Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 02, 2020 | |
Entity Listings [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | American International Group, Inc. | |
Entity Central Index Key | 0000005272 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock Shares Outstanding | 861,525,734 | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity File Number | 1-8787 | |
Entity Incorporation State Country Code | DE | |
Entity Tax Identification Number | 13-2592361 | |
Entity Address Address Line 1 | 175 Water Street | |
Entity Address City Or Town | New York | |
Entity Address State Or Province | NY | |
Entity Address Postal Zip Code | 10038 | |
City Area Code | 212 | |
Local Phone Number | 770-7000 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Common Stock | ||
Entity Listings [Line Items] | ||
Security 12b Title | Common Stock, Par Value $2.50 Per Share | |
Trading Symbol | AIG | |
Security Exchange Name | NYSE | |
Warrants | ||
Entity Listings [Line Items] | ||
Security 12b Title | Warrants (expiring January 19, 2021) | |
Trading Symbol | AIG WS | |
Security Exchange Name | NYSE | |
5.75% Series A-2 Junior Subordinated Debentures | ||
Entity Listings [Line Items] | ||
Security 12b Title | 5.75% Series A-2 Junior Subordinated Debentures | |
Trading Symbol | AIG 67BP | |
Security Exchange Name | NYSE | |
4.875% Series A-3 Junior Subordinated Debentures | ||
Entity Listings [Line Items] | ||
Security 12b Title | 4.875% Series A-3 Junior Subordinated Debentures | |
Trading Symbol | AIG 67EU | |
Security Exchange Name | NYSE | |
Stock Purchase Rights | ||
Entity Listings [Line Items] | ||
Security 12b Title | Stock Purchase Rights | |
No Trading Symbol Flag | true | |
Security Exchange Name | NYSE | |
Depository Shares Each Representing 1/1,000th Interest in a Share of Series A 5.85% Non-Cumulative Perpetual Preferred Stock | ||
Entity Listings [Line Items] | ||
Security 12b Title | Depositary Shares Each Representing a 1/1,000th Interest in a Share of Series A 5.85% Non-Cumulative Perpetual Preferred Stock | |
Trading Symbol | AIG PRA | |
Security Exchange Name | NYSE |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Fixed maturity securities: | ||
Bonds available for sale, at fair value, net of allowance for credit losses of $236 in 2020 (amortized cost: 2020 - $242,470; 2019 - $233,230) | $ 265,965 | $ 251,086 |
Other bond securities, at fair value (See Note 5) | 5,415 | 6,682 |
Equity Securities, at fair value (See Note 5) | 871 | 841 |
Mortgage and other loans receivable, net of allowance for credit losses of $797 in 2020 and $438 in 2019 | 45,590 | 46,984 |
Other invested assets (portion measured at fair value: 2020 - $7,064; 2019 - $6,827) | 17,915 | 18,792 |
Short-term investments, including restricted cash of $214 in 2020 and $188 in 2019 (portion measured at fair value: 2020 - $7,214; 2019 - $5,343) | 20,648 | 13,230 |
Total investments | 356,404 | 337,615 |
Cash | 3,191 | 2,856 |
Accrued investment income | 2,324 | 2,334 |
Premiums and other receivables, net of allowance for credit losses and disputes of $215 in 2020 and $178 in 2019 | 11,827 | 10,274 |
Reinsurance assets, net of allowance for credit losses and disputes | 40,337 | 37,977 |
Deferred income taxes | 12,958 | 13,146 |
Deferred policy acquisition costs | 10,176 | 11,207 |
Other assets, net of allowance for credit losses of $52 in 2020, including restricted cash of $202 in 2020 and $243 in 2019 (portion measured at fair value: 2020 - $901; 2019 - $3,151) | 13,270 | 16,383 |
Separate account assets, at fair value | 92,036 | 93,272 |
Total assets | 577,230 | 525,064 |
Liabilities: | ||
Liability for unpaid losses and loss adjustment expenses, net of allowance for credit losses of $14 in 2020 | 78,584 | 78,328 |
Unearned premiums | 20,093 | 18,269 |
Future policy benefits for life and accident and health insurance contracts | 51,090 | 50,512 |
Policyholder contract deposits (portion measured at fair value: 2020 - $9,322; 2019 - $6,910) | 158,205 | 151,869 |
Other policyholder funds | 3,571 | 3,428 |
Fortitude Re funds withheld payable (portion measured at fair value: 2020 - $5,136) | 42,543 | 0 |
Other liabilities (portion measured at fair value: 2020 - $600; 2019 - $1,100) | 28,264 | 26,609 |
Long-term debt | 28,731 | 25,479 |
Separate account liabilities | 92,036 | 93,272 |
Total liabilities | 512,623 | 457,637 |
Contingencies, commitments and guarantees (see Note 11) | ||
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: 2020 - 20,000 and 2019 - 20,000; liquidation preference $500 | 485 | 485 |
Common stock, $2.50 par value; 5,000,000,000 shares authorized; shares issued: 2020 - 1,906,671,492 and 2019 - 1,906,671,492 | 4,766 | 4,766 |
Treasury stock, at cost; 2020 - 1,045,222,917 shares; 2019 - 1,036,672,461 shares of common stock | (49,327) | (48,987) |
Additional paid-in capital | 81,368 | 81,345 |
Retained earnings | 15,838 | 23,084 |
Accumulated other comprehensive income | 10,978 | 4,982 |
Total AIG shareholders' equity | 64,108 | 65,675 |
Non-redeemable noncontrolling interests | 499 | 1,752 |
Total equity | 64,607 | 67,427 |
Total liabilities and equity | 577,230 | 525,064 |
Fortitude | ||
Fixed maturity securities: | ||
Reinsurance assets, net of allowance for credit losses and disputes | 34,707 | 0 |
Debt of consolidated investments | ||
Liabilities: | ||
Long-term debt | $ 9,506 | $ 9,871 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical - assets and liabilities) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | |
Assets: | |||
Bonds available for sale, allowance for credit losses | $ 236 | $ 0 | |
Bonds available for sale, amortized cost | 242,470 | 233,230 | |
Mortgage and other loans receivable, allowance for credit losses | 797 | 438 | |
Other invested assets, portion measured at fair value | 7,064 | 6,827 | |
Short-term investments, portion measured at fair value | 7,214 | 5,343 | |
Premiums and other receivables, allowance for credit losses and disputes | 215 | 178 | |
Reinsurance assets, allowance for credit losses and disputes | 318 | 151 | |
Other assets, allowance for credit losses | 52 | ||
Other assets, portion measured at fair value | 901 | 3,151 | |
Liabilities: | |||
Liability for unpaid losses and loss adjustment expenses, allowance for credit losses | 14 | 0 | |
Policyholder contract deposits, portion measured at fair value | 9,322 | 6,910 | |
Fortitude Re funds withheld payable, portion measured at fair value | 5,136 | ||
Other liabilities, portion measured at fair value | 600 | 1,100 | |
Long-term debt, portion measured at fair value | 2,169 | 2,062 | |
Fortitude | |||
Assets: | |||
Reinsurance assets, allowance for credit losses and disputes | 0 | ||
Other assets | |||
Assets: | |||
Short-term investments, restricted cash | 202 | [1] | 243 |
Short-term investments | |||
Assets: | |||
Short-term investments, restricted cash | $ 214 | [1] | $ 188 |
[1] | Includes funds held for tax sharing payments to AIG Parent, security deposits, and replacement reserve deposits related to our affordable housing investments. |
Condensed Consolidated Balanc_3
Condensed Consolidated Balance Sheets (Parenthetical - equity) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
AIG shareholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 5 | $ 5 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 20,000 | 20,000 |
Preferred stock liquidation preference | $ 500 | $ 500 |
Common stock, par value (in dollars per share) | $ 2.50 | $ 2.5 |
Common stock, shares authorized | 5,000,000,000 | 5,000,000,000 |
Common stock, shares issued | 1,906,671,492 | 1,906,671,492 |
Treasury stock, shares of common stock | 1,045,222,917 | 1,036,672,461 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Loss) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Revenues: | |||||
Premiums | $ 6,677 | $ 7,617 | $ 21,527 | $ 23,117 | |
Policy fees | 648 | 733 | 2,152 | 2,237 | |
Net investment income | 3,800 | 3,408 | 9,674 | 11,032 | |
Net realized capital gains (losses) | (1,122) | 929 | 65 | 887 | |
Other income | 218 | 227 | 642 | 658 | |
Total revenues | 10,221 | 12,914 | 34,060 | 37,931 | |
Benefits, losses and expenses: | |||||
Policyholder benefits and losses incurred | 5,872 | 6,892 | 18,718 | 19,373 | |
Interest credited to policyholder account balances | 882 | 966 | 2,757 | 2,873 | |
Amortization of deferred policy acquisition costs | 707 | 1,252 | 3,323 | 3,980 | |
General operating and other expenses | 1,991 | 2,187 | 6,231 | 6,380 | |
Interest expense | 379 | 348 | 1,099 | 1,057 | |
(Gain) loss on extinguishment of debt | (2) | 0 | 15 | 13 | |
Net loss on sale of divested businesses | 24 | 9 | 8,652 | 4 | |
Total benefits, losses and expenses | 9,853 | 11,654 | 40,795 | 33,680 | |
Income (loss) from continuing operations before income tax expense (benefit) | 368 | 1,260 | (6,735) | 4,251 | |
Income tax expense (benefit) | 74 | 287 | (918) | 950 | |
Income (loss) from continuing operations | 294 | 973 | (5,817) | 3,301 | |
Income (loss) from discontinued operations, net of income taxes | 5 | 0 | 4 | (1) | |
Net income (loss) | 299 | 973 | (5,813) | 3,300 | |
Less: | |||||
Net income from continuing operations attributable to noncontrolling interests | 11 | 317 | 78 | 881 | |
Net income (loss) attributable to AIG | 288 | 656 | (5,891) | 2,419 | |
Less: Dividends on preferred stock | 7 | 8 | 22 | 15 | |
Net income (loss) attributable to AIG common shareholders | $ 281 | $ 648 | $ (5,913) | $ 2,404 | |
Basic: | |||||
Income (loss) from continuing operations | $ 0.31 | $ 0.74 | $ (6.80) | $ 2.74 | |
Income (loss) from discontinued operations | 0.01 | 0 | 0 | 0 | |
Net income (loss) attributable to AIG common shareholders | 0.32 | 0.74 | (6.80) | 2.74 | |
Diluted: | |||||
Income (loss) from continuing operations | 0.31 | 0.72 | (6.80) | 2.71 | |
Income (loss) from discontinued operations | 0.01 | 0 | 0 | 0 | |
Net income (loss) attributable to AIG common shareholders | $ 0.32 | $ 0.72 | $ (6.80) | $ 2.71 | |
Weighted average shares outstanding: | |||||
Basic | 867,713,308 | 877,009,495 | 869,627,926 | 876,262,372 | |
Diluted | 873,130,950 | 895,814,410 | 869,627,926 | 887,221,116 | |
Excluding Fortitude Re funds withheld assets | |||||
Revenues: | |||||
Net investment income | $ 3,342 | $ 3,408 | $ 9,100 | $ 11,032 | |
Net realized capital gains (losses) | (498) | 929 | 1,430 | 887 | |
Fortitude Re funds withheld assets | |||||
Revenues: | |||||
Net investment income | [1] | 458 | 0 | 574 | 0 |
Net realized capital gains (losses) | [1] | 32 | 0 | 128 | 0 |
Fortitude Re funds withheld embedded derivative | |||||
Revenues: | |||||
Net realized capital gains (losses) | [1] | $ (656) | $ 0 | $ (1,493) | $ 0 |
[1] | Represents activity subsequent to the deconsolidation of Fortitude Re on June 2, 2020. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income (loss) | $ 299 | $ 973 | $ (5,813) | $ 3,300 |
Other comprehensive income, net of tax | ||||
Change in unrealized appreciation (depreciation) of fixed maturity securities on which allowance for credit losses was taken | 79 | 0 | (154) | 0 |
Change in unrealized appreciation (depreciation) of fixed maturity securities on which other-than-temporary credit impairments were taken | 0 | (2) | 0 | 756 |
Change in unrealized appreciation of all other investments | 1,385 | 656 | 5,925 | 6,278 |
Change in foreign currency translation adjustments | 352 | (34) | 206 | 1 |
Change in retirement plan liabilities adjustment | (1) | 7 | 1 | 14 |
Change in fair value of liabilities under fair value option attributable to changes in own credit risk | 1 | 1 | 2 | (1) |
Other comprehensive income | 1,816 | 628 | 5,980 | 7,048 |
Comprehensive income | 2,115 | 1,601 | 167 | 10,348 |
Comprehensive income attributable to noncontrolling interests | 18 | 321 | 62 | 901 |
Comprehensive income attributable to AIG | $ 2,097 | $ 1,280 | $ 105 | $ 9,447 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Equity - USD ($) $ in Millions | Total | Cumulative effect of change in accounting principle | Total AIG Shareholders' Equity | Total AIG Shareholders' EquityCumulative effect of change in accounting principle | Preferred Stock and Additional Paid-In Capital | Preferred Stock and Additional Paid-In CapitalCumulative effect of change in accounting principle | Common Stock | Common StockCumulative effect of change in accounting principle | Treasury Stock | Treasury StockCumulative effect of change in accounting principle | Additional Paid-in Capital | Additional Paid-in CapitalCumulative effect of change in accounting principle | Retained Earnings | Retained EarningsCumulative effect of change in accounting principle | Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss)Cumulative effect of change in accounting principle | Non redeemable Non-controlling Interests | Non redeemable Non-controlling InterestsCumulative effect of change in accounting principle |
Balance at Dec. 31, 2018 | $ 57,309 | $ 56,361 | $ 0 | $ 4,766 | $ (49,144) | $ 81,268 | $ 20,884 | $ (1,413) | $ 948 | |||||||||
Preferred stock issued | 485 | 485 | 485 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||
Common stock issued under stock plans | (77) | (77) | 0 | 0 | 154 | (231) | 0 | 0 | 0 | |||||||||
Purchase of common stock | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||
Net income (loss) attributable to AIG or noncontrolling interests | 3,300 | 2,419 | 0 | 0 | 0 | 0 | 2,419 | 0 | 881 | |||||||||
Dividends on preferred stock | (15) | (15) | 0 | 0 | 0 | 0 | (15) | 0 | 0 | |||||||||
Dividends on common stock | (835) | (835) | 0 | 0 | 0 | 0 | (835) | 0 | 0 | |||||||||
Other comprehensive income (loss) | 7,048 | 7,028 | 0 | 0 | 0 | 0 | 0 | 7,028 | 20 | |||||||||
Current and deferred income taxes | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||
Net increase due to acquisitions and consolidations | 78 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 78 | |||||||||
Contributions from noncontrolling interests | 13 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 13 | |||||||||
Distributions to noncontrolling interests | (106) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (106) | |||||||||
Other | 245 | 237 | 0 | 0 | 1 | 250 | (14) | 0 | 8 | |||||||||
Balance at Sep. 30, 2019 | 67,445 | 65,603 | 485 | 4,766 | (48,989) | 81,287 | 22,439 | 5,615 | 1,842 | |||||||||
Balance at Jun. 30, 2019 | 66,105 | 64,539 | 485 | 4,766 | (48,991) | 81,211 | 22,077 | 4,991 | 1,566 | |||||||||
Preferred stock issued | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||
Common stock issued under stock plans | 1 | 1 | 0 | 0 | 1 | 0 | 0 | 0 | 0 | |||||||||
Purchase of common stock | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||
Net income (loss) attributable to AIG or noncontrolling interests | 973 | 656 | 0 | 0 | 0 | 0 | 656 | 0 | 317 | |||||||||
Dividends on preferred stock | (8) | (8) | 0 | 0 | 0 | 0 | (8) | 0 | 0 | |||||||||
Dividends on common stock | (278) | (278) | 0 | 0 | 0 | 0 | (278) | 0 | 0 | |||||||||
Other comprehensive income (loss) | 628 | 624 | 0 | 0 | 0 | 0 | 0 | 624 | 4 | |||||||||
Current and deferred income taxes | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||
Net increase due to acquisitions and consolidations | (18) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (18) | |||||||||
Contributions from noncontrolling interests | 11 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 11 | |||||||||
Distributions to noncontrolling interests | (37) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (37) | |||||||||
Other | 68 | 69 | 0 | 0 | 1 | 76 | (8) | 0 | (1) | |||||||||
Balance at Sep. 30, 2019 | 67,445 | 65,603 | 485 | 4,766 | (48,989) | 81,287 | 22,439 | 5,615 | 1,842 | |||||||||
Balance at Dec. 31, 2019 | 67,427 | $ (487) | 65,675 | $ (487) | 485 | $ 0 | 4,766 | $ 0 | (48,987) | $ 0 | 81,345 | $ 0 | 23,084 | $ (487) | 4,982 | $ 0 | 1,752 | $ 0 |
Preferred stock issued | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||
Common stock issued under stock plans | (98) | (98) | 0 | 0 | 167 | (265) | 0 | 0 | 0 | |||||||||
Purchase of common stock | (500) | (500) | 0 | 0 | (500) | 0 | 0 | 0 | 0 | |||||||||
Net income (loss) attributable to AIG or noncontrolling interests | (5,813) | (5,891) | 0 | 0 | 0 | 0 | (5,891) | 0 | 78 | |||||||||
Dividends on preferred stock | (22) | (22) | 0 | 0 | 0 | 0 | (22) | 0 | 0 | |||||||||
Dividends on common stock | (827) | (827) | 0 | 0 | 0 | 0 | (827) | 0 | 0 | |||||||||
Other comprehensive income (loss) | 5,980 | 5,996 | 0 | 0 | 0 | 0 | 0 | 5,996 | (16) | |||||||||
Net decrease due to deconsolidation | (1,199) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (1,199) | |||||||||
Contributions from noncontrolling interests | 4 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 4 | |||||||||
Distributions to noncontrolling interests | (113) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (113) | |||||||||
Other | 255 | 262 | 0 | 0 | (7) | 288 | (19) | 0 | (7) | |||||||||
Balance at Sep. 30, 2020 | 64,607 | 64,108 | 485 | 4,766 | (49,327) | 81,368 | 15,838 | 10,978 | 499 | |||||||||
Balance at Jun. 30, 2020 | 62,818 | $ 0 | 62,234 | $ 0 | 485 | $ 0 | 4,766 | $ 0 | (49,327) | $ 0 | 81,294 | $ 0 | 15,847 | $ 0 | 9,169 | $ 0 | 584 | $ 0 |
Preferred stock issued | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||
Common stock issued under stock plans | (1) | (1) | 0 | 0 | 0 | (1) | 0 | 0 | 0 | |||||||||
Purchase of common stock | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||
Net income (loss) attributable to AIG or noncontrolling interests | 299 | 288 | 0 | 0 | 0 | 0 | 288 | 0 | 11 | |||||||||
Dividends on preferred stock | (7) | (7) | 0 | 0 | 0 | 0 | (7) | 0 | 0 | |||||||||
Dividends on common stock | (276) | (276) | 0 | 0 | 0 | 0 | (276) | 0 | 0 | |||||||||
Other comprehensive income (loss) | 1,816 | 1,809 | 0 | 0 | 0 | 0 | 0 | 1,809 | 7 | |||||||||
Net decrease due to deconsolidation | (28) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (28) | |||||||||
Contributions from noncontrolling interests | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||
Distributions to noncontrolling interests | (71) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (71) | |||||||||
Other | 57 | 61 | 0 | 0 | 0 | 75 | (14) | 0 | (4) | |||||||||
Balance at Sep. 30, 2020 | $ 64,607 | $ 64,108 | $ 485 | $ 4,766 | $ (49,327) | $ 81,368 | $ 15,838 | $ 10,978 | $ 499 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (5,813) | $ 3,300 |
(Income) loss from discontinued operations | (4) | 1 |
Noncash revenues, expenses, gains and losses included in income (loss): | ||
Net gain on sales of securities available for sale and other assets | (675) | (600) |
Net loss on sale or disposal of divested businesses | 8,652 | 4 |
Losses on extinguishment of debt | 15 | 13 |
Unrealized (gains) losses in earnings - net | 72 | (273) |
Equity in loss from equity method investments, net of dividends or distributions | 210 | 90 |
Depreciation and other amortization | 3,223 | 3,833 |
Impairments of assets | 79 | 237 |
Changes in operating assets and liabilities: | ||
Insurance reserves | 1,818 | (2,146) |
Premiums and other receivables and payables - net | 2,152 | (42) |
Reinsurance assets and funds held under reinsurance contracts | (2,148) | (1,200) |
Capitalization of deferred policy acquisition costs | (3,256) | (4,181) |
Current and deferred income taxes - net | (1,793) | 757 |
Other, net | (300) | (582) |
Total adjustments | 8,049 | (4,090) |
Net cash provided by (used in) operating activities | 2,232 | (789) |
Sales or distribution of: | ||
Available for sale securities | 17,303 | 17,498 |
Other securities | 2,256 | 5,230 |
Other invested assets | 3,159 | 3,345 |
Divested businesses, net | 2,119 | 2 |
Maturities of fixed maturity securities available for sale | 19,441 | 18,165 |
Principal payments received on and sales of mortgage and other loans receivable | 5,177 | 4,233 |
Purchases of: | ||
Available for sale securities | (43,228) | (41,612) |
Other securities | (562) | (723) |
Other invested assets | (2,197) | (2,662) |
Mortgage and other loans receivable | (4,072) | (6,512) |
Net change in short-term investments | (7,368) | (4,586) |
Other, net | 2,751 | 2,829 |
Net cash used in investing activities | (5,221) | (4,793) |
Proceeds from (payments for) | ||
Policyholder contract deposits | 14,014 | 17,297 |
Policyholder contract withdrawals | (12,184) | (12,474) |
Issuance of long-term debt and debt of consolidated investment entities | 5,625 | 2,564 |
Repayments of long-term debt and debt of consolidated investment entities | (3,249) | (2,421) |
Issuance of preferred stock, net of issuance costs | 0 | 485 |
Purchase of common stock | (500) | 0 |
Dividends paid on preferred stock | (22) | (15) |
Dividends paid on common stock | (827) | (835) |
Other, net | 425 | 1,354 |
Net cash provided by financing activities | 3,282 | 5,955 |
Effect of exchange rate changes on cash and restricted cash | 27 | 39 |
Net increase in cash and restricted cash | 320 | 412 |
Cash and restricted cash at beginning of year | 3,287 | 3,358 |
Cash and restricted cash at end of year | $ 3,607 | $ 3,770 |
Supplementary Disclosure of Con
Supplementary Disclosure of Condensed Consolidated Cash Flow Information - USD ($) $ in Millions | 9 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |||
Cash Equivalents, Restricted Cash and Restricted Cash Equivalents: | |||||
Cash | $ 3,191 | $ 3,361 | $ 2,856 | ||
Total cash and restricted cash shown in the Condensed Consolidated Statements Cash Flows | 3,607 | 3,770 | 3,287 | ||
Cash paid during the period for: | |||||
Interest | 829 | 1,012 | |||
Taxes | 875 | 193 | |||
Cash Flow, Noncash Investing Activities Disclosure | |||||
Fixed maturity securities available for sale received in connection with pension risk transfer transactions | 1,008 | 0 | |||
Fixed maturity securities received in connection with reinsurance transactions | 336 | 0 | |||
Cash Flow, Noncash Financing Activities Disclosure | |||||
Interest credited to policyholder contract deposits included in financing activities | 2,425 | 2,507 | |||
Other assets | |||||
Cash Equivalents, Restricted Cash and Restricted Cash Equivalents: | |||||
Restricted cash | 202 | [1] | 345 | [1] | 243 |
Short-term investments | |||||
Cash Equivalents, Restricted Cash and Restricted Cash Equivalents: | |||||
Restricted cash | $ 214 | [1] | $ 64 | [1] | $ 188 |
[1] | Includes funds held for tax sharing payments to AIG Parent, security deposits, and replacement reserve deposits related to our affordable housing investments. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2020 | |
BASIS OF PRESENTATION | |
BASIS OF PRESENTATION | 1. Basis of Presentation American International Group, Inc. (AIG) is a leading global insurance organization serving customers in more than 80 countries and jurisdictions. AIG companies serve commercial and individual customers through one of the most extensive worldwide property-casualty networks of any insurer. In addition, AIG companies are leading providers of life insurance and retirement services in the United States. AIG Common Stock, par value $ 2.50 per share (AIG Common Stock), is listed on the New York Stock Exchange (NYSE: AIG). Unless the context indicates otherwise, the terms “AIG,” “we,” “us” or “our” 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. These unaudited Condensed Consolidated Financial Statements do not include all disclosures that are normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (GAAP) and should be read in conjunction with the audited Consolidated Financial Statements and the related notes included in our Annual Report on Form 10-K for the year ended December 31, 2019 (the 2019 Annual Report). The condensed consolidated financial information as of December 31, 2019 included herein has been derived from the audited Consolidated Financial Statements in the 2019 Annual Report. Certain of our foreign subsidiaries included in the Condensed Consolidated Financial Statements report on the basis of a fiscal period ending November 30. The effect on our consolidated financial condition and results of operations of all material events occurring at these subsidiaries through the date of each of the periods presented in these Condensed Consolidated Financial Statements has been considered for adjustment and/or disclosure. In the opinion of management, these Condensed Consolidated Financial Statements contain normal recurring adjustments, including eliminations of material intercompany accounts and transactions, necessary for a fair statement of the results presented herein. Operating results for the nine months ended September 30, 2020, are not necessarily indicative of the results that may be expected for the year ended December 31, 2020, especially when considering the risks and uncertainties associated with COVID-19 and the impact it may have on our business, results of operations and financial condition. We evaluated the need to recognize or disclose events that occurred subsequent to September 30, 2020 and prior to the issuance of these Condensed Consolidated Financial Statements. Sales/disposals of Businesses Fortitude Holdings On June 2, 2020, we completed the sale of a majority of the interests in Fortitude Group Holdings, LLC (Fortitude Holdings) to Carlyle FRL, L.P. (Carlyle FRL), an investment fund advised by an affiliate of The Carlyle Group Inc. (Carlyle), and T&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 on November 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 Reinsurance Company Ltd. (Fortitude Re), a wholly owned subsidiary of Fortitude Holdings, in 2018 in a series of reinsurance transactions related to AIG’s Legacy Portfolio. As of September 30, 2020, approximately $ 30.6 billion of reserves from AIG’s Legacy Life and Retirement Run-Off Lines and approximately $ 4.1 billion of reserves from AIG’s Legacy 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 Legacy Portfolio. 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 in Fortitude Holdings to TC Group Cayman Investments Holdings, L.P. (TCG), an affiliate of Carlyle, in November 2018 (the 2018 Fortitude Sale). As a result of completion of the Majority Interest Fortitude Sale, Carlyle FRL purchased from AIG a 51.6 percent ownership interest in Fortitude Holdings and T&D purchased from AIG a 25 percent ownership interest in Fortitude Holdings; AIG retained a 3.5 percent ownership interest in Fortitude Holdings and one seat on its Board of Managers. The $ 2.2 billion of proceeds received by AIG at closing include (i) the $ 1.8 billion under the Majority Interest Fortitude Sale, which is subject to a post-closing purchase price adjustment pursuant to which AIG will pay Fortitude Re for certain adverse development in property casualty related reserves, based on an agreed methodology, that may occur on or prior to December 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 from Fortitude Holdings that was not received by AIG prior to the closing. AIG recorded a total after-tax reduction to total AIG shareholders’ equity of $ 4.3 billion related to the sale of the majority interest in and deconsolidation of Fortitude Holdings in the second quarter of 2020. The impact to equity was primarily due to a $ 6.7 billion after-tax loss partially offset by a $ 2.4 billion increase in accumulated other comprehensive income (AOCI) due to the release of shadow adjustments primarily related to future policy benefits. The $ 6.7 billion after-tax loss was comprised of (i) a $ 2.7 billion loss related to the write-off of prepaid insurance assets and deferred policy acquisition costs (DAC) upon deconsolidation of Fortitude Holdings and (ii) $ 4.0 billion related to the loss on the sale primarily as a result of increases in Fortitude Holdings’ equity principally related to mark to market movements from the December 31, 2018 date as of which Fortitude Holdings’ equity was calculated for purposes of the purchase price determination, through the June 2, 2020 closing date. In connection with the Majority Interest Fortitude Sale, AIG, Fortitude Holdings, and TCG agreed that, effective as of the closing, (i) AIG’s investment commitment targets under the 2018 Fortitude Sale (whereby AIG had agreed to invest certain amounts into various Carlyle strategies and to make certain minimum investment management fee payments by November 2021) were assumed by Fortitude Holdings and AIG was released therefrom, (ii) the purchase price adjustment that AIG had agreed to provide TCG in the 2018 Fortitude Sale (whereby AIG had agreed to reimburse TCG for adverse development in property casualty related reserves, based on an agreed methodology, that may occur on or prior to December 31, 2023, up to the value of TCG’s investment in Fortitude Holdings) has been terminated, and (iii) TCG remains obligated to pay AIG $ 115 million of deferred consideration upon settlement of the post-closing purchase price adjustment referred to above. This latter amount is composed of $ 95 million of deferred consideration contemplated as part of the 2018 Fortitude Sale, together with $ 19.9 million in respect of TCG’s 19.9 percent share of the unpaid portion of the $ 500 million non-pro rata dividend to be paid to AIG under the 2018 Fortitude Sale (TCG paid $ 79.6 million to AIG on May 26, 2020). In addition, the 2018 capital maintenance agreement between AIG and Fortitude Re and the letters of credit issued in support of Fortitude Re and subject to reimbursement by AIG in the event of a drawdown were terminated as of the closing of the Majority Interest Fortitude Sale. Upon closing of the Majority Interest Fortitude Sale, AIG entered into a transition services agreement with Fortitude Holdings for the provision of transition services for a period after closing, and letter of credit agreements with certain financial institutions, which issued letters of credit in support of certain General Insurance subsidiaries that have reinsurance agreements in place with Fortitude Re in the amount of $ 600 million. These letters of credit are subject to reimbursement by AIG in the event of a drawdown by these insurance subsidiaries. Following closing, in the second quarter of 2020, AIG contributed $ 700 million of the proceeds of the Majority Interest Fortitude Sale to certain of its General Insurance subsidiaries and $ 135 million of the proceeds of the Majority Interest Fortitude Sale to certain of its Life and Retirement subsidiaries. For further discussion on the sale of Fortitude Holdings see Note 7 to the Condensed Consolidated Financial Statements . Blackboard At the end of March 2020, Blackboard U.S. Holdings, Inc. (Blackboard), AIG’s technology-driven subsidiary, was placed into run-off. As a result of this decision, during the three months ended March 31, 2020 and the nine months ended September 30, 2020, AIG recognized a pre-tax loss of $ 210 million, primarily consisting of asset impairment charges. Life and Retirement On October 26, 2020, AIG announced its intention to separate its Life and Retirement business from AIG. For further discussion see Note 16 to the Condensed Consolidated Financial Statements . Use of Estimates The preparation of financial statements in accordance with 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: liability for unpaid losses and loss adjustment expenses (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 policy acquisition costs for investment-oriented products; reinsurance assets; impairment charges, including impairments on other invested assets and goodwill; allowances for credit losses primarily on loans, available for sale fixed maturity securities, reinsurance assets and premiums and other receivables; 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 and estimates associated with the Tax Cuts and Jobs Act (the Tax Act). 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. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. Summary of Significant Accounting Policies Accounting Standards Adopted During 2020 Financial Instruments - Credit Losses In June 2016, the FASB issued an accounting standard that changed how entities account for current expected credit losses (CECL) for most financial assets, premiums receivable, trade receivables, off-balance sheet exposures and reinsurance receivables (the Financial Instruments Credit Losses Standard). The standard requires an allowance for credit losses based on the expectation of lifetime credit losses related to such financial assets subject to credit losses, including loans measured at amortized cost, reinsurance receivables and certain off-balance sheet credit exposures. Additionally, the impairment of available-for-sale debt securities, including purchased credit deteriorated (PCD) securities, is subject to the new guidance and is measured in a similar manner, except that losses are recognized as allowances rather than reductions in the amortized cost of the securities. The standard allows for reversals of credit impairments in the event that the credit of an issuer improves. The standard also requires additional disclosures. We adopted the standard on its effective date of January 1, 2020 using a modified retrospective method, which requires a cumulative effect adjustment to retained earnings. As of January 1, 2020, the impact of the adoption of the standard was a reduction in opening retained earnings of $ 487 million (after-tax) primarily driven by commercial mortgage loans, and, to a lesser extent, reinsurance receivables and recoverables. The following table provides a rollforward of our allowance, including credit losses, in connection with the adoption of the Financial Instruments Credit Losses Standard as well as cross references to the applicable notes herein for additional information: Three Months Ended September 30, 2020 Balance, Cumulative Effect Purchased Credit Incremental Increase Write-offs and Balance, Beginning Adjustment as of Deteriorated Initial (Decrease) Recognized Other Changes End of (in millions) of Period January 1, 2020 Allowance in Income in the Allowance (h) Period Securities available for sale (a) $ 198 $ - $ - $ 81 $ ( 43) $ 236 Mortgage and other loan receivables (b) 794 - - 3 - 797 Reinsurance recoverables (inclusive of deposit accounted assets) (c) 364 - - - 6 370 Premiums and other receivables (d) 212 - - 7 ( 4) 215 Contractual deductible recoverables (e) 14 - - - - 14 Commercial mortgage loan commitments (f) 58 - - 8 - 66 Total $ 1,640 $ - $ - $ 99 $ ( 41) $ 1,698 Nine Months Ended September 30, 2020 Securities available for sale (a) $ - $ - $ 33 $ 310 $ ( 107) $ 236 Mortgage and other loan receivables (b) 438 318 - 53 ( 12) 797 Reinsurance recoverables (inclusive of deposit accounted assets) (c) 151 224 - 5 ( 10) 370 Premiums and other receivables (d) 178 34 - 9 ( 6) 215 Contractual deductible recoverables (e) - 14 - - - 14 Commercial mortgage loan commitments (f) - 51 - 14 1 66 Total $ 767 $ 641 $ 33 $ 391 $ ( 134) $ 1,698 Secondary impacts to certain long-duration insurance contracts (g) ( 27) Tax impact ( 127) Total cumulative effect adjustment $ 487 (a) The allowance for credit losses is reported in Bonds available for sale in the Condensed Consolidated Balance Sheets. Changes in the allowance for credit losses are reported in Net realized capital gains (losses) in the Condensed Consolidated Statements of Income. Refer to Note 5 for additional information. (b) The allowance for credit losses is reported in Mortgage and other loans receivable in the Condensed Consolidated Balance Sheets. Changes in the allowance for credit losses are reported in Net realized capital gains (losses) in the Condensed Consolidated Statements of Income. Refer to Note 6 for additional information. (c) The allowance for credit losses is reported in Reinsurance assets – other and Reinsurance assets – Fortitude Re for reinsurance contracts that contain sufficient insurance risk, and reported in Other assets for insurance and reinsurance contracts that do not contain sufficient insurance risk in the Condensed Consolidated Balance Sheets. Changes in the allowance for credit losses are reported in Policyholder benefits and losses incurred for reinsurance contracts that do contain sufficient insurance risk and premiums for contracts that do not contain sufficient insurance risk in the Condensed Consolidated Statements of Income. Refer to Note 7 for additional information. (d) The allowance for credit losses is reported in Premiums and other receivables in the Condensed Consolidated Balance Sheets. Changes in the allowance for credit losses are reported in General operating and other expenses in the Condensed Consolidated Statements of Income. Refer to Note 2 for additional information. (e) The allowance for credit losses is reported in Liability for unpaid losses and loss adjustment expenses in the Condensed Consolidated Balance Sheets. Changes in the allowance for credit losses are reported in Policyholder benefits and losses incurred in the Condensed Consolidated Statements of Income. Refer to Note 10 for additional information. (f) The allowance for credit losses is reported in Other liabilities in the Condensed Consolidated Balance Sheets. Changes in the allowance for credit losses are reported in Net realized capital gains (losses) in the Condensed Consolidated Statements of Income. Refer to Note 6 for additional information. (g) This reflects adjustments to the amortization of DAC, unearned revenue reserve and sales inducement assets as well as impacts on the future policy benefits for certain universal life and variable annuity contracts. (h) A write-off does not generally result in an incremental loss to AIG. Prior to a write-off occurring, the allowance for the credit loss is increased or decreased to reflect AIG’s expectation of the credit loss to be incurred. Accordingly, when a write-off occurs, the allowance is reversed for the same amount, resulting in no incremental loss to AIG. The following presents the impact of the adoption of the standard on premiums and other receivables. Premiums and other receivables — Credit Losses Premiums and other receivables, net of allowance for credit losses include premium balances receivable, amounts due from agents and brokers and policyholders, trade receivables for the Direct Investment book and Global Capital Markets (GCM) and other receivables. Trade receivables for GCM include cash collateral posted to derivative counterparties that is not eligible to be netted against derivative liabilities. The allowance for credit losses and disputes for premiums and other receivables was $ 215 million at September 30, 2020. Our allowance for credit losses for premium receivables considers a combination of internal and external information relating to past events, current conditions and reasonable and supportable forecasts. Our allowance contemplates our contractual provisions. Upon default or delinquency of the policyholder we may be able to cease coverage for the remaining period. In certain jurisdictions we are unable to cancel coverage even in the event of delinquency or default by the policyholder. We consider premium and other receivable balances to be past due if the payment is not received after 90 days from the contractual obligation due date and record an allowance for disputes when there is reasonable uncertainty of the collectability of a disputed amount during the reporting period. For further information regarding the impacts of the adoption of this standard see Notes 4, 5, 6, 10 and 12 to the Condensed Consolidated Financial Statements. Simplifying the Test for Goodwill Impairment In January 2017, the FASB issued an accounting standard that eliminates the requirement to calculate the implied fair value of goodwill, through a hypothetical purchase price allocation, to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on 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. An entity should also consider income tax effects from tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. We adopted the standard on its effective date of January 1, 2020. The adoption of the standard did not have a material impact on our financial position, results of operations or cash flows. Cloud Computing Arrangements In August 2018, the FASB issued an accounting standard that aligns the requirements for capitalizing implementation costs incurred in a cloud computing (or hosting) arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). Capitalized implementation costs must be amortized over the term of the hosting arrangement. The accounting for the service element is not affected by the amendments in this update. We adopted the standard prospectively on its effective date of January 1, 2020. The adoption of the standard did not have a material impact on our consolidated financial position, results of operations or cash flows. Financial Disclosures About Guarantors and Issuers of Guaranteed Securities and Affiliates In March 2020, the Securities and Exchange Commission (SEC) adopted amendments to simplify and streamline the disclosure requirements for guarantors and issuers of guaranteed securities registered or being registered, and issuers’ affiliates whose securities collateralize securities registered or being registered. Currently, the SEC permits the omission of separate financial statements of subsidiary issuers and guarantors when certain conditions are met and the parent company provides summarized financial information of the subsidiary issuers and guarantors. The amendments, among other things, allow companies to cease providing summarized financial information if the subsidiary issuer’s or guarantor’s reporting obligation has been suspended. The amendments are effective January 4, 2021, with early adoption permitted. Effective March 31, 2020, AIG early adopted the amendment and ceased providing the summarized information for the subsidiary issuers and guarantors because the subsidiaries issuer’s reporting obligations have been suspended. Future Application of Accounting Standards Targeted Improvements to the Accounting for Long-Duration Contracts In August 2018, the FASB issued an accounting standard update with the objective of making targeted improvements to the existing recognition, measurement, presentation, and disclosure requirements for long-duration contracts issued by an insurance entity. The standard prescribes significant and comprehensive changes to recognition, measurement, presentation and disclosure as summarized below: Requires the review and if necessary update of future policy benefit assumptions at least annually for traditional and limited pay long duration contracts, with the recognition and separate presentation of any resulting re-measurement gain or loss (except for discount rate changes as noted below) in the income statement. Requires the discount rate assumption to be updated at the end of each reporting period using an upper medium grade (low-credit risk) fixed income instrument yield that maximizes the use of observable market inputs and recognizes the impact of changes to discount rates in other comprehensive income. Simplifies the amortization of DAC to a constant level basis over the expected term of the related contracts with adjustments for unexpected terminations, but no longer requires an impairment test. Requires the measurement of all market risk benefits associated with deposit (or account balance) contracts at fair value through the income statement with the exception of instrument-specific credit risk changes, which will be recognized in other comprehensive income. Increased disclosures of disaggregated roll-forwards of policy benefits, account balances, market risk benefits, separate account liabilities and information about significant inputs, judgments and methods used in measurement and changes thereto and impact of those changes. In September 2020, the FASB affirmed its proposal to defer the effective date of the standard to January 1, 2023, which the FASB initially proposed in an exposure draft in July 2020. We are currently evaluating the change in the effective date on our implementation efforts. We have started our implementation efforts and we are evaluating the method of adoption and impact of the standard on our reported consolidated financial condition, results of operations, cash flows and required disclosures. The adoption of this standard is expected to have a significant impact on our consolidated financial condition, results of operations, cash flows and required disclosures, as well as systems, processes and controls. Income Tax On December 18, 2019, the FASB issued an accounting standard that simplifies the accounting for income taxes by eliminating certain exceptions to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The amendments also simplified other areas including the accounting for franchise taxes and enacted tax laws or rates, and clarified the accounting for transactions that result in the step-up in the tax basis of goodwill. The standard is effective on January 1, 2021, with early adoption permitted. We do not expect the impact of the standard to be material to our consolidated financial condition, results of operations and cash flows. Reference Rate Reform On March 12, 2020, the FASB issued an accounting standard that provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The standard allows us to account for certain contract modifications that result from the discontinuation of the London Inter-Bank Offered Rate (LIBOR) or another reference rate as a continuation of the existing contract without additional analysis. This standard may be elected and applied prospectively over time from March 12, 2020 through December 31, 2022 as reference rate reform activities occur. We have started our implementation efforts and we are evaluating the method of adoption and impact of the standard on our reported consolidated financial condition, results of operations, cash flows and required disclosures. Clarification of Accounting for Certain Equity Method Investments On January 16, 2020, the FASB issued an accounting standard to clarify how a previously issued standard regarding a company’s ability to measure the fair value of certain equity securities without a readily determinable fair value should interact with equity method investments standards. The previously issued standard provides that such equity securities could be measured at cost, minus impairment, if any, unless an observable transaction for an identical or similar security occurs (measurement alternative). The new standard clarifies that a company should consider observable transactions that require the company to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with the equity method immediately before applying or upon discontinuing the equity method. The standard further clarifies that, when determining the accounting for certain forward contracts and purchased options a company should not consider, whether upon settlement or exercise, if the underlying securities would be accounted for under the equity method or fair value option. The standard is effective for interim and annual reporting periods beginning after December 15, 2020. We are evaluating the impact adoption of this standard will have on our consolidated financial condition, results of operations, cash flows and required disclosures. GOODWILL We performed our annual goodwill impairment tests of all reporting units in the third quarter of 2020 using a combination of both qualitative and quantitative assessments and concluded that our goodwill was not impaired. Our goodwill balance was $ 4.0 billion at September 30, 2020. For further information on goodwill see Note 13 to the Consolidated Financial Statements in the 2019 Annual Report. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2020 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | 3. Segment Information We report our results of operations consistent with the manner in which our chief operating decision makers review the business to assess performance and allocate resources, as follows: General Insurance General Insurance business is presented as two operating segments: North America — consists of insurance businesses in the United States, Canada and Bermuda. This also includes the results of Validus Reinsurance, Ltd. (Validus), Western World Insurance Group, Inc. and Glatfelter Insurance Group (Glatfelter). International — consists of regional insurance businesses in Japan, the UK, Europe, Asia Pacific, Latin America and Caribbean, Middle East and Africa, and China. This also includes the results of Talbot Holdings, Ltd. Results are presented before internal reinsurance transactions. North America and International operating segments consist of the following products: – Commercial Lines — consists of Liability, Financial Lines, Property and Special Risks. – Personal Insurance — consists of Personal Lines and Accident and Health. Life and Retirement Life and Retirement business is presented as four operating segments: Individual Retirement — consists of fixed annuities, fixed index annuities, variable annuities and retail mutual funds. Group Retirement — consists of group mutual funds, group annuities, individual annuity and investment products, and financial planning and advisory services. Life Insurance — primary products in the U.S. include term life and universal life insurance. International operations include distribution of life and health products in the UK and Ireland. Institutional Markets — consists of stable value wrap products, structured settlement and pension risk transfer annuities, corporate- and bank-owned life insurance and guaranteed investment contracts (GICs). On October 26, 2020, AIG announced its intention to separate its Life and Retirement business from AIG. For further discussion see Note 16 to the Condensed Consolidated Financial Statements. Other Operations Other Operations consists primarily of: Income from assets held by AIG Parent and other corporate subsidiaries. General operating expenses not attributable to AIG reporting segments. Certain compensation expenses attributable to Other Operations and reporting segments. Amortization of value of distribution network acquired related to the Validus and Glatfelter acquisitions. Interest expense attributable to AIG long-term debt as well as debt associated with consolidated investment entities. Results also include Blackboard and its subsidiaries which are focused on delivering commercial insurance solutions using digital technology, data analytics and automation. At the end of March 2020, Blackboard was placed into run-off. Legacy Portfolio Legacy Portfolio represents exited or discontinued product lines, policy forms or distribution channels. Effective February 2018, the Bermuda domiciled composite reinsurer, Fortitude Re, is included in our Legacy Portfolio. The sale of Fortitude Re was completed on June 2, 2020, and Fortitude Re is only included in the Legacy Portfolio through such date. As of closing of the Majority Interest Fortitude Sale, these reinsurance transactions between AIG and Fortitude Re are no longer considered affiliated transactions and Fortitude Re is the reinsurer of the majority of AIG’s Legacy Portfolio. Legacy Life and Retirement Run-Off Lines — Currently, the remaining legacy business not reinsured to Fortitude Holdings includes reserves that consist of certain structured settlements, pension risk transfer annuities, whole life and other small blocks of life and accident & health product lines. Legacy General Insurance Run-Off Lines — Currently, the remaining legacy business not reinsured to Fortitude Holdings includes reserves that consist of excess workers’ compensation, environmental exposures and exposures to other products within General Insurance that are no longer actively marketed. Also includes the remaining reserves in Eaglestone Reinsurance Company. Legacy Investments — Includes investment classes that we have placed into run-off including holdings in direct investments as well as investments in global capital markets and global real estate. We evaluate segment performance based on adjusted revenues and adjusted pre-tax income (loss). Adjusted revenues and adjusted pre-tax income (loss) are derived by excluding certain items from total revenues and net income (loss) attributable to AIG, respectively. 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. For the items excluded from adjusted revenues and adjusted pre-tax income (loss) see the table below. The following table presents AIG’s continuing operations by operating segment: Three Months Ended September 30, 2020 2019 Adjusted Adjusted Total Pre-tax Total Pre-tax (in millions) Revenues Income (Loss) Revenues Income (Loss) General Insurance North America $ 3,417 $ 399 $ 3,878 $ 435 International 3,275 17 3,537 72 Total General Insurance 6,692 416 7,415 507 Life and Retirement Individual Retirement 1,480 533 1,416 387 Group Retirement 758 338 726 203 Life Insurance 1,076 5 1,037 ( 7) Institutional Markets 556 99 654 63 Total Life and Retirement 3,870 975 3,833 646 Other Operations 128 ( 426) 139 ( 454) Legacy Portfolio 214 89 751 93 AIG Consolidation and elimination ( 148) ( 136) ( 81) ( 46) Total AIG Consolidated adjusted revenues and adjusted pre-tax income 10,756 918 12,057 746 Reconciling items from adjusted pre-tax income to pre-tax income: Changes in fair value of securities used to hedge guaranteed living benefits 14 15 25 12 Changes in benefit reserves and DAC, VOBA and SIA related to net realized capital gains (losses) - 78 - ( 65) Changes in the fair value of equity securities 119 119 ( 51) ( 51) Other income (expense) - net 23 - 16 - Gain on extinguishment of debt - 2 - - Net investment income on Fortitude Re funds withheld assets (a) 458 458 - - Net realized capital gains (losses) on Fortitude Re funds withheld assets (a) 32 32 - - Net realized capital gains (losses) on Fortitude Re funds withheld embedded derivative (a) ( 656) ( 656) - - Net realized capital gains (losses) (b) ( 525) ( 514) 867 881 Loss from divested businesses - ( 24) - ( 9) Non-operating litigation reserves and settlements - ( 1) - ( 5) Favorable prior year development and related amortization changes ceded under retroactive reinsurance agreements - 30 - 59 Net loss reserve discount benefit (charge) - 31 - ( 235) Integration and transaction costs associated with acquired businesses - ( 1) - ( 3) Restructuring and other costs - ( 100) - ( 67) Non-recurring costs related to regulatory or accounting changes - ( 19) - ( 3) Revenues and Pre-tax income $ 10,221 $ 368 $ 12,914 $ 1,260 Nine Months Ended September 30, 2020 2019 Adjusted Adjusted Total Pre-Tax Total Pre-Tax (in millions) Revenues Income (Loss) Revenues Income (Loss) General Insurance North America $ 9,908 $ 813 $ 12,001 $ 2,087 International 9,706 279 10,743 668 Total General Insurance 19,614 1,092 22,744 2,755 Life and Retirement Individual Retirement 4,183 1,389 4,233 1,483 Group Retirement 2,164 695 2,225 728 Life Insurance 3,280 51 3,264 195 Institutional Markets 2,964 295 2,143 213 Total Life and Retirement 12,591 2,430 11,865 2,619 Other Operations 305 ( 1,436) 422 ( 1,256) Legacy Portfolio 1,197 ( 22) 2,197 324 AIG Consolidation and elimination ( 262) ( 171) ( 257) ( 172) Total AIG Consolidated adjusted revenues and adjusted pre-tax income 33,445 1,893 36,971 4,270 Reconciling items from adjusted pre-tax income to pre-tax income (loss): Changes in fair value of securities used to hedge guaranteed living benefits 42 24 214 183 Changes in benefit reserves and DAC, VOBA and SIA related to net realized capital gains (losses) - ( 205) - ( 39) Changes in the fair value of equity securities ( 16) ( 16) 6 6 Other income (expense) - net 46 - 27 - Loss on extinguishment of debt - ( 15) - ( 13) Net investment income on Fortitude Re funds withheld assets (a) 574 574 - - Net realized capital gains (losses) on Fortitude Re funds withheld assets (a) 128 128 - - Net realized capital gains (losses) on Fortitude Re funds withheld embedded derivative (a) ( 1,493) ( 1,493) - - Net realized capital gains (b) 1,328 1,369 713 758 loss from divested businesses - ( 8,652) - ( 4) Non-operating litigation reserves and settlements 6 5 - ( 6) Favorable prior year development and related amortization changes ceded under retroactive reinsurance agreements - 71 - 211 Net loss reserve discount charge - ( 41) - ( 920) Integration and transaction costs associated with acquired businesses - ( 7) - ( 16) Restructuring and other costs - ( 324) - ( 174) Non-recurring costs related to regulatory or accounting changes - ( 46) - ( 5) Revenues and Pre-tax income (loss) $ 34,060 $ ( 6,735) $ 37,931 $ 4,251 (a) Represents activity subsequent to the deconsolidation of Fortitude Re on June 2, 2020. (b) Includes all net realized capital 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). |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2020 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 4. Fair Value Measurements Fair Value Measurements on a Recurring Basis Assets and liabilities recorded at fair value in the Condensed 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. 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: September 30, 2020 Counterparty Cash (in millions) Level 1 Level 2 Level 3 Netting (a) Collateral Total Assets: Bonds available for sale: U.S. government and government sponsored entities $ 33 $ 5,102 $ - $ - $ - $ 5,135 Obligations of states, municipalities and political subdivisions - 13,990 2,183 - - 16,173 Non-U.S. governments 41 15,126 7 - - 15,174 Corporate debt - 159,991 2,115 - - 162,106 RMBS - 20,759 12,655 - - 33,414 CMBS - 14,796 981 - - 15,777 CDO/ABS - 8,833 9,353 - - 18,186 Total bonds available for sale 74 238,597 27,294 - - 265,965 Other bond securities: U.S. government and government sponsored entities - 1,870 - - - 1,870 Non-U.S. governments - - - - - - Corporate debt - 12 - - - 12 RMBS - 320 168 - - 488 CMBS - 274 48 - - 322 CDO/ABS - 168 2,555 - - 2,723 Total other bond securities - 2,644 2,771 - - 5,415 Equity securities 827 18 26 - - 871 Other invested assets (b) - 94 1,583 - - 1,677 Derivative assets: Interest rate contracts 3 5,051 - - - 5,054 Foreign exchange contracts - 1,585 3 - - 1,588 Equity contracts 6 841 110 - - 957 Credit contracts - - 1 - - 1 Other contracts - - 13 - - 13 Counterparty netting and cash collateral - - - ( 3,695) ( 3,129) ( 6,824) Total derivative assets 9 7,477 127 ( 3,695) ( 3,129) 789 Short-term investments 3,195 4,019 - - - 7,214 Other assets - - 112 - - 112 Separate account assets 88,023 4,013 - - - 92,036 Total $ 92,128 $ 256,862 $ 31,913 $ ( 3,695) $ ( 3,129) $ 374,079 Liabilities: Policyholder contract deposits $ - $ - $ 9,322 $ - $ - $ 9,322 Derivative liabilities: Interest rate contracts - 4,559 - - - 4,559 Foreign exchange contracts - 619 - - - 619 Equity contracts 12 84 5 - - 101 Credit contracts - 24 45 - - 69 Other contracts - - 7 - - 7 Counterparty netting and cash collateral - - - ( 3,695) ( 1,060) ( 4,755) Total derivative liabilities 12 5,286 57 ( 3,695) ( 1,060) 600 Fortitude Re funds withheld payable - - 5,136 - - 5,136 Other liabilities - - - - - - Long-term debt - 2,169 - - - 2,169 Total $ 12 $ 7,455 $ 14,515 $ ( 3,695) $ ( 1,060) $ 17,227 December 31, 2019 Counterparty Cash (in millions) Level 1 Level 2 Level 3 Netting (a) Collateral Total Assets: Bonds available for sale: U.S. government and government sponsored entities $ 135 $ 5,245 $ - $ - $ - $ 5,380 Obligations of states, municipalities and political subdivisions - 13,197 2,121 - - 15,318 Non-U.S. governments 60 14,809 - - - 14,869 Corporate debt - 147,973 1,663 - - 149,636 RMBS - 19,397 13,408 - - 32,805 CMBS - 13,377 1,053 - - 14,430 CDO/ABS - 10,962 7,686 - - 18,648 Total bonds available for sale 195 224,960 25,931 - - 251,086 Other bond securities: U.S. government and government sponsored entities - 2,121 - - - 2,121 Non-U.S. governments - - - - - - Corporate debt - 18 - - - 18 RMBS - 346 143 - - 489 CMBS - 272 50 - - 322 CDO/ABS - 187 3,545 - - 3,732 Total other bond securities - 2,944 3,738 - - 6,682 Equity securities 756 77 8 - - 841 Other invested assets (b) - 86 1,192 - - 1,278 Derivative assets: Interest rate contracts 1 3,199 - - - 3,200 Foreign exchange contracts - 1,034 6 - - 1,040 Equity contracts 5 593 171 - - 769 Credit contracts - - 3 - - 3 Other contracts - - 14 - - 14 Counterparty netting and cash collateral - - - ( 2,427) ( 1,806) ( 4,233) Total derivative assets 6 4,826 194 ( 2,427) ( 1,806) 793 Short-term investments 2,299 3,044 - - - 5,343 Other assets 57 2,212 89 - - 2,358 Separate account assets 89,069 4,203 - - - 93,272 Total $ 92,382 $ 242,352 $ 31,152 $ ( 2,427) $ ( 1,806) $ 361,653 Liabilities: Policyholder contract deposits $ - $ - $ 6,910 $ - $ - $ 6,910 Derivative liabilities: Interest rate contracts 4 2,745 - - - 2,749 Foreign exchange contracts - 1,025 - - - 1,025 Equity contracts 8 111 20 - - 139 Credit contracts - 24 65 - - 89 Other contracts - - 7 - - 7 Counterparty netting and cash collateral - - - ( 2,427) ( 527) ( 2,954) Total derivative liabilities 12 3,905 92 ( 2,427) ( 527) 1,055 Other liabilities - 45 - - - 45 Long-term debt - 2,062 - - - 2,062 Total $ 12 $ 6,012 $ 7,002 $ ( 2,427) $ ( 527) $ 10,072 (a) Represents netting of derivative exposures covered by qualifying master netting agreements. (b) Excludes investments that are measured at fair value using the net asset value (NAV) per share (or its equivalent), which totaled $ 5.4 billion and $ 5.5 billion as of September 30, 2020 and December 31, 2019, respectively. Changes in Level 3 Recurring Fair Value Measurements The following tables present changes during the three- and nine-month periods ended September 30, 2020 and 2019 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 Condensed Consolidated Balance Sheets at September 30, 2020 and 2019: Net Changes in Realized Unrealized Gains and Purchases, Changes in (Losses) Included in Unrealized Sales, Unrealized Gains Other Comprehensive Gains Issuances (Losses) Included Income (Loss) for Fair Value (Losses) Other and Gross Gross Fair Value in Income on Recurring Level 3 Beginning Included Comprehensive Settlements, Transfers Transfers Divested End Instruments Held Instruments Held (in millions) of Period in Income Income (Loss) Net In Out Businesses of Period at End of Period at End of Period Three Months Ended September 30, 2020 Assets: Bonds available for sale: Obligations of states, municipalities and political subdivisions $ 2,279 $ 3 $ ( 4) $ ( 30) $ - $ ( 65) $ - $ 2,183 $ - $ - Non-U.S. governments 5 - 1 - 1 - - 7 - - Corporate debt 1,900 ( 33) 52 ( 25) 452 ( 231) - 2,115 - 38 RMBS 12,678 192 301 ( 412) 3 ( 107) - 12,655 - 335 CMBS 1,149 3 36 ( 11) - ( 196) - 981 - 27 CDO/ABS 9,461 5 180 ( 174) 125 ( 244) - 9,353 - 172 Total bonds available for sale (a) 27,472 170 566 ( 652) 581 ( 843) - 27,294 - 572 Other bond securities: RMBS 168 16 - ( 16) - - - 168 4 - CMBS 47 1 - - - - - 48 1 - CDO/ABS 2,531 124 - ( 100) - - - 2,555 34 - Total other bond securities 2,746 141 - ( 116) - - - 2,771 39 - Equity securities 43 - 2 1 7 ( 27) - 26 1 - Other invested assets 1,486 74 ( 2) 25 - - - 1,583 - - Other assets 111 - - 2 - - ( 1) 112 - - Total $ 31,858 $ 385 $ 566 $ ( 740) $ 588 $ ( 870) $ ( 1) $ 31,786 $ 40 $ 572 Net Changes in Realized Unrealized Gains and Purchases, Changes in (Losses) Included in Unrealized Sales, Unrealized Gains Other Comprehensive (Gains) Issuances (Losses) Included Income (Loss) for Fair Value Losses Other and Gross Gross Fair Value in Income on Recurring Level 3 Beginning Included Comprehensive Settlements, Transfers Transfers Divested End Instruments Held Instruments Held (in millions) of Period in Income Income (Loss) Net In Out Businesses of Period at End of Period at End of Period Liabilities: Policyholder contract deposits $ 9,233 $ 19 $ - $ 70 $ - $ - $ - $ 9,322 $ 273 $ - Derivative liabilities, net: Interest rate contracts - - - - - - - - - - Foreign exchange contracts ( 1) ( 2) - - - - - ( 3) 2 - Equity contracts ( 53) 9 - ( 65) ( 1) 5 - ( 105) - - Credit contracts 45 1 - ( 2) - - - 44 ( 7) - Other contracts ( 3) ( 19) - 16 - - - ( 6) 18 - Total derivative liabilities, net (b) ( 12) ( 11) - ( 51) ( 1) 5 - ( 70) 13 - Fortitude Re funds withheld payable 4,510 656 - ( 30) - - - 5,136 ( 256) - Total $ 13,731 $ 664 $ - $ ( 11) $ ( 1) $ 5 $ - $ 14,388 $ 30 $ - Net Changes in Realized Unrealized Gains and Purchases, Changes in (Losses) Included in Unrealized Sales, Unrealized Gains Other Comprehensive Gains Issuances (Losses) Included Income (Loss) for Fair Value (Losses) Other and Gross Gross Fair Value in Income on Recurring Level 3 Beginning Included Comprehensive Settlements, Transfers Transfers Divested End Instruments Held Instruments Held (in millions) of Period in Income Income (Loss) Net In Out Businesses of Period at End of Period at End of Period Nine Months Ended September 30, 2020 Assets: Bonds available for sale: Obligations of states, municipalities and political subdivisions $ 2,121 $ 8 $ 195 $ 127 $ 27 $ ( 295) $ - $ 2,183 $ - $ 193 Non-U.S. governments - - 1 5 7 ( 6) - 7 - - Corporate debt 1,663 ( 101) 43 95 1,074 ( 659) - 2,115 - 59 RMBS 13,408 532 ( 375) ( 806) 29 ( 133) - 12,655 - ( 213) CMBS 1,053 14 70 17 23 ( 196) - 981 - 66 CDO/ABS 7,686 25 55 ( 19) 2,062 ( 456) - 9,353 - 38 Total bonds available for sale (a) 25,931 478 ( 11) ( 581) 3,222 ( 1,745) - 27,294 - 143 Other bond securities: RMBS 143 16 - 9 - - - 168 3 - CMBS 50 - - ( 2) - - - 48 ( 1) - CDO/ABS 3,545 225 - ( 1,215) - - - 2,555 25 - Total other bond securities 3,738 241 - ( 1,208) - - - 2,771 27 - Equity securities 8 ( 1) 3 11 33 ( 28) - 26 1 - Other invested assets 1,192 11 ( 2) 232 150 - - 1,583 ( 13) - Other assets 89 - - 61 - - ( 38) 112 - - Total $ 30,958 $ 729 $ ( 10) $ ( 1,485) $ 3,405 $ ( 1,773) $ ( 38) $ 31,786 $ 15 $ 143 Net Changes in Realized Unrealized Gains and Purchases, Changes in (Losses) Included in Unrealized Sales, Unrealized Gains Other Comprehensive (Gains) Issuances (Losses) Included Income (Loss) for Fair Value Losses Other and Gross Gross Fair Value in Income on Recurring Level 3 Beginning Included Comprehensive Settlements, Transfers Transfers Divested End Instruments Held Instruments Held (in millions) of Period in Income Income (Loss) Net In Out Businesses of Period at End of Period at End of Period Liabilities: Policyholder contract deposits $ 6,910 $ 2,250 $ - $ 162 $ - $ - $ - $ 9,322 $ ( 1,436) $ - Derivative liabilities, net: Interest rate contracts - ( 1) - 1 - - - - 1 - Foreign exchange contracts ( 6) 2 - 1 - - - ( 3) 2 - Equity contracts ( 151) 19 - 23 ( 1) 5 - ( 105) ( 62) - Credit contracts 62 ( 59) - 41 - - - 44 8 - Other contracts ( 7) ( 46) - 47 - - - ( 6) 45 - Total derivative liabilities, net (b) ( 102) ( 85) - 113 ( 1) 5 - ( 70) ( 6) - Fortitude Re funds withheld payable - 1,493 - ( 30) - - 3,673 5,136 ( 919) - Total $ 6,808 $ 3,658 $ - $ 245 $ ( 1) $ 5 $ 3,673 $ 14,388 $ ( 2,361) $ - Net Changes in Realized and Unrealized Gains Unrealized Purchases, (Losses) Included Fair Value Gains (Losses) Other Sales, Gross Gross Fair Value in Income on Beginning Included Comprehensive Issuances and Transfers Transfers Divested End Instruments Held (in millions) of Period in Income Income (Loss) Settlements, Net In Out Businesses of Period at End of Period Three Months Ended September 30, 2019 Assets: Bonds available for sale: Obligations of states, municipalities and political subdivisions $ 2,162 $ ( 1) $ 119 $ 92 $ - $ ( 265) $ - $ 2,107 $ - Non-U.S. governments 2 6 - - 5 - - 13 - Corporate debt 1,821 ( 36) ( 2) ( 535) 112 ( 85) - 1,275 - RMBS 13,863 166 15 ( 418) 16 ( 82) - 13,560 - CMBS 1,103 2 32 85 - ( 172) - 1,050 - CDO/ABS 9,062 3 37 ( 170) 7 - - 8,939 - Total bonds available for sale 28,013 140 201 ( 946) 140 ( 604) - 26,944 - Other bond securities: RMBS 830 9 - ( 24) - - - 815 1 CMBS 88 1 - ( 17) - ( 4) - 68 ( 2) CDO/ABS 4,150 115 - ( 334) - - - 3,931 28 Total other bond securities 5,068 125 - ( 375) - ( 4) - 4,814 27 Equity securities 35 - - ( 29) 2 - - 8 ( 2) Other invested assets 605 6 - ( 22) - - - 589 7 Other assets 61 - - ( 1) - - - 60 - Total $ 33,782 $ 271 $ 201 $ ( 1,373) $ 142 $ ( 608) $ - $ 32,415 $ 32 Net Changes in Realized and Unrealized Gains Unrealized Purchases, (Losses) Included Fair Value (Gains) Losses Other Sales, Gross Gross Fair Value in Income on Beginning Included Comprehensive Issuances and Transfers Transfers Divested End Instruments Held (in millions) of Period in Income Income (Loss) Settlements, Net In Out Businesses of Period at End of Period Liabilities: Policyholder contract deposits $ 6,065 $ 861 $ - $ 240 $ - $ - $ - $ 7,166 $ ( 691) Derivative liabilities, net: Interest rate contracts 16 ( 3) - ( 13) - - - - - Foreign exchange contracts ( 4) 6 - ( 3) - - - ( 1) - Equity contracts ( 113) 12 - - - - - ( 101) ( 13) Credit contracts 173 ( 24) - ( 47) - - - 102 14 Other contracts ( 7) ( 17) - 17 - - - ( 7) 15 Total derivative liabilities, net (b) 65 ( 26) - ( 46) - - - ( 7) 16 Total $ 6,130 $ 835 $ - $ 194 $ - $ - $ - $ 7,159 $ ( 675) Net Changes in Realized and Unrealized Gains Unrealized Purchases, (Losses) Included Fair Value Gains (Losses) Other Sales, Gross Gross Fair Value in Income on Beginning Included Comprehensive Issuances and Transfers Transfers Divested End Instruments Held (in millions) of Period in Income Income (Loss) Settlements, Net In Out Businesses of Period at End of Period Nine Months Ended September 30, 2019 Assets: Bonds available for sale: Obligations of states, municipalities and political subdivisions $ 2,000 $ ( 2) $ 321 $ 178 $ 35 $ ( 425) $ - $ 2,107 $ - Non-U.S. governments 11 5 - ( 4) 5 ( 4) - 13 - Corporate debt 864 ( 10) 79 ( 600) 1,155 ( 213) - 1,275 - RMBS 14,199 575 176 ( 1,234) 83 ( 239) - 13,560 - CMBS 917 8 62 381 58 ( 376) - 1,050 - CDO/ABS 9,102 15 204 ( 111) 103 ( 374) - 8,939 - Total bonds available for sale 27,093 591 842 ( 1,390) 1,439 ( 1,631) - 26,944 - Other bond securities: RMBS 1,290 69 - ( 544) - - - 815 ( 18) CMBS 77 5 - - - ( 14) - 68 3 CDO/ABS 4,478 299 - ( 749) - ( 97) - 3,931 128 Total other bond securities 5,845 373 - ( 1,293) - ( 111) - 4,814 113 Equity securities 27 - - ( 20) 2 ( 1) - 8 2 Other invested assets 587 24 1 ( 23) - - - 589 27 Other assets 58 - - 2 - - - 60 - Total $ 33,610 $ 988 $ 843 $ ( 2,724) $ 1,441 $ ( 1,743) $ - $ 32,415 $ 142 Net Changes in Realized and Unrealized Gains Unrealized Purchases, (Losses) Included Fair Value (Gains) Losses Other Sales, Gross Gross Fair Value in Income on Beginning Included Comprehensive Issuances and Transfers Transfers Divested End Instruments Held (in millions) of Period in Income Income (Loss) Settlements, Net In Out Businesses of Period at End of Period Liabilities: Policyholder contract deposits $ 4,116 $ 2,400 $ - $ 650 $ - $ - $ - $ 7,166 $ ( 2,044) Derivative liabilities, net: Interest rate contracts 15 - - ( 15) - - - - 1 Foreign exchange contracts ( 5) ( 4) - 8 - - - ( 1) - Equity contracts ( 75) ( 8) - ( 18) - - - ( 101) 19 Credit contracts 227 ( 51) - ( 74) - - - 102 13 Other contracts ( 9) ( 50) - 52 - - - ( 7) 50 Total derivative liabilities, net (b) 153 ( 113) - ( 47) - - - ( 7) 83 Total $ 4,269 $ 2,287 $ - $ 603 $ - $ - $ - $ 7,159 $ ( 1,961) (a) As a result of the adoption of the Financial Instruments Credit Losses Standard on January 1, 2020, credit losses are included in net realized and unrealized (gains) losses included in income. (b) 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 Condensed Consolidated Statements of Income as follows: Net Net Realized Investment Capital Other (in millions) Income Gains (Losses) Income Total Three Months Ended September 30, 2020 Assets: Bonds available for sale * $ 177 $ ( 7) $ - $ 170 Other bond securities 143 ( 2) - 141 Equity securities - - - - Other invested assets 74 - - 74 Nine Months Ended September 30, 2020 Assets: Bonds available for sale * $ 557 $ ( 79) $ - $ 478 Other bond securities ( 25) 266 - 241 Equity securities - ( 1) - ( 1) Other invested assets 11 - - 11 Three Months Ended September 30, 2019 Assets: Bonds available for sale $ 164 $ ( 24) $ - $ 140 Other bond securities 110 15 - 125 Other invested assets 7 ( 1) - 6 Nine Months Ended September 30, 2019 Assets: Bonds available for sale $ 651 $ ( 60) $ - $ 591 Other bond securities 306 67 - 373 Other invested assets 25 ( 1) - 24 Net Net Realized Investment Capital Other (in millions) Income (Gains) Losses Income Total Three Months Ended September 30, 2020 Liabilities: Policyholder contract deposits $ - $ 19 $ - $ 19 Derivative liabilities, net - 5 ( 16) ( 11) Fortitude Re funds withheld payable - 656 - 656 Nine Months Ended September 30, 2020 Liabilities: Policyholder contract deposits $ - $ 2,250 $ - $ 2,250 Derivative liabilities, net - ( 41) ( 44) ( 85) Fortitude Re funds withheld payable - 1,493 - 1,493 Three Months Ended September 30, 2019 Liabilities: Policyholder contract deposits $ - $ 861 $ - $ 861 Derivative liabilities, net - ( 11) ( 15) ( 26) Nine Months Ended September 30, 2019 Liabilities: Policyholder contract deposits $ - $ 2,400 $ - $ 2,400 Derivative liabilities, net - ( 64) ( 49) ( 113) * As a result of the adoption of the Financial Instruments Credit Losses Standard on January 1, 2020, credit losses are included in net realized capital gains (losses). The following table presents the gross components of purchases, sales, issuances and settlements, net, shown above, for the three- and nine-month periods ended September 30, 2020 and 2019 related to Level 3 assets and liabilities in the Condensed Consolidated Balance Sheets: Issuances Purchases, Sales, and Issuances and (in millions) Purchases Sales Settlements (a) Settlements, Net (a) Three Months Ended September 30, 2020 Assets: Bonds available for sale: Obligations of states, municipalities and political subdivisions $ 34 $ ( 18) $ ( 46) $ ( 30) Non-U.S. governments - - - - Corporate debt 23 ( 2) ( 46) ( 25) RMBS 182 - ( 594) ( 412) CMBS 2 ( 10) ( 3) ( 11) CDO/ABS 234 ( 78) ( 330) ( 174) Total bonds available for sale 475 ( 108) ( 1,019) ( 652) Other bond securities: RMBS - - ( 16) ( 16) CMBS - - - - CDO/ABS - - ( 100) ( 100) Total other bond securities - - ( 116) ( 116) Equity securities 1 - - 1 Other invested assets 25 - - 25 Other assets - - 2 2 Total assets $ 501 $ ( 108) $ ( 1,133) $ ( 740) Liabilities: Policyholder contract deposits $ - $ 170 $ ( 100) $ 70 Derivative liabilities, net ( 19) - ( 32) ( 51) Fortitude Re funds withheld payable - - ( 30) ( 30) Other liabilities - - - - Total liabilities $ ( 19) $ 170 $ ( 162) $ ( 11) Three Months Ended September 30, 2019 Assets: Bonds available for sale: Obligations of states, municipalities and political subdivisions $ 109 $ - $ ( 17) $ 92 Non-U.S. governments - - - - Corporate debt 1 ( 128) ( 408) ( 535) RMBS 253 - ( 671) ( 418) CMBS 92 - ( 7) 85 CDO/ABS 458 ( 198) ( 430) ( 170) Total bonds available for sale 913 ( 326) ( 1,533) ( 946) Other bond securities: RMBS - - ( 24) ( 24) CMBS - ( 16) ( 1) ( 17) CDO/ABS - ( 153) ( 181) ( 334) Total other bond securities - ( 169) ( 206) ( 375) Equity securities - - ( 29) ( 29) Other invested assets 21 - ( 43) ( 22) Other assets - - ( 1) ( 1) Total assets $ 934 $ ( 495) $ ( 1,812) $ ( 1,373) Liabilities: Policyholder contract deposits $ - $ 240 $ - $ 240 Derivative liabilities, net ( 7) - ( 39) ( 46) Total liabilities $ ( 7) $ 240 $ ( 39) $ 194 Issuances Purchases, Sales, and Issuances and (in millions) Purchases Sales Settlements (a) Settlements, Net (a) Nine Months Ended September 30, 2020 Assets: Bonds available for sale: Obligations of states, municipalities and political subdivisions $ 201 $ ( 20) $ ( 54) $ 127 Non-U.S. governments 5 - - 5 Corporate debt 256 ( 7) ( 154) 95 RMBS 883 - ( 1,689) ( 806) CMBS 56 ( 17) ( 22) 17 CDO/ABS 715 ( 103) ( 631) ( 19) Total bonds available for sale 2,116 ( 147) ( 2,550) ( 581) Other bond securities: RMBS 37 - ( 28) 9 CMBS - - ( 2) ( 2) CDO/ABS 35 ( 579) ( 671) ( 1,215) Total other bond securities 72 ( 579) ( 701) ( 1,208) Equity securities 11 - - 11 Other invested assets 277 - ( 45) 232 Other assets 55 - 6 61 Total assets $ 2,531 $ ( 726) $ ( 3,290) $ ( 1,485) Liabilities: Policyholder contract deposits $ - $ 514 $ ( 352) $ 162 Derivative liabilities, net ( 43) 8 148 113 Fortitude Re funds withheld payable - - ( 30) ( 30) Other liabilities - - - - Total liabilities $ ( 43) $ 522 $ ( 234) $ 245 Nine Months Ended September 30, 2019 Assets: Bonds available for sale: Obligations of states, municipalities and political subdivisions $ 243 $ ( 16) $ ( 49) $ 178 Non-U.S. governments - - ( 4) ( 4) Corporate debt 58 ( 129) ( 529) ( 600) RMBS 860 ( 26) ( 2,068) ( 1,234) CMBS 455 - ( 74) 381 CDO/ABS 1,628 ( 508) ( 1,231) ( 111) Total bonds available for sale 3,244 ( 679) ( 3,955) ( 1,390) Other bond securities: RMBS - ( 437) ( 107) ( 544) CMBS 18 ( 16) ( 2) - CDO/ABS - ( 153) ( 596) ( 749) Total other bond securities 18 ( 606) ( 705) ( 1,293) Equity securities 9 - ( 29) ( 20) Other invested assets 64 - ( 87) ( 23) Other assets - - 2 2 Total assets $ 3,335 $ ( 1,285) $ ( 4,774) $ ( 2,724) Liabilities: Policyholder contract deposits $ - $ 616 $ 34 $ 650 Derivative liabilities, net ( 29) - ( 18) ( 47) Total liabilities $ ( 29) $ 616 $ 16 $ 603 (a) There were no issuances during the three- and nine-month periods ended September 30, 2020 and 2019. 