American International Group, Inc.

Transcription

1 Quarterly Financial Supplement Fourth Quarter 2011 This report should be read in conjunction with AIG s Annual Report on Form 10-K for the year ended December 31, 2011 filed with the Securities and Exchange Commission. All financial information in this document is unaudited.

2 Quarterly Financial Supplement Contact: Liz Werner Investor Relations (212) Table of Contents. Page(s) Cautionary Statement Regarding Forward-Looking Information... 1 Non-GAAP Financial Measures... 2 Consolidated Results Consolidated Statement of Operations Consolidated Statement of Segment Operations After-tax Operating Income (loss) Attributable to AIG... 6 Summary of Non-Qualifying Derivative Hedging Activities... 7 Condensed Consolidating Balance Sheet STAT to GAAP reconciliation Debt and Capital Understanding AIG s Relationship with the U.S. Government Book Value per Common Share Chartis Chartis Operating Statistics Chartis - Operating Statistics by Business Chartis - Operating Statistics (U.S. & International) Revised Historical Chartis - Operating Statistics Worldwide Net Premiums Written by Line of Business & Region Net Premiums Written by Line of Business Chartis Notes SunAmerica Financial Group SunAmerica Financial Group Operating Statistics Domestic Life Insurance (American General) Operating Statistics Domestic Life Insurance (American General) Sales, Deposits and In Force Domestic Life Insurance (American General) Other Data Domestic Retirement Services Operating Statistics Domestic Retirement Services Product Statistics Domestic Retirement Services Account Value Rollforward Domestic Retirement Services Spread Information Domestic Retirement Services Group Retirement Products (VALIC) Domestic Retirement Services Individual Variable Annuities (SunAmerica Retirement markets) Guaranteed Benefits SunAmerica Financial Group Notes Aircraft Leasing Aircraft Leasing Operating Statistics Other Other Operations Mortgage Guaranty Operating Statistics AG AIGFP derivatives i Parent Company Financial Statements Investment Information Other Invested Assets by Segment Realized Capital Gains (Losses) Return on Average Partnership and Mutual Funds Assets by Segment... 54

3 Cautionary Statement Regarding Forward-Looking Information This Financial Supplement includes, and officers and representatives of American International Group, Inc. (AIG) may from time to time make, projections, goals, assumptions and statements that may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of These projections, goals, assumptions and statements are not historical facts but instead represent only AIG s belief regarding future events, many of which, by their nature, are inherently uncertain and outside AIG s control. These projections, goals, assumptions and statements include statements preceded by, followed by or including words such as believe, anticipate, expect, intend, plan, view, target or estimate. These projections, goals, assumptions and statements may address, among other things: the timing of the disposition of the ownership position of the United States Department of the Treasury (the Department of the Treasury) in AIG; the timing and method of repayment of the preferred interests in AIA Aurora LLC held by the Department of the Treasury; the monetization of AIG s interests in International Lease Finance Corporation (ILFC); AIG s exposures to subprime mortgages, monoline insurers and the residential and commercial real estate markets, state and municipal bond issuers and sovereign bond issuers; AIG s exposure to European governments and European financial institutions; AIG s strategy for risk management; AIG s ability to retain and motivate its employees; AIG s generation of deployable capital; AIG s return on equity and earnings per share long-term aspirational goals; AIG s strategy to grow net investment income, efficiently manage capital and reduce expenses; AIG s strategy for customer retention, growth, product development, market position, financial results and reserves; and the revenues and combined ratios of AIG s subsidiaries. It is possible that AIG s actual results and financial condition will differ, possibly materially, from the results and financial condition indicated in these projections, goals, assumptions and statements. Factors that could cause AIG s actual results to differ, possibly materially, from those in the specific projections, goals, assumptions and statements include: actions by credit rating agencies; changes in market conditions; the occurrence of catastrophic events; significant legal proceedings; concentrations in AIG s investment portfolios, including its municipal bond portfolio; judgments concerning casualty insurance underwriting and reserves; judgments concerning the recognition of deferred tax assets; judgments concerning deferred policy acquisition costs (DAC) recoverability; judgments concerning the recoverability of aircraft values in ILFC s fleet; and such other factors as discussed in Part I, Item 1A. Risk Factors and throughout Part II, Item 7. Management s Discussion and Analysis of Financial Condition and Results of Operations in AIG s Annual Report on Form 10-K for the year ended December 31, AIG is not under any obligation (and expressly disclaims any obligation) to update or alter any projections, goals, assumptions or other statements, whether written or oral, that may be made from time to time, whether as a result of new information, future events or otherwise. 1

4 Non-GAAP Financial Measures Throughout this financial supplement, AIG presents its operations in the way it believes will be most meaningful and useful, as well as most transparent, to the investing public and others who use AIG s financial information in evaluating the performance of AIG. That presentation includes the use of certain non-gaap financial measures. The reconciliations of such measures to the most comparable GAAP measures in accordance with Regulation G are included within the relevant tables. AIG believes that After-tax operating income (loss) permits a better assessment and enhanced understanding of the operating performance of its businesses by highlighting the results from ongoing operations and the underlying profitability of its businesses. After-tax operating income (loss) excludes net income (loss) from discontinued operations, net income (loss) from divested businesses that did not qualify for discontinued operations accounting treatment, deferred income tax valuation allowance charges and releases, amortization of the Federal Reserve Bank of New York prepaid commitment fee asset, goodwill impairment charges arising from divestiture-related activities, net realized capital gains (losses), including the DAC offset for SunAmerica, non-qualifying derivative hedging activities and the bargain purchase gain on the Fuji acquisition. See page 6 for the reconciliation of Net income (loss) attributable to AIG to After-tax operating income (loss). Additionally, in some cases, revenues, net income, operating income and related rates of performance are shown exclusive of the effect of tax benefits not obtained for losses incurred, the recognition of other-than-temporary impairments, restructuring-related activities, exchange of the Series C, E and F Preferred Stock, partnership income, other enhancements to income, credit valuation adjustments, unrealized market valuation gains (losses), the effect of catastrophe-related losses and prior year loss development, asbestos losses, returned or additional premiums related to prior year development, foreign exchange rates and aircraft impairments. In all such instances, AIG believes that excluding these items permits investors to better assess the performance of AIG s underlying businesses. AIG believes that providing information in a non-gaap manner is more useful to investors and analysts and more meaningful than the GAAP presentation. Although the investment of premiums to generate investment income (or loss) and realized capital gains or losses is an integral part of both life and general insurance operations, the determination to realize capital gains or losses is independent of the insurance underwriting process. Moreover, under applicable GAAP accounting requirements, losses can be recorded as the result of other than temporary declines in value without actual realization. In sum, investment income and realized capital gains or losses for any particular period are not indicative of underlying business performance for such period. Underwriting profit (loss) is utilized to report results for Chartis operations. Operating income (loss), which is before net realized capital gains (losses) and related DAC and sales inducement asset amortization and goodwill impairment charges, is utilized to report results for SunAmerica operations. Results from discontinued operations and net gains (losses) on sales of divested businesses are excluded from these measures. AIG believes that these measures allow for a better assessment and enhanced understanding of the operating performance of each business by highlighting the results from ongoing operations and the underlying profitability of its businesses. When such measures are disclosed, reconciliations to GAAP pre-tax income are provided. Life and retirement services production (premiums, deposits and other considerations and life insurance CPPE sales) is a non-gaap measure which includes life insurance premiums, deposits on annuity contracts and mutual funds. AIG uses this measure because it is a standard measure of performance used in the insurance industry and thus allows for more meaningful comparisons with AIG s insurance competitors. Additionally, the DAC offset adjustment is a common adjustment for non-gaap operating financial measures in the life insurance industry, and is a better measure of how AIG assesses the operating performance of SunAmerica s operations. 2

