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ITEM 7 / INVESTMENTS.....................................................................................................................................................................................• We continued to make risk-weighted opportunistic investments in RMBS and other structured securities to improveyields and increase net investment income.• We purchased an aggregate of $7.1 billion of CDOs sold in the FRBNY auctions of ML III assets, and elected fairvalue option accounting treatment on those assets.• Blended investment yields on new AIG Life and Retirement investments were lower than blended rates oninvestments that were sold, matured or called. Base yields at AIG Property Casualty benefited from blended yieldson new investments that were higher than the yields on investments that were sold, matured or called.• A continued low interest rate environment and narrowing spreads in many fixed income asset classes contributedto unrealized gains in the investment portfolio.• Other-than-temporary-impairments on structured securities decreased from 2011.• We disposed of our remaining interest in AIA, and our position in ML III was liquidated.Credit Ratings..............................................................................................................................................................................................At December 31, 2012, approximately 88 percent of fixed maturity securities were held by our domestic entities.Approximately 17 percent of such securities were rated AAA by one or more of the principal rating agencies, andapproximately 15 percent were rated below investment grade or not rated. Our investment decision process reliesprimarily on internally generated fundamental analysis and internal risk ratings. Third-party rating services’ ratingsand opinions provide one source of independent perspective for consideration in the internal analysis.A significant portion of our foreign entities’ fixed maturity securities portfolio is rated by Moody’s, S&P or similarforeign rating services. Rating services are not available for some foreign issued securities. Our Credit RiskManagement department closely reviews the credit quality of the foreign portfolio’s non-rated fixed maturity securities.At December 31, 2012, approximately 18 percent of such investments were either rated AAA or, on the basis of ourinternal analysis, were equivalent from a credit standpoint to securities rated AAA, and approximately 3 percent wererated below investment grade or not rated at that date. Approximately 49 percent of the foreign entities’ fixed maturitysecurities portfolio is comprised of sovereign fixed maturity securities supporting policy liabilities in the country ofissuance.With respect to our fixed maturity investments, the credit ratings in the table below and in subsequent tables reflect:(a) a composite of the ratings of the three major rating agencies, or when agency ratings are not available, the ratingassigned by the National Association of Insurance Commissioners (NAIC) Securities Valuations Office (SVO) (over99 percent of total fixed maturity investments), or (b) our equivalent internal ratings when these investments have notbeen rated by any of the major rating agencies or the NAIC. The ‘‘Non-rated’’ category in those tables consists offixed maturity securities that have not been rated by any of the major rating agencies, the NAIC or us, and for 2011,represents primarily our interest in ML III at December 31, 2011.See Enterprise Risk Management herein for a discussion of credit risks associated with Investments...................................................................................................................................................................................................................................AIG 2012 Form 10-K 139
ITEM 7 / INVESTMENTS.....................................................................................................................................................................................The following table presents the composite AIG credit ratings of our fixed maturity securities calculated onthe basis of their fair value:Available for Sale Trading TotalDecember 31, December 31, December 31, December 31, December 31, December 31,2012 2011 2012 2011 2012 2011Rating:Other fixed maturitysecuritiesAAA 10% 13% 75% 89% 12% 15%AA 20 25 8 1 2024A 29 26 7 6 2826BBB 36 32 6 2 3531Below investment grade 5 4 3 2 44Non-rated – – 1 – 1–Total 100% 100% 100% 100% 100% 100%Mortgage backed, assetbacked andcollateralizedAAA 40% 48% 17% 19% 35% 41%AA 6 5 18 14 97A 10 9 6 8 99BBB 7 6 5 3 65Below investment grade 37 32 54 22 4129Non-rated – – – 34 –9Total 100% 100% 100% 100% 100% 100%TotalAAA 16% 19% 36% 41% 17% 21%AA 18 21 14 10 1720A 25 24 6 8 2422BBB 30 27 5 2 2825Below investment grade 11 9 38 16 1310Non-rated – – 1 23 12Total 100% 100% 100% 100% 100% 100%..................................................................................................................................................................................................................................140 AIG 2012 Form 10-K
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American International Group, Inc.2
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KEY FACTS & FIGURES52,000+ $65.7 bi
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■We said we would return to profi
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Financial HighlightsYears Ended Dec
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~63,000AIG EMPLOYEES AROUND THE WOR
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$115.1 millionAVERAGE CLAIMS PAID E
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$10,000MAXIMUM DONATION MADE BY AIG
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American International Group, Inc.F
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AMERICAN INTERNATIONAL GROUP, INC.A
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ITEM 1 / BUSINESS / AIG............
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ITEM 1 / BUSINESS / AIG............