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 September 30, 2020 and 2019 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) as shown in the table above excludes $( 79) million and $( 207) million of net gains (losses) related to assets and liabilities transferred into Level 3 during the three- and nine-month periods ended September 30, 2020, respectively, and includes $ 18 million and $( 13) million of net gains (losses) related to assets and liabilities transferred out of Level 3 during the three- and nine-month periods ended September 30, 2020, respectively. The Net realized and unrealized gains (losses) included in income (loss) or Other comprehensive income (loss) as shown in the table above excludes $( 40) million of net losses related to assets and liabilities transferred into Level 3 during the nine-month period ended September 30, 2019, and includes $ 24 million and $ 28 million of net gains related to assets and liabilities transferred out of Level 3 during the three- and nine-month periods ended September 30, 2019, respectively. Transfers of Level 3 Assets During the three- and nine-month periods ended September 30, 2020 and 2019, transfers into Level 3 assets primarily included certain investments in private placement corporate debt, RMBS, CMBS and CDO/ABS. 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 RMBS, CMBS and CDO and certain ABS into Level 3 assets were due to diminished market transparency and liquidity for individual security types. During the three- and nine-month periods ended September 30, 2020 and 2019, transfers out of Level 3 assets primarily included private placement and other corporate debt, CMBS, RMBS, CDO/ABS and certain investments in municipal securities. Transfers of certain investments in municipal securities, corporate debt, RMBS, CMBS and CDO/ABS 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 and certain ABS 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 three- and nine-month periods ended September 30, 2020 and 2019. Divested Businesses The Level 3 liabilities for the three- and nine-month periods ended September 30, 2020 includes an embedded derivative associated with the funds withheld payable to Fortitude Re that was established as a result of the Majority Interest Fortitude Sale. 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 and from internal valuation models. Because input information from third-parties with respect to certain Level 3 instruments (primarily CDO/ABS) may not be reasonably available to us, balances shown below may not equal total amounts reported for such Level 3 assets and liabilities: Fair Value at September 30, Valuation Range (in millions) 2020 Technique Unobservable Input (b) (Weighted Average) (c) Assets: Obligations of states, municipalities and political subdivisions $ 1,731 Discounted cash flow Yield 2.87% - 3.39% ( 3.13%) Corporate debt 1,672 Discounted cash flow Yield 2.99% - 6.03% ( 4.51%) RMBS (a) 11,810 Discounted cash flow Constant prepayment rate 3.81% - 12.15% ( 7.98%) Loss severity 28.62% - 77.94% ( 53.28%) Constant default rate 1.30% - 6.14% ( 3.72%) Yield 1.74% - 4.41% ( 3.08%) CDO/ABS (a) 8,704 Discounted cash flow Yield 2.01% - 5.53% ( 3.77%) CMBS 561 Discounted cash flow Yield 0.78% - 5.68% ( 3.23%) Liabilities (d) Embedded derivatives within Policyholder contract deposits: Variable annuity guaranteed minimum withdrawal benefits (GMWB) 3,832 Discounted cash flow Equity volatility 7.15% - 56.25% Base lapse rate 0.16% - 12.60% Dynamic lapse multiplier 50.00% - 143.00% Mortality multiplier (e) 38.00% - 147.00% Utilization 90.00% - 100.00% Equity / interest rate correlation 20.00% - 40.00% NPA (f) 0.14% - 2.07% Index annuities including certain GMWB 4,881 Discounted cash flow Lapse rate 0.38% - 50.00% Mortality multiplier (e) 24.00% - 180.00% Utilization (g) 80.00% - 100.00% Option budget 0.00% - 4.00% NPA (f) 0.14% - 2.07% Indexed life 577 Discounted cash flow Base lapse rate 0.00% - 37.97% Mortality rate 0.00% - 100.00% NPA (f) 0.14% - 2.07% Fair Value at December 31, Valuation Range (in millions) 2019 Technique Unobservable Input (b) (Weighted Average) (c) Assets: Obligations of states, municipalities and political subdivisions $ 1,633 Discounted cash flow Yield 3.35% - 3.95% ( 3.65%) Corporate debt 1,087 Discounted cash flow Yield 3.48% - 6.22% ( 4.85%) RMBS (a) 11,746 Discounted cash flow Constant prepayment rate 4.00% - 12.89% ( 8.44%) Loss severity 33.68% - 76.91% ( 55.29%) Constant default rate 1.68% - 6.17% ( 3.93%) Yield 2.52% - 4.53% ( 3.52%) CDO/ABS (a) 6,025 Discounted cash flow Yield 2.92% - 4.91% ( 3.91%) CMBS 476 Discounted cash flow Yield 2.77% - 5.18% ( 3.97%) Liabilities: Embedded derivatives within Policyholder contract deposits: GMWB 2,474 Discounted cash flow Equity volatility 6.15% - 48.85% Base lapse rate 0.16% - 12.60% Dynamic lapse multiplier 50.00% - 143.00% Mortality multiplier (d) 38.00% - 147.00% Utilization 90.00% - 100.00% Equity / interest rate correlation 20.00% - 40.00% NPA (e) 0.12% - 1.53% Index annuities 3,895 Discounted cash flow Lapse rate 0.31% - 50.00% Mortality multiplier (d) 24.00% - 180.00% Option budget 1.00% - 4.00% NPA (e) 0.12% - 1.53% Indexed life 510 Discounted cash flow Base lapse rate 0.00% - 37.97% Mortality rate 0.00% - 100.00% NPA (e) 0.12% - 1.53% (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 CDO 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. Because the valuation methodology for embedded derivatives within Policyholder contract deposits uses a range of inputs that vary at the contract level over the cash flow projection period, management believes that presenting a range, rather than weighted average, is a more meaningful representation of the unobservable inputs used in the valuation. (d) The Fortitude Re funds withheld payable has been excluded from the above table. As discussed in Note 7, the Fortitude Re funds withheld payable is created through modified coinsurance (modco) and funds withheld reinsurance arrangements where the investments supporting the reinsurance agreements are withheld by, and continue to reside on AIG’s balance sheet. This embedded derivative is valued as a total return swap with reference to the fair value of the invested assets held by AIG. Accordingly, the unobservable inputs utilized in the valuation of the embedded derivative are a component of the invested assets supporting the reinsurance agreements that are held on AIG’s balance sheet. (e) Mortality inputs are shown as multipliers of the 2012 Individual Annuity Mortality Basic table. (f) The non-performance risk adjustment (NPA) applied as a spread over risk-free curve for discounting. (g) The partial withdrawal utilization unobservable input range shown applies only to policies with guaranteed minimum withdrawal benefit riders that are accounted for as an embedded derivative. The total embedded derivative liability at September 30, 2020 is approximately $ 611 million. The remaining guaranteed minimum riders on the Index Annuities are valued under the accounting guidance for certain nontraditional long-duration contracts. The ranges of reported inputs for Obligations of states, municipalities and political subdivisions, Corporate debt, RMBS, CDO/ABS, and CMBS valued using a discounted cash flow technique consist of one standard deviation in either direction from the value-wei |
INVESTMENTS
INVESTMENTS | 9 Months Ended |
Sep. 30, 2020 | |
INVESTMENTS | |
INVESTMENTS | 5. Investments Fixed Maturity Securities Subsequent to the adoption of the Financial Instruments Credit Losses Standard on January 1, 2020 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 are measured at fair value at our election. 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 policy related amounts and deferred income taxes, in shareholders’ equity. Realized and unrealized gains and losses from fixed maturity securities measured at fair value at our election 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. An allowance for credit losses is not established upon initial recognition of the asset (unless the security is determined to be a 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. Prior to the adoption of the Financial Instruments Credit Losses Standard on January 1, 2020 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 RMBS, CMBS and CDO/ABS, (collectively, 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, effective yields are recalculated and adjusted prospectively based on changes in expected undiscounted future cash flows. For purchased credit impaired (PCI) securities, at acquisition, the difference between the undiscounted expected future cash flows and the recorded investment in the securities represents the initial accretable yield, which is to be accreted into net investment income over the securities’ remaining lives on an effective level-yield basis. Subsequently, effective yields recognized on PCI securities are recalculated and adjusted prospectively to reflect changes in the contractual benchmark interest rates on variable rate securities and any significant increases in undiscounted expected future cash flows arising due to reasons other than interest rate changes. Securities Available for Sale The following table presents the amortized cost or cost and fair value of our available for sale securities: Amortized Allowance Gross Gross Cost or for Credit Unrealized Unrealized Fair (in millions) Cost Losses (a) Gains Losses Value September 30, 2020 Bonds available for sale: U.S. government and government sponsored entities $ 4,319 $ - $ 840 $ ( 24) $ 5,135 Obligations of states, municipalities and political subdivisions 14,027 - 2,162 ( 16) 16,173 Non-U.S. governments 14,240 ( 5) 1,046 ( 107) 15,174 Corporate debt 146,595 ( 206) 16,897 ( 1,180) 162,106 Mortgage-backed, asset-backed and collateralized: RMBS 30,427 ( 24) 3,088 ( 77) 33,414 CMBS 14,841 ( 1) 1,017 ( 80) 15,777 CDO/ABS 18,021 - 390 ( 225) 18,186 Total mortgage-backed, asset-backed and collateralized 63,289 ( 25) 4,495 ( 382) 67,377 Total bonds available for sale (c) $ 242,470 $ ( 236) $ 25,440 $ ( 1,709) $ 265,965 Other-Than- Amortized Gross Gross Temporary Cost or Unrealized Unrealized Fair Impairments (in millions) Cost Gains Losses Value in AOCI (b) December 31, 2019 Bonds available for sale: U.S. government and government sponsored entities $ 5,108 $ 316 $ ( 44) $ 5,380 $ - Obligations of states, municipalities and political subdivisions 13,960 1,390 ( 32) 15,318 - Non-U.S. governments 14,042 884 ( 57) 14,869 ( 18) Corporate debt 138,046 12,090 ( 500) 149,636 7 Mortgage-backed, asset-backed and collateralized: RMBS 29,802 3,067 ( 64) 32,805 1,149 CMBS 13,879 576 ( 25) 14,430 34 CDO/ABS 18,393 348 ( 93) 18,648 14 Total mortgage-backed, asset-backed and collateralized 62,074 3,991 ( 182) 65,883 1,197 Total bonds available for sale (c) $ 233,230 $ 18,671 $ ( 815) $ 251,086 $ 1,186 (a) Represents the allowance for credit losses that has been recognized. Changes in the allowance for credit losses are recorded through the statements of income and are not recognized in other comprehensive income. (b) Represents the amount of other-than-temporary impairments recognized in AOCI. Amount includes unrealized gains and losses on impaired securities relating to changes in the fair value of such securities subsequent to the impairment measurement date. (c) At September 30, 2020 and December 31, 2019, bonds available for sale held by us that were below investment grade or not rated totaled $ 27.5 billion and $ 27.8 billion, 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 Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized (in millions) Value Losses Value Losses Value Losses September 30, 2020 Bonds available for sale: U.S. government and government sponsored entities $ 366 $ 24 $ - $ - $ 366 $ 24 Obligations of states, municipalities and political subdivisions 419 11 103 5 522 16 Non-U.S. governments 1,756 56 291 51 2,047 107 Corporate debt 20,936 872 1,096 110 22,032 982 RMBS 3,594 43 163 17 3,757 60 CMBS 2,068 71 185 9 2,253 80 CDO/ABS 5,939 144 3,153 81 9,092 225 Total bonds available for sale $ 35,078 $ 1,221 $ 4,991 $ 273 $ 40,069 $ 1,494 Securities Available for Sale in a Loss Position 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: Less than 12 Months 12 Months or More Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized (in millions) Value Losses Value Losses Value Losses December 31, 2019 Bonds available for sale: U.S. government and government sponsored entities $ 1,461 $ 44 $ 63 $ - $ 1,524 $ 44 Obligations of states, municipalities and political subdivisions 672 21 246 11 918 32 Non-U.S. governments 1,105 12 343 45 1,448 57 Corporate debt 11,868 319 2,405 181 14,273 500 RMBS 3,428 28 1,367 36 4,795 64 CMBS 1,877 16 367 9 2,244 25 CDO/ABS 3,920 53 2,571 40 6,491 93 Total bonds available for sale $ 24,331 $ 493 $ 7,362 $ 322 $ 31,693 $ 815 At September 30, 2020, we held 7,335 individual fixed maturity securities that were in an unrealized loss position and for which no allowance for credit losses has been recorded (including 940 individual fixed maturity securities that were in a continuous unrealized loss position for 12 months or more). At December 31, 2019, we held 5,695 individual fixed maturity securities that were in an unrealized loss position, of which 1,254 individual fixed maturity securities 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 September 30, 2020 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: Total Fixed Maturity Securities Available for Sale Amortized Cost, (in millions) Net of Allowance Fair Value September 30, 2020 Due in one year or less $ 11,186 $ 11,298 Due after one year through five years 42,513 43,869 Due after five years through ten years 41,049 44,725 Due after ten years 84,222 98,696 Mortgage-backed, asset-backed and collateralized 63,264 67,377 Total $ 242,234 $ 265,965 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: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Gross Gross Gross Gross Gross Gross Gross Gross Realized Realized Realized Realized Realized Realized Realized Realized (in millions) Gains Losses Gains Losses Gains Losses Gains Losses Fixed maturity securities $ 258 $ 83 $ 198 $ 70 $ 1,179 $ 641 $ 464 $ 280 For the three- and nine-month periods ended September 30, 2020, the aggregate fair value of available for sale securities sold was $ 3.1 billion and $ 17.0 billion, respectively, which resulted in net realized capital gains (losses) of $ 175 million and $ 538 million, respectively. Included within the net realized capital gains (losses) are $ 147 million and $ 269 million of realized capital gains for the three- and nine-month periods ended September 30, 2020, respectively, which relate to the Fortitude Re funds withheld assets held by AIG in support of Fortitude Re’s reinsurance obligations to AIG (Fortitude Re funds withheld assets) for the period after deconsolidation of Fortitude Re. These realized capital gains are included in Net realized capital gains (losses) on Fortitude Re funds withheld assets. For the three- and nine-month periods ended September 30, 2019, the aggregate fair value of available for sale securities sold was $ 4.5 billion and $ 17.3 billion, respectively, which resulted in net realized capital gains of $ 128 million and $ 184 million, respectively. 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 and equity securities measured at fair value: September 30, 2020 December 31, 2019 Fair Percent Fair Percent (in millions) Value of Total Value of Total Fixed maturity securities: U.S. government and government sponsored entities $ 1,870 30 % $ 2,121 28 % Corporate debt 12 - 18 - Mortgage-backed, asset-backed and collateralized: RMBS 488 8 489 7 CMBS 322 5 322 4 CDO/ABS and other collateralized 2,723 43 3,732 50 Total mortgage-backed, asset-backed and collateralized 3,533 56 4,543 61 Total fixed maturity securities 5,415 86 6,682 89 Equity securities 871 14 841 11 Total $ 6,286 100 % $ 7,523 100 % Other Invested Assets The following table summarizes the carrying amounts of other invested assets: September 30, December 31, (in millions) 2020 2019 Alternative investments (a) (b) $ 8,391 $ 8,845 Investment real estate (c) 8,010 8,491 All other investments (d) 1,514 1,456 Total $ 17,915 $ 18,792 (a) At September 30, 2020, included hedge funds of $ 2.2 billion, private equity funds of $ 5.9 billion and affordable housing partnerships of $ 270 million. At December 31, 2019, included hedge funds of $ 3.3 billion, private equity funds of $ 5.2 billion and affordable housing partnerships of $ 331 million. (b) At September 30, 2020, approximately 63 percent of our hedge fund portfolio is available for redemption in 2020. The remaining 37 percent will be available for redemption between 2021 and 2027. (c) Net of accumulated depreciation of $ 780 million and $ 703 million at September 30, 2020 and December 31, 2019, respectively. (d) Includes AIG’s 3.5 percent ownership interest in Fortitude Holdings which is recorded using the measurement alternative for equity securities and is carried at cost, which was $ 100 million as of September 30, 2020. Net Investment Income The following table presents the components of Net investment income: Three Months Ended September 30, 2020 2019 Excluding Fortitude Fortitude Re Re Funds Funds Withheld (in millions) Withheld Assets Assets Total Available for sale fixed maturity securities, including short-term investments $ 2,209 $ 373 $ 2,582 $ 2,698 Other fixed maturity securities (a) 164 7 171 333 Equity securities 119 - 119 ( 51) Interest on mortgage and other loans 443 46 489 495 Alternative investments (b) 455 40 495 115 Real estate 22 - 22 96 Other investments (c) 55 - 55 ( 143) Total investment income 3,467 466 3,933 3,543 Investment expenses 125 8 133 135 Net investment income $ 3,342 $ 458 $ 3,800 $ 3,408 Nine Months Ended September 30, 2020 2019 Excluding Fortitude Fortitude Re Re Funds Funds Withheld (in millions) Withheld Assets Assets (d) Total Available for sale fixed maturity securities, including short-term investments $ 7,320 $ 459 $ 7,779 $ 8,052 Other fixed maturity securities (a) 475 10 485 941 Equity securities ( 16) - ( 16) 6 Interest on mortgage and other loans 1,441 59 1,500 1,511 Alternative investments (b) 309 54 363 879 Real estate 142 - 142 227 Other investments (c) ( 159) - ( 159) ( 203) Total investment income 9,512 582 10,094 11,413 Investment expenses 412 8 420 381 Net investment income $ 9,100 $ 574 $ 9,674 $ 11,032 (a) Included in the three- and nine-month periods ended September 30, 2020 were income of $ 8 million and $ 206 million, respectively, related to fixed maturity securities measured at fair value that economically hedge liabilities described in (c) below. Included in the three- and nine-month periods ended September 30, 2019 were income of $ 146 million and $ 195 million, respectively, for fixed maturity securities measured at fair value through income that economically hedge liabilities as described in (c) below. (b) Included income from hedge funds, private equity funds and affordable housing partnerships. 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 three- and nine-month periods ended September 30, 2020 were income of $ 21 million and a loss of $ 195 million, respectively, related to liabilities measured at fair value that are economically hedged with fixed maturity securities as described in (a) above. Included in the three- and nine-month periods ended September 30, 2019 were losses of $ 174 million and $ 220 million, respectively, related to liabilities measured at fair value that are economically hedged with fixed maturity securities as described in (a) above. (d) Represents activity subsequent to the deconsolidation of Fortitude Re on June 2, 2020. Net Realized Capital Gains and Losses Net realized capital gains and losses are determined by specific identification. The net realized capital gains and losses are generated primarily from the following sources: Sales or full redemptions 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. Changes in fair value of free standing and embedded derivatives, including changes in the non-performance adjustment, except for those instruments that are designated as hedging instruments when the change in the fair value of the hedged item is not reported in Net realized capital 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 capital gains (losses): Three Months Ended September 30, 2020 2019 Excluding Fortitude Re Fortitude Re Funds Funds Withheld (in millions) Withheld Assets Assets Total Sales of fixed maturity securities $ 28 $ 147 $ 175 $ 128 Other-than-temporary impairments - - - ( 24) Change in intent (a) - - - - Change in allowance for credit losses on fixed maturity securities ( 77) ( 4) ( 81) - Change in allowance for credit losses on loans ( 13) 2 ( 11) ( 25) Foreign exchange transactions 250 7 257 ( 203) Variable annuity embedded derivatives, net of related hedges ( 148) - ( 148) 311 All other derivatives and hedge accounting ( 626) ( 120) ( 746) 466 Other 88 - 88 276 Net realized capital gains (losses) – excluding Fortitude Re funds withheld embedded derivative ( 498) 32 ( 466) 929 Net realized capital gains (losses) on Fortitude Re funds withheld embedded derivative - ( 656) ( 656) - Net realized capital gains (losses) $ ( 498) $ ( 624) $ ( 1,122) $ 929 Nine Months Ended September 30, 2020 2019 Excluding Fortitude Re Fortitude Re Funds Funds Withheld (in millions) Withheld Assets Assets (b) Total Sales of fixed maturity securities $ 269 $ 269 $ 538 $ 184 Other-than-temporary impairments - - - ( 137) Change in intent (a) ( 3) - ( 3) - Change in allowance for credit losses on fixed maturity securities ( 299) ( 11) ( 310) - Change in allowance for credit losses on loans ( 73) 6 ( 67) ( 35) Foreign exchange transactions 40 10 50 ( 242) Variable annuity embedded derivatives, net of related hedges 1,034 - 1,034 10 All other derivatives and hedge accounting 365 ( 146) 219 601 Other 97 - 97 506 Net realized capital gains – excluding Fortitude Re funds withheld embedded derivative 1,430 128 1,558 887 Net realized capital gains (losses) on Fortitude Re funds withheld embedded derivative - ( 1,493) ( 1,493) - Net realized capital gains (losses) $ 1,430 $ ( 1,365) $ 65 $ 887 (a) For the three- and nine-month periods ended September 30, 2019, the change in intent was included in Other-than-temporary impairments. (b) Represents activity subsequent to the deconsolidation of Fortitude Re on June 2, 2020. 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: Three Months Ended Nine Months Ended September 30, September 30, (in millions) 2020 2019 2020 2019 Increase (decrease) in unrealized appreciation (depreciation) of investments: Fixed maturity securities $ 2,373 $ 4,377 $ 5,875 $ 16,265 Other investments 1 - 1 ( 68) Total increase (decrease) in unrealized appreciation (depreciation) of investments $ 2,374 $ 4,377 $ 5,876 $ 16,197 The following table summarizes the unrealized gains and losses recognized in Net Investment Income during the reporting period on equity securities still held at the reporting date: Three Months Ended September 30, 2020 2019 Other Other Invested Invested (in millions) Equities Assets Total Equities Assets Total Net gains and losses recognized during the period on equity securities $ 119 $ 464 $ 583 $ ( 51) $ 105 $ 54 Less: Net gains and losses recognized during the period on equity securities sold during the period ( 3) ( 5) ( 8) 18 13 31 Unrealized gains and losses recognized during the reporting period on equity securities still held at the reporting date $ 122 $ 469 $ 591 $ ( 69) $ 92 $ 23 Nine Months Ended September 30, 2020 2019 Other Other Invested Invested (in millions) Equities Assets Total Equities Assets Total Net gains and losses recognized during the period on equity securities $ ( 16) $ 264 $ 248 $ 6 $ 615 $ 621 Less: Net gains and losses recognized during the period on equity securities sold during the period 14 10 24 30 169 199 Unrealized gains and losses recognized during the reporting period on equity securities still held at the reporting date $ ( 30) $ 254 $ 224 $ ( 24) $ 446 $ 422 Evaluating Investments for AN ALLOWANCE FOR CREDIT LOSSES/OTHER-than-TEMPORARY IMPAIRMENTS Fixed Maturity Securities Subsequent to the adoption of the Financial Instruments Credit Losses Standard on January 1, 2020 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 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 realized capital 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 realized capital 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 were recognized (a separate component of accumulated other comprehensive income). 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, CDO, 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. Credit losses are reassessed each period. The allowance for credit losses and the corresponding charge to realized capital 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 decreasing realized capital losses. Prior to the adoption of the Financial Instruments Credit Losses Standard on January 1, 2020 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 the fair value of the security is below amortized cost, an other-than-temporary impairment has occurred and the amortized cost is written down to current fair value, with a corresponding charge to realized capital losses. 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 credit impairment has occurred, the amortized cost is written down to the estimated recoverable value with a corresponding charge to realized capital losses. 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 related to a credit impairment is presented in unrealized appreciation (depreciation) of fixed maturity securities on which other-than-temporary credit impairments were recognized (a separate component of accumulated other comprehensive income). 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. In periods subsequent to the recognition of an other-than-temporary impairment charge for available for sale fixed maturity securities that is not foreign exchange related, we prospectively accrete into earnings the difference between the new amortized cost and the expected undiscounted recoverable value over the remaining expected holding period of the security. 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: Three Months Ended Nine Months Ended September 30, 2020 September 30, 2020 Non- Non- (in millions) Structured Structured Total Structured Structured Total Balance, beginning of period* $ 37 $ 161 $ 198 $ 7 $ - $ 7 Additions: Securities for which allowance for credit losses were not previously recorded 1 30 31 36 294 330 Purchases of available for sale debt securities accounted for as purchased credit deteriorated assets - - - 26 - 26 Accretion of available for sale debt securities accounted for as purchased credit deteriorated assets - - - 1 - 1 Reductions: Securities sold during the period ( 2) ( 5) ( 7) ( 3) ( 10) ( 13) Intent to sell security or more likely than not will be required to sell the security before recovery of its amortized cost basis - - - - - - Additional net increases or decreases to 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 amortized cost basis ( 10) 67 57 ( 41) 34 ( 7) Write-offs charged against the allowance - ( 43) ( 43) - ( 108) ( 108) Recoveries of amounts previously written off - - - - - - Other - - - - - - Balance, end of period $ 26 $ 210 $ 236 $ 26 $ 210 $ 236 * The beginning balance incorporates the Day 1 gross up on PCD assets held as of January 1, 2020. The following table presents a rollforward of the cumulative credit losses in other-than-temporary impairments recognized in earnings for available for sale fixed maturity securities: Three Months Ended Nine Months Ended (in millions) September 30, 2019 September 30, 2019 Balance, beginning of period $ 34 $ - Increases due to: Credit impairments on new securities subject to impairment losses 10 105 Additional credit impairments on previously impaired securities 8 14 Reductions due to: Credit impaired securities fully disposed for which there was no prior intent or requirement to sell ( 3) ( 62) Accretion on securities previously impaired due to credit * ( 7) ( 15) Balance, end of period $ 42 $ 42 Represents both accretion recognized due to changes in cash flows expected to be collected over the remaining expected term of the credit impaired securities and the accretion due to the passage of time. Purchased Credit Deteriorated/Impaired Securities Subsequent to the adoption of the Financial Instruments Credit Losses Standard on January 1, 2020 We purchase certain RMBS securities that have experienced more-than-insignificant deterioration in credit quality since origination. Subsequent to the adoption of the Financial Instruments Credit Losses Standard 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. During the three- and nine-month periods ended September 30, 2020, we purchased certain securities which had more than insignificant credit deterioration since their origination. These PCD securities are held in the portfolio of bonds available for sale in their natural classes at September 30, 2020. The following table presents a reconciliation of the purchase price to the unpaid principal balance at the acquisition date of the PCD securities that were purchased with credit deterioration during the nine-month period ended September 30, 2020: (in millions) September 30, 2020 Unpaid principal balance $ 644 Allowance for expected credit losses at acq |
LENDING ACTIVITIES
LENDING ACTIVITIES | 9 Months Ended |
Sep. 30, 2020 | |
LENDING ACTIVITIES | |
LENDING ACTIVITIES | 6. Lending Activities Mortgage and other loans receivable include commercial mortgages, residential mortgages, life insurance policy loans, commercial loans, and other loans and notes receivable. Commercial mortgages, residential 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. Premiums and discounts on purchased residential mortgages are also 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. 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 September 30, 2020, $ 8 million and $ 282 million of residential mortgage loans and commercial mortgage loans, respectively, were placed on nonaccrual status. Accrued interest is presented separately and is included in Other assets 16 million and $ 125 million associated with residential mortgage loans and commercial mortgage loans, respectively. 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. The following table presents the composition of Mortgage and other loans receivable, net: September 30, December 31, (in millions) 2020 2019 Commercial mortgages (a) $ 36,359 $ 36,170 Residential mortgages 5,202 6,683 Life insurance policy loans 2,072 2,065 Commercial loans, other loans and notes receivable 2,754 2,504 Total mortgage and other loans receivable 46,387 47,422 Allowance for credit losses (b) ( 797) ( 438) Mortgage and other loans receivable, net $ 45,590 $ 46,984 (a) Commercial mortgages primarily represent loans for apartments, offices and retail properties, with exposures in New York and California representing the largest geographic concentrations (aggregating approximately 25 percent and 10 percent, respectively, at September 30, 2020 and 23 percent and 10 percent, respectively, at December 31, 2019). (b) Does not include $ 66 million of expected credit loss liability at September 30, 2020 in relation to off-balance-sheet commitments to fund commercial mortgage loans, which is recorded in Other liabilities. 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) September 30, 2020 (in millions) 2020 2019 2018 2017 2016 Prior Total >1.2X $ 1,577 $ 5,452 $ 5,506 $ 4,008 $ 5,002 $ 11,150 $ 32,695 1.00 - 1.20X 157 393 457 108 162 1,382 2,659 <1.00X 2 79 346 86 94 398 1,005 Total commercial mortgages $ 1,736 $ 5,924 $ 6,309 $ 4,202 $ 5,258 $ 12,930 $ 36,359 The following table presents loan-to-value ratios (b) September 30, 2020 (in millions) 2020 2019 2018 2017 2016 Prior Total Less than 65% $ 1,571 $ 3,594 $ 4,796 $ 3,050 $ 3,251 $ 10,136 $ 26,398 65% to 75% 163 1,858 1,513 974 1,292 1,751 7,551 76% to 80% - 88 - 124 98 500 810 Greater than 80% 2 384 - 54 617 543 1,600 Total commercial mortgages $ 1,736 $ 5,924 $ 6,309 $ 4,202 $ 5,258 $ 12,930 $ 36,359 The following table presents debt service coverage ratios and loan-to-value ratios for commercial mortgages: December 31, 2019 Debt Service Coverage Ratios (a) (in millions) >1.20X 1.00X - 1.20X <1.00X Total Loan-to-Value Ratios (b) Less than 65% $ 23,013 $ 2,440 $ 245 $ 25,698 65% to 75% 9,007 899 40 9,946 76% to 80% 200 6 - 206 Greater than 80% 184 2 134 320 Total commercial mortgages $ 32,404 $ 3,347 $ 419 $ 36,170 (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 2.2X at September 30, 2020 and 2.0X at December 31, 2019. The debt service coverage ratios have been updated within the last three months. (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 57 percent at September 30, 2020 and was 56 percent at December 31, 2019. The loan-to-value ratios have been updated within the last three to nine months. The following table presents the credit quality performance indicators for commercial mortgages: Number Percent of Class of (dollars in millions) Loans Apartments Offices Retail Industrial Hotel Others Total (c) Total September 30, 2020 Credit Quality Performance Indicator: In good standing 700 $ 13,704 $ 10,843 $ 5,124 $ 3,746 $ 2,080 $ 448 $ 35,945 99 % Restructured (a) 3 - - 50 - - - 50 - 90 days or less delinquent 1 - - - - 108 - 108 - >90 days delinquent or in process of foreclosure 5 - 116 54 - 86 - 256 1 Total (b) 709 $ 13,704 $ 10,959 $ 5,228 $ 3,746 $ 2,274 $ 448 $ 36,359 100 % Allowance for credit losses $ 123 $ 281 $ 141 $ 55 $ 52 $ 7 $ 659 2 % December 31, 2019 Credit Quality Performance Indicator: In good standing 736 $ 13,698 $ 10,553 $ 5,332 $ 3,663 $ 2,211 $ 522 $ 35,979 99 % Restructured (a) 3 - 89 - - 101 - 190 1 90 days or less delinquent 1 1 - - - - - 1 - >90 days delinquent or in process of foreclosure - - - - - - - - - Total (b) 740 $ 13,699 $ 10,642 $ 5,332 $ 3,663 $ 2,312 $ 522 $ 36,170 100 % Allowance for credit losses: Specific $ - $ 2 $ 1 $ - $ 6 $ - $ 9 - % General 81 153 44 30 14 5 327 1 Total allowance for credit losses $ 81 $ 155 $ 45 $ 30 $ 20 $ 5 $ 336 1 % (a) Loans that have been modified in troubled debt restructurings and are performing according to their restructured terms. For additional discussion of troubled debt restructurings see Note 8 to the Consolidated Financial Statements in the 2019 Annual Report. (b) Does not reflect allowance for credit losses. (c) Our commercial mortgage loan portfolio is current as to payments of principal and interest, for both periods presented. There were no significant amounts of nonperforming commercial mortgages (defined as those loans where payment of contractual principal or interest is more than 90 days past due) during any of the periods presented. The following table presents credit quality performance indicators for residential mortgages by year of vintage: September 30, 2020 (in millions) 2020 2019 2018 2017 2016 Prior Total FICO*: 780 and greater $ 309 $ 764 $ 364 $ 627 $ 688 $ 650 $ 3,402 720 - 779 326 411 123 182 221 197 1,460 660 - 719 10 67 33 48 56 73 287 600 - 659 1 6 6 7 5 13 38 Less than 600 - - 1 2 3 9 15 Total residential mortgages $ 646 $ 1,248 $ 527 $ 866 $ 973 $ 942 $ 5,202 * Fair Isaac Corporation (FICO) is the credit quality indicator used to evaluate consumer credit risk for residential mortgage loan borrowers and have been updated within the last three months. Methodology Used to Estimate the Allowance for Credit Losses Subsequent to the adoption of the Financial Instruments Credit Losses Standard on January 1, 2020 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 capital losses. This allowance reflects the risk of loss, even when that risk is remote, and reflects losses 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 and residential 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, FICO 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 Condensed 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 capital gains (losses) in the Condensed Consolidated Statements of Income. Prior to the adoption of the Financial Instruments Credit Losses Standard on January 1, 2020 Mortgage and other loans receivable are considered impaired when collection of all amounts due under contractual terms is not probable. Impairment is measured using either i) the present value of expected future cash flows discounted at the loan’s effective interest rate, ii) the loan’s observable market price, if available, or iii) the fair value of the collateral if the loan is collateral dependent. Impairment of commercial mortgages is typically determined using the fair value of collateral while impairment of other loans is typically determined using the present value of cash flows or the loan’s observable market price. An allowance is typically established for the difference between the impaired value of the loan and its current carrying amount. Additional allowance amounts are established for incurred but not specifically identified impairments, based on statistical models primarily driven by past-due status, debt service coverage, loan-to-value ratio, property type and location, loan term, profile of the borrower and of the major property tenants, and loan seasoning. When all or a portion of a loan is deemed uncollectable, the uncollectable portion of the carrying amount of the loan is charged off against the allowance. The following table presents a rollforward of the changes in the allowance for losses on Mortgage and other loans receivable (a) Three Months Ended September 30, 2020 2019 Commercial Other Commercial Other (in millions) Mortgages Loans Total Mortgages Loans Total Allowance, beginning of period $ 667 $ 127 $ 794 $ 310 $ 97 $ 407 Initial allowance upon CECL adoption - - - - - - Loans charged off - - - ( 2) - ( 2) Recoveries of loans previously charged off - - - - - - Net charge-offs - - - ( 2) - ( 2) Provision for loan losses ( 8) 11 3 27 ( 2) 25 Allowance, end of period $ 659 $ 138 $ 797 $ 335 (b) $ 95 $ 430 Nine Months Ended September 30, 2020 2019 Commercial Other Commercial Other (in millions) Mortgages Loans Total Mortgages Loans Total Allowance, beginning of year $ 336 $ 102 $ 438 $ 318 $ 79 $ 397 Initial allowance upon CECL adoption 311 7 318 - - - Loans charged off ( 12) - ( 12) ( 2) - ( 2) Recoveries of loans previously charged off - - - - - - Net charge-offs ( 12) - ( 12) ( 2) - ( 2) Provision for loan losses 24 29 53 19 16 35 Allowance, end of period $ 659 $ 138 $ 797 $ 335 (b) $ 95 $ 430 (a) Does not include $ 66 million of expected credit loss liability at September 30, 2020 in relation to off-balance-sheet commitments to fund commercial mortgage loans, which is recorded in Other liabilities. (b) The September 30, 2019 total allowance was calculated prior to the adoption of ASC 326 on January 1, 2020. Of the total allowance, $ 10 million relates to individually assessed credit losses on $ 151 million of commercial mortgages at September 30, 2019. As a result of the COVID-19 crisis, including the significant global economic slowdown and general market decline, our expectations and models used to estimate the allowance for losses on commercial and residential mortgage loans have been updated to reflect the current economic environment. The full impact of COVID-19 on real estate valuations remains uncertain and we will continue to review our valuations as further information becomes available. TROUBLED DEBT RESTRUCTURINGS We modify loans to optimize their returns and improve their collectability, among other things. When we undertake such a modification with a borrower that is experiencing financial difficulty and the modification involves us granting a concession to the troubled debtor, the modification is a troubled debt restructuring (TDR). 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. Concessions granted may include extended maturity dates, interest rate changes, principal or interest forgiveness, payment deferrals and easing of loan covenants. In response to the COVID-19 pandemic, there was an increase in the volume of loan modifications in our commercial mortgage, residential mortgage and leveraged loan portfolios. The COVID-19 related modifications were primarily in the form of short term payment deferrals (one to six months). Short-term payment deferrals are not considered a concession and therefore these modifications are not considered a TDR. During the nine-month period ended September 30, 2020, loans with a carrying value of $ 50 million were modified in troubled debt restructurings. There were no |
REINSURANCE
REINSURANCE | 9 Months Ended |
Sep. 30, 2020 | |
REINSURANCE | |
REINSURANCE | 7. Reinsurance 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. In addition, our general insurance subsidiaries assume reinsurance from other insurance companies. We determine the portion of the incurred but not reported (IBNR) loss that will be recoverable under our reinsurance contracts by reference to the terms of the reinsurance protection purchased. This determination is necessarily based on the estimate of IBNR and accordingly, is subject to the same uncertainties as that estimate. 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. Amounts related to paid and unpaid losses and benefits and loss expenses with respect to these reinsurance agreements are substantially collateralized. We remain liable to the extent that our reinsurers do not meet their obligation 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 doubtful accounts requires judgment for which key inputs typically include historical trends regarding uncollectible balances, disputes and credit events as well as specific reviews of balances in dispute or subject to credit impairment. Sale of Fortitude Holdings On June 2, 2020, we completed the Majority Interest Fortitude Sale. AIG established Fortitude Re, a wholly owned subsidiary of Fortitude Holdings, in 2018 in a series of reinsurance transactions related to AIG’s Legacy Portfolio. As of September 30, 2020, approximately $ 30.6 billion of reserves from AIG’s Legacy Life and Retirement Run-Off Lines and approximately $ 4.1 billion of reserves from AIG’s Legacy 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 Legacy Portfolio. These reinsurance transactions between AIG and Fortitude Re were 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 other comprehensive income). As a result of the deconsolidation resulting from the Majority Interest Fortitude Sale, 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 capital 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. 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 as of September 30, 2020: September 30, 2020 Carrying Fair (in millions) Value Value Corresponding Accounting Policy Fixed maturity securities - available for sale (a) $ 35,775 $ 35,775 Fair value through other comprehensive income Fixed maturity securities - fair value option 204 204 Fair value through net investment income Commercial mortgage loans 3,577 3,866 Amortized cost Real estate investments 366 595 Amortized cost Private equity funds / hedge funds 992 992 Fair value through net investment income Policy loans 423 423 Amortized cost Derivative assets, net (b) - - Fair value through realized capital gains (losses) Other 687 687 Amortized cost Total $ 42,024 $ 42,542 (a) The change in the net unrealized gains (losses) on available for sale securities related to the Fortitude Re funds withheld assets was $ 722 million ($ 570 million after-tax) during the post deconsolidation period (June 2, 2020-September 30, 2020). (b) The derivative assets have been presented net of collateral. The derivative assets supporting the Fortitude Re funds withheld arrangements had a fair market value of $ 471 million as of September 30, 2020. These derivative assets are fully collateralized. The impact of the funds withheld arrangements with Fortitude Re for the period post June 2, 2020 deconsolidation was as follows: Three Months Ended Nine Months Ended (in millions) September 30, 2020 September 30, 2020 Net underwriting income $ - $ - Net investment income - Fortitude Re funds withheld assets 458 574 Net realized capital losses on Fortitude Re funds withheld assets: Net realized capital gains - Fortitude Re funds withheld assets 32 128 Net realized capital losses - Fortitude Re embedded derivatives ( 656) ( 1,493) Net realized capital losses on Fortitude Re funds withheld assets ( 624) ( 1,365) Loss from continuing operations before income tax benefit ( 166) ( 791) Income tax benefit (a) ( 35) ( 166) Net loss ( 131) ( 625) Change in unrealized appreciation of all other investments (a) 132 570 Comprehensive income (loss) $ 1 $ ( 55) (a) The income tax expense (benefit) and the tax impact in accumulated other comprehensive income 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 arrangements. During the three-month period ended September 30, 2020 and the period from June 2, 2020 to September 30, 2020, these assets appreciated by $( 1) million and $ 55 million, respectively, on an after-tax basis. 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. 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. Similarly, Other assets include reinsurance recoverables for contracts which are accounted for as deposits. 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 uncollectable reinsurance that reduces the carrying amount of reinsurance and other assets on the consolidated balance sheets (collectively, the reinsurance recoverable balances). 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 determined by the Obligor Risk Ratings (ORRs) we assign to each reinsurer based upon our financial reviews; insurers 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 rating. 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 September 30, 2020 were $ 77.5 billion. As of that date, utilizing AIG’s ORRs, (i) approximately 93 percent of the reinsurance recoverables were investment grade, of which 52 percent related to General Insurance and 41 percent related to Life and Retirement; (ii) approximately 7 percent of the reinsurance recoverables were non-investment grade, the majority of which related to General Insurance; (iii) less than one one As of September 30, 2020, approximately 75 percent of our non-investment grade reinsurance exposure related to captive insurers. These arrangements are typically collateralized by letters of credit, funds held or trust agreements. Reinsurance Recoverable Allowance The following table presents a rollforward of the reinsurance recoverable allowance: Three Months Ended Nine Months Ended September 30, 2020 September 30, 2020 General Life and General Life and (in millions) Insurance Retirement Total Insurance Retirement Total Balance, beginning of period $ 305 $ 59 $ 364 $ 111 $ 40 $ 151 Initial allowance upon CECL adoption - - - 202 22 224 Current period provision for expected credit losses and disputes ( 2) 2 - - 5 5 Write-offs charged against the allowance for credit losses and disputes - - - ( 5) ( 5) ( 10) Other changes 5 1 6 - - - Balance, end of period $ 308 $ 62 $ 370 $ 308 $ 62 $ 370 There were no Past-Due Status We consider a reinsurance asset to be past due when it is 90 days past due and record an allowance for disputes when there is reasonable uncertainty of the collectability of a disputed amount during the reporting period. Past due balances were not significant for any of the periods presented. |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 9 Months Ended |
Sep. 30, 2020 | |
VARIABLE INTEREST ENTITIES | |
VARIABLE INTEREST ENTITIES | 8. Variable Interest Entities We enter into various arrangements with variable interest entities (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 the entity was designed to expose the variable interest holders to. 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 The following table presents the total assets and total liabilities associated with our variable interests in consolidated VIEs, as classified in the Condensed Consolidated Balance Sheets: Real Estate and Affordable Investment Securitization Housing (in millions) Entities (d) Vehicles (e) Partnerships Other Total September 30, 2020 Assets: Bonds available for sale $ - $ 6,075 $ - $ - $ 6,075 Other bond and equity securities 281 2,416 - 6 2,703 Mortgage and other loans receivable - 3,247 - - 3,247 Other invested assets 5,975 - 3,549 18 9,542 Other (a) 461 1,635 520 23 2,639 Total assets (b) $ 6,717 $ 13,373 $ 4,069 $ 47 $ 24,206 Liabilities: Long-term debt $ 2,509 $ 4,054 $ 2,317 $ - $ 8,880 Other (c) 165 159 197 9 530 Total liabilities $ 2,674 $ 4,213 $ 2,514 $ 9 $ 9,410 December 31, 2019 Assets: Bonds available for sale $ 177 $ 7,239 $ - $ - $ 7,416 Other bond securities - 3,324 - 1 3,325 Mortgage and other loans receivable - 3,860 - - 3,860 Other invested assets 5,231 - 3,464 42 8,737 Other (a) 615 1,996 469 42 3,122 Total assets (b) $ 6,023 $ 16,419 $ 3,933 $ 85 $ 26,460 Liabilities: Long-term debt $ 2,810 $ 4,356 $ 2,074 $ 4 $ 9,244 Other (c) 236 359 195 24 814 Total liabilities $ 3,046 $ 4,715 $ 2,269 $ 28 $ 10,058 (a) Comprised primarily of Short-term investments and Other assets at September 30, 2020 and December 31, 2019. (b) The assets of each VIE can be used only to settle specific obligations of that VIE. (c) Comprised primarily of Other liabilities at September 30, 2020 and December 31, 2019. (d) At September 30, 2020 and December 31, 2019, off-balance sheet exposure primarily consisting of commitments to real estate and investment entities was $ 2.3 billion and $ 2.6 billion, respectively. (e) At September 30, 2020 and December 31, 2019, the company had contributed total assets of $ 12.6 billion and $ 15.6 billion, respectively, into consolidated securitization vehicles. 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. Interest holders in VIEs sponsored by us generally have recourse only to the assets and cash flows of the VIEs and do not have recourse to us, except in limited circumstances when we have provided a guarantee to the VIE’s interest holders. 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 Total VIE On-Balance Off-Balance (in millions) Assets Sheet (b) Sheet Total September 30, 2020 Real estate and investment entities (a) $ 293,428 $ 5,260 $ 3,238 $ 8,498 Affordable housing partnerships 3,045 384 - 384 Other 5,033 461 562 (c) 1,023 Total $ 301,506 $ 6,105 $ 3,800 $ 9,905 December 31, 2019 Real estate and investment entities (a) $ 283,349 $ 6,519 $ 3,286 $ 9,805 Affordable housing partnerships 3,351 453 - 453 Other 5,320 310 561 (c) 871 Total $ 292,020 $ 7,282 $ 3,847 $ 11,129 (a) Comprised primarily of hedge funds and private equity funds. (b) At September 30, 2020 and December 31, 2019, $ 5.7 billion and $ 7.0 billion, respectively, of our total unconsolidated VIE assets were recorded as Other invested assets. (c) 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. For additional information on VIEs see Note 11 to the Consolidated Financial Statements in the 2019 Annual Report. |
DERIVATIVES AND HEDGE ACCOUNTIN
DERIVATIVES AND HEDGE ACCOUNTING | 9 Months Ended |
Sep. 30, 2020 | |
DERIVATIVES AND HEDGE ACCOUNTING | |
DERIVATIVES AND HEDGE ACCOUNTING | 9. 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. For a discussion of our accounting policies and procedures regarding derivatives and hedge accounting see Note 12 to the Consolidated Financial Statements in the 2019 Annual Report . 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 mitigate financial risk embedded in certain insurance liabilities and economically hedge certain investments. 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 instruments with respect to investment operations, which may include, among other things, credit default swaps (CDSs) and purchases of investments with embedded derivatives, such as equity-linked notes and convertible bonds. The following table presents the notional amounts of our derivatives and the fair value of derivative assets and liabilities in the Condensed Consolidated Balance Sheets: September 30, 2020 December 31, 2019 Gross Derivative Assets Gross Derivative Liabilities Gross Derivative Assets Gross Derivative Liabilities Notional Fair Notional Fair Notional Fair Notional Fair (in millions) Amount Value Amount Value Amount Value Amount Value Derivatives designated as hedging instruments: (a) Interest rate contracts $ 690 $ 19 $ 299 $ 13 $ 495 $ 3 $ 410 $ 7 Foreign exchange contracts 6,146 494 3,910 159 4,328 342 5,230 162 Derivatives not designated as hedging instruments: (a) Interest rate contracts 66,938 5,035 39,057 4,546 52,437 3,197 35,231 2,742 Foreign exchange contracts 15,771 1,094 6,345 460 8,133 698 12,093 863 Equity contracts 21,461 957 4,268 101 18,533 769 7,539 139 Credit contracts (b) 2,797 1 970 69 8,457 3 923 89 Other contracts (c) 43,069 13 55 7 40,582 14 56 7 Total derivatives, gross $ 156,872 $ 7,613 $ 54,904 $ 5,355 $ 132,965 $ 5,026 $ 61,482 $ 4,009 Counterparty netting (d) ( 3,695) ( 3,695) ( 2,427) ( 2,427) Cash collateral (e) ( 3,129) ( 1,060) ( 1,806) ( 527) Total derivatives on condensed consolidated balance sheets (f) $ 789 $ 600 $ 793 $ 1,055 (a) Fair value amounts are shown before the effects of counterparty netting adjustments and offsetting cash collateral. (b) As of September 30, 2020 and December 31, 2019, included CDSs on super senior multi-sector CDOs with a net notional amount of $ 137 million and $ 152 million (fair value liability of $ 45 million and $ 48 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 zero 14.5 billion and $ 6.9 billion, respectively, at September 30, 2020 and December 31, 2019. A bifurcated embedded derivative is generally presented with the host contract in the Condensed Consolidated Balance Sheets. Embedded derivatives are primarily related to guarantee features in variable annuity products, which include equity and interest rate components, and the funds withheld arrangement with Fortitude Re. For additional information see Note 7 to the Condensed Consolidated Financial Statements. . 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 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 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 $ 2.6 billion at September 30, 2020 and $ 2.2 billion at December 31, 2019. 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 $ 3.4 billion and $ 2.2 billion at September 30, 2020 and December 31, 2019, 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 Condensed 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 also designated certain interest rate swaps entered into with third parties as fair value hedges of fixed rate GICs attributable to changes in benchmark interest 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 three- and nine-month periods ended September 30, 2020, we recognized losses of $( 107) million and $( 5) million, respectively, and for the three- and nine-month periods ended September 30, 2019, we recognized gains of $ 89 million and $ 146 million, respectively, included in Change in foreign currency translation adjustment in Other comprehensive income related to the net investment hedge relationships. A qualitative methodology is utilized to assess hedge effectiveness for net investment hedges, while regression analysis is employed for all other hedges. The following table presents the gain (loss) recognized in earnings on our derivative instruments in fair value hedging relationships in the Condensed Consolidated Statements of Income: Gains/(Losses) Recognized in Earnings for: Hedging Excluded Hedged (in millions) Derivatives (a) Components (b) Items Net Impact Three Months Ended September 30, 2020 Interest rate contracts: Interest credited to policyholder account balances $ ( 2) $ - $ 5 $ 3 Net investment income 1 - - 1 Foreign exchange contracts: Realized capital gains/(losses) ( 250) ( 50) 250 ( 50) Three Months Ended September 30, 2019 Interest rate contracts: Interest credited to policyholder account balances $ 4 $ - $ ( 4) $ - Net investment income - - - - Foreign exchange contracts: Realized capital gains/(losses) 228 41 ( 228) 41 Nine Months Ended September 30, 2020 Interest rate contracts: Interest credited to policyholder account balances $ 16 $ - $ ( 15) $ 1 Net investment income ( 6) - 6 - Foreign exchange contracts: Realized capital gains/(losses) ( 77) 155 77 155 Nine Months Ended September 30, 2019 Interest rate contracts: Interest credited to policyholder account balances $ 18 $ - $ ( 18) $ - Net investment income ( 1) - 1 - Foreign exchange contracts: Realized capital gains/(losses) 278 84 ( 278) 84 (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 earnings on a mark-to-market basis. Derivatives Not Designated as Hedging Instruments The following table presents the effect of derivative instruments not designated as hedging instruments in the Condensed Consolidated Statements of Income: Gains (Losses) Recognized in Earnings Three Months Ended Nine Months Ended September 30, September 30, (in millions) 2020 2019 2020 2019 By Derivative Type: Interest rate contracts $ ( 462) $ 1,078 $ 2,104 $ 2,052 Foreign exchange contracts ( 535) 342 366 545 Equity contracts ( 46) 96 586 ( 23) Credit contracts ( 1) 26 55 35 Other contracts 18 14 44 48 Embedded derivatives ( 507) ( 756) ( 3,333) ( 2,037) Total $ ( 1,533) $ 800 $ ( 178) $ 620 By Classification: Policy fees $ 16 $ 16 $ 46 $ 51 Net investment income 4 ( 3) 1 ( 58) Net realized capital gains (losses) - excluding Fortitude Re funds withheld assets ( 775) 780 1,398 611 Net realized capital gains (losses) on Fortitude Re funds withheld assets ( 776) - ( 1,639) - Policyholder benefits and claims incurred ( 2) 7 16 16 Total $ ( 1,533) $ 800 $ ( 178) $ 620 CREDIT RISK-RELATED CONTINGENT FEATURES We estimate that at September 30, 2020, 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 $ 46 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 $ 255 million and $ 336 million at September 30, 2020 and December 31, 2019, respectively. The aggregate fair value of assets posted as collateral under these contracts at September 30, 2020 and December 31, 2019, was approximately $ 305 million and $ 381 million, respectively. Hybrid Securities with Embedded Credit Derivatives We invest in hybrid securities (such as credit-linked notes) with the intent of generating income, and not specifically to acquire exposure to embedded derivative risk. As is the case with our other investments in RMBS, CMBS, CDOs and ABS, our investments in these hybrid securities are exposed to losses only up to the amount of our initial investment in the hybrid security. Other than our initial investment in the hybrid securities, we have no further obligation to make payments on the embedded credit derivatives in the related hybrid securities. We elect to account for our investments in these hybrid securities with embedded written credit derivatives at fair value, with changes in fair value recognized in Net investment income and Other income. Our investments in these hybrid securities are reported as Other bond securities in the Condensed Consolidated Balance Sheets. The fair values of these hybrid securities were $ 2.5 billion and $ 3.3 billion at September 30, 2020 and December 31, 2019, respectively. These securities have par amounts of $ 5.2 billion and $ 7.4 billion at September 30, 2020 and December 31, 2019, respectively, and have remaining stated maturity dates that extend to 2052. |