5 Consolidated Statement of Operations (in millions, except per share data) Quarterly Full Year 4Q11 3Q11 2Q11 1Q11 4Q Revenues: Premiums $ 9,781 $ 9,829 $ 9,898 $ 9,482 $ 11,366 $ 38,990 $ 45,319 Policy fees ,705 2,710 Net investment income 4, ,464 5,569 5,462 14,755 20,934 Net realized capital gains (losses): (1) Total other-than-temporary impairments on available for sale securities (324) (493) (181) (218) (315) (1,216) (1,712) Portion of other-than-temporary impairments on available for sale fixed maturity securities recognized in Accumulated other comprehensive income (loss) (217) 168 (812) Net other-than-temporary impairments on available for sale securities recognized in net income (loss) (286) (422) (125) (215) (532) (1,048) (2,524) Other realized capital gains (losses) (436) 1,839 1,569 2,349 Total net realized capital gains (losses) (page 53) (651) 1, (175) Aircraft leasing revenue 1,089 1,129 1,134 1,156 1,140 4,508 4,749 Other income (1) ,196 1,195 2,758 3,989 Total revenues (1) 17,409 12,716 16,676 17,436 21,202 64,237 77,526 Benefits, claims and expenses: Policyholder benefits and claims incurred 8,071 8,333 8,086 8,959 14,008 33,449 41,394 Interest credited to policyholder account balances 1,097 1,134 1,110 1,105 1,119 4,446 4,480 Amortization of deferred acquisition costs 2,027 2,490 1,786 1,716 3,151 8,019 9,134 Other acquisition and insurance expenses 1,673 1,214 1,653 1,551 1,528 6,091 6,775 Interest expense ,061 2,186 3,871 7,981 Aircraft leasing expenses 584 2, ,379 3,974 4,050 Loss (gain) on extinguishment of debt (2) (484) , , Net loss (gain) on sale of properties and divested businesses (3) (2) (17,641) 74 (17,767) Other expenses ,470 3,439 Total benefits, claims and expenses 14,542 17,074 14,870 18,816 6,714 65,302 59,590 Income (loss) from continuing operations before income tax expense (benefit) 2,867 (4,358) 1,806 (1,380) 14,488 (1,065) 17,936 Income tax expense (benefit) (16,914) (634) (288) (200) 4,815 (18,036) 5,859 Income (loss) from continuing operations 19,781 (3,724) 2,094 (1,180) 9,673 16,971 12,077 Income (loss) from discontinued operations, net of income tax expense (benefit) 140 (221) (37) 1,653 2,037 1,535 (2,064) Net income (loss) 19,921 (3,945) 2, ,710 18,506 10,013 Less: Net income (loss) from continuing operations attributable to noncontrolling interests: Noncontrolling nonvoting, callable, junior and senior preferred interests ,818 Other (55) Total net income from continuing operations attributable to noncontrolling interests ,173 Net income from discontinued operations attributable to noncontrolling interests Total net income attributable to noncontrolling interests ,227 Net income (loss) attributable to AIG $ 19,798 $ (4,109) $ 1,840 $ 269 $ 11,176 $ 17,798 $ 7,786 Net income (loss) attributable to AIG common shareholders $ 19,798 $ (4,109) $ 1,840 $ (543) $ 2,297 $ 16,986 $ 1,583 Income (loss) per common share attributable to AIG common shareholders: Basic: Income (loss) from continuing operations $ $ (2.05) $ 1.03 $ (1.41) $ $ 8.60 $ Income (loss) from discontinued operations $ 0.07 $ (0.11) $ (0.03) $ 1.06 $ 3.00 $ 0.84 $ (3.15) Diluted: Income (loss) from continuing operations $ $ (2.05) $ 1.03 $ (1.41) $ $ 8.60 $ Income (loss) from discontinued operations $ 0.07 $ (0.11) $ (0.03) $ 1.06 $ 3.00 $ 0.84 $ (3.15) Notes: (1) Includes gains (losses) from hedging activities that did not qualify for hedge accounting, including the related foreign exchange gains and losses (See page 7) and other-than-temporary impairment charges. (2) Reflects a $3.3 billion charge in 1Q11, primarily consisting of the accelerated amortization of the prepaid commitment fee asset resulting from the termination of the FRBNY Credit Facility on January 14, (3) Primarily consists of gain on sale of AIA in 4Q

6 Consolidated Statement of Segment Operations (in millions, except per share data) Quarterly Full Year 4Q11 3Q11 2Q11 1Q11 4Q Chartis Net premiums written $ 7,848 $ 8,659 $ 9,167 $ 9,166 $ 7,578 $ 34,840 $ 31,612 Net premiums earned 8,962 9,043 9,033 8,651 8,550 35,689 32,521 Claims and claims adjustment expenses incurred 6,675 6,838 6,680 7,756 10,724 27,949 27,867 Underwriting expenses 2,942 2,787 2,706 2,537 3,001 10,972 10,114 Underwriting loss (655) (582) (353) (1,642) (5,175) (3,232) (5,460) Net investment income 1,003 1,024 1,142 1,179 1,201 4,348 4,392 Operating income (loss) (463) (3,974) 1,116 (1,068) Net realized capital gains (losses) (37) 587 (49) Other income (loss) (1) (4) (1) (5) 1,001 Pre-tax income (loss) (416) (3,342) 1,698 (116) SunAmerica Financial Group Premiums ,513 2,520 Policy fees ,705 2,710 Net investment income 2,372 2,295 2,461 2,754 2,777 9,882 10,768 Other income (2) Total revenues 3,901 3,544 3,805 4,059 4,109 15,309 15,998 Benefits and expenses 2,970 3,100 3,062 2,916 3,066 12,048 11,950 Operating income ,143 1,043 3,261 4,048 Benefit (amortization) of DAC, VOBA and SIA related to net realized capital gains (losses) (142) (173) (59) 17 (235) (357) (85) Net realized capital gains (losses) (220) (1,251) Pre-tax income ,299 2,910 2,712 Aircraft Leasing Revenues 1,048 1,129 1,134 1,156 1,140 4,467 4,749 Expenses 929 2,446 1,048 1,039 1,746 5,462 5,447 Operating income (loss) 119 (1,317) (606) (995) (698) Net realized capital gains (losses) (2) (12) 1 3 (1) (10) (31) Pre-tax income (loss) 117 (1,329) (607) (1,005) (729) Other operations, operating income (loss) 979 (4,240) 115 2, (1,010) (622) Other operations pre-tax income (loss) before net realized capital gains (losses) 981 (4,242) 113 (1,563) 16,195 (4,711) 14,985 Other operations, net realized capital gains (losses) (25) (435) Consolidation and elimination adjustments (78) (26) Income (loss) from continuing operations before income tax expense (benefit) 2,867 (4,358) 1,806 (1,380) 14,488 (1,065) 17,936 Income tax expense (benefit) (3) (16,914) (634) (288) (200) 4,815 (18,036) 5,859 Income (loss) from continuing operations 19,781 (3,724) 2,094 (1,180) 9,673 16,971 12,077 Income (loss) from discontinued operations, net of tax 140 (221) (37) 1,653 2,037 1,535 (2,064) Net income (loss) 19,921 (3,945) 2, ,710 18,506 10,013 Less: Net income (loss) from continuing operations attributable to noncontrolling interests: Noncontrolling nonvoting, callable, junior and senior preferred interests ,818 Other (55) Total net income from continuing operations attributable to noncontrolling interests ,173 Net income from discontinued operations attributable to noncontrolling interests Total net income attributable to noncontrolling interests ,227 Net income (loss) attributable to AIG $ 19,798 $ (4,109) $ 1,840 $ 269 $ 11,176 $ 17,798 $ 7,786 Income (loss) per common share attributable to AIG common shareholders - diluted: Income (loss) from continuing operations $ $ (2.05) $ 1.03 $ (1.41) $ $ 8.60 $ Income (loss) from discontinued operations $ 0.07 $ (0.11) $ (0.03) $ 1.06 $ 3.00 $ 0.84 $ (3.15) Effective tax rates (page 6): Income (loss) from continuing operations N/M 14.5% (15.9)% 14.5% 33.2% N/M 32.7% See Accompanying Notes on Page 5 4

7 Consolidated Statement of Segment Operations Notes (1) See Page 29 for additional information on Chartis Other operating results. (2) Other income includes revenue recorded pursuant to legal settlements. (3) Reflects valuation allowance release of $17.7 billion in 4Q11 as the cumulative positive evidence outweighed the historical negative evidence regarding the likelihood that the deferred tax asset for AIG s U.S. consolidated income tax group (other than life-insurance-business capital loss carryforwards) will be realized. (4) Return on equity computations are presented below: Full Year 4Q11 3Q11 2Q11 1Q11 4Q Annualized After-tax operating income (loss) attributable to AIG $ 6,232 $ (12,152) $ 5,104 $ 8,120 $ (8,856) $ 1,826 $ (898) Average AIG Shareholders' equity $ 95,491 $ 89,356 $ 88,854 $ 85,173 $ 83,081 $ 90,802 $ 77,343 Less: Average AOCI 5,419 7,461 7,995 7,260 12,812 6,890 9,640 Average AIG Shareholders' equity, excluding AOCI $ 90,073 $ 81,895 $ 80,859 $ 77,913 $ 70,269 $ 83,912 $ 67,703 ROE - After-tax operating income (a) 6.9% N/M 6.3% 10.4% N/M 2.2% N/M Average AIG Shareholders' equity, excluding AOCI and valuation allowance release $ 81,792 $ 80,599 ROE - After-tax operating income, excluding valuation allowance release (b) 7.6% N/A N/A N/A N/A 2.3% N/A N/M - Not meaningful (a) Computed as Actual or Annualized After-tax operating income (loss) divided by Average AIG Shareholders' equity, excluding AOCI. (b) Computed as Actual or Annualized After-tax operating income (loss) divided by Average AIG Shareholders' equity, excluding AOCI and valuation allowance release. 5

