheld embedded derivative
(75)
(273)
1,133
Total net realized gains (losses)
(548)
(1,078)
827
Other income
7
6
34
Total revenues
27,251
27,938
29,996
Benefits, losses and expenses:
Losses and loss adjustment expenses incurred
14,567
15,393
15,461
Amortization of deferred policy acquisition costs
3,425
3,771
3,545
General operating and other expenses
5,529
5,399
6,159
Interest expense
462
516
603
(Gain) loss on extinguishment of debt
14
(37)
303
Net (gain) loss on divestitures and other
(616)
29
153
Total benefits, losses and expenses
23,381
25,071
26,224
Income from continuing operations before income tax expense
3,870
2,867
3,772
Income tax expense:
Current
657
176
(452)
Deferred
513
(50)
1,334
Income tax expense
1,170
126
882
Income from continuing operations
2,700
2,741
2,890
Income (loss) from discontinued operations, net of income taxes
(3,626)
1,137
8,383
Net income (loss)
(926)
3,878
11,273
Less: Net income attributable to noncontrolling interests
478
235
1,046
Net income (loss) attributable to AIG
(1,404)
3,643
10,227
Less: Dividends on preferred stock and preferred stock redemption premiums
22
29
29
Net income (loss) attributable to AIG common shareholders
$
(1,426) $
3,614 $
10,198
Income per common share attributable to AIG common shareholders:
Basic:
Income (loss) from continuing operations
$
4.11 $
3.77 $
3.67
Income (loss) from discontinued operations
$
(6.30) $
1.25 $
9.43
Net income (loss) attributable to AIG common shareholders
$
(2.19) $
5.02 $
13.10
Diluted:
Income (loss) from continuing operations
$
4.07 $
3.74 $
3.63
Income (loss) from discontinued operations
$
(6.24) $
1.24 $
9.31
Net income (loss) attributable to AIG common shareholders
$
(2.17) $
4.98 $
12.94
Weighted average shares outstanding:
Basic
651,448,307
719,506,291
778,621,118
Diluted
657,283,160
725,233,068
787,941,750
See accompanying Notes to Consolidated Financial Statements.
AIG | 2024 Form 10-K
95
American International Group, Inc.
Consolidated Statements of Comprehensive Income (Loss)
Years Ended December 31,
(in millions)
2024
2023
2022
Net income (loss)
$
(926) $
3,878 $ 11,273
Other comprehensive income (loss), net of tax
Change in unrealized appreciation (depreciation) of fixed maturity securities on which allowance
for credit losses was taken
60
—
(30)
Change in unrealized appreciation (depreciation) of all other investments
279
2,369
(6,499)
Change in the discount rates used to measure traditional and limited payment long-duration
insurance contracts
(44)
(60)
202
Change in foreign currency translation adjustments
(507)
118
(714)
Change in retirement plan liabilities adjustment
48
112
(21)
Change in other comprehensive income (loss) related to discontinued operations
(945)
3,401
(25,235)
Change in fair value of liabilities under fair value option attributable to changes in our own credit
risk
—
—
(6)
Corebridge Deconsolidation
7,214
—
—
Other comprehensive income (loss)
6,105
5,940
(32,303)
Comprehensive income (loss)
5,179
9,818
(21,030)
Less: Comprehensive income (loss) attributable to noncontrolling interests
182
1,534
(1,454)
Comprehensive income (loss) attributable to AIG
$
4,997 $
8,284 $ (19,576)
See accompanying Notes to Consolidated Financial Statements.
96
AIG | 2024 Form 10-K
American International Group, Inc.
Consolidated Statements of Equity
(in millions, except per share data)
Preferred
Stock and
Additional
Paid-in
Capital
Common
Stock
Treasury
Stock
Additional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total
AIG
Share-
holders'
Equity
Non-
redeemable
Non-
controlling
Interests
Total
Equity
Balance, January 1, 2022
$
485 $
4,766 $ (51,618) $
81,669 $ 25,695 $
5,071 $ 66,068 $
2,966 $ 69,034
Common stock issued under stock plans
—
—
294
(368)
—
—
(74)
—
(74)
Purchase of common stock
—
—
(5,149)
—
—
—
(5,149)
—
(5,149)
Net income attributable to AIG or noncontrolling
interests
—
—
—
—
10,227
—
10,227
1,046
11,273
Dividends on preferred stock ($1,462.50 per share)
—
—
—
—
(29)
—
(29)
—
(29)
Dividends on common stock ($1.28 per share)
—
—
—
—
(982)
—
(982)
—
(982)
Other comprehensive loss
—
—
—
—
—
(29,803)
(29,803)
(2,500)
(32,303)
Net increase (decrease) due to divestitures and
acquisitions
—
—
—
(1,619)
—
2,116
497
1,117
1,614
Contributions from noncontrolling interests
—
—
—
—
—
—
—
133
133
Distributions to noncontrolling interests
—
—
—
—
—
—
—
(284)
(284)
Other
—
—
—
233
(18)
—
215
6
221
Balance, December 31, 2022
$
485 $
4,766 $ (56,473) $
79,915 $ 34,893 $
(22,616) $ 40,970 $
2,484 $ 43,454
Common stock issued under stock plans
—
—
298
(423)
—
—
(125)
—
(125)
Purchase of common stock
—
—
(3,014)
—
—
—
(3,014)
—
(3,014)
Net income attributable to AIG or noncontrolling
interests
—
—
—
—
3,643
—
3,643
235
3,878
Dividends on preferred stock ($1,462.5 per share)
—
—
—
—
(29)
—
(29)
—
(29)
Dividends on common stock ($1.40 per share)
—
—
—
—
(997)
—
(997)
—
(997)
Other comprehensive income
—
—
—
—
—
4,641
4,641
1,299
5,940
Net increase (decrease) due to divestitures and
acquisitions
—
—
—
(3,793)
—
3,938
145
2,524
2,669
Contributions from noncontrolling interests
—
—
—
—
—
—
—
49
49
Distributions to noncontrolling interests
—
—
—
—
—
—
—
(710)
(710)
Other
—
—
—
111
5
—
116
69
185
Balance, December 31, 2023
$
485 $
4,766 $ (59,189) $
75,810 $ 37,516 $
(14,037) $ 45,351 $
5,950 $ 51,301
Common stock issued under stock plans
—
—
329
(324)
—
—
5
—
5
Redemption of preferred stock
(485)
—
—
—
—
—
(485)
—
(485)
Purchase of common stock
—
—
(6,713)
—
—
—
(6,713)
—
(6,713)
Net income (loss) attributable to AIG or noncontrolling
interests
—
—
—
—
(1,404)
—
(1,404)
478
(926)
Dividends on preferred stock ($365.625 per share)
and preferred stock redemption premiums
—
—
—
—
(22)
—
(22)
—
(22)
Dividends on common stock ($1.56 per share)
—
—
—
—
(1,002)
—
(1,002)
—
(1,002)
Other comprehensive income (loss)
—
—
—
—
—
6,401
6,401
(296)
6,105
Net increase (decrease) due to divestitures and
acquisitions
—
—
—
(418)
—
537
119
(6,015)
(5,896)
Contributions from noncontrolling interests
—
—
—
—
—
—
—
28
28
Distributions to noncontrolling interests
—
—
—
—
—
—
—
(72)
(72)
Other
—
—
—
280
(9)
—
271
(44)
227
Balance, December 31, 2024
$
— $
4,766 $ (65,573) $
75,348 $ 35,079 $
(7,099) $ 42,521 $
29 $ 42,550
See accompanying Notes to Consolidated Financial Statements.
AIG | 2024 Form 10-K
97
American International Group, Inc.
Consolidated Statements of Cash Flows
Years Ended December 31,
(in millions)
2024
2023
2022
Cash flows from operating activities:
Net income (loss)
$
(926) $
3,878
$
11,273
(Income) loss from discontinued operations
3,626
(1,137)
(8,383)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Noncash revenues, expenses, gains and losses included in income (loss):
Net losses on sales of securities available for sale and other assets
637
662
637
Net (gain) loss on divestitures and other
(616)
29
153
(Gain) loss on extinguishment of debt
14
(37)
303
Unrealized (gains) losses in earnings - net
(571)
1,075
2,123
Equity in income from equity method investments, net of dividends or distributions
(54)
(15)
(67)
Depreciation and other amortization
3,597
3,841
3,861
Impairments of assets
27
21
2
Changes in operating assets and liabilities:
Insurance reserves
341
823
(4,486)
Premiums and other receivables and payables - net
(571)
544
(1,681)
Reinsurance assets, net
727
(204)
2,794
Capitalization of deferred policy acquisition costs
(3,519)
(4,157)
(3,732)
Current and deferred income taxes - net
468
(338)
199
Other, net
197
1,968
1,626
Total adjustments
677
4,212
1,732
Net cash provided by operating activities - continuing operations
3,377
6,953
4,622
Net cash used in operating activities - discontinued operations
(104)
(710)
(488)
Net cash provided by operating activities
3,273
6,243
4,134
Cash flows from investing activities:
Proceeds from (payments for)
Sales or distributions of:
Available for sale securities
14,063
15,242
11,106
Other securities
263
360
2,347
Other invested assets
6,588
960
1,004
Divestitures, net
587
2,568
—
Maturities of fixed maturity securities available for sale
9,223
9,083
8,945
Principal payments received on and sales of mortgage and other loans receivable
1,007
1,265
1,886
Purchases of:
Available for sale securities
(22,990)
(22,020)
(19,396)
Other securities
(267)
(242)
(804)
Other invested assets
(557)
(1,017)
(684)
Mortgage and other loans receivable
(470)
(1,021)
(612)
Net change in short-term investments
(1,538)
(5,911)
218
Other, net
(66)
(1,754)
(1,097)
Net cash provided by (used in) investing activities - continuing operations
5,843
(2,487)
2,913
Net cash used in investing activities - discontinued operations
(4,171)
(4,534)
(6,539)
Net cash provided by (used in) investing activities
1,672
(7,021)
(3,626)
Cash flows from financing activities:
Proceeds from (payments for)
Issuance of long-term debt
661
742
26
Issuance of debt of consolidated investment entities
—
—
71
Repayments of long-term debt
(2,047)
(2,304)
(9,455)
Repayments of debt of consolidated investment entities
(1)
(45)
(305)
Purchase of common stock
(6,652)
(2,961)
(5,200)
Redemption of preferred stock
(485)
—
—
Dividends on preferred stock and preferred stock redemption premiums
(22)
(29)
(29)
Dividends on common stock
(1,002)
(997)
(982)
Other, net
605
2,846
1,369
Net cash used in financing activities - continuing operations
(8,943)
(2,748)
(14,505)
Net cash provided by financing activities - discontinued operations
3,880
3,530
13,903
Net cash provided by (used in) financing activities
(5,063)
782
(602)
Effect of exchange rate changes on cash and restricted cash
(83)
(13)
(117)
Net decrease in cash and restricted cash
(201)
(9)
(211)
Cash and restricted cash at beginning of year
1,573
1,571
1,877
Cash and restricted cash of held for sale assets
—
11
(95)
Cash and restricted cash at end of year
$
1,372
$
1,573
$
1,571
98
AIG | 2024 Form 10-K
American International Group, Inc.
Consolidated Statements of Cash Flows (continued)
Supplementary Disclosure of Consolidated Cash Flow Information
Years Ended December 31,
(in millions)
2024
2023
2022
Cash
$
1,302
$
1,540
$
1,482
Restricted cash included in Short-term investments*
55
1
70
Restricted cash included in Other assets*
15
32
19
Total cash and restricted cash shown in the Consolidated Statements of Cash Flows
$
1,372
$
1,573
$
1,571
Cash paid during the period for:
Interest
$
858
$
1,059
$
1,127
Taxes
$
708
$
984
$
746
Non-cash investing activities:
Fixed maturity securities available for sale received in connection with pension risk transfer
transactions attributed to discontinued operations
$
1,316
$
4,317
$
1,121
Fixed maturity securities and other invested assets received in connection with reinsurance
transactions
$
256
$
110
$
110
Fixed maturity securities and other invested assets transferred in connection with reinsurance
transactions
$
(148)
$
(838)
$
(224)
Non-cash consideration received from sale of Validus Re
$
—
$
290
$
—
Non-cash financing activities:
Interest credited to policyholder contract deposits included in financing activities
$
2,416
$
4,501
$
3,676
Fee income debited to policyholder contract deposits included in financing activities
$
(1,426)
$
(2,122)
$
(1,694)
*
Includes funds held for tax sharing payments to AIG Parent, security deposits, and replacement reserve deposits related to real estate.
See accompanying Notes to Consolidated Financial Statements.
AIG | 2024 Form 10-K
99
1. Basis of Presentation
American International Group, Inc. is a leading global insurance organization. AIG provides insurance solutions that help businesses
and individuals in over 200 countries and jurisdictions protect their assets and manage risks through AIG operations, licenses and
authorizations as well as network partners. Unless the context indicates otherwise, the terms “AIG,” “we,” “us,” “our” or "the Company"
mean American International Group, Inc. and its consolidated subsidiaries, and the term “AIG Parent” means American International
Group, Inc. and not any of its consolidated subsidiaries.
The consolidated financial statements include the accounts of AIG Parent, our controlled subsidiaries (generally through a greater
than 50 percent ownership of voting rights and voting interests), and variable interest entities (VIEs) of which we are the primary
beneficiary. Equity investments in entities that we do not consolidate, including corporate entities in which we have significant
influence and partnership and partnership-like entities in which we have more than minor influence over the operating and financial
policies, are accounted for under the equity method unless we have elected the fair value option.
Prior to the fourth quarter ending December 31, 2022, certain of our foreign property and casualty subsidiaries reported on the basis
of a fiscal year ending November 30. The effect on our consolidated financial condition and results of operations of all material events
occurring at these subsidiaries from November 30 through December 31 of the periods previously presented in these Consolidated
Financial Statements was considered for adjustment and/or disclosure.
Effective with the fourth quarter of the year ended December 31, 2022, the foreign property and casualty subsidiaries now report on a
calendar year ending December 31. The elimination of a one-month reporting lag of a subsidiary is considered a change in accounting
principle. We believe this change in accounting principle is preferable given that it aligns the reporting dates with other consolidated
entities, which allows for a timelier and more consistent basis of reporting within our Consolidated Financial Statements. A change in
accounting principle requires retrospective application. However, we determined that the effect of not retroactively applying this
change was not material to our Consolidated Financial Statements for the current and prior periods. Therefore, we reported the
cumulative effect of the change in accounting principle within the Consolidated Statements of Income (Loss) for the year ended
December 31, 2022 and did not retrospectively apply the effects of this change to prior periods. The adoption impact was an increase
to net income of $100 million for the year ended December 31, 2022.
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally
accepted in the United States (U.S. GAAP). All material intercompany accounts and transactions have been eliminated.
SALES/DISPOSALS OF ASSETS AND BUSINESSES
Crop Risk Services
On July 3, 2023, AIG closed the sale of Crop Risk Services, Inc. (CRS) to American Financial Group, Inc. (AFG) and in substance,
AIG exited the crop business. The gross proceeds, before deducting commissions, were $234 million, resulting in a pre-tax gain of
$72 million for the year ended December 31, 2023.
Validus Re
On November 1, 2023, AIG completed the sale of Validus Reinsurance, Ltd. (Validus Re), including AlphaCat Managers Ltd. and the
Talbot Treaty reinsurance business, to RenaissanceRe Holdings Ltd. (RenaissanceRe) and received cash proceeds of $2.7 billion
from RenaissanceRe and 1.3 million shares of RenaissanceRe common stock valued at $290 million as of the closing date, resulting
in a pre-tax loss of $78 million for the year ended December 31, 2023. The results of Validus Re are reported in North America
Commercial and International Commercial segments.
Additionally, AIG agreed to retain 95 percent of the difference between (i) the reserves with respect to the business as of the closing
date of the sale for losses occurring prior to the closing date and (ii) the associated reserve development following the closing date
with respect to such losses. Any reserve development will be settled annually, commencing with the calendar year ending
December 31, 2024. This arrangement stays in effect until the parties determine to terminate such arrangement (which they will re-
evaluate on an annual basis beginning 5 years after the closing date) or until all such liabilities of the acquired reinsurance business
have run off. The reserve cover is considered contingent consideration and was recognized at fair value of $130 million when the sale
closed.
ITEM 8 | Notes to Consolidated Financial Statements | 1. Basis of Presentation
100
AIG | 2024 Form 10-K
On September 4, 2023, AIG entered into an Adverse Development Cover Excess of Loss Agreement (the ADC Agreement) to hedge
the risk of adverse development pertaining to Validus Re’s reserves with Clarendon National Insurance Company, a wholly owned
subsidiary of Enstar Group Limited. Under the ADC Agreement, AIG will be reimbursed up to $400 million of adverse development for
all policies in force as of December 31, 2022 when paid losses exceed the baseline reserve balance of $3.043 billion. The premium
expensed in connection with the ADC Agreement was $80 million.
Global Personal Travel Business
On December 2, 2024, AIG concluded the sale of its global individual personal travel insurance and assistance business to Zurich
Insurance Group (Zurich) for $600 million in cash plus additional earn-out consideration, resulting in a pre-tax gain of $511 million for
the year ended December 31, 2024. The global individual personal travel insurance and assistance business is reported in Global
Personal segment. AIG has also agreed to provide transition services to Zurich for 30 months after the transaction date. Additionally,
AIG has fronting agreements in place to front 100 percent of all new travel business produced by Zurich; whereby all of the economics
of the new travel business will pass to Zurich through the fronting arrangements which is recognized as a component of Net gain
(loss) on divestitures and other.
OTHER EVENTS
On December 14, 2022, AIG announced that its wholly-owned subsidiary, AIG Financial Products Corp. (AIGFP), filed a voluntary
petition to reorganize under Chapter 11 of Title 11 of the United States Code in the United States Bankruptcy Court for the District of
Delaware and filed a proposed plan of reorganization. The reorganization will not have a material impact on the consolidated balance
sheets of AIG or our respective businesses. AIGFP has no material operations or businesses and no employees. In conjunction with
the bankruptcy filing, AIGFP and its consolidated subsidiaries were deconsolidated from the results of AIG, resulting in a pre-tax loss
of $114 million for the year ended December 31, 2022, reported in Net gain (loss) on divestitures and other. In addition, AIGFP and its
subsidiaries were determined to be an unconsolidated variable interest entity.
USE OF ESTIMATES
The preparation of financial statements in accordance with U.S. GAAP requires the application of accounting policies that often
involve a significant degree of judgment. Accounting policies that we believe are most dependent on the application of estimates and
assumptions are considered our critical accounting estimates and are related to the determination of:
•
loss reserves;
•
reinsurance assets, including the allowance for credit losses and disputes;
•
allowance for credit losses on certain investments, primarily on loans and available for sale fixed maturity securities;
•
fair value measurements of certain financial assets and financial liabilities;
•
income taxes, in particular the recoverability of our deferred tax asset and establishment of provisions for uncertain tax positions;
and
•
goodwill impairment.
These accounting estimates require the use of assumptions about matters, some of which are highly uncertain at the time of
estimation. To the extent actual experience differs from the assumptions used, our consolidated financial condition, results of
operations and cash flows could be materially affected.
AIG | 2024 Form 10-K
101
ITEM 8 | Notes to Consolidated Financial Statements | 1. Basis of Presentation
2. Summary of Significant Accounting Policies
The following list identifies our significant accounting policies presented in other Notes to these Consolidated Financial Statements,
with a reference to the Note where a detailed description can be found:
Note 6. Investments
•
Fixed maturity and equity securities
•
Other invested assets
•
Net investment income
•
Net realized gains (losses)
•
Allowance for credit losses
Note 7. Lending Activities
•
Mortgage and other loans receivable – net of allowance
Note 8. Reinsurance
•
Reinsurance assets – net of allowance
•
Retroactive reinsurance
Note 9. Deferred Policy Acquisition Costs
Note 10. Variable Interest Entities
Note 11. Derivatives and Hedge Accounting
•
Derivative assets and liabilities, at fair value
Note 12. Goodwill and Other Intangible Assets
Note 13. Insurance Liabilities
•
Liability for unpaid losses and loss adjustment expenses
•
Discounting of reserves
Note 14. Debt
•
Long-term debt
•
Debt of consolidated investment entities
Note 15. Contingencies, Commitments and Guarantees
•
Legal contingencies
Note 17. Earnings Per Common Share (EPS)
Note 21. Income Taxes
OTHER SIGNIFICANT ACCOUNTING POLICIES
Premiums are presented net of reinsurance, as applicable. Premiums for short-duration contracts are recorded as written on the
inception date of the policy. Premiums are earned primarily on a pro rata basis over the term of the related coverage. Sales of
extended services contracts are reflected as premiums written and earned on a pro rata basis over the term of the related coverage.
In addition, certain miscellaneous income is included as premiums written and earned. The reserve for unearned premiums includes
the portion of premiums written relating to the unexpired terms of coverage. Reinsurance premiums are typically earned over the
same period as the underlying policies or risks covered by the contract. As a result, the earnings pattern of a reinsurance contract
may extend up to 24 months, reflecting the inception dates of the underlying policies throughout the year. Premiums from long-
duration life products, other than universal and variable life contracts, are recognized as revenues when due.
Reinsurance premiums for assumed business are estimated based on information received from ceding companies and reinsurers.
Any subsequent differences that arise regarding such estimates are recorded in the periods in which they are determined.
Cash represents cash on hand and demand deposits.
Short-term investments include interest bearing investments and time deposits. Securities included within short-term investments
are stated at estimated fair value.
Premiums and other receivables – net of allowance for credit losses and disputes include premium balances receivable,
amounts due from agents and brokers and policyholders, receivables resulting from sales of securities that had not yet settled, cash
collateral posted to derivative counterparties that is not eligible to be netted against derivative liabilities and other receivables.
Deposit assets and liabilities We have entered into certain insurance and reinsurance contracts that do not contain sufficient
insurance risk to be accounted for as insurance or reinsurance. When we receive premiums on such contracts, the premiums
received, after deduction for certain related expenses, are recorded as deposits within Deposit accounting liabilities in the
Consolidated Balance Sheets. Net proceeds of these deposits are invested and generate Net investment income. When we pay
premiums on such contracts, the premiums paid are recorded as deposits within Deposit accounting assets in the Consolidated
Balance Sheets. The deposit asset or liability is adjusted as amounts are paid, consistent with the underlying contracts. Deferred
gains on retroactive reinsurance agreements are also reflected within deposit accounting liabilities.
Other assets consist of prepaid expenses, deposits, other deferred charges, real estate, other fixed assets, capitalized software
costs, goodwill, intangible assets other than goodwill, restricted cash, derivative assets, and accrued interest income.
ITEM 8 | Notes to Consolidated Financial Statements | 2. Summary of Significant Accounting Policies
AIG | 2024 Form 10-K
102
The cost of buildings and furniture and equipment is depreciated principally on the straight-line basis over their estimated useful lives
(maximum of 40 years for buildings and 10 years for furniture and fixtures). Expenditures for maintenance and repairs are charged to
income as incurred and expenditures for improvements are capitalized and depreciated. We periodically assess the carrying amount
of our real estate for purposes of determining any asset impairment. Capitalized software costs, which represent costs directly related
to obtaining, developing or upgrading internal use software, are capitalized and amortized using the straight-line method over a period
generally not exceeding ten years.
Other liabilities consist of other funds on deposit, other payables, securities sold under agreements to repurchase, securities sold but
not yet purchased, liabilities resulting from purchases of securities that have not yet settled, derivative liabilities, cash collateral
received from derivative counterparties that contractually cannot be netted against derivative assets and allowance for credit losses in
relation to off-balance sheet commitments.
Foreign currency Financial statement accounts expressed in foreign currencies are translated into U.S. dollars. Functional currency
assets and liabilities are translated into U.S. dollars generally using rates of exchange prevailing at the balance sheet date of each
respective subsidiary and the related translation adjustments are recorded as a separate component of Accumulated other
comprehensive income, net of any related taxes, in Total AIG shareholders’ equity. Income statement accounts expressed in
functional currencies are translated using average exchange rates during the period. Functional currencies are generally the
currencies of the local operating environment. Financial statement accounts expressed in currencies other than the functional
currency of a consolidated entity are remeasured into that entity’s functional currency resulting in exchange gains or losses recorded
in income. The adjustments resulting from translation of financial statements of foreign entities operating in highly inflationary
economies are recorded in income.
Non-redeemable noncontrolling interest is the portion of equity (net assets) and net income (loss) in a subsidiary not attributable,
directly or indirectly, to AIG.
ACCOUNTING STANDARDS ADOPTED DURING 2024
Fair Value Measurement
On June 30, 2022, the Financial Accounting Standards Board (FASB) issued an accounting standards update to address diversity in
practice by clarifying that a contractual sale restriction should not be considered in the measurement of the fair value of an equity
security. It also requires entities with investments in equity securities subject to contractual sale restrictions to disclose certain
qualitative and quantitative information about such securities. The Company adopted the standard on January 1, 2024, prospectively
for entities other than investment companies. The adoption of the standard did not have a material impact on AIG Consolidated
Financial Statements.
Segment Reporting
In November 2023, the FASB issued an accounting standard update to address improvements to reportable segment disclosures. The
standard primarily requires the following disclosure on an annual and interim basis: (i) significant segment expenses that are regularly
provided to the chief operating decision makers (CODMs) and included within each reported measure of segment profit or loss; and
(ii) other segment items and description of its composition. The standard also requires current annual disclosures about a reportable
segment's profits or losses and assets to be disclosed in interim periods and the title and position of the CODMs with an explanation
of how the CODMs uses the reported measure(s) of segment profits or losses in assessing segment performance. The Company
adopted the standard for its 2024 Annual Report on Form 10-K, retrospectively. For additional detail, see Note 3
FUTURE APPLICATION OF ACCOUNTING STANDARDS
Income Tax
In December 2023, the FASB issued an accounting standard update to address improvements to income tax disclosures. The
standard requires disaggregated information about a company’s effective tax rate reconciliation as well as information on income
taxes paid. The standard is effective for public companies for annual periods beginning after December 15, 2024, with early adoption
permitted. The standard should be applied on a prospective basis, but retrospective application is permitted. We are assessing the
impact of this standard.
Disaggregation of Income Statement Expenses
On November 4, 2024, the FASB issued new guidance requiring additional disclosure of the nature of expenses included in the
income statement. The new standard requires disclosures about specific types of expenses included in the expense captions
presented on the face of the income statement. The guidance is effective for annual reporting periods beginning after December 15,
2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. The requirements will be
applied prospectively with the option for retrospective application. We are assessing the impact of the standard.
AIG | 2024 Form 10-K
103
ITEM 8 | Notes to Consolidated Financial Statements | 2. Summary of Significant Accounting Policies
3. Segment Information
In the fourth quarter of 2024, the Company realigned its organizational structure and the composition of its reportable segments to
reflect changes in how the Company manages its operations, specifically the level at which its chief operating decision makers
(CODMs) regularly review operating results and allocate resources. Our CODMs are the chief executive officer (CEO) and chief
financial officer (CFO). The CODMs evaluate performance of the segments based on underwriting income (loss). The CODMs use
this measure to benchmark AIG’s performance, assessing performance of the segments and in establishing management’s
compensation.
AIG has three reportable segments: North America Commercial, International Commercial and Global Personal. Prior years’
presentations have been recast to conform to the new reportable segments. Our General Insurance business (General Insurance)
consists of our three segments and the Net investment income related to our insurance operations.
NORTH AMERICA COMMERCIAL
North America Commercial consists of insurance businesses in the United States, Canada and Bermuda.
INTERNATIONAL COMMERCIAL
International Commercial consists of insurance businesses in Japan, the United Kingdom, Europe, Middle East and Africa (EMEA
region), Asia Pacific, Latin America and Caribbean, and China. International also includes the results of Talbot Underwriting Ltd. as
well as AIG’s Global Specialty business.
GLOBAL PERSONAL
Global Personal consists primarily of insurance businesses in the United States as well as Japan, the United Kingdom, Europe,
Middle East and Africa (EMEA region), Asia Pacific, Latin America and Caribbean, and China.
PRODUCTS
The segments consist of the following products:
–
North America and International Commercial consists of Property & Short Tail, Casualty, Financial Lines and Global Specialty.
–
Global Personal consists of Global Accident & Health and Personal Lines.
For further discussion on recent activity in the General Insurance business, see Note 1.
OTHER OPERATIONS
Other Operations predominantly consists of Net Investment Income from our AIG Parent liquidity portfolio, Corebridge dividend
income, corporate General operating expenses, and Interest expense.
SEGMENT RESULTS
Management uses Underwriting income (loss) as the basis for the segment performance reviews. AIG calculates Underwriting income
(loss) by subtracting Losses and loss adjustment expense incurred, Amortization of DAC, Other acquisition cost, and General
operating expense from Net premiums earned. Assets by reportable segment are not used by the CODMs for purposes of making
decisions about allocating resources to the segment and assessing its performance.
ITEM 8 | Notes to Consolidated Financial Statements | 3. Segment Information
AIG | 2024 Form 10-K
104
The following table presents AIG’s continuing operations by segment:
(in millions)
Net
Premiums
Written
Net
Premiums
Earned
Losses
and Loss
Adjustment
Expenses
Incurred(a)
Amortization
of DAC(a)
Other
Acquisition
Expenses(a)
General
Operating
Expenses(a)(b)
Underwriting
Income
(Loss)
Net
Investment
Income
Reconciliation
to Income
(Loss) from
Continuing
Operations
Before
Income Tax
Expense
2024
North America Commercial
$ 8,452 $ 8,172 $
5,713 $
824 $
222 $
865 $
548
International Commercial
8,364
8,145
4,463
1,018
342
1,095
1,227
Global Personal
7,086
7,140
3,862
1,571
573
992
142
Total General Insurance
$ 23,902 $ 23,457 $
14,038 $
3,413 $
1,137 $
2,952 $
1,917 $
3,060 $
4,977
Interest expense
—
(445)
Other Operations
424
(207)
Elimination and consolidations
—
(1)
Total
3,484
4,324
Reconciling items:
Changes in the fair values of equity securities, AIG's investment in Corebridge and gain on sale of shares
586
586
Other income (expense) - net
16
—
Gain (loss) on extinguishment of debt
—
(14)
Net investment income on Fortitude Re funds withheld assets
144
144
Net realized losses on Fortitude Re funds withheld assets
—
(39)
Net realized gains (losses) on Fortitude Re funds withheld embedded derivative
—
(75)
Net realized gains (losses)(c)
8
(428)
Net gain (loss) on divestitures and other
—
616
(Unfavorable) favorable prior year development and related amortization changes ceded under retroactive reinsurance
agreements
—
(105)
Net loss reserve discount benefit (charge)
—
(226)
Net results of businesses in run-off(d)
17
(111)
Integration and transaction costs associated with acquiring or divesting businesses
—
(39)
Restructuring and other costs(e)
—
(745)
Non-recurring costs related to regulatory or accounting changes
—
(18)
Total AIG Consolidated
$
4,255 $
3,870
2023
North America Commercial
$ 11,432 $ 10,233 $
6,323 $
1,371 $
231 $
953 $
1,355
International Commercial
8,168
7,964
4,641
943
350
1,028
1,002
Global Personal
7,119
6,894
3,811
1,309
698
1,084
(8)
Total General Insurance
$ 26,719 $ 25,091 $
14,775 $
3,623 $
1,279 $
3,065 $
2,349 $
3,022 $
5,371
Interest expense
—
(498)
Other Operations
186
(535)
Elimination and consolidations
(13)
(17)
Total
3,195
4,321
Reconciling items:
Changes in the fair values of equity securities, AIG's investment in Corebridge and gain on sale of shares
53
53
Other income (expense) - net
8
—
Gain (loss) on extinguishment of debt
—
37
Net investment income on Fortitude Re funds withheld assets
180
180
Net realized losses on Fortitude Re funds withheld assets
—
(71)
Net realized gains (losses) on Fortitude Re funds withheld embedded derivative
—
(273)
Net realized gains (losses)(c)
(12)
(743)
Net gain (loss) on divestitures and other
—
(29)
Non-operating litigation reserves and settlements
—
(1)
(Unfavorable) favorable prior year development and related amortization changes ceded under retroactive reinsurance
agreements
—
62
Net loss reserve discount benefit (charge)
—
(195)
Net results of businesses in run-off(d)
21
(31)
Pension expense related to lump sum payments to former employees
—
(71)
Integration and transaction costs associated with acquiring or divesting businesses
—
(6)
Restructuring and other costs(e)
—
(356)
Non-recurring costs related to regulatory or accounting changes
—
(22)
Net impact from elimination of international reporting lag(f)
1
12
Total AIG Consolidated
$
3,446 $
2,867
AIG | 2024 Form 10-K
105
ITEM 8 | Notes to Consolidated Financial Statements | 3. Segment Information
(in millions)
Net
Premiums
Written
Net
Premiums
Earned
Losses
and Loss
Adjustment
Expenses
Incurred(a)
Amortization
of DAC(a)
Other
Acquisition
Expenses(a)
General
Operating
Expenses(a)(b)
Underwriting
Income
(Loss)
Net
Investment
Income
Reconciliation
to Income
(Loss) from
Continuing
Operations
Before
Income Tax
Expense
2022
North America Commercial
$ 10,899 $ 10,444 $
7,218 $
1,381 $
174 $
927 $
744
International Commercial
7,877
7,701
4,301
938
378
945
1,139
Global Personal
6,736
7,195
3,888
1,214
813
1,115
165
Total General Insurance
$ 25,512 $ 25,340 $
15,407 $
3,533 $
1,365 $
2,987 $
2,048 $
2,382 $
4,430
Interest expense
—
(624)
Other Operations
(122)
(1,000)
Elimination and consolidations
14
63
Total
2,274
2,869
Reconciling items:
Changes in the fair values of equity securities, AIG's investment in Corebridge and gain on sale of shares
29
29
Other income (expense) - net
28
—
Gain (loss) on extinguishment of debt
—
(303)
Net investment income on Fortitude Re funds withheld assets
53
53
Net realized losses on Fortitude Re funds withheld assets
—
(99)
Net realized gains (losses) on Fortitude Re funds withheld embedded derivative
—
1,133
Net realized gains (losses)(c)
(61)
(268)
Net gain (loss) on divestitures and other
—
(153)
Non-operating litigation reserves and settlements
—
16
(Unfavorable) favorable prior year development and related amortization changes ceded under retroactive reinsurance
agreements
—
160
Net loss reserve discount benefit (charge)
—
703
Net results of businesses in run-off(d)
6
25
Pension expense related to lump sum payments to former employees
—
(59)
Integration and transaction costs associated with acquiring or divesting businesses
—
(12)
Restructuring and other costs(e)
—
(423)
Non-recurring costs related to regulatory or accounting changes
—
(26)
Net impact from elimination of international reporting lag(f)
41
127
Total AIG Consolidated
$
2,370 $
3,772
(a) The significant expense categories and amounts align with segment-level information that is regularly provided to the CODMs.
(b) General operating expenses primarily comprised of employee compensation and benefits, as well as professional fees.
(c) Includes all Net realized gains and losses except earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-
qualifying (economic) hedging or for asset replication and net realized gains and losses on Fortitude Re funds withheld assets held by AIG in support of Fortitude Re’s
reinsurance obligations to AIG (Fortitude Re funds withheld assets).
(d) In the fourth quarter of 2024, AIG realigned and began excluding the net results of run-off businesses previously reported in Other Operations from Adjusted pre-tax
income. Historical results have been recast to reflect these changes.
(e) In the year ended December 31, 2024, Restructuring and other costs increased primarily as a result of employee-related costs, including severance, and real estate
impairment charges.
(f)
For additional information, see Note 1.
For the year ended December 31, 2024, we recorded severance charges of $353 million and asset impairment of $53 million as a
result of restructuring activities.
The following table presents AIG’s consolidated total revenues and real estate and other fixed assets, net of accumulated
depreciation, by major geographic area:
North America Commercial
$
8,172 $
10,233 $
10,444
International Commercial
8,145
7,964
7,701
Global Personal
7,140
6,894
7,195
Net investment income
4,255
3,446
2,370
Net realized gains (losses)
(548)
(1,078)
827
Other income
7
6
34
Net results of businesses in run-off
83
475
478
Net impact from elimination of international reporting lag
—
3
937
Elimination and consolidations
(3)
(5)
10
Total Revenue
$
27,251 $
27,938 $
29,996
Total Revenues*
(in millions)
2024
2023
2022
AIG | 2024 Form 10-K
106
ITEM 8 | Notes to Consolidated Financial Statements | 3. Segment Information
North America
$
13,031 $
14,701 $
15,163
International
14,220
13,237
14,833
Consolidated
$
27,251 $
27,938 $
29,996
Real Estate and Other Fixed Assets,
Net of Accumulated Depreciation
(in millions)
2024
2023
2022
North America
$
804 $
760 $
768
International
312
372
385
Consolidated
$
1,116 $
1,132 $
1,153
Total Revenues*
(in millions)
2024
2023
2022
*
Revenues are generally reported according to the geographic location of the segment. International revenues consists of revenues from our General Insurance
International operations.
4. Discontinued Operations Presentation
DISCONTINUED OPERATIONS PRESENTATION
We present a business, or a component of an entity, as discontinued operations if a) it meets the held-for-sale criteria, or is disposed
of by sale, or is disposed of other than by sale, and b) the disposal of the business, or component of an entity, represents a strategic
shift that has (or will have) a major effect on AIG’s financial results.
Pre-Deconsolidation of Corebridge
Corebridge completed its initial public offering in September 2022 and AIG continued to sell its interest in Corebridge through
secondary offerings. On May 16, 2024, AIG entered into a stock purchase agreement with Corebridge and Nippon Life Insurance
Company (Nippon). On June 3, 2024, AIG closed on a secondary offering of 30 million shares of Corebridge common stock. The sale
was recorded as an equity transaction as AIG controlled Corebridge as of the transaction date. The aggregate gross proceeds of the
offering, before deducting underwriting discounts and commission and other expenses payable by AIG, were $876 million. As a result
of the offering, AIG recorded an increase of $261 million in Total AIG shareholders' equity.
Deconsolidation of Corebridge
On June 9, 2024, AIG held 48.4 percent of Corebridge common stock, waived its right to majority representation on the Corebridge
Board of Directors and one of AIG's designees resigned from the Corebridge Board of Directors as of June 9, 2024 (the
Deconsolidation Date). As a result, AIG met the requirements for the deconsolidation of Corebridge.
In the second quarter of 2024, AIG recognized a loss of $4.8 billion as a result of the deconsolidation, mainly due to the recognition of
an accumulated comprehensive loss of $7.2 billion. The loss is recorded as a component of discontinued operations.
The historical financial results of Corebridge, for all periods presented, are reflected in these Consolidated Financial Statements as
discontinued operations. In addition, the assets and liabilities of Corebridge are classified as Assets of discontinued operations and
Liabilities of discontinued operations in AIG’s Consolidated Balance Sheets as of December 31, 2023.
Post Deconsolidation of Corebridge
Subsequent to the Deconsolidation Date, AIG elected the fair value option and reflects its retained interest in Corebridge as an equity
method investment in Other invested assets using Corebridge’s stock price as its fair value. Dividends received from Corebridge and
changes in its stock price are recognized in Net investment income.
From August 2024 to November 2024, AIG sold approximately 43 million shares of Corebridge common stocks. The aggregate
proceeds received from these transactions were approximately $1.3 billion.
On December 9, 2024, AIG completed the sale of approximately 120 million shares of its Corebridge common stock, representing a
21.6 percent ownership stake, to Nippon for $31.47 per share for an aggregate purchase price of $3.8 billion, which resulted in a
$282 million gain recognized in Net investment income in the fourth quarter of 2024.
Due to share repurchases by Corebridge and sale of shares by AIG after the Deconsolidation Date, as of December 31, 2024, AIG
held 22.7 percent of the outstanding common stock of Corebridge.
AIG | 2024 Form 10-K
107
ITEM 8 | Notes to Consolidated Financial Statements | 3. Segment Information
The following provides Corebridge's pre-tax income for the period June 10, 2024 to December 31, 2024, as well as our equity
method income (representing the sum of dividends received and changes in its stock price since June 9, 2024).
(in millions)
Corebridge pre-tax income
$
1,574
Equity method income (loss) related to Corebridge (based on fair value)
$
601
The following table summarizes the components of assets and liabilities of discontinued operations on the Consolidated
Balance Sheets at December 31, 2023:
Assets:
Investments:
Fixed maturity securities:
Bonds available for sale, at fair value, net of allowance for credit losses
$
166,657
Other bond securities, at fair value
4,579
Equity securities, at fair value
63
Mortgage and other loans receivable, net of allowance for credit losses
46,732
Other invested assets
9,916
Short-term investments
4,346
Total investments
232,293
Cash
618
Accrued investment income
2,011
Premiums and other receivables, net of allowance for credit losses and disputes
709
Reinsurance assets - Fortitude Re, net of allowance for credit losses and disputes
26,772
Reinsurance assets - other, net of allowance for credit losses and disputes
2,519
Deferred income taxes
8,307
Deferred policy acquisition costs
10,782
Market risk benefit assets, at fair value
912
Other assets, net of allowance for credit losses(a)
2,820
Separate account assets, at fair value
91,005
Total assets held for sale/assets of discontinued operations
$
378,748
Liabilities:
Unearned premiums
$
65
Future policy benefits
57,946
Policyholder contract deposits
161,979
Market risk benefit liabilities, at fair value
5,705
Other policyholder funds
2,862
Fortitude Re funds withheld payable
25,957
Other liabilities
8,790
Short-term and long-term debt
9,420
Debt of consolidated investment entities
2,360
Separate account liabilities
91,005
Total liabilities held for sale/liabilities of discontinued operations
$
366,089
December 31, 2023
(a) Other assets, net of allowance for credit losses includes goodwill and other intangibles of $116 million and $3 million, respectively, at December 31, 2023.
ITEM 8 | Notes to Consolidated Financial Statements | 4. Discontinued Operations Presentation
AIG | 2024 Form 10-K
108
The following table presents the amounts related to the operations of Corebridge that have been reflected in Net income
from discontinued operations:
Revenues:
Premiums
$
2,723
$
7,690
$
5,091
Policy fees
1,269
2,797
2,913
Net investment income
5,238
11,146
9,398
Net realized gains (losses)
(923)
(3,530)
6,236
Other income
372
761
816
Total revenues
8,679
18,864
24,454
Benefits, losses and expenses:
Policyholder benefits and losses incurred
3,618
9,362
6,715
Change in the fair value of market risk benefits, net
(350)
2
(960)
Interest credited to policyholder account balances
2,184
4,424
3,746
Amortization of deferred policy acquisition costs
465
1,037
1,013
General operating and other expenses
1,350
3,100
2,962
Interest expense
249
620
522
Net (gain) loss on divestitures and other
(191)
(672)
(71)
Total benefits, losses and expenses
7,325
17,873
13,927
Income (loss) from discontinued operations before income tax expense (benefit) and loss on
disposal of discontinued operations
1,354
991
10,527
Income tax expense (benefit)
226
(146)
2,144
Income (loss) from discontinued operations, net of income taxes before loss on disposal of
discontinued operations
1,128
1,137
8,383
Loss on disposition of operations, net of tax
(4,754)
—
—
Income (loss) from discontinued operations, net of income taxes
(3,626)
1,137
8,383
Less: Net income (loss) from discontinued operations attributable to noncontrolling interests
478
235
1,046
Net income (loss) from discontinued operations attributable to AIG
$
(4,104) $
902
$
7,337
Years Ended December 31,
(in millions)
2024
2023
2022
DISCONTINUED OPERATIONS LOSS PRESENTATION
The loss recognized in the second quarter of 2024 for the deconsolidation of Corebridge includes (i) $8.5 billion of retained investment
in Corebridge (Corebridge’s quoted stock price is used for fair value measurement, which is classified as level 1 in the fair value
hierarchy), (ii) $817 million of certain other investments (considered level 3 in the fair value hierarchy) which are measured based on
valuation techniques (i.e., third-party appraisals) that use significant inputs (i.e., terminal capital rate and discount rate), and (iii)
$378 million of an unsettled receivable. For details on fair value hierarchy, see Note 5. The loss on deconsolidation of Corebridge, as
of December 31, 2024, is calculated as follows:
Corebridge retained investment (294.2 million shares at $28.90 per share at June 9, 2024)
$
8,502
Retained interest in certain investment entities and other assets
1,180
Net fair value of assets retained
9,682
Corebridge book value
12,409
Less: Noncontrolling interests
5,732
Corebridge book value excluding noncontrolling interests
6,677
Pre-tax gain on sale
3,005
Tax expense
545
Subtotal: After tax gain on sale before reclassification adjustment
2,460
Reclassification adjustment of Accumulated other comprehensive loss
(7,214)
After-tax loss on sale of Corebridge
$
(4,754)
(in millions)
AIG | 2024 Form 10-K
109
ITEM 8 | Notes to Consolidated Financial Statements | 4. Discontinued Operations Presentation
5. Fair Value Measurements
FAIR VALUE MEASUREMENTS ON A RECURRING BASIS
We carry certain of our financial instruments at fair value. We define the fair value of a financial instrument as the amount that would
be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date. We are responsible for the determination of the value of the investments carried at fair value and the supporting
methodologies and assumptions.
The degree of judgment used in measuring the fair value of financial instruments generally inversely correlates with the level of
observable valuation inputs. We maximize the use of observable inputs and minimize the use of unobservable inputs when measuring
fair value. Financial instruments with quoted prices in active markets generally have more pricing observability and less judgment is
used in measuring fair value. Conversely, financial instruments for which no quoted prices are available have less observability and
are measured at fair value using valuation models or other pricing techniques that require more judgment. Pricing observability is
affected by a number of factors, including the type of financial instrument, whether the financial instrument is new to the market and
not yet established, the characteristics specific to the transaction, liquidity and general market conditions.
Fair Value Hierarchy
Assets and liabilities recorded at fair value in the Consolidated Balance Sheets are measured and classified in accordance with a fair
value hierarchy consisting of three “levels” based on the observability of valuation inputs:
•
Level 1: Fair value measurements based on quoted prices (unadjusted) in active markets that we have the ability to access for
identical assets or liabilities. Market price data generally is obtained from exchange or dealer markets. We do not adjust the quoted
price for such instruments.
•
Level 2: Fair value measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset
or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted
prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted prices that are
observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals.
•
Level 3: Fair value measurements based on valuation techniques that use significant inputs that are unobservable. Both
observable and unobservable inputs may be used to determine the fair values of positions classified in Level 3. The circumstances
for using these measurements include those in which there is little, if any, market activity for the asset or liability. Therefore, we
must make certain assumptions about the inputs a hypothetical market participant would use to value that asset or liability.
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level
in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input
that is significant to the fair value measurement in its entirety.
The following is a description of the valuation methodologies used for instruments carried at fair value. These methodologies are
applied to assets and liabilities across the levels discussed above, and the observability of the inputs used determines the appropriate
level in the fair value hierarchy for the respective asset or liability.
VALUATION METHODOLOGIES OF FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE
Incorporation of Credit Risk in Fair Value Measurements
•
Our Own Credit Risk. Fair value measurements for certain liabilities incorporate our own credit risk by determining the explicit
cost for each counterparty to protect against its net credit exposure to us at the balance sheet date by reference to observable AIG
credit default swaps (CDS) or cash bond spreads. We calculate the effect of credit spread changes using discounted cash flow
techniques that incorporate current market interest rates. A derivative counterparty’s net credit exposure to us is determined based
on master netting agreements, when applicable, which take into consideration all derivative positions with us, as well as collateral
we post with the counterparty at the balance sheet date.
•
Counterparty Credit Risk. Fair value measurements for freestanding derivatives incorporate counterparty credit by determining
the explicit cost for us to protect against our net credit exposure to each counterparty at the balance sheet date by reference to
observable counterparty CDS spreads, when available. When not available, other directly or indirectly observable credit spreads
will be used to derive the best estimates of the counterparty spreads. Our net credit exposure to a counterparty is determined
based on master netting agreements, which take into consideration all derivative positions with the counterparty, as well as
collateral posted by the counterparty at the balance sheet date.
ITEM 8 | Notes to Consolidated Financial Statements | 5. Fair Value Measurements
AIG | 2024 Form 10-K
110
Fair values for fixed maturity securities based on observable market prices for identical or similar instruments implicitly incorporate
counterparty credit risk. Fair values for fixed maturity securities based on internal models incorporate counterparty credit risk by using
discount rates that take into consideration cash issuance spreads for similar instruments or other observable information.
