2007 Annual Report - AIG.com

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American International Group, Inc. and Subsidiaries Notes to Consolidated Financial Statements Continued 2. Segment Information Continued (c) Represents the sum of General Insurance net premiums earned, Life Insurance & Retirement Services premiums and other considerations, net investment income, Financial Services interest, lease and finance charges, Asset Management investment income from spread-based products and management, advisory and incentive fees, and realized capital gains (losses). (d) In 2007, 2006 and 2005, includes other-than-temporary impairment charges of $4.7 billion, $944 million and $598 million, respectively. (e) Both revenues and operating income (loss) include an unrealized market valuation loss of $11.5 billion on AIGFP’s super senior credit default swap portfolio and an other-than-temporary impairment charge of $643 million on AIGFP’s available for sale investment securities reported in other income. (f) Includes settlement costs of $1.64 billion as described in Note 12(a) Litigation and Investigations herein. The following table summarizes AIG’s General Insurance operations by major internal reporting unit for the years ended December 31, 2007, 2006 and 2005: General Insurance Domestic Foreign Total Consolidation Total Brokerage Personal Mortgage General Reportable and General (in millions) Group Transatlantic Lines Guaranty Insurance Segment Eliminations Insurance 2007 Total revenues $ 27,653 $ 4,382 $4,924 $1,041 $13,715 $ 51,715 $ (7) $ 51,708 Losses & loss expenses incurred 15,948 2,638 3,660 1,493 6,243 29,982 — 29,982 Underwriting expenses 4,400 1,083 1,197 185 4,335 11,200 — 11,200 Operating income (loss) (a) 7,305 661 67 (637) 3,137 10,533 (7) 10,526 Depreciation expense 97 2 70 6 125 300 — 300 Capital expenditures 93 4 81 21 155 354 — 354 Year-end identifiable assets 112,675 15,484 5,930 4,550 48,728 187,367 (5,659) 181,708 2006 Total revenues (b) $ 27,419 $ 4,050 $4,871 $ 877 $11,999 $ 49,216 $ (10) $ 49,206 Losses & loss expenses incurred 16,779 2,463 3,306 349 5,155 28,052 — 28,052 Underwriting expenses 4,795 998 1,133 200 3,616 10,742 — 10,742 Operating income (a)(b) 5,845 589 432 328 3,228 10,422 (10) 10,412 Depreciation expense 100 2 52 5 115 274 — 274 Capital expenditures 125 2 94 11 143 375 — 375 Year-end identifiable assets 104,866 14,268 5,391 3,604 43,879 172,008 (5,004) 167,004 2005 Total revenues $ 25,171 $ 3,766 $4,848 $ 655 $10,719 $ 45,159 $ 15 $ 45,174 Losses & loss expenses incurred 21,466 2,877 3,566 139 5,043 33,091 — 33,091 Underwriting expenses 4,525 928 1,087 153 3,075 9,768 — 9,768 Operating income (loss) (a)(c) (820) (d) (39) 195 363 2,601 2,300 15 2,315 Depreciation expense 114 2 48 4 105 273 — 273 Capital expenditures 119 2 94 6 196 417 — 417 Year-end identifiable assets 95,829 12,365 5,245 3,165 39,044 155,648 (4,981) 150,667 (a) Catastrophe-related losses in 2007 and 2005 by reporting unit were as follows. There were no significant catastrophe-related losses in 2006. 2007 2005 Insurance Net Related Reinstatement Insurance Net Reinstatement (in millions) Losses Premium Cost Related Losses Premium Cost Reporting Unit: DBG $113 $ (13) $1,811 $136 Transatlantic 11 (1) 463 45 Personal Lines 61 14 112 2 Mortgage Guaranty — — 10 — Foreign General Insurance 90 1 229 80 Total $275 $ 1 $2,625 $263 (b) Includes the effect of out of period adjustments related to the accounting for certain interests in unit investment trusts (UCITS). For DBG, the effect was an increase of $66 million in both revenues and operating income and for Foreign General Insurance, the effect was an increase of $424 million in both revenues and operating income. (c) Includes the fourth quarter 2005 increase in net reserves of approximately $1.8 billion resulting from the annual review of General Insurance loss and loss adjustment reserves. (d) Includes $291 million of expenses related to changes in estimates for uncollectible reinsurance and other premium balances, and $100 million of accrued expenses in connection with certain workers compensation insurance policies written between 1985 and 1996. 150 AIG 2007 Form 10-K
