Glossary and Acronyms of Selected Insurance Terms and References
Throughout this Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A), we use certain terms and abbreviations, which are summarized in the Glossary and Acronyms.American International Group, Inc. (AIG) has incorporated into this discussion a number of cross-references to additional information included throughout this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year endedDecember 31, 2020 (the 2020 Annual Report) to assist readers seeking additional information related to a particular subject. In this Quarterly Report on Form 10-Q, unless otherwise mentioned or unless the context indicates otherwise, we use the terms "AIG," "we," "us" and "our" to refer toAmerican International Group, Inc. , aDelaware corporation, and its consolidated subsidiaries. We use the term "AIG Parent" to refer solely toAmerican International Group, Inc. , and not to any of its consolidated subsidiaries.
Cautionary Statement Regarding Forward-Looking Information
This Quarterly Report on Form 10-Q and other publicly available documents may include, and officers and representatives of AIG may from time to time make and discuss, projections, goals, assumptions and statements that may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These projections, goals, assumptions and statements are not historical facts but instead represent only a belief regarding future events, many of which, by their nature, are inherently uncertain and outside AIG's control. These projections, goals, assumptions and statements include statements preceded by, followed by or including words such as "will," "believe," "anticipate," "expect," "intend," "plan," "focused on achieving," "view," "target," "goal" or "estimate." These projections, goals, assumptions and statements may relate to future actions, prospective services or products, future performance or results of current and anticipated services or products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, anticipated organizational, business or regulatory changes, the effect of catastrophes, such as the COVID-19 crisis, and macroeconomic events, anticipated dispositions, monetization and/or acquisitions of businesses or assets, or successful integration of acquired businesses, management succession and retention plans, exposure to risk, trends in operations and financial results.
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TABLE OF CONTENTS It is possible that AIG's actual results and financial condition will differ, possibly materially, from the results and financial condition indicated in these projections, goals, assumptions and statements. Factors that could cause AIG's actual results to differ, possibly materially, from those in the specific projections, goals, assumptions and statements include: ?AIG's ability to successfully separate ?changes to the valuation of AIG's the Life and Retirement business from investments; AIG and the impact any separation may ?changes in judgments concerning the have on AIG, its businesses, employees, recognition of deferred tax assets and contracts and customers; the impairment of goodwill;
?AIG's ability to close the transactions ?availability and affordability of
announced as part of a strategic reinsurance;
partnership with
?the effectiveness of our risk ?changes in market and industry management policies and procedures, conditions, including the significant including with respect to our business global economic downturn, volatility in continuity and disaster recovery plans; financial and capital markets, ?nonperformance or defaults by fluctuations in interest rates, counterparties, including Fortitude prolonged economic recovery andReinsurance Company Ltd. (Fortitude Re); disruptions to AIG's operations driven ?changes in judgments concerning by COVID-19 and responses thereto, potential cost-saving opportunities; including new or changed governmental ?concentrations in AIG's investment policy and regulatory actions; portfolios; ?the occurrence of catastrophic events, ?changes to our sources of or access to both natural and man-made, including liquidity; COVID-19, other pandemics, civil unrest ?changes in judgments or assumptions and the effects of climate change; concerning insurance underwriting and ?the adverse impact of COVID-19, insurance liabilities; including with respect to AIG's ?the effectiveness of strategies to business, financial condition and recruit and retain key personnel and to results of operations; implement effective succession
plans;
?AIG's ability to effectively execute on ?the requirements, which may change from AIG 200 transformational programs time to time, of the global regulatory designed to achieve underwriting framework to which AIG is subject; excellence, modernization of AIG's ?significant legal, regulatory or operating infrastructure, enhanced user governmental proceedings; and and customer experiences and unification ?such other factors discussed in: of AIG; -Part I, Item 2. MD&A of this
Quarterly
?the impact of potential information Report on Form 10-Q; technology, cybersecurity or data -Part I, Item 2. MD&A of the Quarterly security breaches, including as a result Report on Form 10-Q for the quarterly of cyber-attacks or security period endedMarch 31, 2021 ; and vulnerabilities, the likelihood of which -Part I, Item 1A. Risk Factors and Part may increase due to extended remote II, Item 7. MD&A of the 2020 Annual business operations as a result of Report. COVID-19; ?disruptions in the availability of AIG's electronic data systems or those of third parties; ?actions by rating agencies with respect to our credit and financial strength ratings; ?AIG's ability to successfully dispose of, monetize and/or acquire businesses or assets or successfully integrate acquired businesses; We are not under any obligation (and expressly disclaim any obligation) to update or alter any projections, goals, assumptions or other statements, whether written or oral, that may be made from time to time, whether as a result of new information, future events or otherwise. AIG | Second Quarter 2021 Form 10-Q 77
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TABLE OF CONTENTS INDEX TO ITEM 2 Page Use of Non-GAAP Measures 79 Critical Accounting Estimates 81 Executive Summary 82 Overview 82 AIG's Operating Structure 84 Financial Performance Summary
85
AIG's Outlook - Industry and Economic Factors
90
Consolidated Results of Operations
94
Business Segment Operations 101General Insurance 102 Life and Retirement 114 Other Operations 133 Investments 135 Overview 135 Investment Highlights in the Six Months EndedJune 30, 2021 135 Investment Strategies 136 Credit Ratings 138 Insurance Reserves 146 Loss Reserves 146
Life and Annuity Future Policy Benefits, Policyholder Contract Deposits and DAC
151
Liquidity and Capital Resources
157
Overview
157
Analysis of Sources and Uses of Cash
159
Liquidity and Capital Resources of AIG Parent and Subsidiaries 160 Credit Facilities 162 Contractual Obligations 162 Off-Balance Sheet Arrangements and Commercial Commitments 162 Debt 163 Credit Ratings 165 Financial Strength Ratings 165 Rating Agency Actions Related to the Announced Separation of Life and Retirement 166 Regulation and Supervision 166 Dividends 166 Repurchases of AIG Common Stock 167 Dividend Restrictions 167 Enterprise Risk Management 167 Overview 167 Regulatory Environment 168 Overview 168 Glossary 169 Acronyms 172