INSURANCE LIABILITIES
INSURANCE LIABILITIES | 9 Months Ended |
Sep. 30, 2020 | |
Insurance Liabilites | |
INSURANCE LIABILITIES | 10. 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. Given the uncertainties around the impact from the COVID-19 crisis, including the significant global economic slowdown and general market decline, the full impact of COVID-19 and how it may ultimately impact the results of our insurance operations remains uncertain. In addition, in response to the crisis, new governmental, legislative and regulatory initiatives have been put in place and continue to be developed that could result in additional restrictions and requirements relating to our policies that may have a negative impact on our business operations. However, we have recorded our estimate of the ultimate liability for claims that have occurred as of the balance sheet date associated with COVID-19 which reflects our expectations given the current facts and circumstances. We will continue to monitor and review the impact. 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. Our gross loss reserves before reinsurance and discount are net of contractual deductible recoverable amounts due from policyholders of approximately $ 12.7 billion and $ 12.2 billion at September 30, 2020 and December 31, 2019, respectively. 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 and are reimbursed by the insured for the deductible portion of the claim. Thus, these recoverable amounts represent a credit exposure to us. At September 30, 2020 and December 31, 2019, we held collateral of approximately $ 9.2 billion and $ 8.9 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 September 30, 2020. The following table presents the roll-forward of activity in Loss Reserves: Three Months Ended Nine Months Ended September 30, September 30, (in millions) 2020 2019 2020 2019 Liability for unpaid loss and loss adjustment expenses, beginning of period $ 77,853 $ 81,057 $ 78,328 $ 83,639 Reinsurance recoverable ( 35,458) ( 31,333) ( 31,069) ( 31,690) Initial allowance upon CECL adoption - - 164 - Net Liability for unpaid loss and loss adjustment expenses, beginning of period 42,395 49,724 47,423 51,949 Losses and loss adjustment expenses incurred: Current year 4,324 4,612 12,683 13,181 Prior years, excluding discount and amortization of deferred gain 20 ( 74) ( 6) ( 221) Prior years, discount charge (benefit) 25 276 135 1,017 Prior years, amortization of deferred gain on retroactive reinsurance (a) ( 36) 13 ( 187) ( 129) Total losses and loss adjustment expenses incurred 4,333 4,827 12,625 13,848 Losses and loss adjustment expenses paid: Current year ( 1,316) ( 1,572) ( 2,568) ( 2,949) Prior years ( 3,115) ( 4,244) ( 11,256) ( 14,010) Total losses and loss adjustment expenses paid ( 4,431) ( 5,816) ( 13,824) ( 16,959) Other changes: Foreign exchange effect 925 ( 172) 656 ( 165) Allowance for credit losses - - - - Retroactive reinsurance adjustment (net of discount) (b) 80 96 240 ( 14) Fortitude sale and reinsurance adjustment (c) - - ( 3,818) - Total other changes 1,005 ( 76) ( 2,922) ( 179) Liability for unpaid loss and loss adjustment expenses, end of period: Net liability for unpaid losses and loss adjustment expenses 43,302 48,659 43,302 48,659 Reinsurance recoverable 35,282 31,224 35,282 31,224 Total $ 78,584 $ 79,883 $ 78,584 $ 79,883 (a) Includes $ 6 million and $ 6 million for the retroactive reinsurance agreement with National Indemnity Company (NICO), a subsidiary of Berkshire Hathaway Inc. (Berkshire), covering U.S. asbestos exposures for the three-month periods ended September 30, 2020 and 2019, respectively, and $ 26 million and $ 21 million for the nine-month periods ended September 30, 2020 and 2019, respectively. (b) Includes benefit (charge) from change in discount on retroactive reinsurance in the amount of $ 20 million and $ 43 million for the three-month periods ended September 30, 2020 and 2019, respectively, and $ 78 million and $ 475 million for the nine-month periods ended September 30, 2020 and 2019, respectively. (c) On June 2, 2020, AIG completed the Majority Interest Fortitude Sale. Concurrent with the Majority Interest Fortitude Sale, AIG established a reinsurance recoverable. Refer to Note 1 for additional information . On January 20, 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 paid 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. At NICO’s 80 percent share, NICO’s limit of liability under the contract is $ 20 billion. We account for this transaction as retroactive reinsurance. We paid total consideration, including interest, of $ 10.2 billion. The consideration was placed into a collateral trust account as security for NICO’s claim payment obligations, and Berkshire has provided a parental guarantee to secure the obligations of NICO under the agreement. The total paid claims subject to the agreement as of September 30, 2020 were below the attachment point. Discounting of Loss Reserves At September 30, 2020 and December 31, 2019, the loss reserves reflect a net loss reserve discount of $ 938 million and $ 1.5 billion, respectively, including tabular and non-tabular calculations based upon the following assumptions: The discount for asbestos reserves has been fully accreted . The tabular workers’ compensation discount is calculated based on a 3.5 percent interest rate and the mortality rate used in the 2007 U.S. Life Table. The non-tabular workers’ compensation discount is calculated separately for companies domiciled in New York and Pennsylvania, and follows the statutory regulations (prescribed or permitted) for each state. For New York companies, the discount is based on a 5 percent interest rate and the companies’ own payout patterns. For the Pennsylvania companies, the statute specifies discount factors for accident years 2001 and prior, which are based on a 6 percent interest rate and an industry payout pattern. For accident years 2002 and subsequent, the discount is based on the payout patterns and investment yields of the companies. In 2013 and in 2014, our Pennsylvania and Delaware regulators, respectively, approved use of a consistent discount rate (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. In 2020, these regulators also approved that the discount rate will be updated on an annual basis, with the next update being performed in the fourth quarter of 2020. At September 30, 2020 and December 31, 2019, the discount consists of $ 289 million and $ 582 million of tabular discount, respectively, and $ 649 million and $ 967 million of non-tabular discount for workers’ compensation, respectively. During the nine-month periods ended September 30, 2020 and 2019, the benefit (charge) from changes in discount of $( 41) million and $( 920) million, respectively, recorded as part of the policyholder benefits and losses incurred in the Condensed Consolidated Statements of Income. The following table presents the components of the loss reserve discount discussed above: September 30, 2020 December 31, 2019 North North America America Commercial Legacy Commercial Legacy (in millions) Insurance Portfolio (b) Total Insurance Portfolio Total U.S. workers' compensation $ 2,111 $ - $ 2,111 $ 2,134 $ 666 $ 2,800 Retroactive reinsurance ( 1,173) - ( 1,173) ( 1,251) - ( 1,251) Total reserve discount (a) $ 938 $ - $ 938 $ 883 $ 666 $ 1,549 (a) Excludes $ 151 million and $ 172 million of discount related to certain long tail liabilities in the UK at September 30, 2020 and December 31, 2019, respectively. (b) On June 2, 2020, we completed the Majority Interest Fortitude Sale. Refer to Note 1 for additional information. The following table presents the net loss reserve discount benefit (charge): Three Months Ended September 30, 2020 2019 North North America America Commercial Legacy Commercial Legacy (in millions) Insurance Portfolio (c) Total Insurance Portfolio Total Current accident year $ 56 $ - $ 56 $ 41 $ - $ 41 Accretion and other adjustments to prior year discount ( 25) - ( 25) ( 26) ( 56) ( 82) Effect of interest rate changes - - - ( 136) ( 58) ( 194) Net reserve discount benefit (charge) 31 - 31 ( 121) ( 114) ( 235) Change in discount on loss reserves ceded under retroactive reinsurance 20 - 20 43 - 43 Net change in total reserve discount (a) $ 51 $ - $ 51 $ ( 78) $ ( 114) $ ( 192) Nine Months Ended September 30, 2020 2019 North North America America Commercial Legacy Commercial Legacy (in millions) Insurance Portfolio (c) Total Insurance Portfolio Total Current accident year $ 94 $ - $ 94 $ 97 $ - $ 97 Accretion and other adjustments to prior year discount ( 117) ( 18) ( 135) ( 269) ( 80) ( 349) Effect of interest rate changes - - - ( 473) ( 195) ( 668) Net reserve discount benefit (charge) ( 23) ( 18) ( 41) ( 645) ( 275) ( 920) Change in discount on loss reserves ceded under retroactive reinsurance 78 - 78 475 - 475 Net change in total reserve discount (b) $ 55 $ ( 18) $ 37 $ ( 170) $ ( 275) $ ( 445) (a) Excludes $( 12) million and $( 27) million discount related to certain long tail liabilities in the UK for the three-month periods ended September 30, 2020 and 2019, respectively. (b) Excludes $( 20) million and $( 1) million discount related to certain long tail liabilities in the UK for the nine-month periods ended September 30, 2020 and 2019, respectively. (c) On June 2, 2020, we completed the Majority Interest Fortitude Sale. Refer to Note 1 for additional information. |
CONTINGENCIES, COMMITMENTS AND
CONTINGENCIES, COMMITMENTS AND GUARANTEES | 9 Months Ended |
Sep. 30, 2020 | |
CONTINGENCIES, COMMITMENTS AND GUARANTEES | |
CONTINGENCIES, COMMITMENTS AND GUARANTEES | 11. Contingencies, Commitments and Guarantees In the normal course of business, various contingent liabilities and commitments are entered into by AIG and our subsidiaries. In addition, AIG Parent guarantees various obligations of certain subsidiaries. Although AIG cannot currently quantify its 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 AIG’s consolidated financial condition or its consolidated results of operations or consolidated cash flows for an individual reporting period. Legal Contingencies Overview In the normal course of business, AIG and our subsidiaries 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, 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, other than as may be discussed below, 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 the transactions and practices of AIG and our subsidiaries in connection with industry-wide and other inquiries 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. For example, among other matters, we are currently responding to governmental investigations and examinations pertaining to certain sales and compensation practices and payments and related disclosures in connection with financial planning services and the sale and distribution of related products, including 403(b) and similar retirement plans, by the Individual and Group Retirement operating segments. On July 28, 2020, VALIC Financial Advisors, Inc. (VFA), an indirect subsidiary of AIG, agreed to settle two separate proceedings brought by the SEC to resolve certain of these matters. VFA consented to the entry of both orders without admitting or denying the findings therein. In the first matter, the SEC found that VFA violated Sections 206(2) and 206(4) of the Investment Advisers Act of 1940 (the Advisers Act) and Rules 206(4)-3 and 206(4)-7 thereunder, by failing to disclose to certain Florida teachers who were potential and actual clients that VFA’s parent, VALIC, made payments and provided other financial benefits to a company owned by Florida K-12 teachers’ unions for referrals. As part of the settlement VFA agreed to pay a $ 20 million penalty and to comply with certain undertakings. In the second settled proceeding, the SEC found that VFA violated Sections 206(2) and 206(4) of the Advisers Act and Rule 206(4)-7 thereunder, in connection with certain mutual fund share class selection practices. These practices included conflicts of interest associated with VFA’s receipt of revenue sharing, avoidance of transaction fees, and receipt of compensation paid by mutual funds in accordance with Rule 12b-1 under the Investment Company Act of 1940, without appropriate disclosure, and in violation of its duty to seek best execution. VFA agreed as part of the settlement to pay disgorgement of $ 13.2 million, prejudgment interest of $ 2.2 million, and a civil monetary penalty of $ 4.5 million, as well as to comply with certain undertakings. We have cooperated, and will continue to cooperate, in producing documents and other information with respect to these matters. Tax Litigation We are party to tax litigation before the Southern District of New York. In October 2020, the Southern District of New York dismissed the case based upon the settlement reached between AIG and the government. For additional information see Note 15 to the Condensed Consolidated Financial Statements. 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 $ 7.2 billion at September 30, 2020. 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 AIG Financial Products Corp. and related subsidiaries (collectively AIGFP) and of AIG Markets, Inc. arising from transactions entered into by AIG Markets, Inc. In connection with AIGFP’s business activities, AIGFP has issued, in a limited number of transactions, standby letters of credit or similar facilities to equity investors of structured leasing transactions in an amount equal to the termination value owing to the equity investor by the lessee in the event of a lessee default (the equity termination value). The total amount outstanding at September 30, 2020 was $ 78 million. In those transactions, AIGFP has agreed to pay such amount if the lessee fails to pay. The amount payable by AIGFP is, in certain cases, partially offset by amounts payable under other instruments typically equal to the present value of scheduled payments to be made by AIGFP. In the event that AIGFP is required to make a payment to the equity investor, the lessee is unconditionally obligated to reimburse AIGFP. To the extent that the equity investor is paid the equity termination value from the standby letter of credit and/or other sources, including payments by the lessee, AIGFP takes an assignment of the equity investor’s rights under the lease of the underlying property. Because the obligations of the lessee under the lease transactions are generally economically defeased, lessee bankruptcy is the most likely circumstance in which AIGFP would be required to pay without reimbursement. AIG Parent 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 (IRS). AIG Parent and its subsidiaries have adopted, pursuant to a written agreement, a method of allocating consolidated federal income taxes. Under an Amended and Restated Tax Payment Allocation Agreement dated June 6, 2011 between AIG Parent and one of its Bermuda-domiciled insurance subsidiaries, AIG Life of Bermuda, Ltd. (AIGB), AIG Parent has agreed to indemnify AIGB for any tax liability (including interest and penalties) resulting from adjustments made by the IRS or other appropriate authorities to taxable income, special deductions or credits in connection with investments made by AIGB in certain affiliated entities. Asset Dispositions We are subject to financial guarantees and indemnity arrangements in connection with the completed sales of businesses. 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. The Majority Interest Fortitude Sale is subject to a post-closing purchase price adjustment pursuant to which AIG will pay Fortitude Re for certain adverse development in property casualty related reserves, based on an agreed methodology, that may occur on or prior to December 31, 2023, up to a maximum of $ 500 million. We are unable to develop a reasonable estimate of the maximum potential payout under certain of these arrangements. Overall, we believe that it is unlikely we will have to make any material payments related to completed sales under these arrangements, and no material liabilities related to these arrangements have been recorded in the Condensed Consolidated Balance Sheets. For additional discussion on the Fortitude Re transaction, see Note 1 to the Condensed Consolidated Financial Statements. Other For additional discussion on commitments and guarantees associated with VIEs see Note 8 to the Condensed Consolidated Financial Statements. For additional disclosures about derivatives see Note 9 to the Condensed Consolidated Financial Statements. |
EQUITY
EQUITY | 9 Months Ended |
Sep. 30, 2020 | |
EQUITY | |
EQUITY | 12. 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, 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). After underwriting discounts and expenses, we received net proceeds of approximately $ 485 million. We may redeem the Series A Preferred Stock at our option, (a) in whole, but not in part, at any time prior to March 15, 2024, within 90 days after the occurrence of a “Rating Agency Event,” at a redemption price equal to $ 25,500 per share of the Series A Preferred Stock (equivalent to $ 25.50 per Depositary Share), plus an amount equal to any dividends per share that have been declared but not paid prior to the redemption date (but no amount due in respect of any dividends that have not been declared prior to such date), or (b) (i) in whole, but not in part, at any time prior to March 15, 2024, within 90 days after the occurrence of a “Regulatory Capital Event,” or (ii) in whole or in part, from time to time, on or after March 15, 2024, in each case, at a redemption price equal to $ 25,000 per share of the Series A Preferred Stock (equivalent to $ 25.00 per Depositary Share), plus an amount equal to any dividends per share that have been declared but not paid prior to the redemption date (but no amount due in respect of any dividends that have not been declared prior to such date). A “Rating Agency Event” is generally defined to mean that any nationally recognized statistical rating organization within the meaning of Section 3(a)(62) of the Securities Exchange Act of 1934, as amended (the Exchange Act) that then publishes a rating for us amends, clarifies or changes the criteria it uses to assign equity credit to securities such as the Series A Preferred Stock, which amendment, clarification or change results in the shortening of the length of time the Series A Preferred Stock is assigned a particular level of equity credit by that rating agency as compared to the length of time it would have been assigned that level of equity credit by that rating agency or its predecessor on the initial issuance of the Series A Preferred Stock, or the lowering of the equity credit (including up to a lesser amount) assigned to the Series A Preferred Stock by that rating agency as compared to the equity credit assigned by that rating agency or its predecessor on the initial issuance of the Series A Preferred Stock. A “Regulatory Capital Event” is generally defined to mean our good faith determination that as a result of a change in law, rule or regulation, or a proposed change or an official judicial or administrative pronouncement, there is more than an insubstantial risk that the full liquidation preference of the Series A Preferred Stock would not qualify as capital (or a substantially similar concept) for purposes of any group capital standard to which we are or will be subject. Holders of the Series A Preferred Stock will be entitled to receive dividend payments only when, as and if declared by our board of directors (or a duly authorized committee of the board). Dividends will be payable from the original date of issue at a rate of 5.85% per annum, payable quarterly, in arrears, on the fifteenth day of March, June, September and December of each year, beginning on June 15, 2019. Dividends on the Series A Preferred Stock will be non-cumulative. In the event of any liquidation, dissolution or winding-up of the affairs of AIG, whether voluntary or involuntary, before any distribution or payment out of our assets may be made to or set aside for the holders of any junior stock, holders of the Series A Preferred Stock will be entitled to receive out of our assets legally available for distribution to our stockholders, an amount equal to $ 25,000 per share of Series A Preferred Stock (equivalent to $ 25.00 per Depositary Share), together with an amount equal to all declared and unpaid dividends (if any), but no amount in respect of any undeclared dividends prior to such payment date. Distributions will be made only to the extent of our assets that are available for distribution to stockholders (i.e., after satisfaction of all our liabilities to creditors, if any). The Series A Preferred Stock does not have voting rights, except in limited circumstances, including in the case of certain dividend non-payments. The following table presents declaration date, record date, payment date and dividends paid per preferred share and per depository share on the Series A Preferred Stock in the nine months ended September 30, 2020 and 2019: Dividends Paid Declaration Date Record Date Payment Date Per Preferred Share Per Depositary Share August 3, 2020 August 31, 2020 September 15, 2020 $ 365.625 $ 0.365625 May 4, 2020 May 29, 2020 June 15, 2020 365.625 0.365625 February 12, 2020 February 28, 2020 March 16, 2020 365.625 0.365625 August 7, 2019 August 30, 2019 September 16, 2019 $ 365.625 $ 0.365625 May 21, 2019 May 31, 2019 June 17, 2019 369.6875 0.3696875 Common Stock The following table presents a rollforward of outstanding shares: Nine Months Ended September 30, 2020 Common Treasury Common Stock Stock Issued Stock Outstanding Shares, beginning of year 1,906,671,492 ( 1,036,672,461) 869,999,031 Shares issued - 3,610,496 3,610,496 Shares repurchased - ( 12,160,952) ( 12,160,952) Shares, end of period 1,906,671,492 ( 1,045,222,917) 861,448,575 Dividends Dividends are payable on 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. The payment of dividends is also subject to the terms of AIG’s outstanding Series A Preferred Stock, pursuant to which no dividends may be declared or paid on any AIG Common Stock unless the full dividends for the latest completed dividend period on all outstanding shares of Series A Preferred Stock have been declared and paid or provided for. The following table presents declaration date, record date, payment date and dividends paid per common share on AIG Common Stock in the nine months ended September 30, 2020 and 2019: Dividends Paid Declaration Date Record Date Payment Date Per Common Share August 3, 2020 September 17, 2020 September 30, 2020 $ 0.32 May 4, 2020 June 15, 2020 June 29, 2020 0.32 February 12, 2020 March 16, 2020 March 30, 2020 0.32 August 7, 2019 September 17, 2019 September 30, 2019 $ 0.32 May 6, 2019 June 14, 2019 June 28, 2019 0.32 February 13, 2019 March 15, 2019 March 29, 2019 0.32 For a discussion of restrictions on payments of dividends to AIG Parent by its subsidiaries see Note 20 to the Consolidated Financial Statements in the 2019 Annual Report . Repurchase of AIG Common Stock The following table presents repurchases of AIG Common Stock and warrants to purchase shares of AIG Common Stock: Nine Months Ended September 30, (in millions) 2020 2019 Aggregate repurchases of common stock $ 500 $ - Total number of common shares repurchased 12 - Aggregate repurchases of warrants $ - $ - Total number of warrants repurchased - - Our Board of Directors has authorized the repurchase of shares of AIG Common Stock and warrants to purchase shares of AIG Common Stock through a series of actions. On February 13, 2019, our Board of Directors authorized an additional increase of approximately $ 1.5 billion to its previous share repurchase authorization. As of September 30, 2020, $ 1.5 billion remained under our share repurchase authorization. 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 (including through the purchase of warrants). Certain of our share repurchases have been and may from time to time be effected through Exchange Act Rule 10b5-1 repurchase plans. In February 2020, we executed an accelerated stock repurchase (ASR) agreement with a third-party financial institution. The total number of shares of AIG Common Stock repurchased in the nine months ended September 30, 2020, and the aggregate purchase price of those shares, reflect our payment of $ 500 million in the aggregate under the ASR agreement and the receipt of approximately 12 million shares of AIG Common Stock in the aggregate. 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. The repurchase of AIG Common Stock is also subject to the terms of AIG’s outstanding Series A Preferred Stock, pursuant to which AIG may not (other than in limited circumstances) purchase, redeem or otherwise acquire AIG Common Stock unless the full dividends for the latest completed dividend period on all outstanding shares of Series A Preferred Stock have been declared and paid or provided for. Accumulated Other Comprehensive INCOME (LOSS) The following table presents a rollforward of Accumulated other comprehensive income (loss): Unrealized Appreciation Fair Value of (Depreciation) of Fixed Unrealized Liabilities Under Maturity Securities on Appreciation Foreign Retirement Fair Value Option Which Allowance (Depreciation) Currency Plan Attributable to for Credit Losses of All Other Translation Liabilities Changes in (in millions) Was Taken Investments Adjustments Adjustment Own Credit Risk Total Balance, June 30, 2020, net of tax $ ( 233) $ 13,281 $ ( 2,767) $ ( 1,120) $ 8 $ 9,169 Change in unrealized appreciation of investments 101 2,273 - - - 2,374 Change in deferred policy acquisition costs adjustment and other ( 5) ( 296) - - - ( 301) Change in future policy benefits - ( 147) - - - ( 147) Change in foreign currency translation adjustments - - 297 - - 297 Change in net actuarial loss - - - 2 - 2 Change in prior service credit - - - - - - Change in deferred tax asset (liability) ( 17) ( 445) 55 ( 3) - ( 410) Change in fair value of liabilities under fair value option attributable to changes in own credit risk - - - - 1 1 Total other comprehensive income (loss) 79 1,385 352 ( 1) 1 1,816 Noncontrolling interests - 2 5 - - 7 Balance, September 30, 2020, net of tax $ ( 154) $ 14,664 $ ( 2,420) $ ( 1,121) $ 9 $ 10,978 Balance, December 31, 2019, net of tax $ - $ 8,722 $ ( 2,625) $ ( 1,122) $ 7 $ 4,982 Change in unrealized appreciation (depreciation) of investments ( 212) 6,088 - - - 5,876 Change in deferred policy acquisition costs adjustment and other 14 ( 655) - - - ( 641) Change in future policy benefits - 2,187 - - - 2,187 Change in foreign currency translation adjustments - - 169 - - 169 Change in net actuarial loss - - - 18 - 18 Change in prior service credit - - - ( 1) - ( 1) Change in deferred tax asset (liability) 44 ( 1,695) 37 ( 16) - ( 1,630) Change in fair value of liabilities under fair value option attributable to changes in own credit risk - - - - 2 2 Total other comprehensive income (loss) ( 154) 5,925 206 1 2 5,980 Noncontrolling interests - ( 17) 1 - - ( 16) Balance, September 30, 2020, net of tax $ ( 154) $ 14,664 $ ( 2,420) $ ( 1,121) $ 9 $ 10,978 Unrealized Appreciation Fair Value of (Depreciation) of Fixed Unrealized Liabilities Under Maturity Securities on Appreciation Foreign Retirement Fair Value Option Which Other-Than- (Depreciation) Currency Plan Attributable to Temporary Credit of All Other Translation Liabilities Changes in (in millions) Impairments Were Taken Investments Adjustments Adjustment Own Credit Risk Total Balance, June 30, 2019, net of tax $ 720 $ 8,034 $ ( 2,692) $ ( 1,079) $ 8 $ 4,991 Change in unrealized appreciation (depreciation) of investments ( 9) 4,386 - - - 4,377 Change in deferred policy acquisition costs adjustment and other 11 ( 522) - - - ( 511) Change in future policy benefits - ( 3,042) - - - ( 3,042) Change in foreign currency translation adjustments - - ( 24) - - ( 24) Change in net actuarial loss - - - 13 - 13 Change in prior service credit - - - ( 1) - ( 1) Change in deferred tax liability ( 4) ( 166) ( 10) ( 5) - ( 185) Change in fair value of liabilities under fair value option attributable to changes in own credit risk - - - - 1 1 Total other comprehensive income (loss) ( 2) 656 ( 34) 7 1 628 Noncontrolling interests - 5 ( 1) - - 4 Balance, September 30, 2019, net of tax $ 718 $ 8,685 $ ( 2,725) $ ( 1,072) $ 9 $ 5,615 Balance, December 31, 2018, net of tax $ ( 38) $ 2,426 $ ( 2,725) $ ( 1,086) $ 10 $ ( 1,413) Change in unrealized appreciation of investments 935 15,262 - - - 16,197 Change in deferred policy acquisition costs adjustment and other ( 3) ( 2,246) - - - ( 2,249) Change in future policy benefits - ( 5,291) - - - ( 5,291) Change in foreign currency translation adjustments - - 31 - - 31 Change in net actuarial loss - - - 29 - 29 Change in prior service credit - - - ( 2) - ( 2) Change in deferred tax liability ( 176) ( 1,447) ( 30) ( 13) - ( 1,666) Change in fair value of liabilities under fair value option attributable to changes in own credit risk - - - - ( 1) ( 1) Total other comprehensive income (loss) 756 6,278 1 14 ( 1) 7,048 Noncontrolling interests - 19 1 - - 20 Balance, September 30, 2019, net of tax $ 718 $ 8,685 $ ( 2,725) $ ( 1,072) $ 9 $ 5,615 The following table presents the other comprehensive income (loss) reclassification adjustments for the three- and nine-month periods ended September 30, 2020 and 2019, respectively: Unrealized Appreciation Fair Value of (Depreciation) of Fixed Unrealized Liabilities Under Maturity Securities on Appreciation Foreign Retirement Fair Value Option Which Allowance (Depreciation) Currency Plan Attributable to for Credit Losses of All Other Translation Liabilities Changes in (in millions) Was Taken Investments Adjustments Adjustment Own Credit Risk Total Three Months Ended September 30, 2020 Unrealized change arising during period $ 99 $ 2,002 $ 297 $ ( 9) $ 1 $ 2,390 Less: Reclassification adjustments included in net income 3 172 - ( 11) - 164 Total other comprehensive income (loss), before income tax expense (benefit) 96 1,830 297 2 1 2,226 Less: Income tax expense (benefit) 17 445 ( 55) 3 - 410 Total other comprehensive income (loss), net of income tax expense (benefit) $ 79 $ 1,385 $ 352 $ ( 1) $ 1 $ 1,816 Nine Months Ended September 30, 2020 Unrealized change arising during period $ ( 198) $ 8,158 $ 169 $ ( 15) $ 2 $ 8,116 Less: Reclassification adjustments included in net income - 538 - ( 32) - 506 Total other comprehensive income (loss), before income tax expense (benefit) ( 198) 7,620 169 17 2 7,610 Less: Income tax expense (benefit) ( 44) 1,695 ( 37) 16 - 1,630 Total other comprehensive income (loss), net of income tax expense (benefit) $ ( 154) $ 5,925 $ 206 $ 1 $ 2 $ 5,980 Unrealized Appreciation Fair Value of (Depreciation) of Fixed Unrealized Liabilities Under Maturity Securities on Appreciation Foreign Retirement Fair Value Option Which Other-Than- (Depreciation) Currency Plan Attributable to Temporary Credit of All Other Translation Liabilities Changes in (in millions) Impairments Were Taken Investments Adjustments Adjustment Own Credit Risk Total Three Months Ended September 30, 2019 Unrealized change arising during period $ 3 $ 949 $ ( 24) $ 3 $ 1 $ 932 Less: Reclassification adjustments included in net income 1 127 - ( 9) - 119 Total other comprehensive income (loss), before income tax expense 2 822 ( 24) 12 1 813 Less: Income tax expense 4 166 10 5 - 185 Total other comprehensive income (loss), net of income tax expense $ ( 2) $ 656 $ ( 34) $ 7 $ 1 $ 628 Nine Months Ended September 30, 2019 Unrealized change arising during period $ 929 $ 7,912 $ 31 $ 3 $ ( 1) $ 8,874 Less: Reclassification adjustments included in net income ( 3) 187 - ( 24) - 160 Total other comprehensive income (loss), before income tax expense 932 7,725 31 27 ( 1) 8,714 Less: Income tax expense 176 1,447 30 13 - 1,666 Total other comprehensive income (loss), net of income tax expense $ 756 $ 6,278 $ 1 $ 14 $ ( 1) $ 7,048 The following table presents the effect of the reclassification of significant items out of Accumulated other comprehensive income on the respective line items in the Condensed Consolidated Statements of Income: Amount Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Condensed Consolidated Statements of Income Three Months Ended September 30, (in millions) 2020 2019 Unrealized appreciation (depreciation) of fixed maturity securities on which allowance for credit losses was taken Investments $ 3 $ - Other realized capital gains Total 3 - Unrealized appreciation (depreciation) of fixed maturity securities on which other-than-temporary credit impairments were taken Investments - 1 Other realized capital gains Total - 1 Unrealized appreciation (depreciation) of all other investments Investments 172 127 Other realized capital gains Total 172 127 Change in retirement plan liabilities adjustment Prior-service credit - - * Actuarial losses ( 11) ( 9) * Total ( 11) ( 9) Total reclassifications for the period $ 164 $ 119 Amount Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Condensed Consolidated Statements of Income Nine Months Ended September 30, (in millions) 2020 2019 Unrealized appreciation (depreciation) of fixed maturity securities on which allowance for credit losses was taken Investments $ - $ - Other realized capital gains Total - - Unrealized appreciation (depreciation) of fixed maturity securities on which other-than-temporary credit impairments were taken Investments - ( 3) Other realized capital gains Total - ( 3) Unrealized appreciation (depreciation) of all other investments Investments 538 187 Other realized capital gains Total 538 187 Change in retirement plan liabilities adjustment Prior-service credit ( 1) - * Actuarial losses ( 31) ( 24) * Total ( 32) ( 24) Total reclassifications for the period $ 506 $ 160 * These Accumulated other comprehensive income components are included in the computation of net periodic pension cost. For additional information see Note 14 to the Condensed Consolidated Financial Statements. |
EARNINGS PER COMMON SHARE (EPS)
EARNINGS PER COMMON SHARE (EPS) | 9 Months Ended |
Sep. 30, 2020 | |
EARNINGS PER COMMON SHARE (EPS) | |
EARNINGS PER COMMON SHARE (EPS) | 13. 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. The following table presents the computation of basic and diluted EPS: Three Months Ended Nine Months Ended September 30, September 30, (dollars in millions, except per common share data) 2020 2019 2020 2019 Numerator for EPS: Income (loss) from continuing operations $ 294 $ 973 $ ( 5,817) $ 3,301 Less: Net income from continuing operations attributable to noncontrolling interests 11 317 78 881 Less: Preferred stock dividends 7 8 22 15 Income (loss) attributable to AIG common shareholders from continuing operations 276 648 ( 5,917) 2,405 Income (loss) from discontinued operations, net of income tax expense 5 - 4 ( 1) Net income (loss) attributable to AIG common shareholders $ 281 $ 648 $ ( 5,913) $ 2,404 Denominator for EPS: Weighted average common shares outstanding — basic 867,713,308 877,009,495 869,627,926 876,262,372 Dilutive common shares 5,417,642 18,804,915 - 10,958,744 Weighted average common shares outstanding — diluted (a)(b) 873,130,950 895,814,410 869,627,926 887,221,116 Income (loss) per common share attributable to AIG common shareholders: Basic: Income (loss) from continuing operations $ 0.31 $ 0.74 $ ( 6.80) $ 2.74 Income from discontinued operations $ 0.01 $ - $ - $ - Income (loss) attributable to AIG common shareholders $ 0.32 $ 0.74 $ ( 6.80) $ 2.74 Diluted: Income (loss) from continuing operations $ 0.31 $ 0.72 $ ( 6.80) $ 2.71 Income from discontinued operations $ 0.01 $ - $ - $ - Income (loss) attributable to AIG common shareholders $ 0.32 $ 0.72 $ ( 6.80) $ 2.71 (a) Shares in the diluted EPS calculation represent basic shares for the nine-month period ended September 30, 2020 due to the net loss in that period. The number of common shares excluded from the calculation was 4,432,369 shares for the nine-month period ended September 30, 2020. (b) Dilutive common shares included our share-based employee compensation plans and a weighted average portion of the 10-year warrants issued to AIG shareholders as part of AIG’s recapitalization in January 2011 and expire in January 2021. The number of common shares excluded from diluted shares outstanding was 70.9 million and 68.9 million for the three- and nine-month periods ended September 30, 2020, respectively, and 5.1 million and 24.9 million for the three- and nine-month periods ended September 30, 2019, respectively, because the effect of including those common shares in the calculation would have been anti-dilutive. For information about our repurchases of AIG Common Stock see Note 12 to the Condensed Consolidated Financial Statements. |
EMPLOYEE BENEFITS
EMPLOYEE BENEFITS | 9 Months Ended |
Sep. 30, 2020 | |
EMPLOYEE BENEFITS | |
EMPLOYEE BENEFITS | 14. Employee Benefits We sponsor various defined benefit plans for eligible employees and retirees in the U.S. and certain non-U.S. countries. The following table presents the components of net periodic benefit cost (credit) with respect to pension benefits: Pension U.S. Non-U.S. (in millions) Plans Plans Total Three Months Ended September 30, 2020 Components of net periodic benefit cost: Service cost $ 1 $ 5 $ 6 Interest cost 33 3 36 Expected return on assets ( 60) ( 5) ( 65) Amortization of prior service cost - 1 1 Amortization of net loss 9 1 10 Net periodic benefit cost (credit) ( 17) 5 ( 12) Settlement charges - - - Net benefit cost (credit) $ ( 17) $ 5 $ ( 12) Three Months Ended September 30, 2019 Components of net periodic benefit cost: Service cost $ 2 $ 6 $ 8 Interest cost 44 3 47 Expected return on assets ( 58) ( 5) ( 63) Amortization of prior service cost - - - Amortization of net loss 9 1 10 Net periodic benefit cost (credit) ( 3) 5 2 Settlement charges - - - Net benefit cost (credit) $ ( 3) $ 5 $ 2 Nine Months Ended September 30, 2020 Components of net periodic benefit cost: Service cost $ 4 $ 15 $ 19 Interest cost 100 8 108 Expected return on assets ( 179) ( 15) ( 194) Amortization of prior service cost - 2 2 Amortization of net loss 25 5 30 Net periodic benefit cost (credit) ( 50) 15 ( 35) Settlement charges - - - Net benefit cost (credit) $ ( 50) $ 15 $ ( 35) Nine Months Ended September 30, 2019 Components of net periodic benefit cost: Service cost $ 7 $ 16 $ 23 Interest cost 131 11 142 Expected return on assets ( 172) ( 16) ( 188) Amortization of prior service cost - 1 1 Amortization of net loss 25 4 29 Net periodic benefit cost (credit) ( 9) 16 7 Settlement credit - ( 3) ( 3) Net benefit cost (credit) $ ( 9) $ 13 $ 4 The service cost for our U.S. defined benefit plans only reflects administrative fees as the plans are frozen and no longer accrue benefits. We recognized net expense of $ 2 million and $ 6 million for our U.S. and non-U.S. postretirement benefit plans for the three- and nine-month periods ended September 30, 2020, respectively. We recognized net expense of $ 2 million and $ 5 million for our U.S. and non-U.S. postretirement benefit plans for the three- and nine-month periods ended September 30, 2019, respectively. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2020 | |
INCOME TAXES | |
INCOME TAXES | 15. Income Taxes RECENT U.S. Tax law changes On December 22, 2017, the U.S. enacted Public Law 115-97, known informally as the Tax Cuts and Jobs Act (the Tax Act). The Tax Act includes provisions for Global Intangible Low-Taxed Income (GILTI) under which taxes are imposed on the excess of a deemed return on tangible assets of certain foreign subsidiaries and for Base Erosion and Anti-Abuse Tax (BEAT) under which taxes are imposed on certain base eroding payments to affiliated foreign companies. While the U.S. tax authorities issued formal guidance, including recently issued proposed and final regulations for BEAT and other provisions of the Tax Act, there are still certain aspects of the Tax Act that remain unclear and subject to substantial uncertainties. Additional guidance is expected in future periods. Such guidance may result in changes to the interpretations and assumptions we made and actions we may take, which may impact amounts recorded with respect to international provisions of the Tax Act, possibly materially. Consistent with accounting guidance, we treat BEAT as a period tax charge in the period the tax is incurred and have made an accounting policy election to treat GILTI taxes in a similar manner. On March 27, 2020, the U.S. enacted the Coronavirus Aid, Relief, and Economic Security (CARES) Act to mitigate the economic impacts of the COVID-19 crisis. The tax provisions of the CARES Act have not had and are currently not expected to have a material impact on AIG’s U.S. federal tax liabilities. RECLASSIFICATION OF CERTAIN TAX EFFECTS FROM ACCUMULATED OTHER COMPREHENSIVE INCOME We use an item-by-item approach to release the stranded or disproportionate income tax effects in AOCI related to our available-for-sale securities. Under this approach, a portion of the disproportionate tax effects is assigned to each individual security lot at the date the amount becomes lodged. When the individual securities are sold, mature, or are otherwise impaired on an other-than-temporary basis, the assigned portion of the disproportionate tax effect is reclassified from AOCI to income from continuing operations. Interim Tax Calculation Method We use the estimated annual effective tax rate method in computing our interim tax provision. Certain items, including those deemed to be unusual, infrequent or that cannot be reliably estimated, are excluded from the estimated annual effective tax rate. In these cases, the actual tax expense or benefit is reported in the same period as the related item. Certain tax effects are also not reflected in the estimated annual effective tax rate, primarily certain changes in the realizability of deferred tax assets and uncertain tax positions, and are recorded in the period in which the change occurs. While certain impacts of the Tax Act are included in our annual effective tax rate, we continue to refine our calculations as additional information becomes available, which may result in changes to the estimated annual effective tax rate. As of September 30, 2020, the annual effective tax rate includes the tax effects of actual and projected COVID-19 related losses and market developments. The tax effects of the Majority Interest Fortitude Sale were excluded from the estimated annual effective tax rate and reported in the second quarter interim period. Interim Tax Expense (Benefit) For the three-month period ended September 30, 2020, the effective tax rate on income from continuing operations was 20.1 percent. The effective tax rate on income from continuing operations differs from the statutory tax rate of 21 percent primarily due to the effect of foreign operations, accrual of interest associated with IRS and other tax authority matters, state and local income taxes, and non-deductible transfer pricing charges, partially offset by tax benefits associated with tax exempt income, and reclassifications from accumulated other comprehensive income to income from continuing operations related to the disposal of available for sale securities. The effect of foreign operations is primarily related to income in our foreign operations taxed at statutory tax rates higher than 21 percent, other foreign taxes, and foreign income subject to U.S. taxation. For the nine-month period ended September 30, 2020, the effective tax rate on loss from continuing operations was 13.6 percent. The effective tax rate on loss from continuing operations differs from the statutory tax rate of 21 percent primarily due to tax effects of the Majority Interest Fortitude Sale, tax charges associated with the establishment of U.S. federal valuation allowance related to certain tax attribute carryforwards, accrual of interest associated with IRS and other tax authority matters, the effect of foreign operations, excess tax charges related to share based compensation payments recorded through the income statement, state and local income taxes, and non-deductible transfer pricing charges, partially offset by tax benefits associated with tax exempt income, and reclassifications from accumulated other comprehensive income to income from continuing operations related to the disposal of available for sale securities. The effect of foreign operations is primarily related to income in our foreign operations taxed at statutory tax rates higher than 21 percent, other foreign taxes, and foreign income subject to U.S. taxation. For the three-month period ended September 30, 2019, the effective tax rate on income from continuing operations was 22.8 percent. The effective tax rate on income from continuing operations differs from the statutory tax rate of 21 percent primarily due to tax charges associated with the effect of foreign operations, changes in reserves for uncertain tax positions, a net tax charge due to the accrual of interest associated with IRS and other tax authority matters, state and local income taxes, and non-deductible transfer pricing charges, partially offset by tax benefits associated with tax exempt income, reclassifications from accumulated other comprehensive income to income from continuing operations related to the disposal of available for sale securities, and valuation allowance activity related to certain foreign subsidiaries. The effect of foreign operations is primarily related to income in our foreign operations taxed at statutory tax rates higher than 21 percent, other foreign taxes, and foreign income subject to U.S. taxation. For the nine-month period ended September 30, 2019, the effective tax rate on income from continuing operations was 22.3 percent. The effective tax rate on income from continuing operations differs from the statutory tax rate of 21 percent primarily due to tax charges associated with the accrual of interest associated with IRS and other tax authority matters, the effect of foreign operations, changes in reserves for uncertain tax positions, state and local income taxes, excess tax charges related to share based compensation payments recorded through the income statement, and non-deductible transfer pricing charges, partially offset by tax benefits associated with tax exempt income, reclassifications from accumulated other comprehensive income to income from continuing operations related to the disposal of available for sale securities, and valuation allowance activity related to certain foreign subsidiaries. The effect of foreign operations is primarily related to income in our foreign operations taxed at statutory tax rates higher than 21 percent, other foreign taxes, and foreign income subject to U.S. taxation. For the nine-month period ended September 30, 2020, we consider our foreign earnings with respect to certain operations in Canada, South Africa, the Far East, 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. Deferred taxes, if necessary, have been provided on earnings of non-U.S. affiliates whose earnings are not indefinitely reinvested. Given the uncertainties around the impact from the COVID-19 crisis, including the significant global economic slowdown and general market decline, we continue to monitor and review the impact on our reinvestment considerations, including regulatory oversight in the relevant jurisdictions. 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. Our framework for assessing the recoverability of the deferred tax asset requires us to consider all available evidence, including: the nature, frequency, and amount of cumulative financial reporting income and losses in recent years; the sustainability of recent operating profitability of our subsidiaries; the predictability of future operating profitability of the character necessary to realize the net deferred tax asset, including forecasts of future income for each of our businesses and actual and planned business and operational changes; the carryforward periods for the net operating loss, capital loss and foreign tax credit carryforwards, including the effect of reversing taxable temporary differences; and prudent and feasible actions and tax planning strategies that would be implemented, if necessary, to protect against the loss of the deferred tax asset. In performing our assessment of the recoverability of the deferred tax asset under this framework, we consider tax laws governing the utilization of the net operating loss, capital loss and foreign tax credit carryforwards in each applicable jurisdiction. Under U.S. tax law, a company generally must use its net operating loss carryforwards before it can use its foreign tax credit carryforwards, even though the carryforward period for the foreign tax credit is shorter than for the net operating loss. Our U.S. federal consolidated income tax group includes both life companies and non-life companies. While the U.S. taxable income of our non-life companies can be offset by our net operating loss carryforwards, only a portion (no more than 35 percent) of the U.S. taxable income of our life companies can be offset by those net operating loss carryforwards. The remaining tax liability of our life companies can be offset by the foreign tax credit carryforwards. Accordingly, we are able to utilize both the net operating loss and foreign tax credit carryforwards concurrently. Recent events, including the COVID-19 crisis, multiple reductions in target interest rates by the Board of Governors of the Federal Reserve System, and significant market volatility, continue 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 macro-economic 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. The carryforward periods of our foreign tax credit carryforwards range from tax years 2020 through 2023. Carryforward periods for our net operating losses extend from 2028 forward. However, utilization of a portion of our net operating losses is limited under separate return limitation year rules. Based on 2020 events and our analysis of their potential impact on utilization of our tax attributes, we concluded in the first quarter of 2020 that a valuation allowance should be established on a portion of our foreign tax credit carryforwards and net operating losses that are no longer more-likely-than-not to be realized. To the extent that the valuation allowance is attributed to changes in forecast of current year taxable income, the impact is included in our estimated annualized effective tax rate. The valuation allowance related to changes in forecasts of income in future periods as well as other items not related to the current year was recorded discretely in the nine-month period ended September 30, 2020. Accordingly, as of September 30, 2020, we have recorded a $ 286 million valuation allowance through continuing operations. No additional activity was recorded for the three-month period ended September 30, 2020. Estimates of future taxable income, including income generated from prudent and feasible actions and tax planning strategies, impact of settlements with taxing authorities, and any changes to interpretations and assumptions related to the impact of the Tax Act could change in the near term, perhaps materially, which may require us to consider any potential impact to our assessment of the recoverability of the deferred tax asset. Additionally, estimates of future taxable income, including prudent and feasible tax planning strategies, may be further impacted by market developments arising from the COVID-19 crisis and uncertainty regarding its outcome. Such potential impact could be material to our consolidated financial condition or results of operations for an individual reporting period. For the nine-month period ended September 30, 2020, recent changes in market conditions, including the COVID-19 crisis and interest rate fluctuations, impacted the unrealized tax gains and losses in the U.S. Life Insurance Companies’ available for sale securities portfolio, resulting in a deferred tax liability related to net unrealized tax capital gains. As of September 30, 2020, based on all available evidence, we concluded that no valuation allowance is necessary in the U.S. Life Insurance Companies’ available for sale securities portfolio. For the nine-month period ended September 30, 2020, recent changes in market conditions, including interest rate fluctuations, impacted the unrealized tax gains and losses in the U.S. non-life companies’ available for sale securities portfolio, resulting in a deferred tax liability related to net unrealized tax capital gains. As of September 30, 2020, based on all available evidence, we concluded that no valuation allowance is necessary in the U.S. non-life companies’ available for sale securities portfolio. For the three- and nine-month periods ended September 30, 2020, we recognized a net increase (decrease) of $( 8) million and $ 12 million, respectively, in deferred tax asset valuation allowance associated with certain foreign and state jurisdictions, primarily attributable to current year activity. For the nine-month period ended September 30, 2020, we also recognized a $ 206 million decrease in deferred tax asset valuation allowance associated with certain foreign jurisdictions, primarily attributable to a corresponding reduction in foreign net operating loss deferred tax assets as a result of restructuring of our European business and the expiration of a portion of net operating losses prior to utilization in Japan which was recorded during the three-month period ended June 30, 2020. Tax Examinations and Litigation On August 1, 2012, we filed a motion for partial summary judgment related to the disallowance of foreign tax credits associated with cross border financing transactions in the Southern District of New York (SDNY). The SDNY denied our summary judgment motion and upon AIG’s appeal, the U.S. Court of Appeals for the Second Circuit (the Second Circuit) affirmed the denial. AIG’s petition for certiorari to the U.S. Supreme Court from the decision of the Second Circuit was denied on March 7, 2016. As a result, the case was remanded back to the SDNY for a jury trial. In January 2018, the parties reached non-binding agreements in principle on issues presented in the dispute. In 2019, we agreed with the IRS to execute an agreement for the tax years at issue in which AIG would waive restrictions on the assessment of additional tax related to the settlement of the underlying issues in those tax years. The litigation was stayed pending the outcome of the review process. In October 2020, the review process concluded and the parties executed a binding settlement agreement on the underlying issues in those tax years. On October 22, 2020, the SDNY dismissed the case based upon the settlement reached between AIG and the government. The parties continue to review the related interest calculations based on the settlement agreement. We have adequate reserves for the potential liabilities that may result from these matters. In September 2020, we received the IRS Revenue Agent Report containing agreed and disagreed issues for the audit of tax years 2007-2010. In October 2020, we filed a protest of the disagreed issues with IRS Appeals. Accounting for Uncertainty in Income Taxes At September 30, 2020 and December 31, 2019, our unrecognized tax benefits, excluding interest and penalties, were $ 4.8 billion. At September 30, 2020 and December 31, 2019, our unrecognized tax benefits related to tax positions that, if recognized, would not affect the effective tax rate because they relate to such factors as the timing, rather than the permissibility, of the deduction were $ 45 million and $ 43 million, respectively. Accordingly, at both September 30, 2020 and December 31, 2019, the amounts of unrecognized tax benefits that, if recognized, would favorably affect the effective tax rate were $ 4.7 billion. Interest and penalties related to unrecognized tax benefits are recognized in income tax expense. At September 30, 2020 and December 31, 2019, we had accrued liabilities of $ 2.6 billion and $ 2.4 billion, respectively, for the payment of interest (net of the federal benefit) and penalties. For the nine-month periods ended September 30, 2020 and 2019, we accrued expense (benefit) of $ 126 million and $ 181 million, respectively, for the payment of interest and penalties. We believe it is reasonably possible that our unrecognized tax benefits could decrease within the next 12 months by as much as $ 3.6 billion, principally as a result of potential resolutions or settlements of prior years’ tax items. The prior years’ tax items include unrecognized tax benefits related to the deductibility of certain expenses and matters related to cross border financing transactions. In October 2020, AIG and the IRS entered into a binding settlement agreement related to tax years 1991-2006. Pursuant to relevant accounting guidance, developments that occur after the balance sheet date but before issuance of the financial statements should be recognized in the period in which they occur (i.e., the subsequent interim period, which in this case will be the three months ending December 31, 2020). Accordingly, no impact of this agreement is reflected in the current period ended September 30, 2020. We have adequate reserves for the potential liabilities that may result from these matters. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2020 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 16. Subsequent Events announcement of intent to separate LIFE AND RETIREMENT On October 26, 2020, AIG announced its intention to separate its Life and Retirement business from AIG. No decisions have yet been made regarding the structure of the proposed separation. In addition, 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 the SEC. 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. Dividends Declared On November 5, 2020, our Board of Directors declared a cash dividend on AIG Common Stock of $ 0.32 per share, payable on December 28, 2020 to shareholders of record on December 14, 2020. On November 5, 2020, our Board of Directors declared a cash dividend on AIG’s Series A Preferred Stock of $ 365.625 per share, payable on December 15, 2020 to holders of record on November 30, 2020. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
BASIS OF PRESENTATION | |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with 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: liability for unpaid losses and loss adjustment expenses (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 policy acquisition costs for investment-oriented products; reinsurance assets; impairment charges, including impairments on other invested assets and goodwill; allowances for credit losses primarily on loans, available for sale fixed maturity securities, reinsurance assets and premiums and other receivables; 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 and estimates associated with the Tax Cuts and Jobs Act (the Tax Act). 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. |
SUMMARY OF SIGNICFICANT ACCOUNT
SUMMARY OF SIGNICFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Accounting Standards Adopted During 2020 | Accounting Standards Adopted During 2020 Financial Instruments - Credit Losses In June 2016, the FASB issued an accounting standard that changed how entities account for current expected credit losses (CECL) for most financial assets, premiums receivable, trade receivables, off-balance sheet exposures and reinsurance receivables (the Financial Instruments Credit Losses Standard). The standard requires an allowance for credit losses based on the expectation of lifetime credit losses related to such financial assets subject to credit losses, including loans measured at amortized cost, reinsurance receivables and certain off-balance sheet credit exposures. Additionally, the impairment of available-for-sale debt securities, including purchased credit deteriorated (PCD) securities, is subject to the new guidance and is measured in a similar manner, except that losses are recognized as allowances rather than reductions in the amortized cost of the securities. The standard allows for reversals of credit impairments in the event that the credit of an issuer improves. The standard also requires additional disclosures. We adopted the standard on its effective date of January 1, 2020 using a modified retrospective method, which requires a cumulative effect adjustment to retained earnings. As of January 1, 2020, the impact of the adoption of the standard was a reduction in opening retained earnings of $ 487 million (after-tax) primarily driven by commercial mortgage loans, and, to a lesser extent, reinsurance receivables and recoverables. The following table provides a rollforward of our allowance, including credit losses, in connection with the adoption of the Financial Instruments Credit Losses Standard as well as cross references to the applicable notes herein for additional information: Three Months Ended September 30, 2020 Balance, Cumulative Effect Purchased Credit Incremental Increase Write-offs and Balance, Beginning Adjustment as of Deteriorated Initial (Decrease) Recognized Other Changes End of (in millions) of Period January 1, 2020 Allowance in Income in the Allowance (h) Period Securities available for sale (a) $ 198 $ - $ - $ 81 $ ( 43) $ 236 Mortgage and other loan receivables (b) 794 - - 3 - 797 Reinsurance recoverables (inclusive of deposit accounted assets) (c) 364 - - - 6 370 Premiums and other receivables (d) 212 - - 7 ( 4) 215 Contractual deductible recoverables (e) 14 - - - - 14 Commercial mortgage loan commitments (f) 58 - - 8 - 66 Total $ 1,640 $ - $ - $ 99 $ ( 41) $ 1,698 Nine Months Ended September 30, 2020 Securities available for sale (a) $ - $ - $ 33 $ 310 $ ( 107) $ 236 Mortgage and other loan receivables (b) 438 318 - 53 ( 12) 797 Reinsurance recoverables (inclusive of deposit accounted assets) (c) 151 224 - 5 ( 10) 370 Premiums and other receivables (d) 178 34 - 9 ( 6) 215 Contractual deductible recoverables (e) - 14 - - - 14 Commercial mortgage loan commitments (f) - 51 - 14 1 66 Total $ 767 $ 641 $ 33 $ 391 $ ( 134) $ 1,698 Secondary impacts to certain long-duration insurance contracts (g) ( 27) Tax impact ( 127) Total cumulative effect adjustment $ 487 (a) The allowance for credit losses is reported in Bonds available for sale in the Condensed Consolidated Balance Sheets. Changes in the allowance for credit losses are reported in Net realized capital gains (losses) in the Condensed Consolidated Statements of Income. Refer to Note 5 for additional information. (b) The allowance for credit losses is reported in Mortgage and other loans receivable in the Condensed Consolidated Balance Sheets. Changes in the allowance for credit losses are reported in Net realized capital gains (losses) in the Condensed Consolidated Statements of Income. Refer to Note 6 for additional information. (c) The allowance for credit losses is reported in Reinsurance assets – other and Reinsurance assets – Fortitude Re for reinsurance contracts that contain sufficient insurance risk, and reported in Other assets for insurance and reinsurance contracts that do not contain sufficient insurance risk in the Condensed Consolidated Balance Sheets. Changes in the allowance for credit losses are reported in Policyholder benefits and losses incurred for reinsurance contracts that do contain sufficient insurance risk and premiums for contracts that do not contain sufficient insurance risk in the Condensed Consolidated Statements of Income. Refer to Note 7 for additional information. (d) The allowance for credit losses is reported in Premiums and other receivables in the Condensed Consolidated Balance Sheets. Changes in the allowance for credit losses are reported in General operating and other expenses in the Condensed Consolidated Statements of Income. Refer to Note 2 for additional information. (e) The allowance for credit losses is reported in Liability for unpaid losses and loss adjustment expenses in the Condensed Consolidated Balance Sheets. Changes in the allowance for credit losses are reported in Policyholder benefits and losses incurred in the Condensed Consolidated Statements of Income. Refer to Note 10 for additional information. (f) The allowance for credit losses is reported in Other liabilities in the Condensed Consolidated Balance Sheets. Changes in the allowance for credit losses are reported in Net realized capital gains (losses) in the Condensed Consolidated Statements of Income. Refer to Note 6 for additional information. (g) This reflects adjustments to the amortization of DAC, unearned revenue reserve and sales inducement assets as well as impacts on the future policy benefits for certain universal life and variable annuity contracts. (h) A write-off does not generally result in an incremental loss to AIG. Prior to a write-off occurring, the allowance for the credit loss is increased or decreased to reflect AIG’s expectation of the credit loss to be incurred. Accordingly, when a write-off occurs, the allowance is reversed for the same amount, resulting in no incremental loss to AIG. The following presents the impact of the adoption of the standard on premiums and other receivables. Premiums and other receivables — Credit Losses Premiums and other receivables, net of allowance for credit losses include premium balances receivable, amounts due from agents and brokers and policyholders, trade receivables for the Direct Investment book and Global Capital Markets (GCM) and other receivables. Trade receivables for GCM include cash collateral posted to derivative counterparties that is not eligible to be netted against derivative liabilities. The allowance for credit losses and disputes for premiums and other receivables was $ 215 million at September 30, 2020. Our allowance for credit losses for premium receivables considers a combination of internal and external information relating to past events, current conditions and reasonable and supportable forecasts. Our allowance contemplates our contractual provisions. Upon default or delinquency of the policyholder we may be able to cease coverage for the remaining period. In certain jurisdictions we are unable to cancel coverage even in the event of delinquency or default by the policyholder. We consider premium and other receivable balances to be past due if the payment is not received after 90 days from the contractual obligation due date and record an allowance for disputes when there is reasonable uncertainty of the collectability of a disputed amount during the reporting period. For further information regarding the impacts of the adoption of this standard see Notes 4, 5, 6, 10 and 12 to the Condensed Consolidated Financial Statements. Simplifying the Test for Goodwill Impairment In January 2017, the FASB issued an accounting standard that eliminates the requirement to calculate the implied fair value of goodwill, through a hypothetical purchase price allocation, to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on 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. An entity should also consider income tax effects from tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. We adopted the standard on its effective date of January 1, 2020. The adoption of the standard did not have a material impact on our financial position, results of operations or cash flows. Cloud Computing Arrangements In August 2018, the FASB issued an accounting standard that aligns the requirements for capitalizing implementation costs incurred in a cloud computing (or hosting) arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). Capitalized implementation costs must be amortized over the term of the hosting arrangement. The accounting for the service element is not affected by the amendments in this update. We adopted the standard prospectively on its effective date of January 1, 2020. The adoption of the standard did not have a material impact on our consolidated financial position, results of operations or cash flows. Financial Disclosures About Guarantors and Issuers of Guaranteed Securities and Affiliates In March 2020, the Securities and Exchange Commission (SEC) adopted amendments to simplify and streamline the disclosure requirements for guarantors and issuers of guaranteed securities registered or being registered, and issuers’ affiliates whose securities collateralize securities registered or being registered. Currently, the SEC permits the omission of separate financial statements of subsidiary issuers and guarantors when certain conditions are met and the parent company provides summarized financial information of the subsidiary issuers and guarantors. The amendments, among other things, allow companies to cease providing summarized financial information if the subsidiary issuer’s or guarantor’s reporting obligation has been suspended. The amendments are effective January 4, 2021, with early adoption permitted. Effective March 31, 2020, AIG early adopted the amendment and ceased providing the summarized information for the subsidiary issuers and guarantors because the subsidiaries issuer’s reporting obligations have been suspended. |