8 After-tax Operating Income (Loss) Attributable to AIG (in millions, except share data) Quarterly Full Year 4Q11 3Q11 2Q11 1Q11 4Q Net income (loss) attributable to AIG $ 19,798 $ (4,109) $ 1,840 $ 269 $ 11,176 $ 17,798 $ 7,786 Adjustments to arrive at After-tax operating income (loss) attributable to AIG (amounts net of tax): Net income (loss) from discontinued operations 140 (221) (49) 1,646 2,018 1,516 (2,118) Net gain (loss) on sale of divested businesses 1 (1) (1) (47) 13,506 (48) 13,527 Net income (loss) from divested businesses ,657 Deferred income tax valuation allowance (charge)/release 17,780 (1,226) 570 (563) (1,902) 16,561 (1,517) Amortization of FRBNY prepaid commitment fee asset (2,358) (708) (2,358) (2,255) Net realized capital gains (losses) (387) (860) SunAmerica DAC offset related to net realized capital gains (losses) (93) (112) (38) 11 (152) (232) (55) Non-qualifying derivative hedging activities, excluding net realized capital gains (losses) (69) (27) Bargain purchase gain After-tax operating income (loss) attributable to AIG $ 1,558 $ (3,038) $ 1,276 $ 2,030 $ (2,214) $ 1,826 $ (898) After-tax operating income (loss) attributable to AIG per diluted share $ 0.82 $ (1.60) $ 0.69 $ 1.30 $ (15.99) $ 1.02 $ (6.57) Effective tax rates on After-tax operating income (loss) attributable to AIG (a): 25.7% 41.1% 14.6% 27.1% 51.5% (15.8)% (20.2)% Return on equity - After-tax operating income (loss) (page 5) 6.9% N/M 6.3% 10.4% N/M 2.2% N/M (a) The reconciliation of income attributable to AIG After-tax operating income (loss) and calculation of the effective tax rates is presented below (gains are negative and losses are positive). Three Months Ended December 31, 2011 Twelve Months Ended December 31, 2011 Income (loss) Income Tax Net Noncontrolling Net Income (loss) Effective Income (loss) Income Tax Net Noncontrolling Before Tax (Expense) Benefit Income (loss) Interests attributable to AIG Tax Rate (1) Before Tax (Expense) Benefit Income (loss) Interests Net Income (loss) attributable to AIG Income (loss) from continuing operations $ 2,867 $ 16,914 $ 19,781 $ (123) $ 19,658 N/M $ $ (1,065) $ 18,036 $ 16,971 $ (689) $ 16,282 N/M Net gains / losses on sale of divested business (2) 1 (1) - (1) 74 (26) Net income from divested businesses (16) - (16) - (16) Deferred income tax valuation allowance charge - (17,780) (17,780) - (17,780) - (16,561) (16,561) - (16,561) Amortization of FRBNY prepaid commitment fee asset ,627 (1,269) 2,358-2,358 Net realized capital gains / losses net of SunAmerica DAC offset (553) 267 (2) (286) 2 (284) (164) 68 (2) (96) (8) (104) Non-qualifying derivative hedging gains / losses (53) 18 (35) - (35) (278) 97 (181) - (181) After-tax operating income (loss) $ 2,259 $ (580) $ 1,679 $ (121) $ 1, % $ 2,178 $ 345 $ 2,523 $ (697) $ 1,826 (15.8)% (1) Effective tax rates are calculated based on Income (loss) from continuing operations before tax. (2) Includes tax effect of pre-tax losses that are not deductible for tax purposes. Effective Tax Rate (1) 6

9 Summary of Non-Qualifying Derivative Hedging Activities Effect on Continuing Operations (1) (in millions) Net Realized Capital Gains (Losses) Other Line Items (2) Three Months Ended Full Year Three Months Ended Full Year Changes in Fair Values of Hedges of Assets and Liabilities, including Hedges of Embedded Derivatives: Dec. 31, Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Sept. 30, Dec. 31, Dec. 31, Reported in Segment Results: Chartis $ 196 $ (51) $ 109 $ 288 $ (18) $ - $ 4 $ - $ - $ - SunAmerica Financial Group (3) (386) (305) (719) - - (7) - - Aircraft Leasing (1) (29) Other (4) (190) 239 1, Consolidation Adjustments: Elimination of Global Capital Markets internal trades (5) (39) 34 (145) (141) (34) (266) Other eliminations (6) (5) (18) (470) (1) (17) 32 (21) 64 Consolidated pre-tax effect (197) (42) Consolidated after-tax effect (128) (27) Changes in Fair Values of Embedded Derivatives whose Hedges are a Component of the Above: Chartis $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - SunAmerica Financial Group (7) 376 1,029 (938) (511) Aircraft Leasing Other - (4) - - (1) (1) Intercompany transactions and reclassifications (1) Consolidated pre-tax effect 376 1,025 (938) (511) Consolidated after-tax effect (610) (332) Total pre-tax effect 179 1,288 (337) Total after-tax effect $ 116 $ 837 $ (219) $ 68 $ 295 $ 56 $ 60 $ 206 $ 254 $ 22 Notes: (1) This schedule provides a decomposition of the Derivative Instrument effects on the financial statements. These results are not adjusted to reflect situations where there is a natural offset between the exposure and derivative; or, in situations where the hedged item is also recorded into earnings as part of a hedge relationship. (2) Primarily Other income. These amounts are subtracted from Net Income (Loss) attributable to AIG to arrive at After-Tax Operating Income. (3) Primarily equity and interest rate hedges of embedded derivatives. (4) Primarily hedges of interest rate and foreign exchange risk at Parent, Global Capital Markets, the Matched Investment Program (MIP) and MetLife Warrants received in connection with the sale of ALICO to MetLife. Results for 2010 also reflect hedging activities related to AIA prior to its sale. (5) Global Capital Markets has acted as an intermediary between the segments and third parties. This item eliminates the internal arrangements, so that only the third party trade is reported in consolidation. (6) This item primarily eliminates the differences associated between hedge accounting treatment at the segment level versus the consolidated level. (7) Primarily derivatives embedded in variable annuity life products whose payoff is indexed to movements in the S&P index and interest rates. 7

10 Condensed Consolidating Balance Sheet December 31, 2011 (in millions) SunAmerica Other Consolidation Chartis Financial Group Aircraft Leasing UGC Operations (4) & Eliminations (1) AIG Inc. Assets: Investments: Fixed maturity securities Bonds available for sale, at fair value $ 103,831 $ 154,912 $ - $ 3,027 $ 2,211 $ - $ 263,981 Bonds trading securities, at fair value (2) 88 1, ,692-24,364 Equity securities Common and preferred stock available for sale, at fair value 2, ,624 Common and preferred stock trading, at fair value Mortgage and other loans receivable, net of allowance 2,598 21, ,026 (10,429) 19,489 Flight equipment primarily under operating leases, net of accumulated depreciation , ,539 Other invested assets (3) (page 52) 12,279 12, , ,744 Short-term investments 4,660 3,301 1,910 1,010 11,691-22,572 Total investments 126, ,725 37,540 4,041 58,686 (9,905) 410,438 Cash ,474 Premiums and other receivables, net of allowance 11,254 1, ,881 (890) 14,721 Reinsurance assets, net of allowance 25,538 1, ,211 Current and deferred income taxes 3,314 1,570 (158) (62) 20,793 (9,373) 16,084 Deferred policy acquisition costs 5,353 8, ,026 Other assets 7,289 3,621 1, ,294 (97,231) 20,431 Separate account assets, at fair value - 51, ,388 Total assets $ 179,772 $ 262,087 $ 39,038 $ 4,336 $ 187,904 $ (117,364) $ 555,773 Liabilities: Liability for unpaid claims and claims adjustment expense $ 88,211 $ - $ - $ 1,414 $ 1,691 $ (171) $ 91,145 Unearned premiums 23, ,465 Future policy benefits for life and accident and health insurance contracts 3,474 30, (25) 34,317 Policyholder contract deposits - 126, (78) 126,898 Other policyholder funds 4,180 2, ,691 Other liabilities 10,623 13,219 7, ,329 (13,224) 32,287 Long-term debt (page 11) 566 1,911 (6) 24,385-58,342 (9,951) 75,253 Separate account liabilities - 51, ,388 Total liabilities $ 130,290 $ 226,571 $ 31,431 $ 1,898 $ 74,703 $ (23,449) $ 441,444 Redeemable noncontrolling nonvoting, callable, junior preferred interests held by Department of Treasury ,427 8,427 Other redeemable noncontrolling interests Total redeemable noncontrolling interests ,494 8,523 AIG shareholders' equity: Preferred stock ,426 (8,427) - Common stock , ,345 (15,843) 4,766 Treasury stock, at cost (942) - (942) Additional paid-in capital 21,807 40,753 1,244 1,510 71,757 (55,284) 81,787 Accumulated earnings (deficit) 24,301 (9,767) 5, ,322 (14,587) 14,332 Accumulated other comprehensive income (loss) (5) 3,107 4,422 (22) 93 6,139 (8,731) 5,008 Total AIG shareholders' equity 49,323 35,508 7,507 2, ,047 (102,872) 104,951 Non-redeemable noncontrolling interests Total equity 49,453 35,516 7,607 2, ,201 (102,409) 105,806 Total liabilities and equity $ 179,772 $ 262,087 $ 39,038 $ 4,336 $ 187,904 $ (117,364) $ 555,773 Notes: (1) Segment amounts are presented on an AIG stand alone basis prior to intercompany eliminations. (2) Includes interest in Maiden Lane II of $1.3 billion reported in SunAmerica Financial Group and interest in Maiden Lane III of $5.7 billion, reported in Other Operations. (3) Includes AIG's 33% interest in AIA with a total carrying value of $12.4 billion and reported in Other Operations. (4) Primarily represents Parent Company (including the tax valuation allowance), Global Capital Markets, Direct Investment book, SAFG, Inc. (a non-operating holding company), and the AIA SPV. (5) For U.S. tax purposes, SunAmerica Financial Group has approximately $11.0 billion of gross unrealized gains in its available for sale portfolio which, if realized, can be used to reduce a portion of capital loss deferred tax asset totaling $20.7 billion. (6) Consists primarily of intercompany debt which is eliminated in consolidation. 8