For fair values measured based on internal models, the cost of credit protection is determined under a discounted present value
approach considering the market levels for single name CDS spreads for each specific counterparty, the mid-market value of the net
exposure (reflecting the amount of protection required) and the weighted average life of the net exposure. CDS spreads are provided
to us by an independent third party. We utilize an interest rate based on the appropriate benchmark curve to derive our discount rates.
While this approach does not explicitly consider all potential future behavior of the derivative transactions or potential future changes
in valuation inputs, we believe this approach provides a reasonable estimate of the fair value of the assets and liabilities, including
consideration of the impact of non-performance risk.
Fixed Maturity Securities
Whenever available, we obtain quoted prices in active markets for identical assets at the balance sheet date to measure fixed maturity
securities at fair value. Market price data is generally obtained from dealer markets.
We employ independent third-party valuation service providers to gather, analyze, and interpret market information to derive fair value
estimates for individual investments, based upon market-accepted methodologies and assumptions. The methodologies used by
these independent third-party valuation service providers are reviewed and understood by management, through periodic discussion
with and information provided by the independent third-party valuation service providers. In addition, as discussed further below,
control processes designed to ensure the accuracy of these values are applied to the fair values received from independent third-
party valuation service providers.
Valuation service providers typically obtain data about market transactions and other key valuation model inputs from multiple sources
and, through the use of market-accepted valuation methodologies, which may utilize matrix pricing, financial models, accompanying
model inputs and various assumptions, provide a single fair value measurement for individual securities. The inputs used by the
valuation service providers include, but are not limited to, market prices from completed transactions for identical securities and
transactions for comparable securities, benchmark yields, interest rate yield curves, credit spreads, prepayment rates, default rates,
recovery assumptions, currency rates, quoted prices for similar securities and other market-observable information, as applicable. If
fair value is determined using financial models, these models generally take into account, among other things, market observable
information as of the measurement date as well as the specific attributes of the security being valued, including its term, interest rate,
credit rating, industry sector, and when applicable, collateral quality and other security or issuer-specific information. When market
transactions or other market observable data is limited, the extent to which judgment is applied in determining fair value is greatly
increased.
We have control processes designed to ensure that the fair values received from independent third-party valuation service providers
are accurately recorded, that their data inputs and valuation techniques are appropriate and consistently applied and that the
assumptions used appear reasonable and consistent with the objective of determining fair value. We assess the reasonableness of
individual security values received from independent third-party valuation service providers through various analytical techniques, and
have procedures to escalate related questions internally and to the independent third-party valuation service providers for resolution.
To assess the degree of pricing consensus among various valuation service providers for specific asset types, we conduct
comparisons of prices received from available sources. We use these comparisons to establish a hierarchy for the fair values received
from independent third-party valuation service providers to be used for particular security classes. We also validate prices for selected
securities through reviews by members of management who have relevant expertise and who are independent of those charged with
executing investing transactions.
When our independent third-party valuation service providers are unable to obtain sufficient market observable information upon
which to estimate the fair value for a particular security, fair value is determined either by requesting brokers who are knowledgeable
about these securities to provide a price quote, which is generally non-binding, or by employing market accepted valuation models
internally or via our third party asset managers. Broker prices may be based on an income approach, which converts expected future
cash flows to a single present value amount, with specific consideration of inputs relevant to particular security types. For structured
securities, such inputs may include ratings, collateral types, geographic concentrations, underlying loan vintages, loan delinquencies
and defaults, loss severity assumptions, prepayments, and weighted average coupons and maturities. When the volume or level of
market activity for a security is limited, certain inputs used to determine fair value may not be observable in the market. Broker prices
may also be based on a market approach that considers recent transactions involving identical or similar securities. Fair values
provided by brokers are subject to similar control processes to those noted above for fair values from independent third-party
valuation service providers, including management reviews. For those corporate debt instruments (for example, private placements)
that are not traded in active markets or that are subject to transfer restrictions, valuations reflect illiquidity and non-transferability,
based on available market evidence. When observable price quotations are not available, fair value is determined based on
discounted cash flow models using discount rates based on credit spreads, yields or price levels of comparable securities, adjusted
AIG | 2024 Form 10-K
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ITEM 8 | Notes to Consolidated Financial Statements | 5. Fair Value Measurements
for illiquidity and structure. Fair values determined internally or via our third party asset managers are also subject to management
review to ensure that valuation models and related inputs are reasonable.
The methodology above is relevant for all fixed maturity securities including residential mortgage backed securities (RMBS),
commercial mortgage backed securities (CMBS), collateralized loan obligations (CLO), other asset-backed securities (ABS) and fixed
maturity securities issued by government sponsored entities and corporate entities.
Equity Securities Traded in Active Markets
Whenever available, we obtain quoted prices in active markets for identical assets at the balance sheet date to measure equity
securities at fair value. Market price data is generally obtained from exchange or dealer markets.
Mortgage and Other Loans Receivable
We estimate the fair value of mortgage and other loans receivable that are measured at fair value by using dealer quotations,
discounted cash flow analyses and/or internal valuation models. The determination of fair value considers inputs such as interest rate,
maturity, the borrower’s creditworthiness, collateral, subordination, guarantees, past-due status, yield curves, credit curves,
prepayment rates, market pricing for comparable loans and other relevant factors.
Other Invested Assets
We initially estimate the fair value of investments in certain hedge funds, private equity funds and other investment partnerships by
reference to the transaction price. Subsequently, we generally obtain the fair value of these investments from net asset value
information provided by the general partner or manager of the investments, the financial statements of which are generally audited
annually. We consider observable market data and perform certain control procedures to validate the appropriateness of using the net
asset value as a fair value measurement. The fair values of other investments carried at fair value, such as direct private equity
holdings, are initially determined based on transaction price and are subsequently estimated based on available evidence such as
market transactions in similar instruments, other financing transactions of the issuer and other available financial information for the
issuer, with adjustments made to reflect illiquidity as appropriate. AIG's retained investments in Corebridge, for which we have elected
the fair value option, is determined using Corebridge's stock price as its fair value.
Short-term Investments
For short-term investments that are measured at amortized cost, the carrying amounts of these assets approximate fair values
because of the relatively short period of time between origination and expected realization, and their limited exposure to credit risk.
Securities purchased under agreements to resell (reverse repurchase agreements) are generally treated as collateralized receivables.
We report certain receivables arising from securities purchased under agreements to resell as Short-term investments in the
Consolidated Balance Sheets. When these receivables are measured at fair value, we use market-observable interest rates to
determine fair value.
Freestanding Derivatives
Derivative assets and liabilities can be exchange-traded or traded over-the-counter (OTC). We generally value exchange-traded
derivatives such as futures and options using quoted prices in active markets for identical derivatives at the balance sheet date.
OTC derivatives are valued using market transactions and other market evidence whenever possible, including market-based inputs
to models, model calibration to market clearing transactions, broker or dealer quotations or alternative pricing sources with reasonable
levels of price transparency. When models are used, the selection of a particular model to value an OTC derivative depends on the
contractual terms of, and specific risks inherent in the instrument, as well as the availability of pricing information in the market. We
generally use similar models to value similar instruments. Valuation models require a variety of inputs, including contractual terms,
market prices and rates, yield curves, credit curves, measures of volatility, prepayment rates and correlations of such inputs. For OTC
derivatives that trade in liquid markets, such as generic forwards, swaps and options, model inputs can generally be corroborated by
observable market data by correlation or other means, and model selection does not involve significant management judgment.
For certain OTC derivatives that trade in less liquid markets, where we generally do not have corroborating market evidence to
support significant model inputs and cannot verify the model to market transactions, the transaction price may provide the best
estimate of fair value. Accordingly, when a pricing model is used to value such an instrument, the model is adjusted so the model
value at inception equals the transaction price. We will update valuation inputs in these models only when corroborated by evidence
such as similar market transactions, independent third-party valuation service providers and/or broker or dealer quotations, or other
empirical market data. When appropriate, valuations are adjusted for various factors such as liquidity, bid/offer spreads and credit
considerations. Such adjustments are generally based on available market evidence. In the absence of such evidence, management’s
best estimate is used.
AIG | 2024 Form 10-K
112
ITEM 8 | Notes to Consolidated Financial Statements | 5. Fair Value Measurements
We value our super senior credit default swap portfolio using prices obtained from vendors and/or counterparties. The valuation of the
super senior credit derivatives is complex because of the limited availability of market observable information due to the lack of trading
and price transparency in certain structured finance markets. Our valuation methodologies for the super senior CDS portfolio have
evolved over time in response to market conditions and the availability of market observable information. We have sought to calibrate
the methodologies to available market information and to review the assumptions of the methodologies on a regular basis.
Fortitude Re funds withheld payable
The reinsurance transactions between AIG and Fortitude Re were structured as modco and loss portfolio transfer arrangements with
funds withheld (funds withheld). AIG has established a funds withheld payable to Fortitude Re while simultaneously establishing a
reinsurance asset representing reserves for the insurance coverage that Fortitude Re has assumed. The funds withheld payable
contains an embedded derivative and changes in fair value of the embedded derivative related to the funds withheld payable are
recognized in earnings through realized gains (losses). This embedded derivative is considered a total return swap with contractual
returns that are attributable to various assets and liabilities associated with these reinsurance agreements.
Other Liabilities
Other liabilities measured at fair value include certain securities sold under agreements to repurchase and certain securities sold but
not yet purchased. Liabilities arising from securities sold under agreements to repurchase are generally treated as collateralized
borrowings. We estimate the fair value of liabilities arising under these agreements by using market-observable interest rates. This
methodology considers such factors as the coupon rate, yield curves and other relevant factors. Fair values for securities sold but not
yet purchased are based on current market prices.
ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS
The following table presents information about assets and liabilities measured at fair value on a recurring basis and
indicates the level of the fair value measurement based on the observability of the inputs used:
Assets:
Bonds available for sale:
U.S. government and government sponsored entities
$
36 $
3,231 $
— $
— $
— $
3,267
Obligations of states, municipalities and political subdivisions
—
3,140
3
—
—
3,143
Non-U.S. governments
161
7,939
7
—
—
8,107
Corporate debt
—
31,586
240
—
—
31,826
RMBS
—
6,710
1,894
—
—
8,604
CMBS
—
3,900
26
—
—
3,926
CLO/ABS
—
4,293
840
—
—
5,133
Total bonds available for sale
197
60,799
3,010
—
—
64,006
Other bond securities:
Obligations of states, municipalities and political subdivisions
—
50
—
—
—
50
Non-U.S. governments
—
24
—
—
—
24
Corporate debt
—
281
1
—
—
282
RMBS
—
50
50
—
—
100
CMBS
—
43
—
—
—
43
CLO/ABS
—
133
113
—
—
246
Total other bond securities
—
581
164
—
—
745
Equity securities
689
—
15
—
—
704
Other invested assets(b)
3,810
119
163
—
—
4,092
Derivative assets(c):
Interest rate contracts
—
277
—
—
—
277
Foreign exchange contracts
—
296
—
—
—
296
Equity contracts
—
—
20
—
—
20
Credit contracts
—
—
31
—
—
31
Counterparty netting and cash collateral
—
—
—
(270)
(304)
(574)
Total derivative assets
—
573
51
(270)
(304)
50
Short-term investments
7,942
1,847
—
—
—
9,789
Other assets(c)
—
—
129
—
—
129
Total(d)
$
12,638 $
63,919 $
3,532 $
(270) $
(304) $
79,515
December 31, 2024
Level 1
Level 2
Level 3
Counterparty
Netting(a)
Cash
Collateral
Total
(in millions)
AIG | 2024 Form 10-K
113
ITEM 8 | Notes to Consolidated Financial Statements | 5. Fair Value Measurements
Liabilities:
Derivative liabilities(c):
Interest rate contracts
$
— $
304 $
— $
— $
— $
304
Foreign exchange contracts
—
267
—
—
—
267
Equity contracts
—
—
20
—
—
20
Credit contracts
—
—
31
—
—
31
Counterparty netting and cash collateral
—
—
—
(270)
(201)
(471)
Total derivative liabilities
—
571
51
(270)
(201)
151
Fortitude Re funds withheld payable
—
—
(128)
—
—
(128)
Other liabilities
—
—
100
—
—
100
Total
$
— $
571 $
23 $
(270) $
(201) $
123
December 31, 2024
Level 1
Level 2
Level 3
Counterparty
Netting(a)
Cash
Collateral
Total
(in millions)
December 31, 2023
Level 1
Level 2
Level 3
Counterparty
Netting(a)
Cash
Collateral
Total
(in millions)
Assets:
Bonds available for sale:
U.S. government and government sponsored entities
$
15 $
4,380 $
— $
— $
— $
4,395
Obligations of states, municipalities and political subdivisions
—
4,830
3
—
—
4,833
Non-U.S. governments
233
8,156
7
—
—
8,396
Corporate debt
—
32,023
323
—
—
32,346
RMBS
—
4,415
1,792
—
—
6,207
CMBS
—
4,122
25
—
—
4,147
CLO/ABS
—
3,629
1,289
—
—
4,918
Total bonds available for sale
248
61,555
3,439
—
—
65,242
Other bond securities:
Obligations of states, municipalities and political subdivisions
—
51
—
—
—
51
Non-U.S. governments
—
24
—
—
—
24
Corporate debt
—
210
45
—
—
255
RMBS
—
42
51
—
—
93
CMBS
—
33
—
—
—
33
CLO/ABS
—
69
138
—
—
207
Total other bond securities
—
429
234
—
—
663
Equity securities
612
39
14
—
—
665
Other invested assets (b)
—
155
221
—
—
376
Derivative assets(c):
Interest rate contracts
—
335
406
—
—
741
Foreign exchange contracts
—
450
1
—
—
451
Equity contracts
—
18
48
—
—
66
Credit contracts
—
—
33
—
—
33
Other contracts
—
—
1
—
—
1
Counterparty netting and cash collateral
—
—
—
(450)
(711)
(1,161)
Total derivative assets
—
803
489
(450)
(711)
131
Short-term investments
2,613
6,750
—
—
—
9,363
Other assets(c)
—
—
243
—
—
243
Total(d)
$
3,473 $
69,731 $
4,640 $
(450) $
(711) $
76,683
Liabilities:
Derivative liabilities(c):
Interest rate contracts
$
— $
352 $
— $
— $
— $
352
Foreign exchange contracts
—
561
3
—
—
564
Credit contracts
—
3
33
—
—
36
Counterparty netting and cash collateral
—
—
—
(450)
(249)
(699)
Total derivative liabilities
—
916
36
(450)
(249)
253
Fortitude Re funds withheld payable
—
—
(148)
—
—
(148)
Other liabilities
—
107
122
—
—
229
Total
$
— $
1,023 $
10 $
(450) $
(249) $
334
(a) Represents netting of derivative exposures covered by qualifying master netting agreements.
AIG | 2024 Form 10-K
114
ITEM 8 | Notes to Consolidated Financial Statements | 5. Fair Value Measurements
(b) Excludes investments that are measured at fair value using the net asset value (NAV) per share (or its equivalent), which totaled $3.3 billion and $3.8 billion as of
December 31, 2024 and 2023, respectively. As of December 31, 2024, includes AIG's ownership interest in Corebridge of $3.8 billion on which AIG elected the fair value
option.
(c) Presented as part of Other assets and Other liabilities on the Consolidated Balance Sheets.
(d) Excludes $15 million of assets reclassified to Assets held for sale on the Consolidated Balance Sheets at December 31, 2023.
CHANGES IN LEVEL 3 RECURRING FAIR VALUE MEASUREMENTS
The following tables present changes during the years ended December 31, 2024 and 2023 in Level 3 assets and liabilities
measured at fair value on a recurring basis, and the realized and unrealized gains (losses) related to the Level 3 assets and
liabilities in the Consolidated Balance Sheets at December 31, 2024 and 2023:
(in millions)
Fair Value
Beginning
of Year
Net
Realized
and
Unrealized
Gains
(Losses)
Included
in Income
Other
Comprehensive
Income (Loss)
Purchases,
Sales,
Issuances
and
Settlements,
Net
Gross
Transfers
In
Gross
Transfers
Out
Other
Fair
Value
End of
Year
Changes in
Unrealized
Gains
(Losses)
Included in
Income on
Instruments
Held at End
of Year
Changes in
Unrealized Gains
(Losses)
Included in Other
Comprehensive
Income (Loss) for
Recurring Level 3
Instruments Held
at End of Year
December 31, 2024
Assets:
Bonds available for sale:
Obligations of states, municipalities and
political subdivisions
$
3 $
— $
— $
— $
— $
— $
— $
3 $
— $
(5)
Non-U.S. governments
7
—
—
—
—
—
—
7
—
—
Corporate debt
323
(1)
(3)
(71)
232
(245)
5
240
—
(6)
RMBS
1,792
53
32
(238)
308
(89)
36
1,894
—
(43)
CMBS
25
(11)
13
(32)
108
(78)
1
26
—
1
CLO/ABS
1,289
(22)
54
(441)
43
(83)
—
840
—
37
Total bonds available for sale
3,439
19
96
(782)
691
(495)
42
3,010
—
(16)
Other bond securities:
Corporate debt
45
—
—
—
1
(45)
—
1
—
—
RMBS
51
1
—
(3)
—
(3)
4
50
2
—
CLO/ABS
138
1
—
4
2
(32)
—
113
(1)
—
Total other bond securities
234
2
—
1
3
(80)
4
164
1
—
Equity securities
14
1
—
4
11
(13)
(2)
15
1
—
Other invested assets
221
(16)
—
(35)
—
(13)
6
163
(11)
—
Other assets
243
—
—
(114)
—
—
—
129
—
—
Total
$
4,151 $
6 $
96 $
(926) $
705 $
(601) $
50 $ 3,481 $
(9) $
(16)
(in millions)
Fair Value
Beginning
of Year
Net
Realized
and
Unrealized
(Gains)
Losses
Included
in Income
Other
Comprehensive
Income (Loss)
Purchases,
Sales,
Issuances
and
Settlements,
Net
Gross
Transfers
In
Gross
Transfers
Out
Other
Fair
Value
End of
Year
Changes in
Unrealized
Gains
(Losses)
Included in
Income on
Instruments
Held at End
of Year
Changes in
Unrealized Gains
(Losses)
Included in Other
Comprehensive
Income (Loss) for
Recurring Level 3
Instruments Held
at End of Year
Liabilities:
Derivative liabilities, net:
Interest rate contracts
$
(406) $
61 $
— $
345 $
— $
— $
— $
— $
— $
—
Foreign exchange contracts
2
(2)
—
—
—
—
—
—
—
—
Equity contracts
(48)
(18)
—
31
—
—
35
—
—
—
Credit contracts
—
1
—
—
—
—
(1)
—
(1)
—
Other contracts
(1)
(1)
—
1
—
—
1
—
—
—
Total derivative liabilities, net(a)
(453)
41
—
377
—
—
35
—
(1)
—
Fortitude Re funds withheld payable
(148)
75
—
(55)
—
—
—
(128)
(26)
—
Other Liabilities
122
(2)
—
(20)
—
—
—
100
—
—
Total
$
(479) $
114 $
— $
302 $
— $
— $
35 $
(28) $
(27) $
—
AIG | 2024 Form 10-K
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ITEM 8 | Notes to Consolidated Financial Statements | 5. Fair Value Measurements
(in millions)
Fair Value
Beginning
of Year
Net
Realized
and
Unrealized
Gains
(Losses)
Included
in Income
Other
Comprehensive
Income (Loss)
Purchases,
Sales,
Issuances
and
Settlements,
Net
Gross
Transfers
In
Gross
Transfers
Out
Other
Fair
Value
End of
Year
Changes in
Unrealized
Gains
(Losses)
Included in
Income on
Instruments
Held at End
of Year
Changes in
Unrealized Gains
(Losses)
Included in Other
Comprehensive
Income (Loss) for
Recurring Level 3
Instruments Held
at End of Year
December 31, 2023
Assets:
Bonds available for sale:
Obligations of states, municipalities and
political subdivisions
$
20 $
(1) $
1 $
(16) $
— $
(1) $
— $
3 $
— $
—
Non-U.S. governments
2
—
1
(5)
11
(2)
—
7
—
1
Corporate debt
879
(8)
11
(537)
236
(258)
—
323
—
(5)
RMBS
1,884
114
(10)
(142)
—
(54)
—
1,792
—
(17)
CMBS
207
(31)
4
(6)
44
(193)
—
25
—
(11)
CLO/ABS
1,483
(39)
66
(179)
17
(75)
16
1,289
—
3
Total bonds available for sale
4,475
35
73
(885)
308
(583)
16
3,439
—
(29)
Other bond securities:
Corporate debt
—
1
—
44
—
—
—
45
1
—
RMBS
65
4
—
(18)
—
—
—
51
(7)
—
CLO/ABS
158
4
—
(34)
1
(3)
12
138
(25)
—
Total other bond securities
223
9
—
(8)
1
(3)
12
234
(31)
—
Equity securities
13
1
—
3
10
(13)
—
14
1
—
Other invested assets
244
3
—
(36)
10
—
—
221
(1)
—
Other assets
107
—
—
136
—
—
—
243
—
—
Total
$
5,062 $
48 $
73 $
(790) $
329 $
(599) $
28 $ 4,151 $
(31) $
(29)
(in millions)
Fair Value
Beginning
of Year
Net
Realized
and
Unrealized
(Gains)
Losses
Included
in Income
Other
Comprehensive
Income (Loss)
Purchases,
Sales,
Issuances
and
Settlements,
Net
Gross
Transfers
In
Gross
Transfers
Out
Other
Fair
Value
End of
Year
Changes in
Unrealized
Gains
(Losses)
Included in
Income on
Instruments
Held at End
of Year
Changes in
Unrealized Gains
(Losses)
Included in Other
Comprehensive
Income (Loss) for
Recurring Level 3
Instruments Held
at End of Year
Liabilities:
Derivative liabilities, net:
Interest rate contracts
$
(311) $
(44) $
— $
(51) $
— $
— $
— $
(406) $
37 $
—
Foreign exchange contracts
—
2
—
—
—
—
—
2
(2)
—
Equity contracts
(271)
72
—
151
—
—
—
(48)
19
—
Credit contracts
—
—
—
—
—
—
—
—
(1)
—
Other contracts
(1)
(2)
—
2
—
—
—
(1)
2
—
Total derivative liabilities, net(a)
(583)
28
—
102
—
—
—
(453)
55
—
Fortitude Re funds withheld payable
(41)
273
—
(380)
—
—
—
(148)
(151)
—
Other liabilities
112
10
—
—
—
—
—
122
—
—
Total
$
(512) $
311 $
— $
(278) $
— $
— $
— $
(479) $
(96) $
—
(a) Total Level 3 derivative exposures have been netted in these tables for presentation purposes only.
Net realized and unrealized gains and losses included in income related to Level 3 assets and liabilities shown above are
reported in the Consolidated Statements of Income (Loss) as follows:
(in millions)
Net
Investment
Income
Net Realized
Gains (Losses)
Total
December 31, 2024
Assets:
Bonds available for sale
$
75
$
(56)
$
19
Other bond securities
2
—
2
Equity securities
1
—
1
Other invested assets
(16)
—
(16)
December 31, 2023
Assets:
Bonds available for sale
$
104
$
(69)
$
35
Other bond securities
9
—
9
Equity securities
1
—
1
Other invested assets
4
(1)
3
AIG | 2024 Form 10-K
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ITEM 8 | Notes to Consolidated Financial Statements | 5. Fair Value Measurements
(in millions)
Net
Investment
Income
Net Realized
(Gains) Losses
Total
December 31, 2024
Liabilities:
Derivative liabilities, net
$
—
$
41
$
41
Fortitude Re funds withheld payable
—
75
75
Other Liabilities
—
(2)
(2)
December 31, 2023
Liabilities:
Derivative liabilities, net
$
—
$
28
$
28
Fortitude Re funds withheld payable
—
273
273
Other Liabilities
—
10
10
The following table presents the gross components of purchases, sales, issuances and settlements, net, shown above, for
the years ended December 31, 2024 and 2023 related to Level 3 assets and liabilities in the Consolidated Balance Sheets:
December 31, 2024
Assets:
Bonds available for sale:
Obligations of states, municipalities and political subdivisions
$
1
$
—
$
(1)
$
—
Non-U.S. governments
4
—
(4)
—
Corporate debt
43
(29)
(85)
(71)
RMBS
89
(53)
(274)
(238)
CMBS
—
(15)
(17)
(32)
CLO/ABS
447
(681)
(207)
(441)
Total bonds available for sale
584
(778)
(588)
(782)
Other bond securities:
RMBS
3
(1)
(5)
(3)
CLO/ABS
13
—
(9)
4
Total other bond securities
16
(1)
(14)
1
Equity securities
6
(2)
—
4
Other invested assets
3
—
(38)
(35)
Other assets
—
—
(114)
(114)
Total
$
609
$
(781)
$
(754)
$
(926)
Liabilities:
Derivative liabilities, net
$
—
$
—
$
377
$
377
Fortitude Re funds withheld payable
—
—
(55)
(55)
Other Liabilities
—
—
(20)
(20)
Total
$
—
$
—
$
302
$
302
December 31, 2023
Assets:
Bonds available for sale:
Obligations of states, municipalities and political subdivisions
$
1
$
(15)
$
(2)
$
(16)
Non-U.S. governments
—
—
(5)
(5)
Corporate Debt
21
(4)
(554)
(537)
RMBS
228
(25)
(345)
(142)
CMBS
1
(23)
16
(6)
CLO/ABS
291
(437)
(33)
(179)
Total bonds available for sale
542
(504)
(923)
(885)
Other bond securities:
Corporate debt
20
—
24
44
RMBS
—
—
(18)
(18)
CLO/ABS
14
(10)
(38)
(34)
Total other bond securities
34
(10)
(32)
(8)
(in millions)
Purchases
Sales
Issuances
and
Settlements(a)
Purchases, Sales,
Issuances and
Settlements, Net(a)
AIG | 2024 Form 10-K
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ITEM 8 | Notes to Consolidated Financial Statements | 5. Fair Value Measurements
Equity securities
6
(2)
(1)
3
Other invested assets
1
—
(37)
(36)
Other assets
130
—
6
136
Total
$
713
$
(516)
$
(987)
$
(790)
Liabilities:
Derivative liabilities, net
$
(481)
$
7
$
576
$
102
Fortitude Re funds withheld payable
—
—
(380)
(380)
Total
$
(481)
$
7
$
196
$
(278)
(in millions)
Purchases
Sales
Issuances
and
Settlements(a)
Purchases, Sales,
Issuances and
Settlements, Net(a)
(a) There were no issuances during the years ended December 31, 2024 and 2023.
Both observable and unobservable inputs may be used to determine the fair values of positions classified in Level 3 in the tables
above. As a result, the unrealized gains (losses) on instruments held at December 31, 2024 and 2023 may include changes in fair
value that were attributable to both observable (e.g., changes in market interest rates) and unobservable inputs (e.g., changes in
unobservable long-dated volatilities).
Transfers of Level 3 Assets and Liabilities
The Net realized and unrealized gains (losses) included in income (loss) or Other comprehensive income (loss) (OCI) as shown in the
table above excludes $(35) million and $2 million of net gains (losses) related to assets and liabilities transferred into Level 3 during
the years ended December 31, 2024 and 2023, respectively, and includes $(13) million and $(11) million of net gains (losses) related
to assets and liabilities transferred out of Level 3 during the years ended December 31, 2024 and 2023, respectively.
Transfers of Level 3 Assets
During the years ended December 31, 2024 and 2023, transfers into Level 3 assets primarily included certain investments in private
placement corporate debt, commercial mortgage-backed securities (CMBS), residential mortgage-backed securities (RMBS),
collateralized loan obligations (CLO)/asset-backed securities (ABS) and equity securities. Transfers of private placement corporate
debt and certain ABS into Level 3 assets were primarily the result of limited market pricing information that required us to determine
fair value for these securities based on inputs that are adjusted to better reflect our own assumptions regarding the characteristics of a
specific security or associated market liquidity. The transfers of investments in CMBS, RMBS, CLO and certain ABS into Level 3
assets were due to diminished market transparency and liquidity for individual security types.
During the years ended December 31, 2024 and 2023, transfers out of Level 3 assets primarily included certain investments in private
placement corporate debt, CMBS, RMBS, CLO/ABS, municipal bonds and equity securities. Transfers of private placement corporate
debt out of Level 3 assets were based on consideration of market liquidity as well as related transparency of pricing and associated
observable inputs for these investments. Transfers of certain investments in private placement corporate debt out of Level 3 assets
were primarily the result of using observable pricing information that reflects the fair value of those securities without the need for
adjustment based on our own assumptions regarding the characteristics of a specific security or the current liquidity in the market.
Transfers of Level 3 Liabilities
There were no significant transfers of derivative or other liabilities into or out of Level 3 for the years ended December 31, 2024 and
2023.
QUANTITATIVE INFORMATION ABOUT LEVEL 3 FAIR VALUE MEASUREMENTS
The table below presents information about the significant unobservable inputs used for recurring fair value measurements
for certain Level 3 instruments, and includes only those instruments for which information about the inputs is reasonably
available to us, such as data from independent third-party valuation service providers. Because input information from third-
parties with respect to certain Level 3 instruments (primarily CLO/ABS) may not be reasonably available to us, balances
shown below may not equal total amounts reported for such Level 3 assets and liabilities:
Assets:
Obligations of states, municipalities and
political subdivisions
$
3
Discounted cash flow
Yield
5.09% - 5.57% (5.33%)
Corporate debt
177
Discounted cash flow
Yield
6.83% - 11.61% (9.22%)
RMBS(a)
1,321
Discounted cash flow
Constant prepayment rate
4.10% - 9.26% (6.68%)
Loss severity
40.81% - 76.72% (58.76%)
(in millions)
Fair Value at
December 31, 2024
Valuation
Technique
Unobservable Input(b)
Range
(Weighted Average)(c)
AIG | 2024 Form 10-K
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ITEM 8 | Notes to Consolidated Financial Statements | 5. Fair Value Measurements
Constant default rate
0.57% - 2.48% (1.52%)
Yield
5.89% - 6.98% (6.44%)
CLO/ABS(a)
760
Discounted cash flow
Yield
4.24% - 8.42% (6.33%)
CMBS
25
Discounted cash flow
Yield
7.04% - 10.12% (8.70%)
(in millions)
Fair Value at
December 31, 2024
Valuation
Technique
Unobservable Input(b)
Range
(Weighted Average)(c)
Assets:
Obligations of states, municipalities and
political subdivisions
$
3
Discounted cash flow
Yield
5.00% - 5.50% (5.23%)
Corporate debt
332
Discounted cash flow
Yield
5.16% - 9.62% (7.39%)
RMBS(a)
1,341
Discounted cash flow
Constant prepayment rate
4.43% - 10.30% (7.36%)
Loss severity
43.21% - 76.65% (59.93%)
Constant default rate
0.82% - 2.64% (1.73%)
Yield
6.18% - 7.42% (6.80%)
CLO/ABS(a)
1,100
Discounted cash flow
Yield
5.31% - 8.56% (6.94%)
CMBS
22
Discounted cash flow
Yield
9.84% - 17.24% (13.54%)
(in millions)
Fair Value at
December 31, 2023
Valuation
Technique
Unobservable Input(b)
Range
(Weighted Average)(c)
(a) Information received from third-party valuation service providers. The ranges of the unobservable inputs for constant prepayment rate, loss severity and constant default
rate relate to each of the individual underlying mortgage loans that comprise the entire portfolio of securities in the RMBS and CLO securitization vehicles and not
necessarily to the securitization vehicle bonds (tranches) purchased by us. The ranges of these inputs do not directly correlate to changes in the fair values of the
tranches purchased by us, because there are other factors relevant to the fair values of specific tranches owned by us including, but not limited to, purchase price,
position in the waterfall, senior versus subordinated position and attachment points.
(b) Represents discount rates, estimates and assumptions that we believe would be used by market participants when valuing these assets and liabilities.
(c) The weighted averaging for fixed maturity securities is based on the estimated fair value of the securities.
The ranges of reported inputs for Obligations of states, municipalities and political subdivisions, Corporate debt, RMBS, CLO/ABS,
and CMBS valued using a discounted cash flow technique consist of one standard deviation in either direction from the
value-weighted average. The preceding table does not give effect to our risk management practices that might offset risks inherent in
these Level 3 assets and liabilities.
Interrelationships Between Unobservable Inputs
We consider unobservable inputs to be those for which market data is not available and that are developed using the best information
available to us about the assumptions that market participants would use when pricing the asset or liability. Relevant inputs vary
depending on the nature of the instrument being measured at fair value. The following paragraphs provide a general description of
significant unobservable inputs along with interrelationships between and among the significant unobservable inputs and their impact
on the fair value measurements. In practice, simultaneous changes in assumptions may not always have a linear effect on the inputs
discussed below. Interrelationships may also exist between observable and unobservable inputs. Such relationships have not been
included in the discussion below. For each of the individual relationships described below, the inverse relationship would also
generally apply.
Fixed Maturity Securities
The significant unobservable input used in the fair value measurement of fixed maturity securities is yield. The yield is affected by the
market movements in credit spreads and U.S. Treasury yields. The yield may be affected by other factors including constant
prepayment rates, loss severity, and constant default rates. In general, increases in the yield would decrease the fair value of
investments, and conversely, decreases in the yield would increase the fair value of investments.
Embedded Derivatives within Reinsurance Contracts
The fair value of embedded derivatives associated with funds withheld reinsurance contracts is determined based upon a total return
swap technique with reference to the fair value of the investments held by AIG related to AIG’s funds withheld payable. The fair value
of the underlying assets is generally based on market observable inputs using industry standard valuation techniques. The valuation
also requires certain significant inputs, which are generally not observable, and accordingly, the valuation is considered Level 3 in the
fair value hierarchy.
AIG | 2024 Form 10-K
119
ITEM 8 | Notes to Consolidated Financial Statements | 5. Fair Value Measurements
INVESTMENTS IN CERTAIN ENTITIES CARRIED AT FAIR VALUE USING NET ASSET VALUE PER
SHARE
The following table includes information related to our investments in certain other invested assets, including private equity
funds, hedge funds and other alternative investments that calculate net asset value per share (or its equivalent). For these
investments, which are measured at fair value on a recurring basis, we use the net asset value per share to measure fair
value.
Investment Category
Private equity funds:
Leveraged buyout
Debt and/or equity investments made as part of a
transaction in which assets of mature companies are
acquired from the current shareholders, typically with the
use of financial leverage
$
1,126 $
375
$
1,171 $
558
Real assets
Investments in real estate properties, agricultural and
infrastructure assets, including power plants and other
energy producing assets
782
261
870
344
Venture capital
Early-stage, high-potential, growth companies expected
to generate a return through an eventual realization
event, such as an initial public offering or sale of the
company
83
40
67
50
Growth equity
Funds that make investments in established companies
for the purpose of growing their businesses
175
1
196
9
Mezzanine
Funds that make investments in the junior debt and
equity securities of leveraged companies
120
58
140
56
Other
Includes distressed funds that invest in securities of
companies that are in default or under bankruptcy
protection, as well as funds that have multi- strategy, and
other strategies
819
57
944
64
Total private equity funds
3,105
792
3,388
1,081
Hedge funds:
Event-driven
Securities of companies undergoing material structural
changes, including mergers, acquisitions and other
reorganizations
11
—
13
—
Long-short
Securities that the manager believes are undervalued,
with corresponding short positions to hedge market risk
168
—
389
—
Other
Includes investments held in funds that are less liquid, as
well as other strategies which allow for broader allocation
between public and private investments
8
—
9
—
Total hedge funds
187
—
411
—
Total
$
3,292 $
792
$
3,799 $
1,081
December 31, 2024
December 31, 2023
(in millions)
Investment Category Includes
Fair Value
Using NAV
Per Share (or
its equivalent)
Unfunded
Commitments
Fair Value
Using NAV
Per Share (or
its equivalent)
Unfunded
Commitments
Private equity fund investments included above are not redeemable, because distributions from the funds will be received when
underlying investments of the funds are liquidated. Private equity funds are generally expected to have 10-year lives at their inception,
but these lives may be extended at the fund manager’s discretion, typically in one-year or two-year increments.
FAIR VALUE OPTION
Under the fair value option, we may elect to measure at fair value financial assets and financial liabilities that are not otherwise
required to be carried at fair value. Subsequent changes in fair value for designated items are reported in earnings. We elect the fair
value option for certain hybrid securities given the complexity of bifurcating the economic components associated with the embedded
derivatives.
For additional information related to embedded derivatives, see Note 11.
Additionally, we elect the fair value option for certain alternative investments when such investments are eligible for this election. We
believe this measurement basis is consistent with the applicable accounting guidance used by the respective investment company
funds themselves.
For additional information on securities and other invested assets for which we have elected the fair value option, see Note 6.
AIG | 2024 Form 10-K
120
ITEM 8 | Notes to Consolidated Financial Statements | 5. Fair Value Measurements
The following table presents the gains or losses recorded related to the eligible instruments for which we elected the fair
value option:
Years Ended December 31,
Gain (Loss)
(in millions)
2024
2023
2022
Other bond securities(a)
$
19
$
46
$
(374)
Alternative investments(b)
257
220
32
Retained investment in Corebridge(c)
439
—
—
Total gain (loss)
$
715
$
266
$
(136)
(a) Includes certain securities supporting the funds withheld arrangements with Fortitude Re. For additional information regarding the gains and losses for Other bond
securities, see Note 6. For additional information regarding the funds withheld arrangements with Fortitude Re, see Note 8.
(b) Includes certain hedge funds, private equity funds and real estate investments.
(c) Represents the impact of changes in Corebridge stock price on the value of AIG's ownership interest in Corebridge and gain on sale of Corebridge shares.
Interest income and dividend income on assets measured under the fair value option are recognized and included in Net investment
income in the Consolidated Statements of Income. Interest expense on liabilities measured under the fair value option is reported in
Other Income in the Consolidated Statements of Income.
For additional information about our policies for recognition, measurement, and disclosure of interest and dividend income, see
Note 6.
We calculate the effect of these credit spread changes using discounted cash flow techniques that incorporate current market interest
rates, our observable credit spreads on these liabilities and other factors that mitigate the risk of nonperformance such as cash
collateral posted.
FAIR VALUE INFORMATION ABOUT FINANCIAL INSTRUMENTS NOT MEASURED AT FAIR VALUE
Information regarding the estimation of fair value for financial instruments not carried at fair value (excluding insurance contracts and
lease contracts) is discussed below:
•
Mortgage and other loans receivable: Fair values of loans on commercial real estate and other loans receivable are estimated
for disclosure purposes using discounted cash flow calculations based on discount rates that we believe market participants would
use in determining the price that they would pay for such assets. For certain loans, our current incremental lending rates for similar
types of loans are used as the discount rates, because we believe this rate approximates the rates market participants would use.
Fair values of residential mortgage loans are generally determined based on market prices, using market based adjustments for
credit and servicing as appropriate. The fair values of policy loans are generally estimated based on unpaid principal amount as of
each reporting date. No consideration is given to credit risk because policy loans are effectively collateralized by the cash
surrender value of the policies.
•
Other invested assets: The majority of the Other invested assets that are not measured at fair value represent time deposits with
the original maturity at purchase greater than one year. The fair value of long-term time deposits is determined using the expected
discounted future cash flow.
•
Cash and short-term investments: The carrying amounts of these assets approximate fair values because of the relatively short
period of time between origination and expected realization, and their limited exposure to credit risk.
•
Other liabilities: The majority of Other liabilities that are financial instruments not measured at fair value represent secured
financing arrangements, including repurchase agreements. The carrying amounts of these liabilities approximate fair value,
because the financing arrangements are short-term and are secured by cash or other liquid collateral.
•
Fortitude Re funds withheld payable: The funds withheld payable contains an embedded derivative and the changes in its fair
value are recognized in earnings each period. The difference between the total Fortitude Re funds withheld payable and the
embedded derivative represents the host contract.
•
Long-term debt and Debt of consolidated investment entities: Fair values of these obligations were determined by reference
to quoted market prices, when available and appropriate, or discounted cash flow calculations based upon our current
market-observable implicit-credit-spread rates for similar types of borrowings with maturities consistent with those remaining for the
debt being valued.
AIG | 2024 Form 10-K
121
ITEM 8 | Notes to Consolidated Financial Statements | 5. Fair Value Measurements
The following table presents the carrying amounts and estimated fair values of our financial instruments not measured at
fair value and indicates the level in the fair value hierarchy of the estimated fair value measurement based on the
observability of the inputs used:
December 31, 2024
Assets:
Mortgage and other loans receivable
$
— $
339 $
3,413 $
3,752 $
3,868
Other invested assets
—
578
5
583
583
Short-term investments
—
4,673
—
4,673
4,673
Cash
1,302
—
—
1,302
1,302
Other assets
15
—
—
15
15
Liabilities:
Fortitude Re funds withheld payable
—
—
3,335
3,335
3,335
Long-term debt
—
7,981
240
8,221
8,764
Debt of consolidated investment entities
—
—
158
158
158
Estimated Fair Value
Carrying
Value
(in millions)
Level 1
Level 2
Level 3
Total
December 31, 2023
Assets:
Mortgage and other loans receivable
$
— $
242 $
4,113 $
4,355 $
4,441
Other invested assets
—
645
6
651
651
Short-term investments
—
3,502
—
3,502
3,502
Cash
1,540
—
—
1,540
1,540
Other assets
32
—
—
32
32
Liabilities:
Fortitude Re funds withheld payable
—
—
3,675
3,675
3,675
Long-term debt
—
9,623
267
9,890
10,375
Debt of consolidated investment entities
—
—
231
231
231
Estimated Fair Value
Carrying
Value
(in millions)
Level 1
Level 2
Level 3
Total
6. Investments
FIXED MATURITY SECURITIES
Bonds held to maturity are carried at amortized cost when we have the ability and positive intent to hold these securities until maturity.
When we do not have the ability or positive intent to hold bonds until maturity, these securities are classified as available for sale or
the fair value option has been elected. None of our fixed maturity securities met the criteria for held to maturity classification at
December 31, 2024 or 2023.
Unrealized gains and losses from available for sale investments in fixed maturity securities carried at fair value were reported as a
separate component of AOCI, net of deferred income taxes, in shareholders’ equity. Realized and unrealized gains and losses from
fixed maturity securities for which the fair value option has been elected are reflected in Net investment income. Investments in fixed
maturity securities are recorded on a trade-date basis.
Interest income is recognized using the effective yield method and reflects amortization of premium and accretion of discount.
Premiums and discounts arising from the purchase of bonds classified as available for sale are treated as yield adjustments over their
estimated holding periods, until maturity, or call date, if applicable. For investments in certain structured securities, recognized yields
are updated based on current information regarding the timing and amount of expected undiscounted future cash flows. For high
credit quality structured securities, effective yields are recalculated based on actual payments received and updated prepayment
expectations, and the amortized cost is adjusted to the amount that would have existed had the new effective yield been applied since
acquisition with a corresponding charge or credit to net investment income. For structured securities that are not high credit quality,
the structured securities yields are based on expected cash flows which take into account both expected credit losses and
prepayments.
AIG | 2024 Form 10-K
122
ITEM 8 | Notes to Consolidated Financial Statements | 5. Fair Value Measurements
An allowance for credit losses is not established upon initial recognition of the asset (unless the security is determined to be a
purchased credit deteriorated (PCD) asset which is discussed in more detail below). Subsequently, differences between actual and
expected cash flows and changes in expected cash flows are recognized as adjustments to the allowance for credit losses. Changes
that cannot be reflected as adjustments to the allowance for credit losses are accounted for as prospective adjustments to yield.
SECURITIES AVAILABLE FOR SALE
The following table presents the amortized cost and fair value of our available for sale securities:
December 31, 2024
Bonds available for sale:
U.S. government and government sponsored entities
$
3,346 $
— $
20 $
(99) $
3,267
Obligations of states, municipalities and political subdivisions
3,223
—
32
(112)
3,143
Non-U.S. governments
8,644
(1)
54
(590)
8,107
Corporate debt
33,031
(28)
581
(1,758)
31,826
Mortgage-backed, asset-backed and collateralized:
RMBS
8,820
(6)
209
(419)
8,604
CMBS
3,988
(3)
32
(91)
3,926
CLO/ABS
5,143
—
34
(44)
5,133
Total mortgage-backed, asset-backed and collateralized
17,951
(9)
275
(554)
17,663
Total bonds available for sale(b)
$
66,195 $
(38) $
962 $
(3,113) $
64,006
December 31, 2023
Bonds available for sale:
U.S. government and government sponsored entities
$
4,444 $
— $
40 $
(89) $
4,395
Obligations of states, municipalities and political subdivisions
4,930
—
60
(157)
4,833
Non-U.S. governments
8,973
(1)
94
(670)
8,396
Corporate debt
34,013
(20)
606
(2,253)
32,346
Mortgage-backed, asset-backed and collateralized:
RMBS
6,423
(9)
219
(426)
6,207
CMBS
4,326
(4)
23
(198)
4,147
CLO/ABS
5,010
—
31
(123)
4,918
Total mortgage-backed, asset-backed and collateralized
15,759
(13)
273
(747)
15,272
Total bonds available for sale(b)
$
68,119 $
(34) $
1,073 $
(3,916) $
65,242
(in millions)
Amortized
Cost
Allowance
for Credit
Losses(a)
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
(a) Represents the allowance for credit losses that has been recognized. Changes in the allowance for credit losses are recorded through Net realized gains (losses) and
are not recognized in OCI.
(b) At December 31, 2024 and 2023, the fair value of bonds available for sale held by us that were below investment grade or not rated totaled $3.6 billion or 6 percent and
$5.2 billion or 8 percent, respectively.
Securities Available for Sale in a Loss Position for Which No Allowance for Credit Loss Has Been Recorded
The following table summarizes the fair value and gross unrealized losses on our available for sale securities, aggregated
by major investment category and length of time that individual securities have been in a continuous unrealized loss
position for which no allowance for credit loss has been recorded:
Less than 12 Months
12 Months or More
Total
(in millions)
Fair
Value
Gross
Unrealized
Losses
Fair
Value
Gross
Unrealized
Losses
Fair
Value
Gross
Unrealized
Losses
December 31, 2024
Bonds available for sale:
U.S. government and government sponsored entities
$
1,718 $
21 $
358 $
78 $
2,076 $
99
Obligations of states, municipalities and political
subdivisions
1,502
33
586
79
2,088
112
Non-U.S. governments
1,964
55
3,446
534
5,410
589
Corporate debt
10,347
234
10,907
1,515
21,254
1,749
RMBS
3,711
58
2,147
343
5,858
401
CMBS
1,052
18
992
71
2,044
89
CLO/ABS
1,368
9
315
35
1,683
44
Total bonds available for sale
$ 21,662 $
428 $ 18,751 $
2,655 $ 40,413 $
3,083
ITEM 8 | Notes to Consolidated Financial Statements | 6. Investments
AIG | 2024 Form 10-K
123
Less than 12 Months
12 Months or More
Total
(in millions)
Fair
Value
Gross
Unrealized
Losses
Fair
Value
Gross
Unrealized
Losses
Fair
Value
Gross
Unrealized
Losses
December 31, 2023
Bonds available for sale:
U.S. government and government sponsored entities
$
1,027 $
10 $
804 $
79 $
1,831 $
89
Obligations of states, municipalities and political
subdivisions
850
24
1,602
133
2,452
157
Non-U.S. governments
1,431
87
4,503
583
5,934
670
Corporate debt
4,089
171
18,612
2,070
22,701
2,241
RMBS
1,456
114
2,385
300
3,841
414
CMBS
1,024
54
1,622
137
2,646
191
CLO/ABS
1,371
33
1,509
90
2,880
123
Total bonds available for sale
$ 11,248 $
493 $ 31,037 $
3,392 $ 42,285 $
3,885
At December 31, 2024, we held 12,274 individual fixed maturity securities that were in an unrealized loss position and for which no
allowance for credit losses has been recorded (including 5,984 individual fixed maturity securities that were in a continuous unrealized
loss position for 12 months or more). At December 31, 2023, we held 13,052 individual fixed maturity securities that were in an
unrealized loss position and for which no allowance for credit losses has been recorded (including 10,027 individual fixed maturity
securities that were in a continuous unrealized loss position for 12 months or more). We did not recognize the unrealized losses in
earnings on these fixed maturity securities at December 31, 2024 because it was determined that such losses were due to non-credit
factors. Additionally, we neither intend to sell the securities nor do we believe that it is more likely than not that we will be required to
sell these securities before recovery of their amortized cost basis. For fixed maturity securities with significant declines, we performed
fundamental credit analyses on a security-by-security basis, which included consideration of credit enhancements, liquidity position,
expected defaults, industry and sector analysis, forecasts and available market data.