Future Application of Accounting Standards | Future Application of Accounting Standards Targeted Improvements to the Accounting for Long-Duration Contracts In August 2018, the FASB issued an accounting standard update with the objective of making targeted improvements to the existing recognition, measurement, presentation, and disclosure requirements for long-duration contracts issued by an insurance entity. The standard prescribes significant and comprehensive changes to recognition, measurement, presentation and disclosure as summarized below: Requires the review and if necessary update of future policy benefit assumptions at least annually for traditional and limited pay long duration contracts, with the recognition and separate presentation of any resulting re-measurement gain or loss (except for discount rate changes as noted below) in the income statement. Requires the discount rate assumption to be updated at the end of each reporting period using an upper medium grade (low-credit risk) fixed income instrument yield that maximizes the use of observable market inputs and recognizes the impact of changes to discount rates in other comprehensive income. Simplifies the amortization of DAC to a constant level basis over the expected term of the related contracts with adjustments for unexpected terminations, but no longer requires an impairment test. Requires the measurement of all market risk benefits associated with deposit (or account balance) contracts at fair value through the income statement with the exception of instrument-specific credit risk changes, which will be recognized in other comprehensive income. Increased disclosures of disaggregated roll-forwards of policy benefits, account balances, market risk benefits, separate account liabilities and information about significant inputs, judgments and methods used in measurement and changes thereto and impact of those changes. In September 2020, the FASB affirmed its proposal to defer the effective date of the standard to January 1, 2023, which the FASB initially proposed in an exposure draft in July 2020. We are currently evaluating the change in the effective date on our implementation efforts. We have started our implementation efforts and we are evaluating the method of adoption and impact of the standard on our reported consolidated financial condition, results of operations, cash flows and required disclosures. The adoption of this standard is expected to have a significant impact on our consolidated financial condition, results of operations, cash flows and required disclosures, as well as systems, processes and controls. Income Tax On December 18, 2019, the FASB issued an accounting standard that simplifies the accounting for income taxes by eliminating certain exceptions to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The amendments also simplified other areas including the accounting for franchise taxes and enacted tax laws or rates, and clarified the accounting for transactions that result in the step-up in the tax basis of goodwill. The standard is effective on January 1, 2021, with early adoption permitted. We do not expect the impact of the standard to be material to our consolidated financial condition, results of operations and cash flows. Reference Rate Reform On March 12, 2020, the FASB issued an accounting standard that provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The standard allows us to account for certain contract modifications that result from the discontinuation of the London Inter-Bank Offered Rate (LIBOR) or another reference rate as a continuation of the existing contract without additional analysis. This standard may be elected and applied prospectively over time from March 12, 2020 through December 31, 2022 as reference rate reform activities occur. We have started our implementation efforts and we are evaluating the method of adoption and impact of the standard on our reported consolidated financial condition, results of operations, cash flows and required disclosures. Clarification of Accounting for Certain Equity Method Investments On January 16, 2020, the FASB issued an accounting standard to clarify how a previously issued standard regarding a company’s ability to measure the fair value of certain equity securities without a readily determinable fair value should interact with equity method investments standards. The previously issued standard provides that such equity securities could be measured at cost, minus impairment, if any, unless an observable transaction for an identical or similar security occurs (measurement alternative). The new standard clarifies that a company should consider observable transactions that require the company to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with the equity method immediately before applying or upon discontinuing the equity method. The standard further clarifies that, when determining the accounting for certain forward contracts and purchased options a company should not consider, whether upon settlement or exercise, if the underlying securities would be accounted for under the equity method or fair value option. The standard is effective for interim and annual reporting periods beginning after December 15, 2020. We are evaluating the impact adoption of this standard will have on our consolidated financial condition, results of operations, cash flows and required disclosures. |
Credit Losses | Financial Instruments - Credit Losses In June 2016, the FASB issued an accounting standard that changed how entities account for current expected credit losses (CECL) for most financial assets, premiums receivable, trade receivables, off-balance sheet exposures and reinsurance receivables (the Financial Instruments Credit Losses Standard). The standard requires an allowance for credit losses based on the expectation of lifetime credit losses related to such financial assets subject to credit losses, including loans measured at amortized cost, reinsurance receivables and certain off-balance sheet credit exposures. Additionally, the impairment of available-for-sale debt securities, including purchased credit deteriorated (PCD) securities, is subject to the new guidance and is measured in a similar manner, except that losses are recognized as allowances rather than reductions in the amortized cost of the securities. The standard allows for reversals of credit impairments in the event that the credit of an issuer improves. The standard also requires additional disclosures. We adopted the standard on its effective date of January 1, 2020 using a modified retrospective method, which requires a cumulative effect adjustment to retained earnings. As of January 1, 2020, the impact of the adoption of the standard was a reduction in opening retained earnings of $ 487 million (after-tax) primarily driven by commercial mortgage loans, and, to a lesser extent, reinsurance receivables and recoverables. The following table provides a rollforward of our allowance, including credit losses, in connection with the adoption of the Financial Instruments Credit Losses Standard as well as cross references to the applicable notes herein for additional information: Three Months Ended September 30, 2020 Balance, Cumulative Effect Purchased Credit Incremental Increase Write-offs and Balance, Beginning Adjustment as of Deteriorated Initial (Decrease) Recognized Other Changes End of (in millions) of Period January 1, 2020 Allowance in Income in the Allowance (h) Period Securities available for sale (a) $ 198 $ - $ - $ 81 $ ( 43) $ 236 Mortgage and other loan receivables (b) 794 - - 3 - 797 Reinsurance recoverables (inclusive of deposit accounted assets) (c) 364 - - - 6 370 Premiums and other receivables (d) 212 - - 7 ( 4) 215 Contractual deductible recoverables (e) 14 - - - - 14 Commercial mortgage loan commitments (f) 58 - - 8 - 66 Total $ 1,640 $ - $ - $ 99 $ ( 41) $ 1,698 Nine Months Ended September 30, 2020 Securities available for sale (a) $ - $ - $ 33 $ 310 $ ( 107) $ 236 Mortgage and other loan receivables (b) 438 318 - 53 ( 12) 797 Reinsurance recoverables (inclusive of deposit accounted assets) (c) 151 224 - 5 ( 10) 370 Premiums and other receivables (d) 178 34 - 9 ( 6) 215 Contractual deductible recoverables (e) - 14 - - - 14 Commercial mortgage loan commitments (f) - 51 - 14 1 66 Total $ 767 $ 641 $ 33 $ 391 $ ( 134) $ 1,698 Secondary impacts to certain long-duration insurance contracts (g) ( 27) Tax impact ( 127) Total cumulative effect adjustment $ 487 (a) The allowance for credit losses is reported in Bonds available for sale in the Condensed Consolidated Balance Sheets. Changes in the allowance for credit losses are reported in Net realized capital gains (losses) in the Condensed Consolidated Statements of Income. Refer to Note 5 for additional information. (b) The allowance for credit losses is reported in Mortgage and other loans receivable in the Condensed Consolidated Balance Sheets. Changes in the allowance for credit losses are reported in Net realized capital gains (losses) in the Condensed Consolidated Statements of Income. Refer to Note 6 for additional information. (c) The allowance for credit losses is reported in Reinsurance assets – other and Reinsurance assets – Fortitude Re for reinsurance contracts that contain sufficient insurance risk, and reported in Other assets for insurance and reinsurance contracts that do not contain sufficient insurance risk in the Condensed Consolidated Balance Sheets. Changes in the allowance for credit losses are reported in Policyholder benefits and losses incurred for reinsurance contracts that do contain sufficient insurance risk and premiums for contracts that do not contain sufficient insurance risk in the Condensed Consolidated Statements of Income. Refer to Note 7 for additional information. (d) The allowance for credit losses is reported in Premiums and other receivables in the Condensed Consolidated Balance Sheets. Changes in the allowance for credit losses are reported in General operating and other expenses in the Condensed Consolidated Statements of Income. Refer to Note 2 for additional information. (e) The allowance for credit losses is reported in Liability for unpaid losses and loss adjustment expenses in the Condensed Consolidated Balance Sheets. Changes in the allowance for credit losses are reported in Policyholder benefits and losses incurred in the Condensed Consolidated Statements of Income. Refer to Note 10 for additional information. (f) The allowance for credit losses is reported in Other liabilities in the Condensed Consolidated Balance Sheets. Changes in the allowance for credit losses are reported in Net realized capital gains (losses) in the Condensed Consolidated Statements of Income. Refer to Note 6 for additional information. (g) This reflects adjustments to the amortization of DAC, unearned revenue reserve and sales inducement assets as well as impacts on the future policy benefits for certain universal life and variable annuity contracts. (h) A write-off does not generally result in an incremental loss to AIG. Prior to a write-off occurring, the allowance for the credit loss is increased or decreased to reflect AIG’s expectation of the credit loss to be incurred. Accordingly, when a write-off occurs, the allowance is reversed for the same amount, resulting in no incremental loss to AIG. Premiums and other receivables — Credit Losses Premiums and other receivables, net of allowance for credit losses include premium balances receivable, amounts due from agents and brokers and policyholders, trade receivables for the Direct Investment book and Global Capital Markets (GCM) and other receivables. Trade receivables for GCM include cash collateral posted to derivative counterparties that is not eligible to be netted against derivative liabilities. The allowance for credit losses and disputes for premiums and other receivables was $ 215 million at September 30, 2020. Our allowance for credit losses for premium receivables considers a combination of internal and external information relating to past events, current conditions and reasonable and supportable forecasts. Our allowance contemplates our contractual provisions. Upon default or delinquency of the policyholder we may be able to cease coverage for the remaining period. In certain jurisdictions we are unable to cancel coverage even in the event of delinquency or default by the policyholder. We consider premium and other receivable balances to be past due if the payment is not received after 90 days from the contractual obligation due date and record an allowance for disputes when there is reasonable uncertainty of the collectability of a disputed amount during the reporting period. For further information regarding the impacts of the adoption of this standard see Notes 4, 5, 6, 10 and 12 to the Condensed Consolidated Financial Statements. 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. 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. Similarly, Other assets include reinsurance recoverables for contracts which are accounted for as deposits. 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 uncollectable reinsurance that reduces the carrying amount of reinsurance and other assets on the consolidated balance sheets (collectively, the reinsurance recoverable balances). 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 determined by the Obligor Risk Ratings (ORRs) we assign to each reinsurer based upon our financial reviews; insurers 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 rating. 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 September 30, 2020 were $ 77.5 billion. As of that date, utilizing AIG’s ORRs, (i) approximately 93 percent of the reinsurance recoverables were investment grade, of which 52 percent related to General Insurance and 41 percent related to Life and Retirement; (ii) approximately 7 percent of the reinsurance recoverables were non-investment grade, the majority of which related to General Insurance; (iii) less than one one As of September 30, 2020, approximately 75 percent of our non-investment grade reinsurance exposure related to captive insurers. These arrangements are typically collateralized by letters of credit, funds held or trust agreements. Reinsurance Recoverable Allowance The following table presents a rollforward of the reinsurance recoverable allowance: Three Months Ended Nine Months Ended September 30, 2020 September 30, 2020 General Life and General Life and (in millions) Insurance Retirement Total Insurance Retirement Total Balance, beginning of period $ 305 $ 59 $ 364 $ 111 $ 40 $ 151 Initial allowance upon CECL adoption - - - 202 22 224 Current period provision for expected credit losses and disputes ( 2) 2 - - 5 5 Write-offs charged against the allowance for credit losses and disputes - - - ( 5) ( 5) ( 10) Other changes 5 1 6 - - - Balance, end of period $ 308 $ 62 $ 370 $ 308 $ 62 $ 370 There were no Past-Due Status We consider a reinsurance asset to be past due when it is 90 days past due and record an allowance for disputes when there is reasonable uncertainty of the collectability of a disputed amount during the reporting period. Past due balances were not significant for any of the periods presented. |
Investments | Fixed Maturity Securities Subsequent to the adoption of the Financial Instruments Credit Losses Standard on January 1, 2020 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 are measured at fair value at our election. 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 policy related amounts and deferred income taxes, in shareholders’ equity. Realized and unrealized gains and losses from fixed maturity securities measured at fair value at our election 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. An allowance for credit losses is not established upon initial recognition of the asset (unless the security is determined to be a 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. Prior to the adoption of the Financial Instruments Credit Losses Standard on January 1, 2020 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 RMBS, CMBS and CDO/ABS, (collectively, 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, effective yields are recalculated and adjusted prospectively based on changes in expected undiscounted future cash flows. For purchased credit impaired (PCI) securities, at acquisition, the difference between the undiscounted expected future cash flows and the recorded investment in the securities represents the initial accretable yield, which is to be accreted into net investment income over the securities’ remaining lives on an effective level-yield basis. Subsequently, effective yields recognized on PCI securities are recalculated and adjusted prospectively to reflect changes in the contractual benchmark interest rates on variable rate securities and any significant increases in undiscounted expected future cash flows arising due to reasons other than interest rate changes. Evaluating Investments for AN ALLOWANCE FOR CREDIT LOSSES/OTHER-than-TEMPORARY IMPAIRMENTS Fixed Maturity Securities Subsequent to the adoption of the Financial Instruments Credit Losses Standard on January 1, 2020 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 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 realized capital 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 realized capital 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 were recognized (a separate component of accumulated other comprehensive income). 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, CDO, 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. Credit losses are reassessed each period. The allowance for credit losses and the corresponding charge to realized capital 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 decreasing realized capital losses. Prior to the adoption of the Financial Instruments Credit Losses Standard on January 1, 2020 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 the fair value of the security is below amortized cost, an other-than-temporary impairment has occurred and the amortized cost is written down to current fair value, with a corresponding charge to realized capital losses. 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 credit impairment has occurred, the amortized cost is written down to the estimated recoverable value with a corresponding charge to realized capital losses. 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 related to a credit impairment is presented in unrealized appreciation (depreciation) of fixed maturity securities on which other-than-temporary credit impairments were recognized (a separate component of accumulated other comprehensive income). 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. In periods subsequent to the recognition of an other-than-temporary impairment charge for available for sale fixed maturity securities that is not foreign exchange related, we prospectively accrete into earnings the difference between the new amortized cost and the expected undiscounted recoverable value over the remaining expected holding period of the security. Credit Impairments Purchased Credit Deteriorated/Impaired Securities Subsequent to the adoption of the Financial Instruments Credit Losses Standard on January 1, 2020 We purchase certain RMBS securities that have experienced more-than-insignificant deterioration in credit quality since origination. Subsequent to the adoption of the Financial Instruments Credit Losses Standard 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. Prior to the adoption of the Financial Instruments Credit Losses Standard on January 1, 2020 We purchase certain RMBS securities that have experienced deterioration in credit quality since their issuance. We determine whether it is probable at acquisition that we will not collect all contractually required payments for these PCI securities, including both principal and interest. At acquisition, the timing and amount of the undiscounted future cash flows expected to be received on each PCI security is determined based on our best estimate using key assumptions, such as interest rates, default rates and prepayment speeds. At acquisition, the difference between the undiscounted expected future cash flows of the PCI securities and the recorded investment in the securities represents the initial accretable yield, which is accreted into Net investment income over their remaining lives on an effective yield basis. Additionally, the difference between the contractually required payments on the PCI securities and the undiscounted expected future cash flows represents the non-accretable difference at acquisition. The accretable yield and the non-accretable difference will change over time, based on actual payments received and changes in estimates of undiscounted expected future cash flows, which are discussed further below. On a quarterly basis, the undiscounted expected future cash flows associated with PCI securities are re-evaluated based on updates to key assumptions. Declines in undiscounted expected future cash flows due to further credit deterioration as well as changes in the expected timing of the cash flows can result in the recognition of an other-than-temporary impairment charge, as PCI securities are subject to our policy for evaluating investments for other-than-temporary impairment. Changes to undiscounted expected future cash flows due solely to the changes in the contractual benchmark interest rates on variable rate PCI securities will change the accretable yield prospectively. Significant increases in undiscounted expected future cash flows for reasons other than interest rate changes are recognized prospectively as adjustments to the accretable yield. Mortgage and other loans receivable include commercial mortgages, residential mortgages, life insurance policy loans, commercial loans, and other loans and notes receivable. Commercial mortgages, residential 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. Premiums and discounts on purchased residential mortgages are also 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. 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 September 30, 2020, $ 8 million and $ 282 million of residential mortgage loans and commercial mortgage loans, respectively, were placed on nonaccrual status. Accrued interest is presented separately and is included in Other assets 16 million and $ 125 million associated with residential mortgage loans and commercial mortgage loans, respectively. 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. Methodology Used to Estimate the Allowance for Credit Losses Subsequent to the adoption of the Financial Instruments Credit Losses Standard on January 1, 2020 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 capital losses. This allowance reflects the risk of loss, even when that risk is remote, and reflects losses 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 and residential 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, FICO 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 Condensed 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 capital gains (losses) in the Condensed Consolidated Statements of Income. Prior to the adoption of the Financial Instruments Credit Losses Standard on January 1, 2020 Mortgage and other loans receivable are considered impaired when collection of all amounts due under contractual terms is not probable. Impairment is measured using either i) the present value of expected future cash flows discounted at the loan’s effective interest rate, ii) the loan’s observable market price, if available, or iii) the fair value of the collateral if the loan is collateral dependent. Impairment of commercial mortgages is typically determined using the fair value of collateral while impairment of other loans is typically determined using the present value of cash flows or the loan’s observable market price. An allowance is typically established for the difference between the impaired value of the loan and its current carrying amount. Additional allowance amounts are established for incurred but not specifically identified impairments, based on statistical models primarily driven by past-due status, debt service coverage, loan-to-value ratio, property type and location, loan term, profile of the borrower and of the major property tenants, and loan seasoning. When all or a portion of a loan is deemed uncollectable, the uncollectable portion of the carrying amount of the loan is charged off against the allowance. |
Reinsurance | 7. Reinsurance 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. In addition, our general insurance subsidiaries assume reinsurance from other insurance companies. We determine the portion of the incurred but not reported (IBNR) loss that will be recoverable under our reinsurance contracts by reference to the terms of the reinsurance protection purchased. This determination is necessarily based on the estimate of IBNR and accordingly, is subject to the same uncertainties as that estimate. 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. Amounts related to paid and unpaid losses and benefits and loss expenses with respect to these reinsurance agreements are substantially collateralized. We remain liable to the extent that our reinsurers do not meet their obligation 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 doubtful accounts requires judgment for which key inputs typically include historical trends regarding uncollectible balances, disputes and credit events as well as specific reviews of balances in dispute or subject to credit impairment. Sale of Fortitude Holdings On June 2, 2020, we completed the Majority Interest Fortitude Sale. AIG established Fortitude Re, a wholly owned subsidiary of Fortitude Holdings, in 2018 in a series of reinsurance transactions related to AIG’s Legacy Portfolio. As of September 30, 2020, approximately $ 30.6 billion of reserves from AIG’s Legacy Life and Retirement Run-Off Lines and approximately $ 4.1 billion of reserves from AIG’s Legacy 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 Legacy Portfolio. These reinsurance transactions between AIG and Fortitude Re were 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 other comprehensive income). As a result of the deconsolidation resulting from the Majority Interest Fortitude Sale, 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 capital 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. 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 as of September 30, 2020: September 30, 2020 Carrying Fair (in millions) Value Value Corresponding Accounting Policy Fixed maturity securities - available for sale (a) $ 35,775 $ 35,775 Fair value through other comprehensive income Fixed maturity securities - fair value option 204 204 Fair value through net investment income Commercial mortgage loans 3,577 3,866 Amortized cost Real estate investments 366 595 Amortized cost Private equity funds / hedge funds 992 992 Fair value through net investment income Policy loans 423 423 Amortized cost Derivative assets, net (b) - - Fair value through realized capital gains (losses) Other 687 687 Amortized cost Total $ 42,024 $ 42,542 (a) The change in the net unrealized gains (losses) on available for sale securities related to the Fortitude Re funds withheld assets was $ 722 million ($ 570 million after-tax) during the post deconsolidation period (June 2, 2020-September 30, 2020). (b) The derivative assets have been presented net of collateral. The derivative assets supporting the Fortitude Re funds withheld arrangements had a fair market value of $ 471 million as of September 30, 2020. These derivative assets are fully collateralized. The impact of the funds withheld arrangements with Fortitude Re for the period post June 2, 2020 deconsolidation was as follows: Three Months Ended Nine Months Ended (in millions) September 30, 2020 September 30, 2020 Net underwriting income $ - $ - Net investment income - Fortitude Re funds withheld assets 458 574 Net realized capital losses on Fortitude Re funds withheld assets: Net realized capital gains - Fortitude Re funds withheld assets 32 128 Net realized capital losses - Fortitude Re embedded derivatives ( 656) ( 1,493) Net realized capital losses on Fortitude Re funds withheld assets ( 624) ( 1,365) Loss from continuing operations before income tax benefit ( 166) ( 791) Income tax benefit (a) ( 35) ( 166) Net loss ( 131) ( 625) Change in unrealized appreciation of all other investments (a) 132 570 Comprehensive income (loss) $ 1 $ ( 55) (a) The income tax expense (benefit) and the tax impact in accumulated other comprehensive income 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 arrangements. During the three-month period ended September 30, 2020 and the period from June 2, 2020 to September 30, 2020, these assets appreciated by $( 1) million and $ 55 million, respectively, on an after-tax basis. 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. 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. Similarly, Other assets include reinsurance recoverables for contracts which are accounted for as deposits. 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 uncollectable reinsurance that reduces the carrying amount of reinsurance and other assets on the consolidated balance sheets (collectively, the reinsurance recoverable balances). 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 determined by the Obligor Risk Ratings (ORRs) we assign to each reinsurer based upon our financial reviews; insurers 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 rating. 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 September 30, 2020 were $ 77.5 billion. As of that date, utilizing AIG’s ORRs, (i) approximately 93 percent of the reinsurance recoverables were investment grade, of which 52 percent related to General Insurance and 41 percent related to Life and Retirement; (ii) approximately 7 percent of the reinsurance recoverables were non-investment grade, the majority of which related to General Insurance; (iii) less than one one As of September 30, 2020, approximately 75 percent of our non-investment grade reinsurance exposure related to captive insurers. These arrangements are typically collateralized by letters of credit, funds held or trust agreements. |
Liability for unpaid claims and claims adjustment expense | 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. Given the uncertainties around the impact from the COVID-19 crisis, including the significant global economic slowdown and general market decline, the full impact of COVID-19 and how it may ultimately impact the results of our insurance operations remains uncertain. In addition, in response to the crisis, new governmental, legislative and regulatory initiatives have been put in place and continue to be developed that could result in additional restrictions and requirements relating to our policies that may have a negative impact on our business operations. However, we have recorded our estimate of the ultimate liability for claims that have occurred as of the balance sheet date associated with COVID-19 which reflects our expectations given the current facts and circumstances. We will continue to monitor and review the impact. 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. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Rollforward of allowance for credit losses related to the adoption of the Financial Instruments Credit Losses Standard | Three Months Ended September 30, 2020 Balance, Cumulative Effect Purchased Credit Incremental Increase Write-offs and Balance, Beginning Adjustment as of Deteriorated Initial (Decrease) Recognized Other Changes End of (in millions) of Period January 1, 2020 Allowance in Income in the Allowance (h) Period Securities available for sale (a) $ 198 $ - $ - $ 81 $ ( 43) $ 236 Mortgage and other loan receivables (b) 794 - - 3 - 797 Reinsurance recoverables (inclusive of deposit accounted assets) (c) 364 - - - 6 370 Premiums and other receivables (d) 212 - - 7 ( 4) 215 Contractual deductible recoverables (e) 14 - - - - 14 Commercial mortgage loan commitments (f) 58 - - 8 - 66 Total $ 1,640 $ - $ - $ 99 $ ( 41) $ 1,698 Nine Months Ended September 30, 2020 Securities available for sale (a) $ - $ - $ 33 $ 310 $ ( 107) $ 236 Mortgage and other loan receivables (b) 438 318 - 53 ( 12) 797 Reinsurance recoverables (inclusive of deposit accounted assets) (c) 151 224 - 5 ( 10) 370 Premiums and other receivables (d) 178 34 - 9 ( 6) 215 Contractual deductible recoverables (e) - 14 - - - 14 Commercial mortgage loan commitments (f) - 51 - 14 1 66 Total $ 767 $ 641 $ 33 $ 391 $ ( 134) $ 1,698 Secondary impacts to certain long-duration insurance contracts (g) ( 27) Tax impact ( 127) Total cumulative effect adjustment $ 487 (a) The allowance for credit losses is reported in Bonds available for sale in the Condensed Consolidated Balance Sheets. Changes in the allowance for credit losses are reported in Net realized capital gains (losses) in the Condensed Consolidated Statements of Income. Refer to Note 5 for additional information. (b) The allowance for credit losses is reported in Mortgage and other loans receivable in the Condensed Consolidated Balance Sheets. Changes in the allowance for credit losses are reported in Net realized capital gains (losses) in the Condensed Consolidated Statements of Income. Refer to Note 6 for additional information. (c) The allowance for credit losses is reported in Reinsurance assets – other and Reinsurance assets – Fortitude Re for reinsurance contracts that contain sufficient insurance risk, and reported in Other assets for insurance and reinsurance contracts that do not contain sufficient insurance risk in the Condensed Consolidated Balance Sheets. Changes in the allowance for credit losses are reported in Policyholder benefits and losses incurred for reinsurance contracts that do contain sufficient insurance risk and premiums for contracts that do not contain sufficient insurance risk in the Condensed Consolidated Statements of Income. Refer to Note 7 for additional information. (d) The allowance for credit losses is reported in Premiums and other receivables in the Condensed Consolidated Balance Sheets. Changes in the allowance for credit losses are reported in General operating and other expenses in the Condensed Consolidated Statements of Income. Refer to Note 2 for additional information. (e) The allowance for credit losses is reported in Liability for unpaid losses and loss adjustment expenses in the Condensed Consolidated Balance Sheets. Changes in the allowance for credit losses are reported in Policyholder benefits and losses incurred in the Condensed Consolidated Statements of Income. Refer to Note 10 for additional information. (f) The allowance for credit losses is reported in Other liabilities in the Condensed Consolidated Balance Sheets. Changes in the allowance for credit losses are reported in Net realized capital gains (losses) in the Condensed Consolidated Statements of Income. Refer to Note 6 for additional information. (g) This reflects adjustments to the amortization of DAC, unearned revenue reserve and sales inducement assets as well as impacts on the future policy benefits for certain universal life and variable annuity contracts. (h) A write-off does not generally result in an incremental loss to AIG. Prior to a write-off occurring, the allowance for the credit loss is increased or decreased to reflect AIG’s expectation of the credit loss to be incurred. Accordingly, when a write-off occurs, the allowance is reversed for the same amount, resulting in no incremental loss to AIG. |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
SEGMENT INFORMATION | |
Schedule of continuing operations by operating segment including reconciling items | Three Months Ended September 30, 2020 2019 Adjusted Adjusted Total Pre-tax Total Pre-tax (in millions) Revenues Income (Loss) Revenues Income (Loss) General Insurance North America $ 3,417 $ 399 $ 3,878 $ 435 International 3,275 17 3,537 72 Total General Insurance 6,692 416 7,415 507 Life and Retirement Individual Retirement 1,480 533 1,416 387 Group Retirement 758 338 726 203 Life Insurance 1,076 5 1,037 ( 7) Institutional Markets 556 99 654 63 Total Life and Retirement 3,870 975 3,833 646 Other Operations 128 ( 426) 139 ( 454) Legacy Portfolio 214 89 751 93 AIG Consolidation and elimination ( 148) ( 136) ( 81) ( 46) Total AIG Consolidated adjusted revenues and adjusted pre-tax income 10,756 918 12,057 746 Reconciling items from adjusted pre-tax income to pre-tax income: Changes in fair value of securities used to hedge guaranteed living benefits 14 15 25 12 Changes in benefit reserves and DAC, VOBA and SIA related to net realized capital gains (losses) - 78 - ( 65) Changes in the fair value of equity securities 119 119 ( 51) ( 51) Other income (expense) - net 23 - 16 - Gain on extinguishment of debt - 2 - - Net investment income on Fortitude Re funds withheld assets (a) 458 458 - - Net realized capital gains (losses) on Fortitude Re funds withheld assets (a) 32 32 - - Net realized capital gains (losses) on Fortitude Re funds withheld embedded derivative (a) ( 656) ( 656) - - Net realized capital gains (losses) (b) ( 525) ( 514) 867 881 Loss from divested businesses - ( 24) - ( 9) Non-operating litigation reserves and settlements - ( 1) - ( 5) Favorable prior year development and related amortization changes ceded under retroactive reinsurance agreements - 30 - 59 Net loss reserve discount benefit (charge) - 31 - ( 235) Integration and transaction costs associated with acquired businesses - ( 1) - ( 3) Restructuring and other costs - ( 100) - ( 67) Non-recurring costs related to regulatory or accounting changes - ( 19) - ( 3) Revenues and Pre-tax income $ 10,221 $ 368 $ 12,914 $ 1,260 Nine Months Ended September 30, 2020 2019 Adjusted Adjusted Total Pre-Tax Total Pre-Tax (in millions) Revenues Income (Loss) Revenues Income (Loss) General Insurance North America $ 9,908 $ 813 $ 12,001 $ 2,087 International 9,706 279 10,743 668 Total General Insurance 19,614 1,092 22,744 2,755 Life and Retirement Individual Retirement 4,183 1,389 4,233 1,483 Group Retirement 2,164 695 2,225 728 Life Insurance 3,280 51 3,264 195 Institutional Markets 2,964 295 2,143 213 Total Life and Retirement 12,591 2,430 11,865 2,619 Other Operations 305 ( 1,436) 422 ( 1,256) Legacy Portfolio 1,197 ( 22) 2,197 324 AIG Consolidation and elimination ( 262) ( 171) ( 257) ( 172) Total AIG Consolidated adjusted revenues and adjusted pre-tax income 33,445 1,893 36,971 4,270 Reconciling items from adjusted pre-tax income to pre-tax income (loss): Changes in fair value of securities used to hedge guaranteed living benefits 42 24 214 183 Changes in benefit reserves and DAC, VOBA and SIA related to net realized capital gains (losses) - ( 205) - ( 39) Changes in the fair value of equity securities ( 16) ( 16) 6 6 Other income (expense) - net 46 - 27 - Loss on extinguishment of debt - ( 15) - ( 13) Net investment income on Fortitude Re funds withheld assets (a) 574 574 - - Net realized capital gains (losses) on Fortitude Re funds withheld assets (a) 128 128 - - Net realized capital gains (losses) on Fortitude Re funds withheld embedded derivative (a) ( 1,493) ( 1,493) - - Net realized capital gains (b) 1,328 1,369 713 758 loss from divested businesses - ( 8,652) - ( 4) Non-operating litigation reserves and settlements 6 5 - ( 6) Favorable prior year development and related amortization changes ceded under retroactive reinsurance agreements - 71 - 211 Net loss reserve discount charge - ( 41) - ( 920) Integration and transaction costs associated with acquired businesses - ( 7) - ( 16) Restructuring and other costs - ( 324) - ( 174) Non-recurring costs related to regulatory or accounting changes - ( 46) - ( 5) Revenues and Pre-tax income (loss) $ 34,060 $ ( 6,735) $ 37,931 $ 4,251 (a) Represents activity subsequent to the deconsolidation of Fortitude Re on June 2, 2020. (b) Includes all net realized capital 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). |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
FAIR VALUE MEASUREMENTS | |
Assets and liabilities measured at fair value on a recurring basis | September 30, 2020 Counterparty Cash (in millions) Level 1 Level 2 Level 3 Netting (a) Collateral Total Assets: Bonds available for sale: U.S. government and government sponsored entities $ 33 $ 5,102 $ - $ - $ - $ 5,135 Obligations of states, municipalities and political subdivisions - 13,990 2,183 - - 16,173 Non-U.S. governments 41 15,126 7 - - 15,174 Corporate debt - 159,991 2,115 - - 162,106 RMBS - 20,759 12,655 - - 33,414 CMBS - 14,796 981 - - 15,777 CDO/ABS - 8,833 9,353 - - 18,186 Total bonds available for sale 74 238,597 27,294 - - 265,965 Other bond securities: U.S. government and government sponsored entities - 1,870 - - - 1,870 Non-U.S. governments - - - - - - Corporate debt - 12 - - - 12 RMBS - 320 168 - - 488 CMBS - 274 48 - - 322 CDO/ABS - 168 2,555 - - 2,723 Total other bond securities - 2,644 2,771 - - 5,415 Equity securities 827 18 26 - - 871 Other invested assets (b) - 94 1,583 - - 1,677 Derivative assets: Interest rate contracts 3 5,051 - - - 5,054 Foreign exchange contracts - 1,585 3 - - 1,588 Equity contracts 6 841 110 - - 957 Credit contracts - - 1 - - 1 Other contracts - - 13 - - 13 Counterparty netting and cash collateral - - - ( 3,695) ( 3,129) ( 6,824) Total derivative assets 9 7,477 127 ( 3,695) ( 3,129) 789 Short-term investments 3,195 4,019 - - - 7,214 Other assets - - 112 - - 112 Separate account assets 88,023 4,013 - - - 92,036 Total $ 92,128 $ 256,862 $ 31,913 $ ( 3,695) $ ( 3,129) $ 374,079 Liabilities: Policyholder contract deposits $ - $ - $ 9,322 $ - $ - $ 9,322 Derivative liabilities: Interest rate contracts - 4,559 - - - 4,559 Foreign exchange contracts - 619 - - - 619 Equity contracts 12 84 5 - - 101 Credit contracts - 24 45 - - 69 Other contracts - - 7 - - 7 Counterparty netting and cash collateral - - - ( 3,695) ( 1,060) ( 4,755) Total derivative liabilities 12 5,286 57 ( 3,695) ( 1,060) 600 Fortitude Re funds withheld payable - - 5,136 - - 5,136 Other liabilities - - - - - - Long-term debt - 2,169 - - - 2,169 Total $ 12 $ 7,455 $ 14,515 $ ( 3,695) $ ( 1,060) $ 17,227 December 31, 2019 Counterparty Cash (in millions) Level 1 Level 2 Level 3 Netting (a) Collateral Total Assets: Bonds available for sale: U.S. government and government sponsored entities $ 135 $ 5,245 $ - $ - $ - $ 5,380 Obligations of states, municipalities and political subdivisions - 13,197 2,121 - - 15,318 Non-U.S. governments 60 14,809 - - - 14,869 Corporate debt - 147,973 1,663 - - 149,636 RMBS - 19,397 13,408 - - 32,805 CMBS - 13,377 1,053 - - 14,430 CDO/ABS - 10,962 7,686 - - 18,648 Total bonds available for sale 195 224,960 25,931 - - 251,086 Other bond securities: U.S. government and government sponsored entities - 2,121 - - - 2,121 Non-U.S. governments - - - - - - Corporate debt - 18 - - - 18 RMBS - 346 143 - - 489 CMBS - 272 50 - - 322 CDO/ABS - 187 3,545 - - 3,732 Total other bond securities - 2,944 3,738 - - 6,682 Equity securities 756 77 8 - - 841 Other invested assets (b) - 86 1,192 - - 1,278 Derivative assets: Interest rate contracts 1 3,199 - - - 3,200 Foreign exchange contracts - 1,034 6 - - 1,040 Equity contracts 5 593 171 - - 769 Credit contracts - - 3 - - 3 Other contracts - - 14 - - 14 Counterparty netting and cash collateral - - - ( 2,427) ( 1,806) ( 4,233) Total derivative assets 6 4,826 194 ( 2,427) ( 1,806) 793 Short-term investments 2,299 3,044 - - - 5,343 Other assets 57 2,212 89 - - 2,358 Separate account assets 89,069 4,203 - - - 93,272 Total $ 92,382 $ 242,352 $ 31,152 $ ( 2,427) $ ( 1,806) $ 361,653 Liabilities: Policyholder contract deposits $ - $ - $ 6,910 $ - $ - $ 6,910 Derivative liabilities: Interest rate contracts 4 2,745 - - - 2,749 Foreign exchange contracts - 1,025 - - - 1,025 Equity contracts 8 111 20 - - 139 Credit contracts - 24 65 - - 89 Other contracts - - 7 - - 7 Counterparty netting and cash collateral - - - ( 2,427) ( 527) ( 2,954) Total derivative liabilities 12 3,905 92 ( 2,427) ( 527) 1,055 Other liabilities - 45 - - - 45 Long-term debt - 2,062 - - - 2,062 Total $ 12 $ 6,012 $ 7,002 $ ( 2,427) $ ( 527) $ 10,072 (a) Represents netting of derivative exposures covered by qualifying master netting agreements. (b) Excludes investments that are measured at fair value using the net asset value (NAV) per share (or its equivalent), which totaled $ 5.4 billion and $ 5.5 billion as of September 30, 2020 and December 31, 2019, respectively. |
Changes in Level 3 recurring fair value measurements (Assets) | Net Changes in Realized Unrealized Gains and Purchases, Changes in (Losses) Included in Unrealized Sales, Unrealized Gains Other Comprehensive Gains Issuances (Losses) Included Income (Loss) for Fair Value (Losses) Other and Gross Gross Fair Value in Income on Recurring Level 3 Beginning Included Comprehensive Settlements, Transfers Transfers Divested End Instruments Held Instruments Held (in millions) of Period in Income Income (Loss) Net In Out Businesses of Period at End of Period at End of Period Three Months Ended September 30, 2020 Assets: Bonds available for sale: Obligations of states, municipalities and political subdivisions $ 2,279 $ 3 $ ( 4) $ ( 30) $ - $ ( 65) $ - $ 2,183 $ - $ - Non-U.S. governments 5 - 1 - 1 - - 7 - - Corporate debt 1,900 ( 33) 52 ( 25) 452 ( 231) - 2,115 - 38 RMBS 12,678 192 301 ( 412) 3 ( 107) - 12,655 - 335 CMBS 1,149 3 36 ( 11) - ( 196) - 981 - 27 CDO/ABS 9,461 5 180 ( 174) 125 ( 244) - 9,353 - 172 Total bonds available for sale (a) 27,472 170 566 ( 652) 581 ( 843) - 27,294 - 572 Other bond securities: RMBS 168 16 - ( 16) - - - 168 4 - CMBS 47 1 - - - - - 48 1 - CDO/ABS 2,531 124 - ( 100) - - - 2,555 34 - Total other bond securities 2,746 141 - ( 116) - - - 2,771 39 - Equity securities 43 - 2 1 7 ( 27) - 26 1 - Other invested assets 1,486 74 ( 2) 25 - - - 1,583 - - Other assets 111 - - 2 - - ( 1) 112 - - Total $ 31,858 $ 385 $ 566 $ ( 740) $ 588 $ ( 870) $ ( 1) $ 31,786 $ 40 $ 572 Net Changes in Realized Unrealized Gains and Purchases, Changes in (Losses) Included in Unrealized Sales, Unrealized Gains Other Comprehensive (Gains) Issuances (Losses) Included Income (Loss) for Fair Value Losses Other and Gross Gross Fair Value in Income on Recurring Level 3 Beginning Included Comprehensive Settlements, Transfers Transfers Divested End Instruments Held Instruments Held (in millions) of Period in Income Income (Loss) Net In Out Businesses of Period at End of Period at End of Period Liabilities: Policyholder contract deposits $ 9,233 $ 19 $ - $ 70 $ - $ - $ - $ 9,322 $ 273 $ - Derivative liabilities, net: Interest rate contracts - - - - - - - - - - Foreign exchange contracts ( 1) ( 2) - - - - - ( 3) 2 - Equity contracts ( 53) 9 - ( 65) ( 1) 5 - ( 105) - - Credit contracts 45 1 - ( 2) - - - 44 ( 7) - Other contracts ( 3) ( 19) - 16 - - - ( 6) 18 - Total derivative liabilities, net (b) ( 12) ( 11) - ( 51) ( 1) 5 - ( 70) 13 - Fortitude Re funds withheld payable 4,510 656 - ( 30) - - - 5,136 ( 256) - Total $ 13,731 $ 664 $ - $ ( 11) $ ( 1) $ 5 $ - $ 14,388 $ 30 $ - Net Changes in Realized Unrealized Gains and Purchases, Changes in (Losses) Included in Unrealized Sales, Unrealized Gains Other Comprehensive Gains Issuances (Losses) Included Income (Loss) for Fair Value (Losses) Other and Gross Gross Fair Value in Income on Recurring Level 3 Beginning Included Comprehensive Settlements, Transfers Transfers Divested End Instruments Held Instruments Held (in millions) of Period in Income Income (Loss) Net In Out Businesses of Period at End of Period at End of Period Nine Months Ended September 30, 2020 Assets: Bonds available for sale: Obligations of states, municipalities and political subdivisions $ 2,121 $ 8 $ 195 $ 127 $ 27 $ ( 295) $ - $ 2,183 $ - $ 193 Non-U.S. governments - - 1 5 7 ( 6) - 7 - - Corporate debt 1,663 ( 101) 43 95 1,074 ( 659) - 2,115 - 59 RMBS 13,408 532 ( 375) ( 806) 29 ( 133) - 12,655 - ( 213) CMBS 1,053 14 70 17 23 ( 196) - 981 - 66 CDO/ABS 7,686 25 55 ( 19) 2,062 ( 456) - 9,353 - 38 Total bonds available for sale (a) 25,931 478 ( 11) ( 581) 3,222 ( 1,745) - 27,294 - 143 Other bond securities: RMBS 143 16 - 9 - - - 168 3 - CMBS 50 - - ( 2) - - - 48 ( 1) - CDO/ABS 3,545 225 - ( 1,215) - - - 2,555 25 - Total other bond securities 3,738 241 - ( 1,208) - - - 2,771 27 - Equity securities 8 ( 1) 3 11 33 ( 28) - 26 1 - Other invested assets 1,192 11 ( 2) 232 150 - - 1,583 ( 13) - Other assets 89 - - 61 - - ( 38) 112 - - Total $ 30,958 $ 729 $ ( 10) $ ( 1,485) $ 3,405 $ ( 1,773) $ ( 38) $ 31,786 $ 15 $ 143 Net Changes in Realized Unrealized Gains and Purchases, Changes in (Losses) Included in Unrealized Sales, Unrealized Gains Other Comprehensive (Gains) Issuances (Losses) Included Income (Loss) for Fair Value Losses Other and Gross Gross Fair Value in Income on Recurring Level 3 Beginning Included Comprehensive Settlements, Transfers Transfers Divested End Instruments Held Instruments Held (in millions) of Period in Income Income (Loss) Net In Out Businesses of Period at End of Period at End of Period Liabilities: Policyholder contract deposits $ 6,910 $ 2,250 $ - $ 162 $ - $ - $ - $ 9,322 $ ( 1,436) $ - Derivative liabilities, net: Interest rate contracts - ( 1) - 1 - - - - 1 - Foreign exchange contracts ( 6) 2 - 1 - - - ( 3) 2 - Equity contracts ( 151) 19 - 23 ( 1) 5 - ( 105) ( 62) - Credit contracts 62 ( 59) - 41 - - - 44 8 - Other contracts ( 7) ( 46) - 47 - - - ( 6) 45 - Total derivative liabilities, net (b) ( 102) ( 85) - 113 ( 1) 5 - ( 70) ( 6) - Fortitude Re funds withheld payable - 1,493 - ( 30) - - 3,673 5,136 ( 919) - Total $ 6,808 $ 3,658 $ - $ 245 $ ( 1) $ 5 $ 3,673 $ 14,388 $ ( 2,361) $ - Net Changes in Realized and Unrealized Gains Unrealized Purchases, (Losses) Included Fair Value Gains (Losses) Other Sales, Gross Gross Fair Value in Income on Beginning Included Comprehensive Issuances and Transfers Transfers Divested End Instruments Held (in millions) of Period in Income Income (Loss) Settlements, Net In Out Businesses of Period at End of Period Three Months Ended September 30, 2019 Assets: Bonds available for sale: Obligations of states, municipalities and political subdivisions $ 2,162 $ ( 1) $ 119 $ 92 $ - $ ( 265) $ - $ 2,107 $ - Non-U.S. governments 2 6 - - 5 - - 13 - Corporate debt 1,821 ( 36) ( 2) ( 535) 112 ( 85) - 1,275 - RMBS 13,863 166 15 ( 418) 16 ( 82) - 13,560 - CMBS 1,103 2 32 85 - ( 172) - 1,050 - CDO/ABS 9,062 3 37 ( 170) 7 - - 8,939 - Total bonds available for sale 28,013 140 201 ( 946) 140 ( 604) - 26,944 - Other bond securities: RMBS 830 9 - ( 24) - - - 815 1 CMBS 88 1 - ( 17) - ( 4) - 68 ( 2) CDO/ABS 4,150 115 - ( 334) - - - 3,931 28 Total other bond securities 5,068 125 - ( 375) - ( 4) - 4,814 27 Equity securities 35 - - ( 29) 2 - - 8 ( 2) Other invested assets 605 6 - ( 22) - - - 589 7 Other assets 61 - - ( 1) - - - 60 - Total $ 33,782 $ 271 $ 201 $ ( 1,373) $ 142 $ ( 608) $ - $ 32,415 $ 32 Net Changes in Realized and Unrealized Gains Unrealized Purchases, (Losses) Included Fair Value (Gains) Losses Other Sales, Gross Gross Fair Value in Income on Beginning Included Comprehensive Issuances and Transfers Transfers Divested End Instruments Held (in millions) of Period in Income Income (Loss) Settlements, Net In Out Businesses of Period at End of Period Liabilities: Policyholder contract deposits $ 6,065 $ 861 $ - $ 240 $ - $ - $ - $ 7,166 $ ( 691) Derivative liabilities, net: Interest rate contracts 16 ( 3) - ( 13) - - - - - Foreign exchange contracts ( 4) 6 - ( 3) - - - ( 1) - Equity contracts ( 113) 12 - - - - - ( 101) ( 13) Credit contracts 173 ( 24) - ( 47) - - - 102 14 Other contracts ( 7) ( 17) - 17 - - - ( 7) 15 Total derivative liabilities, net (b) 65 ( 26) - ( 46) - - - ( 7) 16 Total $ 6,130 $ 835 $ - $ 194 $ - $ - $ - $ 7,159 $ ( 675) Net Changes in Realized and Unrealized Gains Unrealized Purchases, (Losses) Included Fair Value Gains (Losses) Other Sales, Gross Gross Fair Value in Income on Beginning Included Comprehensive Issuances and Transfers Transfers Divested End Instruments Held (in millions) of Period in Income Income (Loss) Settlements, Net In Out Businesses of Period at End of Period Nine Months Ended September 30, 2019 Assets: Bonds available for sale: Obligations of states, municipalities and political subdivisions $ 2,000 $ ( 2) $ 321 $ 178 $ 35 $ ( 425) $ - $ 2,107 $ - Non-U.S. governments 11 5 - ( 4) 5 ( 4) - 13 - Corporate debt 864 ( 10) 79 ( 600) 1,155 ( 213) - 1,275 - RMBS 14,199 575 176 ( 1,234) 83 ( 239) - 13,560 - CMBS 917 8 62 381 58 ( 376) - 1,050 - CDO/ABS 9,102 15 204 ( 111) 103 ( 374) - 8,939 - Total bonds available for sale 27,093 591 842 ( 1,390) 1,439 ( 1,631) - 26,944 - Other bond securities: RMBS 1,290 69 - ( 544) - - - 815 ( 18) CMBS 77 5 - - - ( 14) - 68 3 CDO/ABS 4,478 299 - ( 749) - ( 97) - 3,931 128 Total other bond securities 5,845 373 - ( 1,293) - ( 111) - 4,814 113 Equity securities 27 - - ( 20) 2 ( 1) - 8 2 Other invested assets 587 24 1 ( 23) - - - 589 27 Other assets 58 - - 2 - - - 60 - Total $ 33,610 $ 988 $ 843 $ ( 2,724) $ 1,441 $ ( 1,743) $ - $ 32,415 $ 142 Net Changes in Realized and Unrealized Gains Unrealized Purchases, (Losses) Included Fair Value (Gains) Losses Other Sales, Gross Gross Fair Value in Income on Beginning Included Comprehensive Issuances and Transfers Transfers Divested End Instruments Held (in millions) of Period in Income Income (Loss) Settlements, Net In Out Businesses of Period at End of Period Liabilities: Policyholder contract deposits $ 4,116 $ 2,400 $ - $ 650 $ - $ - $ - $ 7,166 $ ( 2,044) Derivative liabilities, net: Interest rate contracts 15 - - ( 15) - - - - 1 Foreign exchange contracts ( 5) ( 4) - 8 - - - ( 1) - Equity contracts ( 75) ( 8) - ( 18) - - - ( 101) 19 Credit contracts 227 ( 51) - ( 74) - - - 102 13 Other contracts ( 9) ( 50) - 52 - - - ( 7) 50 Total derivative liabilities, net (b) 153 ( 113) - ( 47) - - - ( 7) 83 Total $ 4,269 $ 2,287 $ - $ 603 $ - $ - $ - $ 7,159 $ ( 1,961) (a) As a result of the adoption of the Financial Instruments Credit Losses Standard on January 1, 2020, credit losses are included in net realized and unrealized (gains) losses included in income. (b) Total Level 3 derivative exposures have been netted in these tables for presentation purposes only. |
Changes in Level 3 recurring fair value measurements (Liabilities) | Net Changes in Realized Unrealized Gains and Purchases, Changes in (Losses) Included in Unrealized Sales, Unrealized Gains Other Comprehensive Gains Issuances (Losses) Included Income (Loss) for Fair Value (Losses) Other and Gross Gross Fair Value in Income on Recurring Level 3 Beginning Included Comprehensive Settlements, Transfers Transfers Divested End Instruments Held Instruments Held (in millions) of Period in Income Income (Loss) Net In Out Businesses of Period at End of Period at End of Period Three Months Ended September 30, 2020 Assets: Bonds available for sale: Obligations of states, municipalities and political subdivisions $ 2,279 $ 3 $ ( 4) $ ( 30) $ - $ ( 65) $ - $ 2,183 $ - $ - Non-U.S. governments 5 - 1 - 1 - - 7 - - Corporate debt 1,900 ( 33) 52 ( 25) 452 ( 231) - 2,115 - 38 RMBS 12,678 192 301 ( 412) 3 ( 107) - 12,655 - 335 CMBS 1,149 3 36 ( 11) - ( 196) - 981 - 27 CDO/ABS 9,461 5 180 ( 174) 125 ( 244) - 9,353 - 172 Total bonds available for sale (a) 27,472 170 566 ( 652) 581 ( 843) - 27,294 - 572 Other bond securities: RMBS 168 16 - ( 16) - - - 168 4 - CMBS 47 1 - - - - - 48 1 - CDO/ABS 2,531 124 - ( 100) - - - 2,555 34 - Total other bond securities 2,746 141 - ( 116) - - - 2,771 39 - Equity securities 43 - 2 1 7 ( 27) - 26 1 - Other invested assets 1,486 74 ( 2) 25 - - - 1,583 - - Other assets 111 - - 2 - - ( 1) 112 - - Total $ 31,858 $ 385 $ 566 $ ( 740) $ 588 $ ( 870) $ ( 1) $ 31,786 $ 40 $ 572 Net Changes in Realized Unrealized Gains and Purchases, Changes in (Losses) Included in Unrealized Sales, Unrealized Gains Other Comprehensive (Gains) Issuances (Losses) Included Income (Loss) for Fair Value Losses Other and Gross Gross Fair Value in Income on Recurring Level 3 Beginning Included Comprehensive Settlements, Transfers Transfers Divested End Instruments Held Instruments Held (in millions) of Period in Income Income (Loss) Net In Out Businesses of Period at End of Period at End of Period Liabilities: Policyholder contract deposits $ 9,233 $ 19 $ - $ 70 $ - $ - $ - $ 9,322 $ 273 $ - Derivative liabilities, net: Interest rate contracts - - - - - - - - - - Foreign exchange contracts ( 1) ( 2) - - - - - ( 3) 2 - Equity contracts ( 53) 9 - ( 65) ( 1) 5 - ( 105) - - Credit contracts 45 1 - ( 2) - - - 44 ( 7) - Other contracts ( 3) ( 19) - 16 - - - ( 6) 18 - Total derivative liabilities, net (b) ( 12) ( 11) - ( 51) ( 1) 5 - ( 70) 13 - Fortitude Re funds withheld payable 4,510 656 - ( 30) - - - 5,136 ( 256) - Total $ 13,731 $ 664 $ - $ ( 11) $ ( 1) $ 5 $ - $ 14,388 $ 30 $ - Net Changes in Realized Unrealized Gains and Purchases, Changes in (Losses) Included in Unrealized Sales, Unrealized Gains Other Comprehensive Gains Issuances (Losses) Included Income (Loss) for Fair Value (Losses) Other and Gross Gross Fair Value in Income on Recurring Level 3 Beginning Included Comprehensive Settlements, Transfers Transfers Divested End Instruments Held Instruments Held (in millions) of Period in Income Income (Loss) Net In Out Businesses of Period at End of Period at End of Period Nine Months Ended September 30, 2020 Assets: Bonds available for sale: Obligations of states, municipalities and political subdivisions $ 2,121 $ 8 $ 195 $ 127 $ 27 $ ( 295) $ - $ 2,183 $ - $ 193 Non-U.S. governments - - 1 5 7 ( 6) - 7 - - Corporate debt 1,663 ( 101) 43 95 1,074 ( 659) - 2,115 - 59 RMBS 13,408 532 ( 375) ( 806) 29 ( 133) - 12,655 - ( 213) CMBS 1,053 14 70 17 23 ( 196) - 981 - 66 CDO/ABS 7,686 25 55 ( 19) 2,062 ( 456) - 9,353 - 38 Total bonds available for sale (a) 25,931 478 ( 11) ( 581) 3,222 ( 1,745) - 27,294 - 143 Other bond securities: RMBS 143 16 - 9 - - - 168 3 - CMBS 50 - - ( 2) - - - 48 ( 1) - CDO/ABS 3,545 225 - ( 1,215) - - - 2,555 25 - Total other bond securities 3,738 241 - ( 1,208) - - - 2,771 27 - Equity securities 8 ( 1) 3 11 33 ( 28) - 26 1 - Other invested assets 1,192 11 ( 2) 232 150 - - 1,583 ( 13) - Other assets 89 - - 61 - - ( 38) 112 - - Total $ 30,958 $ 729 $ ( 10) $ ( 1,485) $ 3,405 $ ( 1,773) $ ( 38) $ 31,786 $ 15 $ 143 Net Changes in Realized Unrealized Gains and Purchases, Changes in (Losses) Included in Unrealized Sales, Unrealized Gains Other Comprehensive (Gains) Issuances (Losses) Included Income (Loss) for Fair Value Losses Other and Gross Gross Fair Value in Income on Recurring Level 3 Beginning Included Comprehensive Settlements, Transfers Transfers Divested End Instruments Held Instruments Held (in millions) of Period in Income Income (Loss) Net In Out Businesses of Period at End of Period at End of Period Liabilities: Policyholder contract deposits $ 6,910 $ 2,250 $ - $ 162 $ - $ - $ - $ 9,322 $ ( 1,436) $ - Derivative liabilities, net: Interest rate contracts - ( 1) - 1 - - - - 1 - Foreign exchange contracts ( 6) 2 - 1 - - - ( 3) 2 - Equity contracts ( 151) 19 - 23 ( 1) 5 - ( 105) ( 62) - Credit contracts 62 ( 59) - 41 - - - 44 8 - Other contracts ( 7) ( 46) - 47 - - - ( 6) 45 - Total derivative liabilities, net (b) ( 102) ( 85) - 113 ( 1) 5 - ( 70) ( 6) - Fortitude Re funds withheld payable - 1,493 - ( 30) - - 3,673 5,136 ( 919) - Total $ 6,808 $ 3,658 $ - $ 245 $ ( 1) $ 5 $ 3,673 $ 14,388 $ ( 2,361) $ - Net Changes in Realized and Unrealized Gains Unrealized Purchases, (Losses) Included Fair Value Gains (Losses) Other Sales, Gross Gross Fair Value in Income on Beginning Included Comprehensive Issuances and Transfers Transfers Divested End Instruments Held (in millions) of Period in Income Income (Loss) Settlements, Net In Out Businesses of Period at End of Period Three Months Ended September 30, 2019 Assets: Bonds available for sale: Obligations of states, municipalities and political subdivisions $ 2,162 $ ( 1) $ 119 $ 92 $ - $ ( 265) $ - $ 2,107 $ - Non-U.S. governments 2 6 - - 5 - - 13 - Corporate debt 1,821 ( 36) ( 2) ( 535) 112 ( 85) - 1,275 - RMBS 13,863 166 15 ( 418) 16 ( 82) - 13,560 - CMBS 1,103 2 32 85 - ( 172) - 1,050 - CDO/ABS 9,062 3 37 ( 170) 7 - - 8,939 - Total bonds available for sale 28,013 140 201 ( 946) 140 ( 604) - 26,944 - Other bond securities: RMBS 830 9 - ( 24) - - - 815 1 CMBS 88 1 - ( 17) - ( 4) - 68 ( 2) CDO/ABS 4,150 115 - ( 334) - - - 3,931 28 Total other bond securities 5,068 125 - ( 375) - ( 4) - 4,814 27 Equity securities 35 - - ( 29) 2 - - 8 ( 2) Other invested assets 605 6 - ( 22) - - - 589 7 Other assets 61 - - ( 1) - - - 60 - Total $ 33,782 $ 271 $ 201 $ ( 1,373) $ 142 $ ( 608) $ - $ 32,415 $ 32 Net Changes in Realized and Unrealized Gains Unrealized Purchases, (Losses) Included Fair Value (Gains) Losses Other Sales, Gross Gross Fair Value in Income on Beginning Included Comprehensive Issuances and Transfers Transfers Divested End Instruments Held (in millions) of Period in Income Income (Loss) Settlements, Net In Out Businesses of Period at End of Period Liabilities: Policyholder contract deposits $ 6,065 $ 861 $ - $ 240 $ - $ - $ - $ 7,166 $ ( 691) Derivative liabilities, net: Interest rate contracts 16 ( 3) - ( 13) - - - - - Foreign exchange contracts ( 4) 6 - ( 3) - - - ( 1) - Equity contracts ( 113) 12 - - - - - ( 101) ( 13) Credit contracts 173 ( 24) - ( 47) - - - 102 14 Other contracts ( 7) ( 17) - 17 - - - ( 7) 15 Total derivative liabilities, net (b) 65 ( 26) - ( 46) - - - ( 7) 16 Total $ 6,130 $ 835 $ - $ 194 $ - $ - $ - $ 7,159 $ ( 675) Net Changes in Realized and Unrealized Gains Unrealized Purchases, (Losses) Included Fair Value Gains (Losses) Other Sales, Gross Gross Fair Value in Income on Beginning Included Comprehensive Issuances and Transfers Transfers Divested End Instruments Held (in millions) of Period in Income Income (Loss) Settlements, Net In Out Businesses of Period at End of Period Nine Months Ended September 30, 2019 Assets: Bonds available for sale: Obligations of states, municipalities and political subdivisions $ 2,000 $ ( 2) $ 321 $ 178 $ 35 $ ( 425) $ - $ 2,107 $ - Non-U.S. governments 11 5 - ( 4) 5 ( 4) - 13 - Corporate debt 864 ( 10) 79 ( 600) 1,155 ( 213) - 1,275 - RMBS 14,199 575 176 ( 1,234) 83 ( 239) - 13,560 - CMBS 917 8 62 381 58 ( 376) - 1,050 - CDO/ABS 9,102 15 204 ( 111) 103 ( 374) - 8,939 - Total bonds available for sale 27,093 591 842 ( 1,390) 1,439 ( 1,631) - 26,944 - Other bond securities: RMBS 1,290 69 - ( 544) - - - 815 ( 18) CMBS 77 5 - - - ( 14) - 68 3 CDO/ABS 4,478 299 - ( 749) - ( 97) - 3,931 128 Total other bond securities 5,845 373 - ( 1,293) - ( 111) - 4,814 113 Equity securities 27 - - ( 20) 2 ( 1) - 8 2 Other invested assets 587 24 1 ( 23) - - - 589 27 Other assets 58 - - 2 - - - 60 - Total $ 33,610 $ 988 $ 843 $ ( 2,724) $ 1,441 $ ( 1,743) $ - $ 32,415 $ 142 Net Changes in Realized and Unrealized Gains Unrealized Purchases, (Losses) Included Fair Value (Gains) Losses Other Sales, Gross Gross Fair Value in Income on Beginning Included Comprehensive Issuances and Transfers Transfers Divested End Instruments Held (in millions) of Period in Income Income (Loss) Settlements, Net In Out Businesses of Period at End of Period Liabilities: Policyholder contract deposits $ 4,116 $ 2,400 $ - $ 650 $ - $ - $ - $ 7,166 $ ( 2,044) Derivative liabilities, net: Interest rate contracts 15 - - ( 15) - - - - 1 Foreign exchange contracts ( 5) ( 4) - 8 - - - ( 1) - Equity contracts ( 75) ( 8) - ( 18) - - - ( 101) 19 Credit contracts 227 ( 51) - ( 74) - - - 102 13 Other contracts ( 9) ( 50) - 52 - - - ( 7) 50 Total derivative liabilities, net (b) 153 ( 113) - ( 47) - - - ( 7) 83 Total $ 4,269 $ 2,287 $ - $ 603 $ - $ - $ - $ 7,159 $ ( 1,961) (a) As a result of the adoption of the Financial Instruments Credit Losses Standard on January 1, 2020, credit losses are included in net realized and unrealized (gains) losses included in income. (b) Total Level 3 derivative exposures have been netted in these tables for presentation purposes only. |
Schedule of net realized and unrealized gains and losses related to Level 3 items | Net Net Realized Investment Capital Other (in millions) Income Gains (Losses) Income Total Three Months Ended September 30, 2020 Assets: Bonds available for sale * $ 177 $ ( 7) $ - $ 170 Other bond securities 143 ( 2) - 141 Equity securities - - - - Other invested assets 74 - - 74 Nine Months Ended September 30, 2020 Assets: Bonds available for sale * $ 557 $ ( 79) $ - $ 478 Other bond securities ( 25) 266 - 241 Equity securities - ( 1) - ( 1) Other invested assets 11 - - 11 Three Months Ended September 30, 2019 Assets: Bonds available for sale $ 164 $ ( 24) $ - $ 140 Other bond securities 110 15 - 125 Other invested assets 7 ( 1) - 6 Nine Months Ended September 30, 2019 Assets: Bonds available for sale $ 651 $ ( 60) $ - $ 591 Other bond securities 306 67 - 373 Other invested assets 25 ( 1) - 24 Net Net Realized Investment Capital Other (in millions) Income (Gains) Losses Income Total Three Months Ended September 30, 2020 Liabilities: Policyholder contract deposits $ - $ 19 $ - $ 19 Derivative liabilities, net - 5 ( 16) ( 11) Fortitude Re funds withheld payable - 656 - 656 Nine Months Ended September 30, 2020 Liabilities: Policyholder contract deposits $ - $ 2,250 $ - $ 2,250 Derivative liabilities, net - ( 41) ( 44) ( 85) Fortitude Re funds withheld payable - 1,493 - 1,493 Three Months Ended September 30, 2019 Liabilities: Policyholder contract deposits $ - $ 861 $ - $ 861 Derivative liabilities, net - ( 11) ( 15) ( 26) Nine Months Ended September 30, 2019 Liabilities: Policyholder contract deposits $ - $ 2,400 $ - $ 2,400 Derivative liabilities, net - ( 64) ( 49) ( 113) * As a result of the adoption of the Financial Instruments Credit Losses Standard on January 1, 2020, credit losses are included in net realized capital gains (losses). |