11 Condensed Consolidating Balance Sheet December 31, 2010 (in millions) SunAmerica Other Consolidation Chartis Financial Group Aircraft Leasing UGC Operations (5) & Eliminations (1) AIG Inc. Assets: Investments: Fixed maturity securities Bonds available for sale, at fair value $ 88,904 $ 128,347 $ - $ 3,214 $ 7,837 $ - $ 228,302 Bonds trading securities, at fair value (2) - 1, ,875-26,182 Equity securities Common and preferred stock available for sale, at fair value 3, ,581 Common and preferred stock trading, at fair value (3) ,651-6,652 Mortgage and other loans receivable, net of allowance 2,892 21, ,075 (11,349) 20,237 Flight equipment primarily under operating leases, net of accumulated depreciation , ,510 Other invested assets (4) (page 52) 15,250 12, ,438 (2,470) 42,210 Short-term investments 11,799 19,144 3,058 1,024 8,713-43,738 Total investments 122, ,490 41,704 4,242 72,123 (13,819) 410,412 Cash ,558 Premiums and other receivables, net of allowance 11,864 1, ,938 (601) 15,713 Reinsurance assets, net of allowance 24,047 1, (1) 25,810 Deferred policy acquisition costs 4,972 9, ,668 Other assets 8,581 11, ,893 (85,656) 53,397 Separate account assets, at fair value - 54, ,432 Assets held for sale , ,453 Total assets $ 172,708 $ 261,505 $ 43,158 $ 5,470 $ 300,637 $ (100,035) $ 683,443 Liabilities: Liability for unpaid claims and claims adjustment expense $ 87,455 $ - $ - $ 2,438 $ 1,469 $ (211) $ 91,151 Unearned premiums 23, ,803 Future policy benefits for life and accident and health insurance contracts 2,867 28, (26) 31,268 Policyholder contract deposits - 121, ,373 Other policyholder funds 4,176 2, ,758 Other liabilities 8,694 17,802 7, ,611 (2,704) 37,212 Long-term debt (page 11) 193 2,235 (7) 27,720-87,216 (10,903) 106,461 Separate account liabilities - 54, ,432 Liabilities held for sale , ,312 Total liabilities $ 126,959 $ 226,574 $ 34,921 $ 3,222 $ 191,926 $ (13,832) $ 569,770 Redeemable noncontrolling interests AIG shareholders' equity: Preferred stock ,994 (28,011) 71,983 Common stock , ,349 (17,288) 368 Treasury stock, at cost (873) - (873) Additional paid-in capital 16,755 40,479 1,240 1,506 5,502 (55,799) 9,683 Accumulated earnings (deficit) 25,866 (8,963) 5, (35,947) 8,994 (3,466) Accumulated other comprehensive income (loss) (6) 2,095 3,304 (55) 52 22,776 (20,548) 7,624 Total AIG shareholders' equity 44,863 34,922 8,137 2, ,801 (112,652) 85,319 Non-redeemable noncontrolling interests ,223 27,920 Total equity 45,554 34,931 8,237 2, ,698 (86,429) 113,239 Total liabilities and equity $ 172,708 $ 261,505 $ 43,158 $ 5,470 $ 300,637 $ (100,035) $ 683,443 Notes: (1) Segment amounts are presented on an AIG stand alone basis prior to intercompany eliminations. (2) Includes interest in Maiden Lane II of $1.3 billion reported in SunAmerica Financial Group and interest in Maiden Lane III of $6.3 billion, reported in Other operations. (3) Includes MetLife securities received as consideration for ALICO sale of $6.5 billion at December 31, 2010 reported in Other operations. (4) Includes AIG's 33% interest in AIA with a total carrying value of $11.1 billion and reported in Other operations. (5) Primarily represents Parent Company (including the tax valuation allowance), Global Capital Markets, Direct Investment book, SAFG, Inc. (a non-operating holding company), ALICO SPV and AIA SPV and held for sale businesses. (6) For U.S. tax purposes, SunAmerica Financial Group has approximately $6.4 billion of gross unrealized gains in its available for sale portfolio which, if realized, can be used to reduce a portion of capital loss deferred tax assets totaling $23.1 billion. (7) Consists primarily of intercompany debt which is eliminated in consolidation. 9

12 Reconciliation of Statutory Surplus to GAAP Equity * As of December 31, 2011 As of December 31, 2010 SunAmerica SunAmerica Chartis Financial Group Chartis Financial Group Statutory surplus $ 39,298 $ 14,451 $ 40,300 $ 14,038 Deferred policy acquisition costs, sales inducements and value of business acquired 5,354 9,359 4,973 10,461 Net unrealized gains on fixed maturity securities 3,073 10,748 1,984 5,935 Statutory non-admitted assets 3,253 1,984 3,362 1,562 Other (1,525)(1) (1,026) (2) (5,065)(1) 2,935 (2) GAAP Equity $ 49,453 $ 35,516 $ 45,554 $ 34,931 * December 31, 2011 amounts subject to change based on final statutory filings. December 31, 2010 amounts reflect finalization of statutory filings. (1) Other for Chartis primarily consists of the statutory surplus of UGC and MG Re which are not included within Chartis for purposes of the GAAP consolidating schedule. (2) Other for SunAmerica primarily includes shadow loss recognition, asset valuation reserve and interest maintenance reserve. 10

13 Debt and Capital Debt and Hybrid Capital Interest Expense Dec. 31, Dec. 31, Inc. Three Months Ended Twelve Months Ended (Dec.) Dec. 31, 2011 Dec. 31, 2010 Dec. 31, 2011 Dec. 31, 2010 Financial debt: FRBNY Credit Facility (a) $ - $ 20,985 (100.0)% $ - $ 1,200 $ 72 $ 4,107 AIG notes and bonds payable 12,725 11, AIG loans and mortgage payable SAFG, Inc. notes and bonds payable Liabilities connected to trust preferred stock 1,339 1, AIG Funding loans to subsidiaries- net - (376) NM - - (b) - - (b) Total 14,596 33,975 (57.0) 199 1, ,760 Operating debt: MIP notes payable 10,147 11,318 (10.3) Series AIGFP matched notes and bonds payable 3,807 3,981 (4.4) Other AIG borrowings supported by assets (c) 10,766 12,143 (11.3) ILFC borrowings 24,364 27,699 (12.0) ,427 1,239 Other subsidiaries (11.9) Borrowings of consolidated investments 1,853 2,614 (29.1) AIG Funding loans to subsidiaries- net NM - - (b) - - (b) Total 51,330 58,577 (12.4) ,188 2,090 Hybrid - debt securities: Junior subordinated debt (e) 9,327 11,740 (20.6) Hybrid - mandatorily convertible units: Junior subordinated debt attributable to equity units (e) - 2,169 NM Total $ 75,253 $ 106,461 (29.3)% $ 897 $ 2,204 $ 3,873 $ 8,056 Interest expense reported in discontinued operations - (18) (2) (75) Interest expense on consolidated income statement $ 897 $ 2,186 $ 3,871 $ 7,981 AIG capitalization: Total equity $ 105,806 $ 113,239 (d) (6.6)% Hybrid - debt securities (e) 9,327 11,740 (20.6) Hybrid - mandatorily convertible units (e) - 2,169 NM Total consolidated equity and hybrid capital 115, ,148 (9.4) Financial debt 14,596 33,975 (57.0) Total capital $ 129,729 $ 161,123 (19.5)% Ratios: Total equity / Total capital 81.6% 70.3% Hybrid - debt securities / Total capital 7.2% 7.3% Hybrid - mandatorily convertible units / Total capital N/A 1.3% Financial debt / Total capital 11.3% 21.1% Notes: (a) Repaid in full on January 14, 2011 following AIG's recapitalization. See page 12. (b) Amounts are eliminated in consolidation. (c) Borrowings are carried at fair value with fair value adjustments reported in Other income (loss) on the Consolidated Statement of Operations. Contractual interest payments amounted to $401 million and $424 million for the twelve months ended December 31, 2011 and 2010, respectively. (d) As a result of the closing of the Recapitalization on January 14, 2011, the SPV noncontrolling interests of $26.4 billion in 2010 are no longer considered permanent equity on AIG's Consolidated Balance Sheet, and are classified as redeemable noncontrollling interest. (e) The equity units and junior subordinated debentures receive hybrid equity treatment from the major rating agencies under their current policies but are recorded as long-term borrowings on the consolidated balance sheet. In 2011, AIG remarketed three series of debentures representing $2.2 billion in aggregate principal and as a result, no debentures relating to the equity units remain outstanding. In November 2011, AIG exchanged specified series of its outstanding Junior Subordinated Debentures for senior notes pursuant to its offer to exchange. 11