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TABLE OF CONTENTS ITEM 2 | Use of Non-GAAP Measures 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" underSecurities and Exchange Commission (SEC) rules and regulations. GAAP is the acronym for "generally accepted accounting principles" inthe United States . The non-GAAP financial measures we present may not be comparable to similarly-named measures reported by other companies. Book value per common share, excluding accumulated other comprehensive income (AOCI) adjusted for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets and deferred tax assets (DTA) (Adjusted book value per common share) is used to show the amount of our net worth on a per-common share basis after eliminating items that can fluctuate significantly from period to period including changes in fair value of AIG's available for sale securities portfolio, foreign currency translation adjustments andU.S. tax attribute deferred tax assets. This measure also eliminates the asymmetrical impact resulting from changes in fair value of our available for sale securities portfolio wherein there is largely no offsetting impact for certain related insurance liabilities. 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 post deconsolidation of Fortitude Re (Fortitude Re funds withheld assets) since these fair value movements are economically transferred to Fortitude Re. We exclude deferred tax assets representingU.S. tax attributes related to net operating loss carryforwards and foreign tax credits as they have not yet been utilized. Amounts for interim periods are estimates based on projections of full-year attribute utilization. As net operating loss carryforwards and foreign tax credits are utilized, the portion of the DTA utilized is included in these book value per common share metrics. Adjusted book value per common share is derived by dividing total AIG common shareholders' equity, excluding AOCI adjusted for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets, and DTA (Adjusted Common Shareholders' Equity), by total common shares outstanding. The reconciliation to book value per common share, the most comparable GAAP measure, is presented in the Executive Summary section of this MD&A. Return on common equity - Adjusted after-tax income excluding AOCI adjusted for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets and DTA (Adjusted return on common equity) is used to show the rate of return on common shareholders' equity. We believe this measure is useful to investors because it eliminates items that can fluctuate significantly from period to period, including changes in fair value of our available for sale securities portfolio, foreign currency translation adjustments andU.S. tax attribute deferred tax assets. This measure also eliminates the asymmetrical impact resulting from changes in fair value of our available for sale securities portfolio wherein there is largely no offsetting impact for certain related insurance liabilities. In addition, we adjust for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets since these fair value movements are economically transferred to Fortitude Re. We exclude deferred tax assets representingU.S. tax attributes related to net operating loss carryforwards and foreign tax credits as they have not yet been utilized. Amounts for interim periods are estimates based on projections of full-year attribute utilization. As net operating loss carryforwards and foreign tax credits are utilized, the portion of the DTA utilized is included in Adjusted return on common equity. Adjusted return on common equity is derived by dividing actual or annualized adjusted after-tax income attributable to AIG common shareholders by average Adjusted Common Shareholders' Equity. The reconciliation to return on common equity, the most comparable GAAP measure, is presented in the Executive Summary section of this MD&A. Adjusted after-tax income attributable to AIG common shareholders is derived by excluding the tax effected adjusted pre-tax income (APTI) adjustments described below, dividends on preferred stock, 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 (the Tax Act);
and by excluding the net realized gains (losses) and other charges from noncontrolling interests.
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 business 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. AIG | Second Quarter 2021 Form 10-Q 79
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TABLE OF CONTENTS ITEM 2 | Use of Non-GAAP Measures Adjusted revenues exclude Net realized gains (losses), income from non-operating litigation settlements (included in Other income for GAAP purposes) and changes in fair value of securities used to hedge guaranteed living benefits (included in Net investment income for GAAP purposes). Adjusted revenues is a GAAP measure for our segments. Adjusted pre-tax income is derived by excluding the items set forth below from income from continuing operations before income tax. This definition is consistent across our segments. These items generally fall into one or more of the following broad categories: legacy matters having no relevance to our current businesses or operating performance; adjustments to enhance transparency to the underlying economics of transactions; and measures that we believe to be common to the industry. APTI is a GAAP measure for our segments. Excluded items include the following:
?changes in fair value of securities ?income or loss from discontinued used to hedge guaranteed living operations; benefits;
?net loss reserve discount benefit ?changes in benefit reserves and (charge); deferred policy acquisition costs (DAC), ?pension expense related to a one-time value of business acquired (VOBA), and lump sum payment to former employees; sales inducement assets (SIA) related to ?income and loss from divested net realized gains and losses; businesses;
?changes in the fair value of equity ?non-operating litigation reserves and securities;
settlements;
?net investment income on Fortitude Re ?restructuring and other costs related funds withheld assets;
to initiatives designed to reduce ?following deconsolidation of Fortitude operating expenses, improve efficiency Re, net realized gains and losses on and simplify our organization; Fortitude Re funds withheld assets; ?the portion of favorable or unfavorable ?loss (gain) on extinguishment of debt; prior year reserve development for which ?all net realized gains and losses we have ceded the risk under retroactive except earned income (periodic reinsurance agreements and related settlements and changes in settlement changes in amortization of the deferred accruals) on derivative instruments used gain; for non-qualifying (economic) hedging or ?integration and transaction costs for asset replication. Earned income on associated with acquiring or divesting such economic hedges is reclassified businesses; from net realized gains and losses to ?losses from the impairment of goodwill; specific APTI line items based on the and economic risk being hedged (e.g. net ?non-recurring costs associated with the investment income and interest credited implementation of non-ordinary course to policyholder account balances); legal or regulatory changes or changes to accounting principles. ?General Insurance -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 forGeneral 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. -Accident year loss and accident year combined ratios, as adjusted: 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 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. 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.
?Life and Retirement
-Premiums and deposits: includes direct and assumed amounts received and earned on traditional life insurance policies, group benefit policies and life-contingent payout annuities, as well as deposits received on universal life, investment-type annuity contracts,Federal Home Loan Bank (FHLB) funding agreements and mutual funds.