Contractual Maturities of Fixed Maturity Securities Available for Sale
The following table presents the amortized cost and fair value of fixed maturity securities available for sale by contractual
maturity:
December 31, 2024
Total Fixed Maturity Securities
Available for Sale
(in millions)
Amortized Cost,
Net of Allowance
Fair Value
Due in one year or less
$
4,070 $
3,980
Due after one year through five years
22,194
22,163
Due after five years through ten years
15,712
15,010
Due after ten years
6,239
5,190
Mortgage-backed, asset-backed and collateralized
17,942
17,663
Total
$
66,157 $
64,006
Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay certain obligations
with or without call or prepayment penalties.
The following table presents the gross realized gains and gross realized losses from sales or maturities of our available for
sale securities:
Years Ended December 31,
2024
2023
2022
(in millions)
Gross
Realized
Gains
Gross
Realized
Losses
Gross
Realized
Gains
Gross
Realized
Losses
Gross
Realized
Gains
Gross
Realized
Losses
Fixed maturity securities
$
81
$
700
$
130
$
865
$
281
$
929
For the years ended December 31, 2024, 2023 and 2022, the aggregate fair value of available for sale securities sold was
$13.7 billion, $15.7 billion and $10.5 billion, respectively, which resulted in net realized gains (losses) of $(619) million, $(735) million
and $(648) million, respectively. Included within the net realized gains (losses) are $(36) million, $(67) million and $(83) million of net
realized gains (losses) for the years ended December 31, 2024, 2023 and 2022, respectively, which relate to Fortitude Re funds
withheld assets. These net realized gains (losses) are included in Net realized gains (losses) on Fortitude Re funds withheld assets.
AIG | 2024 Form 10-K
124
ITEM 8 | Notes to Consolidated Financial Statements | 6. Investments
OTHER SECURITIES MEASURED AT FAIR VALUE
The following table presents the fair value of fixed maturity securities measured at fair value based on our election of the fair
value option, which are reported in the other bond securities caption in the financial statements, and equity securities
measured at fair value:
(in millions)
December 31, 2024
December 31, 2023
Fair
Value
Percent
of Total
Fair
Value
Percent
of Total
Fixed maturity securities:
Obligations of states, municipalities and political subdivisions
$
50
3 %
$
51
4 %
Non-U.S. governments
24
2
24
2
Corporate debt
282
19
255
19
Mortgage-backed, asset-backed and collateralized:
RMBS
100
7
93
7
CMBS
43
3
33
2
CLO/ABS and other collateralized securities
246
17
207
16
Total mortgage-backed, asset-backed and collateralized
389
27
333
25
Total fixed maturity securities
745
51
663
50
Equity securities
704
49
665
50
Total
$
1,449
100 %
$
1,328
100 %
OTHER INVESTED ASSETS
The following table summarizes the carrying amounts of other invested assets:
(in millions)
December 31, 2024
December 31, 2023
Alternative investments(a)
$
4,032
$
4,345
Retained investment in Corebridge using fair value option
3,810
—
All other investments(b)
1,986
2,023
Total
$
9,828
$
6,368
(a) At December 31, 2024, includes hedge funds of $187 million and private equity funds of $3.6 billion. At December 31, 2023, included hedge funds of $411 million and
private equity funds of $3.7 billion. Private equity funds investments include limited partnerships, direct equities and real estate partnerships. Also includes investments
in real estate, net of accumulated depreciation. At December 31, 2024 and 2023, the accumulated depreciation was $161 million and $161 million, respectively.
(b) All other investments include mainly bank deposits with a maturity greater than one year and investments in joint ventures with strategic partners.
Other Invested Assets Carried at Fair Value
Certain hedge funds, private equity funds, and other investment partnerships for which we have elected the fair value option are
reported at fair value with changes in fair value recognized in Net investment income.
Other Invested Assets – Equity Method Investments
We account for hedge funds, private equity funds and other investment partnerships using the equity method of accounting unless our
interest is so minor that we may have virtually no influence over partnership operating and financial policies, or we have elected the
fair value option. Under the equity method of accounting, our carrying amount generally is our share of the net asset value of the
funds or the partnerships, and changes in our share of the net asset values are recorded in Net investment income. In applying the
equity method of accounting, we consistently use the most recently available financial information provided by the general partner or
manager of each of these investments. Hedge funds are reported as of the balance sheet date. Private equity funds are generally
reported on a one-quarter lag. The financial statements of these investees are generally audited annually. The carrying amount of
equity method investments totaled $6.6 billion and $3.0 billion as of December 31, 2024 and 2023, respectively.
AIG | 2024 Form 10-K
125
ITEM 8 | Notes to Consolidated Financial Statements | 6. Investments
Summarized Financial Information of Equity Method Investees
The following is the aggregated summarized financial information of our equity method investees, including those for which
the fair value option has been elected:
Years Ended December 31,
(in millions)
2024*
2023
2022
Operating results:
Total revenues
$
21,860 $
2,320 $
6,486
Total expenses
(18,557)
(1,668)
(1,832)
Income before income taxes
$
3,303 $
652 $
4,654
At December 31,
(in millions)
2024*
2023
Balance sheet:
Total assets
$
418,639 $
28,264
Total liabilities
$
(383,643) $
(5,196)
*
2024 includes investment in Corebridge.
Other Investments
Also included in Other invested assets are real estate held for investment. These investments are reported at cost, less depreciation
and are subject to impairment review, as discussed below.
NET INVESTMENT INCOME
Net investment income represents income primarily from the following sources:
•
Interest income and related expenses, including amortization of premiums and accretion of discounts with changes in the timing
and the amount of expected principal and interest cash flows reflected in yield, as applicable.
•
Dividend income from common and preferred stocks.
•
Realized and unrealized gains and losses from investments in other securities and investments for which we elected the fair value
option.
•
Earnings from alternative investments.
•
Prepayment premiums.
The following table presents the components of Net investment income:
Years Ended December 31,
2024
2023
2022
(in millions)
Excluding
Fortitude
Re Funds
Withheld
Assets
Fortitude
Re
Funds
Withheld
Assets
Total
Excluding
Fortitude
Re Funds
Withheld
Assets
Fortitude
Re
Funds
Withheld
Assets
Total
Excluding
Fortitude
Re Funds
Withheld
Assets
Fortitude
Re
Funds
Withheld
Assets
Total
Available for sale fixed maturity securities,
including short-term investments
$
2,989 $
89 $ 3,078
$ 2,862 $
95 $ 2,957
$ 1,960 $
113 $ 2,073
Other fixed maturity securities(a)
—
19
19
3
43
46
(282)
(92)
(374)
Equity securities
149
—
149
53
—
53
29
—
29
Interest on mortgage and other loans
229
32
261
283
38
321
264
27
291
Alternative investments(b)
196
—
196
199
—
199
315
—
315
Other investments(c)(d)
727
4
731
101
4
105
211
5
216
Total investment income
4,290
144
4,434
3,501
180
3,681
2,497
53
2,550
Investment expenses
179
—
179
235
—
235
180
—
180
Net investment income
$
4,111 $
144 $ 4,255
$ 3,266 $
180 $ 3,446
$ 2,317 $
53 $ 2,370
(a) Included in the year ended December 31, 2022 was losses of $195 million related to fixed maturity securities measured at fair value that economically hedge liabilities
described in (c) below.
(b) Includes income from hedge funds, private equity funds and real estate investments. Hedge funds are recorded as of the balance sheet date. Private equity funds are
generally reported on a one-quarter lag.
(c) Included in the year ended December 31, 2022 was income of $186 million related to liabilities measured at fair value that are economically hedged with fixed maturity
securities as described in (a) above.
(d) Includes dividends received from Corebridge, changes in its stock price and gain on sale of shares of $162 million and $439 million, respectively, for the year ended
December 31, 2024.
AIG | 2024 Form 10-K
126
ITEM 8 | Notes to Consolidated Financial Statements | 6. Investments
NET REALIZED GAINS AND LOSSES
Net realized gains and losses are determined by specific identification. The net realized gains and losses are generated primarily from
the following sources:
•
Sales of available for sale fixed maturity securities, real estate and other alternative investments.
•
Reductions to the amortized cost basis of available for sale fixed maturity securities that have been written down due to our intent
to sell them or it being more likely than not that we will be required to sell them.
•
Changes in the allowance for credit losses on bonds available for sale, mortgage and other loans receivable, and loans
commitments.
•
Most changes in the fair value of free standing and embedded derivatives, including changes in the non-performance adjustment
are included in Net realized gains (losses). However, changes in derivatives designated as hedging instruments when the fair
value of the hedged item is not reported in Net realized gains (losses) are excluded from Net realized gains (losses).
•
Foreign exchange gains and losses resulting from foreign currency transactions.
•
Changes in fair value of the embedded derivative related to the Fortitude Re funds withheld assets.
The following table presents the components of Net realized gains (losses):
Years Ended December 31,
2024
2023
2022
(in millions)
Excluding
Fortitude
Re Funds
Withheld
Assets
Fortitude
Re
Funds
Withheld
Assets
Total
Excluding
Fortitude
Re Funds
Withheld
Assets
Fortitude
Re
Funds
Withheld
Assets
Total
Excluding
Fortitude
Re Funds
Withheld
Assets
Fortitude
Re
Funds
Withheld
Assets
Total
Sales of fixed maturity securities
$ (583) $
(36) $ (619)
$ (668) $
(67) $ (735)
$ (565) $
(83) $ (648)
Intent to sell
—
—
—
—
—
—
(66)
—
(66)
Change in allowance for credit losses on
fixed maturity securities
(25)
—
(25)
(44)
—
(44)
(72)
—
(72)
Change in allowance for credit losses on
loans
(23)
—
(23)
(28)
3
(25)
19
(3)
16
Foreign exchange transactions
256
(9)
247
124
5
129
266
(10)
256
All other derivatives and hedge accounting
(62)
7
(55)
(165)
(8)
(173)
159
(3)
156
Sales of alternative investments
(16)
—
(16)
29
—
29
15
—
15
Other
19
(1)
18
18
(4)
14
37
—
37
Net realized losses – excluding Fortitude
Re funds withheld embedded derivative
(434)
(39)
(473)
(734)
(71)
(805)
(207)
(99)
(306)
Net realized gains (losses) on Fortitude Re
funds withheld embedded derivative
—
(75)
(75)
—
(273)
(273)
—
1,133
1,133
Net realized gains (losses)
$ (434) $ (114) $ (548)
$ (734) $ (344) $ (1,078)
$ (207) $ 1,034 $
827
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS
The following table presents the increase (decrease) in unrealized appreciation (depreciation) of our available for sale
securities and other investments:
Years Ended
December 31,
(in millions)
2024
2023
Increase (decrease) in unrealized appreciation (depreciation) of investments:
Fixed maturity securities
$
692 $
2,463
Other investments
—
—
Total increase (decrease) in unrealized appreciation (depreciation) of investments*
$
692 $
2,463
*
Excludes net unrealized gains and losses attributable to businesses held for sale or reclassified to discontinued operations at December 31, 2024 and 2023.
AIG | 2024 Form 10-K
127
ITEM 8 | Notes to Consolidated Financial Statements | 6. Investments
The following table summarizes the unrealized gains and losses recognized in Net investment income during the reporting
period on equity securities and other investments still held at the reporting date:
Years Ended December 31,
2024
2023
(in millions)
Equities
Other
Invested
Assets*
Total
Equities
Other
Invested
Assets
Total
Net gains recognized during the period on equity securities and other investments
$
149
$
696
$ 845
$
53
$
249
$ 302
Less: Net gains (losses) recognized during the period on equity securities and other
investments sold during the period
45
461
506
90
(20)
70
Unrealized gains (losses) recognized during the reporting period on equity
securities and other investments still held at the reporting date
$
104
$
235
$ 339
$
(37)
$
269
$ 232
*
Includes unrealized gains (losses) on AIG’s ownership interest in Corebridge and gain on sale of shares of $439 million in the year ended December 31, 2024.
EVALUATING INVESTMENTS FOR AN ALLOWANCE FOR CREDIT LOSSES AND IMPAIRMENTS
Fixed Maturity Securities
If we intend to sell a fixed maturity security or it is more likely than not that we will be required to sell a fixed maturity security before
recovery of its amortized cost basis and if the fair value of the security is below amortized cost, an impairment has occurred and the
amortized cost is written down to current fair value, with a corresponding charge to Net realized gains (losses). No allowance is
established in these situations and any previously recorded allowance is reversed. The new cost basis is not adjusted for subsequent
increases in estimated fair value. When assessing our intent to sell a fixed maturity security, or whether it is more likely than not that
we will be required to sell a fixed maturity security before recovery of its amortized cost basis, management evaluates relevant facts
and circumstances including, but not limited to, decisions to reposition our investment portfolio, sales of securities to meet cash flow
needs and sales of securities to take advantage of favorable pricing.
For fixed maturity securities for which a decline in the fair value below the amortized cost is due to credit related factors, an allowance
is established for the difference between the estimated recoverable value and amortized cost with a corresponding charge to Net
realized gains (losses). The allowance for credit losses is limited to the difference between amortized cost and fair value. The
estimated recoverable value is the present value of cash flows expected to be collected, as determined by management. The
difference between fair value and amortized cost that is not associated with credit related factors is presented in unrealized
appreciation (depreciation) of fixed maturity securities on which an allowance for credit losses was previously recognized (a separate
component of AOCI). Accrued interest is excluded from the measurement of the allowance for credit losses.
When estimating future cash flows for structured fixed maturity securities (e.g., RMBS, CMBS, CLO, ABS) management considers the
historical performance of underlying assets and available market information as well as bond-specific structural considerations, such
as credit enhancement and the priority of payment structure of the security. In addition, the process of estimating future cash flows
includes, but is not limited to, the following critical inputs, which vary by asset class:
•
Current delinquency rates;
•
Expected default rates and the timing of such defaults;
•
Loss severity and the timing of any recovery; and
•
Expected prepayment speeds.
When estimating future cash flows for corporate, municipal and sovereign fixed maturity securities determined to be credit impaired,
management considers:
•
Expected default rates and the timing of such defaults;
•
Loss severity and the timing of any recovery; and
•
Scenarios specific to the issuer and the security, which may also include estimates of outcomes of corporate restructurings,
political and macroeconomic factors, stability and financial strength of the issuer, the value of any secondary sources of repayment
and the disposition of assets.
We consider severe price declines in our assessment of potential credit impairments. We may also modify our model inputs when we
determine that price movements in certain sectors are indicative of factors not captured by the cash flow models.
Under the current expected credit loss (CECL) model, credit losses are reassessed each period. The allowance for credit losses and
the corresponding charge to Net realized gains (losses) can be reversed if conditions change, however, the allowance for credit
losses will never be reduced below zero. When we determine that all or a portion of a fixed maturity security is uncollectable, the
uncollectable amortized cost amount is written off with a corresponding reduction to the allowance for credit losses. If we collect cash
flows that were previously written off, the recovery is recognized by recording a gain in Net realized gains (losses).
AIG | 2024 Form 10-K
128
ITEM 8 | Notes to Consolidated Financial Statements | 6. Investments
Credit Impairments
The following table presents a rollforward of the changes in allowance for credit losses on available for sale fixed maturity
securities by major investment category:
Years Ended December 31,
2024
2023
2022
(in millions)
Structured
Non-
Structured
Total
Structured
Non-
Structured
Total
Structured
Non-
Structured
Total
Balance, beginning of year
$
13 $
21 $
34
$
20 $
17 $
37
$
2 $
19 $
21
Additions:
Securities for which allowance for credit
losses was not previously recorded
5
10
15
6
46
52
32
99
131
Reductions:
Securities sold during the period
(4)
(2)
(6)
(3)
(9)
(12)
—
(45)
(45)
Addition to (release of) the allowance for
credit losses on securities that had an
allowance recorded in a previous
period, for which there was no intent to
sell before recovery of amortized cost
basis
(3)
13
10
(1)
(7)
(8)
(13)
(46)
(59)
Write-offs charged against the allowance
—
(24)
(24)
(11)
(26)
(37)
—
(6)
(6)
Other
(1)
10
9
2
—
2
(1)
(4)
(5)
Balance, end of year
$
10 $
28 $
38
$
13 $
21 $
34
$
20 $
17 $
37
Purchased Credit Deteriorated Securities
We purchase certain RMBS securities that have experienced more-than-insignificant deterioration in credit quality since origination.
These are referred to as PCD assets. At the time of purchase an allowance is recognized for these PCD assets by adding it to the
purchase price to arrive at the initial amortized cost. There is no credit loss expense recognized upon acquisition of a PCD asset.
When determining the initial allowance for credit losses, management considers the historical performance of underlying assets and
available market information as well as bond-specific structural considerations, such as credit enhancement and the priority of
payment structure of the security. In addition, the process of estimating future cash flows includes, but is not limited to, the following
critical inputs:
•
Current delinquency rates;
•
Expected default rates and the timing of such defaults;
•
Loss severity and the timing of any recovery; and
•
Expected prepayment speeds.
Subsequent to the acquisition date, the PCD assets follow the same accounting as other structured securities that are not high credit
quality.
We did not purchase securities with more than insignificant credit deterioration since their origination during the years ended
December 31, 2024, 2023 and 2022.
Other Invested Assets
Our equity method investments in private equity funds, hedge funds and other entities are evaluated for impairment each reporting
period. Such evaluation considers market conditions, events and volatility that may impact the recoverability of the underlying
investments within these private equity funds and hedge funds and is based on the nature of the underlying investments and specific
inherent risks. Such risks may evolve based on the nature of the underlying investments.
Our investments in real estate are periodically evaluated for recoverability whenever changes in circumstances indicate the carrying
amount of an asset may be impaired. When impairment indicators are present, we compare expected investment cash flows to
carrying amount. When the expected cash flows are less than the carrying amount, the investments are written down to fair value with
a corresponding charge to earnings.
AIG | 2024 Form 10-K
129
ITEM 8 | Notes to Consolidated Financial Statements | 6. Investments
PLEDGED INVESTMENTS
Secured Financing and Similar Arrangements
We enter into secured financing transactions whereby certain securities are sold under agreements to repurchase (repurchase
agreements), in which we transfer securities in exchange for cash, with an agreement by us to repurchase the same or substantially
similar securities. Our secured financing transactions also include those that involve the transfer of securities to financial institutions in
exchange for cash (securities lending agreements). In all of these secured financing transactions, the securities transferred by us
(pledged collateral) may be sold or repledged by the counterparties. These agreements are recorded at their contracted amounts plus
accrued interest, other than those that are accounted for at fair value.
Pledged collateral levels are monitored daily and are generally maintained at an agreed-upon percentage of the fair value of the
amounts borrowed during the life of the transactions. In the event of a decline in the fair value of the pledged collateral under these
secured financing transactions, we may be required to transfer cash or additional securities as pledged collateral under these
agreements. At the termination of the transactions, we and our counterparties are obligated to return the amounts borrowed and the
securities transferred, respectively.
The following table presents the fair value of securities pledged to counterparties under secured financing transactions,
including repurchase and securities lending agreements:
(in millions)
December 31, 2024
December 31, 2023
Fixed maturity securities available for sale
$
— $
106
At December 31, 2024 and 2023, amounts borrowed under repurchase and securities lending agreements totaled $0 million and
$107 million, respectively.
The following table presents the fair value of securities pledged under our repurchase agreements by collateral type and by
remaining contractual maturity:
Remaining Contractual Maturity of the Agreements
(in millions)
Overnight
and
Continuous
up to
30 days
31 - 90
days
91 - 364
days
365 days
or greater
Total
December 31, 2023
Bonds available for sale:
Non-U.S. governments
$
—
$
106
$
—
$
—
$
—
$
106
Corporate debt
—
—
—
—
—
—
Total
$
—
$
106
$
—
$
—
$
—
$
106
We also enter into agreements in which securities are purchased by us under reverse repurchase agreements, which are accounted
for as secured financing transactions and reported as short-term investments or other assets, depending on their terms. These
agreements are recorded at their contracted resale amounts plus accrued interest, other than those that are accounted for at fair
value. In all reverse repurchase transactions, we take possession of or obtain a security interest in the related securities, and we have
the right to sell or repledge this collateral received.
The following table presents information on the fair value of securities pledged to us under reverse repurchase agreements:
(in millions)
December 31, 2024
December 31, 2023
Securities collateral pledged to us
$
2,853
$
1,200
At December 31, 2024 and 2023, the carrying value of reverse repurchase agreements totaled $2.8 billion and $1.1 billion,
respectively.
All secured financing transactions are collateralized and margined on a daily basis consistent with market standards and subject to
enforceable master netting arrangements with rights of set off. We do not currently offset any such transactions.
Insurance – Statutory and Other Deposits
The total carrying value of cash and securities deposited by our insurance subsidiaries under requirements of regulatory authorities or
other insurance-related arrangements and certain reinsurance contracts, was $7.8 billion and $8.4 billion at December 31, 2024 and
2023, respectively.
AIG | 2024 Form 10-K
130
ITEM 8 | Notes to Consolidated Financial Statements | 6. Investments
Other Pledges and Restrictions
Certain of our subsidiaries are members of Federal Home Loan Banks (FHLBs) and such membership requires the members to own
stock in these FHLBs. We owned an aggregate of $13 million and $15 million of stock in FHLBs at December 31, 2024 and 2023,
respectively. In addition, our subsidiaries have pledged securities available for sale with a fair value of $1.6 billion at December 31,
2024 and $1.7 billion at December 31, 2023.
Investments held in escrow accounts or otherwise subject to restriction as to their use were $73 million and $164 million, comprised of
bonds available for sale and short-term investments at December 31, 2024 and 2023, respectively.
Reinsurance transactions between AIG and Fortitude Re were structured as modified coinsurance (modco) and loss portfolio transfer
arrangements with funds withheld.
7. Lending Activities
Mortgage and other loans receivable include commercial mortgages, life insurance policy loans, commercial loans, and other loans
and notes receivable. Commercial mortgages, commercial loans, and other loans and notes receivable are carried at unpaid principal
balances less allowance for credit losses and plus or minus adjustments for the accretion or amortization of discount or premium.
Interest income on such loans is accrued as earned.
Direct costs of originating commercial mortgages, commercial loans, and other loans and notes receivable, net of nonrefundable
points and fees, are deferred and included in the carrying amount of the related receivables. The amount deferred is amortized to
income as an adjustment to earnings using the interest method.
Life insurance policy loans are carried at unpaid principal balances. There is no allowance for policy loans because these loans serve
to reduce the death benefit paid when the death claim is made and the balances are effectively collateralized by the cash surrender
value of the policy.
The following table presents the composition of Mortgage and other loans receivable, net:
(in millions)
December 31, 2024
December 31, 2023
Commercial mortgages(a)
$
3,305
$
3,836
Life insurance policy loans
6
7
Commercial loans, other loans and notes receivable(b)
721
738
Total mortgage and other loans receivable(c)
4,032
4,581
Allowance for credit losses(c)(d)
(164)
(140)
Mortgage and other loans receivable, net(c)
$
3,868
$
4,441
(a) Commercial mortgages primarily represent loans for apartments, offices and retail properties, with exposures in California and New York representing the largest
geographic concentrations (aggregating approximately 14 percent and 12 percent, respectively, at December 31, 2024 and 13 percent and 10 percent, respectively, at
December 31, 2023).
(b) There were no loans that were held-for-sale carried at lower of cost or market as of December 31, 2024 and 2023.
(c) Excludes $37.6 billion at both December 31, 2024 and 2023 of loans receivable from AIGFP, which has a full allowance for credit losses, recognized upon the
deconsolidation of AIGFP. For additional information, see Note 1.
(d) Does not include allowance for credit losses of $8 million and $9 million, respectively, at December 31, 2024 and 2023, in relation to off-balance-sheet commitments to
fund commercial mortgage loans, which is recorded in Other liabilities.
Interest income is not accrued when payment of contractual principal and interest is not expected. Any cash received on impaired
loans is generally recorded as a reduction of the current carrying amount of the loan. Accrual of interest income is generally resumed
when delinquent contractual principal and interest is repaid or when a portion of the delinquent contractual payments are made and
the ongoing required contractual payments have been made for an appropriate period. As of December 31, 2024 and 2023,
$252 million and $73 million, respectively, of commercial mortgage loans were placed on nonaccrual status.
Accrued interest is presented separately and is included in Accrued investment income on the Consolidated Balance Sheets. As of
December 31, 2024 and 2023, accrued interest receivable was $15 million and $21 million, respectively, associated with commercial
mortgage loans.
A significant majority of commercial mortgages in the portfolio are non-recourse loans and, accordingly, the only guarantees are for
specific items that are exceptions to the non-recourse provisions. It is therefore extremely rare for us to have cause to enforce the
provisions of a guarantee on a commercial real estate or mortgage loan.
AIG | 2024 Form 10-K
131
ITEM 8 | Notes to Consolidated Financial Statements | 6. Investments
Nonperforming loans are generally those loans where payment of contractual principal or interest is more than 90 days past due.
Nonperforming loans were not significant for any of the periods presented.
CREDIT QUALITY OF COMMERCIAL MORTGAGES
The following table presents debt service coverage ratios(a) for commercial mortgages by year of vintage:
December 31, 2024
2024
2023
2022
2021
2020
Prior
Total
(in millions)
>1.2X
$
120 $
484 $
185 $
563 $
79 $
1,482 $
2,913
1.00 - 1.20X
26
10
15
17
—
49
117
<1.00X
—
—
—
32
—
243
275
Total commercial mortgages
$
146 $
494 $
200 $
612 $
79 $
1,774 $
3,305
December 31, 2023
2023
2022
2021
2020
2019
Prior
Total
(in millions)
>1.2X
$
398 $
167 $
394 $
135 $
156 $
1,784 $
3,034
1.00 - 1.20X
5
71
254
56
21
298
705
<1.00X
—
11
—
—
—
86
97
Total commercial mortgages
$
403 $
249 $
648 $
191 $
177 $
2,168 $
3,836
The following table presents loan-to-value ratios(b) for commercial mortgages by year of vintage:
December 31, 2024
2024
2023
2022
2021
2020
Prior
Total
(in millions)
Less than 65%
$
107 $
433 $
177 $
485 $
71 $
1,012 $
2,285
65% to 75%
—
40
—
54
—
317
411
76% to 80%
—
—
—
31
—
51
82
Greater than 80%
39
21
23
42
8
394
527
Total commercial mortgages
$
146 $
494 $
200 $
612 $
79 $
1,774 $
3,305
December 31, 2023
2023
2022
2021
2020
2019
Prior
Total
(in millions)
Less than 65%
$
359 $
159 $
492 $
177 $
156 $
1,385 $
2,728
65% to 75%
10
15
137
—
21
367
550
76% to 80%
—
32
10
—
—
—
42
Greater than 80%
34
43
9
14
—
416
516
Total commercial mortgages
$
403 $
249 $
648 $
191 $
177 $
2,168 $
3,836
(a) The debt service coverage ratio compares a property’s net operating income to its debt service payments, including principal and interest. Our weighted average debt
service coverage ratio was 1.8x at both periods ended at December 31, 2024 and December 31, 2023. The debt service coverage ratios are updated when additional
relevant information becomes available.
(b) The loan-to-value ratio compares the current unpaid principal balance of the loan to the estimated fair value of the underlying property collateralizing the loan. Our
weighted average loan-to-value ratio was 65 percent and 62 percent at December 31, 2024 and December 31, 2023, respectively. The loan-to-value ratios have been
updated within the last three months to reflect the current carrying values of the loans. We update the valuations of collateral properties by obtaining independent
appraisals, generally at least once per year.
The following table presents supplementary credit quality information related to commercial mortgages:
Number
of
Loans
Class
Percent
of
Total
(dollars in millions)
Apartments
Offices
Retail
Industrial
Hotel
Others
Total
December 31, 2024
Past Due Status:
In good standing
186 $
1,087 $
971 $
370 $
301 $
258 $
119 $
3,106
94 %
90 days or less delinquent
1
—
25
—
—
—
—
25
1
>90 days delinquent or in
process of foreclosure
3
—
112
62
—
—
—
174
5
Total*
190 $
1,087 $
1,108 $
432 $
301 $
258 $
119 $
3,305
100 %
Allowance for credit losses
$
5 $
99 $
34 $
11 $
13 $
1 $
163
5 %
ITEM 8 | Notes to Consolidated Financial Statements | 7. Lending Activities
AIG | 2024 Form 10-K
132
Number
of
Loans
Class
Percent
of
Total
(dollars in millions)
Apartments
Offices
Retail
Industrial
Hotel
Others
Total
December 31, 2023
Past Due Status:
In good standing
211 $
1,267 $
1,212 $
476 $
460 $
247 $
121 $
3,783
99 %
90 days or less delinquent
1
—
11
—
—
—
—
11
—
>90 days delinquent or in
process of foreclosure
1
—
—
42
—
—
—
42
1
Total*
213 $
1,267 $
1,223 $
518 $
460 $
247 $
121 $
3,836
100 %
Allowance for credit losses
$
9 $
75 $
36 $
7 $
9 $
2 $
138
4 %
*
Does not reflect allowance for credit losses.
METHODOLOGY USED TO ESTIMATE THE ALLOWANCE FOR CREDIT LOSSES
At the time of origination or purchase, an allowance for credit losses is established for mortgage and other loan receivables and is
updated each reporting period. Changes in the allowance for credit losses are recorded in realized losses. This allowance reflects the
risk of loss, even when that risk is remote, that is expected over the remaining contractual life of the loan. The allowance for credit
losses considers available relevant information about the collectability of cash flows, including information about past events, current
conditions, and reasonable and supportable forecasts of future economic conditions. We revert to historical information when we
determine that we can no longer reliably forecast future economic assumptions.
The allowances for the commercial mortgage loans are estimated utilizing a probability of default and loss given default model. Loss
rate factors are determined based on historical data and adjusted for current and forecasted information. The loss rates are applied
based on individual loan attributes and considering such data points as loan-to-value ratios, Fair Isaac Corporation scores, and debt
service coverage.
The estimate of credit losses also reflects management’s assumptions on certain macroeconomic factors that include, but are not
limited to, gross domestic product growth, employment, inflation, housing price index, interest rates and credit spreads.
Accrued interest is excluded from the measurement of the allowance for credit losses and accrued interest is reversed through
interest income once a loan is placed on nonaccrual.
When all or a portion of a loan is deemed uncollectible, the uncollectible portion of the carrying amount of the loan is charged off
against the allowance.
We also have off-balance sheet commitments related to our commercial mortgage loans. The liability for expected credit losses
related to these commercial mortgage loan commitments is reported in Other liabilities in the Consolidated Balance Sheets. When a
commitment is funded, we record a loan receivable and reclassify the liability for expected credit losses related to the commitment into
loan allowance for expected credit losses. Other changes in the liability for expected credit losses on loan commitments are recorded
in Net realized gains (losses) in the Consolidated Statements of Income (Loss).
The following table presents a rollforward of the changes in the allowance for credit losses on Mortgage and other loans
receivable(a)(b):
Years Ended December 31,
2024
2023
2022
(in millions)
Commercial
Mortgages
Other
Loans
Total
Commercial
Mortgages
Other
Loans
Total
Commercial
Mortgages
Other
Loans
Total
Allowance, beginning of year
$
138 $
2 $
140
$
109 $
8 $
117
$
123 $
11 $
134
Loans charged off
—
—
—
(2)
—
(2)
(4)
—
(4)
Net charge-offs
—
—
—
(2)
—
(2)
(4)
—
(4)
Addition to (release of) allowance for loan losses
25
(1)
24
31
(6)
25
(10)
(3)
(13)
Allowance, end of year
$
163 $
1 $
164
$
138 $
2 $
140
$
109 $
8 $
117
(a) Does not include allowance for credit losses of $8 million, $9 million and $9 million, respectively, at December 31, 2024, 2023 and 2022 in relation to off-
balance-sheet commitments to fund commercial mortgage loans, which is recorded in Other liabilities.
(b) Excludes $37.6 billion of loan receivable from AIGFP, which has a full allowance for credit losses, recognized upon the deconsolidation of AIGFP. For additional
information, see Note 1.
Our expectations and models used to estimate the allowance for losses on commercial mortgage loans are regularly updated to
reflect the current economic environment.
AIG | 2024 Form 10-K
133
ITEM 8 | Notes to Consolidated Financial Statements | 7. Lending Activities
LOAN MODIFICATIONS
The allowance for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon asset
origination or acquisition. The starting point for the estimate of the allowance for credit losses is historical loss information, which
includes losses from modifications of receivables to borrowers experiencing financial difficulty. We use a probability of default/loss
given default model to determine the allowance for credit losses for our commercial mortgage loans. An assessment of whether a
borrower is experiencing financial difficulty is made on the date of a modification.
Because the effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance for
credit losses utilizing the measurement methodologies used to estimate the allowance, a change to the allowance for credit losses is
generally not recorded upon modification.
When modifications are executed, they often will be in the form of principal forgiveness, term extensions, interest rate reductions, or
some combination of any of these concessions. When principal is forgiven, the amortized cost basis of the asset is written off against
the allowance for credit losses. The amount of the principal forgiveness is deemed to be uncollectible; therefore, that portion of the
loan is written off, resulting in a reduction of the amortized cost basis and a corresponding adjustment to the allowance for credit
losses.
We assess whether a borrower is experiencing financial difficulty based on a variety of factors, including the borrower’s current default
on any of its outstanding debt, the probability of a default on any of its debt in the foreseeable future without the modification, the
insufficiency of the borrower’s forecasted cash flows to service any of its outstanding debt (including both principal and interest), and
the borrower’s inability to access alternative third party financing at an interest rate that would be reflective of current market
conditions for a non-troubled debtor.
During the year ended December 31, 2024, commercial mortgage loans with an amortized cost of $5 million supporting the funds
withheld arrangements with Fortitude Re were granted term extensions.
There were no loans that had defaulted during the years ended December 31, 2024 and 2023, that had been previously modified with
borrowers experiencing financial difficulties.
AIG closely monitors the performance of the loans modified to borrowers experiencing financial difficulty to understand the
effectiveness of its modification efforts. All loans with borrowers experiencing financial difficulty that were modified in the 12 months
prior to December 31, 2024 are current and performing in conjunction with their modified terms.
8. Reinsurance
In the ordinary course of business, our insurance companies purchase both treaty and facultative reinsurance to limit potential losses,
provide additional capacity for growth, minimize exposure to significant risks or to facilitate greater diversification of our businesses. In
addition, certain of our General Insurance subsidiaries sell reinsurance to other insurance companies. We determine the portion of our
ultimate net loss that will be recoverable under our reinsurance contracts by reference to the terms of the reinsurance protection
purchased. This determination involves an estimate of incurred but not reported (IBNR) loss. Reinsurance recoverables for contracts
which are accounted for as deposits are subject to similar judgments and uncertainties and reported in Deposit accounting assets.
Reinsurance assets include the balances due for paid losses and expenses, reserves for losses and expenses reported and
outstanding, reserves for IBNR, ceded unearned premiums and ceded future policy benefits for life and accident and health insurance
contracts and benefits paid and unpaid. Amounts related to paid and reserved losses and expenses and benefits with respect to these
reinsurance agreements are sometimes collateralized. We remain liable to our policyholders regardless of whether our reinsurers
meet their obligations under the reinsurance contracts, and as such, we regularly evaluate the financial condition of our reinsurers and
monitor concentration of our credit risk. The estimation of the allowance for unrecoverable reinsurance from reinsurers who are
unwilling and/or unable to pay amounts due to us requires judgment for which key inputs typically include historical collection rates
when amounts due are in dispute or where the reinsurer has suffered a credit event as well as specific reviews of balances in dispute
or subject to credit impairment. The allowance for credit losses and disputes on reinsurance assets was $220 million and $206 million
at December 31, 2024 and 2023, respectively. Changes in the allowance for credit losses and disputes on reinsurance assets are
reflected in Losses and loss adjustment expenses incurred within the Consolidated Statements of Income (Loss).
AIG | 2024 Form 10-K
134
ITEM 8 | Notes to Consolidated Financial Statements | 7. Lending Activities
The following table provides supplemental information for loss and benefit reserves, gross and net of ceded reinsurance:
At December 31,
2024
2023
(in millions)
As
Reported
Net of
Reinsurance
As
Reported
Net of
Reinsurance
Liability for unpaid losses and loss adjustment expenses
$
(69,168) $
(40,032)
$
(70,393) $
(39,994)
Future policy benefits
(1,317)
(591)
(1,467)
(644)
Reserve for unearned premiums
(17,232)
(12,928)
(17,375)
(13,105)
Other policyholder funds
(418)
(418)
(495)
(495)
Reinsurance assets*
34,166
35,492
*
Reinsurance assets excludes (i) allowance for credit losses and disputes of $220 million and $206 million (of which $110 million and $110 million pertains to CECL
reserve for Liability for unpaid losses and loss adjustment expenses) for the years ended December 31, 2024 and 2023, respectively, (ii) paid loss recoveries of
$4,068 million and $3,819 million for the years ended December 31, 2024 and 2023, respectively, and (iii) policy and contract claims recoverable of $31 million and
$27 million for the years ended December 31, 2024 and 2023, respectively.
SHORT-DURATION REINSURANCE
Short-duration reinsurance is effected under reinsurance treaties and by negotiation on individual risks. Certain of these reinsurance
arrangements consist of excess of loss contracts that protect us against losses above stipulated amounts. Ceded premiums are
considered prepaid reinsurance premiums and are recognized as a reduction of premiums earned over the contract period in
proportion to the protection received. Amounts recoverable from reinsurers on short-duration contracts are estimated in a manner
consistent with the claims liabilities associated with the reinsurance and presented as a component of Reinsurance assets.
Reinsurance premiums for assumed business are estimated based on information received from brokers, ceding companies and
reinsurers. Any subsequent differences arising on such estimates are recorded in the periods in which they are determined. Assumed
reinsurance premiums are earned primarily on a pro-rata basis over the terms of the reinsurance contracts and the portion of
premiums relating to the unexpired terms of coverage is included in the reserve for unearned premiums. Reinsurance premiums for
assumed business are estimated based on information received from brokers, ceding companies and reinsureds. Any subsequent
differences arising on such estimates are recorded in the periods in which they are determined. For both ceded and assumed
reinsurance, risk transfer requirements must be met for reinsurance accounting to apply. If risk transfer requirements are not met, the
contract is accounted for as a deposit, resulting in the recognition of cash flows under the contract through a deposit asset or liability
and not as revenue or expense. To meet risk transfer requirements, a reinsurance contract must include both insurance risk,
consisting of both underwriting and timing risk, and a reasonable possibility of a significant loss for the assuming entity. Similar risk
transfer criteria are used to determine whether directly written insurance contracts should be accounted for as insurance or as a
deposit.
The following table presents short-duration insurance premiums written and earned:
Years Ended December 31,
(in millions)
2024
2023
2022
Premiums written:
Direct
$
31,743
$
31,445
$
32,025
Assumed
3,950
7,951
7,385
Ceded
(11,791)
(12,190)
(12,650)
Net
$
23,902
$
27,206
$
26,760
Premiums earned:
Direct
$
31,208
$
30,781
$
32,053
Assumed
3,947
7,050
7,137
Ceded
(11,618)
(12,267)
(12,425)
Net
$
23,537
$
25,564
$
26,765
Percent of amount assumed to net
16.8%
27.6%
26.7%
For the years ended December 31, 2024, 2023 and 2022, reinsurance recoveries, which reduced losses and loss adjustment
expenses incurred, amounted to $5.2 billion, $8.1 billion and $7.1 billion, respectively.
ITEM 8 | Notes to Consolidated Financial Statements | 8. Reinsurance
AIG | 2024 Form 10-K
135
Retroactive reinsurance agreements are reinsurance agreements under which our reinsurer agrees to reimburse us as a result of past
insurable events. For these agreements, the excess of the amounts ultimately collectible under the agreement over the consideration
paid is recognized as a deferred gain liability and amortized into income over the settlement period of the ceded reserves. The
amount of the deferral is recalculated each period based on loss payments and updated estimates. If the consideration paid exceeds
the ultimate losses collectible under the agreement, the net loss on the agreement is recognized in income immediately. Ceded loss
reserves under retroactive agreements were $11.5 billion and $12.4 billion, and the deferred gain liability was $725 million and
$585 million, as of December 31, 2024 and 2023, respectively. The effect on income from amortization of the deferred gain was
$406 million, $82 million and $252 million for the years ended December 31, 2024, 2023 and 2022, respectively.
In the first quarter of 2017, we entered into an adverse development reinsurance agreement with National Indemnity Company
(NICO), a subsidiary of Berkshire Hathaway Inc., under which we transferred to NICO 80 percent of the reserve risk on substantially
all of our U.S. Commercial long-tail exposures for accident years 2015 and prior. Under this agreement, we ceded to NICO 80 percent
of the losses on subject business paid on or after January 1, 2016 in excess of $25 billion of net paid losses, up to an aggregate limit
of $25 billion. We account for this transaction as retroactive reinsurance. This transaction resulted in a gain, which under U.S. GAAP
retroactive reinsurance accounting is deferred and amortized into income over the settlement period. NICO created a collateral trust
account as security for their claim payment obligations to us, into which they deposited the consideration paid under the agreement,
and Berkshire Hathaway Inc. has provided a parental guarantee to secure NICO’s obligations under the agreement.
FORTITUDE RE
Fortitude Re is the reinsurer of the majority of AIG’s run-off operations. The reinsurance transactions are structured as modco and
loss portfolio transfer arrangements with funds withheld (funds withheld). In modco and funds withheld arrangements, the investments
supporting the reinsurance agreements, and which reflect the majority of the consideration that would be paid to the reinsurer for
entering into the transaction, are withheld by, and therefore continue to reside on the balance sheet of, the ceding company (i.e., AIG)
thereby creating an obligation for the ceding company to pay the reinsurer (i.e., Fortitude Re) at a later date. Additionally, as AIG
maintains ownership of these investments, AIG will maintain its existing accounting for these assets (e.g., the changes in fair value of
available for sale securities will be recognized within OCI). AIG has established a funds withheld payable to Fortitude Re while
simultaneously establishing a reinsurance asset representing reserves for the insurance coverage that Fortitude Re has assumed.
The funds withheld payable contains an embedded derivative and changes in fair value of the embedded derivative related to the
funds withheld payable are recognized in earnings through Net realized gains (losses). This embedded derivative is considered a total
return swap with contractual returns that are attributable to various assets and liabilities associated with these reinsurance
agreements.
As of December 31, 2024, $3.4 billion of reserves related to business written by multiple wholly-owned AIG subsidiaries, had been
ceded to Fortitude Re under these reinsurance transactions.
There is a diverse pool of assets supporting the funds withheld arrangements with Fortitude Re. The following summarizes
the composition of the pool of assets:
December 31, 2024
December 31, 2023
(in millions)
Carrying
Value
Fair
Value
Carrying
Value
Fair
Value
Corresponding Accounting Policy
Fixed maturity securities - available for sale(a)
$ 1,918 $ 1,918
$ 2,180 $ 2,180 Fair value through other comprehensive income (loss)
Fixed maturity securities - fair value option
721
721
655
655 Fair value through net investment income
Commercial mortgage loans
450
437
543
528 Amortized cost
Short-term investments
15
15
46
46 Fair value through net investment income
Funds withheld investment assets
3,104
3,091
3,424
3,409
Derivative assets, net(b)
1
1
—
— Fair value through net realized gains (losses)
Other(c)
115
115
118
118 Amortized cost
Total
$ 3,220 $ 3,207
$ 3,542 $ 3,527
(a) The change in the net unrealized gains (losses) on available for sale securities related to the Fortitude Re funds withheld assets was $(35) million ($(28) million after-
tax) and $116 million ($92 million after-tax), respectively for the years ended December 31, 2024 and 2023.
(b) The derivative assets and liabilities have been presented net of cash collateral. The derivative assets and liabilities supporting the Fortitude Re funds withheld
arrangements had a fair market value of $9 million and $2 million, respectively, as of December 31, 2024. The derivative assets and liabilities supporting the Fortitude
Re funds withheld arrangements had a fair market value of $1 million and $28 million, respectively, as of December 31, 2023. These derivative assets and liabilities are
fully collateralized either by cash or securities.
(c) Primarily comprised of Cash and Accrued investment income.
AIG | 2024 Form 10-K
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ITEM 8 | Notes to Consolidated Financial Statements | 8. Reinsurance
The impact of the funds withheld arrangements with Fortitude Re was as follows:
Years Ended December 31,
(in millions)
2024
2023
2022
Net investment income - Fortitude Re funds withheld assets
$
144 $
180 $
53
Net realized gains (losses) on Fortitude Re funds withheld assets:
Net realized losses - Fortitude Re funds withheld assets
(39)
(71)
(99)
Net realized gains (losses) - Fortitude Re funds withheld embedded derivative
(75)
(273)
1,133
Net realized gains (losses) on Fortitude Re funds withheld assets
(114)
(344)
1,034
Income (loss) from continuing operations before income tax expense (benefit)
30
(164)
1,087
Income tax expense (benefit)(a)
6
(34)
228
Net income (loss)
24
(130)
859
Change in unrealized appreciation (depreciation) on available for sale securities(a)
(28)
92
(848)
Comprehensive income (loss)
$
(4) $
(38) $
11
(a) The income tax expense (benefit) and the tax impact in Accumulated other comprehensive income (loss) (AOCI) was computed using AIG’s U.S. statutory tax rate of 21
percent.
Various assets supporting the Fortitude Re funds withheld arrangements are reported at amortized cost, and as such, changes in the
fair value of these assets are not reflected in the financial statements. However, changes in the fair value of these assets are included
in the embedded derivative in the Fortitude Re funds withheld arrangement and the appreciation (depreciation) of the asset is the
primary driver of the comprehensive income (loss) reflected above.
Reinsurance Security
Our third-party reinsurance arrangements do not relieve us from our direct obligations to our beneficiaries. Thus, a credit exposure
exists with respect to both short-duration and long-duration reinsurance ceded to the extent that any reinsurer fails to meet the
obligations assumed under any reinsurance agreement. We hold substantial collateral as security under related reinsurance
agreements in the form of funds, securities, and/or letters of credit. A provision has been recorded for estimated unrecoverable
reinsurance. In light of collateral held, we believe that no exposure to a single reinsurer represents an inappropriate concentration of
credit risk to AIG. Gross reinsurance assets due from reinsurers exceeding 5 percent of our total reinsurance assets were
approximately $15.2 billion and $16.5 billion at December 31, 2024 and 2023, respectively, of which approximately $2.1 billion and
$2.3 billion at December 31, 2024 and 2023, respectively, was not secured by collateral.
REINSURANCE – CREDIT LOSSES
The estimation of reinsurance recoverables involves a significant amount of judgment, particularly for latent exposures, such as
asbestos, due to their long-tail nature. We assess the collectability of reinsurance recoverable balances in each reporting period,
through either historical trends of disputes and credit events or financial analysis of the credit quality of the reinsurer. We record
adjustments to reflect the results of these assessments through an allowance for credit losses and disputes on uncollectible
reinsurance that reduces the carrying amount of reinsurance and deposit accounting assets on the consolidated balance sheets
(collectively, reinsurance recoverables). This estimate requires significant judgment for which key considerations include:
•
paid and unpaid amounts recoverable;
•
whether the balance is in dispute or subject to legal collection;
•
the relative financial health of the reinsurer as classified by the Obligor Risk Ratings (ORRs) we assign to each reinsurer based
upon our financial reviews; reinsurers that are financially troubled (i.e., in run-off, have voluntarily or involuntarily been placed in
receivership, are insolvent, are in the process of liquidation or otherwise subject to formal or informal regulatory restriction) are
assigned ORRs that will generate a significant allowance; and
•
whether collateral and collateral arrangements exist.
An estimate of the reinsurance recoverable's lifetime expected credit losses is established utilizing a probability of default and loss
given default method, which reflects the reinsurer’s ORR. The allowance for credit losses excludes disputed amounts. An allowance
for disputes is established for a reinsurance recoverable using the losses incurred model for contingencies.
The total reinsurance recoverables as of December 31, 2024 were $40.5 billion. As of that date, utilizing AIG’s ORRs,
(i) approximately 83 percent of the reinsurance recoverables were investment grade; (ii) approximately 15 percent of the reinsurance
recoverables were non-investment grade and (iii) approximately 2 percent of the reinsurance recoverables related to entities that were
not rated by AIG.