14 as of 12/31/2011 as of 9/30/2011 as of 12/31/2010 Understanding AIG s Relationship with the U.S. Government AIG executed its recapitalization plan with the U.S. Government on January 14, During the second quarter 2011, AIG and the Treasury Department completed the public offering of 300 million shares of AIG common stock, with 100 million shares issued and sold by AIG and 200 million shares sold by the Treasury Department. Also during 2011, AIG repaid approximately $18.5 billion of the preferred interest. AIG will continue to work with the Treasury Department to help it monetize and exit its equity ownership over time. Repaid or Exchanged ML II & ML III* $16.6 $8.4 PREFERRED INTERESTS to be repaid by AIG Total outstanding assistance, excluding common stock $25.0 billion $27.4 billion $124.1 billion Common stock owned by U.S. Treasury Department billion shares billion shares N/A Outstanding debt and SPV preferred interests to be repaid by AIG $8.4 billion $9.3 billion $96.5 billion The difference between the government assistance outstanding and the balance to be repaid is attributable to the outstanding on the Maiden Lane II and III loans.the Maiden Lane II and III loans are non-recourse to AIG. $18.1 ML II & ML III** $9.3 $32.2 $21.0 $27.6 $75.5 DEBT to be repaid by AIG PREFERRED INTERESTS Redeemable Non-Controlling Interests in the AIA and ALICO SPVs held by the Treasury Department (Repaid and retired in part) AIG paid down and retired approximately $6.1 billion of the FRBNY s preferred interests in the AIA and ALICO SPVs, using cash proceeds from the AIA IPO and the ALICO sale. As part of the January 14, 2011 recapitalization, AIG purchased the remainder of the FRBNY preferred interests (drawing the balance of the Treasury Department then-outstanding TARP Series F Preferred Shares commitment) and transferred those interests, totaling $20.3 billion, to the Treasury Department. AIG reduced the SPV balances further in February 2011 when AIG paid the Treasury Department approximately $2.2 billion from the sale of AIG Star Life Insurance Co., Ltd. and AIG Edison Life Insurance Company; in March 2011 when AIG paid the Treasury Department approximately $6.9 billion from proceeds of the sale of MetLife securities received in the ALICO sale, fully repaying the ALICO SPV liquidation preference; in August 2011 when AIG paid the Treasury Department approximately $2.2 billion from the proceeds of the sale of Nan Shan Life Insurance Company, Ltd.; and in November 2011 when AIG paid $972 million related to the funds released by the escrow held in connection with the ALICO sale. The Treasury Department is expected to be repaid in full over time from the proceeds of asset sales. $8.4 billion $9.3 billion $26.4 billion FRBNY Investment in AIG-related RMBS Maiden Lane II SPV ($22.5 billion originally authorized) In November 2008, FRBNY created this SPV to provide AIG liquidity by purchasing residential mortgage-backed securities from AIG life insurance and retirement services companies. FRBNY provided a loan to Maiden Lane II for the purchases. It also terminated a previously established securities lending arrangement with AIG. The original amount funded by the FRBNY was $19.5 billion. Loans to ML II are being repaid with the proceeds from the interest and principal payments and/or from the liquidation of the assets in the facility. On February 8, 2012, FRBNY announced it had sold $6.2 billion in face amount of ML II assets, and that proceeds will enable the repayment of the entire remaining outstanding loan balance from the FRBNY in early March. *** $6.8 billion* $7.2 billion** $13.5 billion FRBNY Investment in AIG-related CDOs Maiden Lane III SPV ($30 billion originally authorized) In November 2008, FRBNY created this SPV to provide AIG liquidity by purchasing collateralized debt obligations (CDOs) from AIG Financial Products Corp. counterparties in connection with the termination of credit default swaps (CDSs) and surrender of the collateral by AIGFP. FRBNY provided a loan to the SPV for the purchases. The original amount funded by the FRBNY was $24.3 billion. Loans to ML III are being repaid with the proceeds from the interest and principal payments and/or from the liquidation of the assets in the facility. $9.8 billion* $10.9 billion** $14.1 billion DEBT FRBNY Revolving Credit Facility (Repaid and terminated) AIG repaid approximately $21 billion principal and accrued interest and fees owed under the FRBNY credit facility, terminated on January 14, $6.4 billion interest $14.6 billion principal EQUITY Treasury Department TARP Series E and Series F Preferred Shares and AIG Credit Facility Trust Series C Preferred Shares (Exchanged for AIG common stock) AIG exchanged the Preferred Shares previously held by the Treasury Department together with the Series C Preferred Shares previously held by the AIG Credit Facility Trust for approximately billion shares of AIG common stock. Following the May 2011 secondary offering the Treasury Department sold 200 million shares and now holds billion shares or 77% of the total outstanding AIG common stock. Over time, the Treasury Department is expected to sell these shares subject to market conditions. $49.1 billion * As of December 28, 2011, Source: Federal Reserve Statistical Release, issued December 29, 2011 ** As of September 28, 2011, Source: Federal Reserve Statistical Release, issued September 29, 2011 *** Source: Federal Reserve Bank of NY press release, issued February 8,

15 Book Value per Common Share (dollars in millions, except share amounts) (2 3) (2) Book Value Per Share, (1) Total AIG Shareholders' (3) (1 3) Excluding Accumulated Total AIG Equity, Excluding Total Common Book Value Other Comprehensive Shareholders' Accumulated Other Shares Per Share Income (Loss) Equity Comprehensive Income (Loss) Outstanding December 31, 2010 $ (a) $ $ 85,319 $ 77, ,463,159 March 31, (a) ,026 78,130 1,796,719,943 (a) June 30, (a) ,681 83,588 1,897,960,361 September 30, ,031 80,202 1,899,209,621 December 31, ,951 99,943 1,896,821,482 Notes: (a) On January 14, 2011, the Series E and F Preferred Stock were exchanged for AIG Common Stock and retired in connection with the Recapitalization. The pro forma book value per share giving effect to the Recapitalization as well as the conversion of equity units was $49.18, $48.06 and $46.80 at June 30, 2011, March 31, 2011 and December 31, 2010, respectively. 13

16 Chartis Operating Statistics Quarterly Full Year 4Q11 3Q11 2Q11 1Q11 4Q Net premiums written $ 7,848 $ 8,659 $ 9,167 $ 9,166 $ 7,578 $ 34,840 $ 31,612 Net premiums earned 8,962 9,043 9,033 8,651 8,550 35,689 32,521 Claims and claims adjustment expenses incurred (1) 6,675 6,838 6,680 7,756 10,724 27,949 27,867 Underwriting expenses 2,942 2,787 2,706 2,537 3,001 10,972 10,114 Underwriting loss (655) (582) (353) (1,642) (5,175) (3,232) (5,460) Net investment income Interest and dividends ,742 3,450 Alternative investments (86) Mutual funds (4) (15) Other investment income (2) Investment expense (56) (57) (50) (62) (74) (225) (162) Total 1,003 1,024 1,142 1,179 1,201 4,348 4,392 Operating income (loss) before net realized capital gains (losses), bargain purchase gain, gain on sale of properties and other loss (463) (3,974) 1,116 (1,068) Net realized capital gains (losses) (37) 587 (49) Bargain purchase gain (3) Gain on sale of properties (4) Other loss (4) (1) (5) - Pre-tax income (loss) $ 788 $ 498 $ 828 $ (416) $ (3,342) $ 1,698 $ (116) Underwriting ratios: Loss ratio Expense ratio Combined ratio Combined ratio excluding significant current year catastrophe-related losses Combined ratio excluding significant current year catastrophe-related losses and prior year loss development Foreign exchange effect on worldwide premium: Change in net premiums written Increase / (decrease) in original currency (5) 1.7 % (3.5) % 13.6 % 18.7 % 7.8 % 7.3 % 1.8 % Foreign exchange effect Increase / (decrease) as reported in US $ 3.6 % 0.7 % 17.6 % 19.9 % 9.4 % 10.2 % 3.1 % Pre-tax catastrophe-related losses and prior year loss reserve development: Pre-tax catastrophe-related losses $ 478 $ 605 $ 525 $ 1,688 $ 203 $ 3,296 $ 1,066 Reinstatement premium related to catastrophes (11) (31) Prior year loss reserve development (favorable) / unfavorable (13) , ,280 Returned / (additional) premium related to prior year development (19) (25) (91) (37) (26) (172) (8) Net loss and loss expense reserve (at period end) $ 67,979 $ 70,729 $ 70,555 $ 70,201 $ 68,074 $ 67,979 $ 68,074 See Accompanying Notes on Page 29 14