American International Group, Inc. and Subsidiaries 2. Segment Information Continued The following table summarizes AIG’s Life Insurance & Retirement Services operations by major internal reporting unit for the years ended December 31, 2007, 2006 and 2005: Life Insurance & Retirement Services Total Life Domestic Domestic Total Consolidation Insurance & Japan Life Retirement Reportable and Retirement (in millions) and Other Asia Insurance Services Segment Eliminations Services 2007 Total revenues (a)(b) : Insurance-oriented products $ 14,393 $ 19,896 $ 8,535 $ — $ 42,824 $ — $ 42,824 Retirement savings products 3,783 191 493 6,279 10,746 — 10,746 Total revenues 18,176 20,087 9,028 6,279 53,570 — 53,570 Operating income (a)(b) 3,044 3,153 642 1,347 8,186 — 8,186 Depreciation expense 110 84 85 113 392 — 392 Capital expenditures 166 232 53 81 532 — 532 Year-end identifiable assets 177,413 132,521 108,908 203,441 622,283 (6,897) 615,386 2006 Total revenues (a)(c) : Insurance-oriented products $ 13,310 $ 17,712 $ 8,538 $ — $ 39,560 $ — $ 39,560 Retirement savings products 3,441 168 568 7,141 11,318 — 11,318 Total revenues 16,751 17,880 9,106 7,141 50,878 — 50,878 Operating income (a)(c) 3,821 3,060 917 2,323 10,121 — 10,121 Depreciation expense 101 70 63 34 268 — 268 Capital expenditures 342 260 71 38 711 — 711 Year-end identifiable assets 152,409 108,850 103,624 192,885 557,768 (6,811) 550,957 2005 Total revenues (a) : Insurance-oriented products $ 12,524 $ 15,853 $ 8,525 $ — $ 36,902 $ — $ 36,902 Retirement savings products 3,413 129 690 6,886 11,118 — 11,118 Total revenues 15,937 15,982 9,215 6,886 48,020 — 48,020 Operating income (a) 3,020 2,286 1,495 2,164 8,965 — 8,965 Depreciation expense 91 81 65 31 268 — 268 Capital expenditures 153 340 71 26 590 — 590 Year-end identifiable assets 124,524 87,491 99,594 185,383 496,992 (7,661) 489,331 (a) In 2007, 2006 and 2005, includes other-than-temporary impairment charges of $2.8 billion, $641 million and $425 million, respectively. (b) Includes a positive out-of-period adjustment of $158 million related to foreign exchange remediation activities. (c) Includes the effect of out-of-period adjustments related to the accounting for UCITS in 2006, which increased revenues by $240 million and operating income by $169 million. AIG 2007 Form 10-K 151
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AMERICAN INTERNATIONAL GROUP, INC.
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FINANCIAL HIGHLIGHTS (in millions,
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overall financial condition, althou
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Group Executive Committee We are ad
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AIG’s life insurance network is t
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We have also begun to address the e
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WHAT WE SEE The ability to see and
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The Major Accounts Practice within
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Around the world, the middle class
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WE SEE GROWTH OPPORTUNITIES IN EMER
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To grow the strength of the AIG glo
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Since 2003, the AIG Disaster Relief
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RESPECT Respect encompasses how we
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Life Insurance & Retirement Service
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Domestic Brokerage Group— Gross P
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In the summer of 2007, widespread f
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in gross premiums written. It launc
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It grew new business premiums from
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emerging markets for its services,
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ILFC—Revenues by Region Total = $
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AIG Investments acquired a 94 perce
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and changing interest rates, as wel
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American International Group, Inc.
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UNITED STATES SECURITIES AND EXCHAN
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Page 153 and 154: American International Group, Inc.
Page 191 and 192: Index of Notes to Consolidated Fina
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SHAREHOLDER INFORMATION Corporate H
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2007 Annual Report - AIG.com

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