Gross components of purchases, sales, issuances and settlements, net | Issuances Purchases, Sales, and Issuances and (in millions) Purchases Sales Settlements (a) Settlements, Net (a) Three Months Ended September 30, 2020 Assets: Bonds available for sale: Obligations of states, municipalities and political subdivisions $ 34 $ ( 18) $ ( 46) $ ( 30) Non-U.S. governments - - - - Corporate debt 23 ( 2) ( 46) ( 25) RMBS 182 - ( 594) ( 412) CMBS 2 ( 10) ( 3) ( 11) CDO/ABS 234 ( 78) ( 330) ( 174) Total bonds available for sale 475 ( 108) ( 1,019) ( 652) Other bond securities: RMBS - - ( 16) ( 16) CMBS - - - - CDO/ABS - - ( 100) ( 100) Total other bond securities - - ( 116) ( 116) Equity securities 1 - - 1 Other invested assets 25 - - 25 Other assets - - 2 2 Total assets $ 501 $ ( 108) $ ( 1,133) $ ( 740) Liabilities: Policyholder contract deposits $ - $ 170 $ ( 100) $ 70 Derivative liabilities, net ( 19) - ( 32) ( 51) Fortitude Re funds withheld payable - - ( 30) ( 30) Other liabilities - - - - Total liabilities $ ( 19) $ 170 $ ( 162) $ ( 11) Three Months Ended September 30, 2019 Assets: Bonds available for sale: Obligations of states, municipalities and political subdivisions $ 109 $ - $ ( 17) $ 92 Non-U.S. governments - - - - Corporate debt 1 ( 128) ( 408) ( 535) RMBS 253 - ( 671) ( 418) CMBS 92 - ( 7) 85 CDO/ABS 458 ( 198) ( 430) ( 170) Total bonds available for sale 913 ( 326) ( 1,533) ( 946) Other bond securities: RMBS - - ( 24) ( 24) CMBS - ( 16) ( 1) ( 17) CDO/ABS - ( 153) ( 181) ( 334) Total other bond securities - ( 169) ( 206) ( 375) Equity securities - - ( 29) ( 29) Other invested assets 21 - ( 43) ( 22) Other assets - - ( 1) ( 1) Total assets $ 934 $ ( 495) $ ( 1,812) $ ( 1,373) Liabilities: Policyholder contract deposits $ - $ 240 $ - $ 240 Derivative liabilities, net ( 7) - ( 39) ( 46) Total liabilities $ ( 7) $ 240 $ ( 39) $ 194 Issuances Purchases, Sales, and Issuances and (in millions) Purchases Sales Settlements (a) Settlements, Net (a) Nine Months Ended September 30, 2020 Assets: Bonds available for sale: Obligations of states, municipalities and political subdivisions $ 201 $ ( 20) $ ( 54) $ 127 Non-U.S. governments 5 - - 5 Corporate debt 256 ( 7) ( 154) 95 RMBS 883 - ( 1,689) ( 806) CMBS 56 ( 17) ( 22) 17 CDO/ABS 715 ( 103) ( 631) ( 19) Total bonds available for sale 2,116 ( 147) ( 2,550) ( 581) Other bond securities: RMBS 37 - ( 28) 9 CMBS - - ( 2) ( 2) CDO/ABS 35 ( 579) ( 671) ( 1,215) Total other bond securities 72 ( 579) ( 701) ( 1,208) Equity securities 11 - - 11 Other invested assets 277 - ( 45) 232 Other assets 55 - 6 61 Total assets $ 2,531 $ ( 726) $ ( 3,290) $ ( 1,485) Liabilities: Policyholder contract deposits $ - $ 514 $ ( 352) $ 162 Derivative liabilities, net ( 43) 8 148 113 Fortitude Re funds withheld payable - - ( 30) ( 30) Other liabilities - - - - Total liabilities $ ( 43) $ 522 $ ( 234) $ 245 Nine Months Ended September 30, 2019 Assets: Bonds available for sale: Obligations of states, municipalities and political subdivisions $ 243 $ ( 16) $ ( 49) $ 178 Non-U.S. governments - - ( 4) ( 4) Corporate debt 58 ( 129) ( 529) ( 600) RMBS 860 ( 26) ( 2,068) ( 1,234) CMBS 455 - ( 74) 381 CDO/ABS 1,628 ( 508) ( 1,231) ( 111) Total bonds available for sale 3,244 ( 679) ( 3,955) ( 1,390) Other bond securities: RMBS - ( 437) ( 107) ( 544) CMBS 18 ( 16) ( 2) - CDO/ABS - ( 153) ( 596) ( 749) Total other bond securities 18 ( 606) ( 705) ( 1,293) Equity securities 9 - ( 29) ( 20) Other invested assets 64 - ( 87) ( 23) Other assets - - 2 2 Total assets $ 3,335 $ ( 1,285) $ ( 4,774) $ ( 2,724) Liabilities: Policyholder contract deposits $ - $ 616 $ 34 $ 650 Derivative liabilities, net ( 29) - ( 18) ( 47) Total liabilities $ ( 29) $ 616 $ 16 $ 603 (a) There were no issuances during the three- and nine-month periods ended September 30, 2020 and 2019. |
Significant unobservable inputs used for recurring fair value measurements | Fair Value at September 30, Valuation Range (in millions) 2020 Technique Unobservable Input (b) (Weighted Average) (c) Assets: Obligations of states, municipalities and political subdivisions $ 1,731 Discounted cash flow Yield 2.87% - 3.39% ( 3.13%) Corporate debt 1,672 Discounted cash flow Yield 2.99% - 6.03% ( 4.51%) RMBS (a) 11,810 Discounted cash flow Constant prepayment rate 3.81% - 12.15% ( 7.98%) Loss severity 28.62% - 77.94% ( 53.28%) Constant default rate 1.30% - 6.14% ( 3.72%) Yield 1.74% - 4.41% ( 3.08%) CDO/ABS (a) 8,704 Discounted cash flow Yield 2.01% - 5.53% ( 3.77%) CMBS 561 Discounted cash flow Yield 0.78% - 5.68% ( 3.23%) Liabilities (d) Embedded derivatives within Policyholder contract deposits: Variable annuity guaranteed minimum withdrawal benefits (GMWB) 3,832 Discounted cash flow Equity volatility 7.15% - 56.25% Base lapse rate 0.16% - 12.60% Dynamic lapse multiplier 50.00% - 143.00% Mortality multiplier (e) 38.00% - 147.00% Utilization 90.00% - 100.00% Equity / interest rate correlation 20.00% - 40.00% NPA (f) 0.14% - 2.07% Index annuities including certain GMWB 4,881 Discounted cash flow Lapse rate 0.38% - 50.00% Mortality multiplier (e) 24.00% - 180.00% Utilization (g) 80.00% - 100.00% Option budget 0.00% - 4.00% NPA (f) 0.14% - 2.07% Indexed life 577 Discounted cash flow Base lapse rate 0.00% - 37.97% Mortality rate 0.00% - 100.00% NPA (f) 0.14% - 2.07% Fair Value at December 31, Valuation Range (in millions) 2019 Technique Unobservable Input (b) (Weighted Average) (c) Assets: Obligations of states, municipalities and political subdivisions $ 1,633 Discounted cash flow Yield 3.35% - 3.95% ( 3.65%) Corporate debt 1,087 Discounted cash flow Yield 3.48% - 6.22% ( 4.85%) RMBS (a) 11,746 Discounted cash flow Constant prepayment rate 4.00% - 12.89% ( 8.44%) Loss severity 33.68% - 76.91% ( 55.29%) Constant default rate 1.68% - 6.17% ( 3.93%) Yield 2.52% - 4.53% ( 3.52%) CDO/ABS (a) 6,025 Discounted cash flow Yield 2.92% - 4.91% ( 3.91%) CMBS 476 Discounted cash flow Yield 2.77% - 5.18% ( 3.97%) Liabilities: Embedded derivatives within Policyholder contract deposits: GMWB 2,474 Discounted cash flow Equity volatility 6.15% - 48.85% Base lapse rate 0.16% - 12.60% Dynamic lapse multiplier 50.00% - 143.00% Mortality multiplier (d) 38.00% - 147.00% Utilization 90.00% - 100.00% Equity / interest rate correlation 20.00% - 40.00% NPA (e) 0.12% - 1.53% Index annuities 3,895 Discounted cash flow Lapse rate 0.31% - 50.00% Mortality multiplier (d) 24.00% - 180.00% Option budget 1.00% - 4.00% NPA (e) 0.12% - 1.53% Indexed life 510 Discounted cash flow Base lapse rate 0.00% - 37.97% Mortality rate 0.00% - 100.00% NPA (e) 0.12% - 1.53% (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 CDO 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. Because the valuation methodology for embedded derivatives within Policyholder contract deposits uses a range of inputs that vary at the contract level over the cash flow projection period, management believes that presenting a range, rather than weighted average, is a more meaningful representation of the unobservable inputs used in the valuation. (d) The Fortitude Re funds withheld payable has been excluded from the above table. As discussed in Note 7, the Fortitude Re funds withheld payable is created through modified coinsurance (modco) and funds withheld reinsurance arrangements where the investments supporting the reinsurance agreements are withheld by, and continue to reside on AIG’s balance sheet. This embedded derivative is valued as a total return swap with reference to the fair value of the invested assets held by AIG. Accordingly, the unobservable inputs utilized in the valuation of the embedded derivative are a component of the invested assets supporting the reinsurance agreements that are held on AIG’s balance sheet. (e) Mortality inputs are shown as multipliers of the 2012 Individual Annuity Mortality Basic table. (f) The non-performance risk adjustment (NPA) applied as a spread over risk-free curve for discounting. (g) The partial withdrawal utilization unobservable input range shown applies only to policies with guaranteed minimum withdrawal benefit riders that are accounted for as an embedded derivative. The total embedded derivative liability at September 30, 2020 is approximately $ 611 million. The remaining guaranteed minimum riders on the Index Annuities are valued under the accounting guidance for certain nontraditional long-duration contracts. |
Investments in certain entities carried at fair value using net asset value per share | September 30, 2020 December 31, 2019 Fair Value Fair Value Using NAV Using NAV Per Share (or Unfunded Per Share (or Unfunded (in millions) Investment Category Includes its equivalent) Commitments its equivalent) Commitments 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 $ 1,382 $ 1,697 $ 1,189 $ 1,543 Real Estate / Infrastructure Investments in real estate properties and infrastructure positions, including power plants and other energy generating facilities 429 450 400 290 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 143 166 111 155 Growth equity Funds that make investments in established companies for the purpose of growing their businesses 523 54 422 57 Mezzanine Funds that make investments in the junior debt and equity securities of leveraged companies 349 282 325 414 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 821 441 773 206 Total private equity funds 3,647 3,090 3,220 2,665 Hedge funds: Event-driven Securities of companies undergoing material structural changes, including mergers, acquisitions and other reorganizations 353 - 727 - Long-short Securities that the manager believes are undervalued, with corresponding short positions to hedge market risk 364 - 539 - Macro Investments that take long and short positions in financial instruments based on a top-down view of certain economic and capital market conditions 751 - 894 - 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 272 1 169 1 Total hedge funds 1,740 1 2,329 1 Total $ 5,387 $ 3,091 $ 5,549 $ 2,666 |
Gains or losses related to the eligible instruments for which AIG elected the fair value option | Gain (Loss) Three Months Ended September 30, Gain (Loss) Nine Months Ended September 30, (in millions) 2020 2019 2020 2019 Assets: Bonds $ 171 $ 333 $ 485 $ 971 Alternative investments (a) 407 92 242 473 Liabilities: Long-term debt (b) 18 ( 75) ( 203) ( 228) Total gain $ 596 $ 350 $ 524 $ 1,216 (a) Includes certain hedge funds, private equity funds and other investment partnerships. (b) Includes GIAs, notes, bonds and mortgages payable. |
Difference between fair values and aggregate contractual principal amounts, fair value option | September 30, 2020 December 31, 2019 Outstanding Outstanding (in millions) Fair Value Principal Amount Difference Fair Value Principal Amount Difference Liabilities: Long-term debt * $ 2,169 $ 1,506 $ 663 $ 2,062 $ 1,502 $ 560 * Includes GIAs, notes, bonds, loans and mortgages payable. |
Fair value assets measured on nonrecurring basis and impairment charges | Assets at Fair Value Impairment Charges Non-Recurring Basis Three Months Ended September 30, Nine Months Ended September 30, (in millions) Level 1 Level 2 Level 3 Total 2020 2019 2020 2019 September 30, 2020 Other investments $ - $ - $ 268 $ 268 $ 12 $ 7 $ 60 $ 65 Other assets - - 31 31 2 45 14 62 Total $ - $ - $ 299 $ 299 $ 14 $ 52 $ 74 $ 127 December 31, 2019 Other investments $ - $ - $ 329 $ 329 Other assets - - 1 1 Total $ - $ - $ 330 $ 330 |
Carrying values and estimated fair values of AIG's financial instruments | Estimated Fair Value Carrying (in millions) Level 1 Level 2 Level 3 Total Value September 30, 2020 Assets: Mortgage and other loans receivable $ - $ 99 $ 48,118 $ 48,217 $ 45,590 Other invested assets - 798 6 804 804 Short-term investments - 13,434 - 13,434 13,434 Cash 3,191 - - 3,191 3,191 Other assets 188 14 - 202 202 Liabilities: Policyholder contract deposits associated with investment-type contracts - 224 143,873 144,097 129,170 Fortitude Re funds withheld payable - - 37,407 37,407 37,407 Other liabilities - 3,823 - 3,823 3,823 Long-term debt and debt of consolidated investment entities - 31,391 8,281 39,672 36,068 Separate account liabilities - investment contracts - 87,564 - 87,564 87,564 December 31, 2019 Assets: Mortgage and other loans receivable $ - $ 101 $ 48,904 $ 49,005 $ 46,984 Other invested assets - 735 6 741 742 Short-term investments - 7,887 - 7,887 7,887 Cash 2,856 - - 2,856 2,856 Other assets 291 20 - 311 311 Liabilities: Policyholder contract deposits associated with investment-type contracts - 255 132,991 133,246 126,137 Other liabilities 15 3,048 - 3,063 3,063 Long-term debt and debt of consolidated investment entities - 27,024 8,883 35,907 33,288 Separate account liabilities - investment contracts - 88,770 - 88,770 88,770 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Investments [Line Items] | |
Amortized cost or cost and fair value of available for sale securities | Amortized Allowance Gross Gross Cost or for Credit Unrealized Unrealized Fair (in millions) Cost Losses (a) Gains Losses Value September 30, 2020 Bonds available for sale: U.S. government and government sponsored entities $ 4,319 $ - $ 840 $ ( 24) $ 5,135 Obligations of states, municipalities and political subdivisions 14,027 - 2,162 ( 16) 16,173 Non-U.S. governments 14,240 ( 5) 1,046 ( 107) 15,174 Corporate debt 146,595 ( 206) 16,897 ( 1,180) 162,106 Mortgage-backed, asset-backed and collateralized: RMBS 30,427 ( 24) 3,088 ( 77) 33,414 CMBS 14,841 ( 1) 1,017 ( 80) 15,777 CDO/ABS 18,021 - 390 ( 225) 18,186 Total mortgage-backed, asset-backed and collateralized 63,289 ( 25) 4,495 ( 382) 67,377 Total bonds available for sale (c) $ 242,470 $ ( 236) $ 25,440 $ ( 1,709) $ 265,965 Other-Than- Amortized Gross Gross Temporary Cost or Unrealized Unrealized Fair Impairments (in millions) Cost Gains Losses Value in AOCI (b) December 31, 2019 Bonds available for sale: U.S. government and government sponsored entities $ 5,108 $ 316 $ ( 44) $ 5,380 $ - Obligations of states, municipalities and political subdivisions 13,960 1,390 ( 32) 15,318 - Non-U.S. governments 14,042 884 ( 57) 14,869 ( 18) Corporate debt 138,046 12,090 ( 500) 149,636 7 Mortgage-backed, asset-backed and collateralized: RMBS 29,802 3,067 ( 64) 32,805 1,149 CMBS 13,879 576 ( 25) 14,430 34 CDO/ABS 18,393 348 ( 93) 18,648 14 Total mortgage-backed, asset-backed and collateralized 62,074 3,991 ( 182) 65,883 1,197 Total bonds available for sale (c) $ 233,230 $ 18,671 $ ( 815) $ 251,086 $ 1,186 (a) Represents the allowance for credit losses that has been recognized. Changes in the allowance for credit losses are recorded through the statements of income and are not recognized in other comprehensive income. (b) Represents the amount of other-than-temporary impairments recognized in AOCI. Amount includes unrealized gains and losses on impaired securities relating to changes in the fair value of such securities subsequent to the impairment measurement date. (c) At September 30, 2020 and December 31, 2019, bonds available for sale held by us that were below investment grade or not rated totaled $ 27.5 billion and $ 27.8 billion, respectively. |
Securities available for sale in a loss position | Less than 12 Months 12 Months or More Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized (in millions) Value Losses Value Losses Value Losses September 30, 2020 Bonds available for sale: U.S. government and government sponsored entities $ 366 $ 24 $ - $ - $ 366 $ 24 Obligations of states, municipalities and political subdivisions 419 11 103 5 522 16 Non-U.S. governments 1,756 56 291 51 2,047 107 Corporate debt 20,936 872 1,096 110 22,032 982 RMBS 3,594 43 163 17 3,757 60 CMBS 2,068 71 185 9 2,253 80 CDO/ABS 5,939 144 3,153 81 9,092 225 Total bonds available for sale $ 35,078 $ 1,221 $ 4,991 $ 273 $ 40,069 $ 1,494 Less than 12 Months 12 Months or More Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized (in millions) Value Losses Value Losses Value Losses December 31, 2019 Bonds available for sale: U.S. government and government sponsored entities $ 1,461 $ 44 $ 63 $ - $ 1,524 $ 44 Obligations of states, municipalities and political subdivisions 672 21 246 11 918 32 Non-U.S. governments 1,105 12 343 45 1,448 57 Corporate debt 11,868 319 2,405 181 14,273 500 RMBS 3,428 28 1,367 36 4,795 64 CMBS 1,877 16 367 9 2,244 25 CDO/ABS 3,920 53 2,571 40 6,491 93 Total bonds available for sale $ 24,331 $ 493 $ 7,362 $ 322 $ 31,693 $ 815 |
Amortized cost and fair value of fixed maturity securities available for sale by contractual maturity | Total Fixed Maturity Securities Available for Sale Amortized Cost, (in millions) Net of Allowance Fair Value September 30, 2020 Due in one year or less $ 11,186 $ 11,298 Due after one year through five years 42,513 43,869 Due after five years through ten years 41,049 44,725 Due after ten years 84,222 98,696 Mortgage-backed, asset-backed and collateralized 63,264 67,377 Total $ 242,234 $ 265,965 |
Gross realized gains and gross realized losses from sales or maturities of available for sale securities | Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Gross Gross Gross Gross Gross Gross Gross Gross Realized Realized Realized Realized Realized Realized Realized Realized (in millions) Gains Losses Gains Losses Gains Losses Gains Losses Fixed maturity securities $ 258 $ 83 $ 198 $ 70 $ 1,179 $ 641 $ 464 $ 280 |
Value of other securities measured at fair value based on election of the fair value option | September 30, 2020 December 31, 2019 Fair Percent Fair Percent (in millions) Value of Total Value of Total Fixed maturity securities: U.S. government and government sponsored entities $ 1,870 30 % $ 2,121 28 % Corporate debt 12 - 18 - Mortgage-backed, asset-backed and collateralized: RMBS 488 8 489 7 CMBS 322 5 322 4 CDO/ABS and other collateralized 2,723 43 3,732 50 Total mortgage-backed, asset-backed and collateralized 3,533 56 4,543 61 Total fixed maturity securities 5,415 86 6,682 89 Equity securities 871 14 841 11 Total $ 6,286 100 % $ 7,523 100 % |
Carrying amounts values of other invested assets | September 30, December 31, (in millions) 2020 2019 Alternative investments (a) (b) $ 8,391 $ 8,845 Investment real estate (c) 8,010 8,491 All other investments (d) 1,514 1,456 Total $ 17,915 $ 18,792 (a) At September 30, 2020, included hedge funds of $ 2.2 billion, private equity funds of $ 5.9 billion and affordable housing partnerships of $ 270 million. At December 31, 2019, included hedge funds of $ 3.3 billion, private equity funds of $ 5.2 billion and affordable housing partnerships of $ 331 million. (b) At September 30, 2020, approximately 63 percent of our hedge fund portfolio is available for redemption in 2020. The remaining 37 percent will be available for redemption between 2021 and 2027. (c) Net of accumulated depreciation of $ 780 million and $ 703 million at September 30, 2020 and December 31, 2019, respectively. (d) Includes AIG’s 3.5 percent ownership interest in Fortitude Holdings which is recorded using the measurement alternative for equity securities and is carried at cost, which was $ 100 million as of September 30, 2020. |
Components of net investment income | Three Months Ended September 30, 2020 2019 Excluding Fortitude Fortitude Re Re Funds Funds Withheld (in millions) Withheld Assets Assets Total Available for sale fixed maturity securities, including short-term investments $ 2,209 $ 373 $ 2,582 $ 2,698 Other fixed maturity securities (a) 164 7 171 333 Equity securities 119 - 119 ( 51) Interest on mortgage and other loans 443 46 489 495 Alternative investments (b) 455 40 495 115 Real estate 22 - 22 96 Other investments (c) 55 - 55 ( 143) Total investment income 3,467 466 3,933 3,543 Investment expenses 125 8 133 135 Net investment income $ 3,342 $ 458 $ 3,800 $ 3,408 Nine Months Ended September 30, 2020 2019 Excluding Fortitude Fortitude Re Re Funds Funds Withheld (in millions) Withheld Assets Assets (d) Total Available for sale fixed maturity securities, including short-term investments $ 7,320 $ 459 $ 7,779 $ 8,052 Other fixed maturity securities (a) 475 10 485 941 Equity securities ( 16) - ( 16) 6 Interest on mortgage and other loans 1,441 59 1,500 1,511 Alternative investments (b) 309 54 363 879 Real estate 142 - 142 227 Other investments (c) ( 159) - ( 159) ( 203) Total investment income 9,512 582 10,094 11,413 Investment expenses 412 8 420 381 Net investment income $ 9,100 $ 574 $ 9,674 $ 11,032 (a) Included in the three- and nine-month periods ended September 30, 2020 were income of $ 8 million and $ 206 million, respectively, related to fixed maturity securities measured at fair value that economically hedge liabilities described in (c) below. Included in the three- and nine-month periods ended September 30, 2019 were income of $ 146 million and $ 195 million, respectively, for fixed maturity securities measured at fair value through income that economically hedge liabilities as described in (c) below. (b) Included income from hedge funds, private equity funds and affordable housing partnerships. 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 three- and nine-month periods ended September 30, 2020 were income of $ 21 million and a loss of $ 195 million, respectively, related to liabilities measured at fair value that are economically hedged with fixed maturity securities as described in (a) above. Included in the three- and nine-month periods ended September 30, 2019 were losses of $ 174 million and $ 220 million, respectively, related to liabilities measured at fair value that are economically hedged with fixed maturity securities as described in (a) above. (d) Represents activity subsequent to the deconsolidation of Fortitude Re on June 2, 2020. |
Components of net realized capital gains (losses) | Three Months Ended September 30, 2020 2019 Excluding Fortitude Re Fortitude Re Funds Funds Withheld (in millions) Withheld Assets Assets Total Sales of fixed maturity securities $ 28 $ 147 $ 175 $ 128 Other-than-temporary impairments - - - ( 24) Change in intent (a) - - - - Change in allowance for credit losses on fixed maturity securities ( 77) ( 4) ( 81) - Change in allowance for credit losses on loans ( 13) 2 ( 11) ( 25) Foreign exchange transactions 250 7 257 ( 203) Variable annuity embedded derivatives, net of related hedges ( 148) - ( 148) 311 All other derivatives and hedge accounting ( 626) ( 120) ( 746) 466 Other 88 - 88 276 Net realized capital gains (losses) – excluding Fortitude Re funds withheld embedded derivative ( 498) 32 ( 466) 929 Net realized capital gains (losses) on Fortitude Re funds withheld embedded derivative - ( 656) ( 656) - Net realized capital gains (losses) $ ( 498) $ ( 624) $ ( 1,122) $ 929 Nine Months Ended September 30, 2020 2019 Excluding Fortitude Re Fortitude Re Funds Funds Withheld (in millions) Withheld Assets Assets (b) Total Sales of fixed maturity securities $ 269 $ 269 $ 538 $ 184 Other-than-temporary impairments - - - ( 137) Change in intent (a) ( 3) - ( 3) - Change in allowance for credit losses on fixed maturity securities ( 299) ( 11) ( 310) - Change in allowance for credit losses on loans ( 73) 6 ( 67) ( 35) Foreign exchange transactions 40 10 50 ( 242) Variable annuity embedded derivatives, net of related hedges 1,034 - 1,034 10 All other derivatives and hedge accounting 365 ( 146) 219 601 Other 97 - 97 506 Net realized capital gains – excluding Fortitude Re funds withheld embedded derivative 1,430 128 1,558 887 Net realized capital gains (losses) on Fortitude Re funds withheld embedded derivative - ( 1,493) ( 1,493) - Net realized capital gains (losses) $ 1,430 $ ( 1,365) $ 65 $ 887 (a) For the three- and nine-month periods ended September 30, 2019, the change in intent was included in Other-than-temporary impairments. (b) Represents activity subsequent to the deconsolidation of Fortitude Re on June 2, 2020. |
Schedule of increase (decrease) in unrealized appreciation (depreciation) of available for sale securities and other investments | The following table presents the increase (decrease) in unrealized appreciation (depreciation) of our available for sale securities and other investments: Three Months Ended Nine Months Ended September 30, September 30, (in millions) 2020 2019 2020 2019 Increase (decrease) in unrealized appreciation (depreciation) of investments: Fixed maturity securities $ 2,373 $ 4,377 $ 5,875 $ 16,265 Other investments 1 - 1 ( 68) Total increase (decrease) in unrealized appreciation (depreciation) of investments $ 2,374 $ 4,377 $ 5,876 $ 16,197 The following table summarizes the unrealized gains and losses recognized in Net Investment Income during the reporting period on equity securities still held at the reporting date: Three Months Ended September 30, 2020 2019 Other Other Invested Invested (in millions) Equities Assets Total Equities Assets Total Net gains and losses recognized during the period on equity securities $ 119 $ 464 $ 583 $ ( 51) $ 105 $ 54 Less: Net gains and losses recognized during the period on equity securities sold during the period ( 3) ( 5) ( 8) 18 13 31 Unrealized gains and losses recognized during the reporting period on equity securities still held at the reporting date $ 122 $ 469 $ 591 $ ( 69) $ 92 $ 23 Nine Months Ended September 30, 2020 2019 Other Other Invested Invested (in millions) Equities Assets Total Equities Assets Total Net gains and losses recognized during the period on equity securities $ ( 16) $ 264 $ 248 $ 6 $ 615 $ 621 Less: Net gains and losses recognized during the period on equity securities sold during the period 14 10 24 30 169 199 Unrealized gains and losses recognized during the reporting period on equity securities still held at the reporting date $ ( 30) $ 254 $ 224 $ ( 24) $ 446 $ 422 |
Rollforward of changes in allowance for credit losses on available for sale fixed maturity securities by major ivnvestment category | Three Months Ended Nine Months Ended September 30, 2020 September 30, 2020 Non- Non- (in millions) Structured Structured Total Structured Structured Total Balance, beginning of period* $ 37 $ 161 $ 198 $ 7 $ - $ 7 Additions: Securities for which allowance for credit losses were not previously recorded 1 30 31 36 294 330 Purchases of available for sale debt securities accounted for as purchased credit deteriorated assets - - - 26 - 26 Accretion of available for sale debt securities accounted for as purchased credit deteriorated assets - - - 1 - 1 Reductions: Securities sold during the period ( 2) ( 5) ( 7) ( 3) ( 10) ( 13) Intent to sell security or more likely than not will be required to sell the security before recovery of its amortized cost basis - - - - - - Additional net increases or decreases to 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 amortized cost basis ( 10) 67 57 ( 41) 34 ( 7) Write-offs charged against the allowance - ( 43) ( 43) - ( 108) ( 108) Recoveries of amounts previously written off - - - - - - Other - - - - - - Balance, end of period $ 26 $ 210 $ 236 $ 26 $ 210 $ 236 * The beginning balance incorporates the Day 1 gross up on PCD assets held as of January 1, 2020. |
Rollforward of the cumulative credit losses in other-than-temporary impairments recognized in earnings | Three Months Ended Nine Months Ended (in millions) September 30, 2019 September 30, 2019 Balance, beginning of period $ 34 $ - Increases due to: Credit impairments on new securities subject to impairment losses 10 105 Additional credit impairments on previously impaired securities 8 14 Reductions due to: Credit impaired securities fully disposed for which there was no prior intent or requirement to sell ( 3) ( 62) Accretion on securities previously impaired due to credit * ( 7) ( 15) Balance, end of period $ 42 $ 42 Represents both accretion recognized due to changes in cash flows expected to be collected over the remaining expected term of the credit impaired securities and the accretion due to the passage of time. |
Reconciliation of purchase price to unpaid principal balance of securities purchased with credit deterioration | (in millions) September 30, 2020 Unpaid principal balance $ 644 Allowance for expected credit losses at acquisition ( 26) Purchase (discount) premium ( 149) Purchase price $ 469 |
Schedule of purchased credit impaired (PCI) securities, at acquisition date | (in millions) At Date of Acquisition Contractually required payments (principal and interest) $ 35,139 Cash flows expected to be collected * 28,720 Recorded investment in acquired securities 19,382 * Represents undiscounted expected cash flows, including both principal and interest. |
Schedule of purchased credit impaired (PCI) securities, at reporting date | (in millions) December 31, 2019 Outstanding principal balance $ 10,476 Amortized cost 6,970 Fair value 8,664 |
Activity for accretable yield on purchased credit Impaired (PCI) securities | The following table presents activity for the accretable yield on PCI securities: Three Months Ended Nine Months Ended (in millions) September 30, 2019 September 30, 2019 Balance, beginning of period $ 6,402 $ 7,210 Newly purchased PCI securities 4 17 Accretion ( 172) ( 495) Effect of changes in interest rate indices ( 278) ( 678) Net reclassification from (to) non-accretable difference, including effects of prepayments ( 162) ( 260) Balance, end of period $ 5,794 $ 5,794 |
Schedule of fair value of securities pledged to counterparties under secured financing transactions | (in millions) September 30, 2020 December 31, 2019 Fixed maturity securities available for sale $ 3,664 $ 3,030 |
Schedule of fair value of securities pledged under 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 September 30, 2020 Bonds available for sale: Non-U.S. governments $ 107 $ - $ - $ - $ - $ 107 Corporate debt 147 98 - - - 245 Total $ 254 $ 98 $ - $ - $ - $ 352 December 31, 2019 Bonds available for sale: Non-U.S. governments $ 2 $ 71 $ - $ - $ - $ 73 Corporate debt 22 55 82 - - 159 Total $ 24 $ 126 $ 82 $ - $ - $ 232 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 September 30, 2020 Bonds available for sale: Obligations of states, municipalities and political subdivisions $ - $ 102 $ - $ - $ - $ 102 Corporate debt - 1,428 1,379 - - 2,807 RMBS - 403 - - - 403 Total $ - $ 1,933 $ 1,379 $ - $ - $ 3,312 December 31, 2019 Bonds available for sale: Obligations of states, municipalities and political subdivisions $ - $ - $ 386 $ - $ - $ 386 Corporate debt - 1,071 947 - - 2,018 RMBS - - - 394 - 394 Total $ - $ 1,071 $ 1,333 $ 394 $ - $ 2,798 |
Schedule of fair value of securities pledged to the entity under reverse repurchase agreements | (in millions) September 30, 2020 December 31, 2019 Securities collateral pledged to us $ 5,076 $ 2,567 Amount sold or repledged by us - 121 |
LENDING ACTIVITIES (Tables)
LENDING ACTIVITIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
LENDING ACTIVITIES | |
Composition of Mortgages and other loans receivable | September 30, December 31, (in millions) 2020 2019 Commercial mortgages (a) $ 36,359 $ 36,170 Residential mortgages 5,202 6,683 Life insurance policy loans 2,072 2,065 Commercial loans, other loans and notes receivable 2,754 2,504 Total mortgage and other loans receivable 46,387 47,422 Allowance for credit losses (b) ( 797) ( 438) Mortgage and other loans receivable, net $ 45,590 $ 46,984 (a) Commercial mortgages primarily represent loans for apartments, offices and retail properties, with exposures in New York and California representing the largest geographic concentrations (aggregating approximately 25 percent and 10 percent, respectively, at September 30, 2020 and 23 percent and 10 percent, respectively, at December 31, 2019). (b) Does not include $ 66 million of expected credit loss liability at September 30, 2020 in relation to off-balance-sheet commitments to fund commercial mortgage loans, which is recorded in Other liabilities. |
Schedule of debt service coverage ratio and loan-to-value ratio for the commercial mortgage loans | September 30, 2020 (in millions) 2020 2019 2018 2017 2016 Prior Total >1.2X $ 1,577 $ 5,452 $ 5,506 $ 4,008 $ 5,002 $ 11,150 $ 32,695 1.00 - 1.20X 157 393 457 108 162 1,382 2,659 <1.00X 2 79 346 86 94 398 1,005 Total commercial mortgages $ 1,736 $ 5,924 $ 6,309 $ 4,202 $ 5,258 $ 12,930 $ 36,359 September 30, 2020 (in millions) 2020 2019 2018 2017 2016 Prior Total Less than 65% $ 1,571 $ 3,594 $ 4,796 $ 3,050 $ 3,251 $ 10,136 $ 26,398 65% to 75% 163 1,858 1,513 974 1,292 1,751 7,551 76% to 80% - 88 - 124 98 500 810 Greater than 80% 2 384 - 54 617 543 1,600 Total commercial mortgages $ 1,736 $ 5,924 $ 6,309 $ 4,202 $ 5,258 $ 12,930 $ 36,359 December 31, 2019 Debt Service Coverage Ratios (a) (in millions) >1.20X 1.00X - 1.20X <1.00X Total Loan-to-Value Ratios (b) Less than 65% $ 23,013 $ 2,440 $ 245 $ 25,698 65% to 75% 9,007 899 40 9,946 76% to 80% 200 6 - 206 Greater than 80% 184 2 134 320 Total commercial mortgages $ 32,404 $ 3,347 $ 419 $ 36,170 (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 2.2X at September 30, 2020 and 2.0X at December 31, 2019. The debt service coverage ratios have been updated within the last three months. (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 57 percent at September 30, 2020 and was 56 percent at December 31, 2019. The loan-to-value ratios have been updated within the last three to nine months. |
Schedule of credit quality performance indicators for the commercial mortgages | Number Percent of Class of (dollars in millions) Loans Apartments Offices Retail Industrial Hotel Others Total (c) Total September 30, 2020 Credit Quality Performance Indicator: In good standing 700 $ 13,704 $ 10,843 $ 5,124 $ 3,746 $ 2,080 $ 448 $ 35,945 99 % Restructured (a) 3 - - 50 - - - 50 - 90 days or less delinquent 1 - - - - 108 - 108 - >90 days delinquent or in process of foreclosure 5 - 116 54 - 86 - 256 1 Total (b) 709 $ 13,704 $ 10,959 $ 5,228 $ 3,746 $ 2,274 $ 448 $ 36,359 100 % Allowance for credit losses $ 123 $ 281 $ 141 $ 55 $ 52 $ 7 $ 659 2 % December 31, 2019 Credit Quality Performance Indicator: In good standing 736 $ 13,698 $ 10,553 $ 5,332 $ 3,663 $ 2,211 $ 522 $ 35,979 99 % Restructured (a) 3 - 89 - - 101 - 190 1 90 days or less delinquent 1 1 - - - - - 1 - >90 days delinquent or in process of foreclosure - - - - - - - - - Total (b) 740 $ 13,699 $ 10,642 $ 5,332 $ 3,663 $ 2,312 $ 522 $ 36,170 100 % Allowance for credit losses: Specific $ - $ 2 $ 1 $ - $ 6 $ - $ 9 - % General 81 153 44 30 14 5 327 1 Total allowance for credit losses $ 81 $ 155 $ 45 $ 30 $ 20 $ 5 $ 336 1 % (a) Loans that have been modified in troubled debt restructurings and are performing according to their restructured terms. For additional discussion of troubled debt restructurings see Note 8 to the Consolidated Financial Statements in the 2019 Annual Report. (b) Does not reflect allowance for credit losses. (c) Our commercial mortgage loan portfolio is current as to payments of principal and interest, for both periods presented. There were no significant amounts of nonperforming commercial mortgages (defined as those loans where payment of contractual principal or interest is more than 90 days past due) during any of the periods presented. The following table presents credit quality performance indicators for residential mortgages by year of vintage: September 30, 2020 (in millions) 2020 2019 2018 2017 2016 Prior Total FICO*: 780 and greater $ 309 $ 764 $ 364 $ 627 $ 688 $ 650 $ 3,402 720 - 779 326 411 123 182 221 197 1,460 660 - 719 10 67 33 48 56 73 287 600 - 659 1 6 6 7 5 13 38 Less than 600 - - 1 2 3 9 15 Total residential mortgages $ 646 $ 1,248 $ 527 $ 866 $ 973 $ 942 $ 5,202 * Fair Isaac Corporation (FICO) is the credit quality indicator used to evaluate consumer credit risk for residential mortgage loan borrowers and have been updated within the last three months. |
Schedule of changes in the allowance for losses on Mortgage and other loans receivable | Three Months Ended September 30, 2020 2019 Commercial Other Commercial Other (in millions) Mortgages Loans Total Mortgages Loans Total Allowance, beginning of period $ 667 $ 127 $ 794 $ 310 $ 97 $ 407 Initial allowance upon CECL adoption - - - - - - Loans charged off - - - ( 2) - ( 2) Recoveries of loans previously charged off - - - - - - Net charge-offs - - - ( 2) - ( 2) Provision for loan losses ( 8) 11 3 27 ( 2) 25 Allowance, end of period $ 659 $ 138 $ 797 $ 335 (b) $ 95 $ 430 Nine Months Ended September 30, 2020 2019 Commercial Other Commercial Other (in millions) Mortgages Loans Total Mortgages Loans Total Allowance, beginning of year $ 336 $ 102 $ 438 $ 318 $ 79 $ 397 Initial allowance upon CECL adoption 311 7 318 - - - Loans charged off ( 12) - ( 12) ( 2) - ( 2) Recoveries of loans previously charged off - - - - - - Net charge-offs ( 12) - ( 12) ( 2) - ( 2) Provision for loan losses 24 29 53 19 16 35 Allowance, end of period $ 659 $ 138 $ 797 $ 335 (b) $ 95 $ 430 (a) Does not include $ 66 million of expected credit loss liability at September 30, 2020 in relation to off-balance-sheet commitments to fund commercial mortgage loans, which is recorded in Other liabilities. (b) The September 30, 2019 total allowance was calculated prior to the adoption of ASC 326 on January 1, 2020. Of the total allowance, $ 10 million relates to individually assessed credit losses on $ 151 million of commercial mortgages at September 30, 2019. |
REINSURANCE (Tables)
REINSURANCE (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Effects of Reinsurance [Line Items] | |
Summary of the composition of pool of assets | September 30, 2020 Carrying Fair (in millions) Value Value Corresponding Accounting Policy Fixed maturity securities - available for sale (a) $ 35,775 $ 35,775 Fair value through other comprehensive income Fixed maturity securities - fair value option 204 204 Fair value through net investment income Commercial mortgage loans 3,577 3,866 Amortized cost Real estate investments 366 595 Amortized cost Private equity funds / hedge funds 992 992 Fair value through net investment income Policy loans 423 423 Amortized cost Derivative assets, net (b) - - Fair value through realized capital gains (losses) Other 687 687 Amortized cost Total $ 42,024 $ 42,542 (a) The change in the net unrealized gains (losses) on available for sale securities related to the Fortitude Re funds withheld assets was $ 722 million ($ 570 million after-tax) during the post deconsolidation period (June 2, 2020-September 30, 2020). (b) The derivative assets have been presented net of collateral. The derivative assets supporting the Fortitude Re funds withheld arrangements had a fair market value of $ 471 million as of September 30, 2020. These derivative assets are fully collateralized. |
Summary of the impact of modco and funds withheld | Three Months Ended Nine Months Ended (in millions) September 30, 2020 September 30, 2020 Net underwriting income $ - $ - Net investment income - Fortitude Re funds withheld assets 458 574 Net realized capital losses on Fortitude Re funds withheld assets: Net realized capital gains - Fortitude Re funds withheld assets 32 128 Net realized capital losses - Fortitude Re embedded derivatives ( 656) ( 1,493) Net realized capital losses on Fortitude Re funds withheld assets ( 624) ( 1,365) Loss from continuing operations before income tax benefit ( 166) ( 791) Income tax benefit (a) ( 35) ( 166) Net loss ( 131) ( 625) Change in unrealized appreciation of all other investments (a) 132 570 Comprehensive income (loss) $ 1 $ ( 55) (a) The income tax expense (benefit) and the tax impact in accumulated other comprehensive income was computed using AIG’s U.S. statutory tax rate of 21 percent. |
Schedule of rollfoward of allowance for credit losses | Three Months Ended Nine Months Ended September 30, 2020 September 30, 2020 General Life and General Life and (in millions) Insurance Retirement Total Insurance Retirement Total Balance, beginning of period $ 305 $ 59 $ 364 $ 111 $ 40 $ 151 Initial allowance upon CECL adoption - - - 202 22 224 Current period provision for expected credit losses and disputes ( 2) 2 - - 5 5 Write-offs charged against the allowance for credit losses and disputes - - - ( 5) ( 5) ( 10) Other changes 5 1 6 - - - Balance, end of period $ 308 $ 62 $ 370 $ 308 $ 62 $ 370 |
VARIABLE INTEREST ENTITIES (Tab
VARIABLE INTEREST ENTITIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Variable Interest Entity Primary Beneficiary | |
Variable Interest Entity [Line Items] | |
Schedule of Variable Interest Entities | Real Estate and Affordable Investment Securitization Housing (in millions) Entities (d) Vehicles (e) Partnerships Other Total September 30, 2020 Assets: Bonds available for sale $ - $ 6,075 $ - $ - $ 6,075 Other bond and equity securities 281 2,416 - 6 2,703 Mortgage and other loans receivable - 3,247 - - 3,247 Other invested assets 5,975 - 3,549 18 9,542 Other (a) 461 1,635 520 23 2,639 Total assets (b) $ 6,717 $ 13,373 $ 4,069 $ 47 $ 24,206 Liabilities: Long-term debt $ 2,509 $ 4,054 $ 2,317 $ - $ 8,880 Other (c) 165 159 197 9 530 Total liabilities $ 2,674 $ 4,213 $ 2,514 $ 9 $ 9,410 December 31, 2019 Assets: Bonds available for sale $ 177 $ 7,239 $ - $ - $ 7,416 Other bond securities - 3,324 - 1 3,325 Mortgage and other loans receivable - 3,860 - - 3,860 Other invested assets 5,231 - 3,464 42 8,737 Other (a) 615 1,996 469 42 3,122 Total assets (b) $ 6,023 $ 16,419 $ 3,933 $ 85 $ 26,460 Liabilities: Long-term debt $ 2,810 $ 4,356 $ 2,074 $ 4 $ 9,244 Other (c) 236 359 195 24 814 Total liabilities $ 3,046 $ 4,715 $ 2,269 $ 28 $ 10,058 (a) Comprised primarily of Short-term investments and Other assets at September 30, 2020 and December 31, 2019. (b) The assets of each VIE can be used only to settle specific obligations of that VIE. (c) Comprised primarily of Other liabilities at September 30, 2020 and December 31, 2019. (d) At September 30, 2020 and December 31, 2019, off-balance sheet exposure primarily consisting of commitments to real estate and investment entities was $ 2.3 billion and $ 2.6 billion, respectively. (e) At September 30, 2020 and December 31, 2019, the company had contributed total assets of $ 12.6 billion and $ 15.6 billion, respectively, into consolidated securitization vehicles. |
Variable Interest Entity Not Primary Beneficiary | |
Variable Interest Entity [Line Items] | |
Schedule of Variable Interest Entities | Maximum Exposure to Loss Total VIE On-Balance Off-Balance (in millions) Assets Sheet (b) Sheet Total September 30, 2020 Real estate and investment entities (a) $ 293,428 $ 5,260 $ 3,238 $ 8,498 Affordable housing partnerships 3,045 384 - 384 Other 5,033 461 562 (c) 1,023 Total $ 301,506 $ 6,105 $ 3,800 $ 9,905 December 31, 2019 Real estate and investment entities (a) $ 283,349 $ 6,519 $ 3,286 $ 9,805 Affordable housing partnerships 3,351 453 - 453 Other 5,320 310 561 (c) 871 Total $ 292,020 $ 7,282 $ 3,847 $ 11,129 (a) Comprised primarily of hedge funds and private equity funds. (b) At September 30, 2020 and December 31, 2019, $ 5.7 billion and $ 7.0 billion, respectively, of our total unconsolidated VIE assets were recorded as Other invested assets. (c) 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. |
DERIVATIVES AND HEDGE ACCOUNT_2
DERIVATIVES AND HEDGE ACCOUNTING (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
DERIVATIVES AND HEDGE ACCOUNTING | |
Notional amounts and fair values of derivative instruments | September 30, 2020 December 31, 2019 Gross Derivative Assets Gross Derivative Liabilities Gross Derivative Assets Gross Derivative Liabilities Notional Fair Notional Fair Notional Fair Notional Fair (in millions) Amount Value Amount Value Amount Value Amount Value Derivatives designated as hedging instruments: (a) Interest rate contracts $ 690 $ 19 $ 299 $ 13 $ 495 $ 3 $ 410 $ 7 Foreign exchange contracts 6,146 494 3,910 159 4,328 342 5,230 162 Derivatives not designated as hedging instruments: (a) Interest rate contracts 66,938 5,035 39,057 4,546 52,437 3,197 35,231 2,742 Foreign exchange contracts 15,771 1,094 6,345 460 8,133 698 12,093 863 Equity contracts 21,461 957 4,268 101 18,533 769 7,539 139 Credit contracts (b) 2,797 1 970 69 8,457 3 923 89 Other contracts (c) 43,069 13 55 7 40,582 14 56 7 Total derivatives, gross $ 156,872 $ 7,613 $ 54,904 $ 5,355 $ 132,965 $ 5,026 $ 61,482 $ 4,009 Counterparty netting (d) ( 3,695) ( 3,695) ( 2,427) ( 2,427) Cash collateral (e) ( 3,129) ( 1,060) ( 1,806) ( 527) Total derivatives on condensed consolidated balance sheets (f) $ 789 $ 600 $ 793 $ 1,055 (a) Fair value amounts are shown before the effects of counterparty netting adjustments and offsetting cash collateral. (b) As of September 30, 2020 and December 31, 2019, included CDSs on super senior multi-sector CDOs with a net notional amount of $ 137 million and $ 152 million (fair value liability of $ 45 million and $ 48 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 zero 14.5 billion and $ 6.9 billion, respectively, at September 30, 2020 and December 31, 2019. A bifurcated embedded derivative is generally presented with the host contract in the Condensed Consolidated Balance Sheets. Embedded derivatives are primarily related to guarantee features in variable annuity products, which include equity and interest rate components, and the funds withheld arrangement with Fortitude Re. For additional information see Note 7 to the Condensed Consolidated Financial Statements. . |
Gain (loss) recognized in earnings on AIG's derivative instruments in fair value hedging relationships in the Consolidated Statements of Income | Gains/(Losses) Recognized in Earnings for: Hedging Excluded Hedged (in millions) Derivatives (a) Components (b) Items Net Impact Three Months Ended September 30, 2020 Interest rate contracts: Interest credited to policyholder account balances $ ( 2) $ - $ 5 $ 3 Net investment income 1 - - 1 Foreign exchange contracts: Realized capital gains/(losses) ( 250) ( 50) 250 ( 50) Three Months Ended September 30, 2019 Interest rate contracts: Interest credited to policyholder account balances $ 4 $ - $ ( 4) $ - Net investment income - - - - Foreign exchange contracts: Realized capital gains/(losses) 228 41 ( 228) 41 Nine Months Ended September 30, 2020 Interest rate contracts: Interest credited to policyholder account balances $ 16 $ - $ ( 15) $ 1 Net investment income ( 6) - 6 - Foreign exchange contracts: Realized capital gains/(losses) ( 77) 155 77 155 Nine Months Ended September 30, 2019 Interest rate contracts: Interest credited to policyholder account balances $ 18 $ - $ ( 18) $ - Net investment income ( 1) - 1 - Foreign exchange contracts: Realized capital gains/(losses) 278 84 ( 278) 84 (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 earnings on a mark-to-market basis. |
Effect of AIG's derivative instruments not designated as hedging instruments in the Consolidated Statements of Income | Gains (Losses) Recognized in Earnings Three Months Ended Nine Months Ended September 30, September 30, (in millions) 2020 2019 2020 2019 By Derivative Type: Interest rate contracts $ ( 462) $ 1,078 $ 2,104 $ 2,052 Foreign exchange contracts ( 535) 342 366 545 Equity contracts ( 46) 96 586 ( 23) Credit contracts ( 1) 26 55 35 Other contracts 18 14 44 48 Embedded derivatives ( 507) ( 756) ( 3,333) ( 2,037) Total $ ( 1,533) $ 800 $ ( 178) $ 620 By Classification: Policy fees $ 16 $ 16 $ 46 $ 51 Net investment income 4 ( 3) 1 ( 58) Net realized capital gains (losses) - excluding Fortitude Re funds withheld assets ( 775) 780 1,398 611 Net realized capital gains (losses) on Fortitude Re funds withheld assets ( 776) - ( 1,639) - Policyholder benefits and claims incurred ( 2) 7 16 16 Total $ ( 1,533) $ 800 $ ( 178) $ 620 |
INSURANCE LIABILITIES (Tables)
INSURANCE LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Claims Development [Line Items] | |
Schedule of reconciliation of activity in the liability for unpaid claims and claims adjustment expense | The following table presents the roll-forward of activity in Loss Reserves: Three Months Ended Nine Months Ended September 30, September 30, (in millions) 2020 2019 2020 2019 Liability for unpaid loss and loss adjustment expenses, beginning of period $ 77,853 $ 81,057 $ 78,328 $ 83,639 Reinsurance recoverable ( 35,458) ( 31,333) ( 31,069) ( 31,690) Initial allowance upon CECL adoption - - 164 - Net Liability for unpaid loss and loss adjustment expenses, beginning of period 42,395 49,724 47,423 51,949 Losses and loss adjustment expenses incurred: Current year 4,324 4,612 12,683 13,181 Prior years, excluding discount and amortization of deferred gain 20 ( 74) ( 6) ( 221) Prior years, discount charge (benefit) 25 276 135 1,017 Prior years, amortization of deferred gain on retroactive reinsurance (a) ( 36) 13 ( 187) ( 129) Total losses and loss adjustment expenses incurred 4,333 4,827 12,625 13,848 Losses and loss adjustment expenses paid: Current year ( 1,316) ( 1,572) ( 2,568) ( 2,949) Prior years ( 3,115) ( 4,244) ( 11,256) ( 14,010) Total losses and loss adjustment expenses paid ( 4,431) ( 5,816) ( 13,824) ( 16,959) Other changes: Foreign exchange effect 925 ( 172) 656 ( 165) Allowance for credit losses - - - - Retroactive reinsurance adjustment (net of discount) (b) 80 96 240 ( 14) Fortitude sale and reinsurance adjustment (c) - - ( 3,818) - Total other changes 1,005 ( 76) ( 2,922) ( 179) Liability for unpaid loss and loss adjustment expenses, end of period: Net liability for unpaid losses and loss adjustment expenses 43,302 48,659 43,302 48,659 Reinsurance recoverable 35,282 31,224 35,282 31,224 Total $ 78,584 $ 79,883 $ 78,584 $ 79,883 (a) Includes $ 6 million and $ 6 million for the retroactive reinsurance agreement with National Indemnity Company (NICO), a subsidiary of Berkshire Hathaway Inc. (Berkshire), covering U.S. asbestos exposures for the three-month periods ended September 30, 2020 and 2019, respectively, and $ 26 million and $ 21 million for the nine-month periods ended September 30, 2020 and 2019, respectively. (b) Includes benefit (charge) from change in discount on retroactive reinsurance in the amount of $ 20 million and $ 43 million for the three-month periods ended September 30, 2020 and 2019, respectively, and $ 78 million and $ 475 million for the nine-month periods ended September 30, 2020 and 2019, respectively. (c) On June 2, 2020, AIG completed the Majority Interest Fortitude Sale. Concurrent with the Majority Interest Fortitude Sale, AIG established a reinsurance recoverable. Refer to Note 1 for additional information . |
Schedule of components of the loss reserve discount | September 30, 2020 December 31, 2019 North North America America Commercial Legacy Commercial Legacy (in millions) Insurance Portfolio (b) Total Insurance Portfolio Total U.S. workers' compensation $ 2,111 $ - $ 2,111 $ 2,134 $ 666 $ 2,800 Retroactive reinsurance ( 1,173) - ( 1,173) ( 1,251) - ( 1,251) Total reserve discount (a) $ 938 $ - $ 938 $ 883 $ 666 $ 1,549 (a) Excludes $ 151 million and $ 172 million of discount related to certain long tail liabilities in the UK at September 30, 2020 and December 31, 2019, respectively. (b) On June 2, 2020, we completed the Majority Interest Fortitude Sale. Refer to Note 1 for additional information. |
Schedule of loss reserve discount and loss reserve discount benefit (charge) | Three Months Ended September 30, 2020 2019 North North America America Commercial Legacy Commercial Legacy (in millions) Insurance Portfolio (c) Total Insurance Portfolio Total Current accident year $ 56 $ - $ 56 $ 41 $ - $ 41 Accretion and other adjustments to prior year discount ( 25) - ( 25) ( 26) ( 56) ( 82) Effect of interest rate changes - - - ( 136) ( 58) ( 194) Net reserve discount benefit (charge) 31 - 31 ( 121) ( 114) ( 235) Change in discount on loss reserves ceded under retroactive reinsurance 20 - 20 43 - 43 Net change in total reserve discount (a) $ 51 $ - $ 51 $ ( 78) $ ( 114) $ ( 192) Nine Months Ended September 30, 2020 2019 North North America America Commercial Legacy Commercial Legacy (in millions) Insurance Portfolio (c) Total Insurance Portfolio Total Current accident year $ 94 $ - $ 94 $ 97 $ - $ 97 Accretion and other adjustments to prior year discount ( 117) ( 18) ( 135) ( 269) ( 80) ( 349) Effect of interest rate changes - - - ( 473) ( 195) ( 668) Net reserve discount benefit (charge) ( 23) ( 18) ( 41) ( 645) ( 275) ( 920) Change in discount on loss reserves ceded under retroactive reinsurance 78 - 78 475 - 475 Net change in total reserve discount (b) $ 55 $ ( 18) $ 37 $ ( 170) $ ( 275) $ ( 445) (a) Excludes $( 12) million and $( 27) million discount related to certain long tail liabilities in the UK for the three-month periods ended September 30, 2020 and 2019, respectively. (b) Excludes $( 20) million and $( 1) million discount related to certain long tail liabilities in the UK for the nine-month periods ended September 30, 2020 and 2019, respectively. (c) On June 2, 2020, we completed the Majority Interest Fortitude Sale. Refer to Note 1 for additional information. |
EQUITY (Tables)
EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Class of Stock [Line Items] | |
Rollforward of common stock outstanding | Nine Months Ended September 30, 2020 Common Treasury Common Stock Stock Issued Stock Outstanding Shares, beginning of year 1,906,671,492 ( 1,036,672,461) 869,999,031 Shares issued - 3,610,496 3,610,496 Shares repurchased - ( 12,160,952) ( 12,160,952) Shares, end of period 1,906,671,492 ( 1,045,222,917) 861,448,575 |
Dividends Paid | The following table presents declaration date, record date, payment date and dividends paid per common share on AIG Common Stock in the nine months ended September 30, 2020 and 2019: Dividends Paid Declaration Date Record Date Payment Date Per Common Share August 3, 2020 September 17, 2020 September 30, 2020 $ 0.32 May 4, 2020 June 15, 2020 June 29, 2020 0.32 February 12, 2020 March 16, 2020 March 30, 2020 0.32 August 7, 2019 September 17, 2019 September 30, 2019 $ 0.32 May 6, 2019 June 14, 2019 June 28, 2019 0.32 February 13, 2019 March 15, 2019 March 29, 2019 0.32 |
Repurchases Of Common Stock and Warrant | The following table presents repurchases of AIG Common Stock and warrants to purchase shares of AIG Common Stock: Nine Months Ended September 30, (in millions) 2020 2019 Aggregate repurchases of common stock $ 500 $ - Total number of common shares repurchased 12 - Aggregate repurchases of warrants $ - $ - Total number of warrants repurchased - - |
Accumulated Other Comprehensive Income (Loss) | Unrealized Appreciation Fair Value of (Depreciation) of Fixed Unrealized Liabilities Under Maturity Securities on Appreciation Foreign Retirement Fair Value Option Which Allowance (Depreciation) Currency Plan Attributable to for Credit Losses of All Other Translation Liabilities Changes in (in millions) Was Taken Investments Adjustments Adjustment Own Credit Risk Total Balance, June 30, 2020, net of tax $ ( 233) $ 13,281 $ ( 2,767) $ ( 1,120) $ 8 $ 9,169 Change in unrealized appreciation of investments 101 2,273 - - - 2,374 Change in deferred policy acquisition costs adjustment and other ( 5) ( 296) - - - ( 301) Change in future policy benefits - ( 147) - - - ( 147) Change in foreign currency translation adjustments - - 297 - - 297 Change in net actuarial loss - - - 2 - 2 Change in prior service credit - - - - - - Change in deferred tax asset (liability) ( 17) ( 445) 55 ( 3) - ( 410) Change in fair value of liabilities under fair value option attributable to changes in own credit risk - - - - 1 1 Total other comprehensive income (loss) 79 1,385 352 ( 1) 1 1,816 Noncontrolling interests - 2 5 - - 7 Balance, September 30, 2020, net of tax $ ( 154) $ 14,664 $ ( 2,420) $ ( 1,121) $ 9 $ 10,978 Balance, December 31, 2019, net of tax $ - $ 8,722 $ ( 2,625) $ ( 1,122) $ 7 $ 4,982 Change in unrealized appreciation (depreciation) of investments ( 212) 6,088 - - - 5,876 Change in deferred policy acquisition costs adjustment and other 14 ( 655) - - - ( 641) Change in future policy benefits - 2,187 - - - 2,187 Change in foreign currency translation adjustments - - 169 - - 169 Change in net actuarial loss - - - 18 - 18 Change in prior service credit - - - ( 1) - ( 1) Change in deferred tax asset (liability) 44 ( 1,695) 37 ( 16) - ( 1,630) Change in fair value of liabilities under fair value option attributable to changes in own credit risk - - - - 2 2 Total other comprehensive income (loss) ( 154) 5,925 206 1 2 5,980 Noncontrolling interests - ( 17) 1 - - ( 16) Balance, September 30, 2020, net of tax $ ( 154) $ 14,664 $ ( 2,420) $ ( 1,121) $ 9 $ 10,978 Unrealized Appreciation Fair Value of (Depreciation) of Fixed Unrealized Liabilities Under Maturity Securities on Appreciation Foreign Retirement Fair Value Option Which Other-Than- (Depreciation) Currency Plan Attributable to Temporary Credit of All Other Translation Liabilities Changes in (in millions) Impairments Were Taken Investments Adjustments Adjustment Own Credit Risk Total Balance, June 30, 2019, net of tax $ 720 $ 8,034 $ ( 2,692) $ ( 1,079) $ 8 $ 4,991 Change in unrealized appreciation (depreciation) of investments ( 9) 4,386 - - - 4,377 Change in deferred policy acquisition costs adjustment and other 11 ( 522) - - - ( 511) Change in future policy benefits - ( 3,042) - - - ( 3,042) Change in foreign currency translation adjustments - - ( 24) - - ( 24) Change in net actuarial loss - - - 13 - 13 Change in prior service credit - - - ( 1) - ( 1) Change in deferred tax liability ( 4) ( 166) ( 10) ( 5) - ( 185) Change in fair value of liabilities under fair value option attributable to changes in own credit risk - - - - 1 1 Total other comprehensive income (loss) ( 2) 656 ( 34) 7 1 628 Noncontrolling interests - 5 ( 1) - - 4 Balance, September 30, 2019, net of tax $ 718 $ 8,685 $ ( 2,725) $ ( 1,072) $ 9 $ 5,615 Balance, December 31, 2018, net of tax $ ( 38) $ 2,426 $ ( 2,725) $ ( 1,086) $ 10 $ ( 1,413) Change in unrealized appreciation of investments 935 15,262 - - - 16,197 Change in deferred policy acquisition costs adjustment and other ( 3) ( 2,246) - - - ( 2,249) Change in future policy benefits - ( 5,291) - - - ( 5,291) Change in foreign currency translation adjustments - - 31 - - 31 Change in net actuarial loss - - - 29 - 29 Change in prior service credit - - - ( 2) - ( 2) Change in deferred tax liability ( 176) ( 1,447) ( 30) ( 13) - ( 1,666) Change in fair value of liabilities under fair value option attributable to changes in own credit risk - - - - ( 1) ( 1) Total other comprehensive income (loss) 756 6,278 1 14 ( 1) 7,048 Noncontrolling interests - 19 1 - - 20 Balance, September 30, 2019, net of tax $ 718 $ 8,685 $ ( 2,725) $ ( 1,072) $ 9 $ 5,615 |
Other comprehensive income (loss) reclassification adjustments | Unrealized Appreciation Fair Value of (Depreciation) of Fixed Unrealized Liabilities Under Maturity Securities on Appreciation Foreign Retirement Fair Value Option Which Allowance (Depreciation) Currency Plan Attributable to for Credit Losses of All Other Translation Liabilities Changes in (in millions) Was Taken Investments Adjustments Adjustment Own Credit Risk Total Three Months Ended September 30, 2020 Unrealized change arising during period $ 99 $ 2,002 $ 297 $ ( 9) $ 1 $ 2,390 Less: Reclassification adjustments included in net income 3 172 - ( 11) - 164 Total other comprehensive income (loss), before income tax expense (benefit) 96 1,830 297 2 1 2,226 Less: Income tax expense (benefit) 17 445 ( 55) 3 - 410 Total other comprehensive income (loss), net of income tax expense (benefit) $ 79 $ 1,385 $ 352 $ ( 1) $ 1 $ 1,816 Nine Months Ended September 30, 2020 Unrealized change arising during period $ ( 198) $ 8,158 $ 169 $ ( 15) $ 2 $ 8,116 Less: Reclassification adjustments included in net income - 538 - ( 32) - 506 Total other comprehensive income (loss), before income tax expense (benefit) ( 198) 7,620 169 17 2 7,610 Less: Income tax expense (benefit) ( 44) 1,695 ( 37) 16 - 1,630 Total other comprehensive income (loss), net of income tax expense (benefit) $ ( 154) $ 5,925 $ 206 $ 1 $ 2 $ 5,980 Unrealized Appreciation Fair Value of (Depreciation) of Fixed Unrealized Liabilities Under Maturity Securities on Appreciation Foreign Retirement Fair Value Option Which Other-Than- (Depreciation) Currency Plan Attributable to Temporary Credit of All Other Translation Liabilities Changes in (in millions) Impairments Were Taken Investments Adjustments Adjustment Own Credit Risk Total Three Months Ended September 30, 2019 Unrealized change arising during period $ 3 $ 949 $ ( 24) $ 3 $ 1 $ 932 Less: Reclassification adjustments included in net income 1 127 - ( 9) - 119 Total other comprehensive income (loss), before income tax expense 2 822 ( 24) 12 1 813 Less: Income tax expense 4 166 10 5 - 185 Total other comprehensive income (loss), net of income tax expense $ ( 2) $ 656 $ ( 34) $ 7 $ 1 $ 628 Nine Months Ended September 30, 2019 Unrealized change arising during period $ 929 $ 7,912 $ 31 $ 3 $ ( 1) $ 8,874 Less: Reclassification adjustments included in net income ( 3) 187 - ( 24) - 160 Total other comprehensive income (loss), before income tax expense 932 7,725 31 27 ( 1) 8,714 Less: Income tax expense 176 1,447 30 13 - 1,666 Total other comprehensive income (loss), net of income tax expense $ 756 $ 6,278 $ 1 $ 14 $ ( 1) $ 7,048 |
Schedule of effect of the reclassification of significant items out of Accumulated other comprehensive income on the respective line items in the Consolidated Statements of Income | Amount Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Condensed Consolidated Statements of Income Three Months Ended September 30, (in millions) 2020 2019 Unrealized appreciation (depreciation) of fixed maturity securities on which allowance for credit losses was taken Investments $ 3 $ - Other realized capital gains Total 3 - Unrealized appreciation (depreciation) of fixed maturity securities on which other-than-temporary credit impairments were taken Investments - 1 Other realized capital gains Total - 1 Unrealized appreciation (depreciation) of all other investments Investments 172 127 Other realized capital gains Total 172 127 Change in retirement plan liabilities adjustment Prior-service credit - - * Actuarial losses ( 11) ( 9) * Total ( 11) ( 9) Total reclassifications for the period $ 164 $ 119 Amount Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Condensed Consolidated Statements of Income Nine Months Ended September 30, (in millions) 2020 2019 Unrealized appreciation (depreciation) of fixed maturity securities on which allowance for credit losses was taken Investments $ - $ - Other realized capital gains Total - - Unrealized appreciation (depreciation) of fixed maturity securities on which other-than-temporary credit impairments were taken Investments - ( 3) Other realized capital gains Total - ( 3) Unrealized appreciation (depreciation) of all other investments Investments 538 187 Other realized capital gains Total 538 187 Change in retirement plan liabilities adjustment Prior-service credit ( 1) - * Actuarial losses ( 31) ( 24) * Total ( 32) ( 24) Total reclassifications for the period $ 506 $ 160 * These Accumulated other comprehensive income components are included in the computation of net periodic pension cost. For additional information see Note 14 to the Condensed Consolidated Financial Statements. |
Preferred Stock | |
Class of Stock [Line Items] | |
Dividends Paid | Dividends Paid Declaration Date Record Date Payment Date Per Preferred Share Per Depositary Share August 3, 2020 August 31, 2020 September 15, 2020 $ 365.625 $ 0.365625 May 4, 2020 May 29, 2020 June 15, 2020 365.625 0.365625 February 12, 2020 February 28, 2020 March 16, 2020 365.625 0.365625 August 7, 2019 August 30, 2019 September 16, 2019 $ 365.625 $ 0.365625 May 21, 2019 May 31, 2019 June 17, 2019 369.6875 0.3696875 |
EARNINGS PER COMMON SHARE (EP_2
EARNINGS PER COMMON SHARE (EPS) (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
EARNINGS PER COMMON SHARE (EPS) | |
Computation of basic and diluted EPS | Three Months Ended Nine Months Ended September 30, September 30, (dollars in millions, except per common share data) 2020 2019 2020 2019 Numerator for EPS: Income (loss) from continuing operations $ 294 $ 973 $ ( 5,817) $ 3,301 Less: Net income from continuing operations attributable to noncontrolling interests 11 317 78 881 Less: Preferred stock dividends 7 8 22 15 Income (loss) attributable to AIG common shareholders from continuing operations 276 648 ( 5,917) 2,405 Income (loss) from discontinued operations, net of income tax expense 5 - 4 ( 1) Net income (loss) attributable to AIG common shareholders $ 281 $ 648 $ ( 5,913) $ 2,404 Denominator for EPS: Weighted average common shares outstanding — basic 867,713,308 877,009,495 869,627,926 876,262,372 Dilutive common shares 5,417,642 18,804,915 - 10,958,744 Weighted average common shares outstanding — diluted (a)(b) 873,130,950 895,814,410 869,627,926 887,221,116 Income (loss) per common share attributable to AIG common shareholders: Basic: Income (loss) from continuing operations $ 0.31 $ 0.74 $ ( 6.80) $ 2.74 Income from discontinued operations $ 0.01 $ - $ - $ - Income (loss) attributable to AIG common shareholders $ 0.32 $ 0.74 $ ( 6.80) $ 2.74 Diluted: Income (loss) from continuing operations $ 0.31 $ 0.72 $ ( 6.80) $ 2.71 Income from discontinued operations $ 0.01 $ - $ - $ - Income (loss) attributable to AIG common shareholders $ 0.32 $ 0.72 $ ( 6.80) $ 2.71 (a) Shares in the diluted EPS calculation represent basic shares for the nine-month period ended September 30, 2020 due to the net loss in that period. The number of common shares excluded from the calculation was 4,432,369 shares for the nine-month period ended September 30, 2020. (b) Dilutive common shares included our share-based employee compensation plans and a weighted average portion of the 10-year warrants issued to AIG shareholders as part of AIG’s recapitalization in January 2011 and expire in January 2021. The number of common shares excluded from diluted shares outstanding was 70.9 million and 68.9 million for the three- and nine-month periods ended September 30, 2020, respectively, and 5.1 million and 24.9 million for the three- and nine-month periods ended September 30, 2019, respectively, because the effect of including those common shares in the calculation would have been anti-dilutive. |
EMPLOYEE BENEFITS (Tables)
EMPLOYEE BENEFITS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Defined Benefit Plan Disclosure [Line Items] | |
Components of net periodic benefit cost | Pension U.S. Non-U.S. (in millions) Plans Plans Total Three Months Ended September 30, 2020 Components of net periodic benefit cost: Service cost $ 1 $ 5 $ 6 Interest cost 33 3 36 Expected return on assets ( 60) ( 5) ( 65) Amortization of prior service cost - 1 1 Amortization of net loss 9 1 10 Net periodic benefit cost (credit) ( 17) 5 ( 12) Settlement charges - - - Net benefit cost (credit) $ ( 17) $ 5 $ ( 12) Three Months Ended September 30, 2019 Components of net periodic benefit cost: Service cost $ 2 $ 6 $ 8 Interest cost 44 3 47 Expected return on assets ( 58) ( 5) ( 63) Amortization of prior service cost - - - Amortization of net loss 9 1 10 Net periodic benefit cost (credit) ( 3) 5 2 Settlement charges - - - Net benefit cost (credit) $ ( 3) $ 5 $ 2 Nine Months Ended September 30, 2020 Components of net periodic benefit cost: Service cost $ 4 $ 15 $ 19 Interest cost 100 8 108 Expected return on assets ( 179) ( 15) ( 194) Amortization of prior service cost - 2 2 Amortization of net loss 25 5 30 Net periodic benefit cost (credit) ( 50) 15 ( 35) Settlement charges - - - Net benefit cost (credit) $ ( 50) $ 15 $ ( 35) Nine Months Ended September 30, 2019 Components of net periodic benefit cost: Service cost $ 7 $ 16 $ 23 Interest cost 131 11 142 Expected return on assets ( 172) ( 16) ( 188) Amortization of prior service cost - 1 1 Amortization of net loss 25 4 29 Net periodic benefit cost (credit) ( 9) 16 7 Settlement credit - ( 3) ( 3) Net benefit cost (credit) $ ( 9) $ 13 $ 4 |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) $ / shares in Units, $ in Millions | Jun. 02, 2020USD ($) | May 26, 2020USD ($) | Sep. 30, 2020USD ($)item$ / shares | Mar. 31, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)item$ / shares | Sep. 30, 2019USD ($) | Dec. 31, 2019$ / shares | Nov. 13, 2018 |