Results from discontinued operations are excluded from all of these measures.
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TABLE OF CONTENTS ITEM 2 | Critical Accounting Estimates 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; ?valuation of future policy benefit liabilities and timing and extent of loss recognition; ?valuation of liabilities for guaranteed benefit features of variable annuity products; ?valuation of embedded derivatives for fixed index annuity and life products; ?estimated gross profits to value deferred acquisition costs for investment-oriented products, for example universal life, variable and fixed annuities, and fixed indexed annuities; ?reinsurance assets, including the allowance for credit losses; ?goodwill impairment; ?allowances for credit losses primarily on loans and available for sale fixed maturity securities; ?liability for legal contingencies; ?fair value measurements of certain financial assets and liabilities; and ?income tax assets and liabilities, including recoverability of our net deferred tax asset and the predictability of future tax operating profitability of the character necessary to realize the net deferred tax asset.
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.
For a complete discussion of our critical accounting estimates, see Part II, Item 7. MD&A - Critical Accounting Estimates in the 2020 Annual Report.
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TABLE OF CONTENTS ITEM 2 | Executive Summary 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 Quarterly Report on Form 10-Q, together with the 2020 Annual Report, in their entirety for a more detailed description of events, trends, uncertainties, risks and critical accounting estimates affecting us.
Separation of Life and
OnOctober 26, 2020 , AIG announced its intention to separate its Life and Retirement business from AIG. OnJuly 14, 2021 ,AIG and The Blackstone Group Inc. (Blackstone ) announced that they have reached a definitive agreement forBlackstone to acquire a 9.9 percent equity stake inSAFG Retirement Services, Inc. (SAFG), which is the holding company for AIG's Life and Retirement business, for$2.2 billion in an all cash transaction, subject to adjustment if the final pro forma adjusted book value is greater or lesser than the target pro forma adjusted book value. The transaction contemplates that most of AIG's investment operations would be transferred to SAFG or its subsidiaries as part of the separation. As part of this agreement, AIG also agreed to enter into a long-term strategic asset management relationship withBlackstone to manage an initial$50 billion of Life and Retirement's existing investment portfolio upon closing of the equity investment, with that amount increasing by increments of$8.5 billion per year for the next five years beginning in the third or fourth quarter of 2022, for an aggregate of$92.5 billion . Following the closing of the transaction,Blackstone will be entitled to designate one member of the board of directors of the Life and Retirement holding company, which will consist of 11 directors. Pursuant to the definitive agreement,Blackstone will be required to hold its ownership interest in SAFG following the completion of the separation of the Life and Retirement business, subject to exceptions permittingBlackstone to sell 25%, 67% and 75% of its shares after the first, second and third anniversaries, respectively, of the initial public offering of SAFG (the IPO), with the transfer restrictions terminating in full on the fifth anniversary of the IPO. In the event that the IPO of SAFG is not completed prior to the second anniversary of the closing of the transaction,Blackstone will have the right to require AIG to undertake the IPO, and in the event that the IPO has not been completed prior to the third anniversary of the closing,Blackstone will have the right to exchange all or a portion of its ownership interest in SAFG for shares of AIG's common stock on the terms set forth in the definitive agreement. These transactions are subject to customary closing conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the HSR Act), and are expected to close in the third quarter of 2021. While we currently believe the IPO is the next step in the separation of the Life and Retirement business from AIG, no assurance can be given regarding the form that future separation transactions may take or the specific terms or timing thereof, or that a separation will in fact occur. Any separation transaction will be subject to the satisfaction of various conditions and approvals, including approval by the AIG Board of Directors, receipt of insurance and other required regulatory approvals, and satisfaction of any applicable requirements of theSEC . OnJuly 14, 2021 ,AIG and Blackstone Real Estate Income Trust (BREIT), a long-term, perpetual capital vehicle affiliated withBlackstone , announced that they have reached a definitive agreement for BREIT to acquire AIG's interests in aU.S. affordable housing portfolio for approximately$5.1 billion , subject to certain adjustments, in an all cash transaction. This transaction is subject to customary closing conditions and is expected to close in the fourth quarter of 2021. Debt Cash Tender Offers In the second quarter of 2021, we repurchased, through cash tender offers, and canceled approximately$254 million aggregate principal amount of certain notes and debentures issued or guaranteed by AIG for an aggregate purchase price of approximately$359 million and wrote off$4 million of unamortized debt issuance costs, resulting in a total loss on extinguishment of debt of approximately$109 million .
Sale of Certain AIG Life and Retirement Retail Mutual Funds Business
OnFebruary 8, 2021 , AIG announced the execution of a definitive agreement with Touchstone Investments (Touchstone), an indirect wholly-owned subsidiary ofWestern & Southern Financial Group , to sell certain assets ofAIG Life and Retirement's Retail Mutual Funds business. As ofJune 30, 2021 ,AIG Life and Retirement's Retail Mutual Funds business managed$7.1 billion in assets across eighteen funds. The transaction closed onJuly 16, 2021 at which time we received initial proceeds, and twelve retail mutual funds managed bySunAmerica Asset Management, LLC (SAAMCo), a member ofAIG Life and Retirement, with$6.8 billion in assets, were reorganized into Touchstone funds. Additional proceeds may be earned over a three-year period based on asset levels in certain reorganized funds. Six retail mutual funds managed by SAAMCo and not included in the transaction were liquidated.AIG Life and Retirement will retain its fund management platform and capabilities dedicated to its variable insurance products.