AIG | 2024 Form 10-K
137
ITEM 8 | Notes to Consolidated Financial Statements | 8. Reinsurance
The total reinsurance recoverables as of December 31, 2023 were $41.4 billion. As of that date, utilizing AIG’s ORRs,
(i) approximately 83 percent of the reinsurance recoverables were investment grade; (ii) approximately 15 percent of the reinsurance
recoverables were non-investment grade; (iii) approximately 2 percent of the reinsurance recoverables related to entities that were not
rated by AIG.
As of December 31, 2024 and December 31, 2023, approximately 81 percent and 85 percent, respectively, of our non-investment
grade reinsurance exposure related to captive insurers. These arrangements are typically collateralized by letters of credit, funds
withheld or trust agreements.
Reinsurance Recoverable Allowance
The following table presents a rollforward of the reinsurance recoverable allowance:
Years Ended December 31,
(in millions)
2024
2023
2022
Balance, beginning of period
$
255
$
260
$
281
Addition to (release of) allowance for expected credit losses and disputes, net
11
(5)
(22)
Write-offs charged against the allowance for credit losses and disputes
(1)
—
(5)
Recoveries of amounts previously written off
—
—
2
Other changes
4
—
4
Balance, end of year
$
269
$
255
$
260
Past-Due Status
We consider a reinsurance asset to be past due when it is 90 days past due. The allowance for credit losses is estimated excluding
disputed amounts. An allowance for disputes is established using the losses incurred method for contingencies. Past due balances on
claims that are not in dispute were not material for any of the periods presented.
9. Deferred Policy Acquisition Costs
Deferred Policy Acquisition Costs (DAC) represent those costs that are incremental and directly related to the successful acquisition
of new or renewal of existing insurance contracts. We defer incremental costs that result directly from, and are essential to, the
acquisition or renewal of an insurance contract. Such DAC generally include agent or broker commissions and bonuses, premium
taxes, and medical and inspection fees that would not have been incurred if the insurance contract had not been acquired or
renewed. Each cost is analyzed to assess whether it is fully deferrable. We partially defer costs, including certain commissions, when
we do not believe that the entire cost is directly related to the acquisition or renewal of insurance contracts. Commissions that are not
deferred to DAC are recorded in General operating and other expenses in the Consolidated Statements of Income (Loss).
We also defer a portion of employee total compensation and payroll-related fringe benefits directly related to time spent performing
specific acquisition or renewal activities, including costs associated with the time spent on underwriting, policy issuance and
processing, and sales force contract selling. The amounts deferred are derived based on successful efforts for each distribution
channel and/or cost center from which the cost originates.
Policy acquisition costs are deferred and amortized over the period in which the related premiums written are earned, generally
12 months. DAC is grouped consistent with the manner in which the insurance contracts are acquired, serviced and measured for
profitability and is reviewed for recoverability based on the profitability of the underlying insurance contracts. Investment income is
anticipated in assessing the recoverability of DAC. We assess the recoverability of DAC on an annual basis or more frequently if
circumstances indicate an impairment may have occurred. This assessment is performed by comparing recorded net unearned
premiums and anticipated investment income on in-force business to the sum of expected losses and loss adjustment expenses
incurred, unamortized DAC and maintenance costs. If the sum of these costs exceeds the amount of recorded net unearned
premiums and anticipated investment income, the excess is recognized as an offset against the asset established for DAC. This offset
is referred to as a premium deficiency charge. Increases in expected losses and loss adjustment expenses incurred can have a
significant impact on the likelihood and amount of a premium deficiency charge.
AIG | 2024 Form 10-K
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ITEM 8 | Notes to Consolidated Financial Statements | 8. Reinsurance
The following table presents a rollforward of DAC:
Years Ended December 31,
(in millions)
2024
2023
2022
Balance, beginning of year
$
2,117
$
2,343
$
2,473
Capitalization
3,519
4,157
3,732
Amortization expense
(3,425)
(3,771)
(3,545)
Other, including foreign exchange
(146)
(34)
(317)
Dispositions*
—
(578)
—
Balance, end of year
$
2,065
$
2,117
$
2,343
*
Includes amounts related to the sale of Validus Re through the date of disposition.
10. Variable Interest Entities
A variable interest entity (VIE) is a legal entity that does not have sufficient equity at risk to finance its activities without additional
subordinated financial support or is structured such that equity investors lack the ability to make significant decisions relating to the
entity’s operations through voting rights or do not substantively participate in the gains and losses of the entity. Consolidation of a VIE
by its primary beneficiary is not based on majority voting interest, but is based on other criteria discussed below.
We enter into various arrangements with VIEs in the normal course of business and consolidate the VIEs when we determine we are
the primary beneficiary. This analysis includes a review of the VIE’s capital structure, related contractual relationships and terms,
nature of the VIE’s operations and purpose, nature of the VIE’s interests issued and our involvement with the entity. When assessing
the need to consolidate a VIE, we evaluate the design of the VIE as well as the related risks to which the entity was designed to
expose the variable interest holders.
The primary beneficiary is the entity that has both (i) the power to direct the activities of the VIE that most significantly affect the
entity’s economic performance and (ii) the obligation to absorb losses or the right to receive benefits that could be potentially
significant to the VIE. While also considering these factors, the consolidation conclusion depends on the breadth of our decision-
making ability and our ability to influence activities that significantly affect the economic performance of the VIE.
BALANCE SHEET CLASSIFICATION AND EXPOSURE TO LOSS
Creditors or beneficial interest holders of VIEs for which AIG is the primary beneficiary generally have recourse only to the
assets and cash flows of the VIEs and do not have recourse to AIG, except in limited circumstances when AIG has provided
a guarantee to the VIE’s interest holders. The following table presents the total assets and total liabilities associated with
our variable interests in consolidated VIEs, as classified in the Consolidated Balance Sheets:
At December 31, 2024, there were no assets and liabilities associated with our variable interests in consolidated VIEs.
Assets:
Bonds available for sale
$
72
Mortgage and other loans receivable
122
Short-term investments
5
Accrued investment income
2
Other assets
1
Total*
$
202
Liabilities:
Debt of consolidated investment entities
$
38
Total
$
38
(in millions)
December 31, 2023
*
The assets of each VIE can be used only to settle specific obligations of that VIE.
We calculate our maximum exposure to loss to be (i) the amount invested in the debt or equity of the VIE, (ii) the notional amount of
VIE assets or liabilities where we have also provided credit protection to the VIE with the VIE as the referenced obligation, and (iii)
other commitments and guarantees to the VIE.
ITEM 8 | Notes to Consolidated Financial Statements | 9. Deferred Policy Acquisition Costs
AIG | 2024 Form 10-K
139
The following table presents total assets of unconsolidated VIEs in which we hold a variable interest, as well as our
maximum exposure to loss associated with these VIEs:
Maximum Exposure to Loss
(in millions)
Total VIE
Assets
On-Balance
Sheet(c)
Off-Balance
Sheet
Total
December 31, 2024
Real estate and investment entities(a)
$
367,661
$
2,723 $
839 (d)
$
3,562
Other(b)
4,639
255
754 (e)
1,009
Total
$
372,300
$
2,978 $
1,593
$
4,571
December 31, 2023
Real estate and investment entities(a)
$
355,003
$
4,107 $
1,492 (d)
$
5,599
Other(b)
1,027
—
748 (e)
748
Total
$
356,030
$
4,107 $
2,240
$
6,347
(a) Comprised primarily of hedge funds and private equity funds.
(b) At December 31, 2024 and 2023, excludes approximately $1,925 million and $1,971 million, respectively, of VIE assets related to AIGFP and its consolidated
subsidiaries, with maximum off-balance sheet exposure to loss of $1,894 million and $1,941 million, respectively. For additional information, see Note 1.
(c) At December 31, 2024 and 2023, $2.9 billion and $4.1 billion, respectively, of our total unconsolidated VIE assets were recorded as Other invested assets.
(d) These amounts represent our unfunded commitments to invest in private equity funds.
(e) These amounts represent our estimate of the maximum exposure to loss under certain insurance policies issued to VIEs if a hypothetical loss occurred to the extent of
the full amount of the insured value. Our insurance policies cover defined risks and our estimate of liability is included in our insurance reserves on the balance sheet.
REAL ESTATE AND INVESTMENT ENTITIES
Through our insurance operations and AIG Global Real Estate Investment Corp., we are an investor in various real estate investment
entities, some of which are VIEs. These investments are typically with unaffiliated third-party developers via a partnership or limited
liability company structure. The VIEs’ activities consist of the development or redevelopment of commercial, industrial and residential
real estate. Our involvement varies from being a passive equity investor or finance provider to actively managing the activities of the
VIEs.
Our insurance operations participate as passive investors in the equity issued by certain third-party-managed hedge and private
equity funds that are VIEs. Our insurance operations typically are not involved in the design or establishment of these VIEs, nor do
they actively participate in the management of the VIEs.
RMBS, CMBS, OTHER ABS AND CLOS
Primarily through our insurance operations, we are a passive investor in RMBS, CMBS, other ABS and CLOs, the majority of which
are issued by domestic special purpose entities. We generally do not sponsor or transfer assets to, or act as the servicer to these
asset-backed structures, and were not involved in the design of these entities. Our maximum exposure in these types of structures is
limited to our investment in securities issued by these entities and, where applicable, any unfunded commitments to these entities.
11. Derivatives and Hedge Accounting
We use derivatives and other financial instruments as part of our financial risk management programs and as part of our investment
operations. Interest rate derivatives (such as interest rate swaps) are used to manage interest rate risk associated with embedded
derivatives contained in insurance contract liabilities, fixed maturity securities, outstanding medium- and long-term notes as well as
other interest rate sensitive assets and liabilities. Foreign exchange derivatives (principally foreign exchange forwards and swaps) are
used to economically mitigate risk associated with non-U.S. dollar denominated debt, net capital exposures, foreign currency
transactions, and foreign denominated investments. Equity derivatives are used to economically mitigate financial risk associated with
embedded derivatives. We use credit derivatives to manage our credit exposures. The derivatives are effective economic hedges of
the exposures that they are meant to offset. In addition to hedging activities, we also enter into derivative contracts with respect to
investment operations, which may include, among other things, CDSs, total return swaps and purchases of investments with
embedded derivatives, such as equity-linked notes and convertible bonds.
ITEM 8 | Notes to Consolidated Financial Statements | 10. Variable Interest Entities
AIG | 2024 Form 10-K
140
Interest rate, currency, equity swaps, credit contracts, swaptions, options and forward transactions are accounted for as derivatives,
recorded on a trade-date basis and carried at fair value. Unrealized gains and losses are reflected in income, when appropriate.
Aggregate asset or liability positions are netted on the Consolidated Balance Sheets only to the extent permitted by qualifying master
netting arrangements in place with each respective counterparty. Cash collateral posted with counterparties in conjunction with
transactions supported by qualifying master netting arrangements is reported as a reduction of the corresponding net derivative
liability, while cash collateral received in conjunction with transactions supported by qualifying master netting arrangements is reported
as a reduction of the corresponding net derivative asset.
Derivatives, with the exception of embedded derivatives, are reported at fair value in the Consolidated Balance Sheets in Other assets
and Other liabilities. Embedded derivatives are generally presented with the host contract in the Consolidated Balance Sheets. A
bifurcated embedded derivative is measured at fair value and accounted for in the same manner as a free standing derivative
contract. The corresponding host contract is accounted for according to the accounting guidance applicable for that instrument.
For additional information on embedded derivatives, see Notes 5 and 13.
The following table presents the notional amounts of our derivatives and the fair value of derivative assets and liabilities in
the Consolidated Balance Sheets:
Derivatives designated as
hedging instruments:(a)
Foreign exchange contracts
$
879 $
66
$
906 $
109
$
933 $
58
$
1,296 $
164
Derivatives not designated as
hedging instruments:(a)
Interest rate contracts
841
277
913
304
14,657
741
1,165
352
Foreign exchange contracts
3,095
230
1,707
158
4,019
393
8,008
400
Equity contracts
29
20
29
20
36,045
66
—
—
Credit contracts(b)
52
31
147
31
1,804
33
504
36
Other contracts(c)
—
—
—
—
2,131
1
—
—
Total derivatives, gross
$
4,896 $
624
$
3,702 $
622
$ 59,589 $
1,292
$
10,973 $
952
Counterparty netting(d)
(270)
(270)
(450)
(450)
Cash collateral(e)
(304)
(201)
(711)
(249)
Total derivatives on Consolidated
Balance Sheets(f)
$
50
$
151
$
131
$
253
December 31, 2024
December 31, 2023
Gross Derivative Assets
Gross Derivative Liabilities
Gross Derivative Assets
Gross Derivative Liabilities
(in millions)
Notional
Amount
Fair
Value
Notional
Amount
Fair
Value
Notional
Amount
Fair
Value
Notional
Amount
Fair
Value
(a) Fair value amounts are shown before the effects of counterparty netting adjustments and offsetting cash collateral.
(b) As of December 31, 2024 and 2023, included CDSs on super senior multi-sector CLO with a net notional amount of $48 million and $50 million (fair value liability of
$30 million and $32 million, respectively). The net notional amount represents the maximum exposure to loss on the portfolio.
(c) Consists primarily of stable value wraps and contracts with multiple underlying exposures.
(d) Represents netting of derivative exposures covered by a qualifying master netting agreement.
(e) Represents cash collateral posted and received that is eligible for netting.
(f)
Freestanding derivatives only, excludes embedded derivatives. Derivative instrument assets and liabilities are recorded in Other assets and Other liabilities, respectively.
Fair value of assets related to bifurcated embedded derivatives was $3.2 billion at December 31, 2024 and $3.4 billion at December 31, 2023. Fair value of liabilities
related to bifurcated embedded derivatives was zero at both December 31, 2024 and 2023. A bifurcated embedded derivative is generally presented with the host
contract in the Consolidated Balance Sheets. Embedded derivatives are primarily related to the funds withheld arrangement with Fortitude Re. For additional
information, see Note 8.
COLLATERAL
We engage in derivative transactions that are not subject to a clearing requirement directly with unaffiliated third parties, in most
cases, under International Swaps and Derivatives Association, Inc. (ISDA) Master Agreements. Many of the ISDA Master Agreements
also include Credit Support Annex provisions, which provide for collateral postings that may vary at various ratings and threshold
levels. We attempt to reduce our risk with certain counterparties by entering into agreements that enable collateral to be obtained from
a counterparty on an upfront or contingent basis. We minimize the risk that counterparties might be unable to fulfill their contractual
obligations by monitoring counterparty credit exposure and collateral value and generally requiring additional collateral to be posted
upon the occurrence of certain events or circumstances. In addition, certain derivative transactions have provisions that require
collateral to be posted by us upon a downgrade of our long-term debt ratings or give the counterparty the right to terminate the
transaction. In the case of some of the derivative transactions, upon a downgrade of our long-term debt ratings, as an alternative to
posting collateral and subject to certain conditions, we may assign the transaction to an obligor with higher debt ratings or arrange for
a substitute guarantee of our obligations by an obligor with higher debt ratings or take other similar action. The actual amount of
ITEM 8 | Notes to Consolidated Financial Statements | 11. Derivatives and Hedge Accounting
AIG | 2024 Form 10-K
141
collateral required to be posted to counterparties in the event of such downgrades, or the aggregate amount of payments that we
could be required to make, depends on market conditions, the fair value of outstanding affected transactions and other factors
prevailing at and after the time of the downgrade.
Collateral posted by us to third parties for derivative transactions was $601 million and $593 million at December 31, 2024 and 2023,
respectively. In the case of collateral posted under derivative transactions that are not subject to clearing, this collateral can generally
be repledged or resold by the counterparties. Collateral provided to us from third parties for derivative transactions was $595 million
and $856 million at December 31, 2024 and 2023, respectively. In the case of collateral provided to us under derivative transactions
that are not subject to clearing, we generally can repledge or resell collateral.
OFFSETTING
We have elected to present all derivative receivables and derivative payables, and the related cash collateral received and paid, on a
net basis on our Consolidated Balance Sheets when a legally enforceable ISDA Master Agreement exists between us and our
derivative counterparty. An ISDA Master Agreement is an agreement governing multiple derivative transactions between two
counterparties. The ISDA Master Agreement generally provides for the net settlement of all, or a specified group, of these derivative
transactions, as well as transferred collateral, through a single payment, and in a single currency, as applicable. The net settlement
provisions apply in the event of a default on, or affecting any, one derivative transaction or a termination event affecting all, or a
specified group of, derivative transactions governed by the ISDA Master Agreement.
HEDGE ACCOUNTING
We designated certain derivatives entered into with third parties as fair value hedges of available for sale investment securities held
by our insurance subsidiaries. The fair value hedges include foreign currency forwards and cross currency swaps designated as
hedges of the change in fair value of foreign currency denominated available for sale securities attributable to changes in foreign
exchange rates.
We use foreign currency denominated debt and cross-currency swaps as hedging instruments in net investment hedge relationships
to mitigate the foreign exchange risk associated with our non-U.S. dollar functional currency foreign subsidiaries. For net investment
hedge relationships where issued debt is used as a hedging instrument, we assess the hedge effectiveness and measure the amount
of ineffectiveness based on changes in spot rates. For net investment hedge relationships that use derivatives as hedging
instruments, we assess hedge effectiveness and measure hedge ineffectiveness using changes in forward rates. For the years ended
December 31, 2024, 2023 and 2022, we recognized gains (losses) of $86 million, $(42) million and $305 million, respectively, included
in Change in foreign currency translation adjustments in OCI related to the net investment hedge relationships.
A qualitative methodology is utilized to assess hedge effectiveness.
The following table presents the gain (loss) recognized in income on our derivative instruments in fair value hedging
relationships in the Consolidated Statements of Income (Loss):
Year Ended December 31, 2024
Foreign exchange contracts:
Net realized gains/(losses)
$
(85)
$
(19)
$
85
$
(19)
Year Ended December 31, 2023
Foreign exchange contracts:
Net realized gains/(losses)
$
(177)
$
(25)
$
177
$
(25)
Year Ended December 31, 2022
Foreign exchange contracts:
Net realized gains/(losses)
(78)
73
78
73
Gains/(Losses) Recognized in Income for:
(in millions)
Hedging
Derivatives(a)
Excluded
Components(b)
Hedged
Items
Net Impact
(a) Gains and losses on derivative instruments designated and qualifying in fair value hedges that are included in the assessment of hedge effectiveness.
(b) Gains and losses on derivative instruments designated and qualifying in fair value hedges that are excluded from the assessment of hedge effectiveness and
recognized in income on a mark-to-market basis.
AIG | 2024 Form 10-K
142
ITEM 8 | Notes to Consolidated Financial Statements | 11. Derivatives and Hedge Accounting
DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS
The following table presents the effect of derivative instruments not designated as hedging instruments in the Consolidated
Statements of Income (Loss):
Years Ended December 31,
Gains (Losses) Recognized in Income
(in millions)
2024
2023
2022
By Derivative Type:
Interest rate contracts
$
(6)
$
(12)
$
37
Foreign exchange contracts
(52)
(175)
143
Equity contracts
—
1
(9)
Commodity contracts
—
8
(12)
Credit contracts
3
(2)
(3)
Other contracts
—
—
(1)
Embedded derivatives
(75)
(273)
1,134
Total
$
(130)
$
(453)
$
1,289
By Classification:
Net investment income - excluding Fortitude Re funds withheld assets
$
—
$
—
$
4
Net investment income - Fortitude Re funds withheld assets
1
—
(1)
Net realized gains (losses) - excluding Fortitude Re funds withheld assets
(63)
(172)
156
Net realized gains (losses) on Fortitude Re funds withheld assets*
(68)
(281)
1,130
Total
$
(130)
$
(453)
$
1,289
*
Includes over-the-counter derivatives supporting the funds withheld arrangements with Fortitude Re and the embedded derivative contained within the funds withheld
payable with Fortitude Re.
CREDIT RISK-RELATED CONTINGENT FEATURES
We estimate that at December 31, 2024, based on our outstanding financial derivative transactions, a downgrade of our long-term
senior debt ratings to BBB or BBB– by Standard & Poor’s Financial Services LLC, a subsidiary of S&P Global Inc., and/or a
downgrade to Baa2 or Baa3 by Moody’s Investors’ Service, Inc. would permit counterparties to make additional collateral calls and
permit certain counterparties to elect early termination of contracts, resulting in corresponding collateral postings and termination
payments in the total amount of up to approximately $5 million. The aggregate fair value of our derivatives that were in a net liability
position and that contain such credit risk-related contingencies which can be triggered below our long-term senior debt ratings of
BBB+ or Baa1 was approximately $30 million and $32 million at December 31, 2024 and 2023, respectively. The aggregate fair value
of assets posted as collateral under these contracts at December 31, 2024 and 2023, was approximately $30 million and $34 million,
respectively.
12. Goodwill and Other Intangible Assets
Goodwill represents the future economic benefits arising from assets acquired in a business combination that are not individually
identified and separately recognized. Goodwill is tested for impairment at the reporting unit level, which is defined as a segment or
one level below, and the test is performed annually, or more frequently if circumstances indicate an impairment may have occurred. At
December 31, 2024, goodwill is reported within North America Commercial, International Commercial and Global Personal segments,
and within Other Operations. When a business is transferred from one reporting unit to another, goodwill from the original reporting
unit is allocated among reporting units based on the fair value of business transferred, relative to business retained by a reporting unit.
The impairment assessment involves an option to first assess qualitative factors to determine whether events or circumstances exist
that lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the
qualitative assessment is not performed, or after assessing the totality of the events or circumstances, we determine it is more likely
than not that the fair value of a reporting unit is less than its carrying amount, a quantitative assessment for potential impairment is
performed.
If the qualitative test is not performed or if the test indicates a potential impairment is present, we estimate the fair value of each
reporting unit and compare the estimated fair value with the carrying amount of the reporting unit, including allocated goodwill. The
estimate of a reporting unit’s fair value involves management judgment and is based on one or a combination of approaches including
discounted expected future cash flows, market-based earnings multiples of the unit’s peer companies, external appraisals or, in the
case of reporting units being considered for sale, third-party indications of fair value, if available. We consider one or more of these
estimates when determining the fair value of a reporting unit to be used in the impairment test.
AIG | 2024 Form 10-K
143
ITEM 8 | Notes to Consolidated Financial Statements | 11. Derivatives and Hedge Accounting
If the estimated fair value of a reporting unit exceeds its carrying amount, goodwill is not impaired. If the carrying value of a reporting
unit exceeds its estimated fair value, goodwill associated with that reporting unit potentially is impaired. The amount of impairment, if
any, is measured as the excess of a reporting unit’s carrying amount over its fair value not to exceed the total amount of goodwill
allocated to that reporting unit and recognized in income.
The following table presents the changes in goodwill:
Balance at January 1, 2023:
Goodwill - gross
$
4,654
$
1,989
$
499
$
19
$
7,161
Accumulated impairments
(2,216)
(947)
(237)
(10)
(3,410)
Net goodwill
2,438
1,042
262
9
3,751
Increase (decrease) due to:
Dispositions*
(369)
—
—
—
(369)
Other
—
39
3
(2)
40
Balance at December 31, 2023:
Goodwill - gross
4,285
2,028
502
17
6,832
Accumulated impairments
(2,216)
(947)
(237)
(10)
(3,410)
Net goodwill
2,069
1,081
265
7
3,422
Increase (decrease) due to:
Dispositions
—
—
(22)
—
(22)
Other
—
(25)
(2)
—
(27)
Balance at December 31, 2024:
Goodwill - gross
4,285
2,003
478
17
6,783
Accumulated impairments
(2,216)
(947)
(237)
(10)
(3,410)
Net goodwill
$
2,069
$
1,056
$
241
$
7
$
3,373
General Insurance
(in millions)
North America
Commercial
International
Commercial
Global
Personal
Other
Operations
Total
*
Primarily represents amounts related to the sale of Validus Re through the date of disposition.
Indefinite lived intangible assets are not subject to amortization. Indefinite lived intangible assets primarily include Lloyd’s syndicate
capacity and brand names. Finite lived intangible assets are amortized over their useful lives. Finite lived intangible assets primarily
include distribution networks and are recorded net of accumulated amortization. The Company tests indefinite lived intangible assets
for impairment on an annual basis or whenever events or circumstances suggest that the carrying value of an intangible asset may
exceed the sum of the undiscounted cash flows expected to result from its use and eventual disposition. If this condition exists and
the carrying value of an intangible asset exceeds its fair value, the excess is recognized as an impairment and is recorded as a
charge against net income (loss).
The Other intangible assets and Value of distribution network acquired (VODA) were $370 million and $394 million at December 31,
2024 and 2023, respectively.
13. Insurance Liabilities
LIABILITY FOR UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES (LOSS RESERVES)
Loss reserves represent the accumulation of estimates of unpaid claims, including estimates for claims incurred but not reported and
loss adjustment expenses, less applicable discount. We regularly review and update the methods used to determine loss reserve
estimates. Any adjustments resulting from this review are reflected currently in pre-tax income, except to the extent such adjustment
impacts a deferred gain under a retroactive reinsurance agreement, in which case the ceded portion would be amortized into pre-tax
income in subsequent periods. Because these estimates are subject to the outcome of future events, changes in estimates are
common given that loss trends vary and time is often required for changes in trends to be recognized and confirmed. Reserve
changes that increase previous estimates of ultimate cost are referred to as unfavorable or adverse development or reserve
strengthening. Reserve changes that decrease previous estimates of ultimate cost are referred to as favorable development or
reserve releases.
Our gross loss reserves before reinsurance and discount are net of contractual deductible recoverable amounts due from
policyholders of approximately $12.1 billion at both December 31, 2024 and 2023. These recoverable amounts are related to certain
policies with high deductibles (in excess of high dollar amounts retained by the insured through self-insured retentions, deductibles,
retrospective programs, or captive arrangements, each referred to generically as “deductibles”), primarily for U.S. Commercial
casualty business. With respect to the deductible portion of the claim, we manage and pay the entire claim on behalf of the insured
ITEM 8 | Notes to Consolidated Financial Statements | 12. Goodwill and Other Intangible Assets
AIG | 2024 Form 10-K
144
and are reimbursed by the insured for the deductible portion of the claim. Thus, these recoverable amounts represent a credit
exposure to us. At December 31, 2024 and 2023 we held collateral of approximately $8.6 billion and $8.7 billion, respectively, for
these deductible recoverable amounts, consisting primarily of letters of credit and funded trust agreements. Allowance for credit
losses for the unsecured portion of these recoverable amounts was $14 million at both December 31, 2024 and 2023.
The following table presents the rollforward of activity in loss reserves:
Years Ended December 31,
(in millions)
2024
2023
2022
Liability for unpaid loss and loss adjustment expenses, beginning of year
$
70,393
$
75,167
$
79,026
Reinsurance recoverable
(30,289)
(32,102)
(35,213)
Net Liability for unpaid loss and loss adjustment expenses, beginning of year
40,104
43,065
43,813
Losses and loss adjustment expenses incurred:
Current year
14,363
15,100
16,434
Prior years, excluding discount and amortization of deferred gain
254
(392)
(530)
Prior years, discount charge (benefit)
354
307
(605)
Prior years, amortization of deferred gain on retroactive reinsurance(a)
(404)
(81)
(252)
Total losses and loss adjustment expenses incurred
14,567
14,934
15,047
Losses and loss adjustment expenses paid:
Current year
(3,694)
(3,836)
(4,011)
Prior years
(9,849)
(11,868)
(11,066)
Total losses and loss adjustment expenses paid
(13,543)
(15,704)
(15,077)
Other changes:
Foreign exchange effect
(996)
606
(1,463)
Losses and loss adjustment expenses recognized within gain on divestitures
—
569
—
Retroactive reinsurance adjustment (net of discount)(b)
15
158
745
Dispositions(c)
(5)
(3,505)
—
Reclassified to held for sale, net of reinsurance recoverables
—
(19)
—
Total other changes
(986)
(2,191)
(718)
Liability for unpaid loss and loss adjustment expenses, end of year:
Net liability for unpaid losses and loss adjustment expenses
40,142
40,104
43,065
Reinsurance recoverable
29,026
30,289
32,102
Total
$
69,168
$
70,393
$
75,167
(a) Includes $82 million, $33 million and $63 million for the retroactive reinsurance agreement with NICO covering U.S. asbestos exposures for the years ended December
31, 2024, 2023 and 2022, respectively.
(b) Includes benefit (charge) from change in discount on retroactive reinsurance in the amount of $168 million, $150 million and $(301) million for the years ended
December 31, 2024, 2023 and 2022, respectively.
(c) Includes amounts related to the sale of Validus Re through the date of disposition.
The following table presents the reconciliation of the net liability for unpaid losses and loss adjustment expenses in the
following tables to Loss Reserves in the Consolidated Balance Sheets for the year ended December 31, 2024:
(in millions)
Net liability for unpaid
losses and loss adjustment
expenses as presented in the
disaggregated tables below
Reinsurance recoverable on
unpaid losses and loss
adjustment expenses included in
the disaggregated tables below
Gross liability
for unpaid
losses and loss
adjustment expenses
U.S. Workers' Compensation (before discount)
$
3,468
$
4,852
$
8,320
U.S. Excess Casualty
3,208
3,139
6,347
U.S. Other Casualty
4,387
3,416
7,803
U.S. Financial Lines
5,422
1,614
7,036
U.S. Property and Special Risks
4,297
1,233
5,530
U.S. Personal Insurance
836
2,048
2,884
UK/Europe Casualty and Financial lines
7,280
1,952
9,232
UK/Europe Property and Special Risks
2,355
1,761
4,116
UK/Europe and Japan Personal Insurance
1,269
670
1,939
Total
$
32,522
$
20,685
$
53,207
Reconciling Items
Discount on workers' compensation lines
(2,111)
Other product lines*
15,384
Unallocated loss adjustment expenses
2,688
Total Loss Reserves
$
69,168
*
Reinsurance recoverable for other product lines of $8.4 billion resulted in a net liability for unpaid losses and loss adjustment expenses of $7.0 billion for the year ended
December 31, 2024.
ITEM 8 | Notes to Consolidated Financial Statements | 13. Insurance Liabilities
AIG | 2024 Form 10-K
145
Prior Year Development
In the sections below, we provide details by coverage group regarding incurred losses, reserve balances and prior year development.
The first table below shows prior year development by coverage group, the first two columns of which will again be presented in the
coverage group sections that follow. After this table we describe historical drivers of prior year development as well as actuarial
methods and relevant terminology. The following coverage group sections present the undiscounted incurred losses and allocated
loss adjustment expenses by accident year on a net basis after reinsurance, with separate presentation of the adverse development
cover where applicable, excluding related amortization of the deferred gain. Each section also contains a description of the business
included in that section. Finally, we show a table of claims payout patterns by coverage.
In 2017, we entered into adverse development reinsurance agreement (ADC) cessions with NICO under which we transferred to
NICO 80 percent of the reserve risk on substantially all of our U.S. Commercial long-tail exposures for accident years 2015 and prior.
The following table presents the reconciliation of net prior year development before the ADC cessions from the tables below
to the net prior year development after ADC cessions and amortization of deferred gain for the year ended December 31,
2024:
(in millions)
Prior Year
Development
Net of External
Reinsurance
Before ADC
Cessions
Prior Year
Development
Net of External
Reinsurance
After ADC
Cessions(a)
Re-Attribution
of ADC
Recovery(b)
Amortization
of Deferred
Gain at
Inception
Prior Year
Development
After
Amortization
and
Re-attribution
U.S. Workers' Compensation
$
(273) $
(205) $
(14) $
(42) $
(261)
U.S. Excess Casualty
545
238
22
(32)
228
U.S. Other Casualty
12
44
(38)
(31)
(25)
U.S. Financial Lines
51
(40)
20
(23)
(43)
U.S. Property and Special Risks
(44)
4
11
(7)
8
U.S. Personal Insurance
(23)
(25)
(1)
(1)
(27)
UK/Europe Casualty and Financial lines
170
170
—
—
170
UK/Europe Property and Special Risks
(35)
(35)
—
—
(35)
UK/Europe and Japan Personal Insurance
(47)
(47)
—
—
(47)
Other Operations
1
1
—
—
1
Other product lines
(299)
(336)
—
—
(336)
Subtotal, adjusted pre-tax basis
$
58 $
(231) $
— $
(136) $
(367)
Businesses in run-off
196
111
—
—
111
Subtotal
$
254 $
(120) $
— $
(136) $
(256)
Remove impact of Retroactive Reinsurance
Amortization of deferred gain at inception
136
Prior year development ceded under the Asbestos LPT
85
Prior year development ceded under the ADC
289
Total, prior years, excluding discount and amortization of deferred gain
$
254
(a) Change in net ultimate loss and loss adjustment expenses excludes the portion of prior year development we have ceded under the Asbestos Loss Portfolio Transfer
(LPT) and the ADC, both of which are provided by NICO and are considered retroactive reinsurance under U.S. GAAP.
(b) Reattribution of the ADC recovery takes place annually as we model the future payments on the subject reserves. ADC recoverables are then reallocated by line based
on payments expected to be made.
During 2024, we recognized unfavorable prior year loss reserve development of $254 million excluding discount and amortization of
deferred gain. The development was primarily driven by:
•
Favorable development on U.S. Workers’ Compensation of $273 million, net of external reinsurance but before ADC cessions
reflecting continued favorable loss experience;
•
Unfavorable development on U.S. Excess Casualty of $545 million, net of external reinsurance but before ADC cessions, driven by
a large settlement of a legacy mass tort claim with the gross loss in accident years covered under the ADC and increased reserves
related to claims emergence;
•
Unfavorable development on U.S Other Casualty of $12 million, net of external reinsurance but before ADC cessions, reflecting
unfavorable development on Commercial Auto and Wholesale Primary General Liability, partially offset by favorability across
numerous Casualty reserving classes;
•
Unfavorable development in U.S. Financial Lines of $51 million, net of external reinsurance but before ADC cessions, due to
unfavorable development in M&A and High Excess classes, offset by favorable experience across most reserving classes;
•
Favorable development on U.S Property and Special Risks of $44 million, net of external reinsurance but before ADC cessions,
reflecting favorable loss experience in Retail and Wholesale Property, offset by development on prior year catastrophes;
AIG | 2024 Form 10-K
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ITEM 8 | Notes to Consolidated Financial Statements | 13. Insurance Liabilities
•
Favorable development in U.S. Personal Insurance of $23 million driven by favorable development on prior year catastrophes
across several events primarily in the 2019-2023 accident years;
•
Unfavorable development in UK/Europe Casualty and Financial Lines of $170 million driven by unfavorable development in UK
Financial Lines partially offset by favorable development in EMEA Financial Lines, and unfavorable development in European
Excess Casualty driven by claim-specific emergence on accident year 2016;
•
Favorable development on UK/Europe Property and Special Risks of $35 million reflecting favorable development across most
segments and geographies;
•
Favorable development on UK/Europe and Japan Personal Insurance of $47 million primarily driven by Japan A&H and Auto,
partially offset by unfavorable Personal Auto in EMEA;
•
Favorable development of $299 million in total on other product lines, net of external reinsurance but before ADC cessions,
primarily driven by Global Specialty which saw favorable development across multiple lines; and
•
Unfavorable development on Businesses in run-off of $196 million, net of external reinsurance but before ADC cessions, is
primarily attributed to Asbestos development of $85 million, which is entirely ceded under the LPT, and development on the
Blackboard insurance portfolio of $112 million due to increased reported loss activity in general liability.
During 2023, we recognized favorable prior year loss reserve development of $392 million excluding discount and amortization of
deferred gain. The development was primarily driven by:
•
Favorable development on U.S. Workers’ Compensation of $267 million, net of external reinsurance but before ADC cessions due
to a continuation of favorable loss cost trends in guaranteed cost and excess segments across most accident years;
•
Favorable development on U.S. Excess Casualty of $32 million, net of external reinsurance but before ADC cessions, driven by
favorable development on the Excess Construction Runoff Portfolio;
•
Favorable development on U.S Other Casualty of $133 million, net of external reinsurance but before ADC cessions, largely driven
by favorable experience in construction defect and construction wraps as well as guaranteed cost auto and general liability;
•
Unfavorable development in U.S. Financial Lines of $94 million, net of external reinsurance but before ADC cessions, due to
unfavorable development on High Attaching Excess Directors and Officers (D&O), M&A, Primary National D&O, Cyber data
privacy claims, and Architects & Engineers, partially offset by favorable development on Primary Private Not for Profit D&O and
Financial Institutions D&O;
•
Favorable development on U.S Property and Special Risks of $10 million, net of external reinsurance but before ADC cessions,
reflecting favorable development on prior year catastrophes in the 2017-2021 accident years, offset by adverse development on
prior year catastrophes in the 2022 accident year;
•
Favorable development in U.S. Personal Insurance of $64 million driven by favorable development on prior year catastrophes
across several events primarily in the 2017-2020 accident years;
•
Unfavorable development in UK/Europe Casualty and Financial Lines of $165 million due to unfavorable development in auto
liability in Europe and UK and in UK D&O and Commercial Professional Indemnity business, partially offset by favorable
development in Financial Institutions Professional Indemnity and D&O in Europe and UK and Cyber and Commercial Professional
Indemnity in Europe;
•
Unfavorable development on UK/Europe Property and Special Risks of $81 million driven by unfavorable development on prior
year catastrophes;
•
Favorable development on UK/Europe and Japan Personal Insurance of $57 million driven by favorable development in Japan
personal auto and A&H business; and
•
Favorable development of $162 million in total on other product lines, net of external reinsurance but before ADC cessions, driven
by favorable development in global specialty and financial lines in Canada and other International regions.
During 2022, we recognized favorable prior year loss reserve development of $530 million excluding discount and amortization of
deferred gain. The development was primarily driven by:
•
Favorable development on U.S. Workers’ Compensation of $644 million, net of external reinsurance but before ADC cessions due
to continued favorable frequency and severity trends across most accident years particularly for excess and guaranteed cost US
Workers Compensation segments;
•
Favorable development on U.S. Excess Casualty of $116 million, net of external reinsurance but before ADC cessions, driven by
lead and mid-excess Retail Excess Casualty;
•
Favorable development on U.S Other Casualty of $149 million, net of external reinsurance but before ADC cessions, largely driven
by favorable experience in Commercial Auto, General Liability and Construction Wraps;
•
Unfavorable development in U.S. Financial Lines of $939 million, net of external reinsurance but before ADC cessions, due to
higher severity trends particularly in Excess & Primary D&O and Excess & Financial Institutions Errors and Omissions (E&O). This
was partially offset by favorable development in Employment Practices Liability Insurance (EPLI);
AIG | 2024 Form 10-K
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ITEM 8 | Notes to Consolidated Financial Statements | 13. Insurance Liabilities
•
Favorable development in U.S. Property and Special Risks of $81 million driven by more favorable crop experience than
anticipated;
•
Unfavorable development in UK/Europe Casualty and Financial Lines of $82 million due to unfavorable experience in UK Financial
Lines in M&A, Commercial PI and Commercial D&O as well as unfavorable Casualty experience due to large loss activity in the
UK, European Excess Casualty, and French Auto experience;
•
Favorable development on UK/Europe Property and Special Risks of $153 million driven by Global Specialty, primarily from
accident years 2020 and 2021. This favorable experience was seen in each product line and in every region;
•
Favorable development on UK/Europe and Japan Personal Insurance of $111 million driven by Japan Auto and A&H business with
additional favorable experience in UK and Europe; and
•
Favorable development of $264 million in total on other product lines, net of external reinsurance but before ADC cessions, driven
by runoff construction business and favorable results from our Canadian business across most products.
Our analyses and conclusions about prior year reserves also help inform our judgments about the current accident year loss and loss
adjustment expense ratios we selected.
Loss Development Information
The following is information about incurred and paid loss developments as of December 31, 2024, net of reinsurance. The cumulative
number of reported claims, the total of IBNR liabilities and expected development on reported loss included within the net incurred
loss amounts are presented in the following section.
Reserving Methodology
We use a combination of methods to project ultimate losses for both long-tail and short-tail exposures, which include:
•
Paid Development method: The Paid Development method estimates ultimate losses by reviewing paid loss patterns and
selecting paid ultimate loss development factors. These factors are then applied to paid losses by applying them to accident years,
with further expected changes in paid loss. Since the method does not rely on case reserves, it is not directly influenced by
changes in the adequacy of case reserves.
•
Incurred Development method: The Incurred Development method is similar to the Paid Development method, but it uses case
incurred losses instead of paid losses. Since this method uses more data (case reserves in addition to paid losses) than the Paid
Development method, the incurred development patterns may be less variable than paid development patterns.
•
Expected Loss Ratio method: The Expected Loss Ratio method multiplies premiums by an expected loss ratio to produce
ultimate loss estimates for each accident year. This method may be useful if loss development patterns are inconsistent, losses
emerge very slowly, or there is relatively little loss history from which to estimate future losses. Expected loss ratio methods for
business written in excess of a deductible may be given significant weight in the most recent five accident years. The expected
loss ratios used for recent accident years are based on the projected ultimate loss ratios for older years adjusted for rate changes,
loss trend including inflation, and where appropriate, changing market conditions.
•
Bornhuetter-Ferguson method: The Bornhuetter-Ferguson method using premiums and paid losses is a combination of the Paid
Development method and the Expected Loss Ratio method where the weight given to each method is the reciprocal of the loss
development factor. This method normally determines expected loss ratios similar to the method used for the Expected Loss Ratio
method. The Bornhuetter-Ferguson method using premiums and incurred losses is similar to the Bornhuetter-Ferguson method
using premiums and paid losses except that it uses case-incurred losses.
•
Cape Cod method: The Cape Cod method is mechanically similar to the Bornhuetter-Ferguson method with the difference being
that the Expected Loss Ratio estimates are determined based on a weighting of the loss estimates that come from the Paid/
Incurred Development Methods. This method may be more responsive to recent loss trends than the Bornhuetter-Ferguson
method.
•
Average Loss method: The Average Loss method multiplies a projected number of ultimate claims by an estimated ultimate
severity average loss for each accident year to produce ultimate loss estimates. Since projections of the ultimate number of claims
are often less variable than projections of ultimate loss, this method can provide more reliable results for reserve categories where
loss development patterns are inconsistent or too variable to be relied on exclusively.
In updating our loss reserve estimates, we consider and evaluate inputs from many sources, including actual claims data, the
performance of prior reserve estimates, observed industry trends, our internal peer review processes, including challenges and
recommendations from our Enterprise Risk Management group, as well as the views of third-party actuarial firms. We use these
inputs to improve our evaluation techniques, and to analyze and assess the change in estimated ultimate loss for each accident year
by product line. Our analyses produce a range of indications from various methods, from which we select our best estimate.
AIG | 2024 Form 10-K
148
ITEM 8 | Notes to Consolidated Financial Statements | 13. Insurance Liabilities
In determining the actual carried loss reserves, we consider both the internal actuarial best estimate and numerous other internal and
external factors, including:
•
an assessment of economic conditions, including real GDP growth, inflation, employment rates or unemployment duration, stock
market volatility and changes in corporate bond spreads;
•
changes in the legal, regulatory, judicial and social environment, including changes in road safety, public health and cleanup
standards;
•
changes in medical cost trends (inflation, intensity and utilization of medical services) and wage inflation trends;
•
underlying policy pricing, terms and conditions including attachment points and policy limits;
•
change in claims handling philosophy, operating model, processes, and related ongoing enhancements;
•
third-party claims reviews that are periodically performed for key classes of claims such as toxic tort, environmental and other
complex casualty claims;
•
third-party actuarial reviews that are periodically performed for key classes of business;
•
input from underwriters on pricing, terms, and conditions and market trends; and
•
changes in our reinsurance program, pricing and commutations.
Where appropriate and identifiable, adjustments have been made to standard projection techniques. Changes in Claims organization
management, differing referral and review criteria and other factors may also be expected to alter loss emergence.
The following factors are relevant to the loss development information included in the tables below:
•
Table organization: The tables are organized by accident year and include policies written on an occurrence and claims- made
basis. We note that for certain categories of claims (e.g., construction defect claims and environmental claims) and for reinsurance
recoverable, losses may sometimes be reclassified to an earlier or later accident year as more information about the date of
occurrence becomes available to us. These reclassifications are shown as development in the respective years in the tables
below. Financial Lines business is primarily written on a claims-made basis, while the majority of the workers’ compensation,
excess casualty, other casualty, and run-off property and casualty lines of business are written on an occurrence basis. Primarily,
all short-tail lines in Property and Special Risks and Personal Insurance are written on an occurrence basis.
•
Groupings: We believe our groupings have homogenous risk characteristics with similar development patterns and would
generally be subject to similar trends and reflect our reportable segments. The incurred losses and loss adjustment expenses and
paid losses in the following tables for the current reporting year are allocated to the line of business and accident years based on
how the business is coded by profit center and line of business.
•
Reinsurance: Our reinsurance program varies by exposure type. Historically we have leveraged facultative and treaty
reinsurance, both on a pro-rata and excess of loss basis. Our reinsurance program may change from year to year, which may
affect the comparability of the data presented in our tables.
•
Adverse development reinsurance agreement: We have provided the impact of the ADC in an additional table below our
Incurred Losses and Allocated Loss Adjustment Expenses tables. The impact of the ADC is shown beginning in 2016 given the
retroactive date of the contract and coincides with the effective date of the contract. For the lines of business covered by the
agreement (U.S. Workers' Compensation, U.S. Excess Casualty, U.S. Other Casualty, U.S. Financial Lines, U.S. Property and
Special Risks and U.S. Personal Insurance or collectively, the Covered Lines), an attribution of the loss recoveries to the line of
business by calendar year and accident year is performed based on the underlying distribution of the losses subject to the
agreement. Specifically, the future claim payments for all subject incurred losses were projected into future years based on the
same actuarial assumptions underlying the related reserves. The additional table presented after discussion of prior year
development by line of business reconciles the changes in net ultimates to our overall prior year development and provides the
reattribution of loss recoveries for the Covered Lines. The reinsurance terms of the ADC were then used to identify the future
claims payments for which 80% will be reimbursed by NICO. At each reporting period, the attribution of the ADC recoveries is
performed. The factors that could cause the attribution to lines of business and accident year to change include changes in
underlying actuarial assumptions as to timing and amount of future claim payments.
•
Incurred but not reported liabilities (IBNR): We include development from past reported losses in IBNR.
•
Data excluded from tables: Information with respect to accident years older than ten years is excluded from the development
tables. Unallocated loss adjustment expenses are also excluded.
•
Foreign exchange: The loss development for operations outside of the U.S. is presented for all accident years using the current
exchange rate at December 31, 2024. Although this approach requires restating all prior accident year information, the changes in
exchange rates do not impact incurred and paid loss development trends.
•
Acquisitions: We include acquisitions from all accident years presented in the tables. For purposes of this disclosure, we have
applied the retrospective method for the acquired reserves, including incurred and paid claim development histories throughout the
relevant tables. It should be noted that historical reserves for the acquired businesses were established by the acquired companies
AIG | 2024 Form 10-K
149
ITEM 8 | Notes to Consolidated Financial Statements | 13. Insurance Liabilities
using methods, assumptions and procedures then in effect which may differ from our current reserving bases. Accordingly, it may
not be appropriate to extrapolate future redundancies or deficiencies based on the aggregated historical results shown in the
triangles.
•
Dispositions: We exclude dispositions from all accident years presented in the tables.
•
Claim counts: We consider a reported claim to be one claim for each claimant or feature for each loss occurrence. Claims relating
to losses that are 100 percent reinsured are excluded from the reported claims in the tables below. Reported claims for losses from
assumed reinsurance contracts are not available and hence not included in the reported claims.
There are limitations that should be considered on the reported claim count data in the tables below, including:
–
Claim counts are presented only on a reported (not an ultimate) basis;
–
The tables below include lines of business and geographies at a certain aggregated level which may indicate different
frequency and severity trends and characteristics, and may not be as meaningful as the claim count information related to the
individual products within those lines of business and geographies;
–
Certain lines of business are more likely to be subject to occurrences involving multiple claimants and features, which can
distort measures based on the reported claim counts in the table below; and
–
Reported claim counts are not adjusted for ceded reinsurance, which may distort the measure of frequency or severity.
Supplemental Information: The information about incurred and paid loss development for all periods preceding the year ended
December 31, 2024 and the related historical claims payout percentage disclosure is unaudited and is presented as supplementary
information.
The following tables present undiscounted, incurred and paid losses and allocated loss adjustment expenses by accident
year, on a net basis after reinsurance, with a separate presentation of the ADC excluding the related amortization of the
deferred gain:
U.S. Workers' Compensation
U.S. Workers’ Compensation is an extremely long-tail line of business, with loss emergence extending for decades. We generally use
a combination of loss development, frequency/severity and expected loss ratio methods for workers’ compensation.