Basis of Presentation [Line Items] | |||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 2.50 | $ 2.50 | $ 2.5 | ||||||
Net income (loss) on sale of divested businesses | $ (24) | $ (9) | $ (8,652) | $ (4) | |||||
American International Group, Inc. | Fortitude Holdings | |||||||||
Basis of Presentation [Line Items] | |||||||||
Percentage of common stock held after closing of transaction | 3.50% | ||||||||
Carlyle FRL | Fortitude Holdings | |||||||||
Basis of Presentation [Line Items] | |||||||||
Voting interest in subsidiary, percent | 51.60% | ||||||||
T&D | Fortitude Holdings | |||||||||
Basis of Presentation [Line Items] | |||||||||
Voting interest in subsidiary, percent | 25.00% | ||||||||
Fortitude Holdings | |||||||||
Basis of Presentation [Line Items] | |||||||||
Total consideration | $ 2,200 | ||||||||
Consideration in cash | 1,800 | ||||||||
Contingent consideration receivable | 95 | 95 | |||||||
Contingent consideration receivable, maximum | 500 | ||||||||
Maximum borrowing capacity | 600 | 600 | |||||||
After tax loss on disposal | (6,700) | ||||||||
Decrease to stockholders' equity related to disposal | 4,300 | ||||||||
AOCI adjustment related to release of shadow adjustments | 2,400 | ||||||||
Write off of prepaid insurance | (2,700) | ||||||||
Gain (loss) on disposal related to mark to market adjustments | (4,000) | ||||||||
Fortitude Holdings | General insurance subsidiaries | |||||||||
Basis of Presentation [Line Items] | |||||||||
Consideration contributed to subsidiaries | 700 | ||||||||
Fortitude Holdings | Life and retirement subsidiaries | |||||||||
Basis of Presentation [Line Items] | |||||||||
Consideration contributed to subsidiaries | 135 | ||||||||
Fortitude Holdings | Legacy life and retirement run-off lines | |||||||||
Basis of Presentation [Line Items] | |||||||||
Cession of reserves | 30,600 | 30,600 | |||||||
Fortitude Holdings | Legacy general insurance run-off lines | |||||||||
Basis of Presentation [Line Items] | |||||||||
Cession of reserves | $ 4,100 | $ 4,100 | |||||||
Fortitude Holdings | TC Group Cayman | |||||||||
Basis of Presentation [Line Items] | |||||||||
Voting interest in subsidiary, percent | 19.90% | 19.90% | 19.90% | ||||||
Contingent consideration receivable | $ 115 | $ 115 | |||||||
Additional contingent consideration receivable | $ 19.9 | 19.9 | |||||||
Contingent consideration received | $ 79.6 | ||||||||
Fortitude Holdings | Carlyle FRL and T&D | |||||||||
Basis of Presentation [Line Items] | |||||||||
Purchase price adjustment | 383 | ||||||||
Blackboard U.S. Holdings, Inc | |||||||||
Basis of Presentation [Line Items] | |||||||||
Net income (loss) on sale of divested businesses | $ (210) | $ (210) | |||||||
Minimum | |||||||||
Basis of Presentation [Line Items] | |||||||||
Number of countries in which the entity operates | item | 80 | 80 | |||||||
Maximum | Fortitude Holdings | |||||||||
Basis of Presentation [Line Items] | |||||||||
Purchase price adjustment | $ 500 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details - Rollforward of allowance for credit losses related to the adoption of the Financial Instruments Credit Losses Standard) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Summary of Significant Accounting Policies [Line Items] | |||||
Securities available for sale, balance, beginning of year | $ 198 | $ 0 | |||
Securities available for sale, purchased credit deteriorated initial allowance and purchases of available for sale debt securities accounted for as PCD assets | 0 | 33 | |||
Securities available for sale, incremental increase (decrease) recognized in income | 81 | 310 | |||
Securities available for sale, write-offs and other changes in the allowance | (43) | (107) | |||
Securities available for sale, balance, end of period | 236 | 236 | |||
Mortgage and other loan receivables, balance, beginning of year | 794 | $ 407 | 438 | $ 397 | |
Mortgage and other loan receivables, incremental increase (decrease) recognized in income | 3 | 25 | 53 | 35 | |
Mortgage and other loans receivable, write-offs and other changes in the allowance | 0 | (2) | (12) | (2) | |
Mortgage and other loan receivables, balance, end of period | 797 | $ 430 | 797 | $ 430 | |
Reinsurance recoverables, balance, beginning of year | 364 | 151 | |||
Reinsurance recoverables, incremental increase (decrease) recognized in income | 0 | 5 | |||
Reinsurance recoverables, write-offs and other changes in allowance | 6 | (10) | |||
Reinsurance recoverables, balance, end of period | 370 | 370 | |||
Premiums and other receivables, balance, beginning of year | 212 | 178 | |||
Premiums and other receivables, incremental increase (decrease) recognized in income | 7 | 9 | |||
Premiums and other receivables, write-offs and other changes in the allowance | (4) | (6) | |||
Premiums and other receivables, balance, end of period | 215 | 215 | |||
Contractual deductible recoverables, balance, beginning of year | 14 | 0 | |||
Contractual deductible recoverables, incremental increase (decrease) recognized in income | 0 | 0 | |||
Contractual deductible recoverables, write-offs and other changes in the allowance | 0 | 0 | |||
Contractual deductible recoverables, balance, end of period | 14 | 14 | |||
Commercial mortgage loan commitments, balance, beginning of year | 58 | 0 | |||
Commercial mortgage loan commitments, incremental increase (decrease) recognized in income | 8 | 14 | |||
Commercial mortgage loan commitments, write-offs and other changes in the allowance | 0 | 1 | |||
Commercial mortgage loan commitments, balance, end of period | 66 | 66 | |||
Total, beginning of year | 1,640 | 767 | |||
Total, incremental increase (decrease) recognized in income | 99 | 391 | |||
Total, write-offs and other changes in the allowance | (41) | (134) | |||
Total, end of period | 1,698 | 1,698 | |||
Retained earnings | (15,838) | (15,838) | $ (23,084) | ||
Cumulative effect of change in accounting principle | |||||
Summary of Significant Accounting Policies [Line Items] | |||||
Securities available for sale, balance, beginning of year | 0 | 0 | |||
Mortgage and other loan receivables, balance, beginning of year | 0 | 318 | |||
Reinsurance recoverables, balance, beginning of year | 0 | 224 | |||
Premiums and other receivables, balance, beginning of year | 0 | 34 | |||
Contractual deductible recoverables, balance, beginning of year | 0 | 14 | |||
Commercial mortgage loan commitments, balance, beginning of year | 0 | 51 | |||
Total, beginning of year | $ 0 | 641 | |||
Secondary impacts to certain long-duration insurance contracts | (27) | ||||
Tax impact | $ (127) | ||||
Retained earnings | $ 487 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details - Narratives) - USD ($) $ in Millions | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Summary of Significant Accounting Policies [Line Items] | |||
Retained earnings | $ 15,838 | $ 23,084 | |
Premiums and other receivables, allowance for credit losses | 215 | $ 212 | 178 |
Goodwill | $ 4,000 | ||
Cumulative effect of change in accounting principle | |||
Summary of Significant Accounting Policies [Line Items] | |||
Retained earnings | (487) | ||
Premiums and other receivables, allowance for credit losses | $ 0 | $ 34 |
SEGMENT INFORMATION (Details -
SEGMENT INFORMATION (Details - Schedule of continuing operations by operating segment) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Total Revenues | $ 10,221 | $ 12,914 | $ 34,060 | $ 37,931 |
Adjusted Pre-tax Income (Loss) | 368 | 1,260 | (6,735) | 4,251 |
AIG Consolidation and Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenues | (148) | (81) | (262) | (257) |
Adjusted Pre-tax Income (Loss) | (136) | (46) | (171) | (172) |
Total AIG Consolidated adjusted revenues and adjusted pre-tax income (loss) | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenues | 10,756 | 12,057 | 33,445 | 36,971 |
Adjusted Pre-tax Income (Loss) | 918 | 746 | 1,893 | 4,270 |
General Insurance | Reportable Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenues | 6,692 | 7,415 | 19,614 | 22,744 |
Adjusted Pre-tax Income (Loss) | 416 | 507 | 1,092 | 2,755 |
General Insurance | Reportable Segments | North America | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenues | 3,417 | 3,878 | 9,908 | 12,001 |
Adjusted Pre-tax Income (Loss) | 399 | 435 | 813 | 2,087 |
General Insurance | Reportable Segments | International | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenues | 3,275 | 3,537 | 9,706 | 10,743 |
Adjusted Pre-tax Income (Loss) | 17 | 72 | 279 | 668 |
Life and Retirement | Reportable Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenues | 3,870 | 3,833 | 12,591 | 11,865 |
Adjusted Pre-tax Income (Loss) | 975 | 646 | 2,430 | 2,619 |
Life and Retirement | Reportable Segments | Individual Retirement | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenues | 1,480 | 1,416 | 4,183 | 4,233 |
Adjusted Pre-tax Income (Loss) | 533 | 387 | 1,389 | 1,483 |
Life and Retirement | Reportable Segments | Group Retirement | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenues | 758 | 726 | 2,164 | 2,225 |
Adjusted Pre-tax Income (Loss) | 338 | 203 | 695 | 728 |
Life and Retirement | Reportable Segments | Life Insurance | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenues | 1,076 | 1,037 | 3,280 | 3,264 |
Adjusted Pre-tax Income (Loss) | 5 | (7) | 51 | 195 |
Life and Retirement | Reportable Segments | Institutional Markets | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenues | 556 | 654 | 2,964 | 2,143 |
Adjusted Pre-tax Income (Loss) | 99 | 63 | 295 | 213 |
Other Operations | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenues | 128 | 139 | 305 | 422 |
Adjusted Pre-tax Income (Loss) | (426) | (454) | (1,436) | (1,256) |
Legacy Portfolio | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenues | 214 | 751 | 1,197 | 2,197 |
Adjusted Pre-tax Income (Loss) | $ 89 | $ 93 | $ (22) | $ 324 |
SEGMENT INFORMATION (Details _2
SEGMENT INFORMATION (Details - Schedule of continuing operations by operating segment, reconciling items) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Reconciling items from adjusted pre-tax income to pre-tax income (loss): | |||||
Changes in fair value of equity securities | $ 596 | $ 350 | $ 524 | $ 1,216 | |
Gains (loss) on extinguishment of debt | 2 | 0 | (15) | (13) | |
Net investment income | 3,800 | 3,408 | 9,674 | 11,032 | |
Net realized capital gains (losses) on embedded derivative | (1,122) | 929 | 65 | 887 | |
Loss from divested businesses | (24) | (9) | (8,652) | (4) | |
Net reserve discount benefit (charge) | 31 | (235) | (41) | (920) | |
Revenues | 10,221 | 12,914 | 34,060 | 37,931 | |
Adjusted Pre-tax Income (Loss) | 368 | 1,260 | (6,735) | 4,251 | |
Excluding Fortitude Re funds withheld assets | |||||
Reconciling items from adjusted pre-tax income to pre-tax income (loss): | |||||
Net investment income | 3,342 | 3,408 | 9,100 | 11,032 | |
Net realized capital gains (losses) on embedded derivative | (498) | 929 | 1,430 | 887 | |
Fortitude Re funds withheld assets | |||||
Reconciling items from adjusted pre-tax income to pre-tax income (loss): | |||||
Net investment income | [1] | 458 | 0 | 574 | 0 |
Net realized capital gains (losses) on embedded derivative | [1] | 32 | 0 | 128 | 0 |
Fortitude Re funds withheld embedded derivative | |||||
Reconciling items from adjusted pre-tax income to pre-tax income (loss): | |||||
Net realized capital gains (losses) on embedded derivative | [1] | (656) | 0 | (1,493) | 0 |
Total Revenues | |||||
Reconciling items from adjusted pre-tax income to pre-tax income (loss): | |||||
Changes in fair values of securities used to hedge guaranteed living benefits | 14 | 25 | 42 | 214 | |
Changes in benefit reserves and DAC, VOBA and SIA related to net realized capital gains (losses) | 0 | 0 | 0 | 0 | |
Changes in fair value of equity securities | 119 | (51) | (16) | 6 | |
Other income (expense) - net | 23 | 16 | 46 | 27 | |
Gains (loss) on extinguishment of debt | 0 | 0 | 0 | 0 | |
Net realized capital gains (losses) | (525) | 867 | 1,328 | 713 | |
Loss from divested businesses | 0 | 0 | 0 | 0 | |
Non-operating litigation reserves and settlements | 0 | 0 | 6 | 0 | |
(Unfavorable) favorable prior year development and related amortization changes ceded under retroactive reinsurance agreements | 0 | 0 | 0 | 0 | |
Net reserve discount benefit (charge) | 0 | 0 | 0 | 0 | |
Integration and transaction costs associated with acquired business | 0 | 0 | 0 | 0 | |
Restructuring and other costs | 0 | 0 | 0 | 0 | |
Non-recurring costs related to regulatory or accounting changes | 0 | 0 | 0 | 0 | |
Total Revenues | Fortitude Re funds withheld assets | |||||
Reconciling items from adjusted pre-tax income to pre-tax income (loss): | |||||
Net investment income | 458 | 0 | 574 | 0 | |
Net realized capital gains (losses) on embedded derivative | 32 | 0 | 128 | 0 | |
Total Revenues | Fortitude Re funds withheld embedded derivative | |||||
Reconciling items from adjusted pre-tax income to pre-tax income (loss): | |||||
Net realized capital gains (losses) on embedded derivative | (656) | 0 | (1,493) | 0 | |
Adjusted Pre-tax Income (Loss) | |||||
Reconciling items from adjusted pre-tax income to pre-tax income (loss): | |||||
Changes in fair values of securities used to hedge guaranteed living benefits | 15 | 12 | 24 | 183 | |
Changes in benefit reserves and DAC, VOBA and SIA related to net realized capital gains (losses) | 78 | (65) | (205) | (39) | |
Changes in fair value of equity securities | 119 | (51) | (16) | 6 | |
Other income (expense) - net | 0 | 0 | 0 | 0 | |
Gains (loss) on extinguishment of debt | 2 | 0 | (15) | (13) | |
Net realized capital gains (losses) | (514) | 881 | 1,369 | 758 | |
Loss from divested businesses | (24) | (9) | (8,652) | (4) | |
Non-operating litigation reserves and settlements | (1) | (5) | 5 | (6) | |
(Unfavorable) favorable prior year development and related amortization changes ceded under retroactive reinsurance agreements | 30 | 59 | 71 | 211 | |
Net reserve discount benefit (charge) | 31 | (235) | (41) | (920) | |
Integration and transaction costs associated with acquired business | (1) | (3) | (7) | (16) | |
Restructuring and other costs | (100) | (67) | (324) | (174) | |
Non-recurring costs related to regulatory or accounting changes | (19) | (3) | (46) | (5) | |
Adjusted Pre-tax Income (Loss) | Fortitude Re funds withheld assets | |||||
Reconciling items from adjusted pre-tax income to pre-tax income (loss): | |||||
Net investment income | 458 | 0 | 574 | 0 | |
Net realized capital gains (losses) on embedded derivative | 32 | 0 | 128 | 0 | |
Adjusted Pre-tax Income (Loss) | Fortitude Re funds withheld embedded derivative | |||||
Reconciling items from adjusted pre-tax income to pre-tax income (loss): | |||||
Net realized capital gains (losses) on embedded derivative | $ (656) | $ 0 | $ (1,493) | $ 0 | |
[1] | Represents activity subsequent to the deconsolidation of Fortitude Re on June 2, 2020. |
SEGMENT INFORMATION (Details _3
SEGMENT INFORMATION (Details - Narrative) | 9 Months Ended |
Sep. 30, 2020segment | |
General Insurance | |
Segment Reporting Information [Line Items] | |
Number of operating segments | 2 |
Life and Retirement | |
Segment Reporting Information [Line Items] | |
Number of operating segments | 4 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details - Assets and Liabilities Measured at Fair Value on a Recurring Basis) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value, Assets Measured on Recurring Basis | ||
Bonds available for sale | $ 265,965 | $ 251,086 |
Other bond securities | 5,415 | 6,682 |
Equity securities | 871 | 841 |
Other invested assets | 7,064 | 6,827 |
Derivative Assets, Fair Value, Gross | 7,613 | 5,026 |
Derivative assets, Counterparty netting | (3,695) | (2,427) |
Derivative assets, Cash collateral | (3,129) | (1,806) |
Derivative assets | 789 | 793 |
Short-term investments | 7,214 | 5,343 |
Other assets | 901 | 3,151 |
Separate account assets, at fair value | 92,036 | 93,272 |
Fair Value, Liabilities Measured on Recurring Basis | ||
Policyholder contract deposits, portion measured at fair value | 9,322 | 6,910 |
Other policyholder funds | 3,571 | 3,428 |
Derivative Liabilities, Fair Value, Gross | 5,355 | 4,009 |
Derivative liabilities, Counterparty netting | (3,695) | (2,427) |
Derivative liabilities, Cash collateral | (1,060) | (527) |
Derivative liabilities | 600 | 1,055 |
Fortitude Re funds withheld payable | 42,543 | 0 |
Other liabilities | 600 | 1,100 |
Long-term debt | 2,169 | 2,062 |
Fair Value Using Net Asset Value Per Share or its equivalent | 5,387 | 5,549 |
Level 1 | ||
Fair Value, Liabilities Measured on Recurring Basis | ||
Fortitude Re funds withheld payable | 0 | |
Level 2 | ||
Fair Value, Liabilities Measured on Recurring Basis | ||
Fortitude Re funds withheld payable | 0 | |
Level 3 | ||
Fair Value, Liabilities Measured on Recurring Basis | ||
Fortitude Re funds withheld payable | 37,407 | |
Recurring Basis | ||
Fair Value, Assets Measured on Recurring Basis | ||
Bonds available for sale | 265,965 | 251,086 |
Other bond securities | 5,415 | 6,682 |
Equity securities | 871 | 841 |
Other invested assets | 1,677 | 1,278 |
Derivative assets, Counterparty netting | (3,695) | (2,427) |
Derivative assets, Cash collateral | (3,129) | (1,806) |
Derivative assets, Counterparty netting and cash collateral | (6,824) | (4,233) |
Derivative assets | 789 | 793 |
Short-term investments | 7,214 | 5,343 |
Other assets | 112 | 2,358 |
Separate account assets, at fair value | 92,036 | 93,272 |
Fair value assets measured on recurring basis, total | 374,079 | 361,653 |
Fair Value, Liabilities Measured on Recurring Basis | ||
Policyholder contract deposits, portion measured at fair value | 9,322 | 6,910 |
Derivative liabilities, Counterparty netting | (3,695) | (2,427) |
Derivative liabilities, Cash collateral | (1,060) | (527) |
Derivative liabilities, Counterparty netting and cash collateral | (4,755) | (2,954) |
Derivative liabilities | 600 | 1,055 |
Fortitude Re funds withheld payable | 5,136 | |
Other liabilities | 0 | 45 |
Long-term debt | 2,169 | 2,062 |
Fair value liabilities measured on recurring basis, total | 17,227 | 10,072 |
Recurring Basis | Interest rate contracts | ||
Fair Value, Assets Measured on Recurring Basis | ||
Derivative Assets, Fair Value, Gross | 5,054 | 3,200 |
Fair Value, Liabilities Measured on Recurring Basis | ||
Derivative Liabilities, Fair Value, Gross | 4,559 | 2,749 |
Recurring Basis | Foreign exchange contracts | ||
Fair Value, Assets Measured on Recurring Basis | ||
Derivative Assets, Fair Value, Gross | 1,588 | 1,040 |
Fair Value, Liabilities Measured on Recurring Basis | ||
Derivative Liabilities, Fair Value, Gross | 619 | 1,025 |
Recurring Basis | Equity contracts | ||
Fair Value, Assets Measured on Recurring Basis | ||
Derivative Assets, Fair Value, Gross | 957 | 769 |
Fair Value, Liabilities Measured on Recurring Basis | ||
Derivative Liabilities, Fair Value, Gross | 101 | 139 |
Recurring Basis | Credit contracts | ||
Fair Value, Assets Measured on Recurring Basis | ||
Derivative Assets, Fair Value, Gross | 1 | 3 |
Fair Value, Liabilities Measured on Recurring Basis | ||
Derivative Liabilities, Fair Value, Gross | 69 | 89 |
Recurring Basis | Other contracts | ||
Fair Value, Assets Measured on Recurring Basis | ||
Derivative Assets, Fair Value, Gross | 13 | 14 |
Fair Value, Liabilities Measured on Recurring Basis | ||
Derivative Liabilities, Fair Value, Gross | 7 | 7 |
Recurring Basis | U.S. government and government sponsored entities | ||
Fair Value, Assets Measured on Recurring Basis | ||
Bonds available for sale | 5,135 | 5,380 |
Other bond securities | 1,870 | 2,121 |
Recurring Basis | Obligations of states, municipalities and political subdivisions | ||
Fair Value, Assets Measured on Recurring Basis | ||
Bonds available for sale | 16,173 | 15,318 |
Recurring Basis | Non-U.S. governments | ||
Fair Value, Assets Measured on Recurring Basis | ||
Bonds available for sale | 15,174 | 14,869 |
Other bond securities | 0 | 0 |
Recurring Basis | Corporate debt | ||
Fair Value, Assets Measured on Recurring Basis | ||
Bonds available for sale | 162,106 | 149,636 |
Other bond securities | 12 | 18 |
Recurring Basis | Residential mortgage-backed securities (RMBS) | ||
Fair Value, Assets Measured on Recurring Basis | ||
Bonds available for sale | 33,414 | 32,805 |
Other bond securities | 488 | 489 |
Recurring Basis | Commercial mortgage-backed securities (CMBS) | ||
Fair Value, Assets Measured on Recurring Basis | ||
Bonds available for sale | 15,777 | 14,430 |
Other bond securities | 322 | 322 |
Recurring Basis | Collateralized Debt Obligations/Asset Backed Securities (CDO/ABS) | ||
Fair Value, Assets Measured on Recurring Basis | ||
Bonds available for sale | 18,186 | 18,648 |
Other bond securities | 2,723 | 3,732 |
Recurring Basis | Level 1 | ||
Fair Value, Assets Measured on Recurring Basis | ||
Bonds available for sale | 74 | 195 |
Other bond securities | 0 | 0 |
Equity securities | 827 | 756 |
Other invested assets | 0 | 0 |
Derivative Assets, Fair Value, Gross | 9 | 6 |
Short-term investments | 3,195 | 2,299 |
Other assets | 0 | 57 |
Separate account assets, at fair value | 88,023 | 89,069 |
Fair value assets measured on recurring basis, total | 92,128 | 92,382 |
Fair Value, Liabilities Measured on Recurring Basis | ||
Policyholder contract deposits, portion measured at fair value | 0 | 0 |
Derivative Liabilities, Fair Value, Gross | 12 | 12 |
Fortitude Re funds withheld payable | 0 | |
Other liabilities | 0 | 0 |
Long-term debt | 0 | 0 |
Fair value liabilities measured on recurring basis, total | 12 | 12 |
Recurring Basis | Level 1 | Interest rate contracts | ||
Fair Value, Assets Measured on Recurring Basis | ||
Derivative Assets, Fair Value, Gross | 3 | 1 |
Fair Value, Liabilities Measured on Recurring Basis | ||
Derivative Liabilities, Fair Value, Gross | 0 | 4 |
Recurring Basis | Level 1 | Foreign exchange contracts | ||
Fair Value, Assets Measured on Recurring Basis | ||
Derivative Assets, Fair Value, Gross | 0 | 0 |
Fair Value, Liabilities Measured on Recurring Basis | ||
Derivative Liabilities, Fair Value, Gross | 0 | 0 |
Recurring Basis | Level 1 | Equity contracts | ||
Fair Value, Assets Measured on Recurring Basis | ||
Derivative Assets, Fair Value, Gross | 6 | 5 |
Fair Value, Liabilities Measured on Recurring Basis | ||
Derivative Liabilities, Fair Value, Gross | 12 | 8 |
Recurring Basis | Level 1 | Credit contracts | ||
Fair Value, Assets Measured on Recurring Basis | ||
Derivative Assets, Fair Value, Gross | 0 | 0 |
Fair Value, Liabilities Measured on Recurring Basis | ||
Derivative Liabilities, Fair Value, Gross | 0 | 0 |
Recurring Basis | Level 1 | Other contracts | ||
Fair Value, Assets Measured on Recurring Basis | ||
Derivative Assets, Fair Value, Gross | 0 | 0 |
Fair Value, Liabilities Measured on Recurring Basis | ||
Derivative Liabilities, Fair Value, Gross | 0 | 0 |
Recurring Basis | Level 1 | U.S. government and government sponsored entities | ||
Fair Value, Assets Measured on Recurring Basis | ||
Bonds available for sale | 33 | 135 |
Other bond securities | 0 | 0 |
Recurring Basis | Level 1 | Obligations of states, municipalities and political subdivisions | ||
Fair Value, Assets Measured on Recurring Basis | ||
Bonds available for sale | 0 | 0 |
Recurring Basis | Level 1 | Non-U.S. governments | ||
Fair Value, Assets Measured on Recurring Basis | ||
Bonds available for sale | 41 | 60 |
Other bond securities | 0 | 0 |
Recurring Basis | Level 1 | Corporate debt | ||
Fair Value, Assets Measured on Recurring Basis | ||
Bonds available for sale | 0 | 0 |
Other bond securities | 0 | 0 |
Recurring Basis | Level 1 | Residential mortgage-backed securities (RMBS) | ||
Fair Value, Assets Measured on Recurring Basis | ||
Bonds available for sale | 0 | 0 |
Other bond securities | 0 | 0 |
Recurring Basis | Level 1 | Commercial mortgage-backed securities (CMBS) | ||
Fair Value, Assets Measured on Recurring Basis | ||
Bonds available for sale | 0 | 0 |
Other bond securities | 0 | 0 |
Recurring Basis | Level 1 | Collateralized Debt Obligations/Asset Backed Securities (CDO/ABS) | ||
Fair Value, Assets Measured on Recurring Basis | ||
Bonds available for sale | 0 | 0 |
Other bond securities | 0 | 0 |
Recurring Basis | Level 2 | ||
Fair Value, Assets Measured on Recurring Basis | ||
Bonds available for sale | 238,597 | 224,960 |
Other bond securities | 2,644 | 2,944 |
Equity securities | 18 | 77 |
Other invested assets | 94 | 86 |
Derivative Assets, Fair Value, Gross | 7,477 | 4,826 |
Short-term investments | 4,019 | 3,044 |
Other assets | 0 | 2,212 |
Separate account assets, at fair value | 4,013 | 4,203 |
Fair value assets measured on recurring basis, total | 256,862 | 242,352 |
Fair Value, Liabilities Measured on Recurring Basis | ||
Policyholder contract deposits, portion measured at fair value | 0 | 0 |
Derivative Liabilities, Fair Value, Gross | 5,286 | 3,905 |
Fortitude Re funds withheld payable | 0 | |
Other liabilities | 0 | 45 |
Long-term debt | 2,169 | 2,062 |
Fair value liabilities measured on recurring basis, total | 7,455 | 6,012 |
Recurring Basis | Level 2 | Interest rate contracts | ||
Fair Value, Assets Measured on Recurring Basis | ||
Derivative Assets, Fair Value, Gross | 5,051 | 3,199 |
Fair Value, Liabilities Measured on Recurring Basis | ||
Derivative Liabilities, Fair Value, Gross | 4,559 | 2,745 |
Recurring Basis | Level 2 | Foreign exchange contracts | ||
Fair Value, Assets Measured on Recurring Basis | ||
Derivative Assets, Fair Value, Gross | 1,585 | 1,034 |
Fair Value, Liabilities Measured on Recurring Basis | ||
Derivative Liabilities, Fair Value, Gross | 619 | 1,025 |
Recurring Basis | Level 2 | Equity contracts | ||
Fair Value, Assets Measured on Recurring Basis | ||
Derivative Assets, Fair Value, Gross | 841 | 593 |
Fair Value, Liabilities Measured on Recurring Basis | ||
Derivative Liabilities, Fair Value, Gross | 84 | 111 |
Recurring Basis | Level 2 | Credit contracts | ||
Fair Value, Assets Measured on Recurring Basis | ||
Derivative Assets, Fair Value, Gross | 0 | 0 |
Fair Value, Liabilities Measured on Recurring Basis | ||
Derivative Liabilities, Fair Value, Gross | 24 | 24 |
Recurring Basis | Level 2 | Other contracts | ||
Fair Value, Assets Measured on Recurring Basis | ||
Derivative Assets, Fair Value, Gross | 0 | 0 |
Fair Value, Liabilities Measured on Recurring Basis | ||
Derivative Liabilities, Fair Value, Gross | 0 | 0 |
Recurring Basis | Level 2 | U.S. government and government sponsored entities | ||
Fair Value, Assets Measured on Recurring Basis | ||
Bonds available for sale | 5,102 | 5,245 |
Other bond securities | 1,870 | 2,121 |
Recurring Basis | Level 2 | Obligations of states, municipalities and political subdivisions | ||
Fair Value, Assets Measured on Recurring Basis | ||
Bonds available for sale | 13,990 | 13,197 |
Recurring Basis | Level 2 | Non-U.S. governments | ||
Fair Value, Assets Measured on Recurring Basis | ||
Bonds available for sale | 15,126 | 14,809 |
Other bond securities | 0 | 0 |
Recurring Basis | Level 2 | Corporate debt | ||
Fair Value, Assets Measured on Recurring Basis | ||
Bonds available for sale | 159,991 | 147,973 |
Other bond securities | 12 | 18 |
Recurring Basis | Level 2 | Residential mortgage-backed securities (RMBS) | ||
Fair Value, Assets Measured on Recurring Basis | ||
Bonds available for sale | 20,759 | 19,397 |
Other bond securities | 320 | 346 |
Recurring Basis | Level 2 | Commercial mortgage-backed securities (CMBS) | ||
Fair Value, Assets Measured on Recurring Basis | ||
Bonds available for sale | 14,796 | 13,377 |
Other bond securities | 274 | 272 |
Recurring Basis | Level 2 | Collateralized Debt Obligations/Asset Backed Securities (CDO/ABS) | ||
Fair Value, Assets Measured on Recurring Basis | ||
Bonds available for sale | 8,833 | 10,962 |
Other bond securities | 168 | 187 |
Recurring Basis | Level 3 | ||
Fair Value, Assets Measured on Recurring Basis | ||
Bonds available for sale | 27,294 | 25,931 |
Other bond securities | 2,771 | 3,738 |
Equity securities | 26 | 8 |
Other invested assets | 1,583 | 1,192 |
Derivative Assets, Fair Value, Gross | 127 | 194 |
Short-term investments | 0 | 0 |
Other assets | 112 | 89 |
Separate account assets, at fair value | 0 | 0 |
Fair value assets measured on recurring basis, total | 31,913 | 31,152 |
Fair Value, Liabilities Measured on Recurring Basis | ||
Policyholder contract deposits, portion measured at fair value | 9,322 | 6,910 |
Derivative Liabilities, Fair Value, Gross | 57 | 92 |
Fortitude Re funds withheld payable | 5,136 | |
Other liabilities | 0 | 0 |
Long-term debt | 0 | 0 |
Fair value liabilities measured on recurring basis, total | 14,515 | 7,002 |
Recurring Basis | Level 3 | Interest rate contracts | ||
Fair Value, Assets Measured on Recurring Basis | ||
Derivative Assets, Fair Value, Gross | 0 | 0 |
Fair Value, Liabilities Measured on Recurring Basis | ||
Derivative Liabilities, Fair Value, Gross | 0 | 0 |
Recurring Basis | Level 3 | Foreign exchange contracts | ||
Fair Value, Assets Measured on Recurring Basis | ||
Derivative Assets, Fair Value, Gross | 3 | 6 |
Fair Value, Liabilities Measured on Recurring Basis | ||
Derivative Liabilities, Fair Value, Gross | 0 | 0 |
Recurring Basis | Level 3 | Equity contracts | ||
Fair Value, Assets Measured on Recurring Basis | ||
Derivative Assets, Fair Value, Gross | 110 | 171 |
Fair Value, Liabilities Measured on Recurring Basis | ||
Derivative Liabilities, Fair Value, Gross | 5 | 20 |
Recurring Basis | Level 3 | Credit contracts | ||
Fair Value, Assets Measured on Recurring Basis | ||
Derivative Assets, Fair Value, Gross | 1 | 3 |
Fair Value, Liabilities Measured on Recurring Basis | ||
Derivative Liabilities, Fair Value, Gross | 45 | 65 |
Recurring Basis | Level 3 | Other contracts | ||
Fair Value, Assets Measured on Recurring Basis | ||
Derivative Assets, Fair Value, Gross | 13 | 14 |
Fair Value, Liabilities Measured on Recurring Basis | ||
Derivative Liabilities, Fair Value, Gross | 7 | 7 |
Recurring Basis | Level 3 | U.S. government and government sponsored entities | ||
Fair Value, Assets Measured on Recurring Basis | ||
Bonds available for sale | 0 | 0 |
Other bond securities | 0 | 0 |
Recurring Basis | Level 3 | Obligations of states, municipalities and political subdivisions | ||
Fair Value, Assets Measured on Recurring Basis | ||
Bonds available for sale | 2,183 | 2,121 |
Recurring Basis | Level 3 | Non-U.S. governments | ||
Fair Value, Assets Measured on Recurring Basis | ||
Bonds available for sale | 7 | 0 |
Other bond securities | 0 | 0 |
Recurring Basis | Level 3 | Corporate debt | ||
Fair Value, Assets Measured on Recurring Basis | ||
Bonds available for sale | 2,115 | 1,663 |
Other bond securities | 0 | 0 |
Recurring Basis | Level 3 | Residential mortgage-backed securities (RMBS) | ||
Fair Value, Assets Measured on Recurring Basis | ||
Bonds available for sale | 12,655 | 13,408 |
Other bond securities | 168 | 143 |
Recurring Basis | Level 3 | Commercial mortgage-backed securities (CMBS) | ||
Fair Value, Assets Measured on Recurring Basis | ||
Bonds available for sale | 981 | 1,053 |
Other bond securities | 48 | 50 |
Recurring Basis | Level 3 | Collateralized Debt Obligations/Asset Backed Securities (CDO/ABS) | ||
Fair Value, Assets Measured on Recurring Basis | ||
Bonds available for sale | 9,353 | 7,686 |
Other bond securities | $ 2,555 | $ 3,545 |
FAIR VALUE MEASUREMENTS (Deta_2
FAIR VALUE MEASUREMENTS (Details - Changes in Level 3 Recurring Fair Value Measurements) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Fair value assets and liabilities measured on recurring basis, unobservable input reconciliation calculation | ||||
Fair Value Beginning of Period, assets | $ 31,858 | $ 33,782 | $ 30,958 | $ 33,610 |
Net Realized and Unrealized Gains (Losses) Included in Income, assets | 385 | 271 | 729 | 988 |
Other Comprehensive Income (Loss), assets | 566 | 201 | (10) | 843 |
Purchases, Sales, Issuances and Settlements, Net, assets | (740) | (1,373) | (1,485) | (2,724) |
Gross Transfers In, assets | 588 | 142 | 3,405 | 1,441 |
Gross Transfers Out, assets | (870) | (608) | (1,773) | (1,743) |
Divested Businesses | (1) | 0 | (38) | 0 |
Fair Value End of Period, assets | 31,786 | 32,415 | 31,786 | 32,415 |
Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period, assets | 40 | 32 | 15 | 142 |
Changes in Unrealized Gains (Losses) Included in Other Comprehensive Income (Loss) for Recurring Level 3 Instruments Held at End of Period, assets | 572 | 143 | ||
Liabilities | ||||
Fair value assets and liabilities measured on recurring basis, unobservable input reconciliation calculation | ||||
Fair Value Beginning of Period, liabilities | 13,731 | 6,130 | 6,808 | 4,269 |
Net realized and unrealized gains (losses) included in income, liabilities | 664 | 835 | 3,658 | 2,287 |
Other Comprehensive Income (Loss), liabilities | 0 | 0 | 0 | 0 |
Purchases, Sales, Issuances and Settlements, Net, liabilities | (11) | 194 | 245 | 603 |
Gross Transfers In, liabilities | (1) | 0 | (1) | 0 |
Gross Transfers Out, liabilities | 5 | 0 | 5 | 0 |
Divested Businesses | 0 | 0 | 3,673 | 0 |
Fair Value End of Year, liabilities | 14,388 | 7,159 | 14,388 | 7,159 |
Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period, liabilities | 30 | (675) | (2,361) | (1,961) |
Changes in Unrealized Gains (Losses) Included in Other Comprehensive Income (Loss) for Recurring Level 3 Instruments Held at End of Period, liabilities | 0 | 0 | ||
Policyholder contract deposits | ||||
Fair value assets and liabilities measured on recurring basis, unobservable input reconciliation calculation | ||||
Fair Value Beginning of Period, liabilities | 9,233 | 6,065 | 6,910 | 4,116 |
Net realized and unrealized gains (losses) included in income, liabilities | 19 | 861 | 2,250 | 2,400 |
Other Comprehensive Income (Loss), liabilities | 0 | 0 | 0 | 0 |
Purchases, Sales, Issuances and Settlements, Net, liabilities | 70 | 240 | 162 | 650 |
Gross Transfers In, liabilities | 0 | 0 | 0 | 0 |
Gross Transfers Out, liabilities | 0 | 0 | 0 | 0 |
Divested Businesses | 0 | 0 | 0 | 0 |
Fair Value End of Year, liabilities | 9,322 | 7,166 | 9,322 | 7,166 |
Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period, liabilities | 273 | (691) | (1,436) | (2,044) |
Changes in Unrealized Gains (Losses) Included in Other Comprehensive Income (Loss) for Recurring Level 3 Instruments Held at End of Period, liabilities | 0 | 0 | ||
Derivative liabilities, net | ||||
Fair value assets and liabilities measured on recurring basis, unobservable input reconciliation calculation | ||||
Fair Value Beginning of Period, liabilities | (12) | 65 | (102) | 153 |
Net realized and unrealized gains (losses) included in income, liabilities | (11) | (26) | (85) | (113) |
Other Comprehensive Income (Loss), liabilities | 0 | 0 | 0 | 0 |
Purchases, Sales, Issuances and Settlements, Net, liabilities | (51) | (46) | 113 | (47) |
Gross Transfers In, liabilities | (1) | 0 | (1) | 0 |
Gross Transfers Out, liabilities | 5 | 0 | 5 | 0 |
Divested Businesses | 0 | 0 | 0 | 0 |
Fair Value End of Year, liabilities | (70) | (7) | (70) | (7) |
Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period, liabilities | 13 | 16 | (6) | 83 |
Changes in Unrealized Gains (Losses) Included in Other Comprehensive Income (Loss) for Recurring Level 3 Instruments Held at End of Period, liabilities | 0 | 0 | ||
Interest rate contracts | ||||
Fair value assets and liabilities measured on recurring basis, unobservable input reconciliation calculation | ||||
Fair Value Beginning of Period, liabilities | 0 | 16 | 0 | 15 |
Net realized and unrealized gains (losses) included in income, liabilities | 0 | (3) | (1) | 0 |
Other Comprehensive Income (Loss), liabilities | 0 | 0 | 0 | 0 |
Purchases, Sales, Issuances and Settlements, Net, liabilities | 0 | (13) | 1 | (15) |
Gross Transfers In, liabilities | 0 | 0 | 0 | 0 |
Gross Transfers Out, liabilities | 0 | 0 | 0 | 0 |
Divested Businesses | 0 | 0 | 0 | 0 |
Fair Value End of Year, liabilities | 0 | 0 | 0 | 0 |
Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period, liabilities | 0 | 0 | 1 | 1 |
Changes in Unrealized Gains (Losses) Included in Other Comprehensive Income (Loss) for Recurring Level 3 Instruments Held at End of Period, liabilities | 0 | 0 | ||
Foreign exchange contracts | ||||
Fair value assets and liabilities measured on recurring basis, unobservable input reconciliation calculation | ||||
Fair Value Beginning of Period, liabilities | (1) | (4) | (6) | (5) |
Net realized and unrealized gains (losses) included in income, liabilities | (2) | 6 | 2 | (4) |
Other Comprehensive Income (Loss), liabilities | 0 | 0 | 0 | 0 |
Purchases, Sales, Issuances and Settlements, Net, liabilities | 0 | (3) | 1 | 8 |
Gross Transfers In, liabilities | 0 | 0 | 0 | 0 |
Gross Transfers Out, liabilities | 0 | 0 | 0 | 0 |
Divested Businesses | 0 | 0 | 0 | 0 |
Fair Value End of Year, liabilities | (3) | (1) | (3) | (1) |
Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period, liabilities | 2 | 0 | 2 | 0 |
Changes in Unrealized Gains (Losses) Included in Other Comprehensive Income (Loss) for Recurring Level 3 Instruments Held at End of Period, liabilities | 0 | 0 | ||
Equity contracts | ||||
Fair value assets and liabilities measured on recurring basis, unobservable input reconciliation calculation | ||||
Fair Value Beginning of Period, liabilities | (53) | (113) | (151) | (75) |
Net realized and unrealized gains (losses) included in income, liabilities | 9 | 12 | 19 | (8) |
Other Comprehensive Income (Loss), liabilities | 0 | 0 | 0 | 0 |
Purchases, Sales, Issuances and Settlements, Net, liabilities | (65) | 0 | 23 | (18) |
Gross Transfers In, liabilities | (1) | 0 | (1) | 0 |
Gross Transfers Out, liabilities | 5 | 0 | 5 | 0 |
Divested Businesses | 0 | 0 | 0 | 0 |
Fair Value End of Year, liabilities | (105) | (101) | (105) | (101) |
Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period, liabilities | 0 | (13) | (62) | 19 |
Changes in Unrealized Gains (Losses) Included in Other Comprehensive Income (Loss) for Recurring Level 3 Instruments Held at End of Period, liabilities | 0 | 0 | ||
Credit contracts | ||||
Fair value assets and liabilities measured on recurring basis, unobservable input reconciliation calculation | ||||
Fair Value Beginning of Period, liabilities | 45 | 173 | 62 | 227 |
Net realized and unrealized gains (losses) included in income, liabilities | 1 | (24) | (59) | (51) |
Other Comprehensive Income (Loss), liabilities | 0 | 0 | 0 | 0 |
Purchases, Sales, Issuances and Settlements, Net, liabilities | (2) | (47) | 41 | (74) |
Gross Transfers In, liabilities | 0 | 0 | 0 | 0 |
Gross Transfers Out, liabilities | 0 | 0 | 0 | 0 |
Divested Businesses | 0 | 0 | 0 | 0 |
Fair Value End of Year, liabilities | 44 | 102 | 44 | 102 |
Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period, liabilities | (7) | 14 | 8 | 13 |
Changes in Unrealized Gains (Losses) Included in Other Comprehensive Income (Loss) for Recurring Level 3 Instruments Held at End of Period, liabilities | 0 | 0 | ||
Other contracts | ||||
Fair value assets and liabilities measured on recurring basis, unobservable input reconciliation calculation | ||||
Fair Value Beginning of Period, liabilities | (3) | (7) | (7) | (9) |
Net realized and unrealized gains (losses) included in income, liabilities | (19) | (17) | (46) | (50) |
Other Comprehensive Income (Loss), liabilities | 0 | 0 | 0 | 0 |
Purchases, Sales, Issuances and Settlements, Net, liabilities | 16 | 17 | 47 | 52 |
Gross Transfers In, liabilities | 0 | 0 | 0 | 0 |
Gross Transfers Out, liabilities | 0 | 0 | 0 | 0 |
Divested Businesses | 0 | 0 | 0 | 0 |
Fair Value End of Year, liabilities | (6) | (7) | (6) | (7) |
Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period, liabilities | 18 | 15 | 45 | 50 |
Changes in Unrealized Gains (Losses) Included in Other Comprehensive Income (Loss) for Recurring Level 3 Instruments Held at End of Period, liabilities | 0 | 0 | ||
Fortitude Re funds withheld payable | ||||
Fair value assets and liabilities measured on recurring basis, unobservable input reconciliation calculation | ||||
Fair Value Beginning of Period, liabilities | 4,510 | 0 | ||
Net realized and unrealized gains (losses) included in income, liabilities | 656 | 1,493 | ||
Other Comprehensive Income (Loss), liabilities | 0 | 0 | ||
Purchases, Sales, Issuances and Settlements, Net, liabilities | (30) | (30) | ||
Gross Transfers In, liabilities | 0 | 0 | ||
Gross Transfers Out, liabilities | 0 | 0 | ||
Divested Businesses | 0 | 3,673 | ||
Fair Value End of Year, liabilities | 5,136 | 5,136 | ||
Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period, liabilities | (256) | (919) | ||
Changes in Unrealized Gains (Losses) Included in Other Comprehensive Income (Loss) for Recurring Level 3 Instruments Held at End of Period, liabilities | 0 | 0 | ||
Other liabilities | ||||
Fair value assets and liabilities measured on recurring basis, unobservable input reconciliation calculation | ||||
Purchases, Sales, Issuances and Settlements, Net, liabilities | 0 | 0 | ||
Bonds available for sale | ||||
Fair value assets and liabilities measured on recurring basis, unobservable input reconciliation calculation | ||||
Fair Value Beginning of Period, assets | 27,472 | 28,013 | 25,931 | 27,093 |
Net Realized and Unrealized Gains (Losses) Included in Income, assets | 170 | 140 | 478 | 591 |
Other Comprehensive Income (Loss), assets | 566 | 201 | (11) | 842 |
Purchases, Sales, Issuances and Settlements, Net, assets | (652) | (946) | (581) | (1,390) |
Gross Transfers In, assets | 581 | 140 | 3,222 | 1,439 |
Gross Transfers Out, assets | (843) | (604) | (1,745) | (1,631) |
Divested Businesses | 0 | 0 | 0 | 0 |
Fair Value End of Period, assets | 27,294 | 26,944 | 27,294 | 26,944 |
Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period, assets | 0 | 0 | 0 | 0 |
Changes in Unrealized Gains (Losses) Included in Other Comprehensive Income (Loss) for Recurring Level 3 Instruments Held at End of Period, assets | 572 | 143 | ||
Bonds available for sale | Obligations of states, municipalities and political subdivisions | ||||
Fair value assets and liabilities measured on recurring basis, unobservable input reconciliation calculation | ||||
Fair Value Beginning of Period, assets | 2,279 | 2,162 | 2,121 | 2,000 |
Net Realized and Unrealized Gains (Losses) Included in Income, assets | 3 | (1) | 8 | (2) |
Other Comprehensive Income (Loss), assets | (4) | 119 | 195 | 321 |
Purchases, Sales, Issuances and Settlements, Net, assets | (30) | 92 | 127 | 178 |
Gross Transfers In, assets | 0 | 0 | 27 | 35 |
Gross Transfers Out, assets | (65) | (265) | (295) | (425) |
Divested Businesses | 0 | 0 | 0 | 0 |
Fair Value End of Period, assets | 2,183 | 2,107 | 2,183 | 2,107 |
Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period, assets | 0 | 0 | 0 | 0 |
Changes in Unrealized Gains (Losses) Included in Other Comprehensive Income (Loss) for Recurring Level 3 Instruments Held at End of Period, assets | 0 | 193 | ||
Bonds available for sale | Non-U.S. governments | ||||
Fair value assets and liabilities measured on recurring basis, unobservable input reconciliation calculation | ||||
Fair Value Beginning of Period, assets | 5 | 2 | 0 | 11 |
Net Realized and Unrealized Gains (Losses) Included in Income, assets | 0 | 6 | 0 | 5 |
Other Comprehensive Income (Loss), assets | 1 | 0 | 1 | 0 |
Purchases, Sales, Issuances and Settlements, Net, assets | 0 | 0 | 5 | (4) |
Gross Transfers In, assets | 1 | 5 | 7 | 5 |
Gross Transfers Out, assets | 0 | 0 | (6) | (4) |
Divested Businesses | 0 | 0 | 0 | 0 |
Fair Value End of Period, assets | 7 | 13 | 7 | 13 |
Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period, assets | 0 | 0 | 0 | 0 |
Changes in Unrealized Gains (Losses) Included in Other Comprehensive Income (Loss) for Recurring Level 3 Instruments Held at End of Period, assets | 0 | 0 | ||
Bonds available for sale | Corporate debt | ||||
Fair value assets and liabilities measured on recurring basis, unobservable input reconciliation calculation | ||||
Fair Value Beginning of Period, assets | 1,900 | 1,821 | 1,663 | 864 |
Net Realized and Unrealized Gains (Losses) Included in Income, assets | (33) | (36) | (101) | (10) |
Other Comprehensive Income (Loss), assets | 52 | (2) | 43 | 79 |
Purchases, Sales, Issuances and Settlements, Net, assets | (25) | (535) | 95 | (600) |
Gross Transfers In, assets | 452 | 112 | 1,074 | 1,155 |
Gross Transfers Out, assets | (231) | (85) | (659) | (213) |
Divested Businesses | 0 | 0 | 0 | 0 |
Fair Value End of Period, assets | 2,115 | 1,275 | 2,115 | 1,275 |
Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period, assets | 0 | 0 | 0 | 0 |
Changes in Unrealized Gains (Losses) Included in Other Comprehensive Income (Loss) for Recurring Level 3 Instruments Held at End of Period, assets | 38 | 59 | ||
Bonds available for sale | Residential mortgage-backed securities (RMBS) | ||||
Fair value assets and liabilities measured on recurring basis, unobservable input reconciliation calculation | ||||
Fair Value Beginning of Period, assets | 12,678 | 13,863 | 13,408 | 14,199 |
Net Realized and Unrealized Gains (Losses) Included in Income, assets | 192 | 166 | 532 | 575 |
Other Comprehensive Income (Loss), assets | 301 | 15 | (375) | 176 |
Purchases, Sales, Issuances and Settlements, Net, assets | (412) | (418) | (806) | (1,234) |
Gross Transfers In, assets | 3 | 16 | 29 | 83 |
Gross Transfers Out, assets | (107) | (82) | (133) | (239) |
Divested Businesses | 0 | 0 | 0 | 0 |
Fair Value End of Period, assets | 12,655 | 13,560 | 12,655 | 13,560 |
Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period, assets | 0 | 0 | 0 | 0 |
Changes in Unrealized Gains (Losses) Included in Other Comprehensive Income (Loss) for Recurring Level 3 Instruments Held at End of Period, assets | 335 | (213) | ||
Bonds available for sale | Commercial mortgage-backed securities (CMBS) | ||||
Fair value assets and liabilities measured on recurring basis, unobservable input reconciliation calculation | ||||
Fair Value Beginning of Period, assets | 1,149 | 1,103 | 1,053 | 917 |
Net Realized and Unrealized Gains (Losses) Included in Income, assets | 3 | 2 | 14 | 8 |
Other Comprehensive Income (Loss), assets | 36 | 32 | 70 | 62 |
Purchases, Sales, Issuances and Settlements, Net, assets | (11) | 85 | 17 | 381 |
Gross Transfers In, assets | 0 | 0 | 23 | 58 |
Gross Transfers Out, assets | (196) | (172) | (196) | (376) |
Divested Businesses | 0 | 0 | 0 | 0 |
Fair Value End of Period, assets | 981 | 1,050 | 981 | 1,050 |
Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period, assets | 0 | 0 | 0 | 0 |
Changes in Unrealized Gains (Losses) Included in Other Comprehensive Income (Loss) for Recurring Level 3 Instruments Held at End of Period, assets | 27 | 66 | ||
Bonds available for sale | Collateralized Debt Obligations/Asset Backed Securities (CDO/ABS) | ||||
Fair value assets and liabilities measured on recurring basis, unobservable input reconciliation calculation | ||||
Fair Value Beginning of Period, assets | 9,461 | 9,062 | 7,686 | 9,102 |
Net Realized and Unrealized Gains (Losses) Included in Income, assets | 5 | 3 | 25 | 15 |
Other Comprehensive Income (Loss), assets | 180 | 37 | 55 | 204 |
Purchases, Sales, Issuances and Settlements, Net, assets | (174) | (170) | (19) | (111) |
Gross Transfers In, assets | 125 | 7 | 2,062 | 103 |
Gross Transfers Out, assets | (244) | 0 | (456) | (374) |
Divested Businesses | 0 | 0 | 0 | 0 |
Fair Value End of Period, assets | 9,353 | 8,939 | 9,353 | 8,939 |
Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period, assets | 0 | 0 | 0 | 0 |
Changes in Unrealized Gains (Losses) Included in Other Comprehensive Income (Loss) for Recurring Level 3 Instruments Held at End of Period, assets | 172 | 38 | ||
Other bond securities | ||||
Fair value assets and liabilities measured on recurring basis, unobservable input reconciliation calculation | ||||
Fair Value Beginning of Period, assets | 2,746 | 5,068 | 3,738 | 5,845 |
Net Realized and Unrealized Gains (Losses) Included in Income, assets | 141 | 125 | 241 | 373 |
Other Comprehensive Income (Loss), assets | 0 | 0 | 0 | 0 |
Purchases, Sales, Issuances and Settlements, Net, assets | (116) | (375) | (1,208) | (1,293) |
Gross Transfers In, assets | 0 | 0 | 0 | 0 |
Gross Transfers Out, assets | 0 | (4) | 0 | (111) |
Divested Businesses | 0 | 0 | 0 | 0 |
Fair Value End of Period, assets | 2,771 | 4,814 | 2,771 | 4,814 |
Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period, assets | 39 | 27 | 27 | 113 |
Changes in Unrealized Gains (Losses) Included in Other Comprehensive Income (Loss) for Recurring Level 3 Instruments Held at End of Period, assets | 0 | 0 | ||
Other bond securities | Residential mortgage-backed securities (RMBS) | ||||
Fair value assets and liabilities measured on recurring basis, unobservable input reconciliation calculation | ||||
Fair Value Beginning of Period, assets | 168 | 830 | 143 | 1,290 |
Net Realized and Unrealized Gains (Losses) Included in Income, assets | 16 | 9 | 16 | 69 |
Other Comprehensive Income (Loss), assets | 0 | 0 | 0 | 0 |
Purchases, Sales, Issuances and Settlements, Net, assets | (16) | (24) | 9 | (544) |
Gross Transfers In, assets | 0 | 0 | 0 | 0 |
Gross Transfers Out, assets | 0 | 0 | 0 | 0 |
Divested Businesses | 0 | 0 | 0 | 0 |
Fair Value End of Period, assets | 168 | 815 | 168 | 815 |
Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period, assets | 4 | 1 | 3 | (18) |
Changes in Unrealized Gains (Losses) Included in Other Comprehensive Income (Loss) for Recurring Level 3 Instruments Held at End of Period, assets | 0 | 0 | ||
Other bond securities | Commercial mortgage-backed securities (CMBS) | ||||
Fair value assets and liabilities measured on recurring basis, unobservable input reconciliation calculation | ||||
Fair Value Beginning of Period, assets | 47 | 88 | 50 | 77 |
Net Realized and Unrealized Gains (Losses) Included in Income, assets | 1 | 1 | 0 | 5 |
Other Comprehensive Income (Loss), assets | 0 | 0 | 0 | 0 |
Purchases, Sales, Issuances and Settlements, Net, assets | 0 | (17) | (2) | 0 |
Gross Transfers In, assets | 0 | 0 | 0 | 0 |
Gross Transfers Out, assets | 0 | (4) | 0 | (14) |
Divested Businesses | 0 | 0 | 0 | 0 |
Fair Value End of Period, assets | 48 | 68 | 48 | 68 |
Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period, assets | 1 | (2) | (1) | 3 |
Changes in Unrealized Gains (Losses) Included in Other Comprehensive Income (Loss) for Recurring Level 3 Instruments Held at End of Period, assets | 0 | 0 | ||
Other bond securities | Collateralized Debt Obligations/Asset Backed Securities (CDO/ABS) | ||||
Fair value assets and liabilities measured on recurring basis, unobservable input reconciliation calculation | ||||
Fair Value Beginning of Period, assets | 2,531 | 4,150 | 3,545 | 4,478 |
Net Realized and Unrealized Gains (Losses) Included in Income, assets | 124 | 115 | 225 | 299 |
Other Comprehensive Income (Loss), assets | 0 | 0 | 0 | 0 |
Purchases, Sales, Issuances and Settlements, Net, assets | (100) | (334) | (1,215) | (749) |
Gross Transfers In, assets | 0 | 0 | 0 | 0 |
Gross Transfers Out, assets | 0 | 0 | 0 | (97) |
Divested Businesses | 0 | 0 | 0 | 0 |
Fair Value End of Period, assets | 2,555 | 3,931 | 2,555 | 3,931 |
Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period, assets | 34 | 28 | 25 | 128 |
Changes in Unrealized Gains (Losses) Included in Other Comprehensive Income (Loss) for Recurring Level 3 Instruments Held at End of Period, assets | 0 | 0 | ||
Equity securities | ||||
Fair value assets and liabilities measured on recurring basis, unobservable input reconciliation calculation | ||||
Fair Value Beginning of Period, assets | 43 | 35 | 8 | 27 |
Net Realized and Unrealized Gains (Losses) Included in Income, assets | 0 | 0 | (1) | 0 |
Other Comprehensive Income (Loss), assets | 2 | 0 | 3 | 0 |
Purchases, Sales, Issuances and Settlements, Net, assets | 1 | (29) | 11 | (20) |
Gross Transfers In, assets | 7 | 2 | 33 | 2 |
Gross Transfers Out, assets | (27) | 0 | (28) | (1) |
Divested Businesses | 0 | 0 | 0 | 0 |
Fair Value End of Period, assets | 26 | 8 | 26 | 8 |
Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period, assets | 1 | (2) | 1 | 2 |
Changes in Unrealized Gains (Losses) Included in Other Comprehensive Income (Loss) for Recurring Level 3 Instruments Held at End of Period, assets | 0 | 0 | ||
Other invested assets | ||||
Fair value assets and liabilities measured on recurring basis, unobservable input reconciliation calculation | ||||
Fair Value Beginning of Period, assets | 1,486 | 605 | 1,192 | 587 |
Net Realized and Unrealized Gains (Losses) Included in Income, assets | 74 | 6 | 11 | 24 |
Other Comprehensive Income (Loss), assets | (2) | 0 | (2) | 1 |
Purchases, Sales, Issuances and Settlements, Net, assets | 25 | (22) | 232 | (23) |
Gross Transfers In, assets | 0 | 0 | 150 | 0 |
Gross Transfers Out, assets | 0 | 0 | 0 | 0 |
Divested Businesses | 0 | 0 | 0 | 0 |
Fair Value End of Period, assets | 1,583 | 589 | 1,583 | 589 |
Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period, assets | 0 | 7 | (13) | 27 |
Changes in Unrealized Gains (Losses) Included in Other Comprehensive Income (Loss) for Recurring Level 3 Instruments Held at End of Period, assets | 0 | 0 | ||
Other assets | ||||
Fair value assets and liabilities measured on recurring basis, unobservable input reconciliation calculation | ||||
Fair Value Beginning of Period, assets | 111 | 61 | 89 | 58 |
Net Realized and Unrealized Gains (Losses) Included in Income, assets | 0 | 0 | 0 | 0 |
Other Comprehensive Income (Loss), assets | 0 | 0 | 0 | 0 |
Purchases, Sales, Issuances and Settlements, Net, assets | 2 | (1) | 61 | 2 |
Gross Transfers In, assets | 0 | 0 | 0 | 0 |
Gross Transfers Out, assets | 0 | 0 | 0 | 0 |
Divested Businesses | (1) | 0 | (38) | 0 |
Fair Value End of Period, assets | 112 | 60 | 112 | 60 |
Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period, assets | 0 | $ 0 | 0 | $ 0 |
Changes in Unrealized Gains (Losses) Included in Other Comprehensive Income (Loss) for Recurring Level 3 Instruments Held at End of Period, assets | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS (Deta_3
FAIR VALUE MEASUREMENTS (Details - Net realized and unrealized gains and losses included in income related to Level 3 assets and liabilities) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Net realized and unrealized gains and losses related to Level 3 items, assets | $ 385 | $ 271 | $ 729 | $ 988 |
Policyholder contract deposits | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Net realized and unrealized gains (losses) included in income, liabilities | 19 | 861 | 2,250 | 2,400 |
Policyholder contract deposits | Net investment income | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Net realized and unrealized gains (losses) included in income, liabilities | 0 | 0 | 0 | 0 |
Policyholder contract deposits | Net realized capital gains (losses) | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Net realized and unrealized gains (losses) included in income, liabilities | 19 | 861 | 2,250 | 2,400 |
Policyholder contract deposits | Other Income | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Net realized and unrealized gains (losses) included in income, liabilities | 0 | 0 | 0 | 0 |
Derivative liabilities, net | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Net realized and unrealized gains (losses) included in income, liabilities | (11) | (26) | (85) | (113) |
Derivative liabilities, net | Net investment income | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Net realized and unrealized gains (losses) included in income, liabilities | 0 | 0 | 0 | 0 |
Derivative liabilities, net | Net realized capital gains (losses) | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Net realized and unrealized gains (losses) included in income, liabilities | 5 | (11) | (41) | (64) |
Derivative liabilities, net | Other Income | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Net realized and unrealized gains (losses) included in income, liabilities | (16) | (15) | (44) | (49) |
Fortitude Re funds withheld payable | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Net realized and unrealized gains (losses) included in income, liabilities | 656 | 1,493 | ||
Fortitude Re funds withheld payable | Net investment income | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Net realized and unrealized gains (losses) included in income, liabilities | 0 | 0 | ||
Fortitude Re funds withheld payable | Net realized capital gains (losses) | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Net realized and unrealized gains (losses) included in income, liabilities | 656 | 1,493 | ||
Fortitude Re funds withheld payable | Other Income | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Net realized and unrealized gains (losses) included in income, liabilities | 0 | 0 | ||
Bonds available for sale | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Net realized and unrealized gains and losses related to Level 3 items, assets | 170 | 140 | 478 | 591 |
Bonds available for sale | Net investment income | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Net realized and unrealized gains and losses related to Level 3 items, assets | 177 | 164 | 557 | 651 |
Bonds available for sale | Net realized capital gains (losses) | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Net realized and unrealized gains and losses related to Level 3 items, assets | (7) | (24) | (79) | (60) |
Bonds available for sale | Other Income | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Net realized and unrealized gains and losses related to Level 3 items, assets | 0 | 0 | 0 | 0 |
Other bond securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Net realized and unrealized gains and losses related to Level 3 items, assets | 141 | 125 | 241 | 373 |
Other bond securities | Net investment income | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Net realized and unrealized gains and losses related to Level 3 items, assets | 143 | 110 | (25) | 306 |
Other bond securities | Net realized capital gains (losses) | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Net realized and unrealized gains and losses related to Level 3 items, assets | (2) | 15 | 266 | 67 |
Other bond securities | Other Income | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Net realized and unrealized gains and losses related to Level 3 items, assets | 0 | 0 | 0 | 0 |
Equity securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Net realized and unrealized gains and losses related to Level 3 items, assets | 0 | 0 | (1) | 0 |
Equity securities | Net investment income | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Net realized and unrealized gains and losses related to Level 3 items, assets | 0 | 0 | ||
Equity securities | Net realized capital gains (losses) | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Net realized and unrealized gains and losses related to Level 3 items, assets | 0 | (1) | ||
Equity securities | Other Income | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Net realized and unrealized gains and losses related to Level 3 items, assets | 0 | 0 | ||
Other invested assets | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Net realized and unrealized gains and losses related to Level 3 items, assets | 74 | 6 | 11 | 24 |
Other invested assets | Net investment income | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Net realized and unrealized gains and losses related to Level 3 items, assets | 74 | 7 | 11 | 25 |
Other invested assets | Net realized capital gains (losses) | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Net realized and unrealized gains and losses related to Level 3 items, assets | 0 | (1) | 0 | (1) |
Other invested assets | Other Income | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Net realized and unrealized gains and losses related to Level 3 items, assets | $ 0 | $ 0 | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS (Deta_4
FAIR VALUE MEASUREMENTS (Details - Gross components of purchases, sales, issuances and settlements) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring Basis Unobservable Input Reconciliation [Line Items] | ||||
Purchases, Sales, Issuances and Settlements, Net, assets | $ (740,000,000) | $ (1,373,000,000) | $ (1,485,000,000) | $ (2,724,000,000) |
Issuances | 0 | 0 | 0 | 0 |
Transfers into Level 3 at end of reporting period, net gains (losses) not included in realized and unrealized gains and losses related to Level 3 for the period | (79,000,000) | (207,000,000) | (40,000,000) | |
Transfers out Level 3 at end of reporting period, net gains (losses) included in realized and unrealized gains and losses related to Level 3 for the period. | 18,000,000 | 24,000,000 | (13,000,000) | 28,000,000 |
Liabilities | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis Unobservable Input Reconciliation [Line Items] | ||||
Purchases, liabilities | (19,000,000) | (7,000,000) | (43,000,000) | (29,000,000) |
Sales, liabilities | 170,000,000 | 240,000,000 | 522,000,000 | 616,000,000 |
Issuances and Settlements, liabilities | (162,000,000) | (39,000,000) | (234,000,000) | 16,000,000 |
Purchases, Sales, Issuances and Settlements, Net, liabilities | (11,000,000) | 194,000,000 | 245,000,000 | 603,000,000 |
Policyholder contract deposits | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis Unobservable Input Reconciliation [Line Items] | ||||
Purchases, liabilities | 0 | 0 | 0 | 0 |
Sales, liabilities | 170,000,000 | 240,000,000 | 514,000,000 | 616,000,000 |
Issuances and Settlements, liabilities | (100,000,000) | 0 | (352,000,000) | 34,000,000 |
Purchases, Sales, Issuances and Settlements, Net, liabilities | 70,000,000 | 240,000,000 | 162,000,000 | 650,000,000 |
Derivative liabilities, net | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis Unobservable Input Reconciliation [Line Items] | ||||
Purchases, liabilities | (19,000,000) | (7,000,000) | (43,000,000) | (29,000,000) |
Sales, liabilities | 0 | 0 | 8,000,000 | 0 |
Issuances and Settlements, liabilities | (32,000,000) | (39,000,000) | 148,000,000 | (18,000,000) |
Purchases, Sales, Issuances and Settlements, Net, liabilities | (51,000,000) | (46,000,000) | 113,000,000 | (47,000,000) |
Fortitude Re funds withheld payable | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis Unobservable Input Reconciliation [Line Items] | ||||
Purchases, liabilities | 0 | 0 | ||
Sales, liabilities | 0 | 0 | ||
Issuances and Settlements, liabilities | (30,000,000) | (30,000,000) | ||
Purchases, Sales, Issuances and Settlements, Net, liabilities | (30,000,000) | (30,000,000) | ||
Other liabilities | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis Unobservable Input Reconciliation [Line Items] | ||||
Purchases, liabilities | 0 | 0 | ||
Sales, liabilities | 0 | 0 | ||
Issuances and Settlements, liabilities | 0 | 0 | ||
Purchases, Sales, Issuances and Settlements, Net, liabilities | 0 | 0 | ||
Assets | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis Unobservable Input Reconciliation [Line Items] | ||||
Purchases, assets | 501,000,000 | 934,000,000 | 2,531,000,000 | 3,335,000,000 |
Sales, assets | (108,000,000) | (495,000,000) | (726,000,000) | (1,285,000,000) |
Issuances and Settlements, assets | (1,133,000,000) | (1,812,000,000) | (3,290,000,000) | (4,774,000,000) |
Purchases, Sales, Issuances and Settlements, Net, assets | (740,000,000) | (1,373,000,000) | (1,485,000,000) | (2,724,000,000) |
Bonds available for sale | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis Unobservable Input Reconciliation [Line Items] | ||||
Purchases, assets | 475,000,000 | 913,000,000 | 2,116,000,000 | 3,244,000,000 |
Sales, assets | (108,000,000) | (326,000,000) | (147,000,000) | (679,000,000) |
Issuances and Settlements, assets | (1,019,000,000) | (1,533,000,000) | (2,550,000,000) | (3,955,000,000) |
Purchases, Sales, Issuances and Settlements, Net, assets | (652,000,000) | (946,000,000) | (581,000,000) | (1,390,000,000) |
Bonds available for sale | Obligations of states, municipalities and political subdivisions | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis Unobservable Input Reconciliation [Line Items] | ||||
Purchases, assets | 34,000,000 | 109,000,000 | 201,000,000 | 243,000,000 |
Sales, assets | (18,000,000) | 0 | (20,000,000) | (16,000,000) |
Issuances and Settlements, assets | (46,000,000) | (17,000,000) | (54,000,000) | (49,000,000) |
Purchases, Sales, Issuances and Settlements, Net, assets | (30,000,000) | 92,000,000 | 127,000,000 | 178,000,000 |
Bonds available for sale | Non-U.S. governments | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis Unobservable Input Reconciliation [Line Items] | ||||
Purchases, assets | 0 | 0 | 5,000,000 | 0 |
Sales, assets | 0 | 0 | 0 | 0 |
Issuances and Settlements, assets | 0 | 0 | 0 | (4,000,000) |
Purchases, Sales, Issuances and Settlements, Net, assets | 0 | 0 | 5,000,000 | (4,000,000) |
Bonds available for sale | Corporate debt | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis Unobservable Input Reconciliation [Line Items] | ||||
Purchases, assets | 23,000,000 | 1,000,000 | 256,000,000 | 58,000,000 |
Sales, assets | (2,000,000) | (128,000,000) | (7,000,000) | (129,000,000) |
Issuances and Settlements, assets | (46,000,000) | (408,000,000) | (154,000,000) | (529,000,000) |
Purchases, Sales, Issuances and Settlements, Net, assets | (25,000,000) | (535,000,000) | 95,000,000 | (600,000,000) |
Bonds available for sale | Residential mortgage-backed securities (RMBS) | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis Unobservable Input Reconciliation [Line Items] | ||||
Purchases, assets | 182,000,000 | 253,000,000 | 883,000,000 | 860,000,000 |
Sales, assets | 0 | 0 | 0 | (26,000,000) |
Issuances and Settlements, assets | (594,000,000) | (671,000,000) | (1,689,000,000) | (2,068,000,000) |
Purchases, Sales, Issuances and Settlements, Net, assets | (412,000,000) | (418,000,000) | (806,000,000) | (1,234,000,000) |
Bonds available for sale | Commercial mortgage-backed securities (CMBS) | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis Unobservable Input Reconciliation [Line Items] | ||||
Purchases, assets | 2,000,000 | 92,000,000 | 56,000,000 | 455,000,000 |
Sales, assets | (10,000,000) | 0 | (17,000,000) | 0 |
Issuances and Settlements, assets | (3,000,000) | (7,000,000) | (22,000,000) | (74,000,000) |
Purchases, Sales, Issuances and Settlements, Net, assets | (11,000,000) | 85,000,000 | 17,000,000 | 381,000,000 |
Bonds available for sale | Collateralized Debt Obligations/Asset Backed Securities (CDO/ABS) | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis Unobservable Input Reconciliation [Line Items] | ||||
Purchases, assets | 234,000,000 | 458,000,000 | 715,000,000 | 1,628,000,000 |
Sales, assets | (78,000,000) | (198,000,000) | (103,000,000) | (508,000,000) |
Issuances and Settlements, assets | (330,000,000) | (430,000,000) | (631,000,000) | (1,231,000,000) |
Purchases, Sales, Issuances and Settlements, Net, assets | (174,000,000) | (170,000,000) | (19,000,000) | (111,000,000) |
Other bond securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis Unobservable Input Reconciliation [Line Items] | ||||