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TABLE OF CONTENTS ITEM 2 | Executive Summary Sale ofFortitude Holdings OnJune 2, 2020 , we completed the sale of a majority of the interests inFortitude Group Holdings, LLC (Fortitude Holdings ) toCarlyle FRL, L.P. (Carlyle FRL), an investment fund advised by an affiliate of The Carlyle Group Inc. (Carlyle), andT&D United Capital Co., Ltd. (T&D), a subsidiary of T&D Holdings, Inc., under the terms of a membership interest purchase agreement entered into onNovember 25, 2019 by and among AIG,Fortitude Holdings , Carlyle FRL, Carlyle,T&D and T&D Holdings, Inc. (the Majority Interest Fortitude Sale). AIG established Fortitude Re, a wholly owned subsidiary ofFortitude Holdings , in 2018 in a series of reinsurance transactions related to AIG's Run-Off portfolio. As ofJune 30, 2021 , approximately$30.1 billion of reserves from AIG's Life and Retirement Run-Off Lines and approximately$4.0 billion of reserves from AIG's General Insurance Run-Off Lines, related to business written by multiple wholly-owned AIG subsidiaries, had been ceded to Fortitude Re under these reinsurance transactions. As of closing of the Majority Interest Fortitude Sale, these reinsurance transactions are no longer considered affiliated transactions and Fortitude Re is the reinsurer of the majority of AIG's Run-Off operations. As these reinsurance transactions are structured as modified coinsurance and loss portfolio transfers with funds withheld, following the closing of the Majority Interest Fortitude Sale, AIG continues to reflect the invested assets, which consist mostly of available for sale securities, supporting Fortitude Re's obligations, in AIG's financial statements. AIG sold a 19.9 percent ownership interest inFortitude Holdings toTC Group Cayman Investments Holdings, L.P. , an affiliate of Carlyle, inNovember 2018 . As a result of completion of the Majority Interest Fortitude Sale, Carlyle FRL purchased from AIG a 51.6 percent ownership interest inFortitude Holdings and T&D purchased from AIG a 25 percent ownership interest inFortitude Holdings ; AIG retained a 3.5 percent ownership interest inFortitude Holdings and one seat on itsBoard of Managers . The$2.2 billion of proceeds received by AIG at closing included (i) the$1.8 billion under the Majority Interest Fortitude Sale, subject to a post-closing purchase price adjustment pursuant to which AIG would pay Fortitude Re for certain adverse development in property casualty related reserves, based on an agreed methodology, that may occur throughDecember 31, 2023 , up to a maximum payment of$500 million ; and (ii) a$383 million purchase price adjustment from Carlyle FRL and T&D, corresponding to their respective portions of a proposed$500 million non-pro rata distribution fromFortitude Holdings that was not received by AIG prior to the closing. Effective in the second quarter of 2021, AIG,Fortitude Holdings , Carlyle FRL, T&D and Carlyle amended the purchase agreement to finalize the post-closing purchase price adjustment for adverse reserve development. As a result of this amendment, during the three months endedJune 30, 2021 , AIG recorded a$21 million benefit through Policyholder benefits and losses incurred and eliminated further net exposure to adverse development on the reserves ceded to Fortitude Re.
For further discussion on the sale of
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TABLE OF CONTENTS ITEM 2 | Executive Summary AIG'S OPERATING STRUCTURE AIG reports the results of its businesses through three segments -General Insurance , Life and Retirement and Other Operations.General Insurance consists of two operating segments -North America and International. Life and Retirement consists of four operating segments - Individual Retirement, Group Retirement, Life Insurance and Institutional Markets. Other Operations is primarily comprised of corporate, our institutional asset management business and consolidation and eliminations. OnOctober 26, 2020 , AIG announced its intention to separate its Life and Retirement business from AIG. Consistent with how we manage our business, ourGeneral Insurance North America operating segment primarily includes insurance businesses inthe United States ,Canada andBermuda , and our global reinsurance business, AIG Re. OurGeneral Insurance International operating segment includes regional insurance businesses inJapan , theUnited Kingdom ,Europe ,Middle East andAfrica (EMEA region),Asia Pacific ,Latin America andCaribbean , andChina . International also includes the results ofTalbot Holdings, Ltd. as well as AIG's global specialty business.
For further discussion on our business segments see Note 3 to the Condensed Consolidated Financial Statements, and for further discussion on the separation of Life and Retirement see Note 1 to the Condensed Consolidated Financial Statements.
Business SegmentsGeneral Insurance Life and Retirement
provider of insurance products and that brings together a broad portfolio of
services for commercial and life insurance, retirement and
personal insurance customers. It institutional products offered through an
includes one of the world's most extensive, multichannel distribution
far-reaching property casualty network. It holds long-standing, leading
networks.
a broad range of products to serves in the
customers through a diversified, position, customer-focused service, breadth
multichannel distribution network. of product expertise and deep distribution
Customers value
strong capital position, extensive Life and Retirement is well positioned to
risk management and claims serve growing market needs. experience and its ability to be a market leader in critical lines of the insurance business. [[Image Removed: Picture [[Image Removed: Picture 1]][[Image Removed: Picture 2]] 3]][[Image Removed: Picture 4]][[Image Removed: Picture 5]][[Image Removed: Picture 6]]
following major operating major operating companies: American
General
companies: National Union Fire
Pa. (
(Lexington);AIG General Insurance Company, Ltd. (AIG Sonpo);AIG Asia Pacific Insurance, Pte, Ltd. ;AIG Europe S.A. ;American International Group UK Ltd. ;Validus Reinsurance, Ltd. (Validus Re);Talbot Holdings Ltd. (Talbot );Western World Insurance Group, Inc. andGlatfelter Insurance Group (Glatfelter). Other Operations
Other Operations primarily consists of income from assets held by AIG Parent
and other corporate subsidiaries, deferred tax assets related to tax
attributes, corporate expenses and intercompany eliminations, our institutional
asset management business and results of our consolidated investment entities,
our legacy insurance lines ceded to Fortitude Re.
