American International Group, Inc.

Transcription

1 Financial Supplement Revised Historical AIG Life and Retirement Segment Results 1Q Q 2012 This report should be read in conjunction with AIG s Annual Report on Form 10-K for the year ended December 31, 2012 filed with the Securities and Exchange Commission. All financial information in this document is unaudited.

2 Revised Historical Financial Supplement Contact: Liz Werner Investor Relations (212) Table of Contents.... Page(s) AIG Life and Retirement Operating Segment Changes... 1 Reclassifications... 2 Schematic of Revised Segment Structure... 3 Cautionary Statement Regarding Forward-Looking Information... 4 Non-GAAP Financial Measures... 5 Consolidated Statement of Segment Operations AIG Life and Retirement Operating Statistics Retail Total Retail Operating Statistics Life Insurance and A&H Operating Statistics Life Insurance and A&H Reserves Fixed Annuities Operating Statistics Fixed Annuities Spread Information and Reserves Retirement Income Solutions Operating Statistics Retirement Income Solutions Spread Information and Reserves Institutional Total Institutional Operating Statistics Group Retirement Operating Statistics Group Retirement Spread Information and Reserves Institutional Markets Operating Statistics Institutional Markets Reserves Notes This Historical Results Financial Supplement presents revised quarterly results in the format that AIG will use to present its 2013 First Quarter Financial Supplement, which will include additional supplemental disclosures that are not included in this Historical Results Financial Supplement. The revisions reflected in this Historical Results Financial Supplement and described below had no effect on AIG Life and Retirement operating income and pre-tax income or AIG s consolidated pre-tax income and net income: AIG Life and Retirement Operating Segment Changes In order to align financial reporting with changes made during 2013 to the manner in which AIG s chief operating decision makers review the businesses to assess performance and make decisions about resources to be allocated, AIG Life and Retirement now presents its results in two operating segments Retail and Institutional. These changes are further described on page 1. Prior to the first quarter of 2013, AIG Life and Retirement presented its results in the Life Insurance and Retirement Services operating segments. Prior periods have been revised to conform to the current period presentation. Reclassifications AIG Life and Retirement and Consolidated results were also revised to reflect the reclassification of certain fee income and expenses, which increased total revenues and total expenses by the same amounts. These changes are further described on page 2.

3 AIG Life and Retirement Operating Segment Changes In 2012, AIG Life and Retirement announced several key organizational structure and management changes intended to better serve the organization s distribution partners and customers. Key aspects of the new structure are distinct product divisions, shared annuity and life operations platforms and a unified all-channel distribution organization with access to all AIG Life and Retirement products. During the first quarter of 2013, AIG Life and Retirement fully implemented reporting changes to reflect its new structure and now presents its results in the following two operating segments: Retail: product lines include life insurance and accident and health (A&H), fixed annuities, retirement income solutions including variable and indexed annuities, brokerage services and retail mutual funds. Institutional: product lines include group retirement, group benefits and institutional markets. The institutional markets product line consists of stable value wrap products, structured settlement and terminal funding annuities, private placement variable life and annuities, guaranteed investment contracts, and corporate and bank-owned life insurance. Invested assets are maintained in segregated portfolios for each of the product lines comprising our Retail and Institutional operating segments. Our fundamental investment strategy is to maintain primarily a diversified, high quality portfolio of fixed maturity securities and, as is practicable, to match established duration targets based on characteristics of the underlying liabilities. Invested assets in excess of liabilities are allocated to product lines based on an internal capital model. All prior periods presented have been revised to reflect the new structure. Insurance operations are conducted through American General Life Insurance Company, The Variable Annuity Life Insurance Company, and The United States Life Insurance Company in the City of New York. Selected operating statistics are provided for life insurance and A&H, fixed annuities, retirement income solutions, group retirement, and institutional markets. Operating statistics are not separately presented for brokerage services and retail mutual funds included in the Retail operating segment and group benefits included in the Institutional operating segment. 1