Many of our workers compensation policies contain risk-sharing features, including high deductibles, self-insured retentions or
retrospective rating features, in addition to a traditional insurance component. These risk-sharing programs generally are large and
complex, comprising multiple products, years and structures, and are subject to amendment over time. We group guaranteed cost
and excess of deductible business separately and then further by state and industry subset to the extent that meaningful differences
are determined to exist. We also separately analyze certain subsets of the portfolio that have unique characteristics (e.g., U.S.
government sub-contractor accounts and construction wrap-up business). For excess of deductible business, we also segment by
size of deductible and whether the claim is handled by AIG or an outside third-party administrator. The proportion of large deductible
business has increased over time, which has slowed the reporting pattern of claims.
Incurred Losses and Allocated Loss Adjustment Expenses, Undiscounted and Net of Reinsurance
Years Ended December 31, (in millions)
December 31, 2024
Accident
Year
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2024
Prior Year
Development
Excluding
the Impact
of ADC
Total of IBNR
Liabilities
Plus Expected
Development
on Reported
Losses
Cumulative
Number of
Reported
Claims
Incurred
Impact
of ADC
IBNR
Impact
of ADC
2024
(Net of
Impact
of ADC)
Total of
IBNR
Liabilities
Net of
Impact
of ADC
Unaudited
2015
$ 1,708 $ 1,864 $ 1,866 $ 1,814 $ 1,722 $ 1,675 $ 1,634 $ 1,612 $ 1,592 $
1,464 $
(128) $
179
37,763 $
(317) $
(144) $
1,147 $
35
2016
1,299
1,346
1,318
1,140
1,090
1,075
1,036
1,025
986
(39)
178
32,178
—
—
986
178
2017
789
850
776
763
731
712
705
673
(32)
176
28,057
—
—
673
176
2018
998
1,021
961
911
896
875
786
(89)
200
22,484
—
—
786
200
2019
887
873
812
801
788
730
(58)
218
17,292
—
—
730
218
2020
597
573
521
477
434
(43)
104
14,124
—
—
434
104
2021
597
570
545
514
(31)
212
11,293
—
—
514
212
2022
523
493
464
(29)
209
9,829
—
—
464
209
2023
500
465
(35)
273
8,954
—
—
465
273
2024
567
455
6,285
—
—
567
455
Total
$
7,083 $
(484)
$
(317)
$
6,766
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of
Reinsurance from the table below
(3,806)
—
71
(3,735)
Liabilities for losses and loss adjustment expenses and prior year development before
accident year 2015, net of reinsurance
4,145
(187)
(3,708)
437
Unallocated loss adjustment expense prior year development
398
Liabilities for losses and loss adjustment expenses and prior year loss development,
net of reinsurance
$
7,422 $
(273)
$
(3,954)
$
3,468
AIG | 2024 Form 10-K
150
ITEM 8 | Notes to Consolidated Financial Statements | 13. Insurance Liabilities
Incurred Losses and Loss Adjustment Expenses, Undiscounted, Net of Reinsurance (including impact of ADC)
Calendar Years Ended December 31, (in millions)
Accident
Year
2016
2017
2018
2019
2020
2021
2022
2023
2024
Prior Year
Development
Unaudited
2015
$
1,279
$
1,279
$
1,318
$
1,134
$
1,105
$
1,041
$
1,092
$
1,154 $
1,147 $
(7)
2016
1,299
1,346
1,318
1,140
1,090
1,075
1,036
1,025
986
(39)
2017
789
850
776
763
731
712
705
673
(32)
2018
998
1,021
961
911
896
875
786
(89)
2019
887
873
812
801
788
730
(58)
2020
597
573
521
477
434
(43)
2021
597
570
545
514
(31)
2022
523
493
464
(29)
2023
500
465
(35)
2024
567
Total
$
2,578 $
3,414 $
4,484 $
4,958 $
5,389 $
5,740 $
6,151 $
6,562 $
6,766 $
(363)
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below
(3,735)
Liabilities for losses and allocated loss adjustment expenses and prior year development before 2015, net of reinsurance
437
(26)
Unallocated loss adjustment expense prior year adjustment
184
Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance
$
3,468 $
(205)
The following table provides our attribution of our reinsurance recoverable for the ADC only (included in the table above):
Calendar Years Ended December 31, (in millions)
Accident
Year
2016
2017
2018
2019
2020
2021
2022
2023
2024
Prior Year
Development
Unaudited
2015
$
(585) $
(587) $
(496) $
(588) $
(570) $
(593) $
(520) $
(438) $
(317) $
121
2016
—
—
—
—
—
—
—
—
—
—
2017
—
—
—
—
—
—
—
—
—
—
2018
—
—
—
—
—
—
—
—
—
—
2019
—
—
—
—
—
—
—
—
—
—
2020
—
—
—
—
—
—
—
—
—
—
2021
—
—
—
—
—
—
—
—
—
—
2022
—
—
—
—
—
—
—
—
—
—
2023
—
—
—
—
—
—
—
—
—
—
2024
—
—
—
—
—
—
—
—
—
—
Total
$
(585) $
(587) $
(496) $
(588) $
(570) $
(593) $
(520) $
(438) $
(317) $
121
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below
71
Liabilities for losses and allocated loss adjustment expenses and prior year development before 2015, net of reinsurance
(3,708)
161
Unallocated loss adjustment expense prior year development
(214)
Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance
$
(3,954) $
68
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
Years Ended December 31, (in millions)
Paid Impact
of ADC
Accident Year
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Unaudited
2015
$
234 $
524 $
725 $
854 $
925 $
979 $
1,013 $
1,038 $
1,058 $
1,080
$
(71)
2016
147
378
521
584
630
662
686
694
708
—
2017
93
224
294
333
367
389
395
402
—
2018
85
215
296
359
388
409
448
—
2019
93
219
301
347
389
417
—
2020
64
159
205
245
259
—
2021
60
128
171
211
—
2022
45
102
143
—
2023
38
103
—
2024
35
—
Total
$
3,806
$
(71)
AIG | 2024 Form 10-K
151
ITEM 8 | Notes to Consolidated Financial Statements | 13. Insurance Liabilities
U.S. Excess Casualty
U.S. Excess Casualty policies tend to attach at a high layer above underlying policies, which causes the loss development pattern to
lag significantly. Many of the claims notified to the excess layers are closed without payment because the claims never reach our layer
as a result of high deductibles and other underlying coverages, while the claims that reach our layer can have large case reserves or
settlements and be highly variable in terms of reported timing and amount. For a portion of this business, the underlying primary
policies are issued by other insurance companies, which can limit our access to relevant information to help inform our judgments as
the loss events evolve and mature. Furthermore, this coverage is often significantly impacted by the underwriting cycle and external
judicial trends.
Recent accident years reflect a strategy towards having higher attachment points on the portfolio through changing participations in
various layers within an insured’s program.
Incurred Losses and Allocated Loss Adjustment Expenses, Undiscounted and Net of Reinsurance
Years Ended December 31, (in millions)
December 31, 2024
Accident
Year
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2024
Prior Year
Development
Excluding
the Impact
of ADC
Total of IBNR
Liabilities
Plus Expected
Development
on Reported
Losses
Cumulative
Number of
Reported
Claims
Incurred
Impact
of ADC
IBNR
Impact
of ADC
2024
(Net of
Impact
of ADC)
Total of
IBNR
Liabilities
Net of
Impact
of ADC
Unaudited
2015
$
989 $ 1,463 $ 1,440 $ 1,603 $ 1,656 $ 1,694 $ 1,721 $ 1,686 $ 1,658 $
1,723 $
65 $
258
3,269 $
(534) $
(131) $
1,189 $
127
2016
898
1,146
1,162
1,171
1,274
1,250
1,263
1,276
1,317
41
343
2,970
—
—
1,317
343
2017
856
1,002
1,097
1,153
1,157
1,200
1,182
1,228
46
227
2,252
—
—
1,228
227
2018
648
646
721
769
769
779
779
—
149
1,613
—
—
779
149
2019
577
583
597
612
600
604
4
279
1,469
—
—
604
279
2020
406
413
410
420
404
(16)
194
1,438
—
—
404
194
2021
278
277
274
358
84
154
1,039
—
—
358
154
2022
305
305
333
28
156
690
—
—
333
156
2023
345
348
3
210
567
—
—
348
210
2024
315
302
235
—
—
315
302
Total
$
7,409 $
255
$
(534)
$
6,875
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of
Reinsurance from the table below
(4,350)
—
197
(4,153)
Liabilities for losses and loss adjustment expenses and prior year development before
accident year 2015, net of reinsurance
2,104
217
(1,618)
486
Unallocated loss adjustment expense prior year development
73
Liabilities for losses and loss adjustment expenses and prior year loss development,
net of reinsurance
$
5,163 $
545
$
(1,955)
$
3,208
Incurred Losses and Loss Adjustment Expenses, Undiscounted, Net of Reinsurance (including impact of ADC)
Calendar Years Ended December 31, (in millions)
Accident
Year
2016
2017
2018
2019
2020
2021
2022
2023
2024
Prior Year
Development
Unaudited
2015
$
1,027
$
1,015
$
1,139
$
1,163
$
1,211
$
1,231
$
1,174
$
1,196 $
1,189 $
(7)
2016
898
1,146
1,162
1,171
1,274
1,250
1,263
1,276
1,317
41
2017
856
1,002
1,097
1,153
1,157
1,200
1,182
1,228
46
2018
648
646
721
769
769
779
779
—
2019
577
583
597
612
600
604
4
2020
406
413
410
420
404
(16)
2021
278
277
274
358
84
2022
305
305
333
28
2023
345
348
3
2024
315
Total
$
1,925 $
3,017 $
3,951 $
4,654 $
5,348 $
5,695 $
6,010 $
6,377 $
6,875 $
183
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below
(4,153)
Liabilities for losses and allocated loss adjustment expenses and prior year development before 2015, net of reinsurance
486
39
Unallocated loss adjustment expense prior year adjustment
16
Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance
$
3,208 $
238
AIG | 2024 Form 10-K
152
ITEM 8 | Notes to Consolidated Financial Statements | 13. Insurance Liabilities
The following table provides our attribution of our reinsurance recoverable for the ADC only (included in the table above):
Calendar Years Ended December 31, (in millions)
Accident
Year
2016
2017
2018
2019
2020
2021
2022
2023
2024
Prior Year
Development
Unaudited
2015
$
(436) $
(425) $
(464) $
(493) $
(483) $
(490) $
(512) $
(462) $
(534) $
(72)
2016
—
—
—
—
—
—
—
—
—
—
2017
—
—
—
—
—
—
—
—
—
—
2018
—
—
—
—
—
—
—
—
—
—
2019
—
—
—
—
—
—
—
—
—
—
2020
—
—
—
—
—
—
—
—
—
—
2021
—
—
—
—
—
—
—
—
—
—
2022
—
—
—
—
—
—
—
—
—
—
2023
—
—
—
—
—
—
—
—
—
—
2024
—
—
—
—
—
—
—
—
—
—
Total
$
(436) $
(425) $
(464) $
(493) $
(483) $
(490) $
(512) $
(462) $
(534) $
(72)
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below
197
Liabilities for losses and allocated loss adjustment expenses and prior year development before 2015, net of reinsurance
(1,618)
(178)
Unallocated loss adjustment expense prior year development
(57)
Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance
$
(1,955) $
(307)
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
Years Ended December 31, (in millions)
Paid Impact
of ADC
Accident Year
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Unaudited
2015
$
9 $
210 $
391 $
718 $
935 $
1,061 $
1,124 $
1,253 $
1,291 $
1,325
$
(197)
2016
28
80
204
388
502
566
670
798
851
—
2017
1
45
156
505
585
676
781
860
—
2018
1
125
227
315
414
494
527
—
2019
7
43
79
157
216
253
—
2020
4
15
33
128
188
—
2021
4
43
62
161
—
2022
14
51
96
—
2023
1
89
—
2024
—
—
Total
$
4,350
$
(197)
AIG | 2024 Form 10-K
153
ITEM 8 | Notes to Consolidated Financial Statements | 13. Insurance Liabilities
U.S. Other Casualty
U.S. Other Casualty includes general liability, automobile liability, environmental, medical malpractice, and other casualty lines of
business. These lines of business are all long-tail in nature and while somewhat diverse in terms of exposures, these lines are often
subject to similar trends. These lines are often significantly impacted by the underwriting cycle and external judicial trends. Many of
our policies contain risk-sharing features, including high deductibles, self-insured retentions or retrospective rating features, in addition
to a traditional insurance component. These risk-sharing programs generally are large and complex, comprising multiple products,
years and structures, and are subject to amendment over time.
Incurred Losses and Allocated Loss Adjustment Expenses, Undiscounted and Net of Reinsurance
Years Ended December 31, (in millions)
December 31, 2024
Accident
Year
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2024
Prior Year
Development
Excluding
the Impact
of ADC
Total of IBNR
Liabilities
Plus Expected
Development
on Reported
Losses
Cumulative
Number of
Reported
Claims
Incurred
Impact
of ADC
IBNR
Impact
of ADC
2024
(Net of
Impact
of ADC)
Total of
IBNR
Liabilities
Net of
Impact
of ADC
Unaudited
2015
$ 1,329 $ 1,762 $ 1,829 $ 1,736 $ 1,794 $ 1,834 $ 1,824 $ 1,815 $ 1,796 $
1,770 $
(26) $
6
35,881 $
(273) $
(3) $
1,497 $
3
2016
1,339
1,343
1,321
1,391
1,340
1,323
1,293
1,297
1,264
(33)
69
29,391
—
—
1,264
69
2017
602
629
738
674
668
643
654
662
8
14
21,382
—
—
662
14
2018
802
845
837
870
824
810
841
31
154
17,096
—
—
841
154
2019
1,059
1,058
1,053
1,062
1,039
1,024
(15)
469
21,383
—
—
1,024
469
2020
524
576
538
540
519
(21)
223
11,622
—
—
519
223
2021
795
793
790
818
28
470
11,249
—
—
818
470
2022
793
819
827
8
530
13,636
—
—
827
530
2023
933
955
22
781
13,687
—
—
955
781
2024
840
754
9,070
—
—
840
754
Total
$
9,520 $
2
$
(273)
$
9,247
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of
Reinsurance from the table below
(5,435)
—
194
(5,241)
Liabilities for losses and loss adjustment expenses and prior year development before
accident year 2015, net of reinsurance
1,300
(14)
(919)
381
Unallocated loss adjustment expense prior year development
24
Liabilities for losses and loss adjustment expenses and prior year loss development,
net of reinsurance
$
5,385 $
12
$
(998)
$
4,387
Incurred Losses and Loss Adjustment Expenses, Undiscounted, Net of Reinsurance (including impact of ADC)
Calendar Years Ended December 31, (in millions)
Accident
Year
2016
2017
2018
2019
2020
2021
2022
2023
2024
Prior Year
Development
Unaudited
2015
$
1,361
$
1,373
$
1,423
$
1,493
$
1,553
$
1,562
$
1,563
$
1,514 $
1,497 $
(17)
2016
1,339
1,343
1,321
1,391
1,340
1,323
1,293
1,297
1,264
(33)
2017
602
629
738
674
668
643
654
662
8
2018
802
845
837
870
824
810
841
31
2019
1,059
1,058
1,053
1,062
1,039
1,024
(15)
2020
524
576
538
540
519
(21)
2021
795
793
790
818
28
2022
793
819
827
8
2023
933
955
22
2024
840
Total
$
2,700 $
3,318 $
4,175 $
5,526 $
5,986 $
6,847 $
7,509 $
8,396 $
9,247 $
11
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below
(5,241)
Liabilities for losses and allocated loss adjustment expenses and prior year development before 2015, net of reinsurance
381
37
Unallocated loss adjustment expense prior year adjustment
(4)
Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance
$
4,387 $
44
AIG | 2024 Form 10-K
154
ITEM 8 | Notes to Consolidated Financial Statements | 13. Insurance Liabilities
The following table provides our attribution of our reinsurance recoverable for the ADC only (included in the table above):
Calendar Years Ended December 31, (in millions)
Accident
Year
2016
2017
2018
2019
2020
2021
2022
2023
2024
Prior Year
Development
Unaudited
2015
$
(401) $
(456) $
(313) $
(301) $
(281) $
(262) $
(252) $
(282) $
(273) $
9
2016
—
—
—
—
—
—
—
—
—
—
2017
—
—
—
—
—
—
—
—
—
—
2018
—
—
—
—
—
—
—
—
—
—
2019
—
—
—
—
—
—
—
—
—
—
2020
—
—
—
—
—
—
—
—
—
—
2021
—
—
—
—
—
—
—
—
—
—
2022
—
—
—
—
—
—
—
—
—
—
2023
—
—
—
—
—
—
—
—
—
—
2024
—
—
—
—
—
—
—
—
—
—
Total
$
(401) $
(456) $
(313) $
(301) $
(281) $
(262) $
(252) $
(282) $
(273) $
9
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below
194
Liabilities for losses and allocated loss adjustment expenses and prior year development before 2015, net of reinsurance
(919)
51
Unallocated loss adjustment expense prior year development
(28)
Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance
$
(998) $
32
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
Years Ended December 31, (in millions)
Paid Impact
of ADC
Accident Year
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Unaudited
2015
$
105 $
309 $
769 $
1,087 $
1,351 $
1,485 $
1,603 $
1,680 $
1,707 $
1,717
$
(194)
2016
77
298
489
703
846
938
1,018
1,074
1,144
—
2017
51
111
216
314
455
527
592
613
—
2018
43
122
227
360
470
565
636
—
2019
53
138
226
321
410
474
—
2020
26
73
139
198
252
—
2021
32
87
169
265
—
2022
38
112
195
—
2023
36
102
—
2024
37
—
Total
$
5,435
$
(194)
AIG | 2024 Form 10-K
155
ITEM 8 | Notes to Consolidated Financial Statements | 13. Insurance Liabilities
U.S. Financial Lines
U.S. Financial Lines business includes D&O, E&O, EPLI policies and various professional liability subsets of business, as well as the
fidelity book of business. This includes cyber coverage and mergers and acquisitions coverage, which have been a growing and
evolving portion of this portfolio. These product lines are predominantly claims-made in nature, losses are characterized by low
frequency and high severity, and results are often significantly impacted by external economic conditions.
Our analysis is segmented by major coverages, such as D&O, E&O, etc. and then further segmented by major industry groups (e.g.
corporate accounts, national accounts, financial institutions, private/not-for-profit, etc.). We also separately review primary business
from excess business for certain product lines.
Incurred Losses and Allocated Loss Adjustment Expenses, Undiscounted and Net of Reinsurance
Years Ended December 31, (in millions)
December 31, 2024
Accident
Year
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2024
Prior Year
Development
Excluding
the Impact
of ADC
Total of IBNR
Liabilities
Plus Expected
Development
on Reported
Losses
Cumulative
Number of
Reported
Claims
Incurred
Impact
of ADC
IBNR
Impact
of ADC
2024
(Net of
Impact
of ADC)
Total of
IBNR
Liabilities
Net of
Impact
of ADC
Unaudited
2015
$ 1,737 $ 1,762 $ 1,743 $ 1,788 $ 1,830 $ 1,874 $ 1,959 $ 2,044 $ 2,048 $
2,039 $
(9) $
63
16,263 $
(485) $
(50) $
1,554 $
13
2016
1,605
1,855
1,993
2,064
2,139
2,281
2,325
2,308
2,322
14
112
16,138
—
—
2,322
112
2017
1,564
1,675
1,756
1,846
1,898
1,987
1,957
1,969
12
121
15,287
—
—
1,969
121
2018
1,640
1,766
1,882
2,063
2,225
2,322
2,282
(40)
354
14,857
—
—
2,282
354
2019
1,503
1,536
1,627
1,926
1,912
1,945
33
358
13,381
—
—
1,945
358
2020
1,213
1,252
1,408
1,457
1,470
13
260
10,461
—
—
1,470
260
2021
1,430
1,408
1,388
1,316
(72)
700
7,226
—
—
1,316
700
2022
1,130
1,108
1,105
(3)
857
5,939
—
—
1,105
857
2023
1,043
1,041
(2)
800
6,997
—
—
1,041
800
2024
942
851
7,258
—
—
942
851
Total
$
16,431 $
(54)
$
(485)
$ 15,946
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of
Reinsurance from the table below
(10,922)
—
367
(10,555)
Liabilities for losses and loss adjustment expenses and prior year development before
accident year 2015, net of reinsurance
427
92
(396)
31
Unallocated loss adjustment expense prior year development
13
Liabilities for losses and loss adjustment expenses and prior year loss development,
net of reinsurance
$
5,936 $
51
$
(514)
$
5,422
Incurred Losses and Loss Adjustment Expenses, Undiscounted, Net of Reinsurance (including impact of ADC)
Calendar Years Ended December 31, (in millions)
Accident
Year
2016
2017
2018
2019
2020
2021
2022
2023
2024
Prior Year
Development
Unaudited
2015
$
1,429
$
1,430
$
1,462
$
1,552
$
1,550
$
1,595
$
1,605
$
1,553 $
1,554 $
1
2016
1,605
1,855
1,993
2,064
2,139
2,281
2,325
2,308
2,322
14
2017
1,564
1,675
1,756
1,846
1,898
1,987
1,957
1,969
12
2018
1,640
1,766
1,882
2,063
2,225
2,322
2,282
(40)
2019
1,503
1,536
1,627
1,926
1,912
1,945
33
2020
1,213
1,252
1,408
1,457
1,470
13
2021
1,430
1,408
1,388
1,316
(72)
2022
1,130
1,108
1,105
(3)
2023
1,043
1,041
(2)
2024
942
Total
$
3,034 $
4,849 $
6,770 $
8,641 $
10,166 $
12,146 $
14,014 $
15,048 $
15,946 $
(44)
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below
(10,555)
Liabilities for losses and allocated loss adjustment expenses and prior year development before 2015, net of reinsurance
31
4
Unallocated loss adjustment expense prior year adjustment
—
Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance
$
5,422 $
(40)
AIG | 2024 Form 10-K
156
ITEM 8 | Notes to Consolidated Financial Statements | 13. Insurance Liabilities
The following table provides our attribution of our reinsurance recoverable for the ADC only (included in the table above):
Calendar Years Ended December 31, (in millions)
Accident
Year
2016
2017
2018
2019
2020
2021
2022
2023
2024
Prior Year
Development
Unaudited
2015
$
(333) $
(313) $
(326) $
(278) $
(324) $
(364) $
(439) $
(495) $
(485) $
10
2016
—
—
—
—
—
—
—
—
—
—
2017
—
—
—
—
—
—
—
—
—
—
2018
—
—
—
—
—
—
—
—
—
—
2019
—
—
—
—
—
—
—
—
—
—
2020
—
—
—
—
—
—
—
—
—
—
2021
—
—
—
—
—
—
—
—
—
—
2022
—
—
—
—
—
—
—
—
—
—
2023
—
—
—
—
—
—
—
—
—
—
2024
—
—
—
—
—
—
—
—
—
—
Total
$
(333) $
(313) $
(326) $
(278) $
(324) $
(364) $
(439) $
(495) $
(485) $
10
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below
367
Liabilities for losses and allocated loss adjustment expenses and prior year development before 2015, net of reinsurance
(396)
(88)
Unallocated loss adjustment expense prior year development
(13)
Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance
$
(514) $
(91)
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
Years Ended December 31, (in millions)
Paid Impact
of ADC
Accident Year
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Unaudited
2015
$
63 $
390 $
791 $
1,055 $
1,282 $
1,488 $
1,686 $
1,818 $
1,914 $
1,929
$
(367)
2016
73
499
1,002
1,358
1,659
1,826
1,903
2,039
2,115
—
2017
64
391
761
1,118
1,396
1,515
1,653
1,777
—
2018
86
486
835
1,126
1,415
1,601
1,776
—
2019
94
367
642
953
1,204
1,423
—
2020
84
356
648
915
1,063
—
2021
43
151
315
468
—
2022
30
109
177
—
2023
46
150
—
2024
44
—
Total
$
10,922
$
(367)
AIG | 2024 Form 10-K
157
ITEM 8 | Notes to Consolidated Financial Statements | 13. Insurance Liabilities
U.S. Property and Special Risks
U.S. Property products include commercial, industrial and energy-related property insurance products and services that cover
exposures to manmade and natural disasters, including business interruption. U.S. Special Risk products include aerospace,
environmental, political risk, trade credit, surety and marine insurance, and program business for various small and medium sized
enterprises insurance lines. The program segments include both property and casualty exposures. Recent years have seen an
increasing proportion of non-admitted coverages which has altered the underlying customer profile to be less severe in the aggregate.
Incurred Losses and Allocated Loss Adjustment Expenses, Undiscounted and Net of Reinsurance
Years Ended December 31, (in millions)
December 31, 2024
Accident
Year
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2024
Prior Year
Development
Excluding
the Impact
of ADC
Total of IBNR
Liabilities
Plus Expected
Development
on Reported
Losses
Cumulative
Number of
Reported
Claims
Incurred
Impact
of ADC
IBNR
Impact
of ADC
2024
(Net of
Impact
of ADC)
Total of
IBNR
Liabilities
Net of
Impact
of ADC
Unaudited
2015
$ 2,567 $ 2,506 $ 2,489 $ 2,492 $ 2,466 $ 2,471 $ 2,479 $ 2,490 $ 2,493 $
2,484 $
(9) $
4
59,598 $
(97) $
(3) $
2,387 $
1
2016
2,674
2,748
2,690
2,697
2,707
2,694
2,700
2,713
2,727
14
8
54,893
—
—
2,727
8
2017
4,569
4,239
4,127
4,153
4,173
4,212
4,175
4,187
12
12
79,846
—
—
4,187
12
2018
2,978
2,993
2,992
3,229
3,201
3,210
3,204
(6)
49
70,122
—
—
3,204
49
2019
2,177
2,146
2,211
2,222
2,177
2,198
21
34
78,995
—
—
2,198
34
2020
3,391
3,320
3,280
3,238
3,269
31
645
68,891
—
—
3,269
645
2021
2,339
2,213
2,160
2,190
30
122
82,226
—
—
2,190
122
2022
3,171
3,281
3,240
(41)
504
86,499
—
—
3,240
504
2023
2,528
2,440
(88)
431
99,114
—
—
2,440
431
2024
1,844
537
25,410
—
—
1,844
537
Total
$
27,783 $
(36)
$
(97)
$ 27,686
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of
Reinsurance from the table below
(23,702)
—
70
(23,632)
Liabilities for losses and loss adjustment expenses and prior year development before
accident year 2015, net of reinsurance
395
(8)
(152)
243
Unallocated loss adjustment expense prior year development
—
Liabilities for losses and loss adjustment expenses and prior year loss development,
net of reinsurance
$
4,476 $
(44)
$
(179)
$
4,297
Incurred Losses and Loss Adjustment Expenses, Undiscounted, Net of Reinsurance (including impact of ADC)
Calendar Years Ended December 31, (in millions)
Accident
Year
2016
2017
2018
2019
2020
2021
2022
2023
2024
Prior Year
Development
Unaudited
2015
$
2,365
$
2,391
$
2,405
$
2,372
$
2,372
$
2,372
$
2,375
$
2,393 $
2,387 $
(6)
2016
2,674
2,748
2,690
2,697
2,707
2,694
2,700
2,713
2,727
14
2017
4,569
4,239
4,127
4,153
4,173
4,212
4,175
4,187
12
2018
2,978
2,993
2,992
3,229
3,201
3,210
3,204
(6)
2019
2,177
2,146
2,211
2,222
2,177
2,198
21
2020
3,391
3,320
3,280
3,238
3,269
31
2021
2,339
2,213
2,160
2,190
30
2022
3,171
3,281
3,240
(41)
2023
2,528
2,440
(88)
2024
1,844
Total
$
5,039 $
9,708 $
12,312 $
14,366 $
17,761 $
20,338 $
23,374 $
25,875 $
27,686 $
(33)
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below
(23,632)
Liabilities for losses and allocated loss adjustment expenses and prior year development before 2015, net of reinsurance
243
38
Unallocated loss adjustment expense prior year adjustment
(1)
Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance
$
4,297 $
4
AIG | 2024 Form 10-K
158
ITEM 8 | Notes to Consolidated Financial Statements | 13. Insurance Liabilities
The following table provides our attribution of our reinsurance recoverable for the ADC only (included in the table above):
Calendar Years Ended December 31, (in millions)
Accident
Year
2016
2017
2018
2019
2020
2021
2022
2023
2024
Prior Year
Development
Unaudited
2015
$
(141) $
(98) $
(87) $
(94) $
(99) $
(107) $
(115) $
(100) $
(97) $
3
2016
—
—
—
—
—
—
—
—
—
—
2017
—
—
—
—
—
—
—
—
—
—
2018
—
—
—
—
—
—
—
—
—
—
2019
—
—
—
—
—
—
—
—
—
—
2020
—
—
—
—
—
—
—
—
—
—
2021
—
—
—
—
—
—
—
—
—
—
2022
—
—
—
—
—
—
—
—
—
—
2023
—
—
—
—
—
—
—
—
—
—
2024
—
—
—
—
—
—
—
—
—
—
Total
$
(141) $
(98) $
(87) $
(94) $
(99) $
(107) $
(115) $
(100) $
(97) $
3
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below
70
Liabilities for losses and allocated loss adjustment expenses and prior year development before 2015, net of reinsurance
(152)
46
Unallocated loss adjustment expense prior year development
(1)
Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance
$
(179) $
48
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
Years Ended December 31, (in millions)
Paid Impact
of ADC
Accident Year
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Unaudited
2015
$
844 $
1,572 $
1,878 $
2,121 $
2,240 $
2,308 $
2,344 $
2,391 $
2,457 $
2,462
$
(70)
2016
821
1,747
2,076
2,296
2,464
2,539
2,616
2,647
2,679
—
2017
1,137
2,625
3,281
3,638
3,897
3,999
4,055
4,129
—
2018
977
2,162
2,509
2,715
2,863
2,994
3,094
—
2019
1,039
1,673
1,906
2,037
2,083
2,124
—
2020
844
1,613
1,874
2,190
2,414
—
2021
878
1,743
1,983
2,004
—
2022
1,208
2,207
2,437
—
2023
1,173
1,692
—
2024
667
—
Total
$
23,702
$
(70)
AIG | 2024 Form 10-K
159
ITEM 8 | Notes to Consolidated Financial Statements | 13. Insurance Liabilities
U.S. Personal Insurance
U.S. Personal Insurance consists of accident and health and personal lines. Accident and health products include voluntary and
sponsor-paid personal accident and supplemental health products for individuals, employees, associations and other organizations as
well as a broad range of travel insurance products and services for leisure and business travelers. Personal lines include automobile
and homeowners’ insurance, extended warranty, and consumer specialty products, such as identity theft and credit card protection.
Personal lines also provides insurance for high net worth individuals offered through AIG Private Client Group, including auto,
homeowners, umbrella, yacht, fine art and collections insurance. Personal lines are generally short-tail in nature and can reflect
significant salvage and subrogation recoveries.
Incurred Losses and Allocated Loss Adjustment Expenses, Undiscounted and Net of Reinsurance
Years Ended December 31, (in millions)
December 31, 2024
Accident
Year
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2024
Prior Year
Development
Excluding
the Impact
of ADC
Total of IBNR
Liabilities
Plus Expected
Development
on Reported
Losses
Cumulative
Number of
Reported
Claims
Incurred
Impact
of ADC
IBNR
Impact
of ADC
2024
(Net of
Impact
of ADC)
Total of
IBNR
Liabilities
Net of
Impact
of ADC
Unaudited
2015
$ 1,511 $ 1,498 $ 1,494 $ 1,483 $ 1,482 $ 1,485 $ 1,487 $ 1,488 $ 1,487 $
1,488 $
1 $
12
261,309 $
(9) $
— $
1,479 $
12
2016
1,536
1,533
1,533
1,540
1,542
1,544
1,544
1,541
1,541
—
16
247,696
—
—
1,541
16
2017
1,878
2,137
2,011
2,057
1,924
1,916
1,896
1,899
3
15
220,270
—
—
1,899
15
2018
2,188
2,193
2,154
1,937
1,936
1,920
1,927
7
37
102,483
—
—
1,927
37
2019
1,593
1,664
1,646
1,596
1,578
1,569
(9)
44
93,909
—
—
1,569
44
2020
954
906
913
894
890
(4)
33
55,713
—
—
890
33
2021
748
765
762
752
(10)
73
57,288
—
—
752
73
2022
517
529
525
(4)
100
55,394
—
—
525
100
2023
677
668
(9)
122
47,201
—
—
668
122
2024
604
294
29,007
—
—
604
294
Total
$
11,863 $
(25)
$
(9)
$ 11,854
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of
Reinsurance from the table below
(10,979)
—
9
(10,970)
Liabilities for losses and loss adjustment expenses and prior year development before
accident year 2015, net of reinsurance
(48)
3
—
(48)
Unallocated loss adjustment expense prior year development
(1)
Liabilities for losses and loss adjustment expenses and prior year loss development,
net of reinsurance
$
836 $
(23)
$
—
$
836
Incurred Losses and Loss Adjustment Expenses, Undiscounted, Net of Reinsurance (including impact of ADC)
Calendar Years Ended December 31, (in millions)
Accident
Year
2016
2017
2018
2019
2020
2021
2022
2023
2024
Prior Year
Development
Unaudited
2015
$
1,476
$
1,475
$
1,472
$
1,476
$
1,480
$
1,482
$
1,481
$
1,479 $
1,479 $
—
2016
1,536
1,533
1,533
1,540
1,542
1,544
1,544
1,541
1,541
—
2017
1,878
2,137
2,011
2,057
1,924
1,916
1,896
1,899
3
2018
2,188
2,193
2,154
1,937
1,936
1,920
1,927
7
2019
1,593
1,664
1,646
1,596
1,578
1,569
(9)
2020
954
906
913
894
890
(4)
2021
748
765
762
752
(10)
2022
517
529
525
(4)
2023
677
668
(9)
2024
604
Total
$
3,012 $
4,886 $
7,330 $
8,813 $
9,851 $
10,187 $
10,668 $
11,276 $
11,854 $
(26)
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below
(10,970)
Liabilities for losses and allocated loss adjustment expenses and prior year development before 2015, net of reinsurance
(48)
2
Unallocated loss adjustment expense prior year adjustment
(1)
Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance
$
836 $
(25)
AIG | 2024 Form 10-K
160
ITEM 8 | Notes to Consolidated Financial Statements | 13. Insurance Liabilities
The following table provides our attribution of our reinsurance recoverable for the ADC only (included in the table above):
Calendar Years Ended December 31, (in millions)
Accident
Year
2016
2017
2018
2019
2020
2021
2022
2023
2024
Prior Year
Development
Unaudited
2015
$
(22) $
(19) $
(11) $
(6) $
(5) $
(5) $
(7) $
(8) $
(9) $
(1)
2016
—
—
—
—
—
—
—
—
—
—
2017
—
—
—
—
—
—
—
—
—
—
2018
—
—
—
—
—
—
—
—
—
—
2019
—
—
—
—
—
—
—
—
—
—
2020
—
—
—
—
—
—
—
—
—
—
2021
—
—
—
—
—
—
—
—
—
—
2022
—
—
—
—
—
—
—
—
—
—
2023
—
—
—
—
—
—
—
—
—
—
2024
—
—
—
—
—
—
—
—
—
—
Total
$
(22) $
(19) $
(11) $
(6) $
(5) $
(5) $
(7) $
(8) $
(9) $
(1)
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below
9
Liabilities for losses and allocated loss adjustment expenses and prior year development before 2015, net of reinsurance
—
(1)
Unallocated loss adjustment expense prior year development
—
Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance
$
— $
(2)
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
Years Ended December 31, (in millions)
Paid Impact
of ADC
Accident Year
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Unaudited
2015
$
931 $
1,320 $
1,411 $
1,439 $
1,455 $
1,461 $
1,463 $
1,468 $
1,471 $
1,474
$
(9)
2016
857
1,344
1,422
1,460
1,501
1,512
1,518
1,521
1,521
—
2017
941
1,672
1,896
1,789
1,826
1,852
1,861
1,878
—
2018
1,227
1,939
1,973
1,789
1,832
1,849
1,881
—
2019
884
1,295
1,379
1,416
1,491
1,516
—
2020
667
679
725
824
846
—
2021
488
650
658
662
—
2022
372
401
406
—
2023
400
522
—
2024
273
—
Total
$
10,979
$
(9)
AIG | 2024 Form 10-K
161
ITEM 8 | Notes to Consolidated Financial Statements | 13. Insurance Liabilities
UK/Europe Casualty and Financial Lines
UK/Europe is our largest non-U.S. region for Liability and Financial Lines. UK/Europe Casualty and Financial Lines is composed of
third-party coverages including general liability, auto liability, D&O, professional liability and various other coverages throughout both
the UK and Continental Europe. These areas are all long-tail in nature and while somewhat diverse in terms of exposures, these lines
are often subject to similar trends. These lines are impacted by the underwriting cycle and external judicial trends. The largest share
of business is in the UK, but significant business is also written in other European countries such as Germany, France, and Italy.
Incurred Losses and Allocated Loss Adjustment Expenses, Undiscounted and Net of Reinsurance*
Years Ended December 31, (in millions)
December 31, 2024
Accident Year
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2024
Prior Year
Development
Total of IBNR
Liabilities
Plus Expected
Development on
Reported Losses
Cumulative
Number of
Reported
Claims
Unaudited
2015
$ 1,043 $ 1,177 $ 1,166 $ 1,187 $ 1,265 $ 1,184 $ 1,191 $ 1,210 $ 1,221 $
1,215 $
(6) $
63
113,532
2016
1,251
1,342
1,421
1,426
1,539
1,536
1,548
1,547
1,618
71
143
142,423
2017
1,282
1,221
1,151
1,263
1,323
1,311
1,351
1,398
47
171
149,728
2018
1,286
1,316
1,416
1,455
1,554
1,596
1,686
90
229
151,718
2019
1,189
1,204
1,276
1,291
1,282
1,307
25
210
142,854
2020
1,163
1,215
1,161
1,154
1,114
(40)
353
86,254
2021
1,316
1,275
1,279
1,261
(18)
566
77,499
2022
1,243
1,203
1,197
(6)
681
74,390
2023
1,233
1,230
(3)
803
69,733
2024
1,240
1,052
60,687
Total
$ 13,266 $
160
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
from the table below
(6,843)
—
Liabilities for losses and loss adjustment expenses and prior year development before
accident year 2015, net of reinsurance
857
10
Unallocated loss adjustment expense prior year development
—
Liabilities for losses and loss adjustment expenses and prior year loss development, net
of reinsurance
$
7,280 $
170
*
The losses reported in the table are not covered by the ADC.
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance*
Years Ended December 31, (in millions)
Accident Year
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Unaudited
2015
$
69 $
230 $
416 $
546 $
656 $
828 $
914 $
955 $
1,004 $
1,023
2016
115
363
563
746
896
1,022
1,127
1,214
1,253
2017
93
269
428
578
724
862
924
1,025
2018
109
359
549
711
867
1,085
1,172
2019
95
297
458
632
728
842
2020
57
218
351
484
572
2021
49
224
331
434
2022
55
177
282
2023
35
183
2024
57
Total
$
6,843
*
The losses reported in the table are not covered by the ADC.
AIG | 2024 Form 10-K
162
ITEM 8 | Notes to Consolidated Financial Statements | 13. Insurance Liabilities
UK/Europe Property and Special Risks
UK/Europe Property products include commercial, industrial and energy-related property insurance products and services that cover
exposures to manmade and natural disasters, including business interruption. UK/Europe Special Risk products include aerospace,
environmental, political risk, trade credit, surety and marine insurance, and various small and medium sized enterprises insurance
lines.
Incurred Losses and Allocated Loss Adjustment Expenses, Undiscounted and Net of Reinsurance*
Years Ended December 31, (in millions)
December 31, 2024
Accident Year
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2024
Prior Year
Development
Total of IBNR
Liabilities
Plus Expected
Development on
Reported Losses
Cumulative
Number of
Reported
Claims
Unaudited
2015
$ 1,516 $ 1,472 $ 1,457 $ 1,431 $ 1,410 $ 1,400 $ 1,388 $ 1,421 $ 1,407 $
1,399 $
(8) $
3
54,684
2016
1,494
1,636
1,661
1,635
1,632
1,626
1,563
1,558
1,553
(5)
17
57,353
2017
1,609
1,598
1,576
1,582
1,567
1,533
1,533
1,535
2
15
53,528
2018
1,547
1,514
1,493
1,481
1,429
1,427
1,422
(5)
25
44,342
2019
1,112
1,073
1,076
1,064
1,062
1,065
3
45
33,930
2020
1,282
1,223
1,181
1,200
1,190
(10)
94
26,280
2021
995
958
914
923
9
85
22,968
2022
1,098
1,253
1,238
(15)
95
24,972
2023
1,034
1,038
4
179
23,267
2024
1,081
542
17,451
Total
$ 12,444 $
(25)
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
from the table below
(10,174)
—
Liabilities for losses and loss adjustment expenses and prior year development before
accident year 2015, net of reinsurance
85
(10)
Unallocated loss adjustment expense prior year development
—
Liabilities for losses and loss adjustment expenses and prior year loss development, net
of reinsurance
$
2,355 $
(35)
*
The losses reported in the table are not covered by the ADC.
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance*
Years Ended December 31, (in millions)
Accident Year
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Unaudited
2015
$
336 $
895 $
1,163 $
1,263 $
1,298 $
1,321 $
1,329 $
1,331 $
1,373 $
1,377
2016
441
1,080
1,327
1,457
1,501
1,528
1,546
1,520
1,522
2017
345
916
1,193
1,333
1,388
1,426
1,439
1,446
2018
308
952
1,131
1,254
1,267
1,301
1,325
2019
258
632
798
884
922
953
2020
245
657
805
896
1,004
2021
185
489
672
748
2022
190
650
1,100
2023
150
504
2024
195
Total
$
10,174
*
The losses reported in the table are not covered by the ADC.
AIG | 2024 Form 10-K
163
ITEM 8 | Notes to Consolidated Financial Statements | 13. Insurance Liabilities
UK/Europe and Japan Personal Insurance
UK/Europe and Japan Personal Insurance lines consist of accident and health and personal lines. Accident and health products
include voluntary and sponsor-paid personal accident and supplemental health products for individuals, employees, associations and
other organizations as well as a broad range of travel insurance products and services for leisure and business travelers. Personal
lines include automobile and homeowners’ insurance, extended warranty, and consumer specialty products, such as identity theft and
credit card protection. Personal lines are generally short-tail in nature.
Incurred Losses and Allocated Loss Adjustment Expenses, Undiscounted and Net of Reinsurance*
Years Ended December 31, (in millions)
December 31, 2024
Accident Year
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2024
Prior Year
Development
Total of IBNR
Liabilities
Plus Expected
Development on
Reported Losses
Cumulative
Number of
Reported
Claims
Unaudited
2015
$ 2,153 $ 2,134 $ 2,135 $ 2,127 $ 2,126 $ 2,126 $ 2,126 $ 2,123 $ 2,127 $
2,128 $
1 $
2 1,777,959
2016
2,113
2,112
2,099
2,094
2,092
2,090
2,082
2,086
2,084
(2)
3 1,795,415
2017
2,070
1,995
1,982
1,978
1,995
1,960
1,990
1,989
(1)
4 1,719,018
2018
2,372
2,283
2,279
2,251
2,296
2,274
2,272
(2)
1 1,917,173
2019
1,915
1,871
1,834
1,853
1,825
1,827
2
(1) 1,676,687
2020
1,757
1,627
1,580
1,563
1,552
(11)
5 1,392,905
2021
1,626
1,554
1,555
1,555
—
13 1,394,112
2022
1,710
1,752
1,716
(36)
67 2,072,754
2023
1,557
1,552
(5)
101 1,435,789
2024
1,416
177 1,260,923
Total
$ 18,091 $
(54)
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
from the table below
(16,861)
—
Liabilities for losses and loss adjustment expenses and prior year development before
accident year 2015, net of reinsurance
39
7
Unallocated loss adjustment expense prior year development
—
Liabilities for losses and loss adjustment expenses and prior year loss development, net
of reinsurance
$
1,269 $
(47)
*
The losses reported in the table are not covered by the ADC.
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance*
Years Ended December 31, (in millions)
Accident Year
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Unaudited
2015
$
1,155 $
1,751 $
1,927 $
2,020 $
2,055 $
2,079 $
2,096 $
2,104 $
2,112 $
2,117
2016
1,154
1,723
1,894
1,976
2,019
2,043
2,057
2,065
2,070
2017
1,130
1,682
1,830
1,896
1,930
1,949
1,949
1,960
2018
1,426
1,913
2,062
2,139
2,180
2,226
2,250
2019
1,120
1,576
1,690
1,746
1,777
1,798
2020
937
1,350
1,446
1,485
1,513
2021
920
1,306
1,408
1,465
2022
1,006
1,440
1,550
2023
881
1,290
2024
848
Total
$
16,861
*
The losses reported in the table are not covered by the ADC.
Claims Payout Patterns
The following table presents the historical average annual percentage claims payout on an accident year basis at the same
level of disaggregation as presented in the claims development table.
Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance (Unaudited)
Year
1
2
3
4
5
6
7
8
9
10
U.S. Workers' compensation
11.9%
17.5%
11.0%
7.5%
4.5%
3.3%
2.7%
1.2%
1.4%
1.5%
U.S. Excess casualty
1.1
10.1
8.9
19.5
10.8
7.2
6.1
7.9
3.1
2.0
U.S. Other casualty
5.2
9.7
13.8
14.0
13.3
8.7
7.8
4.0
3.5
0.6
U.S. Financial Lines
3.9
14.0
16.0
15.0
12.3
8.5
6.9
6.2
4.0
0.7
U.S. Property and Special Risks
35.6
31.1
10.9
7.1
5.1
2.8
2.2
1.6
1.9
0.2
U.S. Personal Insurance
60.3
22.9
4.7
0.5
2.5
1.0
0.7
0.5
0.1
0.2
UK/Europe Casualty and Financial Lines
5.4
13.6
11.5
10.8
8.9
10.7
5.8
5.3
3.2
1.6
UK/Europe Property and Special Risks
20.9
37.5
18.7
8.2
3.7
2.2
1.1
(0.4)
1.6
0.3
UK/Europe and Japan Personal Insurance
58.5
25.8
7.0
3.5
1.8
1.3
0.6
0.4
0.3
0.2
AIG | 2024 Form 10-K
164
ITEM 8 | Notes to Consolidated Financial Statements | 13. Insurance Liabilities
DISCOUNTING OF LOSS RESERVES
At December 31, 2024 and 2023, the loss reserves reflect a net loss reserve discount of $1.2 billion and $1.2 billion, respectively,
including tabular and non-tabular calculations based upon the following assumptions:
•
The non-tabular workers’ compensation discount is calculated separately for companies domiciled in New York, Pennsylvania and
Delaware, and follows the statutory regulations (prescribed or historically permitted) for each state.
–
For New York companies, the discount is based on a 5 percent interest rate and the companies’ own payout patterns.
–
The Pennsylvania and Delaware regulators have historically approved use of a consistent benchmark discount rate and spread
(U.S. Treasury rate plus a liquidity premium) to all of our workers’ compensation reserves in our Pennsylvania domiciled and
Delaware domiciled companies, as well as our use of updated payout patterns specific to our primary and excess workers
compensation portfolios. Delaware stipulates that the maximum allowable rate is 4.5 percent. We have sought approval to apply
a discount rate of 4.5 percent for National Union Fire Insurance Company of Pittsburgh, Pa. and Lexington Insurance Company.
In 2020, the regulators also approved that the discount rate will be updated on an annual basis.
•
The tabular workers’ compensation discount is calculated based on the mortality rate used in the 2007 U.S. Life table and interest
rates prescribed or permitted by each state (i.e. New York is based on 5 percent interest rate and Pennsylvania and Delaware are
based on U.S. Treasury rate plus a liquidity premium). In the case that applying this tabular discount factor to our nominal reserves
produces a tabular discount that is greater than the indemnity portion of our case reserves, the tabular discount is capped at our
estimate of the indemnity portion of our cases reserves (45 percent).
The discount for asbestos reserves has been fully accreted.
At December 31, 2024 and 2023, the discount consists of $107 million and $294 million of tabular discount, respectively, and
$1.1 billion and $939 million of non-tabular discount for workers’ compensation, respectively. During the years ended December 31,
2024, 2023 and 2022, the benefit / (charge) from changes in discount of $(226) million, $(195) million and $703 million, respectively,
were recorded as part of Losses and loss adjustment expenses incurred in the Consolidated Statements of Income (Loss).