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TABLE OF CONTENTS ITEM 2 | Executive Summary
Financial Performance Summary
Net Income (Loss) Attributable to AIG Common Shareholders Three Months EndedJune 30 , (in millions) 2021 and 2020 Quarterly Comparison [[Image Removed: Chart 3]] Net income attributable to AIG Common Shareholders increased$8.0 billion due to the following, on a pre-tax basis: ?the recognition of an$8.4 billion loss on the closing of the Majority Interest Fortitude Sale in 2020; ?$406 million lower net realized losses, as lower derivative losses on variable annuity embedded derivatives, net of related hedges ($957 million ) and other derivative and hedge activity ($318 million ) were offset by a larger mark-to-market net realized loss on the Fortitude Re embedded derivative ($1.2 billion), with remaining impacts driven primarily by other changes in realized gains across our investment portfolio; ?$309 million higher returns in our investment portfolio due primarily to Private Equity income compared to losses in the prior year period, partially offset by lower gains on fair value option bonds; ?General Insurance loss ratio improvement of 11.3 points primarily driven by change in business mix along with strong rate improvement, focused risk selection, improved terms and conditions and significantly lower catastrophe losses (9.8 points or$556 million); and ?General Insurance expense ratio improvement of 2.2 points primarily driven by change in business mix, ongoing expense discipline and a higher premium base. These pre-tax increases were partially offset by$1.9 billion higher income tax expense with$1.7 billion attributable to the tax benefit on the deconsolidation ofFortitude Holdings in 2020. For further discussion see Consolidated Results of Operations. AIG | Second Quarter 2021 Form 10-Q 85
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TABLE OF CONTENTS ITEM 2 | Executive Summary Net Income (Loss) Attributable to AIG Common Shareholders Six Months EndedJune 30 , (in millions) 2021 and 2020 Year-to-Date Comparison [[Image Removed: Chart 4]] Net income attributable to AIG Common Shareholders increased$10.2 billion due to the following, on a pre-tax basis: ?the recognition of an$8.4 billion loss on the closing of the Majority Interest Fortitude Sale in 2020; ?$1.5 billion higher returns in our investment portfolio due primarily to higher income on our alternative investments and fair value option equity securities gains, which was driven primarily by positive returns achieved in equity markets. This compares to the prior year where we experienced losses on our alternative investments and fair value option equity securities, which were driven by the equity market downturn associated with the onset of the COVID-19 pandemic, partially offset by declines in fair value option and available for sale bonds; ?$137 million higher net realized gains, due to the favorable change in net realized gains on the Fortitude Re embedded derivative mark-to-market ($1.2 billion ), a reduction in the allowance for credit losses on fixed maturity securities ($296 million ) and other favorable changes in realized gains across our investment portfolio, largely offset by lower derivative gains on variable annuity embedded derivatives, net of related hedges ($1.1 billion) and other derivative and hedge activity ($1.0 billion ); ?General Insurance loss ratio improvement of 6.2 points primarily driven by change in business mix along with strong rate improvement, focused risk selection, improved terms and conditions and significantly lower catastrophe losses (4.7 points or$542 million); and ?General Insurance expense ratio improvement of 2.0 points primarily due to change in business mix, ongoing expense discipline and a higher premium base. These pre-tax increases were partially offset by$1.8 billion higher income tax expense with$1.7 billion attributable to the tax benefit on the deconsolidation ofFortitude Holdings in 2020. For further discussion see Consolidated Results of Operations.
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TABLE OF CONTENTS ITEM 2 | Executive Summary Adjusted Pre-Tax Income* Three Months EndedJune 30 , (in millions) 2021 and 2020 Quarterly Comparison [[Image Removed: Chart 4]] Adjusted pre-tax income increased$917 million primarily due to: ?General Insurance loss ratio improvement of 11.3 points primarily driven by change in business mix along with strong rate improvement, focused risk selection, improved terms and conditions and significantly lower catastrophe losses (9.8 points or$556 million ); and ?General Insurance expense ratio improvement of 2.2 points primarily driven by change in business mix, ongoing expense discipline and a higher premium base. Adjusted Pre-Tax Income* Six Months EndedJune 30 , (in millions) 2021 and 2020 Year-to-Date Comparison [[Image Removed: Chart 4]] Adjusted pre-tax income increased$2.0 billion primarily due to: ?$476 million higher returns in our investment portfolio due primarily to higher income on our alternative investments, which was driven by positive returns achieved in equity markets. This compares to the prior year where we experienced losses on our alternative investments due to the equity market downturn associated with the onset of the COVID-19 pandemic; ?General Insurance loss ratio improvement of 6.2 points primarily driven by change in business mix along with strong rate improvement, focused risk selection, improved terms and conditions and significantly lower catastrophe losses (4.7 points or$542 million ); and ?General Insurance expense ratio improvement of 2.0 points primarily due to change in business mix, ongoing expense discipline and a higher premium base.
*Non-GAAP measure - for reconciliation of Non-GAAP to GAAP measures see Consolidated Results of Operations.
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TABLE OF CONTENTS ITEM 2 | Executive Summary General Operating and Other Expenses Three Months EndedJune 30 , (in millions) 2021 and 2020 Quarterly Comparison [[Image Removed: Chart 1]] General operating and other expenses increased$131 million primarily due to increases in performance-based employee costs ($73 million ) and transaction costs ($31 million ) partially offset by decreases in restructuring and other costs. General operating and other expenses in the three-month periods endedJune 30, 2021 and 2020 included approximately$126 million and$134 million of pre-tax restructuring and other costs, respectively, which were primarily comprised of employee severance charges and other costs related to organizational simplification, operational efficiency, and business rationalization. General Operating and Other Expenses Six Months EndedJune 30 , (in millions) 2021 and 2020 Year-to-Date Comparison [[Image Removed: Chart 1]] General operating and other expenses increased$66 million primarily due to increases in performance-based employee costs ($73 million ). General operating and other expenses in the six-month periods endedJune 30, 2021 and 2020 included approximately$200 million and$224 million of pre-tax restructuring and other costs, respectively, which were primarily comprised of employee severance charges and other costs related to organizational simplification, operational efficiency, and business rationalization.