17 Chartis Commercial Operating Statistics Quarterly Full Year 4Q11 3Q11 2Q11 1Q11 4Q Net premiums written $ 4,510 $ 5,293 $ 5,845 $ 5,821 $ 4,526 $ $ 21,469 $ 20,466 Net premiums earned 5,477 5,708 5,732 5,379 5,298 22,296 21,472 Claims and claims adjustment expenses incurred 4,537 4,668 4,524 5,224 6,714 18,953 19,001 Underwriting expenses 1,575 1,514 1,418 1,340 1,692 5,847 5,752 Underwriting loss (635) (474) (210) (1,185) (3,108) (2,504) (3,281) Net investment income ,248 3,348 Operating income (loss) (401) (2,295) Underwriting ratios: Loss ratio Expense ratio Combined ratio Combined ratio excluding significant current year catastrophe-related losses Combined ratio excluding significant current year catastrophe-related losses and prior year loss development Pre-tax catastrophe-related losses and prior year loss reserve development: Pre-tax catastrophe-related losses $ 443 $ 483 $ 456 $ 1,199 $ 203 $ 2,581 $ 1,000 Reinstatement premium related to catastrophes (11) (31) Prior year loss reserve development (favorable) / unfavorable (75) 20 (43) (16) 2,251 (114) 2,186 Returned / (additional) premium related to prior year development (19) (25) (91) (37) (26) (172) (8) Net loss and loss expense reserve (at period end) $ 58,625 $ 59,163 $ 59,233 $ 59,006 $ 57,324 $ 58,625 $ 57,324 See Accompanying Notes on Page 29 15

18 Chartis Consumer Operating Statistics Quarterly Full Year 4Q11 3Q11 2Q11 1Q11 4Q Net premiums written $ 3,339 $ 3,365 $ 3,317 $ 3,320 $ 3,039 $ 13,341 $ 11,056 Net premiums earned 3,475 3,322 3,278 3,249 3,229 13,324 10,959 Claims and claims adjustment expenses incurred 2,099 2,143 2,076 2,479 2,046 8,797 6,686 Underwriting expenses 1,291 1,224 1,207 1,135 1,237 4,857 4,171 Underwriting profit (loss) 85 (45) (5) (365) (54) (330) 102 Net investment income Operating income (loss) (277) Underwriting ratios: Loss ratio Expense ratio Combined ratio Combined ratio excluding significant current year catastrophe-related losses Combined ratio excluding significant current year catastrophe-related losses and prior year loss development Pre-tax catastrophe-related losses and prior year loss reserve development: Pre-tax catastrophe-related losses $ 35 $ 122 $ 69 $ 489 $ - $ 715 $ 66 Reinstatement premium related to catastrophes Prior year loss reserve development (favorable) / unfavorable (1) (36) 86 (66) Returned / (additional) premium related to prior year development Net loss and loss expense reserve (at period end) $ 5,362 $ 5,853 $ 5,590 $ 5,514 $ 5,030 $ 5,362 $ 5,030 See Accompanying Notes on Page 29 16

19 Chartis Other Operating Statistics Quarterly Full Year 4Q11 3Q11 2Q11 1Q11 4Q Net premiums written $ (1) $ 1 $ 5 $ 25 $ 13 $ 30 $ 90 Net premiums earned Claims and claims adjustment expenses incurred , ,180 Underwriting expenses Underwriting loss (105) (63) (138) (92) (2,013) (398) (2,281) Net investment income Operating income (loss), before net realized capital gains (losses), bargain purchase gain, gain on sale of properties and other loss (28) (1,716) 348 (1,538) Net realized capital gains (losses) (37) 587 (49) Bargain purchase gain Gain on sale of properties Other loss (4) (1) (5) - Pre-tax income (loss) $ 412 $ 122 $ 134 $ 262 $ (1,084) $ 930 $ (586) Pre-tax catastrophe-related losses and prior year loss reserve development: Pre-tax catastrophe-related losses $ - $ - $ - $ - $ - $ - $ - Reinstatement premium related to catastrophes Prior year loss reserve development (favorable) / unfavorable , ,160 Returned / (additional) premium related to prior year development Net loss and loss expense reserve (at period end) $ 3,992 $ 5,713 $ 5,732 $ 5,681 $ 5,720 $ 3,992 $ 5,720 See Accompanying Notes on Page 29 17

20 Chartis U.S. Operating Statistics Quarterly Full Year 4Q11 3Q11 2Q11 1Q11 4Q Net premiums written $ 3,828 $ 4,359 $ 4,957 $ 4,128 $ 3,982 $ 17,272 $ 17,247 Net premiums earned 4,492 4,616 4,689 4,482 4,444 18,279 18,223 Claims and claims adjustment expenses incurred 3,770 4,110 3,940 4,103 7,579 15,923 18,514 Underwriting expenses 1,152 1,132 1,063 1,095 1,335 4,442 4,671 Underwriting loss (430) (626) (314) (716) (4,470) (2,086) (4,962) Net investment income Interest and dividends ,678 2,574 Alternative investments (87) Mutual funds Other investment income (2) Investment expense (44) (38) (39) (45) (55) (166) (99) Total ,226 3,458 Operating income (loss) before net realized capital gains (losses) and other loss (3,531) 1,140 (1,504) Net realized capital gains (losses) (196) Other loss (4) (1) (5) - Pre-tax income (loss) $ 338 $ 177 $ 632 $ 224 $ (3,478) $ 1,371 $ (1,700) Underwriting ratios: Loss ratio Expense ratio Combined ratio Combined ratio excluding significant current year catastrophe-related losses Combined ratio excluding significant current year catastrophe-related losses and prior year loss development Pre-tax catastrophe-related losses and prior year loss reserve development: Pre-tax catastrophe-related losses $ 191 $ 480 $ 397 $ 529 $ 77 $ 1,597 $ 557 Reinstatement premium related to catastrophes 1 (4) 1 (4) - (6) - Prior year loss reserve development (favorable) / unfavorable , ,948 Returned / (additional) premium related to prior year development (19) (25) (91) (37) (26) (172) (8) See Accompanying Notes on Page 29 18

21 Chartis U.S. - Operating Statistics by Business Quarterly Full Year Commercial Insurance 4Q11 3Q11 2Q11 1Q11 4Q Net premiums written $ 3,129 $ 3,543 $ 4,201 $ 3,344 $ 3,288 $ 14,217 $ 13,959 Net premiums earned 3,679 3,805 3,857 3,678 3,660 15,019 14,982 Claims and claims adjustment expenses incurred 3,180 3,490 3,351 3,556 5,338 13,577 14,514 Underwriting expenses ,266 3,416 Underwriting loss (355) (535) (248) (686) (2,659) (1,824) (2,948) Net investment income ,701 2,784 Operating income (loss) $ 344 $ 133 $ 432 $ (32) $ (1,986) $ 877 $ (164) Underwriting ratios: Loss ratio Expense ratio Combined ratio Combined ratio excluding significant current year catastrophe-related losses Combined ratio excluding significant current year catastrophe-related losses and prior year loss development Consumer Insurance Net premiums written $ 700 $ 815 $ 751 $ 759 $ 681 $ 3,025 $ 3,198 Net premiums earned ,191 3,150 Claims and claims adjustment expenses incurred ,191 2,124 Underwriting expenses ,075 1,126 Underwriting profit (loss) (14) (61) (6) 6 (95) (75) (100) Net investment income Operating income (loss) $ 9 $ (36) $ 19 $ 31 $ (67) $ 23 $ 12 Underwriting ratios: Loss ratio Expense ratio Combined ratio Combined ratio excluding significant current year catastrophe-related losses Combined ratio excluding significant current year catastrophe-related losses and prior year loss development Chartis Other U.S Net premiums written $ (1) $ 1 $ 5 $ 25 $ 13 $ 30 $ 90 Net premiums earned Claims and claims adjustment expenses incurred , ,876 Underwriting expenses Underwriting loss (61) (30) (60) (36) (1,716) (187) (1,914) Net investment income Operating income (loss) before net realized capital gains (losses) and other loss (54) (1,478) 240 (1,352) Net realized capital gains (losses) (196) Other loss (4) (1) (5) - Pre-tax income (loss) $ (15) $ 80 $ 181 $ 225 $ (1,425) $ 471 $ (1,548) Total Chartis U.S. Net premiums written $ 3,828 $ 4,359 $ 4,957 $ 4,128 $ 3,982 $ 17,272 $ 17,247 Net premiums earned 4,492 4,616 4,689 4,482 4,444 18,279 18,223 Claims and claims adjustment expenses incurred 3,770 4,110 3,940 4,103 7,579 15,923 18,514 Underwriting expenses 1,152 1,132 1,063 1,095 1,335 4,442 4,671 Underwriting loss (430) (626) (314) (716) (4,470) (2,086) (4,962) Net investment income ,226 3,458 Operating income before net realized capital gains (losses) and other loss (3,531) 1,140 (1,504) Net realized capital gains (losses) (196) Other loss (4) (1) (5) - Pre-tax income (loss) $ 338 $ 177 $ 632 $ 224 $ (3,478) $ 1,371 $ (1,700) See Accompanying Notes on Page 29 19