The following table presents the components of the loss reserve discount discussed above:
(in millions)
December 31, 2024
December 31, 2023
U.S. workers' compensation
$
2,111 $
2,337
Retroactive reinsurance
(936)
(1,104)
Total reserve discount(a)(b)
$
1,175 $
1,233
(a) Excludes $184 million and $196 million of discount related to certain long-tail liabilities in the UK at December 31, 2024 and 2023, respectively.
(b) Includes gross discount of $627 million and $687 million, which was 100 percent ceded to Fortitude Re at December 31, 2024 and 2023, respectively.
The following table presents the net loss reserve discount benefit (charge):
Years Ended December 31,
(in millions)
2024
2023
2022
Current accident year
$
128 $
112 $
98
Accretion and other adjustments to prior year discount
(303)
(264)
(239)
Effect of interest rate changes
(51)
(43)
844
Net reserve discount benefit (charge)
(226)
(195)
703
Change in discount on loss reserves ceded under retroactive reinsurance
168
150
(301)
Net change in total reserve discount*
$
(58) $
(45) $
402
*
Excludes $(12) million, $61 million and $19 million of discount related to certain long-tail liabilities in the UK for the years ended December 31, 2024, 2023 and 2022,
respectively.
During 2024, net change in total reserve discount was impacted by updates to future payouts, and despite increases in U.S. Treasury
rates, the updated discount rate resulted in a decrease in the total reserve discount due to the implementation of a statutory cap.
During 2023, net change in total reserve discount was impacted by updates to future payouts, along with a decrease in the discount
rate due to an increase in U.S. Treasury rates being offset by a decrease in the discount spread.
During 2022, effective interest rates increased due to an increase in the forward yield curve component of the discount rates reflecting
an increase in U.S. Treasury rates along with changes in payout pattern assumptions.
Amortization of Deferred Gain on Retroactive Reinsurance
Amortization of the deferred gain on retroactive reinsurance includes $322 million, $48 million and $189 million related to the adverse
development reinsurance cover with NICO for the years ended December 31, 2024, 2023 and 2022, respectively.
AIG | 2024 Form 10-K
165
ITEM 8 | Notes to Consolidated Financial Statements | 13. Insurance Liabilities
Amounts recognized reflect the amortization of the initial deferred gain at inception, as amended for subsequent changes in the
deferred gain due to changes in subject reserves.
FUTURE POLICY BENEFITS
Future policy benefits primarily include reserves for traditional life and annuity payout contracts, which represent an estimate of the
present value of future benefits less the present value of future net premiums. For traditional and limited pay long-duration products,
benefit reserves are accrued and benefit expense is recognized using a net premium ratio methodology for each annual cohort of
business.
The following tables present the balances and changes in the liability for future policy benefits and a reconciliation of the
net liability for future policy benefits to the liability for future policy benefits in the Consolidated Balance Sheets:
Present value of expected net premiums
Balance, beginning of year
$
1,702
$
1,929
Effect of changes in discount rate assumptions (AOCI)
339
262
Beginning balance at original discount rate
2,041
2,191
Effect of changes in cash flow assumptions
12
(2)
Effect of actual variances from expected experience
(12)
(16)
Adjusted beginning of year balance
2,041
2,173
Issuances
88
122
Interest accrual
39
43
Net premium collected
(254)
(283)
Foreign exchange impact
(165)
(14)
Ending balance at original discount rate
1,749
2,041
Effect of changes in discount rate assumptions (AOCI)
(203)
(339)
Balance, end of year
$
1,546
$
1,702
Present value of expected future policy benefits
Balance, beginning of year
$
2,149
$
2,380
Effect of changes in discount rate assumptions (AOCI)
441
362
Beginning balance at original discount rate
2,590
2,742
Effect of changes in cash flow assumptions
3
(13)
Effect of actual variances from expected experience
(12)
(18)
Adjusted beginning of year balance
2,581
2,711
Issuances
93
130
Interest accrual
48
52
Benefit payments
(262)
(276)
Foreign exchange impact
(211)
(27)
Ending balance at original discount rate
2,249
2,590
Effect of changes in discount rate assumptions (AOCI)
(273)
(441)
Balance, end of year
$
1,976
$
2,149
Net liability for future policy benefits, end of year
$
430
$
447
Deferred profit liability
1
1
Other reconciling items(a)
886
1,019
Future policy benefits
1,317
1,467
Less: Reinsurance recoverable
(726)
(823)
Net liability for future policy benefits after reinsurance recoverable
$
591
$
644
Weighted average liability duration of the liability for future policy benefits(b)
9.1
9.3
Years Ended December 31,
(in millions, except for liability durations)
2024
2023
(a) Other reconciling items primarily include Global Accident & Health (short-duration) contracts and certain long-duration contracts that are 100 percent ceded of
$691 million and $785 million at December 31, 2024 and 2023, respectively.
(b) The weighted average liability durations are calculated as the modified duration using projected future net liability cash flows that are aggregated at the segment level,
utilizing the segment level weighted average interest rates and current discount rate, which can be found in the table below.
AIG | 2024 Form 10-K
166
ITEM 8 | Notes to Consolidated Financial Statements | 13. Insurance Liabilities
The following table presents the amount of undiscounted expected future benefit payments and undiscounted and
discounted expected gross premiums for future policy benefits for nonparticipating contracts*:
Years Ended December 31,
(in millions)
2024
2023
2022
Undiscounted expected future benefits and expense
$
2,816
$
3,194
$
3,325
Undiscounted expected future gross premiums
3,911
4,403
4,558
*
Discounted expected future gross premiums (at current discount rate) for 2024 and 2023 were $2.8 billion and $3.0 billion, respectively.
The following table presents the amount of revenue and interest recognized in the Consolidated Statements of Income
(Loss) for future policy benefits for nonparticipating contracts:
Years Ended December 31,
(in millions)
2024
2023
2022
Gross premiums
$
409
$
477
$
487
Interest accretion
$
9
$
9
$
8
The following table presents the weighted-average interest rate for future policy benefits for nonparticipating contracts:
Years Ended December 31,
2024
2023
2022
Weighted-average interest rate, original discount rate
1.83 %
1.82 %
1.77 %
Weighted-average interest rate, current discount rate
3.22 %
3.78 %
3.21 %
The weighted average interest rates are calculated using projected future net liability cash flows that are aggregated to the segment
level, and are represented as an annual rate.
14. Debt
Our long-term debt is denominated in various currencies, with both fixed and variable interest rates. Long-term debt is carried at the
principal amount borrowed, including unamortized discounts, hedge accounting valuation adjustments and fair value adjustments,
when applicable.
The following table lists our total debt outstanding at December 31, 2024 and 2023. The interest rates presented in the
following table are the range of contractual rates in effect at December 31, 2024, including fixed and variable-rates:
General borrowings:
Notes and bonds payable
1.58% - 6.82%
2025 - 2055
$
7,885
$
9,079
Junior subordinated debt
5.75% - 8.18%
2037 - 2058
602
992
AIG Japan Holdings Kabushiki Kaisha
0.27% - 0.73%
2025
239
267
Total general borrowings
8,726
10,338
Borrowings supported by assets
4.48% - 7.05%
2025 - 2046
37
37
Other subsidiaries' notes, bonds, loans and mortgages payable - not
guaranteed by AIG
9.96% - 10.46%
2027 - 2028
1
—
Total long-term debt
8,764
10,375
Debt of consolidated investment entities - not guaranteed by AIG*
4.15% - 4.48%
2026 - 2028
158
231
Total debt
$
8,922
$
10,606
At December 31, 2024
Range of
Interest Rate(s)
Maturity
Date(s)
Balance at
December 31, 2024
Balance at
December 31, 2023
(in millions)
*
At December 31, 2024, includes debt of consolidated investment entities primarily related to real estate investments of $158 million. At December 31, 2023, includes
debt of consolidated investment entities related to real estate investments of $79 million and other securitization vehicles of $152 million.
AIG | 2024 Form 10-K
167
ITEM 8 | Notes to Consolidated Financial Statements | 13. Insurance Liabilities
The following table presents maturities of long-term debt (including unamortized original issue discount, hedge accounting
valuation adjustments and fair value adjustments, when applicable):
General borrowings:
Notes and bonds payable
$ 7,885 $ 146 $
265 $ 848 $ 830 $ 257
$
5,539
Junior subordinated debt
602
—
—
—
—
—
602
AIG Japan Holdings Kabushiki Kaisha
239
239
—
—
—
—
—
Total general borrowings
8,726
385
265
848
830
257
6,141
Borrowings supported by assets
37
12
7
—
—
—
18
Other subsidiaries notes, bonds, loans and mortgages payable
1
1
—
—
—
—
—
Total long-term debt*
$ 8,764 $ 398 $
272 $ 848 $ 830 $ 257
$
6,159
December 31, 2024
Year Ending
(in millions)
Total
2025
2026
2027
2028
2029
Thereafter
*
Does not reflect $158 million of notes issued by consolidated investment entities, for which recourse is limited to the assets of the respective investment entities and for
which there is no recourse to the general credit of AIG.
DEBT ISSUANCE
In November 2024, AIG issued ¥77.1 billion aggregate principal amount of 1.580% Notes Due 2028, ¥10.3 billion aggregate principal
amount of 1.757% Notes Due 2029 and ¥12.6 billion aggregate principal amount of 2.137% Notes Due 2034, which was equivalent to
approximately $660 million at the time of the offering.
DEBT CASH TENDER OFFERS AND REDEMPTIONS
In 2024, we repaid, redeemed and repurchased $2.0 billion aggregate principal amount of certain notes and debentures issued or
guaranteed by AIG, for an aggregate purchase price of $2.1 billion, resulting in a total loss on extinguishment of debt of $14 million.
This includes the following:
•
Repayment of $459 million aggregate principal amount of our 4.125% Notes due February 15, 2024.
•
Redemption of €41.55 million aggregate principal amount of our Series A-3 Junior Subordinated Debentures, equivalent to
approximately $46 million at the time of repayment.
•
Redemption of $400 million aggregate principal amount of our Zero Coupon Callable Notes Due 2047, for a purchase price of
approximately $543 million.
•
Repurchased, through cash tender offers, approximately $1.13 billion aggregate principal amount of certain notes and debentures
issued by AIG for an aggregate purchase price of approximately $1.14 billion.
CREDIT FACILITIES
On September 27, 2024, AIG entered into the amended and restated credit agreement (Amended Credit Agreement) that amends and
restates AIG's credit agreement, dated as of November 19, 2021, which provides for a syndicated, multicurrency revolving credit
facility as a potential source of liquidity for general corporate purposes. The Amended Credit Agreement provides for a five-year total
commitment of $3.0 billion, consisting of standby letters of credit and/or revolving credit borrowings. Under circumstances described in
the Amended Credit Agreement, the aggregate commitments may be increased by up to $1.5 billion, for a total commitment of up to
$4.5 billion. Under the Amended Credit Agreement, the applicable rate, commitment fee and letter of credit fee are determined by
reference to the credit ratings of AIG’s senior long-term unsecured debt. The Amended Credit Agreement is scheduled to expire in
September 2029.
As of December 31, 2024, there were no borrowings or letters of credit outstanding under the Amended Credit Agreement, so that a
total of approximately $3.0 billion remains available under the Amended Credit Agreement.
ITEM 8 | Notes to Consolidated Financial Statements | 14. Debt
AIG | 2024 Form 10-K
168
15. Contingencies, Commitments and Guarantees
In the normal course of business, we enter into various contingent liabilities and commitments. In addition, AIG Parent guarantees
various obligations of certain subsidiaries.
Although we cannot currently quantify our ultimate liability for unresolved litigation and investigation matters, including those referred
to below, it is possible that such liability could have a material adverse effect on our consolidated financial condition or consolidated
results of operations or consolidated cash flows for an individual reporting period.
LEGAL CONTINGENCIES
In the normal course of business, we are subject to regulatory and government investigations and actions, and litigation and other
forms of dispute resolution in a large number of proceedings pending in various domestic and foreign jurisdictions. Certain of these
matters involve potentially significant risk of loss due to potential for significant jury awards and settlements, punitive damages or
other penalties. Many of these matters are also highly complex and may seek recovery on behalf of a class or similarly large number
of plaintiffs. It is therefore inherently difficult to predict the size or scope of potential future losses arising from these matters. In our
insurance and reinsurance operations, litigation and arbitration concerning the scope of coverage under insurance and reinsurance
contracts, and litigation and arbitration in which our subsidiaries defend or indemnify their insureds under insurance contracts, are
generally considered in the establishment of our loss reserves. Separate and apart from the foregoing matters involving insurance and
reinsurance coverage, AIG Parent, our subsidiaries and their respective officers and directors are subject to a variety of additional
types of legal proceedings brought by holders of AIG securities, customers, employees and others, alleging, among other things,
breach of contractual or fiduciary duties, bad faith, indemnification and violations of federal and state statutes and regulations. With
respect to these other categories of matters not arising out of claims for insurance or reinsurance coverage, we establish reserves for
loss contingencies when it is probable that a loss will be incurred and the amount of the loss can be reasonably estimated. In many
instances, we are unable to determine whether a loss is probable or to reasonably estimate the amount of such a loss and, therefore,
the potential future losses arising from legal proceedings may exceed the amount of liabilities that we have recorded in our financial
statements covering these matters. While such potential future charges could be material, based on information currently known to
management, management does not believe that any such charges are likely to have a material adverse effect on our financial
position or results of operation.
Additionally, from time to time, various regulatory and governmental agencies review our transactions and practices in connection with
industry-wide and other inquiries or examinations into, among other matters, the business practices of current and former operating
insurance subsidiaries. Such investigations, inquiries or examinations could develop into administrative, civil or criminal proceedings
or enforcement actions, in which remedies could include fines, penalties, restitution or alterations in our business practices, and could
result in additional expenses, limitations on certain business activities and reputational damage.
LEASE COMMITMENTS
We lease office space and equipment in various locations across jurisdictions in which the Company operates. The majority of the
resulting obligation arising from these contracts is generated by our real estate portfolio, which only includes contracts classified as
operating leases. The lease liability and corresponding right of use asset reflected in Other liabilities and Other assets were
$868 million and $696 million, respectively, at December 31, 2024, and $894 million and $744 million, respectively, at December 31,
2023. We made cash payments of $177 million and $179 million in 2024 and 2023, respectively, in connection with these leases. The
liability includes non-lease components, such as property taxes and insurance for our gross leases. Some of these leases contain
options to renew after a specified period of time at the prevailing market rate; however, renewal options that have not been exercised
as of December 31, 2024 are excluded until management attains a reasonable level of certainty. Some leases also include
termination options at specified times and term; however, termination options are not reflected in the lease asset and liability balances
until they have been exercised.
The weighted average discount rate and lease term assumptions used in determining the liability are 3.36 percent and 10.1 years,
respectively. The primary assumption used to determine the discount rate is the cost of funding for the Company, which is based on
the secured borrowing rate for terms similar to the lease term, and for the major financial markets in which AIG operates.
Rent expense was $164 million, $162 million and $174 million for the years ended December 31, 2024, 2023 and 2022, respectively.
ITEM 8 | Notes to Consolidated Financial Statements | 15. Contingencies, Commitments and Guarantees
AIG | 2024 Form 10-K
169
The following table presents the future undiscounted cash flows under operating leases at December 31, 2024:
(in millions)
2025
$
143
2026
95
2027
88
2028
76
2029
78
Remaining years after 2029
578
Total undiscounted lease payments
1,058
Less: Present value adjustment
190
Net lease liabilities
$
868
OTHER COMMITMENTS
In the normal course of business, we enter into commitments to invest in limited partnerships, private equity funds and hedge funds
and to purchase and develop real estate in the U.S. and abroad. These commitments totaled $1.8 billion and $1.7 billion at December
31, 2024 and 2023, respectively.
GUARANTEES
Subsidiaries
We have issued unconditional guarantees with respect to the prompt payment, when due, of all present and future payment
obligations and liabilities of AIGFP and certain of its subsidiaries. We have also issued guarantees of all present and future payment
obligations and liabilities of AIG Markets, Inc.
Due to the deconsolidation of AIGFP and its subsidiaries, as of December 31, 2024, a $100 million guarantee related to the
obligations of AIGFP and certain of its subsidiaries was recognized, and is reported in Other liabilities.
We continue to guarantee certain policyholder contracts issued by Corebridge subsidiaries as well as certain debt issued by
Corebridge Life Holdings, Inc. (CRBGLH). Pursuant to the Separation Agreement entered in by AIG and Corebridge on September 14,
2022, Corebridge must indemnify, defend and hold us harmless from and against any liability related to these guarantees. Also, under
a collateral agreement, in the event of: (i) a ratings downgrade of Corebridge or the guaranteed debt below specified levels or (ii) the
failure by CRBGLH to pay principal and interest on the guaranteed debt when due, Corebridge must collateralize an amount equal to
the sum of: (i) 100 percent of the principal amount outstanding, (ii) accrued and unpaid interest and (iii) 100 percent of the net present
value of scheduled interest payments through the maturity dates of the debt.
Business and Asset Dispositions
We are subject to financial guarantees and indemnity arrangements in connection with the completed sales of businesses and assets.
The various arrangements may be triggered by, among other things, declines in asset values, the occurrence of specified business
contingencies, the realization of contingent liabilities, developments in litigation or breaches of representations, warranties or
covenants provided by us. These arrangements are typically subject to various time limitations, defined by the contract or by operation
of law, such as statutes of limitation. In some cases, the maximum potential obligation is subject to contractual limitations, while in
other cases such limitations are not specified or are not applicable.
We are unable to develop a reasonable estimate of the maximum potential payout under certain of these arrangements. Overall, we
believe the likelihood that we will have to make any material payments related to completed sales under these arrangements is
remote, and no material liabilities related to these arrangements have been recorded in the Consolidated Balance Sheets.
Other
•
For additional information on commitments and guarantees associated with VIEs, see Note 10.
•
For additional information on derivatives, see Note 11.
AIG | 2024 Form 10-K
170
ITEM 8 | Notes to Consolidated Financial Statements | 15. Contingencies, Commitments and Guarantees
16. Equity
SHARES OUTSTANDING
Preferred Stock
On March 14, 2019, we issued 20,000 shares of Series A 5.85% Non-Cumulative Perpetual Preferred Stock (Series A Preferred
Stock) (equivalent to 20,000,000 Depositary Shares (the Depositary Shares), each representing a 1/1,000th interest in a share of
Series A Preferred Stock), $5.00 par value and $25,000 liquidation preference per share (equivalent to $25 per Depositary Share).
On March 15, 2024, we redeemed all 20,000 outstanding shares of our Series A Preferred Stock and all 20,000,000 of the
corresponding Depositary Shares, each representing a 1/1,000th interest in a share of Series A Preferred Stock, for a redemption
price of $25,000 per share (equivalent to $25.00 per Depositary Share) for an aggregate redemption price of $500 million, paid in
cash. The $15 million difference between the aggregate redemption price and the outstanding par and additional paid in capital
amount of $485 million was recorded as a reduction of retained earnings and is presented on Dividends on preferred stock and
preferred stock redemption premiums on the Consolidated Statements of Income.
Common Stock
The following table presents a rollforward of outstanding shares:
Years Ended December 31,
2024
2023
2022
(in millions)
Common
Stock Issued
Treasury
Stock
Common Stock
Outstanding
Common
Stock Issued
Treasury
Stock
Common Stock
Outstanding
Common
Stock Issued
Treasury
Stock
Common Stock
Outstanding
Shares, beginning of year
1,906.7 (1,217.9)
688.8
1,906.7 (1,172.6)
734.1
1,906.7 (1,088.0)
818.7
Shares issued
—
6.8
6.8
—
5.5
5.5
—
5.5
5.5
Shares repurchased
—
(89.5)
(89.5)
—
(50.8)
(50.8)
—
(90.1)
(90.1)
Shares, end of year
1,906.7 (1,300.6)
606.1
1,906.7 (1,217.9)
688.8
1,906.7 (1,172.6)
734.1
Dividends
Dividends are payable on AIG common stock, par value $2.50 per share (AIG Common Stock) only when, as and if declared by our
Board of Directors in its discretion, from funds legally available for this purpose. In considering whether to pay a dividend on or
purchase shares of AIG Common Stock, our Board of Directors considers a number of factors, including, but not limited to: the capital
resources available to support our insurance operations and business strategies, AIG’s funding capacity and capital resources in
comparison to internal benchmarks, expectations for capital generation, rating agency expectations for capital, regulatory standards
for capital and capital distributions, and such other factors as our Board of Directors may deem relevant.
Repurchase of AIG Common Stock
Shares may be repurchased from time to time in the open market, private purchases, through forward, derivative, accelerated
repurchase or automatic repurchase transactions or otherwise. Certain of our share repurchases have been and may from time to
time be effected through the Securities Exchange Act of 1934, as amended (the Exchange Act) Rule 10b5-1 repurchase plans. On
April 30, 2024, the Board of Directors authorized the repurchase of $10.0 billion of AIG Common Stock (inclusive of the approximately
$3.9 billion remaining under the Board's prior share repurchase authorization).
The timing of any future repurchases will depend on market conditions, our business and strategic plans, financial condition, results of
operations, liquidity and other factors.
Pursuant to an Exchange Act Rule 10b5-1 repurchase plan, from January 1, 2025 to February 7, 2025, we repurchased
approximately 13 million shares of AIG Common Stock for an aggregate purchase price of approximately $952 million.
DIVIDENDS DECLARED
On February 11, 2025, our Board of Directors declared a cash dividend on AIG Common Stock of $0.40 per share, payable on
March 31, 2025 to shareholders of record on March 17, 2025.
ITEM 8 | Notes to Consolidated Financial Statements | 16. Equity
AIG | 2024 Form 10-K
171
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The following table presents a rollforward of Accumulated other comprehensive income (loss):
Balance, January 1, 2022, net of tax
$
(48) $
12,125 $
(1,496) $
(2,167) $
(2,446) $
(903) $
6 $
5,071
Change in unrealized appreciation
(depreciation) of investments
(119)
(47,647)
—
—
—
—
—
(47,766)
Change in other
—
(12)
—
—
—
—
—
(12)
Change in fair value of market risk
benefits, net
—
—
1,635
—
—
—
—
1,635
Change in discount rates
—
—
—
6,993
—
—
—
6,993
Change in future policy benefits
—
1,805
—
—
—
—
—
1,805
Change in foreign currency translation
adjustments
—
—
—
—
(593)
—
—
(593)
Change in net actuarial loss
—
—
—
—
—
(31)
—
(31)
Change in prior service cost
—
—
—
—
—
8
—
8
Change in deferred tax asset (liability)
25
7,446
(341)
(1,449)
(20)
3
—
5,664
Change in fair value of liabilities under
fair value option attributable to
changes in own credit risk
—
—
—
—
—
—
(6)
(6)
Total other comprehensive loss
(94)
(38,408)
1,294
5,544
(613)
(20)
(6)
(32,303)
Add: Corebridge noncontrolling
interests
—
2,485
11
(393)
14
(1)
—
2,116
Less: Noncontrolling interests
(6)
(3,123)
93
525
11
—
—
(2,500)
(in millions)
Unrealized
Appreciation
(Depreciation)
of Fixed Maturity
Securities on Which
Allowance for Credit
Losses Was Taken
Unrealized
Appreciation
(Depreciation)
of All Other
Investments
Change in Fair
Value of Market
Risk Benefits
Attributable to
Changes in
Our Own
Credit Risk
Change in the
discount rates
used to measure
traditional and
limited payment
long-duration
insurance contracts
Foreign
Currency
Translation
Adjustments
Retirement
Plan
Liabilities
Adjustment
Fair Value of
Liabilities
Under Fair
Value Option
Attributable to
Changes in Our
Own Credit Risk
Total
Balance, December 31, 2022, net of tax
$
(136) $
(20,675) $
(284) $
2,459 $
(3,056) $
(924) $
— $ (22,616)
Change in unrealized appreciation
(depreciation) of investments*
30
8,410
—
—
—
—
—
8,440
Change in other
(10)
52
—
—
—
—
—
42
Change in fair value of market risk
benefits, net
—
—
(695)
—
—
—
—
(695)
Change in discount rates
—
—
—
(1,045)
—
—
—
(1,045)
Change in future policy benefits
—
(254)
—
—
—
—
—
(254)
Change in foreign currency translation
adjustments
—
—
—
—
137
—
—
137
Change in net actuarial loss
—
—
—
—
—
143
—
143
Change in prior service cost
—
—
—
—
—
4
—
4
Change in deferred tax asset (liability)
(6)
(1,074)
151
174
(35)
(42)
—
(832)
Total other comprehensive income
14
7,134
(544)
(871)
102
105
—
5,940
Add: Corebridge noncontrolling
interests
13
4,524
153
(732)
(18)
(2)
—
3,938
Less: Noncontrolling interests
(3)
1,871
(199)
(377)
7
—
—
1,299
Balance, December 31, 2023, net of tax
$
(106) $
(10,888) $
(476) $
1,233 $
(2,979) $
(821) $
— $ (14,037)
Change in unrealized appreciation
(depreciation) of investments*
95
(1,551)
—
—
—
—
—
(1,456)
Change in other
—
18
—
—
—
—
—
18
Change in fair value of market risk
benefits, net
—
—
130
—
—
—
—
130
Change in discount rates
—
—
—
946
—
—
—
946
Change in future policy benefits
—
(59)
—
—
—
—
—
(59)
Change in foreign currency translation
adjustments
—
—
—
—
(407)
—
—
(407)
Change in net actuarial loss
—
—
—
—
—
63
—
63
Change in prior service cost
—
—
—
—
—
2
—
2
Change in deferred tax asset (liability)
(20)
(70)
(28)
(165)
(45)
(18)
—
(346)
Corebridge deconsolidation, net of tax
42
8,513
330
(1,583)
(88)
—
—
7,214
Total other comprehensive income (loss)
117
6,851
432
(802)
(540)
47
—
6,105
Add: Corebridge noncontrolling
interests
2
610
33
(105)
(3)
—
—
537
Less: Noncontrolling interests
17
(559)
(11)
258
(1)
—
—
(296)
Balance, December 31, 2024, net of tax
$
(4) $
(2,868) $
— $
68 $
(3,521) $
(774) $
— $
(7,099)
*
Includes net unrealized gains and losses attributable to businesses held for sale or reclassified to discontinued operations at December 31, 2024 and 2023.
AIG | 2024 Form 10-K
172
ITEM 8 | Notes to Consolidated Financial Statements | 16. Equity
The following table presents the other comprehensive income (loss) reclassification adjustments for the years ended
December 31, 2024, 2023 and 2022, respectively:
Year Ended December 31, 2024
Unrealized change arising during year
$
95 $
(2,211) $
130 $
946 $
(407) $
34 $
— $
(1,413)
Less: Reclassification adjustments
included in net income
(42)
(9,132)
(330)
1,583
88
(31)
—
(7,864)
Total other comprehensive income
(loss), before of income tax expense
(benefit)
137
6,921
460
(637)
(495)
65
—
6,451
Less: Income tax expense (benefit)
20
70
28
165
45
18
—
346
Total other comprehensive income
(loss), net of income tax expense
(benefit)
$
117 $
6,851 $
432 $
(802) $
(540) $
47 $
— $
6,105
Year Ended December 31, 2023
Unrealized change arising during year
$
(6) $
7,172 $
(695) $
(1,045) $
137 $
118 $
— $
5,681
Less: Reclassification adjustments
included in net income
(26)
(1,036)
—
—
—
(29)
—
(1,091)
Total other comprehensive income (loss),
before income tax expense (benefit)
20
8,208
(695)
(1,045)
137
147
—
6,772
Less: Income tax expense (benefit)
6
1,074
(151)
(174)
35
42
—
832
Total other comprehensive income (loss),
net of income tax expense (benefit)
$
14 $
7,134 $
(544) $
(871) $
102 $
105 $
— $
5,940
Year Ended December 31, 2022
Unrealized change arising during year
$
(112) $
(47,043) $
1,635 $
6,993 $
(593) $
(53) $
(6) $ (39,179)
Less: Reclassification adjustments
included in net income
7
(1,189)
—
—
—
(30)
—
(1,212)
Total other comprehensive income (loss),
before income tax expense (benefit)
(119)
(45,854)
1,635
6,993
(593)
(23)
(6)
(37,967)
Less: Income tax expense (benefit)
(25)
(7,446)
341
1,449
20
(3)
—
(5,664)
Total other comprehensive income (loss),
net of income tax expense (benefit)
$
(94) $
(38,408) $
1,294 $
5,544 $
(613) $
(20) $
(6) $ (32,303)
(in millions)
Unrealized
Appreciation
(Depreciation)
of Fixed Maturity
Securities on Which
Allowance for Credit
Losses Was Taken
Unrealized
Appreciation
(Depreciation)
of All Other
Investments
Change in Fair
Value of Market
Risk Benefits
Attributable to
Changes in Our
Own Credit Risk
Change in the
discount rates
used to measure
traditional and
limited payment
long-duration
insurance contracts
Foreign
Currency
Translation
Adjustments
Retirement
Plan
Liabilities
Adjustment
Fair Value of
Liabilities
Under Fair
Value Option
Attributable to
Changes in Our
Own Credit Risk
Total
The following table presents the effect of the reclassification of significant items out of AOCI on the respective line items in
the Consolidated Statements of Income (Loss)(a):
Amount Reclassified from AOCI
Affected Line Item in the
Years Ended December 31,
Consolidated
(in millions)
2024
2023
2022
Statements of Income (Loss)
Unrealized appreciation (depreciation) of fixed maturity securities
on which allowance for credit losses was taken
Investments
$
— $
(26) $
7
Net realized gains (losses)
Total
—
(26)
7
Unrealized appreciation (depreciation) of all other investments
Investments
(619)
(1,036)
(1,189) Net realized gains (losses)
Total
(619)
(1,036)
(1,189)
Change in retirement plan liabilities adjustment
Prior-service credit
(2)
(2)
(2)
(b)
Actuarial losses
(29)
(27)
(28)
(b)
Total
(31)
(29)
(30)
Corebridge deconsolidation, net of tax
(7,214)
—
—
(c)
Total reclassifications for the year
$
(7,864) $
(1,091) $
(1,212)
(a) The following items are not reclassified out of AOCI and included in the Consolidated Statements of Income (Loss) and thus have been excluded from the table:
(a) Change in fair value of market risk benefits attributable to changes in our own credit risk and (b) Change in the discount rates used to measure traditional and
limited-payment long-duration insurance contracts.
(b) These AOCI components are included in the computation of net periodic pension cost. For additional information, see Note 20.
(c) Represents adjustments related to the deconsolidation of Corebridge which is reflected in Income (loss) from discontinued operations, net of taxes. See the rollforward
of Accumulated other comprehensive income (loss) above for further details.
AIG | 2024 Form 10-K
173
ITEM 8 | Notes to Consolidated Financial Statements | 16. Equity
17. Earnings Per Common Share (EPS)
The basic EPS computation is based on the weighted average number of common shares outstanding, adjusted to reflect all stock
dividends and stock splits. The diluted EPS computation is based on those shares used in the basic EPS computation plus common
shares that would have been outstanding assuming issuance of common shares for all dilutive potential common shares outstanding
and adjusted to reflect all stock dividends and stock splits, using the treasury stock method or the if-converted method, as applicable.
The following table presents the computation of basic and diluted EPS:
Years Ended December 31,
(dollars in millions, except per common share data)
2024
2023
2022
Numerator for EPS:
Income (loss) from continuing operations
$
2,700
$
2,741
$
2,890
Less: Preferred stock dividends and preferred stock redemption premiums
22
29
29
Income (loss) attributable to AIG common shareholders from continuing operations
2,678
2,712
2,861
Income (loss) from discontinued operations, net of income tax expense
(3,626)
1,137
8,383
Less: Net income attributable to noncontrolling interests
478
235
1,046
Income (loss) from discontinued operations, net of noncontrolling interest
(4,104)
902
7,337
Net income (loss) attributable to AIG common shareholders
$
(1,426)
$
3,614
$
10,198
Denominator for EPS:
Weighted average common shares outstanding - basic
651,448,307
719,506,291
778,621,118
Dilutive common shares
5,834,853
5,726,777
9,320,632
Weighted average common shares outstanding - diluted(a)
657,283,160
725,233,068
787,941,750
Income (loss) per common share attributable to AIG common shareholders:
Basic:
Income (loss) from continuing operations
$
4.11
$
3.77
$
3.67
Income (loss) from discontinued operations
$
(6.30)
$
1.25
$
9.43
Income (loss) attributable to AIG common shareholders
$
(2.19)
$
5.02
$
13.10
Diluted:
Income (loss) from continuing operations
$
4.07
$
3.74
$
3.63
Income (loss) from discontinued operations
$
(6.24)
$
1.24
$
9.31
Income (loss) attributable to AIG common shareholders
$
(2.17)
$
4.98
$
12.94
(a) Potential dilutive common shares are primarily due to our share-based employee compensation plans. The number of potential common shares excluded from diluted
shares outstanding was 0.1 million, 4.4 million and 24.1 million for the years ended December 31, 2024, 2023 and 2022, respectively, because the effect of including
those common shares in the calculation would have been anti-dilutive.
For information regarding our repurchases of AIG Common Stock, see Note 16.
ITEM 8 | Notes to Consolidated Financial Statements | 17. Earnings Per Common Share (EPS)
AIG | 2024 Form 10-K
174
18. Statutory Financial Data and Restrictions
The following table presents statutory net income (loss) and capital and surplus for our General Insurance companies in
accordance with statutory accounting practices:
(in millions)
2024
2023
2022
Years Ended December 31,
Statutory net income (loss)(a)(b):
General Insurance companies:
Domestic
$
1,594 $
1,912 $
2,272
Foreign
1,741
1,867
1,047
Total General Insurance companies
$
3,335 $
3,779 $
3,319
At December 31,
Statutory capital and surplus(a)(b):
General Insurance companies:
Domestic
$
17,001 $
18,703
Foreign
12,299
11,527
Total General Insurance companies
$
29,300 $
30,230
Aggregate minimum required statutory capital and surplus:
General Insurance companies:
Domestic
$
3,763 $
3,625
Foreign
5,741
6,041
Total General Insurance companies
$
9,504 $
9,666
(a) Excludes discontinued operations and other divested businesses.
(b) The 2024 statutory net income and capital and surplus reflect our best estimate as of the date of AIG’s Form 10-K filing.
Our insurance subsidiaries file financial statements prepared in accordance with statutory accounting practices prescribed or
permitted by domestic and foreign insurance regulatory authorities. The principal differences between statutory financial statements
and financial statements prepared in accordance with U.S. GAAP for domestic companies are that statutory financial statements do
not reflect DAC, some bond portfolios may be carried at amortized cost, investment impairments are determined in accordance with
statutory accounting practices, assets and liabilities are presented net of reinsurance, policyholder liabilities are generally valued
using more conservative assumptions and certain assets are non-admitted.
For domestic insurance subsidiaries, aggregate minimum required statutory capital and surplus is based on the greater of the Risk-
Based Capital (RBC) level that would trigger regulatory action or minimum requirements per state insurance regulation. Capital and
surplus requirements of our foreign subsidiaries differ from those prescribed in the U.S., and can vary significantly by jurisdiction. At
both December 31, 2024 and 2023, all domestic and foreign insurance subsidiaries individually exceeded the minimum required
statutory capital and surplus requirements and all domestic insurance subsidiaries individually exceeded RBC minimum required
levels.
For foreign insurance companies, financial statements are prepared in accordance with local regulatory requirements. These
accounting practices differ from U.S. GAAP primarily by different rules on deferral of policy acquisition costs, amortization of deferred
acquisition costs, and establishing future policy benefit liabilities using different actuarial assumptions, as well as valuing for deferred
taxes on a different basis.
SUBSIDIARY DIVIDEND RESTRICTIONS
Payments of dividends to us by our insurance subsidiaries are subject to certain restrictions imposed by regulatory authorities. With
respect to our domestic insurance subsidiaries, the payment of any dividend requires formal notice to the insurance department in
which the particular insurance subsidiary is domiciled. For example, unless permitted by the Superintendent of Financial Services,
property casualty companies domiciled in New York generally may not pay dividends to shareholders that, in any 12-month period,
exceed the lesser of 10 percent of such company’s statutory policyholders’ surplus or 100 percent of its “adjusted net investment
income,” for the previous year, as defined. Generally, less severe restrictions applicable to property casualty companies exist in most
of the other states in which our insurance subsidiaries are domiciled. Under state insurance laws, an insurer may pay a dividend
without prior approval of the insurance regulator when the amount of the dividend is below certain regulatory thresholds. Other foreign
jurisdictions may restrict the ability of our foreign insurance subsidiaries to pay dividends. Various other regulatory restrictions also
limit cash loans and advances to us by our subsidiaries.
ITEM 8 | Notes to Consolidated Financial Statements | 18. Statutory Financial Data and Restrictions
AIG | 2024 Form 10-K
175
The amount of dividends available to be paid in 2025 from our insurance subsidiaries without prior regulatory approval was $2.5 billion
at December 31, 2024.
To our knowledge, no AIG insurance company is currently on any regulatory or similar “watch list” with regard to solvency.
PARENT COMPANY DIVIDEND RESTRICTIONS
At December 31, 2024, our ability to pay dividends is not subject to any significant contractual restrictions, but remains subject to
regulatory restrictions.
For additional information about our ability to pay dividends to our shareholders, see Note 16.
19. Share-Based Compensation Plans
The following table presents our total share-based compensation expense:
Years Ended December 31,
(in millions)
2024
2023
2022
Share-based compensation expense - pre-tax(a)
$
211 $
199 $
288
Share-based compensation expense - after tax(b)
167
157
228
(a) As a result of accelerated vesting events, such as retirement eligibility in the year of grant and involuntary terminations, we recognized $52 million, $58 million and
$67 million in 2024, 2023 and 2022, respectively, prior to the end of the specified vesting periods. It is our policy to reverse compensation expense for forfeited awards
when they occur.
(b) We also recognized $16 million of tax benefit due to share settlements occurring in 2024.
EMPLOYEE PLANS
The Company sponsors several stock compensation programs under the AIG Long Term Incentive Plan (LTIP) (as amended) and its
predecessor plan from which performance share units (PSUs), restricted stock units (RSUs), stock options and deferred stock units
(DSUs) (collectively units) are issued. In addition, off-cycle grants are made from time to time during the year generally as sign-on
awards to new hires or as a result of a change in employee status. The LTIP is governed by the AIG 2021 Omnibus Incentive Plan
(2021 Omnibus Plan), which was adopted at the annual shareholders’ meeting in May 2021, replacing the AIG 2013 Omnibus
Incentive Plan (2013 Plan).
Our share-settled awards are settled with previously acquired shares held in AIG’s treasury.
AIG Omnibus Incentive Plan
The 2021 Omnibus Plan provided for the grants of share-based awards to our employees and non-employee directors. The total
number of shares granted under the 2021 Plan (the reserve) was the sum of 1) 8.1 million shares of AIG Common Stock, plus 2) the
number of authorized shares that remained available for issuance under the 2013 Plan when the 2021 Omnibus Plan became
effective, plus 3) the number of shares of AIG Common Stock relating to outstanding awards under the 2013 Plan at the time the 2021
Omnibus Plan became effective that subsequently were forfeited, expired, terminated or otherwise lapse or are settled in cash. Each
share-based unit granted under the Omnibus Plan reduces the number of shares available for future grants by one share. However,
shares with respect to awards that are forfeited, expired or settled for cash are returned to the reserve. As of December 31, 2024,
23,168,953 shares are available for future grants.
AIG Long Term Incentive Plan
Long-Term Incentive (LTI) Awards
The LTIP provides for an annual award to certain employees, including our senior executive officers and other highly compensated
employees that may be comprised of a combination of one or more of the following units: PSUs, RSUs or stock options.
The number of PSUs issued on the grant date (the target) provides the opportunity for LTIP participants (usually senior management)
to receive shares of AIG Common Stock based on AIG achieving specified performance goals at the end of a three-year performance
period. These performance goals are pre-established by AIG’s Compensation and Management Resources Committee (CMRC) for
each annual grant and may differ from year to year. The actual number of PSUs earned can vary from zero to 200 percent of the
target for the 2024, 2023 and 2022 LTI awards, depending on AIG’s performance relative to a specified peer group and/or the
outcome of pre-established financial goals, as applicable.
AIG | 2024 Form 10-K
176
ITEM 8 | Notes to Consolidated Financial Statements | 18. Statutory Financial Data and Restrictions
RSUs and stock options are earned based solely on continued service by the participant. In addition, PSUs and RSUs accrue
dividend equivalent rights (DERs) during the specified service period as AIG’s dividends are declared. These DERs are settled in cash
only if the underlying units’ vesting conditions are met.
Vesting occurs on January 1 of the year immediately following the end of the three-year performance and service period. Beginning in
2022, vesting for RSUs and stock options awarded occurs in three equal installments on the first, second and third anniversary of the
grant date. Recipients must be employed at each vesting date to be entitled to share delivery, except upon the occurrence of an
accelerated vesting event, such as an involuntary termination without cause, disability, retirement eligibility or death during the vesting
period. However, for involuntarily terminated employees hired after April 1, 2022 unvested RSUs and options are forfeited on the
termination date, while PSUs are pro-rated based on the number of completed years in the performance period.
Unit Valuation
The fair value of time-vesting RSUs as well as PSUs that are earned based on certain company-specific metrics was based on the
closing price of AIG Common Stock on the grant date; while the fair value of PSUs that are earned based on AIG’s relative total
shareholder return (TSR) was determined on the grant date using a Monte Carlo simulation.
The following table presents the assumptions used to estimate the fair value of PSUs that vest based on AIG’s TSR:
2024
2023
2022
Expected dividend yield(a)
— %
— %
— %
Expected volatility(b)
28.72 %
37.98 %
47.60 %
Risk-free interest rate(c)
4.36 %
4.42 %
1.71 %
(a) The award agreement provides that TSR for AIG and each member of the Peer Group will be calculated assuming dividends distributed are reinvested on the
ex-dividend date.
(b) We used the historical volatility over the most recent 2.86-year period for AIG and the members of the Peer Group, commensurate with the remaining Performance
Period as of the valuation date.
(c) We converted the semi-annual zero-coupon U.S. Treasury rates as of the valuation date to continuously compounded rates. We then chose the continuously
compounded risk-free rate that is commensurate with the length of the remaining performance period as of the valuation date and interpolated between the yields of the
two-year and the three-year continuously compounded rates to determine the yield.
The following table summarizes outstanding share-settled LTI awards(a):
Number of Units
Weighted Average Grant-Date Fair Value
Year Ended December 31, 2024(b)
2024 LTI
2023 LTI
2022 LTI
2021 LTI
2024 LTI
2023 LTI
2022 LTI
2021 LTI
Unvested, beginning of year
— 1,734,969 1,108,153 1,727,851
$
—
$ 60.02
$ 61.95
$ 45.08
Granted
2,140,298
—
—
—
68.31
—
—
—
Vested(c)
(675,495) (652,758) (743,117) (1,721,506)
68.27
59.86
62.13
45.08
Forfeited
(99,414) (111,860)
(55,994)
(6,345)
68.19
59.89
65.07
44.10
Unvested, end of year(d)
1,365,389
970,351
309,042
—
$ 68.34
$ 60.14
$ 60.94
$
—
(a) Excludes stock options, other RSUs and DSUs, which are discussed under Stock Options, Other RSU Grants and Non-Employee Plan, respectively.
(b) PSUs represent target amount granted and does not reflect potential increases or decreases that could result from the final outcome of the performance goals for the
respective awards, which is determined by the CMRC in the quarter after the applicable performance period ends.
(c) Also reflects units that vest as a result of an accelerated vesting event that occurred prior to the specified vesting date but for which share delivery has not yet occurred.
(d) At December 31, 2024, the total unrecognized compensation cost for outstanding RSUs and PSUs was $96 million and the weighted-average and expected period of
years over which that cost is expected to be recognized are 1.00 year and 2.25 years.
Stock Options
Stock options were issued as part of the 2024, 2023 and 2022 LTI awards, and to certain newly hired senior executives in 2017 and
2018. Option awards are generally granted with an exercise price equal to the market price of the company’s stock on the grant date
and are exercisable up to 10 years from the date of grant, or 3 years from the date of an involuntary termination or the option's
expiration date, if earlier. The fair value of the options was estimated on the grant date using the Black-Scholes model for the time-
vesting options, and a Monte Carlo simulation for the hurdle-vesting options.
ITEM 8 | Notes to Consolidated Financial Statements | 19. Share-Based Compensation Plans
AIG | 2024 Form 10-K
177
The following weighted-average assumptions were used for stock options granted:
2024
2023
2022
Expected annual dividend yield(a)
2.11 %
2.14 %
2.08 %
Expected volatility(b)
25.27 %
25.17 %
32.13 %
Risk-free interest rate(c)
4.21 %
4.06 %
1.92 %
Expected term(d)
6.00 years
6.00 years
6.00 years
(a) The dividend yield is the last dividend from Bloomberg times 4 divided by stock price based on Bloomberg Professional service as of the valuation date.
(b) The expected volatility is based on the implied volatility of 24 months stock option estimated by the Bloomberg Professional service as of the valuation date.
(c) We converted the semi-annual zero-coupon U.S. Treasury rates as of the valuation date to continuously compounded rates. We then chose the continuously
compounded risk-free rate that is commensurate with the length of the remaining performance period as of the valuation date and interpolated between the yields of the
two-year and the three-year continuously compounded rates to determine the yield.
(d) The contractual term is 10 years from the date of grant.
The following table provides a rollforward of stock option activity:
As of or for the Year Ended December 31, 2024
Units
Weighted
Average
Exercise Price
Weighted Average
Remaining
Contractual Life
Aggregate
Intrinsic Values
(in millions)
Outstanding, beginning of year
12,295,661
$
50.69
6.81
Granted
1,080,790
68.19
Exercised
(3,071,453)
52.62
Forfeited or expired
(1,287,410)
62.82
Outstanding, end of year
9,017,588
$
50.40
6.61
$
202
Exercisable, end of year
7,263,927
$
46.94
5.87
$
188
The weighted average grant-date fair value of stock options granted during 2024, 2023 and 2022 was $12.51, $11.43 and $10.77,
respectively. As of December 31, 2024, we recognized $18 million of expense, while $13 million was unrecognized and is expected to
be amortized up to 2.25 years. We received $162 million in cash from the exercise of stock options during 2024.
Other RSU Grants
The Company may issue time-vesting RSUs for various reasons including, as a sign-on bonus, retention grant or replacement award
in an acquisition. Vesting for these awards ranges from 1 to 5 years and is contingent on continuous service.
The following table summarizes outstanding share-settled Other RSU grants.
Number of Units
Weighted Average Grant-Date Fair Value
Years Ended December 31,
2024
2023
2022
2024
2023
2022
Unvested, beginning of year
1,361,714
1,488,248
728,340
$
57.79 $
54.77 $
42.82
Granted
241,536
208,641
1,070,458
73.78
62.42
60.16
Vested
(264,588)
(252,635)
(290,037)
52.82
49.42
44.59
Forfeited
(20,382)
(82,540)
(20,513)
64.03
40.70
55.89
Unvested, end of year
1,318,280
1,361,714
1,488,248
$
61.62 $
57.79 $
54.77
We recognized $29 million of expense related to these RSU grants in 2024. Total unrecognized compensation cost related to these
grants was $42 million and the weighted-average and expected period of years over which that cost is expected to be recognized are
1.09 years and 4.25 years at December 31, 2024.
NON-EMPLOYEE PLAN
Our non-employee directors, who serve on our Board of Directors, receive share-based compensation in the form of fully vested
DSUs with delivery deferred until retirement from the Board of Directors. DSUs granted in 2024, 2023 and 2022 accrue dividend
equivalents in the form of additional DSUs equal to the amount of any regular quarterly dividend that would have been paid by AIG if
the shares of AIG Common Stock underlying the DSUs had been outstanding. In 2024, 2023 and 2022, we granted to non-employee
directors 33,940, 47,344 and 46,273 DSUs, respectively, and recognized expense of $2.6 million, $2.6 million and $2.7 million,
respectively.
AIG | 2024 Form 10-K
178
ITEM 8 | Notes to Consolidated Financial Statements | 19. Share-Based Compensation Plans
20. Employee Benefits
PENSION PLANS
We offer various defined benefit plans to eligible employees. Effective January 1, 2016, the U.S. defined benefit pension plans were
frozen. Consequently, these plans are closed to new participants and current participants no longer earn benefits.