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TABLE OF CONTENTS ITEM 2 | Executive Summary Return on Common Equity Return on Common Equity [[Image Removed: Chart 1]] [[Image Removed: Chart 3]]
Adjusted Return on Common Equity* Adjusted Return on Common Equity* [[Image Removed: Chart 1]] [[Image Removed: Chart 1]]
*Non-GAAP measure - for reconciliation of Non-GAAP to GAAP measures see Consolidated Results of Operations.
Book Value Per Common Share Adjusted Book Value Per Common Share* [[Image Removed: Chart 1]] [[Image Removed: Chart 1]]
*Non-GAAP measure - for reconciliation of Non-GAAP to GAAP measures see Consolidated Results of Operations.
AIG | Second Quarter 2021 Form 10-Q 89
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TABLE OF CONTENTS ITEM 2 | Executive Summary
AIG's Outlook - Industry and economic factors
Our business is affected by industry and economic factors such as interest rates, currency exchange rates, credit and equity market conditions, catastrophic claims events, regulation, tax policy, competition, and general economic, market and political conditions. We continued to operate under challenging market conditions in the first six months of 2021, characterized by factors such as the impact of COVID-19 and the related governmental and societal responses, interest rate volatility, inflationary pressures, an uneven global economic recovery, global trade tensions and Brexit. Brexit has also affected theU.S. dollar/British pound exchange rate and increased the volatility of exchange rates among the Euro, British pound and the Japanese yen (the Major Currencies), which may continue for some time. OnOctober 26, 2020 , AIG announced its intention to separate its Life and Retirement business from AIG. OnJuly 14, 2021 , AIG andBlackstone announced that they have reached a definitive agreement forBlackstone to acquire a 9.9 percent equity stake in SAFG, which is the holding company for AIG's Life and Retirement business, for$2.2 billion in an all cash transaction, subject to adjustment if the final pro forma adjusted book value is greater or lesser than the target pro forma adjusted book value. The transaction contemplates that most of AIG's investment operations would be transferred to SAFG or its subsidiaries as part of the separation. As part of this agreement, AIG also agreed to enter into a long-term strategic asset management relationship withBlackstone to manage an initial$50 billion of Life and Retirement's existing investment portfolio upon closing of the equity investment, with that amount increasing by increments of$8.5 billion per year for the next five years beginning in the third or fourth quarter of 2022, for an aggregate of$92.5 billion . These transactions are subject to customary closing conditions, including the expiration or termination of the waiting period under the HSR Act, and are expected to close in the third quarter of 2021. While we currently believe an initial public offering is the next step in the separation of the Life and Retirement business from AIG, no assurance can be given regarding the form that a separation transaction may take or the specific terms or timing thereof, or that a separation will in fact occur. Any separation transaction will be subject to the satisfaction of various conditions and approvals, including approval by the AIG Board of Directors, receipt of insurance and other required regulatory approvals, and satisfaction of any applicable requirements of theSEC .
On
For additional information on the separation of AIG's Life and Retirement business, please see the 2020 Annual Report, Part I, Item 1A. Risk Factors - Business and Operations - No assurances can be given that the separation of our Life and Retirement business will occur or as to the specific terms or timing thereof. In addition, the separation could cause the emergence or exacerbate the effects of other risks to which AIG is exposed and Executive Summary - Overview.
Impact of COVID-19
We are continually assessing the impact on our business, operations and investments of COVID-19 and the resulting ongoing economic and societal disruption. These impacts initially included a global economic contraction, disruptions in financial markets, increased market volatility and declines in certain equity and other asset prices that had negative effects on our investments, our access to liquidity, our ability to generate new sales and the costs associated with claims. While many of the major global economies continue to recover and global financial markets appear to have largely stabilized, there remains a risk that the disruptions previously experienced could return as COVID-19 persists or new variants arise. In addition, in response to the crisis, new governmental, legislative and regulatory actions have been taken and continue to be developed that have resulted and could continue to result in additional restrictions and requirements, or court decisions rendered, relating to or otherwise affecting our policies that may have a negative impact on our business, operations and capital.General Insurance offers numerous products for which we are monitoring claims activity and assessing adverse impact on future new and renewal business in relation to the COVID-19 crisis. We are continually reassessing our exposures in light of unfolding developments in theU.S. and globally and evaluating coverage by our reinsurance arrangements. In our Life and Retirement business, the most significant impacts relating to COVID-19 have been the impact of interest rate and equity market levels on spread and fee income, deferred acquisition cost amortization and adverse mortality. We are actively monitoring our claims activity and the potential direct and indirect impacts that COVID-19 may have across our portfolio of Life and Retirement businesses. We have a diverse investment portfolio with material exposures to various forms of credit risk. The far-reaching economic impacts of COVID-19 have been largely offset, to date, by intervention taken by governments and monetary authorities and equity market rebound resulting in a minimal impact on the value of the portfolio. At this point in time, uncertainty surrounding the duration and severity of the COVID-19 crisis makes the long-term financial impact difficult to quantify.
90 AIG | Second Quarter 2021 Form 10-Q
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TABLE OF CONTENTS ITEM 2 | Executive Summary For additional information please see the 2020 Annual Report, Part I, Item 1A. Risk Factors - Market Conditions - COVID-19 is adversely affecting, and is expected to continue to adversely affect, our global business, financial condition and results of operations, and its ultimate impact will depend on future developments that are uncertain and cannot be predicted, including the scope, severity and duration of the crisis, and the governmental, legislative and regulatory actions taken and court decisions rendered in response thereto.
Impact of Changes in the Interest Rate Environment
KeyU.S. benchmark rates initially rose sharply in the first three months of 2021 but subsequently fell reflecting concerns over future economic growth. The low interest rate environment negatively affects sales of interest rate sensitive products in our industry and negatively impacts the profitability of our existing business as we reinvest cash flows from investments, including increased calls and prepayments of fixed maturity securities and mortgage loans, at rates below the average yield of our existing portfolios. We actively manage our exposure to the interest rate environment through portfolio selection and asset-liability management, including spread management strategies for our investment-oriented products and economic hedging of interest rate risk from guarantee features in our variable and fixed index annuities. We may not be able to fully mitigate our interest rate risk by matching exposure of our assets relative to our liabilities. A low interest rate environment could also impair our ability to earn the returns assumed in the pricing and the reserving of our products at the time they were sold and issued.
