2007 Annual Report - AIG.com
2007 Annual Report - AIG.com
2007 Annual Report - AIG.com
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American International Group, Inc. and Subsidiaries<br />
The amortized cost or cost and estimated fair value of <strong>AIG</strong>’s available for sale and held to maturity securities at<br />
December 31, <strong>2007</strong> and 2006 were as follows:<br />
December 31, <strong>2007</strong>* December 31, 2006<br />
Amortized Gross Gross Amortized Gross Gross<br />
Cost or Unrealized Unrealized Fair Cost or Unrealized Unrealized Fair<br />
(in millions) Cost Gains Losses Value Cost Gains Losses Value<br />
Available for sale: *<br />
U.S. government and government<br />
sponsored entities $ 7,956 $ 333 $ 37 $ 8,252 $ 7,667 $ 221 $ 140 $ 7,748<br />
Obligations of states, municipalities<br />
and political subdivisions 46,087 927 160 46,854 59,785 1,056 210 60,631<br />
Non-U.S. governments 67,023 3,920 743 70,200 62,860 5,461 437 67,884<br />
Corporate debt 239,822 6,216 4,518 241,520 257,383 7,443 2,536 262,290<br />
Mortgage-backed, asset-backed and<br />
collateralized 140,982 1,221 7,703 134,500 104,687 502 362 104,827<br />
Total bonds $501,870 $12,617 $13,161 $501,326 $492,382 $14,683 $3,685 $503,380<br />
Equity securities 15,188 5,545 463 20,270 13,147 2,807 159 15,795<br />
Total $517,058 $18,162 $13,624 $521,596 $505,529 $17,490 $3,844 $519,175<br />
Held to maturity: *<br />
Bonds — Obligations of states,<br />
municipalities and political<br />
subdivisions $ 21,581 $ 609 $ 33 $ 22,157 $ 21,437 $ 731 $ 14 $ 22,154<br />
* At December 31, <strong>2007</strong> and 2006, fixed maturities held by <strong>AIG</strong> that were below investment grade or not rated totaled $27.0 billion and $26.6 billion,<br />
respectively.<br />
<strong>AIG</strong>’s held to maturity and available for sale fixed maturity<br />
securities so rated. Approximately five percent were below investinvestments<br />
totaled $523.5 billion at December 31, <strong>2007</strong>,<br />
ment grade or not rated at that date. A large portion (approxi<strong>com</strong>pared<br />
to $525.5 billion at December 31, 2006. At Decem- mately one third) of the foreign fixed in<strong>com</strong>e portfolio is sovereign<br />
ber 31, <strong>2007</strong>, approximately 63 percent of the fixed maturities fixed maturity securities supporting the policy liabilities in the<br />
investments were in domestic portfolios. Approximately 53 per- country of issuance.<br />
cent of such domestic securities were rated AAA by one or more<br />
of the principal rating agencies. Approximately five percent were The credit ratings of <strong>AIG</strong>’s fixed maturity investments, other<br />
below investment grade or not rated. <strong>AIG</strong>’s investment decision than those of <strong>AIG</strong>FP, at December 31, <strong>2007</strong> and 2006 were as<br />
process relies primarily on internally generated fundamental follows:<br />
analysis and internal risk ratings. Third party rating services’<br />
ratings and opinions provide one source of independent perspectives<br />
Rating <strong>2007</strong> 2006<br />
for consideration in the internal analysis. AAA 38% 37%<br />
A significant portion of the foreign fixed in<strong>com</strong>e portfolio is AA 28 26<br />
rated by Moody’s, S&P or similar foreign rating services. Rating<br />
A 18 20<br />
services are not available in all overseas locations. The Credit<br />
BBB 11 12<br />
Risk Committee (CRC) closely reviews the credit quality of the<br />
Below investment grade 4 4<br />
foreign portfolio’s non-rated fixed in<strong>com</strong>e investments. At December<br />
31, <strong>2007</strong>, approximately 19 percent of the foreign fixed<br />
Non-rated 1 1<br />
in<strong>com</strong>e investments were either rated AAA or, on the basis of Total 100% 100%<br />
<strong>AIG</strong>’s internal analysis, were equivalent from a credit standpoint to<br />
<strong>AIG</strong> <strong>2007</strong> Form 10-K 103