22 Chartis International Operating Statistics Quarterly Full Year 4Q11 3Q11 2Q11 1Q11 4Q Net premiums written $ 4,020 $ 4,300 $ 4,210 $ 5,038 $ 3,596 $ 17,568 $ 14,365 Net premiums earned 4,470 4,427 4,344 4,169 4,106 17,410 14,298 Claims and claims adjustment expenses incurred (1) 2,905 2,728 2,740 3,653 3,145 12,026 9,353 Underwriting expenses 1,790 1,655 1,643 1,442 1,666 6,530 5,443 Underwriting profit (loss) (225) 44 (39) (926) (705) (1,146) (498) Net investment income Interest and dividends , Alternative investments Mutual funds (4) (15) (10) Other investment income (2) Investment expense (12) (19) (11) (17) (19) (59) (63) Total , Operating income (loss), before net realized capital gains (losses), bargain purchase gain and gain on sale of properties (621) (443) (24) 436 Net realized capital gains (losses) (53) (19) (90) Bargain purchase gain (3) Gain on sale of properties (4) Pre-tax income (loss) (6) $ 450 $ 321 $ 196 $ (640) $ 136 $ 327 $ 1,584 Underwriting ratios: Loss ratio Expense ratio Combined ratio Combined ratio excluding significant current year catastrophe-related losses Combined ratio excluding significant current year catastrophe-related losses and prior year loss development Foreign exchange effect on Chartis International's premium: Change in net premiums written Increase / (decrease) in original currency (5) 7.8 % 2.1 % 27.7 % 28.1 % 28.6 % 15.9 % 13.7 % Foreign exchange effect Increase / (decrease) as reported in US $ 11.8 % 11.5 % 37.9 % 30.6 % 32.7 % 22.3 % 17.0 % Pre-tax catastrophe-related losses and prior year loss reserve development: Pre-tax catastrophe-related losses $ 287 $ 125 $ 128 $ 1,159 $ 126 $ 1,699 $ 509 Reinstatement premium related to catastrophes (12) (27) Prior year loss reserve development (favorable) / unfavorable (84) 17 (4) (50) 350 (121) 332 See Accompanying Notes on Page 29 20

23 Chartis International - Operating Statistics by Business Quarterly Full Year Commercial Insurance 4Q11 3Q11 2Q11 1Q11 4Q Net premiums written $ 1,381 $ 1,750 $ 1,644 $ 2,477 $ 1,238 $ 7,252 $ 6,507 Net premiums earned 1,798 1,903 1,875 1,701 1,638 7,277 6,490 Claims and claims adjustment expenses incurred 1,357 1,178 1,173 1,668 1,376 5,376 4,487 Underwriting expenses ,581 2,336 Underwriting profit (loss) (280) (499) (449) (680) (333) Net investment income Operating income (loss) $ (142) $ 200 $ 178 $ (369) $ (309) $ (133) $ 231 Underwriting ratios: Loss ratio Expense ratio Combined ratio Combined ratio excluding significant current year catastrophe-related losses Combined ratio excluding significant current year catastrophe-related losses and prior year loss development Consumer Insurance Net premiums written $ 2,639 $ 2,550 $ 2,566 $ 2,561 $ 2,358 $ 10,316 $ 7,858 Net premiums earned 2,671 2,524 2,469 2,469 2,468 10,133 7,809 Claims and claims adjustment expenses incurred 1,547 1,544 1,543 1,972 1,506 6,606 4,562 Underwriting expenses 1, ,782 3,045 Underwriting profit (loss) (371) 41 (255) 202 Net investment income Operating income (loss) $ 165 $ 79 $ 65 $ (308) $ 104 $ 1 $ 391 Underwriting ratios: Loss ratio Expense ratio Combined ratio Combined ratio excluding significant current year catastrophe-related losses Combined ratio excluding significant current year catastrophe-related losses and prior year loss development Chartis Other Int'l Net premiums written $ - $ - $ - $ - $ - $ - $ - Net premiums earned (1) - - (1) Claims and claims adjustment expenses incurred Underwriting expenses Underwriting loss (44) (33) (78) (56) (297) (211) (367) Net investment income Operating income before net realized capital gains (losses), bargain purchase gain and gain on sale of properties (238) 108 (186) Net realized capital gains (losses) (53) (19) (90) Bargain purchase gain Gain on sale of properties Pre-tax income (loss) $ 427 $ 42 $ (47) $ 37 $ 341 $ 459 $ 962 Total Chartis Int'l Net premiums written $ 4,020 $ 4,300 $ 4,210 $ 5,038 $ 3,596 $ 17,568 $ 14,365 Net premiums earned 4,470 4,427 4,344 4,169 4,106 17,410 14,298 Claims and claims adjustment expenses incurred 2,905 2,728 2,740 3,653 3,145 12,026 9,353 Underwriting expenses 1,790 1,655 1,643 1,442 1,666 6,530 5,443 Underwriting profit (loss) (225) 44 (39) (926) (705) (1,146) (498) Net investment income , Operating income before net realized capital gains (losses), bargain purchase gain and gain on sale of properties (621) (443) (24) 436 Net realized capital gains (losses) (53) (19) (90) Bargain purchase gain Gain on sale of properties Pre-tax income (loss) $ 450 $ 321 $ 196 $ (640) $ 136 $ 327 $ 1,584 See Accompanying Notes on Page 29 21

24 Revised Historical - Chartis Commercial Operating Statistics Quarterly Full Year 1Q10 2Q10 3Q10 4Q Net premiums written $ 5,198 $ 5,407 $ 5,335 $ 4,526 $ 20,466 $ 21,461 Net premiums earned 5,305 5,442 5,427 5,298 21,472 23,106 Claims and claims adjustment expenses incurred 4,092 4,165 4,030 6,714 19,001 18,920 Underwriting expenses 1,356 1,372 1,332 1,692 5,752 5,658 Underwriting profit (loss) (143) (95) 65 (3,108) (3,281) (1,472) Net investment income ,348 3,883 Operating income (loss) (2,295) 67 2,411 Underwriting ratios: Loss ratio Expense ratio Combined ratio Combined ratio excluding significant current year catastrophe-related losses Combined ratio excluding significant current year catastrophe-related losses and prior year loss development Pre-tax catastrophe-related losses and prior year loss reserve development: Pre-tax catastrophe-related losses $ 460 $ 270 $ 67 $ 203 $ 1,000 $ 53 Reinstatement premium related to catastrophes Prior year loss reserve development (favorable) / unfavorable (167) ,251 2,186 1,573 Returned / (additional) premium related to prior year development 59 (1) (40) (26) (8) 118 Net loss and loss expense reserve (at period end) $ 55,371 $ 54,828 $ 54,812 $ 57,324 $ 57,324 $ 55,864 See Accompanying Notes on Page 29 22

25 Revised Historical - Chartis Consumer Operating Statistics Quarterly Full Year 1Q10 2Q10 3Q10 4Q Net premiums written $ 2,427 $ 2,367 $ 3,223 $ 3,039 $ 11,056 $ 9,096 Net premiums earned 2,313 2,269 3,148 3,229 10,959 9,055 Claims and claims adjustment expenses incurred 1,349 1,351 1,940 2,046 6,686 5,315 Underwriting expenses ,061 1,237 4,171 3,690 Underwriting profit (loss) (8) (54) Net investment income Operating income (loss) Underwriting ratios: Loss ratio Expense ratio Combined ratio Combined ratio excluding significant current year catastrophe-related losses Combined ratio excluding significant current year catastrophe-related losses and prior year loss development Pre-tax catastrophe-related losses and prior year loss reserve development: Pre-tax catastrophe-related losses $ 31 $ 30 $ 5 $ - $ 66 $ - Reinstatement premium related to catastrophes Prior year loss reserve development (favorable) / unfavorable (18) (4) (8) (36) (66) 75 Returned / (additional) premium related to prior year development Net loss and loss expense reserve (at period end) $ 4,845 $ 4,768 $ 5,070 $ 5,030 $ 5,030 $ 3,428 See Accompanying Notes on Page 29 23