Additionally, sustained low interest rates may result in higher pension expense due to the impact on discounting of projected benefit cash flows.
Annuity Sales and Surrenders
The interest rate environment has a significant impact on the annuity industry. Low long-term interest rates put pressure on investment returns, which may negatively affect sales of interest rate sensitive products and reduce future profits on certain existing fixed rate products. However, our disciplined rate setting has helped to mitigate some of the pressure on investment spreads. Rapidly rising interest rates could create the potential for increased sales, but may also drive higher surrenders. Fixed annuities have surrender charge periods, generally in the three-to-five year range, which may help mitigate increased early surrenders in a rising rate environment. In addition, older contracts that have higher minimum interest rates and continue to be attractive to the contract holders have driven better than expected persistency in fixed annuities, although the reserves for such contracts have continued to decrease over time in amount and as a percentage of the total annuity portfolio. We closely monitor surrenders of fixed annuities as contracts with lower minimum interest rates come out of the surrender charge period. Changes in interest rates significantly impact the valuation of our liabilities for annuities with guaranteed income features and the value of the related hedging portfolio.
Reinvestment and Spread Management
We actively monitor fixed income markets, including the level of interest rates, credit spreads and the shape of the yield curve. We also frequently review our interest rate assumptions and actively manage the crediting rates used for new and in-force business. Business strategies continue to evolve to maintain profitability of the overall business in light of the interest rate environment. A low interest rate environment puts margin pressure on pricing of new business and on existing products, due to the challenge of investing new money or recurring premiums and deposits, and reinvesting investment portfolio cash flows, in the low interest rate environment. In addition, there is investment risk associated with future premium receipts from certain in-force business. Specifically, the investment of these future premium receipts may be at a yield below that required to meet future policy liabilities. The contractual provisions for renewal of crediting rates and guaranteed minimum crediting rates included in products may reduce spreads in a sustained low interest rate environment and thus reduce future profitability. Although this interest rate risk is partially mitigated through the asset-liability management process, product design elements and crediting rate strategies, a sustained low interest rate environment may negatively affect future profitability.
For additional information on our investment and asset-liability management strategies see Investments.
For investment-oriented products, for example universal life, and variable, fixed and fixed indexed annuities, in ourIndividual Retirement, Group Retirement, Life Insurance and Institutional Markets businesses, our spread management strategies include disciplined pricing and product design for new business, modifying or limiting the sale of products that do not achieve targeted spreads, using asset-liability management to match assets to liabilities to the extent practicable, and actively managing crediting rates to help mitigate some of the pressure on investment spreads. Renewal crediting rate management is done under contractual provisions that were designed to allow crediting rates to be reset at pre-established intervals in accordance with state and federal laws and subject to minimum crediting rate guarantees. We will continue to adjust crediting rates on in-force business to mitigate the pressure on spreads from declining base yields, but our ability to lower crediting rates may be limited by the competitive environment, contractual minimum crediting rates, and provisions that allow rates to be reset only at pre-established intervals. As interest rates begin to rise again, we may need to raise crediting rates on in-force business for competitive and other reasons, potentially offsetting a portion of the additional investment income resulting from investing in a higher interest rate environment. AIG | Second Quarter 2021 Form 10-Q 91
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TABLE OF CONTENTS ITEM 2 | Executive Summary Of the aggregate fixed account values of ourIndividual Retirement and Group Retirement annuity products, 68 percent were crediting at the contractual minimum guaranteed interest rate atJune 30, 2021 . The percentage of fixed account values of our annuity products that are currently crediting at rates above one percent was 59 percent at bothJune 30, 2021 andDecember 31, 2020 . These businesses continue to focus on pricing discipline and strategies to manage the minimum guaranteed interest crediting rates offered on new sales in the context of regulatory requirements and competitive positioning. In the universal life products in our Life Insurance business, 67 percent of the account values were crediting at the contractual minimum guaranteed interest rate atJune 30, 2021 . The following table presents fixed annuity and universal life account values of our Individual Retirement, GroupRetirement and Life Insurance operating segments by contractual minimum guaranteed interest rate and current crediting rates, excluding balances ceded to Fortitude Re: Current Crediting Rates June 30, 2021 1-50 Basis More than 50 Contractual Minimum Guaranteed At Contractual Points Above Basis Points Interest Rate Minimum Minimum Above Minimum (in millions) Guarantee Guarantee Guarantee Total Individual Retirement* <=1%$ 9,453 $ 2,132 $ 18,082 $ 29,667 > 1% - 2% 4,774 29 1,690 6,493 > 2% - 3% 10,684 1 18 10,703 > 3% - 4% 8,368 41 6 8,415 > 4% - 5% 491 - 4 495 > 5% - 5.5% 34 - 5 39 Total Individual Retirement$ 33,804 $ 2,203 $ 19,805 $ 55,812 Group Retirement* <=1%$ 2,107 $ 3,168 $ 4,677 $ 9,952 > 1% - 2% 6,080 703 117 6,900 > 2% - 3% 14,869 - - 14,869 > 3% - 4% 741 - - 741 > 4% - 5% 7,045 - - 7,045 > 5% - 5.5% 166 - - 166 Total Group Retirement$ 31,008 $ 3,871 $ 4,794 $ 39,673 Universal life insurance <=1% $ - $ - $ - $ - > 1% - 2% 101 24 361 486 > 2% - 3% 265 537 1,202 2,004 > 3% - 4% 1,437 180 205 1,822 > 4% - 5% 3,134 2 - 3,136 > 5% - 5.5% 240 - - 240 Total universal life insurance$ 5,177 $ 743 $ 1,768 $ 7,688 Total$ 69,989 $ 6,817 $ 26,367 $ 103,173 Percentage of total 68 % 7 % 25 % 100 %
*Individual Retirement and Group Retirement amounts shown include fixed options within variable annuity products.