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ITEM 1 / BUSINESS / AIG PROPERTY CA
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ITEM 1 / BUSINESS / AIG PROPERTY CA
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ITEM 1 / BUSINESS / AIG LIFE AND RE
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ITEM 1 / BUSINESS / OTHER OPERATION
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ITEM 1 / BUSINESS / OTHER OPERATION
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ITEM 1 / BUSINESS..................
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ITEM 1 / BUSINESS..................
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ITEM 1 / BUSINESS..................
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ITEM 1 / BUSINESS..................
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ITEM 1 / BUSINESS..................
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ITEM 1A / RISK FACTORS.............
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ITEM 1B / UNRESOLVED STAFF COMMENTS
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ITEM 5 / MARKET FOR REGISTRANT’S
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ITEM 6 / SELECTED FINANCIAL DATA...
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ITEM 6 / SELECTED FINANCIAL DATA...
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ITEM 7 / MANAGEMENT’S DISCUSSION
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ITEM 7 / USE OF NON-GAAP MEASURES..
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ITEM 7 / EXECUTIVE SUMMARY.........
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ITEM 7 / RESULTS OF OPERATIONS.....
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Page 105 and 106: ITEM 7 / RESULTS OF OPERATIONS.....
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ITEM 7 / CRITICAL ACCOUNTING ESTIMA
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ITEM 7 / GLOSSARY..................
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ITEM 7 / GLOSSARY..................
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ITEM 7A / QUANTITATIVE AND QUALITAT
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ITEM 8 / INDEX TO FINANCIAL STATEME
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AMERICAN INTERNATIONAL GROUP, INC.C
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ITEM 8 / NOTE 1. BASIS OF PRESENTAT
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ITEM 8 / NOTE 2. SUMMARY OF SIGNIFI
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ITEM 8 / NOTE 3. SEGMENT INFORMATIO
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ITEM 8 / NOTE 3. SEGMENT INFORMATIO
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ITEM 8 / NOTE 4. DIVESTED BUSINESSE
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ITEM 8 / NOTE 4. DIVESTED BUSINESSE
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ITEM 8 / NOTE 5. BUSINESS COMBINATI
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ITEM 8 / NOTE 6. FAIR VALUE MEASURE
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ITEM 8 / NOTE 7. INVESTMENTS.......
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ITEM 8 / NOTE 8. LENDING ACTIVITIES
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ITEM 8 / NOTE 9. REINSURANCE.......
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ITEM 8 / NOTE 10. DEFERRED POLICY A
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ITEM 8 / NOTE 10. DEFERRED POLICY A
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ITEM 8 / NOTE 11. VARIABLE INTEREST
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ITEM 8 / NOTE 11. VARIABLE INTEREST
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ITEM 8 / NOTE 12. DERIVATIVES AND H
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ITEM 8 / NOTE 13. LIABILITY FOR UNP
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ITEM 8 / NOTE 14. VARIABLE LIFE AND
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ITEM 8 / NOTE 15. DEBT OUTSTANDING.
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ITEM 8 / NOTE 15. DEBT OUTSTANDING.
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ITEM 8 / NOTE 16. CONTINGENCIES, CO
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ITEM 8 / NOTE 17. TOTAL EQUITY.....
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ITEM 8 / NOTE 18. NONCONTROLLING IN
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ITEM 8 / NOTE 19. EARNINGS (LOSS) P
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ITEM 8 / NOTE 20. STATUTORY FINANCI
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ITEM 8 / NOTE 21. SHARE-BASED COMPE
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ITEM 8 / NOTE 21. SHARE-BASED COMPE
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ITEM 8 / NOTE 22. EMPLOYEE BENEFITS
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ITEM 8 / NOTE 24. INCOME TAXES.....
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ITEM 8 / NOTE 26. QUARTERLY FINANCI
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ITEM 8 / NOTE 27. INFORMATION PROVI
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PART II............................
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PART IV............................
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SignatureTitle/s/ ARTHUR C. MARTINE
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ExhibitNumber Description Location(
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Condensed Financial Information of
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Condensed Financial Information of
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Notes to Condensed Financial Inform
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Supplementary Insurance Information
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Valuation and Qualifying AccountsFo
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Subsidiaries of RegistrantExhibit 2
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Percentageof VotingSecuritiesJurisd
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Percentageof VotingSecuritiesJurisd
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CONSENT OF INDEPENDENT REGISTERED P
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CERTIFICATIONSI, Robert H. Benmosch
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CERTIFICATIONExhibit 32In connectio
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SECURITIES REGISTERED PURSUANT TO S
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American International Group, Inc.1
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