The U.S. AIG Retirement Plan (the qualified plan) is a noncontributory defined benefit plan subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended (ERISA). In 2012, the qualified plan was converted to a cash balance formula
comprised of pay credits based on 6% of a plan participant’s annual compensation (subject to IRS limitations) and annual interest
credits. Although benefits are frozen, these interest credits continue to accrue on the cash balance accounts of active participants,
who also accrue years of service for purposes of early retirement eligibility and subsidies. Employees can take their vested benefits as
a lump sum or an annuity option when they leave AIG or are terminated from the plan.
Employees satisfying certain age and service requirements (i.e., grandfathered employees) remain covered under the average pay
formula that was in effect prior to the conversion. The final average pay formula is based upon a percentage of final average
compensation multiplied by years of credited service, up to 44 years. Grandfathered employees will receive the higher of the benefit
under the cash balance formula or the final average pay formula at retirement.
In the U.S. we also sponsor non-qualified unfunded defined benefit plans, such as the AIG Non-Qualified Retirement Income Plan
(AIG NQRIP) for certain employees, including key executives, designed to supplement pension benefits provided by the qualified
plan. The AIG NQRIP provides a benefit equal to the reduction in benefits under the qualified plan as a result of federal tax limitations
on compensation and benefits payable.
Non-U.S. defined benefit plans generally are either based on the employee’s years of credited service and compensation in the years
preceding retirement or on points accumulated based on the employee’s job grade and other factors during each year of service.
POSTRETIREMENT PLANS
U.S. postretirement medical and life insurance benefits are based upon the employee attaining the age of 55 and having a minimum
of ten years of service, which was reduced to 5 years in 2019 for medical coverage only. Eligible employees who have medical
coverage can enroll in retiree medical upon termination of employment. Medical benefits are contributory, while the life insurance
benefits, which are closed to new employees, are generally non-contributory. Retiree medical contributions vary from none for
pre-1989 retirees to actual premium payments reduced by certain subsidies for post-1992 retirees. These retiree contributions are
subject to annual adjustments. Other cost sharing features of the medical plan include deductibles, coinsurance, Medicare
coordination, and an employer subsidy for grandfathered employees only.
Postretirement benefits are offered in certain non-U.S. countries and vary by geographic location.
The following table presents the funded status of the plans reconciled to the amount reported in the Consolidated Balance
Sheets.
Change in projected benefit obligation:
Benefit obligation, beginning of year
$
3,301 $
3,475
$
804 $
810
$
97 $
99
$
31 $
32
Service cost
4
5
14
16
—
—
—
—
Interest cost
154
168
20
20
4
5
2
2
Actuarial (gain) loss(b)
(200)
75
14
(8)
(4)
3
—
(2)
Benefits paid:
AIG assets
(17)
(16)
(9)
(10)
(10)
(10)
(1)
(1)
Plan assets
(280)
(171)
(28)
(31)
—
—
—
—
Plan amendment
—
—
1
(1)
—
—
—
—
Settlements
—
(234)
(9)
(1)
—
—
—
—
Foreign exchange effect
—
—
(60)
9
—
—
(2)
—
Other
—
(1)
—
—
—
—
—
—
Projected benefit obligation, end of
year
$
2,962 $
3,301
$
747 $
804
$
87 $
97
$
30 $
31
As of or for the Years Ended
Pension
Postretirement
December 31,
U.S. Plans(a)
Non-U.S. Plans(a)
U.S. Plans
Non-U.S. Plans
(in millions)
2024
2023
2024
2023
2024
2023
2024
2023
ITEM 8 | Notes to Consolidated Financial Statements | 20. Employee Benefits
AIG | 2024 Form 10-K
179
Change in plan assets:
Fair value of plan assets, beginning of
year
$
3,228 $
3,345
$
734 $
709
$
— $
—
$
— $
—
Actual return on plan assets, net of
expenses
28
288
35
15
—
—
—
—
AIG contributions
17
16
42
47
10
10
1
1
Benefits paid:
AIG assets
(17)
(16)
(9)
(10)
(10)
(10)
(1)
(1)
Plan assets
(280)
(171)
(28)
(31)
—
—
—
—
Settlements
—
(234)
(9)
(1)
—
—
—
—
Foreign exchange effect
—
—
(61)
5
—
—
—
—
Fair value of plan assets, end of year
$
2,976 $
3,228
$
704 $
734
$
— $
—
$
— $
—
Funded status, end of year
$
14 $
(73)
$
(43) $
(70)
$
(87) $
(97)
$
(30) $
(31)
Amounts recognized in the balance
sheet:
Assets
$
184 $
110
$
122 $
97
$
— $
—
$
— $
—
Liabilities
(170)
(183)
(165)
(167)
(87)
(97)
(30)
(31)
Total amounts recognized
$
14 $
(73)
$
(43) $
(70)
$
(87) $
(97)
$
(30) $
(31)
Pre-tax amounts recognized in AOCI:
Net gain (loss)
$ (1,082) $ (1,142)
$
(72) $
(79)
$
28 $
28
$
21 $
23
Prior service (cost) credit
—
—
(18)
(21)
—
—
—
1
Total amounts recognized
$ (1,082) $ (1,142)
$
(90) $
(100)
$
28 $
28
$
21 $
24
As of or for the Years Ended
Pension
Postretirement
December 31,
U.S. Plans(a)
Non-U.S. Plans(a)
U.S. Plans
Non-U.S. Plans
(in millions)
2024
2023
2024
2023
2024
2023
2024
2023
(a) Includes non-qualified unfunded plans of which the aggregate projected benefit obligation was $170 million and $184 million for the U.S. at December 31, 2024 and
2023, respectively, and $139 million and $140 million for the non-U.S. at December 31, 2024 and 2023, respectively.
(b) The primary reason for the significant gain in 2024 is due to a change in the discount rate for the U.S. AIG Retirement Plan.
The following table presents the accumulated benefit obligations for U.S. and non-U.S. pension benefit plans:
At December 31,
(in millions)
2024
2023
U.S. pension benefit plans
$
2,962
$
3,301
Non-U.S. pension benefit plans
$
735
$
792
Defined benefit plan obligations in which the projected benefit obligation (PBO) was in excess of the related plan assets and
the accumulated benefit obligation (ABO) was in excess of the related plan assets were as follows:
At December 31,
PBO Exceeds Fair Value of Plan Assets
ABO Exceeds Fair Value of Plan Assets
U.S. Plans
Non-U.S. Plans
U.S. Plans
Non-U.S. Plans
(in millions)
2024
2023
2024
2023
2024
2023
2024
2023
Projected benefit obligation
$
170
$
184
$
287
$
287
$
—
$
—
$
—
$
—
Accumulated benefit obligation
—
—
—
—
170
184
245
245
Fair value of plan assets
—
—
91
88
—
—
91
88
AIG | 2024 Form 10-K
180
ITEM 8 | Notes to Consolidated Financial Statements | 20. Employee Benefits
The following table presents the components of net periodic benefit cost with respect to pensions and other postretirement
benefits:
Years Ended December 31,
Pension
Postretirement
U.S. Plans
Non-U.S. Plans
U.S. Plans
Non-U.S. Plans
(in millions)
2024
2023
2022
2024
2023
2022
2024
2023
2022
2024
2023
2022
Components of net periodic
benefit cost:
Service cost*
$
4 $
5 $
6
$
14 $
16 $
18
$
— $
— $
1
$
— $
— $
—
Interest cost
154
168
109
20
20
9
4
5
3
2
2
1
Expected return on assets
(201)
(193)
(213)
(19)
(21)
(16)
—
—
—
—
—
—
Amortization of prior service cost
(credit)
—
—
—
2
3
3
—
—
—
(1)
(1)
(1)
Amortization of net (gain) loss
33
33
24
2
2
4
(4)
(5)
—
(2)
(3)
(1)
Net periodic benefit cost (credit)
$
(10) $
13 $
(74)
$
19 $
20 $
18
$
— $
— $
4
$
(1) $
(2) $
(1)
Settlement loss
—
71
59
1
—
—
—
—
—
—
—
—
Net benefit cost (credit)
$
(10) $
84 $
(15)
$
20 $
20 $
18
$
— $
— $
4
$
(1) $
(2) $
(1)
Total recognized in AOCI
$
60 $ 137 $ (117)
$
11 $
6 $
54
$
(1) $
(8) $
33
$
(2) $
(2) $
13
Total recognized in net periodic
benefit cost and other
comprehensive income (loss)
$
70 $
53 $ (102)
$
(9) $
(14) $
36
$
(1) $
(8) $
29
$
(1) $
— $
14
*
Reflects administrative fees for the U.S. pension plans.
Interest cost for pension and postretirement benefits for our U.S. plans and largest non-U.S. plans is measured using the spot rate
approach, which applies specific spot rates along the yield curve to a plan’s corresponding discounted cash flows that comprise the
obligation. This method provides a more precise measurement of interest cost by aligning the timing of the plans’ discounted cash
flows to the corresponding spot rates on the yield curve. For certain non-U.S. plans, interest cost is measured utilizing a single
weighted-average discount rate derived from the yield curve used to measure the benefit obligations.
A 100 basis point increase in the expected long-term rate of return would decrease the 2025 pension expense by approximately
$35 million with all other items remaining the same. A 100 basis point increase in the discount rate would increase the 2025 pension
expense by approximately $2 million. Conversely, a 100 basis point decrease in the discount rate would decrease the 2024 pension
expense by approximately $3 million while a 100 basis point decrease in the expected long-term rate of return would increase the
2025 pension expense by approximately $35 million, with all other items remaining the same.
ASSUMPTIONS
The following table summarizes the weighted average assumptions used to determine the benefit obligations:
Pension
Postretirement
U.S. Plans
Non-U.S. Plans(a)
U.S. Plans
Non-U.S. Plans(a)
December 31, 2024
Discount rate
5.57 %
2.87 %
5.53 %
4.97 %
Interest crediting rate
4.37 %
1.36 % (b)
N/A
N/A
Rate of compensation increase
N/A (c)
2.43 %
N/A
N/A
December 31, 2023
Discount rate
4.98 %
2.85 %
4.97 %
5.37 %
Interest crediting rate
4.94 %
1.40 % (b)
N/A
N/A
Rate of compensation increase
N/A (c)
2.42 %
N/A
N/A
(a) The non-U.S. plans reflect those assumptions that were most appropriate for the local economic environments of each of the subsidiaries providing such benefits.
(b) Represents the weighted average interest crediting rate of non-U.S. cash balance plans primarily in Japan and Switzerland.
(c) Compensation increases are no longer applicable as the plan is frozen effective January 1, 2016.
AIG | 2024 Form 10-K
181
ITEM 8 | Notes to Consolidated Financial Statements | 20. Employee Benefits
The following table summarizes assumed health care cost trend rates for the U.S. plans:
At December 31,
2024
2023
Following year:
Medical (before age 65)
— %
5.78 %
Medical (age 65 and older)
6.67 %
4.93 %
Ultimate rate to which cost increase is assumed to decline
4.00 %
4.00 %
Year in which the ultimate trend rate is reached:
Medical (before age 65)
2048
2046
Medical (age 65 and older)
2048
2046
The following table presents the weighted average assumptions used to determine the net periodic benefit costs:
Pension
Postretirement
U.S. Plans
Non-U.S. Plans(a)
U.S. Plans
Non-U.S. Plans(a)
For the Year Ended December 31, 2024
Discount rate
4.98 %
2.85 %
4.96 %
5.37 %
Interest crediting rate
4.94 %
1.40 % (b)
N/A
N/A
Rate of compensation increase
N/A
2.42 %
N/A
N/A
Expected return on assets
6.50 %
2.77 %
N/A
N/A
For the Year Ended December 31, 2023
Discount rate
5.22 %
2.51 %
5.19 %
5.23 %
Interest crediting rate
4.02 %
1.07 % (b)
— %
N/A
Rate of compensation increase
N/A
2.38 %
N/A
N/A
Expected return on assets
6.25 %
2.67 %
— %
N/A
For the Year Ended December 31, 2022
Discount rate
2.75 %
1.09 %
2.87 %
2.89 %
Interest crediting rate
2.06 %
0.70 % (b)
N/A
N/A
Rate of compensation increase
N/A
2.40 %
N/A
N/A
Expected return on assets
4.65 %
1.84 %
N/A
N/A
(a) The non-U.S. plans reflect those assumptions that were most appropriate for the local economic environments of each of the subsidiaries providing such benefits.
(b) Represents the weighted average interest crediting rate of non-U.S. cash balance plans primarily in Japan and Switzerland.
Discount Rate Methodology
The projected benefit cash flows under the U.S. AIG Retirement Plan were discounted using the spot rates derived from the Mercer
U.S. Pension Discount Yield Curve (Mercer Yield Curve) at December 31, 2024 and 2023, which resulted in a single discount rate that
would produce the same liability at the respective measurement dates. The discount rates were 5.57 percent at December 31, 2024
and 4.98 percent at December 31, 2023. The methodology was consistently applied for the respective years in determining the
discount rates for the other U.S. pension plans.
In general, the discount rates for the non-U.S. plans were developed using a similar methodology to the U.S. AIG Retirement Plan, by
using country-specific Mercer Yield Curves.
The projected benefit obligation for AIG’s Japan pension plans represents approximately 50 percent and 54 percent of the total
projected benefit obligations for our non-U.S. pension plans at December 31, 2024 and 2023, respectively. The weighted average
discount rate of 1.81 percent and 1.48 percent at December 31, 2024 and 2023, respectively, was selected by reference to the Mercer
Yield Curve for Japan.
Plan Assets
The investment strategy with respect to assets relating to our U.S. and non-U.S. pension plans is designed to achieve investment
returns that will provide for the benefit obligations of the plans over the long term, limit the risk of short-term funding shortfalls and
maintain liquidity sufficient to address cash needs. Accordingly, the asset allocation strategy is designed to maximize the investment
rate of return while managing various risk factors, including, but not limited to, volatility relative to the benefit obligations, liquidity, and
concentration, and incorporates the risk/return profile applicable to each asset class.
There were no shares of AIG Common Stock included in the U.S. and non-U.S. pension plans assets at December 31, 2024 or 2023.
AIG | 2024 Form 10-K
182
ITEM 8 | Notes to Consolidated Financial Statements | 20. Employee Benefits
U.S. Pension Plan
The assets of the qualified plan are monitored by the AIG U.S. Investment Committee and actively managed by the investment
managers, which involves allocating the plan’s assets among approved asset classes within ranges as permitted by the strategic
allocation. The long-term strategic asset allocation historically has been reviewed and revised approximately every three years. The
investment strategy is focused on de-risking the qualified plan via regular monitoring through liability driven investing and the glide
path approach, where the glide path defines the target allocation for the “Return-Seeking” portion of the portfolio (i.e., growth assets)
based on the funded ratio and level of interest rates. Under this approach, the allocation to growth assets is reduced and the
allocation to liability-hedging assets is increased as the plan’s funded ratio increases in accordance with the defined glide path.
The following table presents the asset allocation percentage by major asset class for the U.S. qualified plan and the target
allocation for 2025 based on the plan’s funded status at December 31, 2024:
At December 31,
Target 2025
Actual 2024
Actual 2023
Asset class:
Equity securities
9 %
13 %
8 %
Fixed maturity securities
80
72
77
Other investments
11
15
15
Total
100 %
100 %
100 %
The expected weighted average long-term rate of return for the plan was 6.50 percent and 6.25 percent for 2024 and 2023,
respectively. The expected weighted average rate of return is an aggregation of expected returns within each asset class category,
weighted for the investment mix of the assets. The combination of the expected asset return and any contributions made by us are
expected to maintain the plan’s ability to meet all required benefit obligations. The expected asset return for each asset class was
developed based on an approach that considers key fundamental drivers of the asset class returns in addition to historical returns,
current market conditions, asset volatility and the expectations for future market returns.
Non-U.S. Pension Plans
The assets of the non-U.S. pension plans are held in various trusts in multiple countries and are invested primarily in equities and
fixed maturity securities to maximize the long-term return on assets for a given level of risk.
The following table presents the asset allocation percentage by major asset class for non-U.S. pension plans and the target
allocation:
At December 31,
Target 2025
Actual 2024
Actual 2023
Asset class:
Equity securities
20 %
20 %
19 %
Fixed maturity securities
58
47
45
Other investments
18
24
21
Cash and cash equivalents
4
9
15
Total
100 %
100 %
100 %
The assets of AIG’s Japan pension plans represent approximately 66 percent and 67 percent of total non-U.S. pension plan assets at
December 31, 2024 and 2023, respectively. The expected long-term rate of return was 1.85 percent for both 2024 and 2023, and is
evaluated by the Japanese Pension Investment Committee on a quarterly and annual basis along with various investment managers
and is revised to achieve the optimal allocation to meet targeted funding levels if necessary. In addition, the funding policy is revised in
accordance with local regulation every five years.
The expected weighted average long-term rate of return for all our non-U.S. pension plans was 2.77 percent and 2.67 percent for the
years ended December 31, 2024 and 2023, respectively. It is an aggregation of expected returns within each asset class that was
generally developed based on the building block approach that considers historical returns, current market conditions, asset volatility
and the expectations for future market returns.
AIG | 2024 Form 10-K
183
ITEM 8 | Notes to Consolidated Financial Statements | 20. Employee Benefits
ASSETS MEASURED AT FAIR VALUE
The following table presents information about our plan assets and indicates the level of the fair value measurement based
on the observability of the inputs used. The inputs and methodology used in determining the fair value of these assets are
consistent with those used to measure our assets as discussed in Note 5 to the Consolidated Financial Statements.
U.S. Plans
Non-U.S. Plans
(in millions)
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
December 31, 2024
Assets:
Cash and cash equivalents
$
52 $
— $
— $
52
$
66 $
— $
— $
66
Equity securities:
U.S.(a)
163
—
—
163
—
—
—
—
International(b)
4
—
—
4
82
55
—
137
Fixed maturity securities:
U.S. investment grade(c)
22
1,996
5
2,023
—
—
—
—
International investment grade(c)
—
101
—
101
—
146
—
146
U.S. and international high yield(d)
—
(40)
—
(40)
—
185
—
185
Mortgage and other asset-backed
securities
—
54
1
55
—
—
—
—
Other fixed maturity securities
—
9
—
9
—
—
—
—
Other investment types(e):
Futures
(7)
—
—
(7)
—
—
—
—
Insurance contracts
—
8
—
8
—
—
161
161
Mutual funds(f)
—
—
—
—
—
9
—
9
Total
$
234 $
2,128 $
6 $
2,368
$
148 $
395 $
161 $
704
December 31, 2023
Assets:
Cash and cash equivalents
$
54 $
— $
— $
54
$
108 $
— $
— $
108
Equity securities:
U.S.(a)
140
—
—
140
—
—
—
—
International(b)
4
—
—
4
104
35
—
139
Fixed maturity securities:
U.S. investment grade(c)
24
2,230
10
2,264
—
—
—
—
International investment grade(c)
—
125
—
125
—
138
—
138
U.S. and international high yield(d)
—
33
—
33
—
192
—
192
Mortgage and other asset-backed
securities
—
59
1
60
—
—
—
—
Other fixed maturity securities
—
12
—
12
—
—
—
—
Other investment types(e):
Futures
10
—
—
10
—
—
—
—
Insurance contracts
—
9
—
9
—
—
138
138
Mutual funds(f)
—
—
—
—
—
19
—
19
Total
$
232 $
2,468 $
11 $
2,711
$
212 $
384 $
138 $
734
(a) Includes passive and active U.S. equity strategies.
(b) Includes passive and active international equity strategies.
(c) Includes investments in U.S. and non-U.S. government issued bonds, U.S. government agency or sponsored agency bonds, and investment grade corporate bonds.
(d) Consists primarily of investments in securities or debt obligations that have a rating below investment grade.
(e) Excludes investments that are measured at fair value using the NAV per share (or its equivalent), which totaled $608 million and $517 million at December 31, 2024 and
2023, respectively.
(f)
Comprised of mutual fund investing in variety of equity, derivatives, and bonds.
The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in these
securities. Based on our investment strategy, we had no significant concentrations of risks at December 31, 2024.
AIG | 2024 Form 10-K
184
ITEM 8 | Notes to Consolidated Financial Statements | 20. Employee Benefits
Changes in Level 3 Fair Value Measurements
The following table presents changes in our U.S. and non-U.S. Level 3 plan assets measured at fair value:
December 31, 2024
Balance
Beginning
of year
Net
Realized
and
Unrealized
Gains
(Losses)
Purchases
Sales
Issuances
Settlements
Transfers
In
Transfers
Out
Balance
at End
of Year
Changes in
Unrealized
Gains (Losses)
on Instruments
Held at
End of Year
Changes in Unrealized
Gains (Losses) included
in other Comprehensive
Income (Loss) for Recurring
Level 3 Instruments
Held at End of Year
(in millions)
U.S. Plan Assets:
Fixed maturity securities
U.S. investment grade
$
10 $
(1) $
— $
(3) $
— $
— $
— $
(1) $
5 $
—
$
—
Mortgage and other asset
backed securities
1
—
—
—
—
—
—
—
1
—
—
Total
$
11 $
(1) $
— $
(3) $
— $
— $
— $
(1) $
6 $
—
$
—
Non-U.S. Plan Assets:
Insurance contracts
$
138 $
21 $
2 $
— $
— $
— $
— $
— $
161 $
—
$
—
Total
$
138 $
21 $
2 $
— $
— $
— $
— $
— $
161 $
—
$
—
December 31, 2023
U.S. Plan Assets:
Fixed maturity securities
U.S. investment grade
$
10 $
1 $
— $
(1) $
— $
— $
— $
— $
10 $
1
$
—
Mortgage and other asset
backed securities
5
—
—
(4)
—
—
—
—
1
1
—
Direct private equity
5
(5)
—
—
—
—
—
—
—
(5)
—
Total
$
20 $
(4) $
— $
(5) $
— $
— $
— $
— $
11 $
(3)
$
—
Non-U.S. Plan Assets:
Insurance contracts
$
132 $
6 $
— $
— $
— $
— $
— $
— $
138 $
—
$
—
Total
$
132 $
6 $
— $
— $
— $
— $
— $
— $
138 $
—
$
—
EXPECTED CASH FLOWS
Funding for the qualified plan ranges from the minimum amount required by ERISA to the maximum amount that would be deductible
for U.S. tax purposes. Contributed amounts in excess of the minimum amounts are deemed voluntary. Amounts in excess of the
maximum amount would be subject to an excise tax and may not be deductible under the Internal Revenue Code. There are no
minimum required cash contributions in 2024 for the U.S. AIG Retirement Plan. The non-qualified and postretirement plans’ benefit
payments are deductible when paid to participants.
Our annual pension contribution in 2025 is expected to be approximately $53 million for our U.S. and non-U.S. pension plans. This
estimate is subject to change, since contribution decisions are affected by various factors including our liquidity, market performance
and management’s discretion.
The expected future benefit payments, net of participants’ contributions, with respect to the defined benefit pension plans
and other postretirement benefit plans, are as follows:
Pension
Postretirement
(in millions)
U.S. Plans
Non-U.S. Plans
U.S. Plans
Non-U.S. Plans
2025
$
261 $
39
$
8 $
1
2026
254
43
7
1
2027
262
44
7
2
2028
255
49
7
2
2029
259
47
7
2
2030-2034
1,138
235
32
9
DEFINED CONTRIBUTION PLANS
AIG Parent sponsors several defined contribution plans for U.S. employees that provide for pre-tax salary reduction contributions by
employees. The most significant plan is the AIG Incentive Savings Plan (ISP), for which the matching contribution is 100 percent of
the first 6% of a participant’s contributions, subject to the IRS-imposed limitations. Participants in the AIG ISP receive an additional
fully vested, non-elective, non-discretionary contribution equal to 3% of the participant’s eligible compensation for the plan year, paid
each pay period regardless of whether the participant currently contributes to the plan, and subject to the IRS-imposed limitations. Our
pre-tax expenses associated with these plans were $87 million,$95 million and $100 million in 2024, 2023 and 2022, respectively.
AIG | 2024 Form 10-K
185
ITEM 8 | Notes to Consolidated Financial Statements | 20. Employee Benefits
21. Income Taxes
U.S. TAX LAW CHANGES
The Inflation Reduction Act of 2022 (H.R. 5376) includes a 15 percent corporate alternative minimum tax (CAMT) on adjusted
financial statement income for corporations with average profits over $1 billion over a three-year period. While the U.S. Treasury and
Internal Revenue Service (IRS) issued proposed regulations for CAMT during the third quarter of 2024, there are still certain details
and specifics of application of the CAMT that remain unclear and we continue to evaluate the impact of the proposed regulations
along with prior guidance.
BASIS OF PRESENTATION
We file a consolidated U.S. federal income tax return with our eligible U.S. subsidiaries. Income earned by subsidiaries operating
outside the U.S. is taxed, and income tax expense is recorded, based on applicable U.S. and foreign laws.
TAX ACCOUNTING POLICIES
We consider our foreign earnings with respect to certain operations in Canada, South Africa, Japan, Latin America, Bermuda as well
as the European, Asia Pacific and Middle East regions to be indefinitely reinvested. These earnings relate to ongoing operations and
have been reinvested in active business operations. A deferred tax liability has not been recorded for those foreign subsidiaries whose
earnings are considered to be indefinitely reinvested. If recorded, such deferred tax liability would not be material to our consolidated
financial condition. Deferred taxes, if necessary, have been provided on earnings of non-U.S. affiliates whose earnings are not
indefinitely reinvested.
Global Intangible Low-Taxed Income (GILTI) imposes U.S. taxes on the excess of a deemed return on tangible assets of certain
foreign subsidiaries. Consistent with accounting guidance, we have made an accounting policy election to treat GILTI taxes as a
period tax charge in the period the tax is incurred.
EFFECTIVE TAX RATE
The following table presents income (loss) from continuing operations before income tax expense (benefit) by U.S. and
foreign location in which such pre-tax income (loss) was earned or incurred:
Years Ended December 31,
(in millions)
2024
2023
2022
U.S.
$
1,818 $
900 $
1,950
Foreign
2,052
1,967
1,822
Total
$
3,870 $
2,867 $
3,772
The following table presents the income tax expense (benefit) attributable to pre-tax income (loss) from continuing
operations:
Years Ended December 31,
(in millions)
2024
2023
2022
Foreign and U.S. components of actual income tax expense (benefit):
U.S.:
Current
$
283
$
(246) $
(713)
Deferred
416
(110)
1,173
Foreign:
Current
374
422
261
Deferred
97
60
161
Total
$
1,170
$
126
$
882
ITEM 8 | Notes to Consolidated Financial Statements | 21. Income Taxes
AIG | 2024 Form 10-K
186
Our actual income tax expense (benefit) from continuing operations differs from the statutory U.S. federal amount computed
by applying the federal income tax rate due to the following:
Years Ended December 31,
2024
2023
2022
(dollars in millions)
Pre-Tax
Income
(Loss)
Tax
Expense
(Benefit)
Percent of
Pre-Tax
Income
(Loss)
Pre-Tax
Income
(Loss)
Tax
Expense
(Benefit)
Percent of
Pre-Tax
Income
(Loss)
Pre-Tax
Income
(Loss)
Tax
Expense
(Benefit)
Percent of
Pre-Tax
Income
(Loss)
U.S. federal income tax at statutory rate
$
3,870 $
813
21.0 %
$
2,867 $
602
21.0 %
$
3,772 $
792
21.0 %
Adjustments:
Tax exempt interest
(8)
(0.2)
(14)
(0.5)
(18)
(0.5)
Uncertain tax positions(a)
17
0.4
169
5.9
(12)
(0.3)
Dispositions of subsidiaries(b)
(1)
—
(143)
(5.0)
—
—
Non-deductible transfer pricing charges
13
0.3
16
0.6
15
0.4
Effect of foreign operations(c)
110
2.8
176
6.1
150
4.0
Share-based compensation payments excess tax
effect
(16)
(0.4)
(21)
(0.7)
(13)
(0.3)
State and local income taxes
26
0.7
23
0.8
(42)
(1.1)
Developments related to prior tax years under
IRS review(a)
240
6.2
(467)
(16.3)
—
—
Other(d)
9
0.3
150
5.2
184
4.8
Valuation allowance(e)
(33)
(0.9)
(365)
(12.7)
(174)
(4.6)
Consolidated total amounts
$
3,870 $
1,170
30.2 %
$
2,867 $
126
4.4 %
$
3,772 $
882
23.4 %
(a) 2024 includes an update related to the estimated impact of potential resolution for prior tax years under IRS Appeals review. Refer to the Tax Examinations section
below for further discussion on developments related to prior tax years under IRS review. For 2023, refer to the Accounting for Uncertainty in Income Taxes section
below for further discussion on tax audit resolution activity.
(b) This primarily includes tax implications of the sales of Validus Re for year 2023.
(c) Effect of foreign operations is primarily related to income and losses in our foreign operations taxed at statutory tax rates different than 21 percent, and foreign income
subject to U.S. taxation.
(d) Primarily includes tax charges associated with tax adjustments related to prior year returns.
(e) Primarily due to 2023 and 2022 reductions in valuation allowance related to AIG’s U.S. federal consolidated income tax group tax attribute carryforwards.
DEFERRED TAX ASSET
The following table presents the components of the net deferred tax assets (liabilities):
Deferred tax assets:
Losses and tax credit carryforwards
$
4,636
$
5,655
Basis differences on investments
30
75
Accruals not currently deductible, and other
150
273
Investments in foreign subsidiaries
19
16
Loss reserve discount
443
424
Loan loss and other reserves
37
51
Unearned premium reserve reduction
46
87
Fixed assets and intangible assets
293
159
Unrealized losses related to available for sale debt securities
618
783
Employee benefits
192
271
Other
39
156
Total deferred tax assets
6,503
7,950
Deferred tax liabilities:
Deferred policy acquisition costs
(278)
(316)
Life policy reserves
(45)
(49)
Total deferred tax liabilities
(323)
(365)
Net deferred tax assets before valuation allowance
6,180
7,585
Valuation allowance
(1,650)
(1,746)
Net deferred tax assets (liabilities)
$
4,530
$
5,839
December 31,
(in millions)
2024
2023
AIG | 2024 Form 10-K
187
ITEM 8 | Notes to Consolidated Financial Statements | 21. Income Taxes
The following table presents AIG's U.S. consolidated federal income tax group tax losses and credits carryforwards.
December 31, 2024
Tax
Carryforward Period
Ending Tax Year(b)
Unlimited Carryforward Period
and Carryforward Periods(b)
(in millions)
Gross
Effected
2028
2029
2030
2031
2032 - After
Net operating loss carryforwards
$ 18,046 $
3,790 $
1,836 $
178 $
— $
930 $
846
Other carryforwards
—
—
—
—
—
—
Total AIG U.S. consolidated federal income tax group tax losses
and credits carryforwards on a U.S. GAAP basis(a)
$
3,790 $
1,836 $
178 $
— $
930 $
846
(a) Financial reporting basis reflects the impact of unrecognized tax benefits for tax years in which tax attributes can be realized through carryback upon settlement.
(b) Carryforward periods are based on U.S. tax laws governing utilization of tax attributes. Expiration periods are based on the year the carryforward was generated.
ASSESSMENT OF DEFERRED TAX ASSET VALUATION ALLOWANCE
The evaluation of the recoverability of our deferred tax asset and the need for a valuation allowance requires us to weigh all positive
and negative evidence to reach a conclusion that it is more likely than not that all or some portion of the deferred tax asset will not be
realized. The weight given to the evidence is commensurate with the extent to which it can be objectively verified. The more negative
evidence that exists, the more positive evidence is necessary and the more difficult it is to support a conclusion that a valuation
allowance is not needed.
During the fourth quarter, taxable income projections were updated to reflect the latest projections of income for our insurance and
non-insurance companies, 2024 transactions, and projections of taxable income generated from prudent and feasible tax planning
strategies. Given there is a shorter carryforward period to utilize remaining net operating losses, we continue to consider multiple data
points and stresses. Additionally, significant market volatility continues to impact actual and projected results of our business
operations as well as our views on potential effectiveness of certain prudent and feasible tax planning strategies. In order to
demonstrate the predictability and sufficiency of future taxable income necessary to support the realizability of the net operating
losses and foreign tax credit carryforwards, we have considered forecasts of future income for each of our businesses, including
assumptions about future macroeconomic and AIG-specific conditions and events, and any impact these conditions and events may
have on our prudent and feasible tax planning strategies. We also subjected the forecasts to a variety of stresses of key assumptions
and evaluated the effect on tax attribute utilization.
After factoring in multiple data points and assessing the relative weight of all positive and negative evidence, we concluded that a
valuation allowance of $300 million should remain on a portion of AIG's U.S. federal consolidated income tax group tax attribute
carryforwards that are not more likely than not to be realized. Accordingly, during the year ended December 31, 2024, we recorded no
change in valuation allowance.
For the year ended December 31, 2024, recent changes in market conditions, including changes in interest rates, impacted the
unrealized tax gains and losses in the available for sale securities portfolios of our general insurance and non-insurance companies,
resulting in a decrease to deferred tax assets related to net unrealized tax capital losses. The deferred tax assets relate to the
unrealized tax capital losses for which the carryforward period has not yet begun. As of December 31, 2024, based on all available
evidence, we concluded that a valuation allowance of $509 million is necessary on deferred tax assets related to unrealized tax
capital losses that are not more-likely-than-not to be realized. For the year ended December 31, 2024, we recorded a decrease in
valuation allowance of $41 million associated with the unrealized tax capital losses in AIG's available for sale securities portfolio. The
valuation allowance decrease was allocated to other comprehensive income.
For the year ended December 31, 2024, we recognized a net $31 million decrease in deferred tax asset valuation allowance
associated with certain foreign and state jurisdictions.
The following table presents the net deferred tax assets (liabilities) at December 31, 2024 and 2023 on a U.S. GAAP basis:
December 31,
(in millions)
2024
2023
Net U.S. deferred tax assets
$
4,922
$
5,992
Net deferred tax assets (liabilities) in AOCI
421
509
Valuation allowance
(798)
(840)
Subtotal
4,545
5,661
Net foreign, state and local deferred tax assets
1,263
1,431
Valuation allowance
(852)
(906)
Subtotal
411
525
Subtotal - Net U.S., foreign, state and local deferred tax assets
4,956
6,186
Net foreign, state and local deferred tax liabilities
(426)
(347)
Total AIG net deferred tax assets (liabilities)
$
4,530
$
5,839
AIG | 2024 Form 10-K
188
ITEM 8 | Notes to Consolidated Financial Statements | 21. Income Taxes
TAX EXAMINATIONS
We are currently under examination by the IRS for the tax years 2011 through 2019. We continue to engage in the IRS Appeals
process for certain disagreed issues related to tax years 2007-2010. These tax years are still subject to ongoing computational review
by IRS Appeals.
Listed below are the tax years that remain subject to examination by major tax jurisdictions:
At December 31, 2024
Open Tax Years
Major Tax Jurisdiction
United States
2007-2023
Australia
2020-2023
Canada
2020-2023
France
2022-2023
Japan
2018-2023
Korea
2019-2023
Singapore
2020-2023
United Kingdom
2022-2023
ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES
The following table presents a reconciliation of the beginning and ending balances of the total amounts of gross
unrecognized tax benefits, excluding interest and penalties:
Years Ended December 31,
(in millions)
2024
2023
2022
Gross unrecognized tax benefits, beginning of year
$
1,387
$
1,191
$
1,157
Increases in tax positions for prior years
3
200
29
Decreases in tax positions for prior years
(20)
(4)
(33)
Increases in tax positions for current year
15
—
59
Lapse in statute of limitations
(1)
—
(21)
Gross unrecognized tax benefits, end of year
$
1,384
$
1,387
$
1,191
The activity in unrecognized tax benefits for the year ended December 31, 2023 is primarily attributable to the potential resolution of
an IRS audit matter. There was no significant activity in unrecognized tax benefits for the years ended December 31, 2024 and
December 31, 2022.
At December 31, 2024 and 2023 and 2022, the amounts of unrecognized tax benefits that, if recognized, would favorably affect the
effective tax rate were $1.4 billion, $1.4 billion and $1.2 billion, respectively. Unrecognized tax benefits that would not affect the
effective tax rate generally relate to such factors as the timing, rather than the permissibility of the deduction.
Interest and penalties related to unrecognized tax benefits are recognized in income tax expense. At December 31, 2024, 2023 and
2022, we had accrued liabilities of $53 million, $52 million and $63 million, respectively for the payment of interest (net of the federal
benefit) and penalties. For the years ended December 31, 2024, 2023, and 2022, we accrued expense (benefit) of $1 million,
$(11) million, and $(2) million, respectively, for the payment of interest and penalties. There was no significant activity in interest and
penalties related to unrecognized tax benefit for the years 2024, 2023 or 2022.
Although it is reasonably possible that a change in the balance of unrecognized tax benefits may occur within the next 12 months,
based on the information currently available, we do not expect any change to be material to our consolidated financial condition.
AIG | 2024 Form 10-K
189
ITEM 8 | Notes to Consolidated Financial Statements | 21. Income Taxes
22. Quarterly Financial Information (Unaudited)
During the second quarter of 2024, AIG met the requirements for the deconsolidation of Corebridge and Corebridge to be presented
as discontinued operations. The results of operations of Corebridge are reported as discontinued operations for all periods presented
in the Consolidated Statements of Income (Loss). The financial information for the quarterly periods has been restated to reflect
Corebridge as discontinued operations. For further details, see Note 4.
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
Three Months Ended
March 31,
June 30,
September 30,
December 31,
(dollars in millions, except per common share data)
2024
2023
2024
2023
2024
2023
2024
2023
Total revenues
$
6,763 $
6,709
$
6,560 $
7,436
$
6,751 $
7,267
$
7,177 $
6,526
Net income from continuing operations
797
337
475
841
481
701
947
862
Income (loss) from discontinued
operations, net of income taxes
803
(424)
(4,359)
850
(24)
2,046
(46)
(1,335)
Net income (loss)
1,600
(87)
(3,884)
1,691
457
2,747
901
(473)
Net income (loss) attributable to AIG
1,216
30
(3,977)
1,493
459
2,027
898
93
Net income (loss) attributable to AIG
common shareholders
1,194
23
(3,977)
1,485
459
2,020
898
86
Income per common share attributable
to AIG common shareholders:
Basic:
Income from continuing operations
$
1.14 $
0.45
$
0.72 $
1.15
$
0.75 $
0.97
$
1.53 $
1.22
Income (loss) from discontinuing
operations
$
0.61 $
(0.42)
$
(6.74) $
0.90
$
(0.03) $
1.86
$
(0.08) $
(1.10)
Diluted:
Income from continuing operations
$
1.13 $
0.44
$
0.71 $
1.14
$
0.74 $
0.97
$
1.51 $
1.21
Income (loss) from discontinuing
operations
$
0.61 $
(0.41)
$
(6.67) $
0.89
$
(0.03) $
1.84
$
(0.08) $
(1.09)
Weighted average shares outstanding:
Basic
682,576,848 738,661,428
661,092,967 725,754,549
641,621,768 712,598,496
620,940,268 701,485,716
Diluted
687,961,518 744,099,186
666,955,168 730,547,112
647,365,442 718,727,312
627,289,135 708,033,686
23. Subsequent Events
CALIFORNIA WILDFIRES
In January 2025, wildfires impacted parts of southern California resulting in damage to commercial and residential structures. While
too early to determine the full impact of these wildfires, we estimate the net loss for AIG to be approximately $500 million, before
consideration of reinstatement premiums and barring any unforeseen additional developments.
ITEM 8 | Notes to Consolidated Financial Statements | 22. Quarterly Financial Information (Unaudited)
AIG | 2024 Form 10-K
190
Part II
ITEM 9 | Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
None.
ITEM 9A | Controls and Procedures
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted
under the Securities Exchange Act of 1934, as amended (the Exchange Act), is recorded, processed, summarized and reported within
the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management,
including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures. In
connection with the preparation of this Annual Report on Form 10-K, an evaluation was carried out by AIG management, with the
participation of AIG’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of December 31, 2024. Based on this
evaluation, AIG’s Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were
effective as of December 31, 2024.
Management’s Report on Internal Control Over Financial Reporting
Management of AIG is responsible for establishing and maintaining adequate internal control over financial reporting. AIG’s internal
control over financial reporting is a process, under the supervision of AIG’s Chief Executive Officer and Chief Financial Officer,
designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of AIG’s financial
statements for external purposes in accordance with U.S. GAAP.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes
in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
AIG management conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31,
2024 based on the criteria established in the 2013 Internal Control – Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).
AIG management has concluded that, as of December 31, 2024, our internal control over financial reporting was effective based on
the criteria articulated in the 2013 Internal Control – Integrated Framework issued by the COSO. The effectiveness of our internal
control over financial reporting as of December 31, 2024 has been audited by PricewaterhouseCoopers LLP, an independent
registered public accounting firm, as stated in their report, which is included in this Annual Report on Form 10-K.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f)) that have occurred during
the quarter ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control
over financial reporting.
AIG | 2024 Form 10-K
191
ITEM 9B | Other Information
Our officers and directors (as defined in Rule 16a-1 under the Exchange Act) may, with our Board of Directors' approval, enter into
plans for the purchase or sale of our Common Stock that are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c)
under the Exchange Act. Other than as described below, during the three months ended December 31, 2024, none of the Company’s
directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as each
term is defined in Item 408 of Regulation S-K.
•
Peter Zaffino, our Chairman & CEO, entered into a new trading plan on November 7, 2024. The plan’s maximum duration is until
March 1, 2026, and the first trade may not occur prior to February 18, 2025, at the earliest. The trading plan is intended to permit
Mr. Zaffino to exercise up to 325,000 stock options and immediately sell the acquired shares.
The Rule 10b5-1 trading arrangement described above was adopted and precleared in accordance with AIG’s Insider Trading Policy
and actual sale transactions made pursuant to such trading arrangements will be disclosed publicly in future Section 16 filings with the
SEC.
ITEM 9C | Disclosure Regarding Foreign Jurisdictions that Prevent
Inspections
Not applicable.
192
AIG | 2024 Form 10-K
Part III
ITEM 10 | Directors, Executive Officers and Corporate Governance
Other information required by Items 10, 11, 12, 13 and 14 of this Form 10-K but not included herein is incorporated by reference from
the definitive proxy statement for AIG’s 2025 Annual Meeting of Shareholders, which will be filed with the SEC not later than 120 days
after the close of the fiscal year pursuant to Regulation 14A.
Our Executive Officers
Peter Zaffino
Age: 58
Served as an executive
officer since 2017
•
Chairman, President & Chief Executive Officer (since 2022)
•
President (since 2020) and Chief Executive Officer (since 2021)
•
Executive Vice President & Global Chief Operating Officer and Chief Executive Officer, General
Insurance (2017-2019)
•
Executive Vice President & Global Chief Operating Officer (2017-2021)
Don Bailey
Age: 59
Served as an executive
officer since 2023
•
Executive Vice President and Chief Executive Officer, North America Insurance (since 2024)
•
Executive Vice President, Global Head of Distribution and Field Operations (2023)
•
Partner, Bristlecone Partners (2017-2023)
Ed Dandridge
Age: 60
Served as an executive
officer since 2023
•
Executive Vice President and Chief Marketing & Communications Officer (since 2023)
•
President, ScaleWith (2023)
•
Senior Vice President, Chief Communications Officer, Boeing (2020-2022)
Christopher Flatt
Age: 56
Served as an executive
officer since 2025
•
Executive Vice President, Global Chief Underwriting Officer (since 2025)
Charlie Fry
Age: 52
Served as an executive
officer since 2022
•
Executive Vice President, Reinsurance and Risk Capital Optimization (since 2022)
•
Chief Executive Officer of Acacia Holdings Ltd. (2020-2022)
Rose Marie Glazer
Age: 58
Served as an executive
officer since 2022
•
Executive Vice President, General Counsel (since 2024)
•
Executive Vice President, General Counsel and Interim Chief Human Resources & Diversity Officer
(2023-2024)
•
Executive Vice President, Chief Human Resources & Diversity Officer (2023)
•
Executive Vice President, Chief Human Resources Officer (2022)
•
Executive Vice President, Chief Human Resources Officer & Corporate Secretary (2022)
•
Senior Vice President, Deputy General Counsel & Corporate Secretary (2019-2021)
Jon Hancock
Age: 59
Served as an executive
officer since 2024
•
Executive Vice President, Chief Executive Officer, International Commercial and Global Personal
Insurance (since 2025)
•
Executive Vice President, Chief Executive Officer, International Insurance (2024-2025)
•
Chief Executive Officer, International General Insurance (2020-2023)
Kelly Lafnitzegger
Age: 58
Served as an executive
officer since 2024
•
Executive Vice President, Chief Human Resources Officer (since 2024)
•
Company Officer, General Electric (1989-2024)
Roshan Navagamuwa
Age: 47
Served as an executive
officer since 2024
•
Executive Vice President, Chief Information Officer (since 2024)
•
Executive Vice President and Chief Information Officer, CVS Health (2012-2023)
Name
Current Title and Other Business Experience Since 2020
AIG | 2024 Form 10-K
193
Chris Schaper
Age: 60
Served as an executive
officer since 2023
•
Executive Vice President, Chief Risk Officer (since 2024)
•
Executive Vice President, Global Chief Underwriting Officer and Interim Chief Risk Officer
(2023-2024)
•
Senior Vice President, General Insurance and Chief Executive Officer, AIG Re (2019-2023)
Melissa Twiningdavis
Age: 55
Served as an executive
officer since 2024
•
Executive Vice President, Chief Administrative Officer (since 2024)
•
Senior Managing Director, Accenture (2022-2024)
•
Division President, Precision Castparts (2018-2022)
Claude Wade
Age: 57
Served as an executive
officer since 2021
•
Executive Vice President, Chief Digital Officer and Global Head of Business Operations (since
2023)
•
Executive Vice President, Global Head of Operations & Shared Services and Chief Digital Officer
(2021-2023)
•
Head of Client Experience & Atlanta Innovation Hub Leader, BlackRock Inc. (2017-2021)
Keith Walsh
Age: 50
Served as an executive
officer since 2024
•
Executive Vice President, Chief Financial Officer (since 2024)
•
Executive Vice President, Chief Financial Officer, Marsh & McLennan Companies (2017-2024)
Name
Current Title and Other Business Experience Since 2020
Insider Trading Policies and Procedures
We have insider trading policies and procedures that govern the purchase, sale and other dispositions of our securities by our
directors, officers and employees. We believe these policies and procedures are reasonably designed to promote compliance with
insider trading laws, rules and regulations and applicable listing standards. The foregoing summary of our insider trading policies and
procedures does not purport to be complete and is qualified by reference to our Insider Trading Policy filed as an exhibit to this Annual
Report on Form 10-K.
ITEM 11 | Executive Compensation
See Item 10 herein.
ITEM 12 | Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
See Item 10 herein.
ITEM 13 | Certain Relationships and Related Transactions, and
Director Independence
See Item 10 herein.
ITEM 14 | Principal Accountant Fees and Services
See Item 10 herein.
194
AIG | 2024 Form 10-K
Part IV
ITEM 15 | Exhibits and Financial Statement Schedules
(a) Financial Statements and Schedules. See accompanying Index to Financial Statements.
Exhibit Index
3
Articles of incorporation and by laws
3(i)
Amended and Restated Certificate of Incorporation of AIG, amended and
restated May 15, 2024
Incorporated by reference to Exhibit 3.3 to AIG’s Current
Report on Form 8-K, filed with the SEC on May 17, 2024
(File No. 1-8787).
3(ii)
AIG By-laws, amended and restated December 9, 2020
Incorporated by reference to Exhibit 3.1 to AIG’s Current
Report on Form 8-K filed with the SEC on December 9, 2020
(File No. 1-8787).
3(iii)
American International Group, Inc. Certificate of Elimination of the
Participating Preferred Stock
Incorporated by reference to Exhibit 3.1 to AIG’s Current
Report on Form 8-K, filed with the SEC on May 17, 2024
(File No. 1-8787).
3(iv)
American International Group, Inc. Certificate of Elimination of the Series A
5.85% Non-Cumulative Perpetual Preferred Stock
Incorporated by reference to Exhibit 3.2 to AIG’s Current
Report on Form 8-K, filed with the SEC on May 17, 2024
(File No. 1-8787).
4
Instruments defining the rights of security holders, including indentures
Certain instruments defining the rights of holders of long-term
debt securities of AIG and its subsidiaries are omitted
pursuant to Item 601(b)(4)(iii) of Regulation S-K. AIG hereby
undertakes to furnish to the Commission, upon request,
copies of any such instruments.
(1) Description of Registrant’s Securities
Filed herewith.