92 AIG | Second Quarter 2021 Form 10-Q
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TABLE OF CONTENTS ITEM 2 | Executive SummaryGeneral Insurance The impact of low interest rates on ourGeneral Insurance segment is primarily on our long-tail casualty line of business. We currently expect limited impacts on our existing long-tail casualty business as the duration of our assets is slightly longer than that of our liabilities. Sustained low interest rates would potentially impact new and renewal business for the long-tail casualty line as we may not be able to adjust our future pricing consistent with our profitability objectives to fully offset the impact of investing at lower rates. However, we will continue to be disciplined in pricing and risk selection. In addition, for ourGeneral Insurance segment, sustained low interest rates may unfavorably affect the net loss reserve discount for workers' compensation, and to a lesser extent could favorably impact assumptions about future medical costs, the combined net effect of which could result in higher net loss reserves.
Standard of Care Developments
In our Life and Retirement business, we and our distributors are subject to laws and regulations regarding the standard of care applicable to sales of our products and the provision of advice to our customers. In recent years, many of these laws and regulations have been revised or reexamined while others have been newly adopted. We continue to closely follow these legislative and regulatory activities. For additional information regarding these legislative and regulatory activities, see Item 1. Business - Regulation -U.S. Regulation - Standard of Care Developments in the 2020 Annual Report. Changes in standard of care requirements or new standards issued by governmental authorities, such as theDepartment of Labor , theSEC , theNational Association of Insurance Commissioners (NAIC) or state regulators and/or legislators, may affect our businesses, results of operations and financial condition. While we cannot predict the long-term impact of these legislative and regulatory developments on our Life and Retirement businesses, we believe our diverse product offerings and distribution relationships position us to compete effectively in this evolving marketplace. Impact of Currency Volatility Currency volatility remains acute. Such volatility affected line item components of income for those businesses with substantial international operations. In particular, growth trends in net premiums written reported inU.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, in either direction, especially as a result of theUK's exit from theEuropean Union (EU), and such fluctuations will affect net premiums written growth trends reported inU.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: Three Months Ended Six Months Ended June 30, Percentage June 30, Percentage Rate for1 USD 2021 2020 Change 2021 2020 Change Currency: GBP 0.72 0.81 (11) % 0.73 0.79 (8) % EUR 0.83 0.91 (9) % 0.83 0.91 (9) % JPY 108.95 107.57 1 % 106.62 108.51 (2) %
Unless otherwise noted, references to the effects of foreign exchange in the
AIG | Second Quarter 2021 Form 10-Q 93
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TABLE OF CONTENTS ITEM 2 | Consolidated Results of Operations
Consolidated Results of Operations
The following section provides a comparative discussion of our consolidated results of operations on a reported basis for the three- and six-month periods endedJune 30, 2021 and 2020. Factors that relate primarily to a specific business are discussed in more detail within the business segment operations section. For a discussion of the Critical Accounting Estimates that affect our results of operations see Critical Accounting Estimates in this MD&A and Part II, Item 7. MD&A - Critical Accounting Estimates in the 2020 Annual Report. The following table presents our consolidated results of operations and other key financial metrics: Three Months Ended Six Months Ended June 30, Percentage June 30, Percentage (in millions) 2021 2020 Change 2021 2020 Change Revenues: Premiums$ 7,914 $ 7,407 7 %$ 14,421 $ 14,850 (3) % Policy fees 771 749 3 1,555 1,504 3 Net investment income: NM Net investment income - excluding Fortitude Re funds withheld assets 3,168 3,250 (3) 6,339 5,758 10 Net investment income - Fortitude Re funds withheld assets 507 116 337 993 116 NM Total net investment income 3,675 3,366 9 7,332 5,874 25 Net realized gains (losses): NM Net realized gains (losses) - excluding Fortitude Re funds withheld assets and embedded derivative (43) (1,591) 97 652 1,928 (66) Net realized gains on Fortitude Re funds withheld assets 173 96 80 346 96 260 Net realized gains (losses) on Fortitude Re funds withheld embedded derivative (2,056) (837) (146) 326 (837) NM Total net realized gains (losses) (1,926) (2,332) 17 1,324 1,187 12 Other income 247 206 20 503 424 19 Total revenues 10,681 9,396 14 25,135 23,839 5 Benefits, losses and expenses: Policyholder benefits and losses incurred 6,084 6,521 (7) 11,223 12,846 (13) Interest credited to policyholder account balances 872 918 (5) 1,740 1,875 (7) Amortization of deferred policy acquisition costs 915 754 21 2,219 2,616 (15) General operating and other expenses 2,218 2,087 6 4,306 4,240 2 Interest expense 338 365 (7) 680 720 (6) (Gain) loss on extinguishment of debt 106 - NM 98 17 476 Net (gain) loss on sale or disposal of divested businesses 1 8,412 (100) (6) 8,628 NM Total benefits, losses and expenses 10,534 19,057 (45) 20,260 30,942 (35) Income (loss) from continuing operations before income tax expense (benefit) 147 (9,661) NM 4,875 (7,103) NM Income tax expense (benefit) (3) (1,896) 100 795 (992) NM Income (loss) from continuing operations 150 (7,765) NM 4,080 (6,111) NM Loss from discontinued operations, net of income taxes - (1) NM - (1) NM Net income (loss) 150 (7,766) NM 4,080 (6,112) NM Less: Net income attributable to noncontrolling interests 51 162 (69) 105 67 57 Net income (loss) attributable to AIG 99 (7,928) NM 3,975 (6,179) NM Less: Dividends on preferred stock 8 8 - 15 15 - Net income (loss) attributable to AIG common shareholders$ 91 $ (7,936) NM %$ 3,960 $ (6,194) NM %
94 AIG | Second Quarter 2021 Form 10-Q
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