Purchases, assets | 0 | 0 | 72,000,000 | 18,000,000 |
Sales, assets | 0 | (169,000,000) | (579,000,000) | (606,000,000) |
Issuances and Settlements, assets | (116,000,000) | (206,000,000) | (701,000,000) | (705,000,000) |
Purchases, Sales, Issuances and Settlements, Net, assets | (116,000,000) | (375,000,000) | (1,208,000,000) | (1,293,000,000) |
Other bond securities | Residential mortgage-backed securities (RMBS) | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis Unobservable Input Reconciliation [Line Items] | ||||
Purchases, assets | 0 | 0 | 37,000,000 | 0 |
Sales, assets | 0 | 0 | 0 | (437,000,000) |
Issuances and Settlements, assets | (16,000,000) | (24,000,000) | (28,000,000) | (107,000,000) |
Purchases, Sales, Issuances and Settlements, Net, assets | (16,000,000) | (24,000,000) | 9,000,000 | (544,000,000) |
Other bond securities | Commercial mortgage-backed securities (CMBS) | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis Unobservable Input Reconciliation [Line Items] | ||||
Purchases, assets | 0 | 0 | 0 | 18,000,000 |
Sales, assets | 0 | (16,000,000) | 0 | (16,000,000) |
Issuances and Settlements, assets | 0 | (1,000,000) | (2,000,000) | (2,000,000) |
Purchases, Sales, Issuances and Settlements, Net, assets | 0 | (17,000,000) | (2,000,000) | 0 |
Other bond securities | Collateralized Debt Obligations/Asset Backed Securities (CDO/ABS) | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis Unobservable Input Reconciliation [Line Items] | ||||
Purchases, assets | 0 | 0 | 35,000,000 | 0 |
Sales, assets | 0 | (153,000,000) | (579,000,000) | (153,000,000) |
Issuances and Settlements, assets | (100,000,000) | (181,000,000) | (671,000,000) | (596,000,000) |
Purchases, Sales, Issuances and Settlements, Net, assets | (100,000,000) | (334,000,000) | (1,215,000,000) | (749,000,000) |
Equity securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis Unobservable Input Reconciliation [Line Items] | ||||
Purchases, assets | 1,000,000 | 0 | 11,000,000 | 9,000,000 |
Sales, assets | 0 | 0 | 0 | 0 |
Issuances and Settlements, assets | 0 | (29,000,000) | 0 | (29,000,000) |
Purchases, Sales, Issuances and Settlements, Net, assets | 1,000,000 | (29,000,000) | 11,000,000 | (20,000,000) |
Other invested assets | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis Unobservable Input Reconciliation [Line Items] | ||||
Purchases, assets | 25,000,000 | 21,000,000 | 277,000,000 | 64,000,000 |
Sales, assets | 0 | 0 | 0 | 0 |
Issuances and Settlements, assets | 0 | (43,000,000) | (45,000,000) | (87,000,000) |
Purchases, Sales, Issuances and Settlements, Net, assets | 25,000,000 | (22,000,000) | 232,000,000 | (23,000,000) |
Other assets | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis Unobservable Input Reconciliation [Line Items] | ||||
Purchases, assets | 0 | 0 | 55,000,000 | 0 |
Sales, assets | 0 | 0 | 0 | 0 |
Issuances and Settlements, assets | 2,000,000 | (1,000,000) | 6,000,000 | 2,000,000 |
Purchases, Sales, Issuances and Settlements, Net, assets | $ 2,000,000 | $ (1,000,000) | $ 61,000,000 | $ 2,000,000 |
FAIR VALUE MEASUREMENTS (Deta_5
FAIR VALUE MEASUREMENTS (Details - Quantitative Information about Level 3 Fair Value Measurements, Assets) $ in Millions | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
Obligations of states, municipalities and political subdivisions | Minimum | Measurement Input Yield [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Debt instrument, measurement input | 0.0287 | 0.0335 |
Obligations of states, municipalities and political subdivisions | Maximum | Measurement Input Yield [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Debt instrument, measurement input | 0.0339 | 0.0395 |
Obligations of states, municipalities and political subdivisions | Weighted-average | Measurement Input Yield [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Debt instrument, measurement input | 0.0313 | 0.0365 |
Obligations of states, municipalities and political subdivisions | Discounted cash flow | Level 3 | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value | $ 1,731 | $ 1,633 |
Corporate debt | Minimum | Measurement Input Yield [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Debt instrument, measurement input | 0.0299 | 0.0348 |
Corporate debt | Maximum | Measurement Input Yield [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Debt instrument, measurement input | 0.0603 | 0.0622 |
Corporate debt | Weighted-average | Measurement Input Yield [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Debt instrument, measurement input | 0.0451 | 0.0485 |
Corporate debt | Discounted cash flow | Level 3 | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value | $ 1,672 | $ 1,087 |
Residential mortgage-backed securities | Minimum | Measurement Input Yield [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Debt instrument, measurement input | 0.0174 | 0.0252 |
Residential mortgage-backed securities | Minimum | Measurement Input Constant Prepayment Rate [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Debt instrument, measurement input | 0.0381 | 0.0400 |
Residential mortgage-backed securities | Minimum | Measurement Input Loss Severity [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Debt instrument, measurement input | 0.2862 | 0.3368 |
Residential mortgage-backed securities | Minimum | Measurement Input Constant Default Rate [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Debt instrument, measurement input | 0.0130 | 0.0168 |
Residential mortgage-backed securities | Maximum | Measurement Input Yield [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Debt instrument, measurement input | 0.0441 | 0.0453 |
Residential mortgage-backed securities | Maximum | Measurement Input Constant Prepayment Rate [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Debt instrument, measurement input | 0.1215 | 0.1289 |
Residential mortgage-backed securities | Maximum | Measurement Input Loss Severity [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Debt instrument, measurement input | 0.7794 | 0.7691 |
Residential mortgage-backed securities | Maximum | Measurement Input Constant Default Rate [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Debt instrument, measurement input | 0.0614 | 0.0617 |
Residential mortgage-backed securities | Weighted-average | Measurement Input Yield [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Debt instrument, measurement input | 0.0308 | 0.0352 |
Residential mortgage-backed securities | Weighted-average | Measurement Input Constant Prepayment Rate [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Debt instrument, measurement input | 0.0798 | 0.0844 |
Residential mortgage-backed securities | Weighted-average | Measurement Input Loss Severity [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Debt instrument, measurement input | 0.5328 | 0.5529 |
Residential mortgage-backed securities | Weighted-average | Measurement Input Constant Default Rate [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Debt instrument, measurement input | 0.0372 | 0.0393 |
Residential mortgage-backed securities | Discounted cash flow | Level 3 | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value | $ 11,810 | $ 11,746 |
Certain CDO/ABS | Minimum | Measurement Input Yield [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Debt instrument, measurement input | 0.0201 | 0.0292 |
Certain CDO/ABS | Maximum | Measurement Input Yield [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Debt instrument, measurement input | 0.0553 | 0.0491 |
Certain CDO/ABS | Weighted-average | Measurement Input Yield [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Debt instrument, measurement input | 0.0377 | 0.0391 |
Certain CDO/ABS | Discounted cash flow | Level 3 | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value | $ 8,704 | $ 6,025 |
Commercial mortgage backed securities | Minimum | Measurement Input Yield [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Debt instrument, measurement input | 0.0078 | 0.0277 |
Commercial mortgage backed securities | Maximum | Measurement Input Yield [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Debt instrument, measurement input | 0.0568 | 0.0518 |
Commercial mortgage backed securities | Weighted-average | Measurement Input Yield [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Debt instrument, measurement input | 0.0323 | 0.0397 |
Commercial mortgage backed securities | Discounted cash flow | Level 3 | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value | $ 561 | $ 476 |
FAIR VALUE MEASUREMENTS (Deta_6
FAIR VALUE MEASUREMENTS (Details - Quantitative Information about Level 3 Fair Value Measurements, Liabilities) $ in Millions | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
Variable annuity guaranteed minimum withdrawal benefits | Minimum | Measurement Input Equity Volatility [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 0.0715 | 0.0615 |
Variable annuity guaranteed minimum withdrawal benefits | Minimum | Measurement Input Base Lapse Rates [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 0.0016 | 0.0016 |
Variable annuity guaranteed minimum withdrawal benefits | Minimum | Measurement Input Dynamic Lapse Multiplier [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 0.5000 | 0.5000 |
Variable annuity guaranteed minimum withdrawal benefits | Minimum | Measurement Input Mortality Multiplier [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 0.3800 | 0.3800 |
Variable annuity guaranteed minimum withdrawal benefits | Minimum | Measurement Input Utilization Rate [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 0.9000 | 0.9000 |
Variable annuity guaranteed minimum withdrawal benefits | Minimum | Measurement Input Equity Interest Rate Correlation [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 0.2000 | 0.2000 |
Variable annuity guaranteed minimum withdrawal benefits | Minimum | Measurement Input, NPA [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 0.0014 | 0.0012 |
Variable annuity guaranteed minimum withdrawal benefits | Maximum | Measurement Input Equity Volatility [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 0.5625 | 0.4885 |
Variable annuity guaranteed minimum withdrawal benefits | Maximum | Measurement Input Base Lapse Rates [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 0.1260 | 0.1260 |
Variable annuity guaranteed minimum withdrawal benefits | Maximum | Measurement Input Dynamic Lapse Multiplier [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 1.4300 | 1.4300 |
Variable annuity guaranteed minimum withdrawal benefits | Maximum | Measurement Input Mortality Multiplier [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 1.4700 | 1.4700 |
Variable annuity guaranteed minimum withdrawal benefits | Maximum | Measurement Input Utilization Rate [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 1 | 1 |
Variable annuity guaranteed minimum withdrawal benefits | Maximum | Measurement Input Equity Interest Rate Correlation [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 0.4000 | 0.4000 |
Variable annuity guaranteed minimum withdrawal benefits | Maximum | Measurement Input, NPA [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 0.0207 | 0.0153 |
Variable annuity guaranteed minimum withdrawal benefits | Discounted cash flow | Level 3 | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Fair value | $ 3,832 | $ 2,474 |
Index annuities including certain GMWB | Level 3 | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embeded derivative liability | $ 611 | |
Index annuities including certain GMWB | Minimum | Measurement Input Base Lapse Rates [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 0.0038 | |
Index annuities including certain GMWB | Minimum | Measurement Input Mortality Multiplier [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 0.2400 | |
Index annuities including certain GMWB | Minimum | Measurement Input Utilization Rate [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 0.8000 | |
Index annuities including certain GMWB | Minimum | Measurement Input Options Budget [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 0 | |
Index annuities including certain GMWB | Minimum | Measurement Input, NPA [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 0.0014 | |
Index annuities including certain GMWB | Maximum | Measurement Input Base Lapse Rates [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 0.5000 | |
Index annuities including certain GMWB | Maximum | Measurement Input Mortality Multiplier [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 1.8000 | |
Index annuities including certain GMWB | Maximum | Measurement Input Utilization Rate [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 1 | |
Index annuities including certain GMWB | Maximum | Measurement Input Options Budget [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 0.0400 | |
Index annuities including certain GMWB | Maximum | Measurement Input, NPA [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 0.0207 | |
Index annuities including certain GMWB | Discounted cash flow | Level 3 | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Fair value | $ 4,881 | |
Index annuities | Minimum | Measurement Input Mortality Multiplier [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 0.2400 | |
Index annuities | Minimum | Measurement Input Lapse Rate [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 0.0031 | |
Index annuities | Minimum | Measurement Input Options Budget [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 0.0100 | |
Index annuities | Minimum | Measurement Input, NPA [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 0.0012 | |
Index annuities | Maximum | Measurement Input Mortality Multiplier [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 1.8000 | |
Index annuities | Maximum | Measurement Input Lapse Rate [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 0.5000 | |
Index annuities | Maximum | Measurement Input Options Budget [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 0.0400 | |
Index annuities | Maximum | Measurement Input, NPA [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 0.0153 | |
Index annuities | Discounted cash flow | Level 3 | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Fair value | $ 3,895 | |
Indexed Life | Minimum | Measurement Input Base Lapse Rates [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 0 | 0 |
Indexed Life | Minimum | Measurement Input Mortality Rate [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 0 | 0 |
Indexed Life | Minimum | Measurement Input, NPA [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 0.0014 | 0.0012 |
Indexed Life | Maximum | Measurement Input Base Lapse Rates [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 0.3797 | 0.3797 |
Indexed Life | Maximum | Measurement Input Mortality Rate [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 1 | 1 |
Indexed Life | Maximum | Measurement Input, NPA [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Embedded derivative liability, measurement input | 0.0207 | 0.0153 |
Indexed Life | Discounted cash flow | Level 3 | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Fair value | $ 577 | $ 510 |
FAIR VALUE MEASUREMENTS (Deta_7
FAIR VALUE MEASUREMENTS (Details - Investments in certain other invested assets, including private equity funds, hedge funds and other alternative investments) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Fair Value Using Net Asset Value Per Share or its equivalent | $ 5,387 | $ 5,549 |
Unfunded Commitments | 3,091 | 2,666 |
Direct private equity | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Fair Value Using Net Asset Value Per Share or its equivalent | 3,647 | 3,220 |
Unfunded Commitments | $ 3,090 | 2,665 |
Average original expected lives | 10 years | |
Direct private equity | Maximum [Member] | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Average original expected lives, Increments | 2 years | |
Direct private equity | Minimum [Member] | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Average original expected lives, Increments | 1 year | |
Leveraged buyout | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Fair Value Using Net Asset Value Per Share or its equivalent | $ 1,382 | 1,189 |
Unfunded Commitments | 1,697 | 1,543 |
Real Estate / Infrastructure | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Fair Value Using Net Asset Value Per Share or its equivalent | 429 | 400 |
Unfunded Commitments | 450 | 290 |
Venture capital | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Fair Value Using Net Asset Value Per Share or its equivalent | 143 | 111 |
Unfunded Commitments | 166 | 155 |
Growth equity | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Fair Value Using Net Asset Value Per Share or its equivalent | 523 | 422 |
Unfunded Commitments | 54 | 57 |
Mezzanine | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Fair Value Using Net Asset Value Per Share or its equivalent | 349 | 325 |
Unfunded Commitments | 282 | 414 |
Other | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Fair Value Using Net Asset Value Per Share or its equivalent | 821 | 773 |
Unfunded Commitments | 441 | 206 |
Hedge funds | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Fair Value Using Net Asset Value Per Share or its equivalent | 1,740 | 2,329 |
Unfunded Commitments | 1 | 1 |
Event-driven | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Fair Value Using Net Asset Value Per Share or its equivalent | 353 | 727 |
Unfunded Commitments | 0 | 0 |
Long-short | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Fair Value Using Net Asset Value Per Share or its equivalent | 364 | 539 |
Unfunded Commitments | 0 | 0 |
Macro | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Fair Value Using Net Asset Value Per Share or its equivalent | 751 | 894 |
Unfunded Commitments | 0 | 0 |
Other | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Fair Value Using Net Asset Value Per Share or its equivalent | 272 | 169 |
Unfunded Commitments | $ 1 | $ 1 |
FAIR VALUE MEASUREMENTS (Deta_8
FAIR VALUE MEASUREMENTS (Details - Gains or losses recorded related to the eligible instruments for which we elected the fair value option) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Fair Value, Option, Quantitative Disclosures [Line Items] | ||||
Fair value option gain (loss) | $ 596 | $ 350 | $ 524 | $ 1,216 |
Bonds | ||||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||||
Fair value option gain (loss) | 171 | 333 | 485 | 971 |
Alternative investments | ||||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||||
Fair value option gain (loss) | 407 | 92 | 242 | 473 |
Long-term debt | ||||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||||
Fair value option gain (loss) | $ 18 | $ (75) | $ (203) | $ (228) |
FAIR VALUE MEASUREMENTS (Deta_9
FAIR VALUE MEASUREMENTS (Details - Difference between fair values and the aggregate contractual principal amounts of mortgage and other loans receivable and long-term borrowings for which the fair value option was elected) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage and other loans receivable, Difference | $ 46,387 | $ 47,422 |
Long-term debt, Fair Value | 2,169 | 2,062 |
Long-term debt, Outstanding Principal Amount | 28,731 | 25,479 |
Fair Value Option | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, Fair Value | 2,169 | 2,062 |
Long-term debt, Outstanding Principal Amount | 1,506 | 1,502 |
Long-term debt, Difference | $ 663 | $ 560 |
FAIR VALUE MEASUREMENTS (Det_10
FAIR VALUE MEASUREMENTS (Details - Assets measured at fair value on a non-recurring basis at the time of impairment and the related impairment charges recorded during the periods presented) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Other investments | |||||
Fair Value Assets Measured on Nonrecurring Basis [Line Items] | |||||
Fair Value | $ 268 | $ 268 | $ 329 | ||
Other assets | |||||
Fair Value Assets Measured on Nonrecurring Basis [Line Items] | |||||
Fair Value | 31 | 31 | 1 | ||
Fair value on a non-recurring basis | Fair Value Assets Impairment Charges Measured on Nonrecurring Basis [Domain] | |||||
Fair Value Assets Measured on Nonrecurring Basis [Line Items] | |||||
Fair Value | 299 | 299 | 330 | ||
Impairment Charges | 14 | $ 52 | 74 | $ 127 | |
Fair value on a non-recurring basis | Other investments | |||||
Fair Value Assets Measured on Nonrecurring Basis [Line Items] | |||||
Impairment Charges | 12 | 7 | 60 | 65 | |
Fair value on a non-recurring basis | Other assets | |||||
Fair Value Assets Measured on Nonrecurring Basis [Line Items] | |||||
Impairment Charges | 2 | $ 45 | 14 | $ 62 | |
Fair value on a non-recurring basis | Level 1 | Fair Value Assets Impairment Charges Measured on Nonrecurring Basis [Domain] | |||||
Fair Value Assets Measured on Nonrecurring Basis [Line Items] | |||||
Fair Value | 0 | 0 | 0 | ||
Fair value on a non-recurring basis | Level 1 | Other investments | |||||
Fair Value Assets Measured on Nonrecurring Basis [Line Items] | |||||
Fair Value | 0 | 0 | 0 | ||
Fair value on a non-recurring basis | Level 1 | Other assets | |||||
Fair Value Assets Measured on Nonrecurring Basis [Line Items] | |||||
Fair Value | 0 | 0 | 0 | ||
Fair value on a non-recurring basis | Level 2 | Fair Value Assets Impairment Charges Measured on Nonrecurring Basis [Domain] | |||||
Fair Value Assets Measured on Nonrecurring Basis [Line Items] | |||||
Fair Value | 0 | 0 | 0 | ||
Fair value on a non-recurring basis | Level 2 | Other investments | |||||
Fair Value Assets Measured on Nonrecurring Basis [Line Items] | |||||
Fair Value | 0 | 0 | 0 | ||
Fair value on a non-recurring basis | Level 2 | Other assets | |||||
Fair Value Assets Measured on Nonrecurring Basis [Line Items] | |||||
Fair Value | 0 | 0 | 0 | ||
Fair value on a non-recurring basis | Level 3 | Fair Value Assets Impairment Charges Measured on Nonrecurring Basis [Domain] | |||||
Fair Value Assets Measured on Nonrecurring Basis [Line Items] | |||||
Fair Value | 299 | 299 | 330 | ||
Fair value on a non-recurring basis | Level 3 | Other investments | |||||
Fair Value Assets Measured on Nonrecurring Basis [Line Items] | |||||
Fair Value | 268 | 268 | 329 | ||
Fair value on a non-recurring basis | Level 3 | Other assets | |||||
Fair Value Assets Measured on Nonrecurring Basis [Line Items] | |||||
Fair Value | $ 31 | $ 31 | $ 1 |
FAIR VALUE MEASUREMENTS (Det_11
FAIR VALUE MEASUREMENTS (Details - Carrying values and estimated fair values of our financial instruments not measured at fair value) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 |
Assets: | |||
Mortgage and other loans receivable | $ 45,590 | $ 46,984 | |
Short-term investments | 20,648 | 13,230 | |
Cash | 3,191 | 2,856 | $ 3,361 |
Other assets | 13,270 | 16,383 | |
Liabilities: | |||
Fortitude Re funds withheld payable | 42,543 | 0 | |
Other liabilities | 28,264 | 26,609 | |
Long-term debt and debt of consolidated investment entities | 28,731 | 25,479 | |
Carrying Value | |||
Assets: | |||
Mortgage and other loans receivable | 45,590 | 46,984 | |
Other invested assets | 804 | 742 | |
Short-term investments | 13,434 | 7,887 | |
Cash | 3,191 | 2,856 | |
Other assets | 202 | 311 | |
Liabilities: | |||
Policyholder contract deposits associated with investment-type contracts | 129,170 | 126,137 | |
Fortitude Re funds withheld payable | 37,407 | ||
Other liabilities | 3,823 | 3,063 | |
Long-term debt and debt of consolidated investment entities | 36,068 | 33,288 | |
Separate account liabilities - investment contracts | 87,564 | 88,770 | |
Total Fair Value | |||
Assets: | |||
Mortgage and other loans receivable | 48,217 | 49,005 | |
Other invested assets | 804 | 741 | |
Short-term investments | 13,434 | 7,887 | |
Cash | 3,191 | 2,856 | |
Other assets | 202 | 311 | |
Liabilities: | |||
Policyholder contract deposits associated with investment-type contracts | 144,097 | 133,246 | |
Fortitude Re funds withheld payable | 37,407 | ||
Other liabilities | 3,823 | 3,063 | |
Long-term debt and debt of consolidated investment entities | 39,672 | 35,907 | |
Separate account liabilities - investment contracts | 87,564 | 88,770 | |
Level 1 | |||
Assets: | |||
Mortgage and other loans receivable | 0 | 0 | |
Other invested assets | 0 | 0 | |
Short-term investments | 0 | 0 | |
Cash | 3,191 | 2,856 | |
Other assets | 188 | 291 | |
Liabilities: | |||
Policyholder contract deposits associated with investment-type contracts | 0 | 0 | |
Fortitude Re funds withheld payable | 0 | ||
Other liabilities | 0 | 15 | |
Long-term debt and debt of consolidated investment entities | 0 | 0 | |
Separate account liabilities - investment contracts | 0 | 0 | |
Level 2 | |||
Assets: | |||
Mortgage and other loans receivable | 99 | 101 | |
Other invested assets | 798 | 735 | |
Short-term investments | 13,434 | 7,887 | |
Cash | 0 | 0 | |
Other assets | 14 | 20 | |
Liabilities: | |||
Policyholder contract deposits associated with investment-type contracts | 224 | 255 | |
Fortitude Re funds withheld payable | 0 | ||
Other liabilities | 3,823 | 3,048 | |
Long-term debt and debt of consolidated investment entities | 31,391 | 27,024 | |
Separate account liabilities - investment contracts | 87,564 | 88,770 | |
Level 3 | |||
Assets: | |||
Mortgage and other loans receivable | 48,118 | 48,904 | |
Other invested assets | 6 | 6 | |
Short-term investments | 0 | 0 | |
Cash | 0 | 0 | |
Other assets | 0 | 0 | |
Liabilities: | |||
Policyholder contract deposits associated with investment-type contracts | 143,873 | 132,991 | |
Fortitude Re funds withheld payable | 37,407 | ||
Other liabilities | 0 | 0 | |
Long-term debt and debt of consolidated investment entities | 8,281 | 8,883 | |
Separate account liabilities - investment contracts | $ 0 | $ 0 |
INVESTMENTS (Details - Amortize
INVESTMENTS (Details - Amortized cost or cost and fair value of available for sale securities) - USD ($) $ in Millions | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Schedule of Available-for-sale Securities [Line Items] | |||
Available for sale securities, Amortized Cost or Cost, Net of Allowance | $ 242,470 | $ 233,230 | |
Available for sale securities, Allowance for Credit Losses | (236) | $ (198) | 0 |
Available for sale securities, Fair Value | 265,965 | 251,086 | |
Bonds available for sale | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available for sale securities, Amortized Cost or Cost, Net of Allowance | 242,470 | 233,230 | |
Available for sale securities, Allowance for Credit Losses | (236) | ||
Available for sale securities, Gross Unrealized Gains | 25,440 | 18,671 | |
Available for sale securities, Gross Unrealized Losses | (1,709) | (815) | |
Available for sale securities, Fair Value | 265,965 | 251,086 | |
Other details of available for sale securities | |||
Available for sale securities not rated or rated below investment grade | 27,500 | 27,800 | |
Bonds available for sale | AOCI- OTTI | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available for sale securities, Other-Than-Temporary Impairments in AOCI | 1,186 | ||
Bonds available for sale | U.S. government and government sponsored entities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available for sale securities, Amortized Cost or Cost, Net of Allowance | 4,319 | 5,108 | |
Available for sale securities, Allowance for Credit Losses | 0 | ||
Available for sale securities, Gross Unrealized Gains | 840 | 316 | |
Available for sale securities, Gross Unrealized Losses | (24) | (44) | |
Available for sale securities, Fair Value | 5,135 | 5,380 | |
Bonds available for sale | U.S. government and government sponsored entities | AOCI- OTTI | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available for sale securities, Other-Than-Temporary Impairments in AOCI | 0 | ||
Bonds available for sale | Obligations of states, municipalities and political subdivisions | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available for sale securities, Amortized Cost or Cost, Net of Allowance | 14,027 | 13,960 | |
Available for sale securities, Allowance for Credit Losses | 0 | ||
Available for sale securities, Gross Unrealized Gains | 2,162 | 1,390 | |
Available for sale securities, Gross Unrealized Losses | (16) | (32) | |
Available for sale securities, Fair Value | 16,173 | 15,318 | |
Bonds available for sale | Obligations of states, municipalities and political subdivisions | AOCI- OTTI | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available for sale securities, Other-Than-Temporary Impairments in AOCI | 0 | ||
Bonds available for sale | Non-U.S. governments | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available for sale securities, Amortized Cost or Cost, Net of Allowance | 14,240 | 14,042 | |
Available for sale securities, Allowance for Credit Losses | (5) | ||
Available for sale securities, Gross Unrealized Gains | 1,046 | 884 | |
Available for sale securities, Gross Unrealized Losses | (107) | (57) | |
Available for sale securities, Fair Value | 15,174 | 14,869 | |
Bonds available for sale | Non-U.S. governments | AOCI- OTTI | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available for sale securities, Other-Than-Temporary Impairments in AOCI | (18) | ||
Bonds available for sale | Corporate debt | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available for sale securities, Amortized Cost or Cost, Net of Allowance | 146,595 | 138,046 | |
Available for sale securities, Allowance for Credit Losses | (206) | ||
Available for sale securities, Gross Unrealized Gains | 16,897 | 12,090 | |
Available for sale securities, Gross Unrealized Losses | (1,180) | (500) | |
Available for sale securities, Fair Value | 162,106 | 149,636 | |
Bonds available for sale | Corporate debt | AOCI- OTTI | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available for sale securities, Other-Than-Temporary Impairments in AOCI | 7 | ||
Bonds available for sale | Mortgage-backed, asset-backed and collateralized | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available for sale securities, Amortized Cost or Cost, Net of Allowance | 63,289 | 62,074 | |
Available for sale securities, Allowance for Credit Losses | (25) | ||
Available for sale securities, Gross Unrealized Gains | 4,495 | 3,991 | |
Available for sale securities, Gross Unrealized Losses | (382) | (182) | |
Available for sale securities, Fair Value | 67,377 | 65,883 | |
Bonds available for sale | Mortgage-backed, asset-backed and collateralized | AOCI- OTTI | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available for sale securities, Other-Than-Temporary Impairments in AOCI | 1,197 | ||
Bonds available for sale | Residential mortgage-backed securities (RMBS) | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available for sale securities, Amortized Cost or Cost, Net of Allowance | 30,427 | 29,802 | |
Available for sale securities, Allowance for Credit Losses | (24) | ||
Available for sale securities, Gross Unrealized Gains | 3,088 | 3,067 | |
Available for sale securities, Gross Unrealized Losses | (77) | (64) | |
Available for sale securities, Fair Value | 33,414 | 32,805 | |
Bonds available for sale | Residential mortgage-backed securities (RMBS) | AOCI- OTTI | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available for sale securities, Other-Than-Temporary Impairments in AOCI | 1,149 | ||
Bonds available for sale | Commercial mortgage-backed securities (CMBS) | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available for sale securities, Amortized Cost or Cost, Net of Allowance | 14,841 | 13,879 | |
Available for sale securities, Allowance for Credit Losses | (1) | ||
Available for sale securities, Gross Unrealized Gains | 1,017 | 576 | |
Available for sale securities, Gross Unrealized Losses | (80) | (25) | |
Available for sale securities, Fair Value | 15,777 | 14,430 | |
Bonds available for sale | Commercial mortgage-backed securities (CMBS) | AOCI- OTTI | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available for sale securities, Other-Than-Temporary Impairments in AOCI | 34 | ||
Bonds available for sale | Collateralized Debt Obligations/Asset-Backed Securities (CDO/ABS) | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available for sale securities, Amortized Cost or Cost, Net of Allowance | 18,021 | 18,393 | |
Available for sale securities, Allowance for Credit Losses | 0 | ||
Available for sale securities, Gross Unrealized Gains | 390 | 348 | |
Available for sale securities, Gross Unrealized Losses | (225) | (93) | |
Available for sale securities, Fair Value | $ 18,186 | 18,648 | |
Bonds available for sale | Collateralized Debt Obligations/Asset-Backed Securities (CDO/ABS) | AOCI- OTTI | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available for sale securities, Other-Than-Temporary Impairments in AOCI | $ 14 |
INVESTMENTS (Details - Securiti
INVESTMENTS (Details - Securities available for sale in a loss position) - Bonds available for sale $ in Millions | Sep. 30, 2020USD ($)security | Dec. 31, 2019USD ($)security |
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Fair Value, Less than 12 Months | $ 35,078 | $ 24,331 |
Gross Unrealized Losses, Less than 12 Months | 1,221 | 493 |
Fair Value, 12 Months or More | 4,991 | 7,362 |
Gross Unrealized Losses, 12 Months or More | 273 | 322 |
Fair Value, Total | 40,069 | 31,693 |
Gross Unrealized Losses, Total | $ 1,494 | $ 815 |
Number of securities in an unrealized loss position | security | 7,335 | 5,695 |
Number of individual securities in continuous unrealized loss position for longer than twelve months | security | 940 | 1,254 |
U.S. government and government sponsored entities | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Fair Value, Less than 12 Months | $ 366 | $ 1,461 |
Gross Unrealized Losses, Less than 12 Months | 24 | 44 |
Fair Value, 12 Months or More | 0 | 63 |
Gross Unrealized Losses, 12 Months or More | 0 | 0 |
Fair Value, Total | 366 | 1,524 |
Gross Unrealized Losses, Total | 24 | 44 |
Obligations of states, municipalities and political subdivisions | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Fair Value, Less than 12 Months | 419 | 672 |
Gross Unrealized Losses, Less than 12 Months | 11 | 21 |
Fair Value, 12 Months or More | 103 | 246 |
Gross Unrealized Losses, 12 Months or More | 5 | 11 |
Fair Value, Total | 522 | 918 |
Gross Unrealized Losses, Total | 16 | 32 |
Non-U.S. governments | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Fair Value, Less than 12 Months | 1,756 | 1,105 |
Gross Unrealized Losses, Less than 12 Months | 56 | 12 |
Fair Value, 12 Months or More | 291 | 343 |
Gross Unrealized Losses, 12 Months or More | 51 | 45 |
Fair Value, Total | 2,047 | 1,448 |
Gross Unrealized Losses, Total | 107 | 57 |
Corporate debt | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Fair Value, Less than 12 Months | 20,936 | 11,868 |
Gross Unrealized Losses, Less than 12 Months | 872 | 319 |
Fair Value, 12 Months or More | 1,096 | 2,405 |
Gross Unrealized Losses, 12 Months or More | 110 | 181 |
Fair Value, Total | 22,032 | 14,273 |
Gross Unrealized Losses, Total | 982 | 500 |
Residential mortgage-backed securities (RMBS) | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Fair Value, Less than 12 Months | 3,594 | 3,428 |
Gross Unrealized Losses, Less than 12 Months | 43 | 28 |
Fair Value, 12 Months or More | 163 | 1,367 |
Gross Unrealized Losses, 12 Months or More | 17 | 36 |
Fair Value, Total | 3,757 | 4,795 |
Gross Unrealized Losses, Total | 60 | 64 |
Commercial mortgage-backed securities (CMBS) | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Fair Value, Less than 12 Months | 2,068 | 1,877 |
Gross Unrealized Losses, Less than 12 Months | 71 | 16 |
Fair Value, 12 Months or More | 185 | 367 |
Gross Unrealized Losses, 12 Months or More | 9 | 9 |
Fair Value, Total | 2,253 | 2,244 |
Gross Unrealized Losses, Total | 80 | 25 |
Collateralized Debt Obligations/Asset-Backed Securities (CDO/ABS) | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Fair Value, Less than 12 Months | 5,939 | 3,920 |
Gross Unrealized Losses, Less than 12 Months | 144 | 53 |
Fair Value, 12 Months or More | 3,153 | 2,571 |
Gross Unrealized Losses, 12 Months or More | 81 | 40 |
Fair Value, Total | 9,092 | 6,491 |
Gross Unrealized Losses, Total | $ 225 | $ 93 |
INVESTMENTS (Details - Amorti_2
INVESTMENTS (Details - Amortized cost and fair value of fixed maturity securities available for sale by contractual maturity) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed Maturity Securities Available for Sale, Fair Value, Total | $ 265,965 | $ 251,086 |
Fixed maturity securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Due in one year or less, Amortized Cost Net of Allowance | 11,186 | |
Due after one year through five years, Amortized Cost Net of Allowance | 42,513 | |
Due after five years through ten years, Amortized Cost Net of Allowance | 41,049 | |
Due after ten years, Amortized Cost Net of Allowance | 84,222 | |
Mortgage-backed, asset-backed and collateralized, Amortized Cost Net of Allowance | 63,264 | |
Available for sale securities, Amortized Cost or Cost, Net of Allowance | 242,234 | |
Due in one year or less, Fair Value | 11,298 | |
Due after one year through five years, Fair Value | 43,869 | |
Due after five years through ten years, Fair Value | 44,725 | |
Due after ten years, Fair Value | 98,696 | |
Mortgage-backed, asset-backed and collateralized, Fair Value | 67,377 | |
Fixed Maturity Securities Available for Sale, Fair Value, Total | $ 265,965 | $ 251,086 |
INVESTMENTS (Details - Gross re
INVESTMENTS (Details - Gross realized gains and gross realized losses from sales or maturities of available for sale securities) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Schedule of Available-for-sale Securities [Line Items] | ||||
Aggregate fair value of available for sale securities sold | $ 3,100 | $ 4,500 | $ 17,000 | $ 17,300 |
Net realized capital gains (losses) | 175 | 128 | 538 | 184 |
Fortitude | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Net realized capital gains (losses) | 147 | 269 | ||
Fixed maturity securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Gross Realized Gains | 258 | 198 | 1,179 | 464 |
Gross Realized Losses | $ 83 | $ 70 | $ 641 | $ 280 |
INVESTMENTS (Details - Carrying
INVESTMENTS (Details - Carrying amounts of other invested assets) - USD ($) $ in Millions | 9 Months Ended | 84 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2027 | Dec. 31, 2019 | |
Investments [Line Items] | |||
Other invested assets | $ 17,915 | $ 18,792 | |
Alternative investments | |||
Investments [Line Items] | |||
Other invested assets | 8,391 | 8,845 | |
Investment real estate | |||
Investments [Line Items] | |||
Other invested assets | 8,010 | 8,491 | |
Net of accumulated depreciation on investment in real estate | 780 | 703 | |
All other investments | |||
Investments [Line Items] | |||
Other invested assets | 1,514 | 1,456 | |
All other investments | Fortitude | |||
Investments [Line Items] | |||
Other invested assets | 100 | ||
Hedge Funds | |||
Investments [Line Items] | |||
Other invested assets | $ 2,200 | 3,300 | |
Hedge Fund Fair Value Redemption, Additional Percentage | 63.00% | 37.00% | |
Direct private equity | |||
Investments [Line Items] | |||
Other invested assets | $ 5,900 | 5,200 | |
Affordable Housing Partnerships | |||
Investments [Line Items] | |||
Other invested assets | $ 270 | $ 331 |
INVESTMENTS (Details - Componen
INVESTMENTS (Details - Components of Net investment income) - USD ($) $ in Millions | Jun. 02, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Net Investment Income [Line Items] | |||||
Total investment income | $ 3,933 | $ 3,543 | $ 10,094 | $ 11,413 | |
Investment expenses | 133 | 135 | 420 | 381 | |
Net investment income | 3,800 | 3,408 | 9,674 | 11,032 | |
Fortitude | |||||
Net Investment Income [Line Items] | |||||
Total investment income | 466 | 582 | |||
Investment expenses | 8 | 8 | |||
Net investment income | 458 | 574 | |||
American International Group, Inc. | Fortitude | |||||
Net Investment Income [Line Items] | |||||
Percentage of common stock held after closing of transaction | 3.50% | ||||
Excluding Fortitude Re funds withheld assets | |||||
Net Investment Income [Line Items] | |||||
Total investment income | 3,467 | 9,512 | |||
Investment expenses | 125 | 412 | |||
Net investment income | 3,342 | 9,100 | |||
Fixed maturity securities, including short-term investments | |||||
Net Investment Income [Line Items] | |||||
Total investment income | 2,582 | 2,698 | 7,779 | 8,052 | |
Fixed maturity securities, including short-term investments | Fortitude | |||||
Net Investment Income [Line Items] | |||||
Total investment income | 373 | 459 | |||
Fixed maturity securities, including short-term investments | Excluding Fortitude Re funds withheld assets | |||||
Net Investment Income [Line Items] | |||||
Total investment income | 2,209 | 7,320 | |||
Other fixed maturity securities | |||||
Net Investment Income [Line Items] | |||||
Total investment income | 171 | 333 | 485 | 941 | |
Derivative Fair Value Hedge Included In Effectiveness Gain Loss | 8 | 146 | 206 | 195 | |
Other fixed maturity securities | Fortitude | |||||
Net Investment Income [Line Items] | |||||
Total investment income | 7 | 10 | |||
Other fixed maturity securities | Excluding Fortitude Re funds withheld assets | |||||
Net Investment Income [Line Items] | |||||
Total investment income | 164 | 475 | |||
Equity securities | |||||
Net Investment Income [Line Items] | |||||
Total investment income | 119 | (51) | (16) | 6 | |
Equity securities | Fortitude | |||||
Net Investment Income [Line Items] | |||||
Total investment income | 0 | 0 | |||
Equity securities | Excluding Fortitude Re funds withheld assets | |||||
Net Investment Income [Line Items] | |||||
Total investment income | 119 | (16) | |||
Interest on mortgage and other loans | |||||
Net Investment Income [Line Items] | |||||
Total investment income | 489 | 495 | 1,500 | 1,511 | |
Interest on mortgage and other loans | Fortitude | |||||
Net Investment Income [Line Items] | |||||
Total investment income | 46 | 59 | |||
Interest on mortgage and other loans | Excluding Fortitude Re funds withheld assets | |||||
Net Investment Income [Line Items] | |||||
Total investment income | 443 | 1,441 | |||
Alternative investments | |||||
Net Investment Income [Line Items] | |||||
Total investment income | 495 | 115 | 363 | 879 | |
Alternative investments | Fortitude | |||||
Net Investment Income [Line Items] | |||||
Total investment income | 40 | 54 | |||
Alternative investments | Excluding Fortitude Re funds withheld assets | |||||
Net Investment Income [Line Items] | |||||
Total investment income | 455 | 309 | |||
Real estate | |||||
Net Investment Income [Line Items] | |||||
Total investment income | 22 | 96 | 142 | 227 | |
Real estate | Fortitude | |||||
Net Investment Income [Line Items] | |||||
Total investment income | 0 | 0 | |||
Real estate | Excluding Fortitude Re funds withheld assets | |||||
Net Investment Income [Line Items] | |||||
Total investment income | 22 | 142 | |||
Other investments | |||||
Net Investment Income [Line Items] | |||||
Total investment income | 55 | (143) | (159) | (203) | |
Derivative Fair Value Hedge Included In Effectiveness Gain Loss | 21 | $ 174 | (195) | $ 220 | |
Other investments | Fortitude | |||||
Net Investment Income [Line Items] | |||||
Total investment income | 0 | 0 | |||
Other investments | Excluding Fortitude Re funds withheld assets | |||||
Net Investment Income [Line Items] | |||||
Total investment income | $ 55 | $ (159) |
INVESTMENTS (Details - Compon_2
INVESTMENTS (Details - Components of Net realized capital gains (losses)) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Gain (Loss) on Investments [Line Items] | |||||
Other-than-temporary impairments | $ 0 | $ (24,000,000) | $ 0 | $ (137,000,000) | |
Change in intent | 0 | 0 | (3,000,000) | 0 | |
Change in allowance for credit losses on fixed maturity securities | (81,000,000) | 0 | (310,000,000) | 0 | |
Change in allowance for credit losses on loans | (11,000,000) | (25,000,000) | (67,000,000) | (35,000,000) | |
Foreign exchange transactions | 257,000,000 | (203,000,000) | 50,000,000 | (242,000,000) | |
Variable annuity embedded derivatives, net of related hedges | (148,000,000) | 311,000,000 | 1,034,000,000 | 10,000,000 | |
All other derivatives and hedge accounting | (746,000,000) | 466,000,000 | 219,000,000 | 601,000,000 | |
Other | 88,000,000 | 276,000,000 | 97,000,000 | 506,000,000 | |
Total net realized capital gains (losses) | (1,122,000,000) | 929,000,000 | 65,000,000 | 887,000,000 | |
Excluding Fortitude Re funds withheld assets | |||||
Gain (Loss) on Investments [Line Items] | |||||
Other-than-temporary impairments | 0 | 0 | |||
Change in intent | 0 | (3,000,000) | |||
Change in allowance for credit losses on fixed maturity securities | (77,000,000) | (299,000,000) | |||
Change in allowance for credit losses on loans | (13,000,000) | (73,000,000) | |||
Foreign exchange transactions | 250,000,000 | 40,000,000 | |||
Variable annuity embedded derivatives, net of related hedges | (148,000,000) | 1,034,000,000 | |||
All other derivatives and hedge accounting | (626,000,000) | 365,000,000 | |||
Other | 88,000,000 | 97,000,000 | |||
Total net realized capital gains (losses) | (498,000,000) | 1,430,000,000 | |||
Fortitude | |||||
Gain (Loss) on Investments [Line Items] | |||||
Other-than-temporary impairments | 0 | 0 | |||
Change in intent | 0 | 0 | |||
Change in allowance for credit losses on fixed maturity securities | (4,000,000) | (11,000,000) | |||
Change in allowance for credit losses on loans | 2,000,000 | 6,000,000 | |||
Foreign exchange transactions | 7,000,000 | 10,000,000 | |||
Variable annuity embedded derivatives, net of related hedges | 0 | 0 | |||
All other derivatives and hedge accounting | (120,000,000) | (146,000,000) | |||
Other | 0 | 0 | |||
Total net realized capital gains (losses) | (624,000,000) | (1,365,000,000) | |||
Fixed maturity securities | |||||
Gain (Loss) on Investments [Line Items] | |||||
Sales of fixed maturity securities | 175,000,000 | 128,000,000 | 538,000,000 | 184,000,000 | |
Fixed maturity securities | Excluding Fortitude Re funds withheld assets | |||||
Gain (Loss) on Investments [Line Items] | |||||
Sales of fixed maturity securities | 28,000,000 | 269,000,000 | |||
Fixed maturity securities | Fortitude | |||||
Gain (Loss) on Investments [Line Items] | |||||
Sales of fixed maturity securities | 147,000,000 | 269,000,000 | |||
Excluding Fortitude Re funds withheld embedded derivative | |||||
Gain (Loss) on Investments [Line Items] | |||||
Total net realized capital gains (losses) | (466,000,000) | 929,000,000 | 1,558,000,000 | 887,000,000 | |
Excluding Fortitude Re funds withheld embedded derivative | Excluding Fortitude Re funds withheld assets | |||||
Gain (Loss) on Investments [Line Items] | |||||
Total net realized capital gains (losses) | (498,000,000) | 1,430,000,000 | |||
Excluding Fortitude Re funds withheld embedded derivative | Fortitude | |||||
Gain (Loss) on Investments [Line Items] | |||||
Total net realized capital gains (losses) | 32,000,000 | 128,000,000 | |||
Fortitude Re funds withheld embedded derivative | |||||
Gain (Loss) on Investments [Line Items] | |||||
Total net realized capital gains (losses) | [1] | (656,000,000) | $ 0 | (1,493,000,000) | $ 0 |
Fortitude Re funds withheld embedded derivative | Excluding Fortitude Re funds withheld assets | |||||
Gain (Loss) on Investments [Line Items] | |||||
Total net realized capital gains (losses) | 0 | 0 | |||
Fortitude Re funds withheld embedded derivative | Fortitude | |||||
Gain (Loss) on Investments [Line Items] | |||||
Total net realized capital gains (losses) | $ (656,000,000) | $ (1,493,000,000) | |||
[1] | Represents activity subsequent to the deconsolidation of Fortitude Re on June 2, 2020. |
INVESTMENTS (Details - Schedule
INVESTMENTS (Details - Schedule of increase (decrease) in unrealized appreciation (depreciation) of available for sale securities and other investments) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Increase (decrease) in unrealized appreciation (depreciation) of investments | ||||
Net gains and losses recognized during the year on equity securities | $ 583 | $ 54 | $ 248 | $ 621 |
Less: Net gains and losses recognized during the year on equity securities sold during the year | (8) | 31 | 24 | 199 |
Unrealized gains and losses recognized during the reporting period on equity securities still held at the reporting date | 591 | 23 | 224 | 422 |
Change in unrealized appreciation (depreciation) of investments | 2,374 | 4,377 | 5,876 | 16,197 |
Fixed maturity securities | ||||
Increase (decrease) in unrealized appreciation (depreciation) of investments | ||||
Change in unrealized appreciation (depreciation) of investments | 2,373 | 4,377 | 5,875 | 16,265 |
Equity securities | ||||
Increase (decrease) in unrealized appreciation (depreciation) of investments | ||||
Net gains and losses recognized during the year on equity securities | 119 | (51) | (16) | 6 |
Less: Net gains and losses recognized during the year on equity securities sold during the year | (3) | 18 | 14 | 30 |
Unrealized gains and losses recognized during the reporting period on equity securities still held at the reporting date | 122 | (69) | (30) | (24) |
Other investments | ||||
Increase (decrease) in unrealized appreciation (depreciation) of investments | ||||
Change in unrealized appreciation (depreciation) of investments | 1 | 0 | 1 | (68) |
Other invested assets | ||||
Increase (decrease) in unrealized appreciation (depreciation) of investments | ||||
Net gains and losses recognized during the year on equity securities | 464 | 105 | 264 | 615 |
Less: Net gains and losses recognized during the year on equity securities sold during the year | (5) | 13 | 10 | 169 |
Unrealized gains and losses recognized during the reporting period on equity securities still held at the reporting date | $ 469 | $ 92 | $ 254 | $ 446 |
INVESTMENTS (Details - Rollforw
INVESTMENTS (Details - Rollforward of changes in allowance for credit losses on available for sale fixed maturity securities by major investment category) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Schedule of Available-for-sale Securities [Line Items] | ||
Securities available for sale, balance, beginning of year | $ 198 | $ 0 |
Securities for which allowance for credit losses were not previously recorded | 31 | 330 |
Purchases of available for sale debt securities accounted for as PCD assets | 0 | 26 |
Accretion of available for sale debt securities accounted for as purchased credit deteriorated assets | 0 | 1 |
Securities sold during the period | (7) | (13) |
Intent to sell security or more like than not will be required to sell the security before recovery of its amortized cost basis | 0 | 0 |
Additional net increases or decreases to the allowance for credit losses on securities that had an allowance recorded in a previous period, for which there was no intention to sell before recovery amortized cost basis | 57 | (7) |
Write-offs charged against the allowance | (43) | (108) |
Recoveries of amounts previously written off | 0 | 0 |
Other | 0 | 0 |
Securities available for sale, balance, end of period | 236 | 236 |
Adjusted balance | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Securities available for sale, balance, beginning of year | 7 | |
Structured Finance [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Securities available for sale, balance, beginning of year | 37 | |
Securities for which allowance for credit losses were not previously recorded | 1 | 36 |
Purchases of available for sale debt securities accounted for as PCD assets | 0 | 26 |
Accretion of available for sale debt securities accounted for as purchased credit deteriorated assets | 0 | 1 |
Securities sold during the period | (2) | (3) |
Intent to sell security or more like than not will be required to sell the security before recovery of its amortized cost basis | 0 | 0 |
Additional net increases or decreases to the allowance for credit losses on securities that had an allowance recorded in a previous period, for which there was no intention to sell before recovery amortized cost basis | (10) | (41) |
Write-offs charged against the allowance | 0 | 0 |
Recoveries of amounts previously written off | 0 | 0 |
Other | 0 | 0 |
Securities available for sale, balance, end of period | 26 | 26 |
Structured Finance [Member] | Adjusted balance | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Securities available for sale, balance, beginning of year | 7 | |
Non-structured [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Securities available for sale, balance, beginning of year | 161 | |
Securities for which allowance for credit losses were not previously recorded | 30 | 294 |
Purchases of available for sale debt securities accounted for as PCD assets | 0 | 0 |
Accretion of available for sale debt securities accounted for as purchased credit deteriorated assets | 0 | 0 |
Securities sold during the period | (5) | (10) |
Intent to sell security or more like than not will be required to sell the security before recovery of its amortized cost basis | 0 | 0 |
Additional net increases or decreases to the allowance for credit losses on securities that had an allowance recorded in a previous period, for which there was no intention to sell before recovery amortized cost basis | 67 | 34 |
Write-offs charged against the allowance | (43) | (108) |
Recoveries of amounts previously written off | 0 | 0 |
Other | 0 | 0 |
Securities available for sale, balance, end of period | $ 210 | 210 |
Non-structured [Member] | Adjusted balance | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Securities available for sale, balance, beginning of year | $ 0 |
INVESTMENTS (Details - Rollfo_2
INVESTMENTS (Details - Rollforward of the cumulative credit losses in other-than-temporary impairments recognized in earnings) - Fixed maturity securities - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Other Than Temporary Impairment Credit Losses Recognized in Earnings | ||
Balance, beginning of year | $ 34 | $ 0 |
Increases due to: | ||
Credit impairments on new securities subject to impairment losses | 10 | 105 |
Additional credit impairments on previously impaired securities | 8 | 14 |
Reductions due to: | ||
Credit impaired securities fully disposed for which there was no prior intent or requirement to sell | (3) | (62) |
Accretion on securities previously impaired due to credit | (7) | (15) |
Balance, end of year | $ 42 | $ 42 |
INVESTMENTS (Details - Reconcil
INVESTMENTS (Details - Reconciliation of purchase price to unpaid principal balance of securities purchased with credit deterioration) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
INVESTMENTS | |
Unpaid principal balance | $ 644 |
Allowance for expected credit losses at acquisition | (26) |
Purchase (discount) premium | (149) |
Purchase price | $ 469 |
INVESTMENTS (Details - Schedu_2
INVESTMENTS (Details - Schedule of purchased credit impaired (PCI) securities) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2020 | Dec. 31, 2019 | |
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized cost | $ 242,470 | $ 233,230 | ||
Bonds available for sale | $ 265,965 | 251,086 | ||
Purchased Credit Impaired (PCI) Securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Contractually required payments (principal and interest) | 35,139 | |||
Cash flows expected to be collected | 28,720 | |||
Recorded investment in acquired securities | 19,382 | |||
Outstanding principal balance | 10,476 | |||
Amortized cost | 6,970 | |||
Bonds available for sale | $ 8,664 | |||
Available for sale securities | Purchased Credit Impaired (PCI) Securities | ||||
Changes in activity for the accretable yield on PCI securities: | ||||
Balance, beginning of year | $ 6,402 | $ 7,210 | ||
Newly purchased PCI securities | 4 | 17 | ||
Accretion | (172) | (495) | ||
Effect of changes in interest rate indices | (278) | (678) | ||
Net reclassification from (to) non-accretable difference, including effects of prepayments | (162) | (260) | ||
Balance, end of year | $ 5,794 | $ 5,794 |
INVESTMENTS (Details - Pledged
INVESTMENTS (Details - Pledged investments) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Investments [Line Items] | ||
Fair value of securities collateral pledged | $ 5,076 | $ 2,567 |
Fair value of amount sold or repledged | 0 | 121 |
Securities Lending Agreements, Fair Value of Collateral | 3,312 | 2,798 |
Short-term investments held in escrow | 476 | 330 |
Total carrying values of cash and securities deposited under requirements of regulatory authorities or other insurance-related arrangements | 10,800 | 8,700 |
Overnight and continuous | ||
Investments [Line Items] | ||
Securities Lending Agreements, Fair Value of Collateral | 0 | 0 |
Up to 30 Days | ||
Investments [Line Items] | ||
Securities Lending Agreements, Fair Value of Collateral | 1,933 | 1,071 |
31 to 90 Days | ||
Investments [Line Items] | ||
Securities Lending Agreements, Fair Value of Collateral | 1,379 | 1,333 |
91 to 364 Days | ||
Investments [Line Items] | ||
Securities Lending Agreements, Fair Value of Collateral | 0 | 394 |
365 Days or Greater | ||
Investments [Line Items] | ||
Securities Lending Agreements, Fair Value of Collateral | 0 | 0 |
FHLBs | ||
Investments [Line Items] | ||
Fair value of fixed maturities securities available for sale | 5,700 | 4,300 |
Amount owned by subsidiaries | 191 | 194 |
Residential loans pledged as collateral | 1,500 | 1,800 |
Secured financing | ||
Investments [Line Items] | ||
Amounts Borrowed Under Repurchase and Securities Lending Agreements | 3,700 | 3,100 |
Securities Sold under Agreements to Repurchase, Fair Value of Collateral | 352 | 232 |
Amounts Loaned under Reverse Repurchase Agreements | 5,100 | 2,600 |
Secured financing | Fixed Maturities [Member] | ||
Investments [Line Items] | ||
Fair value of fixed maturities securities available for sale | 3,664 | 3,030 |
Secured financing | Overnight and continuous | ||
Investments [Line Items] | ||
Securities Sold under Agreements to Repurchase, Fair Value of Collateral | 254 | 24 |
Secured financing | Up to 30 Days | ||
Investments [Line Items] | ||
Securities Sold under Agreements to Repurchase, Fair Value of Collateral | 98 | 126 |
Secured financing | 31 to 90 Days | ||
Investments [Line Items] | ||
Securities Sold under Agreements to Repurchase, Fair Value of Collateral | 0 | 82 |
Secured financing | 91 to 364 Days | ||
Investments [Line Items] | ||
Securities Sold under Agreements to Repurchase, Fair Value of Collateral | 0 | 0 |
Secured financing | 365 Days or Greater | ||
Investments [Line Items] | ||
Securities Sold under Agreements to Repurchase, Fair Value of Collateral | 0 | 0 |
Secured financing | Bonds available for sale | Obligations of states, municipalities and political subdivisions | ||
Investments [Line Items] | ||
Securities Lending Agreements, Fair Value of Collateral | 102 | 386 |
Secured financing | Bonds available for sale | Non-U.S. governments | ||
Investments [Line Items] | ||
Securities Sold under Agreements to Repurchase, Fair Value of Collateral | 107 | 73 |
Secured financing | Bonds available for sale | Corporate debt | ||
Investments [Line Items] | ||
Securities Sold under Agreements to Repurchase, Fair Value of Collateral | 245 | 159 |
Securities Lending Agreements, Fair Value of Collateral | 2,807 | 2,018 |
Secured financing | Bonds available for sale | Residential mortgage-backed securities (RMBS) | ||
Investments [Line Items] | ||
Securities Lending Agreements, Fair Value of Collateral | 403 | 394 |
Secured financing | Bonds available for sale | Overnight and continuous | Obligations of states, municipalities and political subdivisions | ||
Investments [Line Items] | ||
Securities Lending Agreements, Fair Value of Collateral | 0 | 0 |
Secured financing | Bonds available for sale | Overnight and continuous | Non-U.S. governments | ||
Investments [Line Items] | ||
Securities Sold under Agreements to Repurchase, Fair Value of Collateral | 107 | 2 |
Secured financing | Bonds available for sale | Overnight and continuous | Corporate debt | ||
Investments [Line Items] | ||
Securities Sold under Agreements to Repurchase, Fair Value of Collateral | 147 | 22 |
Securities Lending Agreements, Fair Value of Collateral | 0 | 0 |
Secured financing | Bonds available for sale | Overnight and continuous | Residential mortgage-backed securities (RMBS) | ||
Investments [Line Items] | ||
Securities Lending Agreements, Fair Value of Collateral | 0 | 0 |
Secured financing | Bonds available for sale | Up to 30 Days | Obligations of states, municipalities and political subdivisions | ||
Investments [Line Items] | ||
Securities Lending Agreements, Fair Value of Collateral | 102 | 0 |
Secured financing | Bonds available for sale | Up to 30 Days | Non-U.S. governments | ||
Investments [Line Items] | ||
Securities Sold under Agreements to Repurchase, Fair Value of Collateral | 0 | 71 |
Secured financing | Bonds available for sale | Up to 30 Days | Corporate debt | ||
Investments [Line Items] | ||
Securities Sold under Agreements to Repurchase, Fair Value of Collateral | 98 | 55 |
Securities Lending Agreements, Fair Value of Collateral | 1,428 | 1,071 |
Secured financing | Bonds available for sale | Up to 30 Days | Residential mortgage-backed securities (RMBS) | ||
Investments [Line Items] | ||
Securities Lending Agreements, Fair Value of Collateral | 403 | 0 |
Secured financing | Bonds available for sale | 31 to 90 Days | Obligations of states, municipalities and political subdivisions | ||
Investments [Line Items] | ||
Securities Lending Agreements, Fair Value of Collateral | 0 | 386 |
Secured financing | Bonds available for sale | 31 to 90 Days | Non-U.S. governments | ||
Investments [Line Items] | ||
Securities Sold under Agreements to Repurchase, Fair Value of Collateral | 0 | 0 |
Secured financing | Bonds available for sale | 31 to 90 Days | Corporate debt | ||
Investments [Line Items] | ||
Securities Sold under Agreements to Repurchase, Fair Value of Collateral | 0 | 82 |
Securities Lending Agreements, Fair Value of Collateral | 1,379 | 947 |
Secured financing | Bonds available for sale | 31 to 90 Days | Residential mortgage-backed securities (RMBS) | ||
Investments [Line Items] | ||
Securities Lending Agreements, Fair Value of Collateral | 0 | 0 |
Secured financing | Bonds available for sale | 91 to 364 Days | Obligations of states, municipalities and political subdivisions | ||
Investments [Line Items] | ||
Securities Lending Agreements, Fair Value of Collateral | 0 | 0 |
Secured financing | Bonds available for sale | 91 to 364 Days | Non-U.S. governments | ||
Investments [Line Items] | ||
Securities Sold under Agreements to Repurchase, Fair Value of Collateral | 0 | 0 |
Secured financing | Bonds available for sale | 91 to 364 Days | Corporate debt | ||
Investments [Line Items] | ||
Securities Sold under Agreements to Repurchase, Fair Value of Collateral | 0 | 0 |
Securities Lending Agreements, Fair Value of Collateral | 0 | 0 |
Secured financing | Bonds available for sale | 91 to 364 Days | Residential mortgage-backed securities (RMBS) | ||
Investments [Line Items] | ||
Securities Lending Agreements, Fair Value of Collateral | 0 | 394 |
Secured financing | Bonds available for sale | 365 Days or Greater | Obligations of states, municipalities and political subdivisions | ||
Investments [Line Items] | ||
Securities Lending Agreements, Fair Value of Collateral | 0 | 0 |
Secured financing | Bonds available for sale | 365 Days or Greater | Non-U.S. governments | ||
Investments [Line Items] | ||
Securities Sold under Agreements to Repurchase, Fair Value of Collateral | 0 | 0 |
Secured financing | Bonds available for sale | 365 Days or Greater | Corporate debt | ||
Investments [Line Items] | ||
Securities Sold under Agreements to Repurchase, Fair Value of Collateral | 0 | 0 |
Securities Lending Agreements, Fair Value of Collateral | 0 | 0 |
Secured financing | Bonds available for sale | 365 Days or Greater | Residential mortgage-backed securities (RMBS) | ||
Investments [Line Items] | ||
Securities Lending Agreements, Fair Value of Collateral | 0 | 0 |
GIAs | ||
Investments [Line Items] | ||
Fair value of other bond securities | $ 1,500 | $ 1,500 |
INVESTMENTS (Details - Value of
INVESTMENTS (Details - Value of other securities measured at fair value based on election of the fair value option) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Other Securities, Fair Value | $ 6,286 | $ 7,523 |
Other Securities, Percent of Total | 100.00% | 100.00% |
Fixed maturity securities | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Other Securities, Fair Value | $ 5,415 | $ 6,682 |
Other Securities, Percent of Total | 86.00% | 89.00% |
Fixed maturity securities | U.S. government and government sponsored entities | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Other Securities, Fair Value | $ 1,870 | $ 2,121 |
Other Securities, Percent of Total | 30.00% | 28.00% |
Fixed maturity securities | Corporate debt | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Other Securities, Fair Value | $ 12 | $ 18 |
Other Securities, Percent of Total | 0.00% | 0.00% |
Fixed maturity securities | Mortgage-backed, asset-backed and collateralized | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Other Securities, Fair Value | $ 3,533 | $ 4,543 |
Other Securities, Percent of Total | 56.00% | 61.00% |
Fixed maturity securities | Residential mortgage-backed securities (RMBS) | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Other Securities, Fair Value | $ 488 | $ 489 |
Other Securities, Percent of Total | 8.00% | 7.00% |
Fixed maturity securities | Commercial mortgage-backed securities (CMBS) | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Other Securities, Fair Value | $ 322 | $ 322 |
Other Securities, Percent of Total | 5.00% | 4.00% |
Fixed maturity securities | Collateralized Debt Obligations/Asset-Backed Securities (CDO/ABS) | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Other Securities, Fair Value | $ 2,723 | $ 3,732 |
Other Securities, Percent of Total | 43.00% | 50.00% |
Equity securities | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Other Securities, Fair Value | $ 871 | $ 841 |
Other Securities, Percent of Total | 14.00% | 11.00% |
LENDING ACTIVITIES (Details - C
LENDING ACTIVITIES (Details - Composition of mortgages and other loans receivable) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Total mortgage and other loans receivable | $ 46,387 | $ 47,422 | ||||
Allowance for credit losses | (797) | (438) | $ (794) | $ (430) | $ (407) | $ (397) |
Mortgage and other loans receivable, net | $ 45,590 | 46,984 | ||||
Accrued interest receivable, balance sheet location | us-gaap:OtherAssets | |||||
Off-balance-sheet commitments | $ 66 | 0 | 58 | |||
Commercial mortgages | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Total mortgage and other loans receivable | 36,359 | 36,170 | ||||
Allowance for credit losses | (659) | $ (336) | $ (667) | $ (335) | $ (310) | $ (318) |
Loans on nonaccrual status | 282 | |||||
Accrued interest receivable | 125 | |||||
Off-balance-sheet commitments | $ 66 | |||||
Commercial mortgages | Geographic Concentration Risk | Total Assets | California | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Percentage of mortgage loans in geographic area | 10.00% | 10.00% | ||||
Commercial mortgages | Geographic Concentration Risk | Total Assets | New York | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Percentage of mortgage loans in geographic area | 25.00% | 23.00% | ||||
Residential mortgages | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Total mortgage and other loans receivable | $ 5,202 | $ 6,683 | ||||
Mortgage and other loans receivable, net | 5,202 | |||||
Loans on nonaccrual status | 8 | |||||