26 Revised Historical - Chartis Other Operating Statistics Quarterly Full Year 1Q10 2Q10 3Q10 4Q Net premiums written $ 19 $ 18 $ 40 $ 13 $ 90 $ 96 Net premiums earned Claims and claims adjustment expenses incurred ,964 2,180 1,127 Underwriting expenses Underwriting loss (41) (80) (147) (2,013) (2,281) (1,176) Net investment income (942) Operating income (loss), before net realized capital gains (losses), bargain purchase gain, gain on sale of properties (63) (1,716) (1,538) (2,118) Net realized capital gains (losses) (207) (37) (49) (530) Bargain purchase gain Gain on sale of properties Pre-tax income (loss) $ 588 $ 180 $ (270) $ (1,084) $ (586) $ (2,648) Pre-tax catastrophe-related losses and prior year loss reserve development: Pre-tax catastrophe-related losses $ - $ - $ - $ - $ - $ - Reinstatement premium related to catastrophes Prior year loss reserve development (favorable) / unfavorable ,987 2,160 1,147 Returned / (additional) premium related to prior year development Net loss and loss expense reserve (at period end) $ 3,829 $ 3,788 $ 3,826 $ 5,720 $ 5,720 $ 3,894 See Accompanying Notes on Page 29 24

27 Revised Historical - Chartis U.S. - Operating Statistics by Business Quarterly Full Year Commercial Insurance 1Q10 2Q10 3Q10 4Q Net premiums written $ 2,901 $ 3,917 $ 3,853 $ 3,288 $ 13,959 $ 15,121 Net premiums earned 3,717 3,779 3,826 3,660 14,982 16,642 Claims and claims adjustment expenses incurred 2,923 3,202 3,051 5,338 14,514 14,758 Underwriting expenses ,416 3,326 Underwriting profit (loss) (68) (228) 7 (2,659) (2,948) (1,442) Net investment income ,784 3,263 Operating income (loss) $ 635 $ 480 $ 707 $ (1,986) $ (164)$ 1,821 Underwriting ratios: Loss ratio Expense ratio Combined ratio Combined ratio excluding significant current year catastrophe-related losses Combined ratio excluding significant current year catastrophe-related losses and prior year loss development Consumer Insurance Net premiums written $ 866 $ 804 $ 847 $ 681 $ 3,198 $ 3,157 Net premiums earned ,150 3,036 Claims and claims adjustment expenses incurred ,124 2,059 Underwriting expenses , Underwriting profit (loss) (13) (5) 13 (95) (100) 14 Net investment income Operating income (loss) $ 15 $ 23 $ 41 $ (67) $ 12 $ 147 Underwriting ratios: Loss ratio Expense ratio Combined ratio Combined ratio excluding significant current year catastrophe-related losses Combined ratio excluding significant current year catastrophe-related losses and prior year loss development Chartis Other U.S. Net premiums written $ 20 $ 17 $ 40 $ 13 $ 90 $ 95 Net premiums earned Claims and claims adjustment expenses incurred ,701 1,876 1,126 Underwriting expenses Underwriting loss (30) (65) (103) (1,716) (1,914) (1,138) Net investment income (606) Operating income (loss) before net realized capital gains (losses) (46) (1,478) (1,352) (1,744) Net realized capital gains (losses) (3) (61) (185) 53 (196) (679) Pre-tax income (loss) $ 80 $ 28 $ (231) $ (1,425) $ (1,548)$ (2,423) Total Chartis U.S. Net premiums written $ 3,787 $ 4,738 $ 4,740 $ 3,982 $ 17,247 $ 18,373 Net premiums earned 4,562 4,580 4,637 4,444 18,223 19,778 Claims and claims adjustment expenses incurred 3,474 3,763 3,698 7,579 18,514 17,943 Underwriting expenses 1,199 1,115 1,022 1,335 4,671 4,401 Underwriting loss (111) (298) (83) (4,470) (4,962) (2,566) Net investment income ,458 2,790 Operating income before net realized capital gains (losses) (3,531) (1,504) 224 Net realized capital gains (losses) (3) (61) (185) 53 (196) (679) Pre-tax income (loss) $ 730 $ 531 $ 517 $ (3,478) $ (1,700)$ (455) See Accompanying Notes on Page 29 25

28 Revised Historical - Chartis International - Operating Statistics by Business Quarterly Full Year Commercial Insurance 1Q10 2Q10 3Q10 4Q Net premiums written $ 2,297 $ 1,490 $ 1,482 $ 1,238 $ 6,507 $ 6,340 Net premiums earned 1,588 1,663 1,601 1,638 6,490 6,464 Claims and claims adjustment expenses incurred 1, ,376 4,487 4,162 Underwriting expenses ,336 2,332 Underwriting profit (loss) (75) (449) (333) (30) Net investment income Operating income (loss) $ 65 $ 277 $ 198 $ (309) $ 231 $ 590 Underwriting ratios: Loss ratio Expense ratio Combined ratio Combined ratio excluding significant current year catastrophe-related losses Combined ratio excluding significant current year catastrophe-related losses and prior year loss development Consumer Insurance Net premiums written $ 1,561 $ 1,563 $ 2,376 $ 2,358 $ 7,858 $ 5,939 Net premiums earned 1,491 1,491 2,359 2,468 7,809 6,019 Claims and claims adjustment expenses incurred ,396 1,506 4,562 3,256 Underwriting expenses ,045 2,727 Underwriting profit Net investment income Operating income (loss) $ 45 $ 53 $ 189 $ 104 $ 391 $ 254 Underwriting ratios: Loss ratio Expense ratio Combined ratio Combined ratio excluding significant current year catastrophe-related losses Combined ratio excluding significant current year catastrophe-related losses and prior year loss development Chartis Other Int'l Net premiums written $ (1) $ 1 $ - $ - $ - $ 1 Net premiums earned - (1) - - (1) - Claims and claims adjustment expenses incurred Underwriting expenses Underwriting loss (11) (15) (44) (297) (367) (38) Net investment income (336) Operating income before net realized capital gains (losses), bargain purchase gain and gain on sale of properties (17) (238) (186) (374) Net realized capital gains (losses) (22) (90) Bargain purchase gain Gain on sale of properties Pre-tax income (loss) $ 508 $ 152 $ (39) $ 341 $ 962 $ (225) Total Chartis Int'l Net premiums written $ 3,857 $ 3,054 $ 3,858 $ 3,596 $ 14,365 $ 12,280 Net premiums earned 3,079 3,153 3,960 4,106 14,298 12,483 Claims and claims adjustment expenses incurred 1,985 1,812 2,411 3,145 9,353 7,419 Underwriting expenses 1,175 1,201 1,401 1,666 5,443 5,096 Underwriting profit (loss) (81) (705) (498) (32) Net investment income Operating income before net realized capital gains (losses), bargain purchase gain and gain on sale of properties (443) Net realized capital gains (losses) (22) (90) Bargain purchase gain Gain on sale of properties Pre-tax income (loss) $ 618 $ 482 $ 348 $ 136 $ 1,584 $ 619 See Accompanying Notes on Page 29 26

29 Chartis Worldwide Net Premiums Written (NPW) by Line of Business & Region 2010 Worldwide NPW by Line of Business = $31,612 Commercial 65% and Consumer 35% 2011 Worldwide NPW by Line of Business = $34,840 Commercial 62% and Consumer 38% 10% 11% 17% A&H Personal Lines Life 12% 10% A&H 17% Personal Lines Life Casualty 13% 17% 1% 31% Financial Lines Property Specialty 12% 28% 19% 2% Casualty Financial Lines Property Specialty 2010 Worldwide NPW by Region 2011 Worldwide NPW by Region 9% U.S. & Canada 9% U.S. & Canada 18% 55% Europe 24% 50% Europe 18% Far East Growth Economies 17% Far East Growth Economies 1 27

30 Chartis U.S. and International Net Premiums Written (NPW) by Line of Business 2010 U.S. NPW by Line of Business = $17, U.S. NPW by Line of Business = $17,272 8% 10% 9% 12% A&H 14% 47% Personal Lines Casualty Financial Lines Property 11% 15% 12% A&H 8% 9% 45% Personal Lines Casualty Financial Lines Property Specialty Specialty 2010 International NPW by Line of Business = $14, International NPW by Line of Business = $17,568 10% A&H 12% 28% 11% 24% Personal Lines Life Casualty Financial Lines Property 13% 2% Specialty 9% A&H 26% 11% Personal Lines 9% 12% 29% 4% Life Casualty Financial Lines Property Specialty 2 28