(2) Forty-Second Supplemental Indenture, dated March 27, 2023, between
AIG and The Bank of New York Mellon, as Trustee, relating to the 5.125%
Notes due 2033 (2033 Notes)
Incorporated by reference to Exhibit 4.1 to AIG’s Current
Report on Form 8-K, filed with the SEC on March 27, 2023
(File No. 1-8787).
(3) Form of the 2033 Notes (included in Exhibit 4.2)
Incorporated by reference to Exhibit 4.1 to AIG's Current
Report on Form 8-K, filed with the SEC on March 27, 2023
(File No. 1-8787).
(4) Forty-Third Supplemental Indenture, dated November 27, 2024,
between AIG and The Bank of New York Mellon, as Trustee, relating to the
2028 Notes
Incorporated by reference to Exhibit 4.1 to AIG's Current
Report on Form 8-K, filed with the SEC on November 27,
2024 (File No. 1-8787).
(5) Forty-Fourth Supplemental Indenture, dated November 27, 2024,
between AIG and The Bank of New York Mellon, as Trustee, relating to the
2029 Notes
Incorporated by reference to Exhibit 4.2 to AIG's Current
Report on Form 8-K, filed with the SEC on November 27,
2024 (File No. 1-8787).
(6) Forty-Fifth Supplemental Indenture, dated November 27, 2024, between
AIG and The Bank of New York Mellon, as Trustee, relating to the 2034
Notes
Incorporated by reference to Exhibit 4.3 to AIG's Current
Report on Form 8-K, filed with the SEC on November 27,
2024 (File No. 1-8787).
(7) Form of the 2028 Notes (included in Exhibit 4.4)
Incorporated by reference to Exhibit 4.4 to AIG's Current
Report on Form 8-K, filed with the SEC on November 27,
2024 (File No. 1-8787).
(8) Form of the 2029 Notes (included in Exhibit 4.5)
Incorporated by reference to Exhibit 4.5 to AIG's Current
Report on Form 8-K, filed with the SEC on November 27,
2024 (File No. 1-8787).
(9) Form of the 2034 Notes (included in Exhibit 4.6)
Incorporated by reference to Exhibit 4.6 to AIG's Current
Report on Form 8-K, filed with the SEC on November 27,
2024 (File No. 1-8787).
10
Material contracts
(1) American International Group, Inc. 2010 Stock Incentive Plan*
Incorporated by reference to Appendix B in AIG’s Definitive
Proxy Statement, dated April 12, 2010 (Filed No. 1-8787).
(2) AIG 2010 Stock Incentive Plan Non-Employee Director Deferred Stock
Units (DSU) Award Agreement*
Incorporated by reference to Exhibit 10.14 to AIG’s Quarterly
Report on Form 10-Q for the quarter ended March 31, 2012
(File No. 1-8787).
(3) Executive Officer Form of Release and Restrictive Covenant
Agreement*
Incorporated by reference to Exhibit 10.5 to AIG’s Quarterly
Report on Form 10-Q for the quarter ended March 31, 2016
(File No. 1-8787).
Exhibit
Number
Description
Location
AIG | 2024 Form 10-K
195
(4) Master Transaction Agreement, dated as of April 19, 2011, by and
among American Home Assurance Company, Chartis Casualty Company
(f/k/a American International South Insurance Company), Chartis Property
Casualty Company (f/k/a AIG Casualty Company), Commerce and Industry
Insurance Company, Granite State Insurance Company, Illinois National
Insurance Co., National Union Fire Insurance Company of Pittsburgh, Pa.,
New Hampshire Insurance Company, The Insurance Company of the State
of Pennsylvania, Chartis Select Insurance Company (f/k/a AIG Excess
Liability Insurance Company Ltd.), Chartis Specialty Insurance Company (f/
k/a American International Specialty Lines Insurance Company), Landmark
Insurance Company, Lexington Insurance Company, AIU Insurance
Company, American International Reinsurance Company, Ltd. and
American Home Assurance Company, National Union Fire Insurance
Company of Pittsburgh, Pa., New Hampshire Insurance Company and
Chartis Overseas Limited acting as members of the Chartis Overseas
Association as respects business written or assumed by or from affiliated
companies of Chartis Inc. (collectively, the Reinsureds), Eaglestone
Reinsurance Company and National Indemnity Company
Incorporated by reference to Exhibit 10.6 to AIG’s Quarterly
Report on Form 10-Q for the quarter ended March 31, 2011
(File No. 1-8787).
(5) AIG Clawback Policy (as amended and restated effective December 1,
2023)*
Incorporated by Reference to Exhibit 10.7 to AIG’s Annual
Report on Form 10-K, filed with the SEC on February 14,
2024 (File No. 1-8787).
(6) AIG 2013 Omnibus Incentive Plan*
Incorporated by reference to Appendix B in AIG’s Definitive
Proxy Statement on Schedule 14A, dated April 4, 2013 (File
No. 1-8787).
(7) Form of AIG 2013 Omnibus Incentive Plan Non-Employee Director DSU
Award Agreement*
Incorporated by reference to Exhibit 10.52 to AIG’s Annual
Report on Form 10-K for the year ended December 31, 2016
(File No. 1-8787).
(8) Aggregate Excess of Loss Reinsurance Agreement, dated January 20,
2017, by and between AIG Assurance Company, AIG Property Casualty
Company, AIG Specialty Insurance Company, AIU Insurance Company,
American Home Assurance Company, Commerce and Industry Insurance
Company, Granite State Insurance Company, Illinois National Insurance
Co., Lexington Insurance Company, National Union Fire Insurance
Company of Pittsburgh, Pa., New Hampshire Insurance Company and The
Insurance Company Of The State Of Pennsylvania and National Indemnity
Company (portions of this exhibit have been redacted pursuant to a request
for confidential treatment)
Incorporated by reference to Exhibit 10.1 to AIG's Current
Report on Form 8-K filed with the SEC on February 14, 2017
(File No. 1-8787).
(9) Trust Agreement, dated January 20, 2017, by and among National
Union Fire Insurance Company of Pittsburgh, Pa., National Indemnity
Company, and Wells Fargo Bank, National Association (portions of this
exhibit have been redacted pursuant to a request for confidential treatment)
Incorporated by reference to Exhibit 10.2 to AIG's Current
Report on Form 8-K filed with the SEC on February 14, 2017
(File No. 1-8787).
(10) Parental Guarantee Agreement, dated January 20, 2017, by Berkshire
Hathaway Inc. in favor of National Union Fire Insurance Company of
Pittsburgh, Pa.
Incorporated by reference to Exhibit 10.3 to AIG's Current
Report on Form 8-K filed with the SEC on February 14, 2017
(File No. 1-8787).
(11) Description of Non-Management Director Compensation*
Incorporated by reference to “Compensation of Directors” in
AIG’s Definitive Proxy Statement on Schedule 14A, dated
April 2, 2024 (File No. 1-8787).
(12) Form of AIG Long Term Incentive Award Agreement (as of January
2020)*
Incorporated by reference to Exhibit 10.49 to AIG’s Annual
Report on Form 10-K, filed with the SEC on February 21,
2020 (File No. 1-8787).
(13) AIG 2012 Executive Severance Plan (as amended and restated
February 2021)*
Incorporated by reference to Exhibit 10.35 to AIG’s Annual
Report on Form 10-K, filed with the SEC on February 19,
2021 (File No. 1-8787).
(14) AIG Non-Qualified Retirement Income Plan (as amended and restated
February 2021)*
Incorporated by reference to Exhibit 10.37 to AIG’s Annual
Report on Form 10-K, filed with the SEC on February 19,
2021 (File No. 1-8787).
(15) American International Group, Inc. 2021 Omnibus Incentive Plan
Incorporated by reference to Appendix B to AIG’s Definitive
Proxy Statement filed with the Commission on March 30,
2021 (File No. 001-08787).
(16) AIG Long Term Incentive Plan Form of Award Agreement (April 2021)*
Incorporated by reference to Exhibit 10.7 to AIG’s Quarterly
Report on Form 10-Q, filed with the SEC on May 7, 2021
(File No. 1-8787).
(17) AIG Long Term Incentive Plan Form of Award Agreement (September
2021)*
Incorporated by reference to Exhibit 10.4 to AIG’s Quarterly
Report on Form 10-Q, filed with the SEC on November 5,
2021 (File No. 1-8787).
(18) Form of AIG 2021 Omnibus Incentive Plan Non-Employee Director
DSU Award Agreement*
Incorporated by Reference to Exhibit 10.4 to AIG’s Quarterly
Report on Form 10-Q, filed with the SEC on May 5, 2022.
(19) Form of Long-Term Incentive Award Agreement (as of March 2022)*
Incorporated by reference to Exhibit 10.41 to AIG's Annual
Report on Form 10-K, filed with the SEC on February 17,
2022 (File No. 1-8787).
(20) Separation Agreement, dated as of September 14, 2022, by and
between American International Group, Inc. and Corebridge Financial, Inc.
Incorporated by Reference to Exhibit 10.3 to AIG’s Quarterly
Report on Form 10-Q, filed with the SEC on November 2,
2022 (File No. 1-8787).
(21) Registration Rights Agreement, dated as of September 14, 2022, by
and between American International Group, Inc. and Corebridge Financial,
Inc.
Incorporated by Reference to Exhibit 10.4 to AIG’s Quarterly
Report on Form 10-Q, filed with the SEC on November 2,
2022 (File No. 1-8787).
Exhibit
Number
Description
Location
196
AIG | 2024 Form 10-K
(22) Employment Agreement, dated as of November 10, 2022, by and
between American International Group, Inc. and Peter Zaffino*
Incorporated by reference to Exhibit 10.55 on AIG’s Annual
Report on Form 10-K for the year ended December 31, 2022,
filed with the SEC on February 17, 2023 (File No. 1-8787).
(23) RSU Award Agreement, between American International Group, Inc.
and Peter Zaffino*
Incorporated by reference to Exhibit 10.56 on AIG’s Annual
Report on Form 10-K for the year ended December 31, 2022,
filed with the SEC on February 17, 2023 (File No. 1-8787).
(24) Letter Agreement, dated June 19, 2023, between AIG and Sabra
Purtill*
Incorporated by Reference to Exhibit 10.1 to AIG’s Quarterly
Report on Form 10-Q, filed with the SEC on August 2, 2023
(File No. 1-8787).
(25) Form of AIG 2021 Omnibus Incentive Plan Non-Employee Director
Deferred Stock Units Award Agreement*
Incorporated by Reference to Exhibit 10.2 to AIG’s Quarterly
Report on Form 10-Q, filed with the SEC on November 2,
2023 (File No. 1-8787).
(26) Financial Restatement Compensation Recoupment Policy (effective as
of September 11, 2023)
Incorporated by Reference to Exhibit 10.49 to AIG’s Annual
Report on Form 10-K, filed with the SEC on February 14,
2024 (File No. 1-8787).
(27) AIG Long Term Incentive Plan (as amended and restated effective
February 1, 2024)*
Incorporated by Reference to Exhibit 10.50 to AIG’s Annual
Report on Form 10-K, filed with the SEC on February 14,
2024 (File No. 1-8787).
(28) AIG Annual Short-Term Incentive Plan (as amended and restated
effective February 1, 2024)*
Incorporated by Reference to Exhibit 10.51 to AIG’s Annual
Report on Form 10-K, filed with the SEC on February 14,
2024 (File No. 1-8787).
(29) Stock Purchase Agreement, dated as of May 16, 2024, by and among
American International Group, Inc., Corebridge Financial, Inc. and Nippon
Life Insurance Company
Incorporated by reference to Exhibit 10.1 to AIG’s Current
Report on Form 8-K, filed with the SEC on May 16, 2024
(File No. 1-8787).
(30) Amendment, dated as of May 16, 2024, to Separation Agreement, by
and between American International Group, Inc. and Corebridge Financial,
Inc.
Incorporated by reference to Exhibit 99.1 to AIG’s Current
Report on Form 8-K, filed with the SEC on May 16, 2024
(File No. 1-8787)
(31) Letter Agreement including Non-Solicitation and Non-Disclosure
Agreement, effective September 13, 2024, between AIG and Keith Walsh*
Incorporated by Reference to Exhibit 10.1 to AIG’s Quarterly
Report on Form 10-Q, filed with the SEC on November 7,
2024 (File No. 1-8787).
(32) Amendment Letter, dated October 4, 2024, to the Letter Agreement,
effective September 13, 2024, between AIG and Keith Walsh*
Incorporated by Reference to Exhibit 10.3 to AIG’s Quarterly
Report on Form 10-Q, filed with the SEC on November 7,
2024 (File No. 1-8787).
(33) Credit Agreement, dated as of September 27, 2024, among AIG, the
subsidiary borrowers party thereto, the lenders party thereto, Bank of
America, N.A., as Administrative Agent, and each Several L/C Agent party
thereto.
Incorporated by Reference to Exhibit 10.2 to AIG’s Quarterly
Report on Form 10-Q, filed with the SEC on November 7,
2024 (File No. 1-8787).
(34) Form of AIG Long Term Incentive Stock Award Agreement (as of
December 2024)*
Filed herewith.
(35) Form of AIG Long Term Incentive Restricted Stock Unit Award
Agreement (as of December 2024)*
Filed herewith.
(36) Form of AIG Long Term Incentive Performance Share Unit Award
Agreement (as of December 2024)*
Filed herewith.
19
Insider Trading Policy
Filed herewith.
21
Subsidiaries of Registrant
Filed herewith.
22
Guaranteed Securities
None.
23
Consent of Independent Registered Public Accounting Firm
Filed herewith.
24
Powers of attorney
Included on signature page and filed herewith.
31
Rule 13a-14(a)/15d-14(a) Certifications
Filed herewith.
32
Section 1350 Certifications**
Filed herewith.
101
Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the
Consolidated Balance Sheets as of December 31, 2024 and December 31,
2023, (ii) the Consolidated Statements of Income (Loss) for the three years
ended December 31, 2024, (iii) the Consolidated Statements of Equity for
the three years ended December 31, 2024, (iv) the Consolidated
Statements of Cash Flows for the three years ended December 31, 2024,
(v) the Consolidated Statements of Comprehensive Income (Loss) for the
three years ended December 31, 2024 and (vi) the Notes to the
Consolidated Financial Statements.
Filed herewith.
104
Cover Page Interactive Data File (formatted as inline XBRL with applicable
taxonomy extension information contained in Exhibits 101)
Filed herewith.
Exhibit
Number
Description
Location
*
This exhibit is a management contract or a compensatory plan or arrangement.
**
This information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934.
ITEM 16 | Form 10-K Summary
None.
AIG | 2024 Form 10-K
197
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly
caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, on the 13th of
February, 2025.
AMERICAN INTERNATIONAL GROUP, INC.
By
/S/ PETER ZAFFINO
(Peter Zaffino, Chairman and Chief Executive Officer)
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Peter
Zaffino and Keith Walsh, and each of them severally, his or her true and lawful attorney-in-fact, with full power of substitution and
resubstitution, to sign in his or her name, place and stead, in any and all capacities, to do any and all things and execute any and all
instruments that such attorney may deem necessary or advisable under the Securities Exchange Act of 1934, as amended, and any
rules, regulations and requirements of the U.S. Securities and Exchange Commission in connection with this Annual Report on Form
10-K and any and all amendments hereto, as fully for all intents and purposes as he or she might or could do in person, and hereby
ratifies and confirms all said attorneys-in-fact and agents, each acting alone, and his or her substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report on Form 10-K has been signed
below by the following persons on behalf of the Registrant and in the capacities indicated on the 13th of February, 2025.
SIGNATURE
TITLE
/S/ PETER ZAFFINO
Chairman and Chief Executive Officer and Director
(Peter Zaffino)
/S/ KEITH WALSH
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
(Keith Walsh)
/S/ KATHLEEN CARBONE
Vice President and Chief Accounting Officer
(Principal Accounting Officer)
(Kathleen Carbone)
/S/ PAOLA BERGAMASCHI
Director
(Paola Bergamaschi)
/S/ JAMES COLE JR.
Director
(James Cole Jr.)
/S/ JAMES DUNNE III
Director
(James Dunne III)
/S/ JOHN C. INGLIS
Director
(John C. Inglis)
/S/ COURTNEY LEIMKUHLER
Director
(Courtney Leimkuhler)
/S/ LINDA A. MILLS
Director
(Linda A. Mills)
/S/ DIANA M. MURPHY
Director
(Diana M. Murphy)
/S/ PETER R. PORRINO
Director
(Peter R. Porrino)
/S/ JOHN G. RICE
Director
(John G. Rice)
/S/ VANESSA A. WITTMAN
Director
(Vanessa A. Wittman)
198
AIG | 2024 Form 10-K
Summary of Investments – Other than Investments in Related Parties
Schedule I
At December 31, 2024
Amount at
which shown in
the Balance sheet
(in millions)
Cost(a)
Fair value
Fixed maturities:
U.S. government and government sponsored entities
$
3,346
$
3,267
$
3,267
Obligations of states, municipalities and political subdivisions
3,273
3,193
3,193
Non-U.S. governments
8,668
8,131
8,131
Public utilities
3,253
3,053
3,053
All other corporate debt securities
30,059
29,055
29,055
Mortgage-backed, asset-backed and collateralized
18,341
18,052
18,052
Total fixed maturity securities
66,940
64,751
64,751
Equity securities and mutual funds:
Common stock:
Public utilities
1
1
1
Banks, trust and insurance companies
489
489
489
Industrial, miscellaneous and all other
36
36
36
Total common stock
526
526
526
Mutual funds
178
178
178
Total equity securities and mutual funds
704
704
704
Mortgage and other loans receivable, net of allowance
3,868
3,752
3,868
Other invested assets
9,995
9,828
9,828
Short-term investments, at cost (approximates fair value)
14,462
14,462
14,462
Derivative assets(b)
50
50
50
Total investments
$
96,019
$
93,547
$
93,663
(a) Original cost of fixed maturities is reduced by repayments and adjusted for amortization of premiums or accretion of discounts.
(b) The balance is reported in Other assets.
AIG | 2024 Form 10-K
199
Condensed Financial Information of Registrant
Balance Sheets – Parent Company Only
Schedule II
December 31,
(in millions)
2024
2023
Assets:
Short-term investments
$
8,360
$
7,782
Retained investment in Corebridge using fair value option
3,810
—
Other investments
393
758
Total investments
12,563
8,540
Cash
4
10
Due from affiliates - net(a)
1,931
1,317
Intercompany tax receivable(a)
288
379
Deferred income taxes
3,380
4,566
Investment in consolidated subsidiaries(a)
35,312
36,544
Assets of discontinued operations - net
—
6,111
Other assets
755
1,335
Total assets
$
54,233
$
58,802
Liabilities:
Due to affiliates(a)
$
1,031
$
682
Intercompany tax payable(a)
551
767
Notes and bonds payable
7,904
9,098
Junior subordinated debt
602
992
Series AIGFP matched notes and bonds payable
18
18
Loans from subsidiaries(a)
462
443
Other liabilities
1,144
1,451
Total liabilities
11,712
13,451
AIG Shareholders’ equity:
Preferred stock
—
485
Common stock
4,766
4,766
Treasury stock
(65,573)
(59,189)
Additional paid-in capital
75,348
75,810
Retained earnings
35,079
37,516
Accumulated other comprehensive income
(7,099)
(14,037)
Total AIG shareholders’ equity
42,521
45,351
Total liabilities and equity
$
54,233
$
58,802
(a) Eliminated in consolidation.
See accompanying Notes to Condensed Financial Information of Registrant.
200
AIG | 2024 Form 10-K
Condensed Financial Information of Registrant (Continued)
Statements of Income – Parent Company Only
Schedule II
Years Ended December 31,
(in millions)
2024
2023
2022
Revenues:
Equity in undistributed net income (loss) of consolidated subsidiaries(a)
$
(957) $
(4,313) $
1,319
Dividend income from consolidated subsidiaries(a)
4,631
7,312
2,202
Interest income(b)
288
226
936
Net realized losses
(13)
(74)
(433)
Other income
606
5
22
Expenses:
Interest expense
468
525
631
Net (gain) loss on extinguishment of debt
14
(58)
301
Net (gain) loss on divestitures and other
1
5
111
Other expenses
949
778
960
Income (loss) from continuing operations before income tax benefit
3,123
1,906
2,043
Income tax expense (benefit)
85
(859)
(838)
Net income
3,038
2,765
2,881
Income (loss) from discontinued operations
(4,442)
878
7,346
Net income (loss) attributable to AIG Parent Company
$
(1,404) $
3,643
$
10,227
(a) Eliminated in consolidation.
(b) Includes interest income on intercompany borrowings of $1 million, $1 million and $767 million on December 31, 2024, 2023 and 2022, respectively, eliminated in
consolidation.
See accompanying Notes to Condensed Financial Information of Registrant.
Condensed Financial Information of Registrant (Continued)
Statements of Comprehensive Income – Parent Company Only
Schedule II
Years Ended December 31,
(in millions)
2024
2023
2022
Net income (loss)
$
(1,404)
$
3,643
$
10,227
Other comprehensive income (loss) related to continued operations
132
1,240
(4,568)
Other comprehensive income (loss) related to discontinued operations
(945)
3,401
(25,235)
Corebridge deconsolidation
7,214
—
—
Total comprehensive income attributable to AIG
$
4,997
$
8,284
$
(19,576)
See accompanying Notes to Condensed Financial Information of Registrant.
AIG | 2024 Form 10-K
201
Condensed Financial Information of Registrant (Continued)
Statements of Cash Flows – Parent Company Only
Schedule II
Years Ended December 31,
(in millions)
2024
2023
2022
Net cash provided by (used in) operating activities
$
3,367
$
4,309
$
(562)
Cash flows from investing activities:
Sales and maturities of investments
6,018
3,367
13,505
Purchase of investments
(353)
(2,070)
(90)
Net change in short-term investments
(523)
(4,393)
945
Contributions from (to) subsidiaries - net
(12)
(47)
(330)
Loans to subsidiaries - net
—
84
127
Other, net
278
1,025
798
Net cash provided by (used in) investing activities
5,408
(2,034)
14,955
Cash flows from financing activities:
Issuance of long-term debt
660
742
—
Repayments of long-term debt
(2,047)
(2,037)
(9,364)
Redemption of preferred stock
(485)
—
—
Dividends on preferred stock and preferred stock redemption premiums
(22)
(29)
(29)
Cash dividends paid on common stock
(1,002)
(997)
(982)
Loans from subsidiaries - net
—
(97)
(224)
Purchase of common stock
(6,652)
(2,961)
(5,200)
Other, net
822
3,108
1,408
Net cash provided by (used in) financing activities
(8,726)
(2,271)
(14,391)
Change in cash and restricted cash
49
4
2
Cash and restricted cash at beginning of year
10
6
4
Cash and restricted cash at end of year
$
59
$
10
$
6
Supplementary disclosure of cash flow information:
Years Ended December 31,
(in millions)
2024
2023
2022
Cash
$
4
$
10
$
5
Restricted cash included in Short-term investments
55
—
—
Restricted cash included in Other assets
—
—
1
Total cash and restricted cash shown in Statements of Cash Flows – Parent
Company Only
$
59
$
10
$
6
Cash (paid) received during the period for:
Interest:
Third party
$
(611) $
(455) $
(653)
Intercompany
1
(3)
—
Taxes:
Income tax authorities
(231)
(109)
(348)
Intercompany
248
399
92
Intercompany non-cash financing and investing activities:
Capital contributions
371
861
473
Dividends received in the form of securities
—
314
494
See accompanying Notes to Condensed Financial Information of Registrant.
202
AIG | 2024 Form 10-K
NOTES TO CONDENSED FINANCIAL INFORMATION OF REGISTRANT
American International Group, Inc.’s (the Registrant) investments in consolidated subsidiaries are stated at cost plus equity in
undistributed income of consolidated subsidiaries. The accompanying condensed financial statements of the Registrant should be
read in conjunction with the consolidated financial statements and notes thereto of American International Group, Inc. and subsidiaries
included in the Registrant’s 2024 Annual Report on Form 10-K for the year ended December 31, 2024 (Annual Report on Form 10-K)
filed with the Securities and Exchange Commission on February 13, 2025.
The Registrant includes in its Statement of Income dividends from its subsidiaries and equity in undistributed income (loss) of
consolidated subsidiaries, which represents the net income (loss) of each of its wholly-owned subsidiaries.
The five-year debt maturity schedule is incorporated by reference from Note 14 to the Consolidated Financial Statements.
On December 14, 2022, AIG announced that its wholly-owned subsidiary, AIG Financial Products Corp. (AIGFP), filed a voluntary
petition to reorganize under Chapter 11 of Title 11 of the United States Code in the United States Bankruptcy Court for the District of
Delaware and filed a proposed plan of reorganization. The reorganization will not have a material impact on the consolidated balance
sheets of AIG or our respective businesses. AIGFP has no material operations or businesses and no employees. In conjunction with
the bankruptcy filing, AIGFP and its consolidated subsidiaries were deconsolidated from the results of AIG, resulting in a pre-tax loss
of $114 million reported in Net gain (loss) on divestitures and other. The AIGFP loan receivable of $37.6 billion was reclassified to a
third party asset, which has a full allowance for credit losses. In addition, AIGFP and its subsidiaries were determined to be an
unconsolidated variable interest entity.
The Registrant files a consolidated federal income tax return with certain subsidiaries and acts as an agent for the consolidated tax
group when making payments to the Internal Revenue Service. The Registrant and its subsidiaries have adopted, pursuant to a
written agreement, a method of allocating consolidated Federal income taxes. Amounts allocated to the subsidiaries under the written
agreement are included in Due from affiliates in the accompanying Condensed Balance Sheets.
Under the U.S. federal tax laws, AIGFP will continue to join in filing of AIG’s consolidated U.S. federal income tax return and AIGFP’s
net operating losses continue to be available to offset taxable income of AIG’s consolidated U.S. federal income tax group.
Accordingly, deferred tax assets related to AIGFP’s net operating losses remain part of AIG’s deferred tax assets as of December 31,
2024. No additional valuation allowance is required in connection with AIGFP’s reorganization.
Income taxes in the accompanying Condensed Balance Sheets are composed of the Registrant’s current and deferred tax assets, the
consolidated group’s current income tax receivable and deferred taxes related to tax attribute carryforwards of AIG’s U.S.
consolidated federal income tax group.
The consolidated U.S. deferred tax asset for net operating loss and tax credit carryforwards are recorded by the Parent Company,
which files the consolidated U.S. Federal income tax return, and are not allocated to its subsidiaries. Generally, as, and if, the
consolidated net operating losses and other tax attribute carryforwards are utilized, the intercompany tax balance will be settled with
the subsidiaries.
For additional information, see Note 21 to the Consolidated Financial Statements.
AIG | 2024 Form 10-K
203
Supplementary Insurance Information
Schedule III
At December 31, 2024, 2023
Segment (in millions)
Deferred Policy
Acquisition Costs
Liability for Unpaid
Losses and Loss
Adjustment Expenses,
Future Policy Benefits
Unearned
Premiums
Policy and
Contract Claims
2024
North America Commercial
$
379
$
39,619
$
5,936
$
—
International Commercial
718
16,208
5,773
—
Global Personal
1,063
7,899
5,340
—
Other Operations(a)
(95)
6,759
183
31
$
2,065
$
70,485
$
17,232
$
31
2023
North America Commercial
$
317
$
39,758
$
5,660
$
—
International Commercial
691
17,354
5,789
—
Global Personal
1,170
8,339
5,650
—
Other Operations(a)
(61)
6,409
276
23
$
2,117
$
71,860
$
17,375
$
23
For the years ended December 31, 2024, 2023, and 2022
Segment (in millions)
Premiums
Net
Investment
Income
Losses and
Loss Expenses
Incurred
Amortization of
Deferred Policy
Acquisition Costs
Other
Operating
Expenses
Net
Premiums
Written
2024
North America Commercial
$
8,172 $
(b)
$
5,713 $
824 $
1,087 $
8,452
International Commercial
8,145
(b)
4,463
1,018
1,437
8,364
Global Personal
7,140
(b)
3,862
1,571
1,565
7,086
Other Operations(a)
80
1,195
529
12
1,440
—
$
23,537 $
4,255 $
14,567 $
3,425 $
5,529 $
23,902
2023
North America Commercial
$
10,233 $
(b)
$
6,323 $
1,371 $
1,184 $
11,432
International Commercial
7,964
(b)
4,641
943
1,378
8,168
Global Personal
6,894
(b)
3,811
1,309
1,782
7,119
Other Operations(a)
473
424
618
148
1,055
487
$
25,564 $
3,446 $
15,393 $
3,771 $
5,399 $
27,206
2022
North America Commercial
$
10,444 $
(b)
$
7,218 $
1,381 $
1,101 $
10,899
International Commercial
7,701
(b)
4,301
938
1,323
7,877
Global Personal
7,195
(b)
3,888
1,214
1,928
6,736
Other Operations(a)
1,425
(12)
54
12
1,807
1,248
$
26,765 $
2,370 $
15,461 $
3,545 $
6,159 $
26,760
(a) Includes consolidation and elimination entries and reconciling items from adjusted pre-tax income to pre-tax income. See Note 3 to the Consolidated Financial
Statements.
(b) North America Commercial, International Commercial and Global Personal does not include Net investment income as the investment portfolio results are managed at
the General Insurance level. Net investment income for General Insurance were $3,060 million, $3,022 million and $2,382 million for the years ended December 31,
2024, 2023 and 2022, respectively.
204
AIG | 2024 Form 10-K
Reinsurance
Schedule IV
For the years ended December 31, 2024, 2023, and 2022
(in millions)
Gross
Amount
Ceded to Other
Companies
Assumed from
Other Companies
Net Amount
Percent of Amount
Assumed to Net
2024
Premiums earned:
Accident and health
$
2,507
$
104
$
30
$
2,433
1.2 %
Property and liability
28,701
11,514
3,917
21,104
18.6
Total
$
31,208
$
11,618
$
3,947
$
23,537
16.8 %
2023
Premiums earned:
Accident and health
$
2,612
$
107
$
35
$
2,540
1.4 %
Property and liability
28,169
12,160
7,015
23,024
30.5
Total
$
30,781
$
12,267
$
7,050
$
25,564
27.6 %
2022
Premiums earned:
Accident and health
$
2,687
$
111
$
75
$
2,651
2.8 %
Property and liability
29,366
12,314
7,062
24,114
29.3
Total
$
32,053
$
12,425
$
7,137
$
26,765
26.7 %
Valuation and Qualifying Accounts
Schedule V
For the years ended December 31, 2024, 2023, and 2022
(in millions)
Balance,
Beginning
of year
Charged to
Costs and
Expenses
Write
Offs
Other
Changes(a)
Balance,
End of year
2024
Allowance for premiums and insurances balances receivable
$
138
$
1
$
(12)
$
—
$
127
Federal and foreign valuation allowance for deferred tax assets
1,745
(31)
—
(64)
1,650
2023
Allowance for premiums and insurances balances receivable
$
168
$
(7)
$
(28)
$
5
$
138
Federal and foreign valuation allowance for deferred tax assets
2,594
(365)
—
(484)
1,745
2022
Allowance for premiums and insurances balances receivable
$
184
$
—
$
(15)
$
(1)
$
168
Federal and foreign valuation allowance for deferred tax assets
1,890
(174)
—
878
2,594
(a) Includes recoveries of amounts previously charged off and reclassifications to/from other accounts.
AIG | 2024 Form 10-K
205
American International Group, Inc., and Subsidiaries
Subsidiaries of Registrant
Exhibit 21
American International Group, Inc.
Delaware
(2)
AIG Property Casualty Inc.
Delaware
100
AIG Claims, Inc.
Delaware
100
AIG PC Global Services, Inc.
Delaware
100
AIG Global Operations (Ireland) Limited
Ireland
100
AIG Property Casualty International, LLC
Delaware
100
AIG Insurance Management Services, Inc.
Vermont
100
Grand Isle SAC Limited
Bermuda
100
AIG International Holdings GmbH
Switzerland
100
AIG APAC HOLDINGS PTE. LTD.
Singapore
100
AIG Asia Pacific Insurance Pte. Ltd.
Singapore
100
AIG Australia Limited
Australia
100
AIG Insurance Hong Kong Limited
Hong Kong
100
AIG Insurance New Zealand Limited
New Zealand
100
AIG Korea Inc.
Korea, Republic of
100
AIG Malaysia Insurance Berhad
Malaysia
100
AIG Philippines Insurance, Inc.
Philippines
100
AIG Vietnam Insurance Company Limited
Vietnam
100
PT AIG Insurance Indonesia
Indonesia
100
AIG Insurance (Thailand) Public Company Limited
Thailand
100
AIG Canada Holdings Inc.
Canada
100
AIG Insurance Company of Canada
Canada
100
AIG Europe Holdings S.a.r.l
Luxembourg
100
AIG Europe S.A.
Luxembourg
100
AIG Global Reinsurance Operations
Belgium
100
AIG Holdings Europe Limited
England and Wales
100
AIG Israel Insurance Company Ltd
Israel
100
American International Group UK Limited
England and Wales
100
AIG Investments UK Limited
England and Wales
100
Talbot Holdings Ltd.
Bermuda
100
Talbot 2002 Underwriting Capital Ltd.
England and Wales
100
Talbot Underwriting Holdings Ltd.
England and Wales
100
Talbot Underwriting Ltd.
England and Wales
100
AIG Japan Holdings Kabushiki Kaisha
Japan
100
AIG General Insurance Co., Ltd.
Japan
100
American Home Assurance Co., Ltd.
Japan
100
AIG Latin America Investments, S.L.
Spain
100
Inversiones Segucasai, C.A.
Venezuela
100
C.A. de Seguros American International
Venezuela
97.39
AIG Brazil Holding I, LLC
Delaware
100
AIG Seguros Brasil S.A.
Brazil
90.56
(3)
AIG Resseguros Brasil S.A.
Brazil
100
AIG Insurance Company-Puerto Rico
Puerto Rico
100
AIG Latin America I.I.
Puerto Rico
100
AIG Seguros Mexico, S.A. de C.V.
Mexico
100
AIG-Metropolitana Cía. de Seguros y Reaseguros S.A.
Ecuador
51.78
AIG MEA Holdings Limited
United Arab Emirates
100
AIG MEA Limited
United Arab Emirates
100
Johannesburg Insurance Holdings (Proprietary) Limited
South Africa
100
Percentage
of Voting
Securities
Jurisdiction of
held by
Incorporation or
Immediate
As of December 31, 2024
Organization
Parent
(1)
AIG Life South Africa Limited
South Africa
100
AIG South Africa Limited
South Africa
100
American International Reinsurance Company, Ltd.
Bermuda
100
PCG 2019 Corporate Member Limited
England and Wales
100
AIG Property Casualty U.S., Inc.
Delaware
100
AIG Aerospace Insurance Services, Inc.
Georgia
100
AIG Assurance Company
Illinois
100
AIG Property Casualty Company
Illinois
100
AIG Specialty Insurance Company
Illinois
100
AIG WarrantyGuard, Inc.
Delaware
100
AIU Insurance Company
New York
100
American Home Assurance Company
New York
100
AIG Insurance Company China Limited
China
100
Commerce and Industry Insurance Company
New York
100
Eaglestone Reinsurance Company
Pennsylvania
100
Arthur J. Glatfelter Agency, Inc.
Pennsylvania
100
Glatfelter Underwriting Services, Inc.
Pennsylvania
100
Volunteer Firemen's Insurance Services, Inc.
Pennsylvania
100
Granite State Insurance Company
Illinois
100
Illinois National Insurance Co.
Illinois
100
Lexington Insurance Company
Delaware
100
National Union Fire Insurance Company of Pittsburgh, Pa.
Pennsylvania
100
American International Realty LLC
Delaware
100
National Union Fire Insurance Company of Vermont
Vermont
100
New Hampshire Insurance Company
Illinois
100
Risk Specialists Companies Insurance Agency, Inc.
Massachusetts
100
Service Net Warranty, LLC
Delaware
100
The Insurance Company of the State of Pennsylvania
Illinois
100
Western World Insurance Company
New Hampshire
100
Stratford Insurance Company
New Hampshire
100
Tudor Insurance Company
New Hampshire
100
Lexington Specialty Insurance Agency, Inc.
Delaware
100
Blackboard U.S. Holdings, Inc.
Delaware
100
Marbleshore Specialty Insurance Company
Delaware
100
Glatfelter Insurance Company
Delaware
100
AIG Employee Services, Inc.
Delaware
100
AIG Financial Products Corp.
Delaware
100
AIG Matched Funding Corp.
Delaware
100
AIG-FP Pinestead Holdings Corp.
Delaware
100
AIG Markets, Inc.
Delaware
100
AIG Global Operations, Inc.
Delaware
100
AM Holdings LLC
Delaware
100
(1) Percentages include directors' qualifying shares.
(2) Substantially all subsidiaries listed are consolidated in the accompanying financial statements. Certain subsidiaries have been omitted from the
tabulation. The omitted subsidiaries, when considered in the aggregate, do not constitute a significant subsidiary.
(3) Also owned 9.44 percent by AIG Brazil Holding II, LLC, which is wholly owned by AIG Latin America Investments, S.L.
Percentage
of Voting
Securities
Jurisdiction of
held by
Incorporation or
Immediate
As of December 31, 2024
Organization
Parent
(1)
Exhibit 23
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No.333-277075) and Forms S-8
(No.333-101640, No.333-168679 and No.333-256033) of American International Group, Inc. of our report dated February 13, 2025
relating to the financial statements, financial statement schedules and the effectiveness of internal control over financial reporting,
which appears in this Form 10-K.
/s/ PricewaterhouseCoopers LLP
New York, New York
February 13, 2025
Exhibit 31
CERTIFICATIONS
I, Peter Zaffino, certify that:
1. I have reviewed this Annual Report on Form 10-K of American International Group, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with
respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this
report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act
Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under
our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report
based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the
equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial
information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant’s internal control over financial reporting.
Date: February 13, 2025
/S/ PETER ZAFFINO
Peter Zaffino
Chairman and Chief Executive Officer
CERTIFICATIONS
I, Keith Walsh, certify that:
1. I have reviewed this Annual Report on Form 10-K of American International Group, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with
respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this
report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act
Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under
our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report
based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the
equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial
information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant’s internal control over financial reporting.
Date: February 13, 2025
/S/ KEITH WALSH
Keith Walsh
Executive Vice President and
Chief Financial Officer
Exhibit 32
CERTIFICATION
In connection with this Annual Report on Form 10-K of American International Group, Inc. (the “Company”) for the year ended
December 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Peter Zaffino,
Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, that to my knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of
1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of
the Company.
Date: February 13, 2025
/S/ PETER ZAFFINO
Peter Zaffino
Chairman and Chief Executive Officer
The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or
as a separate disclosure document.
CERTIFICATION
In connection with this Annual Report on Form 10-K of American International Group, Inc. (the “Company”) for the year ended
December 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Keith Walsh,
Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, that to my
knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of
1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of
the Company.
Date: February 13, 2025
/S/ KEITH WALSH
Keith Walsh
Executive Vice President and
Chief Financial Officer
The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or
as a separate disclosure document.
This page intentionally left blank.
Cautionary Statement Regarding Forward-Looking Information
This Annual Report and other publicly available documents
may include, and members of management may from time to
time make and discuss, statements which, to the extent they
are not statements of historical or present fact, may constitute
“forward-looking statements” within the meaning of the U.S.
Private Securities Litigation Reform Act of 1995. These forward
looking statements are intended to provide management’s
current expectations or plans for future operating and financial
performance, based on assumptions currently believed to
be valid and accurate. Forward-looking statements are often
preceded by, followed by or include words such as “will,”
“believe,” “anticipate,” “expect,” “expectations,” “intend,”
“plan,” “strategy,” “prospects,” “project,” “anticipate,” “should,”
“guidance,” “outlook,” “confident,” “focused on achieving,”
“view,” “target,” “goal,” “estimate” and other words of similar
meaning in connection with a discussion of future operating or
financial performance. These statements may include, among
other things, projections, goals and assumptions that relate
to future actions, prospective services or products, future
performance or results of current and anticipated services or
products, sales efforts, expense reduction efforts, the outcome
of contingencies such as legal proceedings, anticipated
organizational, business or regulatory changes, the effect of
catastrophic events, both natural and man-made, and macro-
economic and/or geopolitical events, anticipated dispositions,
monetization and/or acquisitions of businesses or assets, the
successful integration of acquired businesses, management
succession and retention plans, exposure to risk, trends in
operations and financial results, and other statements that are
not historical facts.
All forward-looking statements involve risks, uncertainties
and other factors that may cause actual results and financial
condition to differ, possibly materially, from the results and
financial condition expressed or implied in the forward-looking
statements. Factors that could cause actual results to differ,
possibly materially, from those in specific projections, targets,
goals, plans, assumptions and other forward-looking state-
ments include, without limitation:
• the impact of adverse developments affecting economic
conditions in the markets in which we operate in the
U.S. and globally, including financial market conditions,
macroeconomic trends, fluctuations in interest rates and
foreign currency exchange rates, inflationary pressures,
including social inflation, pressures on the commercial real
estate market, and an economic slowdown or recession and
geopolitical events or conflicts;
• the occurrence of catastrophic events, both natural and
man-made, which may be exacerbated by the effects of
climate change;
• disruptions in the availability or accessibility of our or a third
party’s information technology systems, including hardware
and software, infrastructure or networks, and the inability
to safeguard the confidentiality and integrity of customer,
employee or company data due to cyberattacks, data
security breaches, or infrastructure vulnerabilities;
• our ability to effectively implement technological advance-
ments, including the use of artificial intelligence (AI), and
respond to competitors’ AI and other technology initiatives;
• the effects of changes in laws and regulations, including
those relating to privacy, data protection, cybersecurity and
AI, and the regulation of insurance, in the U.S. and other
countries in which we operate;
• our ability to successfully dispose of, monetize and/or
acquire businesses or assets or successfully integrate
acquired businesses, and the anticipated benefits thereof;
• concentrations in our investment portfolios, including our
continuing equity market exposure to Corebridge Financial,
Inc. (Corebridge);
• our reliance on third-party investment managers;
• changes in the valuation of our investments;
• our reliance on third parties to provide certain business and
administrative services;
• availability of adequate reinsurance or access to reinsurance
on acceptable terms;
• our ability to adequately assess risk and estimate related
losses as well as the effectiveness of our enterprise risk
management policies and procedures;
AIG 2024 Annual Report
214
• changes in judgments or assumptions concerning insurance
underwriting and insurance liabilities;
• concentrations of our insurance, reinsurance and other
risk exposures;
• nonperformance or defaults by counterparties;
• the effectiveness of strategies to retain and recruit key
personnel and to implement effective
succession plans;
• difficulty in marketing and distributing products through
current and future distribution channels;
• actions by rating agencies with respect to our credit and
financial strength ratings as well as those of its businesses
and subsidiaries;
• changes in judgments concerning the recognition of deferred
tax assets and the impairment of goodwill;
• our ability to address evolving global stakeholder
expectations and regulatory requirements with respect to
environmental, social and governance matters;
• the effects of sanctions and the failure to comply
with those sanctions;
• our ability to effectively implement restructuring initiatives
and potential cost-savings opportunities;
• changes to sources of or access to liquidity;
• changes in accounting principles and financial reporting
requirements or their applicability to us;
• changes to tax laws in the U.S. and other countries in which
we operate;
• the outcome of significant legal, regulatory or
governmental proceedings;
• our ability to effectively execute on sustainability targets
and standards;
• the impact of epidemics, pandemics and other public health
crises and responses thereto; and
• such other factors discussed in Part II, Item 7. Management’s
Discussion and Analysis of Financial Condition and Results
of Operations and Part I, Item 1A. Risk Factors in AIG’s Annual
Report on Form 10-K for the year ended December 31, 2024.
Forward-looking statements speak only as of the date of
this report, or in the case of any document incorporated by
reference, the date of that document. We are not under any
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future
events or otherwise, except as required by applicable law.
Additional information as to factors that may cause actual
results to differ materially from those expressed or implied in
any forward-looking statements is disclosed from time to time
in our filings with the Securities and Exchange Commission.
AIG 2024 Annual Report 215
Comment on Regulation G and Non-GAAP Financial Measures
Throughout this Annual Report, we present our financial
condition and results of operations in the way we believe will
be most meaningful and representative of our business results.
Some of the measurements we use are “non-GAAP financial
measures” under Securities and Exchange Commission rules
and regulations. GAAP is the acronym for generally accepted
accounting principles in the United States. The non-GAAP
financial measures we present may not be comparable to
similarly-named measures reported by other companies. The
reconciliations of such measures to the most comparable GAAP
measures in accordance with Regulation G are included within
this Annual Report, our Annual Report on Form 10-K for the
fiscal year ended December 31, 2024 or in the Fourth Quarter
2024 Financial Supplement available in the Investors section of
AIG’s website, www.aig.com.
Adjusted pre-tax income (APTI) is derived by excluding the
items set forth below from income from continuing operations
before income tax:
• changes in the fair values of equity securities, AIG's
investment in Corebridge and gain on sale of shares;
• net investment income on Fortitude Re funds
withheld assets;
• net realized gains and losses on Fortitude Re funds
withheld assets;
• loss (gain) on extinguishment of debt;
• all net realized gains and losses except earned income
(periodic settlements and changes in settlement accruals) on
derivative instruments used for non-qualifying (economic)
hedging or for asset replication. Earned income on such
economic hedges is reclassified from net realized gains and
losses to specific APTI line items based on the economic risk
being hedged (e.g. net investment income);
• income or loss from discontinued operations;
• net loss reserve discount benefit (charge);
• net results of businesses in run-off;
• pension expense related to lump sum payments to
former employees;
• net gain or loss on divestitures and other;
• non-operating litigation reserves and settlements;
• restructuring and other costs related to initiatives designed
to reduce operating expenses, improve efficiency and
simplify our organization;
• the portion of favorable or unfavorable prior year reserve
development for which we have ceded the risk under
retroactive reinsurance agreements and related changes in
amortization of the deferred gain;
• integration and transaction costs associated with acquiring
or divesting businesses;
• losses from the impairment of goodwill;
• non-recurring costs associated with the implementation of
non-ordinary course legal or regulatory changes or changes
to accounting principles; and
• income from elimination of the international reporting lag.
Adjusted after-tax income attributable to AIG common
shareholders is derived by excluding the tax effected APTI
adjustments described above, dividends on preferred stock
and preferred stock redemption premiums, noncontrolling
interest on net realized gains (losses), other non-operating
expenses and the following tax items from net income
attributable to AIG:
• deferred income tax valuation allowance releases
and charges;
• changes in uncertain tax positions and other tax items
related to legacy matters having no relevance to our current
businesses or operating performance; and
• net tax charge related to the enactment of the Tax Cuts
and Jobs Act.
AIG 2024 Annual Report
216
Non-GAAP Reconciliations
For the Years Ended December 31,
(in millions)
2018
2019
2020
2021
2022
2023
Underwriting income (loss), as reported
$
(3,137)
$
89
$
(1,024)
$
1,055
$
2,048
$
2,349
Validus Re and CRS impact
226
6
105
(7)
(242)
(411)
Underwriting income (loss), excluding
Validus Re and CRS impact
$
(2,911)
$
95
$
(919)
$
1,048
$
1,806
$
1,938
For the Years Ended December 31,
(in millions)
2018
2019
2020
2021
2022
2023
Catastrophe losses, as reported
$
2,919
$
1,257
$
2,428
$
1,357
$
1,228
$
1,067
Validus Re and CRS impact
(334)
(245)
(401)
(314)
(218)
(138)
COVID-19 losses
-
-
(869)
-
-
-
Catastrophe losses, excluding Validus Re
and CRS impact and COVID-19 losses
$
2,585
$
1,012
$
1,158
$
1,043
$
1,010
$
929
For the Years Ended December 31,
(in millions, except dollars per share)
2023
2024
Adjusted after-tax income attributable
to AIG common shareholders, as reported
$
3,205
$
3,254
Validus Re and Crop Risk Services
(404)
-
Adjusted after-tax income attributable
to AIG common shareholders,
comparable basis
$
2,801
$
3,254
Weighted average diluted
shares outstanding
725.2
657.3
Adjusted after-tax income attributable
to AIG common shareholders per
diluted share, comparable basis
$
3.86
$
4.95
AIG 2024 Annual Report 217
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AIG’s global headquarters in New York City.
American International Group, Inc.
www.aig.com
Requests for copies of the 2024 Annual Report should
be directed to AIG Investor Relations. Shareholders may
eliminate duplicate mailings of AIG’s proxy materials by
contacting AIG’s transfer agent. Contact details can be
found at www.aig.com/investor-relations.