Accrued interest receivable | 16 | |||||
Life insurance policy loans | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Total mortgage and other loans receivable | 2,072 | 2,065 | ||||
Commercial loans, other loans and notes receivable | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Total mortgage and other loans receivable | $ 2,754 | $ 2,504 |
LENDING ACTIVITIES (Details -_2
LENDING ACTIVITIES (Details - Credit quality of commercial mortgages) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | $ 646 | |
2019 | 1,248 | |
2018 | 527 | |
2017 | 866 | |
2016 | 973 | |
Prior | 942 | |
Mortgage and other loans receivable, net | 46,387 | $ 47,422 |
Commercial mortgages | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 1,736 | |
2019 | 5,924 | |
2018 | 6,309 | |
2017 | 4,202 | |
2016 | 5,258 | |
Prior | 12,930 | |
Mortgage and other loans receivable, net | 36,359 | 36,170 |
Less than 65% | Commercial mortgages | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 1,571 | |
2019 | 3,594 | |
2018 | 4,796 | |
2017 | 3,050 | |
2016 | 3,251 | |
Prior | 10,136 | |
Mortgage and other loans receivable, net | 26,398 | |
65% to 75% | Commercial mortgages | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 163 | |
2019 | 1,858 | |
2018 | 1,513 | |
2017 | 974 | |
2016 | 1,292 | |
Prior | 1,751 | |
Mortgage and other loans receivable, net | 7,551 | |
76% to 80% | Commercial mortgages | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 88 | |
2018 | 0 | |
2017 | 124 | |
2016 | 98 | |
Prior | 500 | |
Mortgage and other loans receivable, net | 810 | |
Greater than 80% | Commercial mortgages | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 2 | |
2019 | 384 | |
2018 | 0 | |
2017 | 54 | |
2016 | 617 | |
Prior | 543 | |
Mortgage and other loans receivable, net | 1,600 | |
Greater than 1.2x | Commercial mortgages | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 1,577 | |
2019 | 5,452 | |
2018 | 5,506 | |
2017 | 4,008 | |
2016 | 5,002 | |
Prior | 11,150 | |
Mortgage and other loans receivable, net | 32,695 | |
Greater than 1.2x | Less than 65% | Commercial mortgages | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Mortgage and other loans receivable, net | 23,013 | |
Greater than 1.2x | 65% to 75% | Commercial mortgages | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Mortgage and other loans receivable, net | 9,007 | |
Greater than 1.2x | 76% to 80% | Commercial mortgages | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Mortgage and other loans receivable, net | 200 | |
Greater than 1.2x | Greater than 80% | Commercial mortgages | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Mortgage and other loans receivable, net | 184 | |
Greater than 1.2x | Total | Commercial mortgages | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Mortgage and other loans receivable, net | 32,404 | |
1.00X - 1.20X | Commercial mortgages | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 157 | |
2019 | 393 | |
2018 | 457 | |
2017 | 108 | |
2016 | 162 | |
Prior | 1,382 | |
Mortgage and other loans receivable, net | 2,659 | |
1.00X - 1.20X | Less than 65% | Commercial mortgages | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Mortgage and other loans receivable, net | 2,440 | |
1.00X - 1.20X | 65% to 75% | Commercial mortgages | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Mortgage and other loans receivable, net | 899 | |
1.00X - 1.20X | 76% to 80% | Commercial mortgages | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Mortgage and other loans receivable, net | 6 | |
1.00X - 1.20X | Greater than 80% | Commercial mortgages | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Mortgage and other loans receivable, net | 2 | |
1.00X - 1.20X | Total | Commercial mortgages | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Mortgage and other loans receivable, net | 3,347 | |
Less than 1.00X | Commercial mortgages | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 2 | |
2019 | 79 | |
2018 | 346 | |
2017 | 86 | |
2016 | 94 | |
Prior | 398 | |
Mortgage and other loans receivable, net | $ 1,005 | |
Less than 1.00X | Less than 65% | Commercial mortgages | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Mortgage and other loans receivable, net | 245 | |
Less than 1.00X | 65% to 75% | Commercial mortgages | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Mortgage and other loans receivable, net | 40 | |
Less than 1.00X | 76% to 80% | Commercial mortgages | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Mortgage and other loans receivable, net | 0 | |
Less than 1.00X | Greater than 80% | Commercial mortgages | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Mortgage and other loans receivable, net | 134 | |
Less than 1.00X | Total | Commercial mortgages | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Mortgage and other loans receivable, net | 419 | |
Total | Less than 65% | Commercial mortgages | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Mortgage and other loans receivable, net | 25,698 | |
Total | 65% to 75% | Commercial mortgages | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Mortgage and other loans receivable, net | 9,946 | |
Total | 76% to 80% | Commercial mortgages | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Mortgage and other loans receivable, net | 206 | |
Total | Greater than 80% | Commercial mortgages | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Mortgage and other loans receivable, net | 320 | |
Total | Total | Commercial mortgages | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Mortgage and other loans receivable, net | $ 36,170 |
LENDING ACTIVITIES (Details -_3
LENDING ACTIVITIES (Details - Credit quality performance indicators for commercial mortgages) $ in Millions | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2020USD ($)loan | Dec. 31, 2019USD ($)loan | Jun. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2018USD ($) | |
Financing Receivable, Credit Quality Indicator [Line Items] | ||||||
Mortgage and other loans receivable, net | $ 45,590 | $ 46,984 | ||||
Allowance for credit losses | $ 797 | $ 438 | $ 794 | $ 430 | $ 407 | $ 397 |
Debt Coverage Ratio | 2.2 | 2 | ||||
Average Loan to Value Ratio | 57.00% | 56.00% | ||||
Apartments | ||||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||||
In good standing | $ 13,704 | $ 13,698 | ||||
Restructured | 0 | 0 | ||||
90 days or less delinquent | 0 | 1 | ||||
Greater than 90 days delinquent or in process of foreclosure | 0 | 0 | ||||
Mortgage and other loans receivable, net | 13,704 | 13,699 | ||||
Allowance for credit losses, Specific | 0 | |||||
Allowance for credit losses, General | 81 | |||||
Allowance for credit losses | 123 | 81 | ||||
Offices | ||||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||||
In good standing | 10,843 | 10,553 | ||||
Restructured | 0 | 89 | ||||
90 days or less delinquent | 0 | 0 | ||||
Greater than 90 days delinquent or in process of foreclosure | 116 | 0 | ||||
Mortgage and other loans receivable, net | 10,959 | 10,642 | ||||
Allowance for credit losses, Specific | 2 | |||||
Allowance for credit losses, General | 153 | |||||
Allowance for credit losses | 281 | 155 | ||||
Retail | ||||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||||
In good standing | 5,124 | 5,332 | ||||
Restructured | 50 | 0 | ||||
90 days or less delinquent | 0 | 0 | ||||
Greater than 90 days delinquent or in process of foreclosure | 54 | 0 | ||||
Mortgage and other loans receivable, net | 5,228 | 5,332 | ||||
Allowance for credit losses, Specific | 1 | |||||
Allowance for credit losses, General | 44 | |||||
Allowance for credit losses | 141 | 45 | ||||
Industrial | ||||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||||
In good standing | 3,746 | 3,663 | ||||
Restructured | 0 | 0 | ||||
90 days or less delinquent | 0 | 0 | ||||
Greater than 90 days delinquent or in process of foreclosure | 0 | 0 | ||||
Mortgage and other loans receivable, net | 3,746 | 3,663 | ||||
Allowance for credit losses, Specific | 0 | |||||
Allowance for credit losses, General | 30 | |||||
Allowance for credit losses | 55 | 30 | ||||
Hotel | ||||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||||
In good standing | 2,080 | 2,211 | ||||
Restructured | 0 | 101 | ||||
90 days or less delinquent | 108 | 0 | ||||
Greater than 90 days delinquent or in process of foreclosure | 86 | 0 | ||||
Mortgage and other loans receivable, net | 2,274 | 2,312 | ||||
Allowance for credit losses, Specific | 6 | |||||
Allowance for credit losses, General | 14 | |||||
Allowance for credit losses | 52 | 20 | ||||
Others | ||||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||||
In good standing | 448 | 522 | ||||
Restructured | 0 | 0 | ||||
90 days or less delinquent | 0 | 0 | ||||
Greater than 90 days delinquent or in process of foreclosure | 0 | 0 | ||||
Mortgage and other loans receivable, net | 448 | 522 | ||||
Allowance for credit losses, Specific | 0 | |||||
Allowance for credit losses, General | 5 | |||||
Allowance for credit losses | $ 7 | $ 5 | ||||
Commercial mortgages | ||||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||||
Number of loans in good standing | loan | 700 | 736 | ||||
Number of loans restructured | loan | 3 | 3 | ||||
Number of loans 90 days or less delinquent | loan | 1 | 1 | ||||
Number of loans greater than 90 days delinquent or in process of foreclosure | loan | 5 | 0 | ||||
Number of Loans | loan | 709 | 740 | ||||
In good standing | $ 35,945 | $ 35,979 | ||||
Restructured | 50 | 190 | ||||
90 days or less delinquent | 108 | 1 | ||||
Greater than 90 days delinquent or in process of foreclosure | 256 | 0 | ||||
Mortgage and other loans receivable, net | 36,359 | 36,170 | ||||
Allowance for credit losses, Specific | 9 | |||||
Allowance for credit losses, General | 327 | |||||
Allowance for credit losses | $ 659 | $ 336 | ||||
Percentage of loans that are current as to payments of principal and interest | 99.00% | 99.00% | ||||
Percentage restructured | 0.00% | 1.00% | ||||
Percentage 90 days or less delinquent | 0.00% | 0.00% | ||||
Percentage greater than 90 days delinquent or in foreclosure | 1.00% | 0.00% | ||||
Percentage Total | 100.00% | 100.00% | ||||
Percentage of loans with valuation allowance, Specific | 0.00% | |||||
Percentage of loans with valuation allowance, General | 1.00% | |||||
Percentage of loans with allowance for losses | 2.00% | 1.00% |
LENDING ACTIVITIES (Details -_4
LENDING ACTIVITIES (Details - Credit quality of residential mortgages by year of vintage) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | $ 646 | |
2019 | 1,248 | |
2018 | 527 | |
2017 | 866 | |
2016 | 973 | |
Prior | 942 | |
Mortgage and other loans receivable, net | 45,590 | $ 46,984 |
Residential mortgages | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Mortgage and other loans receivable, net | 5,202 | |
780 and greater | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 309 | |
2019 | 764 | |
2018 | 364 | |
2017 | 627 | |
2016 | 688 | |
Prior | 650 | |
Mortgage and other loans receivable, net | 3,402 | |
720 - 779 | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 326 | |
2019 | 411 | |
2018 | 123 | |
2017 | 182 | |
2016 | 221 | |
Prior | 197 | |
Mortgage and other loans receivable, net | 1,460 | |
660 - 719 | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 10 | |
2019 | 67 | |
2018 | 33 | |
2017 | 48 | |
2016 | 56 | |
Prior | 73 | |
Mortgage and other loans receivable, net | 287 | |
600 - 659 | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 1 | |
2019 | 6 | |
2018 | 6 | |
2017 | 7 | |
2016 | 5 | |
Prior | 13 | |
Mortgage and other loans receivable, net | 38 | |
Less than 600 | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 1 | |
2017 | 2 | |
2016 | 3 | |
Prior | 9 | |
Mortgage and other loans receivable, net | $ 15 |
LENDING ACTIVITIES (Details - R
LENDING ACTIVITIES (Details - Rollforward of the changes in the allowance for losses on Mortgage and other loans receivable) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2020 | Dec. 31, 2019 | |
Changes in the allowance for losses on Mortgage and other loans receivable | ||||||
Mortgage and other loan receivables, balance, beginning of year | $ 794,000,000 | $ 407,000,000 | $ 438,000,000 | $ 397,000,000 | ||
Initial allowance upon adoption | 0 | 0 | 318,000,000 | 0 | ||
Loans charged off | 0 | (2,000,000) | (12,000,000) | (2,000,000) | ||
Recoveries of loans previously charged off | 0 | 0 | 0 | 0 | ||
Net charge-offs | 0 | (2,000,000) | (12,000,000) | (2,000,000) | ||
Provision for loan losses | 3,000,000 | 25,000,000 | 53,000,000 | 35,000,000 | ||
Mortgage and other loan receivables, balance, end of period | 797,000,000 | 430,000,000 | 797,000,000 | 430,000,000 | ||
Loans modified in a troubled debt restructuring | 50,000,000 | 0 | 50,000,000 | 0 | ||
Off-balance-sheet commitments | 66,000,000 | 66,000,000 | $ 58,000,000 | $ 0 | ||
Commercial mortgages | ||||||
Changes in the allowance for losses on Mortgage and other loans receivable | ||||||
Mortgage and other loan receivables, balance, beginning of year | 667,000,000 | 310,000,000 | 336,000,000 | 318,000,000 | ||
Initial allowance upon adoption | 0 | 0 | 311,000,000 | 0 | ||
Loans charged off | 0 | (2,000,000) | (12,000,000) | (2,000,000) | ||
Recoveries of loans previously charged off | 0 | 0 | 0 | 0 | ||
Net charge-offs | 0 | (2,000,000) | (12,000,000) | (2,000,000) | ||
Provision for loan losses | (8,000,000) | 27,000,000 | 24,000,000 | 19,000,000 | ||
Mortgage and other loan receivables, balance, end of period | 659,000,000 | 335,000,000 | 659,000,000 | 335,000,000 | ||
Allowance related to individually assessed credit losses | 10,000,000 | 10,000,000 | ||||
Commercial mortgage loans | 151,000,000 | 151,000,000 | ||||
Off-balance-sheet commitments | 66,000,000 | 66,000,000 | ||||
Other Loans | ||||||
Changes in the allowance for losses on Mortgage and other loans receivable | ||||||
Mortgage and other loan receivables, balance, beginning of year | 127,000,000 | 97,000,000 | 102,000,000 | 79,000,000 | ||
Initial allowance upon adoption | 0 | 0 | 7,000,000 | 0 | ||
Loans charged off | 0 | 0 | 0 | 0 | ||
Recoveries of loans previously charged off | 0 | 0 | 0 | 0 | ||
Net charge-offs | 0 | 0 | 0 | 0 | ||
Provision for loan losses | 11,000,000 | (2,000,000) | 29,000,000 | 16,000,000 | ||
Mortgage and other loan receivables, balance, end of period | $ 138,000,000 | $ 95,000,000 | $ 138,000,000 | $ 95,000,000 |
REINSURANCE (Details - Summary
REINSURANCE (Details - Summary of the composition of pool of assets) - USD ($) $ in Millions | 4 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Effects of Reinsurance [Line Items] | ||
Available for sale securities, Fair Value | $ 265,965 | $ 251,086 |
Fixed maturity securities - fair value option | 5,415 | 6,682 |
Investments | 17,915 | 18,792 |
Policy Loans | 46,387 | 47,422 |
Derivative assets, net | 789 | 793 |
Other | 13,270 | 16,383 |
Fixed maturity securities - available for sale | 265,965 | 251,086 |
Fixed maturity securities - fair value option | 5,415 | 6,682 |
Real estate investments | 7,064 | 6,827 |
Derivative assets, net | 7,613 | 5,026 |
Other | 901 | 3,151 |
Commercial mortgages | ||
Effects of Reinsurance [Line Items] | ||
Policy Loans | 36,359 | $ 36,170 |
Fortitude Holdings | ||
Effects of Reinsurance [Line Items] | ||
Available for sale securities, Fair Value | 35,775 | |
Fixed maturity securities - fair value option | 204 | |
Derivative assets, net | 0 | |
Other | 687 | |
Total | 42,024 | |
Fixed maturity securities - available for sale | 35,775 | |
Fixed maturity securities - fair value option | 204 | |
Derivative assets, net | 0 | |
Other | 687 | |
Total | 42,542 | |
Sale securities, Gross | 722 | |
Sale securities, Net | 570 | |
Derivative asset, Fair value | 471 | |
Fortitude Holdings | Real Estate Funds | ||
Effects of Reinsurance [Line Items] | ||
Investments | 366 | |
Real estate investments | 595 | |
Fortitude Holdings | Direct private equity | ||
Effects of Reinsurance [Line Items] | ||
Investments | 992 | |
Real estate investments | 992 | |
Fortitude Holdings | Policy Loans | ||
Effects of Reinsurance [Line Items] | ||
Policy Loans | 423 | |
Commercial mortgage loans | 423 | |
Fortitude Holdings | Commercial mortgages | ||
Effects of Reinsurance [Line Items] | ||
Policy Loans | 3,577 | |
Commercial mortgage loans | $ 3,866 |
REINSURANCE (Details - Summar_2
REINSURANCE (Details - Summary of the impact of modco and funds withheld) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Effects of Reinsurance [Line Items] | |||||
Net investment income | $ 3,800 | $ 3,408 | $ 9,674 | $ 11,032 | |
Net realized capital gains (losses) | (1,122) | 929 | 65 | 887 | |
Loss from continuing operations before income tax benefit | 368 | 1,260 | (6,735) | 4,251 | |
Income tax benefit | 74 | 287 | (918) | 950 | |
Net loss | $ 299 | $ 973 | $ (5,813) | $ 3,300 | |
U.S. federal income tax at statutory rate (as a percent) | 21.00% | 21.00% | 21.00% | 21.00% | |
Fortitude Re funds withheld assets | |||||
Effects of Reinsurance [Line Items] | |||||
Net investment income | [1] | $ 458 | $ 0 | $ 574 | $ 0 |
Net realized capital gains (losses) | [1] | 32 | $ 0 | 128 | $ 0 |
Fortitude Holdings | |||||
Effects of Reinsurance [Line Items] | |||||
Net underwriting income | 0 | 0 | |||
Net investment income | 458 | 574 | |||
Net realized capital gains (losses) | (624) | (1,365) | |||
Loss from continuing operations before income tax benefit | (166) | (791) | |||
Income tax benefit | (35) | (166) | |||
Net loss | (131) | (625) | |||
Change in net unrealized gains (losses) on real estate investments | 132 | 570 | |||
Total economic impact to AIG | 1 | (55) | |||
Fortitude Holdings | Fortitude Re funds withheld assets | |||||
Effects of Reinsurance [Line Items] | |||||
Net realized capital gains (losses) | 32 | 128 | |||
Fortitude Holdings | Fortitude Re funds withheld assets | Embedded derivatives | |||||
Effects of Reinsurance [Line Items] | |||||
Net realized capital gains (losses) | $ (656) | $ (1,493) | |||
[1] | Represents activity subsequent to the deconsolidation of Fortitude Re on June 2, 2020. |
REINSURANCE (Details - Rollforw
REINSURANCE (Details - Rollforward of the reinsurance recoverable allowance for credit losses and disputes) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Effects of Reinsurance [Line Items] | ||
Reinsurance recoverables, balance, beginning of year | $ 364 | $ 151 |
Initial allowance upon CECL adoption | 0 | 224 |
Current period provision for expected credit losses and disputes | 0 | 5 |
Write-offs charged against the allowance for credit losses and disputes | 0 | (10) |
Other changes | 6 | 0 |
Reinsurance recoverables, balance, end of period | 370 | 370 |
General Insurance | ||
Effects of Reinsurance [Line Items] | ||
Reinsurance recoverables, balance, beginning of year | 305 | 111 |
Initial allowance upon CECL adoption | 0 | 202 |
Current period provision for expected credit losses and disputes | (2) | 0 |
Write-offs charged against the allowance for credit losses and disputes | 0 | (5) |
Other changes | 5 | 0 |
Reinsurance recoverables, balance, end of period | 308 | 308 |
Life and Retirement | ||
Effects of Reinsurance [Line Items] | ||
Reinsurance recoverables, balance, beginning of year | 59 | 40 |
Initial allowance upon CECL adoption | 0 | 22 |
Current period provision for expected credit losses and disputes | 2 | 5 |
Write-offs charged against the allowance for credit losses and disputes | 0 | (5) |
Other changes | 1 | 0 |
Reinsurance recoverables, balance, end of period | $ 62 | $ 62 |
REINSURANCE (Details - Narrativ
REINSURANCE (Details - Narrative) | 3 Months Ended | 4 Months Ended | 9 Months Ended |
Sep. 30, 2020USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2020USD ($) | |
Effects of Reinsurance [Line Items] | |||
Embedded derivative, appreciation - after-tax | $ (1,000,000) | $ 55,000,000 | |
Reinsurance recoverables | 77,500,000,000 | $ 77,500,000,000 | $ 77,500,000,000 |
Reinsurance assets, paid loss recoveries | $ 0 | $ 0 | |
Investment Grade | |||
Effects of Reinsurance [Line Items] | |||
Reinsurance recoverables, percent | 93.00% | 93.00% | 93.00% |
Non-Investment Grade | |||
Effects of Reinsurance [Line Items] | |||
Reinsurance recoverables, percent | 7.00% | 7.00% | 7.00% |
Non-Investment Grade | Captive Insurers | |||
Effects of Reinsurance [Line Items] | |||
Reinsurance recoverables, percent | 75.00% | 75.00% | 75.00% |
Not Rated | |||
Effects of Reinsurance [Line Items] | |||
Reinsurance recoverables, percent | 1.00% | 1.00% | 1.00% |
General Insurance | Investment Grade | |||
Effects of Reinsurance [Line Items] | |||
Reinsurance recoverables, percent | 52.00% | 52.00% | 52.00% |
Life and Retirement | Investment Grade | |||
Effects of Reinsurance [Line Items] | |||
Reinsurance recoverables, percent | 41.00% | 41.00% | 41.00% |
Life and Retirement | Non-Investment Grade | Maximum | |||
Effects of Reinsurance [Line Items] | |||
Reinsurance recoverables, percent | 1.00% | 1.00% | 1.00% |
Fortitude Holdings | Legacy life and retirement run-off lines | |||
Effects of Reinsurance [Line Items] | |||
Reserves ceded | $ 30,600,000,000 | $ 30,600,000,000 | $ 30,600,000,000 |
Fortitude Holdings | Legacy General Insurance Run Off Lines Segment | |||
Effects of Reinsurance [Line Items] | |||
Reserves ceded | $ 4,100,000,000 | $ 4,100,000,000 | $ 4,100,000,000 |
VARIABLE INTEREST ENTITIES (Det
VARIABLE INTEREST ENTITIES (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Assets: | ||
Bonds available for sale | $ 265,965 | $ 251,086 |
Other bond securities, at fair value | 5,415 | 6,682 |
Mortgage and other loans receivable | 45,590 | 46,984 |
Other invested assets | 17,915 | 18,792 |
Total assets | 577,230 | 525,064 |
Liabilities: | ||
Long-term debt | 28,731 | 25,479 |
Total liabilities | 512,623 | 457,637 |
Real Estate and Investment Entities | ||
Liabilities: | ||
Off-balance sheet exposure | 2,300 | 2,600 |
Consolidated VIE | ||
Assets: | ||
Bonds available for sale | 6,075 | 7,416 |
Other bond securities, at fair value | 3,325 | |
Other bond and equity securities | 2,703 | |
Mortgage and other loans receivable | 3,247 | 3,860 |
Other invested assets | 9,542 | 8,737 |
Other assets | 2,639 | 3,122 |
Total assets | 24,206 | 26,460 |
Liabilities: | ||
Long-term debt | 8,880 | 9,244 |
Other liabilities | 530 | 814 |
Total liabilities | 9,410 | 10,058 |
Consolidated VIE | Real Estate and Investment Entities | ||
Assets: | ||
Bonds available for sale | 0 | 177 |
Other bond securities, at fair value | 0 | |
Other bond and equity securities | 281 | |
Mortgage and other loans receivable | 0 | 0 |
Other invested assets | 5,975 | 5,231 |
Other assets | 461 | 615 |
Total assets | 6,717 | 6,023 |
Liabilities: | ||
Long-term debt | 2,509 | 2,810 |
Other liabilities | 165 | 236 |
Total liabilities | 2,674 | 3,046 |
Consolidated VIE | Securitization Vehicles | ||
Assets: | ||
Bonds available for sale | 6,075 | 7,239 |
Other bond securities, at fair value | 3,324 | |
Other bond and equity securities | 2,416 | |
Mortgage and other loans receivable | 3,247 | 3,860 |
Other invested assets | 0 | 0 |
Other assets | 1,635 | 1,996 |
Total assets | 13,373 | 16,419 |
Liabilities: | ||
Long-term debt | 4,054 | 4,356 |
Other liabilities | 159 | 359 |
Total liabilities | 4,213 | 4,715 |
Total assets of unconsolidated VIEs as well as maximum exposure to loss | ||
Total assets contributed into consolidated securitization vehicles | 12,600 | 15,600 |
Consolidated VIE | Affordable Housing Partnerships | ||
Assets: | ||
Bonds available for sale | 0 | 0 |
Other bond securities, at fair value | 0 | |
Other bond and equity securities | 0 | |
Mortgage and other loans receivable | 0 | 0 |
Other invested assets | 3,549 | 3,464 |
Other assets | 520 | 469 |
Total assets | 4,069 | 3,933 |
Liabilities: | ||
Long-term debt | 2,317 | 2,074 |
Other liabilities | 197 | 195 |
Total liabilities | 2,514 | 2,269 |
Consolidated VIE | Other | ||
Assets: | ||
Bonds available for sale | 0 | 0 |
Other bond securities, at fair value | 1 | |
Other bond and equity securities | 6 | |
Mortgage and other loans receivable | 0 | 0 |
Other invested assets | 18 | 42 |
Other assets | 23 | 42 |
Total assets | 47 | 85 |
Liabilities: | ||
Long-term debt | 0 | 4 |
Other liabilities | 9 | 24 |
Total liabilities | 9 | 28 |
Unconsolidated VIE | ||
Assets: | ||
Other invested assets | 5,700 | 7,000 |
Total assets of unconsolidated VIEs as well as maximum exposure to loss | ||
Total VIE Assets | 301,506 | 292,020 |
Maximum Exposure to Loss, On-Balance Sheet | 6,105 | 7,282 |
Maximum Exposure to Loss, Off-Balance Sheet | 3,800 | 3,847 |
Total maximum exposure to loss | 9,905 | 11,129 |
Unconsolidated VIE | Real Estate and Investment Entities | ||
Total assets of unconsolidated VIEs as well as maximum exposure to loss | ||
Total VIE Assets | 293,428 | 283,349 |
Maximum Exposure to Loss, On-Balance Sheet | 5,260 | 6,519 |
Maximum Exposure to Loss, Off-Balance Sheet | 3,238 | 3,286 |
Total maximum exposure to loss | 8,498 | 9,805 |
Unconsolidated VIE | Affordable Housing Partnerships | ||
Total assets of unconsolidated VIEs as well as maximum exposure to loss | ||
Total VIE Assets | 3,045 | 3,351 |
Maximum Exposure to Loss, On-Balance Sheet | 384 | 453 |
Maximum Exposure to Loss, Off-Balance Sheet | 0 | 0 |
Total maximum exposure to loss | 384 | 453 |
Unconsolidated VIE | Other | ||
Total assets of unconsolidated VIEs as well as maximum exposure to loss | ||
Total VIE Assets | 5,033 | 5,320 |
Maximum Exposure to Loss, On-Balance Sheet | 461 | 310 |
Maximum Exposure to Loss, Off-Balance Sheet | 562 | 561 |
Total maximum exposure to loss | $ 1,023 | $ 871 |
DERIVATIVES AND HEDGE ACCOUNT_3
DERIVATIVES AND HEDGE ACCOUNTING (Details - Notional amounts and fair values of derivative instruments) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Derivative [Line Items] | ||
Gross Derivative Assets, Notional Amount | $ 156,872,000,000 | $ 132,965,000,000 |
Gross Derivative Assets, Fair Value | 7,613,000,000 | 5,026,000,000 |
Gross Derivative Liabilities, Notional Amount | 54,904,000,000 | 61,482,000,000 |
Gross Derivative Liabilities, Fair Value | 5,355,000,000 | 4,009,000,000 |
Derivative assets, Counterparty netting | (3,695,000,000) | (2,427,000,000) |
Derivative assets, Cash collateral | (3,129,000,000) | (1,806,000,000) |
Total derivative assets on consolidated balance sheet | 789,000,000 | 793,000,000 |
Derivative liabilities, Counterparty netting | (3,695,000,000) | (2,427,000,000) |
Derivative liabilities, Cash collateral | (1,060,000,000) | (527,000,000) |
Total derivative liabilities on consolidated balance sheet | 600,000,000 | 1,055,000,000 |
Bifurcated embedded derivatives | ||
Derivative [Line Items] | ||
Bifurcated embedded derivatives assets, fair value | 0 | 0 |
Bifurcated embedded derivative liabilities, fair value | 14,500,000,000 | 6,900,000,000 |
Derivatives designated as hedging instruments | Interest rate contracts | ||
Derivative [Line Items] | ||
Gross Derivative Assets, Notional Amount | 690,000,000 | 495,000,000 |
Gross Derivative Assets, Fair Value | 19,000,000 | 3,000,000 |
Gross Derivative Liabilities, Notional Amount | 299,000,000 | 410,000,000 |
Gross Derivative Liabilities, Fair Value | 13,000,000 | 7,000,000 |
Derivatives designated as hedging instruments | Foreign exchange contracts | ||
Derivative [Line Items] | ||
Gross Derivative Assets, Notional Amount | 6,146,000,000 | 4,328,000,000 |
Gross Derivative Assets, Fair Value | 494,000,000 | 342,000,000 |
Gross Derivative Liabilities, Notional Amount | 3,910,000,000 | 5,230,000,000 |
Gross Derivative Liabilities, Fair Value | 159,000,000 | 162,000,000 |
Derivatives not designated as hedging instruments | Interest rate contracts | ||
Derivative [Line Items] | ||
Gross Derivative Assets, Notional Amount | 66,938,000,000 | 52,437,000,000 |
Gross Derivative Assets, Fair Value | 5,035,000,000 | 3,197,000,000 |
Gross Derivative Liabilities, Notional Amount | 39,057,000,000 | 35,231,000,000 |
Gross Derivative Liabilities, Fair Value | 4,546,000,000 | 2,742,000,000 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | ||
Derivative [Line Items] | ||
Gross Derivative Assets, Notional Amount | 15,771,000,000 | 8,133,000,000 |
Gross Derivative Assets, Fair Value | 1,094,000,000 | 698,000,000 |
Gross Derivative Liabilities, Notional Amount | 6,345,000,000 | 12,093,000,000 |
Gross Derivative Liabilities, Fair Value | 460,000,000 | 863,000,000 |
Derivatives not designated as hedging instruments | Equity contracts | ||
Derivative [Line Items] | ||
Gross Derivative Assets, Notional Amount | 21,461,000,000 | 18,533,000,000 |
Gross Derivative Assets, Fair Value | 957,000,000 | 769,000,000 |
Gross Derivative Liabilities, Notional Amount | 4,268,000,000 | 7,539,000,000 |
Gross Derivative Liabilities, Fair Value | 101,000,000 | 139,000,000 |
Derivatives not designated as hedging instruments | Credit contracts | ||
Derivative [Line Items] | ||
Gross Derivative Assets, Notional Amount | 2,797,000,000 | 8,457,000,000 |
Gross Derivative Assets, Fair Value | 1,000,000 | 3,000,000 |
Gross Derivative Liabilities, Notional Amount | 970,000,000 | 923,000,000 |
Gross Derivative Liabilities, Fair Value | 69,000,000 | 89,000,000 |
Derivatives not designated as hedging instruments | Credit contracts | CDS | ||
Derivative [Line Items] | ||
Gross Derivative Liabilities, Notional Amount | 137,000,000 | 152,000,000 |
Gross Derivative Liabilities, Fair Value | 45,000,000 | 48,000,000 |
Derivatives not designated as hedging instruments | Other contracts | ||
Derivative [Line Items] | ||
Gross Derivative Assets, Notional Amount | 43,069,000,000 | 40,582,000,000 |
Gross Derivative Assets, Fair Value | 13,000,000 | 14,000,000 |
Gross Derivative Liabilities, Notional Amount | 55,000,000 | 56,000,000 |
Gross Derivative Liabilities, Fair Value | $ 7,000,000 | $ 7,000,000 |
DERIVATIVES AND HEDGE ACCOUNT_4
DERIVATIVES AND HEDGE ACCOUNTING (Details - Fair values of derivative assets and liabilities) - USD ($) $ in Billions | Sep. 30, 2020 | Dec. 31, 2019 |
Collateral | ||
Collateral posted to third parties for derivative transactions | $ 2.6 | $ 2.2 |
Collateral obtained from third parties for derivative transactions | $ 3.4 | $ 2.2 |
DERIVATIVES AND HEDGE ACCOUNT_5
DERIVATIVES AND HEDGE ACCOUNTING (Details - Hedge Accounting) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Foreign currency translation gain (loss) adjustment related to net investment hedge relationships | $ (107) | $ 89 | $ (5) | $ 146 |
Derivatives designated as hedging instruments | Interest rate contracts | Fair value hedging | Interest credited to policyholder account balances | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in earnings on derivatives | (2) | 4 | 16 | 18 |
Gain (loss) recognized in earnings on hedged items | 5 | (4) | (15) | (18) |
Gain (loss) recognized in earnings for amounts excluded from effectiveness testing | 0 | 0 | 0 | 0 |
Net Impact | 3 | 0 | 1 | 0 |
Derivatives designated as hedging instruments | Interest rate contracts | Fair value hedging | Net investment income | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in earnings on derivatives | 1 | 0 | (6) | (1) |
Gain (loss) recognized in earnings on hedged items | 0 | 0 | 6 | 1 |
Gain (loss) recognized in earnings for amounts excluded from effectiveness testing | 0 | 0 | 0 | 0 |
Net Impact | 1 | 0 | 0 | 0 |
Derivatives designated as hedging instruments | Foreign exchange contracts | Fair value hedging | Net realized capital gains (losses) | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in earnings on derivatives | (250) | 228 | (77) | 278 |
Gain (loss) recognized in earnings on hedged items | 250 | (228) | 77 | (278) |
Gain (loss) recognized in earnings for amounts excluded from effectiveness testing | (50) | 41 | 155 | 84 |
Net Impact | (50) | 41 | 155 | 84 |
Derivatives not designated as hedging instruments | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in earnings on derivatives | (1,533) | 800 | (178) | 620 |
Derivatives not designated as hedging instruments | Net realized capital gains (losses) | Excluding Fortitude Re funds withheld assets | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in earnings on derivatives | (775) | 780 | 1,398 | 611 |
Derivatives not designated as hedging instruments | Net realized capital gains (losses) | Modified Coinsurance And Funds Withheld Assets [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in earnings on derivatives | (776) | 0 | (1,639) | 0 |
Derivatives not designated as hedging instruments | Net investment income | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in earnings on derivatives | 4 | (3) | 1 | (58) |
Derivatives not designated as hedging instruments | Policy fees | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in earnings on derivatives | 16 | 16 | 46 | 51 |
Derivatives not designated as hedging instruments | Policyholder benefits and claims incurred | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in earnings on derivatives | (2) | 7 | 16 | 16 |
Derivatives not designated as hedging instruments | Interest rate contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in earnings on derivatives | (462) | 1,078 | 2,104 | 2,052 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in earnings on derivatives | (535) | 342 | 366 | 545 |
Derivatives not designated as hedging instruments | Equity contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in earnings on derivatives | (46) | 96 | 586 | (23) |
Derivatives not designated as hedging instruments | Credit contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in earnings on derivatives | (1) | 26 | 55 | 35 |
Derivatives not designated as hedging instruments | Other contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in earnings on derivatives | 18 | 14 | 44 | 48 |
Derivatives not designated as hedging instruments | Embedded derivatives | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in earnings on derivatives | $ (507) | $ (756) | $ (3,333) | $ (2,037) |
DERIVATIVES AND HEDGE ACCOUNT_6
DERIVATIVES AND HEDGE ACCOUNTING (Details - Additional Information) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Credit Derivatives [Line Items] | ||
Collateral posted | $ 2,600 | $ 2,200 |
Fair value of hybrid securities | 2,500 | 3,300 |
Par value of hybrid securities | 5,200 | 7,400 |
Credit Risk Related Contingent Features [Member] | ||
Credit Derivatives [Line Items] | ||
Collateral posted | 305 | 381 |
Aggregate fair value of net liability position | 255 | $ 336 |
Additional collateral postings and termination payments | $ 46 |
INSURANCE LIABILITIES (Details
INSURANCE LIABILITIES (Details - Liability for Unpaid Losses and Loss Adjustment Expenses) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2020 | Dec. 31, 2019 | Jan. 20, 2017 | |
Supplementary Insurance Information, by Segment [Line Items] | |||||||
Contractual deductible recoverable amount | $ 12,700 | $ 12,700 | $ 12,200 | ||||
Collateral Held For Deductible Recoverable Amounts | 9,200 | 9,200 | 8,900 | ||||
Allowance for credit losses for unsecured reinsurance recoverable | 14 | 14 | $ 14 | $ 0 | |||
Reconciliation of activity in the Liability for unpaid claims and claims adjustment expense: | |||||||
Liability for unpaid loss and loss adjustment expenses, beginning of period | 77,853 | $ 81,057 | 78,328 | $ 83,639 | |||
Reinsurance recoverable, balance at the beginning of the period | (35,458) | (31,333) | (31,069) | (31,690) | |||
Initial allowance upon CECL adoption | 0 | 0 | 164 | 0 | |||
Net Liability for unpaid loss and loss adjustment expenses, beginning of period | 42,395 | 49,724 | 47,423 | 51,949 | |||
Losses and loss adjustment expenses incurred | |||||||
Current year | 4,324 | 4,612 | 12,683 | 13,181 | |||
Prior years, excluding discount and amortization of deferred gain | 20 | (74) | (6) | (221) | |||
Prior years, discount charge (benefit) | 25 | 276 | 135 | 1,017 | |||
Prior years, amortization of deferred gain on retroactive reinsurance | (36) | 13 | (187) | (129) | |||
Total losses and loss adjustment expenses incurred | 4,333 | 4,827 | 12,625 | 13,848 | |||
Losses and loss adjustment expenses paid | |||||||
Current year | (1,316) | (1,572) | (2,568) | (2,949) | |||
Prior years | (3,115) | (4,244) | (11,256) | (14,010) | |||
Total losses and loss adjustment expenses paid | (4,431) | (5,816) | (13,824) | (16,959) | |||
Other changes | |||||||
Foreign exchange effect | 925 | (172) | 656 | (165) | |||
Allowance for credit losses | 0 | 0 | 0 | 0 | |||
Retroactive reinsurance adjustment (net of discount) | 80 | 96 | 240 | (14) | |||
Fortitude sale and reinsurance adjustment | 0 | 0 | (3,818) | 0 | |||
Total other changes | 1,005 | (76) | (2,922) | (179) | |||
Net liability for unpaid losses and loss adjustment expenses, balance at end of period | 43,302 | 48,659 | 43,302 | 48,659 | |||
Reinsurance recoverable, balance at the end of the period | 35,282 | 31,224 | 35,282 | 31,224 | |||
Total, balance at the end of period | 78,584 | 79,883 | 78,584 | 79,883 | |||
Change in discount on loss reserves ceded under retroactive reinsurance | 20 | 43 | 78 | 475 | |||
U.S. Commercial long-tail exposures | NICO | Accident Years 2015 and Prior | |||||||
Other changes | |||||||
Discount on retroactive reinsurance | $ 6 | $ 6 | $ 26 | $ 21 | |||
Risk Transferred - U.S. Commercial long-tail exposures for accident years 2015 and prior, percent | 80.00% | ||||||
Reinsurance Percent Ceded on Paid Losses Percent | 80.00% | ||||||
Ceded to NICO net paid losses in excess | $ 25,000 | ||||||
Ceded to NICO net paid losses in excess, aggregate limit | 25,000 | ||||||
NICO's limit of liability under the contract | 20,000 | ||||||
Consideration paid, including interest | $ 10,200 |
INSURANCE LIABILITIES (Detail_2
INSURANCE LIABILITIES (Details - Discounting of Reserves) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Discounting of Reserves [Line Items] | |||||
Tabular Discount Rate | 3.50% | ||||
Workers Compensation Tabular Discount Amount | $ 289 | $ 289 | $ 582 | ||
Workers Compensation Non Tabular Discount Amount | 649 | 649 | 967 | ||
U.S. Workers' compensation | 2,111 | 2,111 | 2,800 | ||
Retroactive Reinsurance | (1,173) | (1,173) | (1,251) | ||
Total reserve discount | 938 | 938 | 1,549 | ||
Current accident year | 56 | $ 41 | 94 | $ 97 | |
Accretion and other adjustments to prior year discount | (25) | (82) | (135) | (349) | |
Effect of interest rate changes | 0 | (194) | 0 | (668) | |
Net reserve discount benefit (charge) | 31 | (235) | (41) | (920) | |
Change in discount on loss reserves ceded under retroactive reinsurance | 20 | 43 | 78 | 475 | |
Net change in total reserve discount | 51 | (192) | 37 | (445) | |
North America Commercial Insurance | |||||
Discounting of Reserves [Line Items] | |||||
U.S. Workers' compensation | 2,111 | 2,111 | 2,134 | ||
Retroactive Reinsurance | (1,173) | (1,173) | (1,251) | ||
Total reserve discount | 938 | 938 | 883 | ||
Current accident year | 56 | 41 | 94 | 97 | |
Accretion and other adjustments to prior year discount | (25) | (26) | (117) | (269) | |
Effect of interest rate changes | 0 | (136) | 0 | (473) | |
Net reserve discount benefit (charge) | 31 | (121) | (23) | (645) | |
Change in discount on loss reserves ceded under retroactive reinsurance | 20 | 43 | 78 | 475 | |
Net change in total reserve discount | 51 | (78) | 55 | (170) | |
Legacy General Insurance Run-Off Lines | |||||
Discounting of Reserves [Line Items] | |||||
U.S. Workers' compensation | 0 | 0 | 666 | ||
Retroactive Reinsurance | 0 | 0 | 0 | ||
Total reserve discount | 0 | 0 | 666 | ||
Current accident year | 0 | 0 | 0 | 0 | |
Accretion and other adjustments to prior year discount | 0 | (56) | (18) | (80) | |
Effect of interest rate changes | 0 | (58) | 0 | (195) | |
Net reserve discount benefit (charge) | 0 | (114) | (18) | (275) | |
Change in discount on loss reserves ceded under retroactive reinsurance | 0 | 0 | 0 | 0 | |
Net change in total reserve discount | 0 | (114) | $ (18) | (275) | |
New York | |||||
Discounting of Reserves [Line Items] | |||||
Nontabular discount rate | 5.00% | ||||
Pennsylvania | |||||
Discounting of Reserves [Line Items] | |||||
Nontabular discount rate | 6.00% | ||||
United Kingdom | |||||
Discounting of Reserves [Line Items] | |||||
Net reserve discount benefit (charge) | $ 151 | $ 172 | |||
Net change in total reserve discount | $ (12) | $ (27) | $ (20) | $ (1) |
CONTINGENCIES, COMMITMENTS AN_2
CONTINGENCIES, COMMITMENTS AND GUARANTEES (Details - Contingencies, Commitments and Guarantees) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($)item | |
Future undiscounted cash flows under operating leases | |
Other commitments | $ 7,200 |
Amount outstanding under standby letters of credit at end of period | $ 78 |
Number of cases | item | 2 |
Amount awarded to other party | $ 20 |
Interest | 2.2 |
Penalty | 4.5 |
Disgorgement | 13.2 |
Fortitude [Member] | |
Future undiscounted cash flows under operating leases | |
Maximum purchase price adjustment payable | $ 500 |
EQUITY (Details - Preferred Sto
EQUITY (Details - Preferred Stock) - USD ($) $ / shares in Units, $ in Millions | Sep. 30, 2020 | Sep. 15, 2020 | Jun. 29, 2020 | Jun. 15, 2020 | Mar. 30, 2020 | Mar. 16, 2020 | Sep. 30, 2019 | Sep. 16, 2019 | Jun. 28, 2019 | Jun. 17, 2019 | Mar. 29, 2019 | Mar. 14, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Class of Stock [Line Items] | |||||||||||||||
Issuances (in shares) | 3,610,496 | ||||||||||||||
Preferred stock, par value (in dollars per share) | $ 5 | $ 5 | $ 5 | ||||||||||||
Preferred stock liquidation preference | $ 500 | $ 500 | $ 500 | ||||||||||||
Issuance of preferred stock | $ 0 | $ 485 | |||||||||||||
Date dividends declared | Aug. 3, 2020 | May 4, 2020 | Feb. 12, 2020 | Aug. 7, 2019 | May 6, 2019 | Feb. 13, 2019 | |||||||||
Date dividends paid | Sep. 30, 2020 | Jun. 29, 2020 | Mar. 30, 2020 | Sep. 30, 2019 | Jun. 28, 2019 | Mar. 29, 2019 | |||||||||
Date of record | Sep. 17, 2020 | Jun. 15, 2020 | Mar. 16, 2020 | Sep. 17, 2019 | Jun. 14, 2019 | Mar. 15, 2019 | |||||||||
Series A Preferred Stock | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Issuances (in shares) | 20,000 | ||||||||||||||
Preferred stock, dividend rate (as a percent) | 5.85% | 5.85% | |||||||||||||
Preferred stock, par value (in dollars per share) | $ 5 | ||||||||||||||
Preferred stock liquidation preference | $ 25,000 | ||||||||||||||
Issuance of preferred stock | $ 485 | ||||||||||||||
Date dividends declared | Aug. 3, 2020 | May 4, 2020 | Feb. 12, 2020 | Aug. 7, 2019 | May 21, 2019 | ||||||||||
Preferred Stock Dividends Per Share Cash Paid | $ 365.625 | $ 365.625 | $ 365.625 | $ 365.625 | $ 369.6875 | ||||||||||
Date dividends paid | Sep. 15, 2020 | Jun. 15, 2020 | Mar. 16, 2020 | Sep. 16, 2019 | Jun. 17, 2019 | ||||||||||
Date of record | Aug. 31, 2020 | May 29, 2020 | Feb. 28, 2020 | Aug. 30, 2019 | May 31, 2019 | ||||||||||
Series A Preferred Stock | Rating Agency Event [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Preferred stock redemption terms | 90 days | ||||||||||||||
Preferred stock redemption price per share | $ 25,500 | ||||||||||||||
Series A Preferred Stock | Regulatory Capital Event [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Preferred stock redemption terms | 90 days | ||||||||||||||
Preferred stock redemption price per share | $ 25,000 | ||||||||||||||
Depositary Shares | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Issuances (in shares) | 20,000,000 | ||||||||||||||
Preferred stock liquidation preference | $ 25 | ||||||||||||||
Date dividends declared | Aug. 3, 2020 | May 4, 2020 | Feb. 12, 2020 | Aug. 7, 2019 | May 21, 2019 | ||||||||||
Preferred Stock Dividends Per Share Cash Paid | $ 0.365625 | $ 0.365625 | $ 0.365625 | $ 0.365625 | $ 0.3696875 | ||||||||||
Date dividends paid | Sep. 15, 2020 | Jun. 15, 2020 | Mar. 16, 2020 | Sep. 16, 2019 | Jun. 17, 2019 | ||||||||||
Date of record | Aug. 31, 2020 | May 29, 2020 | Feb. 28, 2020 | Aug. 30, 2019 | May 31, 2019 | ||||||||||
Depositary Shares | Rating Agency Event [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Preferred stock redemption price per share | 25.50 | ||||||||||||||
Depositary Shares | Regulatory Capital Event [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Preferred stock redemption price per share | $ 25 |
EQUITY (Details - Common Stock
EQUITY (Details - Common Stock and Dividends) - USD ($) $ / shares in Units, $ in Millions | Sep. 30, 2020 | Jun. 29, 2020 | Mar. 30, 2020 | Sep. 30, 2019 | Jun. 28, 2019 | Mar. 29, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Feb. 13, 2019 |
The following table presents a roll forward of outstanding shares: | |||||||||
Shares, beginning of year | (1,036,672,461) | ||||||||
Shares, beginning of year | 1,906,671,492 | ||||||||
Shares, beginning of year | 869,999,031 | ||||||||
Shares issued | 3,610,496 | ||||||||
Shares repurchased | (12,160,952) | 0 | |||||||
Shares, end of period | (1,045,222,917) | (1,045,222,917) | |||||||
Shares, end of period | 1,906,671,492 | 1,906,671,492 | |||||||
Shares, end of period | 861,448,575 | 861,448,575 | |||||||
The following table presents record date, payment date and dividends paid per share on AIG Common Stock: | |||||||||
Dividend paid (in dollars per share) | $ 0.32 | $ 0.32 | $ 0.32 | $ 0.32 | $ 0.32 | $ 0.32 | |||
Date of Shareholders of Record | Sep. 17, 2020 | Jun. 15, 2020 | Mar. 16, 2020 | Sep. 17, 2019 | Jun. 14, 2019 | Mar. 15, 2019 | |||
Date Dividends Declared | Aug. 3, 2020 | May 4, 2020 | Feb. 12, 2020 | Aug. 7, 2019 | May 6, 2019 | Feb. 13, 2019 | |||
Date Dividends To Be Paid | Sep. 30, 2020 | Jun. 29, 2020 | Mar. 30, 2020 | Sep. 30, 2019 | Jun. 28, 2019 | Mar. 29, 2019 | |||
Authorized amount of common stock share repurchase | $ 1,500 | ||||||||
Aggregate remaining authorization amount of common Stock share repurchase | $ 1,500 | $ 1,500 | |||||||
Aggregate repurchases of common stock | $ 500 | $ 500 | |||||||
Shares purchased | 12,000,000 | ||||||||
Aggregate repurchases of common stock | $ 500 | $ 0 | |||||||
Aggregate repurchases of warrants | $ 0 | $ 0 | |||||||
Total number of warrants repurchased | 0 | 0 | |||||||
Common Stock Issued | |||||||||
The following table presents a roll forward of outstanding shares: | |||||||||
Shares, beginning of year | 1,906,671,492 | ||||||||
Shares issued | 0 | ||||||||
Shares repurchased | 0 | ||||||||
Shares, end of period | 1,906,671,492 | 1,906,671,492 | |||||||
Treasury Stock | |||||||||
The following table presents a roll forward of outstanding shares: | |||||||||
Shares, beginning of year | (1,036,672,461) | ||||||||
Shares issued | 3,610,496 | ||||||||
Shares repurchased | (12,160,952) | ||||||||
Shares, end of period | (1,045,222,917) | (1,045,222,917) |
EQUITY (Details - Rollforward o
EQUITY (Details - Rollforward of Accumulated other comprehensive income (loss)) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance, beginning of period, net of tax | $ 9,169,000,000 | $ 4,991,000,000 | $ 4,982,000,000 | $ (1,413,000,000) |
Change in unrealized appreciation (depreciation) of investments | 2,374,000,000 | 4,377,000,000 | 5,876,000,000 | 16,197,000,000 |
Change in deferred policy acquisition costs adjustment and other | (301,000,000) | (511,000,000) | (641,000,000) | (2,249,000,000) |
Change in future policy benefits | (147,000,000) | (3,042,000,000) | 2,187,000,000 | (5,291,000,000) |
Changes in foreign currency translation adjustments | 297,000,000 | (24,000,000) | 169,000,000 | 31,000,000 |
Change in net actuarial loss | 2,000,000 | 13,000,000 | 18,000,000 | 29,000,000 |
Change in prior service credit | 0 | (1,000,000) | (1,000,000) | (2,000,000) |
Change in deferred tax asset (liability) | (410,000,000) | (185,000,000) | (1,630,000,000) | (1,666,000,000) |
Change in fair value of liabilities under fair value option attributable to changes in own credit risk | 1,000,000 | 1,000,000 | 2,000,000 | (1,000,000) |
Other comprehensive income (loss) | 1,816,000,000 | 628,000,000 | 5,980,000,000 | 7,048,000,000 |
Noncontrolling interests | 7,000,000 | 4,000,000 | (16,000,000) | 20,000,000 |
Balance, end of period, net of tax | 10,978,000,000 | 5,615,000,000 | 10,978,000,000 | 5,615,000,000 |
Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Other comprehensive income (loss) | 1,809,000,000 | 624,000,000 | 5,996,000,000 | 7,028,000,000 |
Unrealized Appreciation (Depreciation) of Fixed Maturity Securities on Which Allowance for Credit Losses Were Taken | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance, beginning of period, net of tax | (233,000,000) | 0 | ||
Change in unrealized appreciation (depreciation) of investments | 101,000,000 | (212,000,000) | ||
Change in deferred policy acquisition costs adjustment and other | (5,000,000) | 14,000,000 | ||
Change in future policy benefits | 0 | 0 | ||
Changes in foreign currency translation adjustments | 0 | 0 | ||
Change in net actuarial loss | 0 | 0 | ||
Change in prior service credit | 0 | 0 | ||
Change in deferred tax asset (liability) | (17,000,000) | 44,000,000 | ||
Change in fair value of liabilities under fair value option attributable to changes in own credit risk | 0 | 0 | ||
Other comprehensive income (loss) | 79,000,000 | (154,000,000) | ||
Noncontrolling interests | 0 | 0 | ||
Balance, end of period, net of tax | (154,000,000) | (154,000,000) | ||
Unrealized Appreciation (Depreciation) of Fixed Maturity Securities on Which Other-Than-Temporary Credit Impairments Were Taken | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance, beginning of period, net of tax | 720,000,000 | (38,000,000) | ||
Change in unrealized appreciation (depreciation) of investments | (9,000,000) | 935,000,000 | ||
Change in deferred policy acquisition costs adjustment and other | 11,000,000 | (3,000,000) | ||
Change in future policy benefits | 0 | 0 | ||
Changes in foreign currency translation adjustments | 0 | 0 | ||
Change in net actuarial loss | 0 | 0 | ||
Change in prior service credit | 0 | 0 | ||
Change in deferred tax asset (liability) | (4,000,000) | (176,000,000) | ||
Change in fair value of liabilities under fair value option attributable to changes in own credit risk | 0 | 0 | ||
Other comprehensive income (loss) | (2,000,000) | 756,000,000 | ||
Noncontrolling interests | 0 | 0 | ||
Balance, end of period, net of tax | 718,000,000 | 718,000,000 | ||
Unrealized Appreciation (Depreciation) of All Other Investments | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance, beginning of period, net of tax | 13,281,000,000 | 8,034,000,000 | 8,722,000,000 | 2,426,000,000 |
Change in unrealized appreciation (depreciation) of investments | 2,273,000,000 | 4,386,000,000 | 6,088,000,000 | 15,262,000,000 |
Change in deferred policy acquisition costs adjustment and other | (296,000,000) | (522,000,000) | (655,000,000) | (2,246,000,000) |
Change in future policy benefits | (147,000,000) | (3,042,000,000) | 2,187,000,000 | (5,291,000,000) |
Changes in foreign currency translation adjustments | 0 | 0 | 0 | 0 |
Change in net actuarial loss | 0 | 0 | 0 | 0 |
Change in prior service credit | 0 | 0 | 0 | 0 |
Change in deferred tax asset (liability) | (445,000,000) | (166,000,000) | (1,695,000,000) | (1,447,000,000) |
Change in fair value of liabilities under fair value option attributable to changes in own credit risk | 0 | 0 | 0 | 0 |
Other comprehensive income (loss) | 1,385,000,000 | 656,000,000 | 5,925,000,000 | 6,278,000,000 |
Noncontrolling interests | 2,000,000 | 5,000,000 | (17,000,000) | 19,000,000 |
Balance, end of period, net of tax | 14,664,000,000 | 8,685,000,000 | 14,664,000,000 | 8,685,000,000 |
Foreign Currency Translation Adjustments | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance, beginning of period, net of tax | (2,767,000,000) | (2,692,000,000) | (2,625,000,000) | (2,725,000,000) |
Change in unrealized appreciation (depreciation) of investments | 0 | 0 | 0 | 0 |
Change in deferred policy acquisition costs adjustment and other | 0 | 0 | 0 | 0 |
Change in future policy benefits | 0 | 0 | 0 | 0 |
Changes in foreign currency translation adjustments | 297,000,000 | (24,000,000) | 169,000,000 | 31,000,000 |
Change in net actuarial loss | 0 | 0 | 0 | 0 |
Change in prior service credit | 0 | 0 | 0 | 0 |
Change in deferred tax asset (liability) | 55,000,000 | (10,000,000) | 37,000,000 | (30,000,000) |
Change in fair value of liabilities under fair value option attributable to changes in own credit risk | 0 | 0 | 0 | 0 |
Other comprehensive income (loss) | 352,000,000 | (34,000,000) | 206,000,000 | 1,000,000 |
Noncontrolling interests | 5,000,000 | (1,000,000) | 1,000,000 | 1,000,000 |
Balance, end of period, net of tax | (2,420,000,000) | (2,725,000,000) | (2,420,000,000) | (2,725,000,000) |
Retirement Plan Liabilities Adjustment | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance, beginning of period, net of tax | (1,120,000,000) | (1,079,000,000) | (1,122,000,000) | (1,086,000,000) |
Change in unrealized appreciation (depreciation) of investments | 0 | 0 | 0 | 0 |
Change in deferred policy acquisition costs adjustment and other | 0 | 0 | 0 | 0 |
Change in future policy benefits | 0 | 0 | 0 | 0 |
Changes in foreign currency translation adjustments | 0 | 0 | 0 | 0 |
Change in net actuarial loss | 2,000,000 | 13,000,000 | 18,000,000 | 29,000,000 |
Change in prior service credit | 0 | (1,000,000) | (1,000,000) | (2,000,000) |
Change in deferred tax asset (liability) | (3,000,000) | (5,000,000) | (16,000,000) | (13,000,000) |
Change in fair value of liabilities under fair value option attributable to changes in own credit risk | 0 | 0 | 0 | 0 |
Other comprehensive income (loss) | (1,000,000) | 7,000,000 | 1,000,000 | 14,000,000 |
Noncontrolling interests | 0 | 0 | 0 | 0 |
Balance, end of period, net of tax | (1,121,000,000) | (1,072,000,000) | (1,121,000,000) | (1,072,000,000) |
Fair Value of Liabilities Under Fair Value Option Attributable to Changes in Own Credit Risk | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance, beginning of period, net of tax | 8,000,000 | 8,000,000 | 7,000,000 | 10,000,000 |
Change in unrealized appreciation (depreciation) of investments | 0 | 0 | 0 | 0 |
Change in deferred policy acquisition costs adjustment and other | 0 | 0 | 0 | 0 |
Change in future policy benefits | 0 | 0 | 0 | 0 |
Changes in foreign currency translation adjustments | 0 | 0 | 0 | 0 |
Change in net actuarial loss | 0 | 0 | 0 | 0 |
Change in prior service credit | 0 | 0 | 0 | 0 |
Change in deferred tax asset (liability) | 0 | 0 | 0 | 0 |
Change in fair value of liabilities under fair value option attributable to changes in own credit risk | 1,000,000 | 1,000,000 | 2,000,000 | (1,000,000) |
Other comprehensive income (loss) | 1,000,000 | 1,000,000 | 2,000,000 | (1,000,000) |
Noncontrolling interests | 0 | 0 | 0 | 0 |
Balance, end of period, net of tax | $ 9,000,000 | $ 9,000,000 | $ 9,000,000 | $ 9,000,000 |
EQUITY (Details - Other compreh
EQUITY (Details - Other comprehensive income reclassification adjustments) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Other Comprehensive Income (Loss) Reclassification Adjustments | ||||
Unrealized change arising during period | $ 2,390,000,000 | $ 932,000,000 | $ 8,116,000,000 | $ 8,874,000,000 |
Less: Reclassification adjustments included in net income | 164,000,000 | 119,000,000 | 506,000,000 | 160,000,000 |
Total other comprehensive income (loss), before income tax expense (benefit) | 2,226,000,000 | 813,000,000 | 7,610,000,000 | 8,714,000,000 |
Less: Income tax expense (benefit) | 410,000,000 | 185,000,000 | 1,630,000,000 | 1,666,000,000 |
Other comprehensive income | 1,816,000,000 | 628,000,000 | 5,980,000,000 | 7,048,000,000 |
Unrealized appreciation (depreciation) of fixed maturity securities on which other-than-temporary credit impairments were taken | ||||
Other Comprehensive Income (Loss) Reclassification Adjustments | ||||
Unrealized change arising during period | 3,000,000 | 929,000,000 | ||
Less: Reclassification adjustments included in net income | 1,000,000 | (3,000,000) | ||
Total other comprehensive income (loss), before income tax expense (benefit) | 2,000,000 | 932,000,000 | ||
Less: Income tax expense (benefit) | 4,000,000 | 176,000,000 | ||
Other comprehensive income | (2,000,000) | 756,000,000 | ||
Unrealized Appreciation (Depreciation) of Fixed Maturity Securities on Which Allowance for Credit Losses Were Taken | ||||
Other Comprehensive Income (Loss) Reclassification Adjustments | ||||
Unrealized change arising during period | 99,000,000 | (198,000,000) | ||
Less: Reclassification adjustments included in net income | 3,000,000 | 0 | ||
Total other comprehensive income (loss), before income tax expense (benefit) | 96,000,000 | (198,000,000) | ||
Less: Income tax expense (benefit) | 17,000,000 | (44,000,000) | ||
Other comprehensive income | 79,000,000 | (154,000,000) | ||
Unrealized Appreciation (Depreciation) of All Other Investments | ||||
Other Comprehensive Income (Loss) Reclassification Adjustments | ||||
Unrealized change arising during period | 2,002,000,000 | 949,000,000 | 8,158,000,000 | 7,912,000,000 |
Less: Reclassification adjustments included in net income | 172,000,000 | 127,000,000 | 538,000,000 | 187,000,000 |
Total other comprehensive income (loss), before income tax expense (benefit) | 1,830,000,000 | 822,000,000 | 7,620,000,000 | 7,725,000,000 |
Less: Income tax expense (benefit) | 445,000,000 | 166,000,000 | 1,695,000,000 | 1,447,000,000 |
Other comprehensive income | 1,385,000,000 | 656,000,000 | 5,925,000,000 | 6,278,000,000 |
Foreign Currency Translation Adjustments | ||||
Other Comprehensive Income (Loss) Reclassification Adjustments | ||||
Unrealized change arising during period | 297,000,000 | (24,000,000) | 169,000,000 | 31,000,000 |
Less: Reclassification adjustments included in net income | 0 | 0 | 0 | 0 |
Total other comprehensive income (loss), before income tax expense (benefit) | 297,000,000 | (24,000,000) | 169,000,000 | 31,000,000 |
Less: Income tax expense (benefit) | (55,000,000) | 10,000,000 | (37,000,000) | 30,000,000 |
Other comprehensive income | 352,000,000 | (34,000,000) | 206,000,000 | 1,000,000 |
Retirement Plan Liabilities Adjustment | ||||
Other Comprehensive Income (Loss) Reclassification Adjustments | ||||
Unrealized change arising during period | (9,000,000) | 3,000,000 | (15,000,000) | 3,000,000 |
Less: Reclassification adjustments included in net income | (11,000,000) | (9,000,000) | (32,000,000) | (24,000,000) |
Total other comprehensive income (loss), before income tax expense (benefit) | 2,000,000 | 12,000,000 | 17,000,000 | 27,000,000 |
Less: Income tax expense (benefit) | 3,000,000 | 5,000,000 | 16,000,000 | 13,000,000 |
Other comprehensive income | (1,000,000) | 7,000,000 | 1,000,000 | 14,000,000 |
Fair Value of Liabilities Under Fair Value Option Attributable to Changes in Own Credit Risk | ||||
Other Comprehensive Income (Loss) Reclassification Adjustments | ||||
Unrealized change arising during period | 1,000,000 | 1,000,000 | 2,000,000 | (1,000,000) |
Less: Reclassification adjustments included in net income | 0 | 0 | 0 | 0 |
Total other comprehensive income (loss), before income tax expense (benefit) | 1,000,000 | 1,000,000 | 2,000,000 | (1,000,000) |
Less: Income tax expense (benefit) | 0 | 0 | 0 | 0 |
Other comprehensive income | $ 1,000,000 | $ 1,000,000 | $ 2,000,000 | $ (1,000,000) |
EQUITY (Details - Reclassificat
EQUITY (Details - Reclassification of significant items out of Accumulated other comprehensive income) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Total | $ 164 | $ 119 | $ 506 | $ 160 |
Income (loss) from continuing operations before income tax expense (benefit) | 368 | 1,260 | (6,735) | 4,251 |
Amount Reclassified from Accumulated Other Comprehensive Income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Income (loss) from continuing operations before income tax expense (benefit) | 164 | 119 | 506 | 160 |
Unrealized appreciation (depreciation) of fixed maturity securities on which allowance for credit losses were taken | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Total | 3 | 0 | ||
Unrealized appreciation (depreciation) of fixed maturity securities on which allowance for credit losses were taken | Amount Reclassified from Accumulated Other Comprehensive Income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Investments | 3 | 0 | 0 | 0 |
Total | 3 | 0 | 0 | 0 |
Unrealized appreciation (depreciation) of fixed maturity securities on which other-than-temporary credit impairments were taken | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Total | 1 | (3) | ||
Unrealized appreciation (depreciation) of fixed maturity securities on which other-than-temporary credit impairments were taken | Amount Reclassified from Accumulated Other Comprehensive Income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Investments | 0 | 1 | 0 | (3) |
Total | 0 | 1 | 0 | (3) |
Unrealized appreciation (depreciation) of all other investments | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Total | 172 | 127 | 538 | 187 |
Unrealized appreciation (depreciation) of all other investments | Amount Reclassified from Accumulated Other Comprehensive Income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Investments | 172 | 127 | 538 | 187 |
Total | 172 | 127 | 538 | 187 |
Change in retirement plan liabilities adjustment | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Total | (11) | (9) | (32) | (24) |
Change in retirement plan liabilities adjustment | Amount Reclassified from Accumulated Other Comprehensive Income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Prior-service credit | 0 | 0 | (1) | 0 |
Actuarial gains (losses) | (11) | (9) | (31) | (24) |
Total | $ (11) | $ (9) | $ (32) | $ (24) |
EQUITY (Details - Narratives)
EQUITY (Details - Narratives) - USD ($) shares in Millions, $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
EQUITY | ||
Payments for Repurchase of Stock | $ 500 | $ 0 |
Shares purchased | 12 |
EARNINGS PER COMMON SHARE (EP_3
EARNINGS PER COMMON SHARE (EPS) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Numerator for EPS: | ||||
Income (loss) from continuing operations | $ 294 | $ 973 | $ (5,817) | $ 3,301 |
Less: Net income from continuing operations attributable to noncontrolling interests | 11 | 317 | 78 | 881 |
Less: Preferred stock dividends | 7 | 8 | 22 | 15 |
Income (loss) attributable to AIG common shareholders from continuing operations | 276 | 648 | (5,917) | 2,405 |
Income (loss) from discontinued operations, net of income tax expense | 5 | 0 | 4 | (1) |
Net income (loss) attributable to AIG common shareholders | $ 281 | $ 648 | $ (5,913) | $ 2,404 |
Denominator for EPS: | ||||
Weighted average common shares outstanding - basic | 867,713,308 | 877,009,495 | 869,627,926 | 876,262,372 |
Dilutive common shares | 5,417,642 | 18,804,915 | 0 | 10,958,744 |
Weighted average common shares outstanding - diluted | 873,130,950 | 895,814,410 | 869,627,926 | 887,221,116 |
Basic: | ||||
Income (loss) from continuing operations | $ 0.31 | $ 0.74 | $ (6.80) | $ 2.74 |
Income from discontinued operations | 0.01 | 0 | 0 | 0 |
Income (loss) attributable to AIG common shareholders | 0.32 | 0.74 | (6.80) | 2.74 |
Diluted: | ||||
Income (loss) from continuing operations | 0.31 | 0.72 | (6.80) | 2.71 |
Income from discontinued operations | 0.01 | 0 | 0 | 0 |
Income (loss) attributable to AIG common shareholders | $ 0.32 | $ 0.72 | $ (6.80) | $ 2.71 |
Dilutive shares excluded from computation of diluted earnings per share | 4,432,369 | |||
Number of shares excluded from diluted shares outstanding because the effect would have been anti-dilutive | 70,900,000 | 5,100,000 | 68,900,000 | 24,900,000 |
EMPLOYEE BENEFITS (Details - Co
EMPLOYEE BENEFITS (Details - Components of net periodic benefit cost) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Pensions | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 6 | $ 8 | $ 19 | $ 23 |
Interest cost | 36 | 47 | 108 | 142 |
Expected return on assets | (65) | (63) | (194) | (188) |
Amortization of prior service cost (credit) | 1 | 0 | 2 | 1 |
Amortization of net loss | 10 | 10 | 30 | 29 |
Net periodic benefit cost (credit) | (12) | 2 | (35) | 7 |
Settlement (credit) charges | 0 | 0 | 0 | (3) |
Net benefit cost (credit) | (12) | 2 | (35) | 4 |
Pensions | U.S. | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 1 | 2 | 4 | 7 |
Interest cost | 33 | 44 | 100 | 131 |
Expected return on assets | (60) | (58) | (179) | (172) |
Amortization of prior service cost (credit) | 0 | 0 | 0 | 0 |
Amortization of net loss | 9 | 9 | 25 | 25 |
Net periodic benefit cost (credit) | (17) | (3) | (50) | (9) |
Settlement (credit) charges | 0 | 0 | 0 | 0 |
Net benefit cost (credit) | (17) | (3) | (50) | (9) |
Pensions | Non U.S. Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 5 | 6 | 15 | 16 |
Interest cost | 3 | 3 | 8 | 11 |
Expected return on assets | (5) | (5) | (15) | (16) |
Amortization of prior service cost (credit) | 1 | 0 | 2 | 1 |
Amortization of net loss | 1 | 1 | 5 | 4 |
Net periodic benefit cost (credit) | 5 | 5 | 15 | 16 |
Settlement (credit) charges | 0 | 0 | 0 | (3) |
Net benefit cost (credit) | 5 | 5 | 15 | 13 |
Postretirement Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Net benefit cost (credit) | $ 2 | $ 2 | $ 6 | $ 5 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Income Tax Disclosure [Line Items] | |||||
Effective tax rates on income from continuing operations (as a percent) | 20.10% | 22.80% | 13.60% | 22.30% | |
U.S. federal income tax at statutory rate (as a percent) | 21.00% | 21.00% | 21.00% | 21.00% | |
U.S. taxable income from life companies offset by those net operating loss carryforwards | 35.00% | ||||
Unrecognized tax benefits, excluding interest and penalties | $ 4,800,000,000 | $ 4,800,000,000 | $ 4,800,000,000 | ||
Unrecognized tax positions that if recognized would not affect the effective tax rate | 45,000,000 | 45,000,000 | 43,000,000 | ||
Unrecognized tax benefits, interest and penalties accrued | 2,600,000,000 | 2,600,000,000 | 2,400,000,000 | ||
Unrecognized tax benefits, interest net of the federal (benefit) expense and penalties | 126,000,000 | $ 181,000,000 | |||
Deferred tax asset valuation allowance allocated to income from continuing operations | 286,000,000 | ||||
Deferred tax asset valuation allowance recognized related to certain state, local and foreign jurisdictions | (8,000,000) | 12,000,000 | |||
Decrease in unrecognized tax benefits is reasonably possible in the next twelve months | 3,600,000,000 | 3,600,000,000 | |||
Unrecognized tax benefits, if recognized would favorably affect the effective tax rate | 4,700,000,000 | 4,700,000,000 | $ 4,700,000,000 | ||
Change in valuation allowance | 0 | $ (206,000,000) | |||
Impact of tax examination settlement | $ 0 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - $ / shares | Sep. 30, 2020 | Jun. 29, 2020 | Mar. 30, 2020 | Sep. 30, 2019 | Jun. 28, 2019 | Mar. 29, 2019 | Nov. 05, 2020 |
Subsequent Event [Line Items] | |||||||
Date dividends declared | Aug. 3, 2020 | May 4, 2020 | Feb. 12, 2020 | Aug. 7, 2019 | May 6, 2019 | Feb. 13, 2019 | |
Date dividends paid | Sep. 30, 2020 | Jun. 29, 2020 | Mar. 30, 2020 | Sep. 30, 2019 | Jun. 28, 2019 | Mar. 29, 2019 | |
Date of record | Sep. 17, 2020 | Jun. 15, 2020 | Mar. 16, 2020 | Sep. 17, 2019 | Jun. 14, 2019 | Mar. 15, 2019 | |
Subsequent event | |||||||
Subsequent Event [Line Items] | |||||||
Dividends declared per common share | $ 0.32 | ||||||
Dividends declared per preferred share | $ 365.625 | ||||||
Subsequent event | Common Stock | |||||||
Subsequent Event [Line Items] | |||||||
Date dividends declared | Nov. 5, 2020 | ||||||
Date dividends paid | Dec. 28, 2020 | ||||||
Date of record | Dec. 14, 2020 | ||||||
Subsequent event | Preferred Stock | |||||||
Subsequent Event [Line Items] | |||||||
Date dividends declared | Nov. 5, 2020 | ||||||
Date dividends paid | Dec. 15, 2020 | ||||||
Date of record | Nov. 30, 2020 |