4 Reclassifications Consolidated results and AIG Life and Retirement results on an historical basis were revised to reflect the reclassification of certain items described below, which increased total revenues and total expenses by the same amount and had no effect on AIG s consolidated pre-tax income and net income or AIG Life and Retirement operating income and pre-tax income. Advisory fee income, and the related commissions and advisory fee expenses of AIG s Life and Retirement broker dealer business, are being presented on a gross basis within Other income and Other expenses. Previously, these amounts were included on a net basis within Policy fees on AIG s Consolidated Statement of Operations and AIG Life and Retirement results. In addition, revenues and expenses related to certain payout annuities primarily with life contingent features have been reclassified in the Consolidated Statement of Operations to conform to the first quarter 2013 presentation. The effect on AIG s Consolidated Statement of Operations before and after the reclassifications follows As Previously Increase As Previously Increase (in millions) Reported (Decrease) As Revised Reported (Decrease) As Revised Statement of Operations: Premiums $ 38,011 $ 36 $ 38,047 $ 38,990 $ 36 $ 39,026 Policy fees 2,791 (442) 2,349 2,705 (396) 2,309 Other income 3,582 1,284 4,866 2,661 1,208 3,869 Total revenues 44, ,262 44, ,204 Policyholder benefits and claims incurred 31, ,036 33, ,523 Interest credited to policyholder account balances 4,362 (22) 4,340 4,467 (35) 4,432 Other expenses 2, ,562 2, ,280 Total expenses $ 39,060 $ 878 $ 39,938 $ 40,387 $ 848 $ 41,235 2

5 AIG Life and Retirement The chart below shows the AIG Life and Retirement products under the previous operating segments and their mapping to the new operating segments. New Operating Segments Retail Institutional Businesses Life Insurance and A&H Fixed Annuities Retirement Income Solutions Group Retirement Institutional Markets Products Term Insurance Universal Life A&H Products Fixed Annuity Immediate Annuity Variable Annuity Indexed Annuity Retail Mutual Funds Brokerage Services Fixed Annuity Variable Annuity Mutual Funds Structured Settlements Terminal Funding Annuity GICs / COLI / BOLI PPVUL and PPVA Stable Value Wraps Group Benefits American General Term Insurance Universal Life A&H Products Western National Fixed Annuity Sun America Retirement Markets VALIC Other Variable Annuity Fixed Annuity Variable Annuity Mutual Funds GICs Previous Business Line Presentation Fixed Annuity Immediate Annuity Variable Annuity Indexed Annuity Structured Settlements Terminal Funding Annuity PPVUL and PPVA GICs/COLI/BOLI Stable Value Wraps Indexed Annuity Structured Settlements Structured Settlements Retail Mutual Funds Brokerage Services Group Benefits Previous Operating Segments Life Insurance Retirement Services Definitions: Guaranteed Investment Contracts (GICs), Corporate-Owned Life Insurance (COLI), Bank-Owned Life Insurance (BOLI), Private Placement Variable Life and Annuities (PPVUL & PPVA). 3

6 Cautionary Statement Regarding Forward-Looking Information This Historical Results Financial Supplement may include, 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 monetization of AIG s interests in International Lease Finance Corporation (ILFC), including whether AIG s proposed sale of up to 90 percent of ILFC will be completed and if completed, the timing and final terms of such sale; AIG s exposures to subprime mortgages, monoline insurers, 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 generation of deployable capital; AIG s return on equity and earnings per share long-term aspirational goals; AIG s strategies to grow net investment income, efficiently manage capital and reduce expenses; AIG s strategies 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: changes in market conditions; the occurrence of catastrophic events, both natural and man-made; significant legal proceedings; the timing and applicable requirements of any new regulatory framework to which AIG is subject as a savings and loan holding company, and if such a determination is made, as a systemically important financial institution; concentrations in AIG s investment portfolios; actions by credit rating agencies; judgments concerning casualty insurance underwriting and insurance liabilities; judgments concerning the recognition of deferred tax assets; judgments concerning deferred policy acquisition costs (DAC) recoverability; and such other factors as are discussed in Part II, Item 7. Management s Discussion and Analysis of Financial Condition and Results of Operations and in Part I, Item 1A. Risk Factors 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. 4

7 Non-GAAP Financial Measures Throughout this financial supplement, we use the following operating performance measures because we believe they enhance understanding of the underlying profitability of continuing operations and trends of AIG and our business segments. We believe they also allow for more meaningful comparison with our insurance competitors. When such measures are disclosed, reconciliations to the most comparable GAAP measure are provided. Operating income (loss) is derived by excluding the following items from net income (loss): legal settlements related to legacy crisis matters, changes in fair values of fixed maturity securities designated to hedge living benefits liabilities, net realized capital (gains) losses, and changes in benefit reserves and DAC, VOBA, and SIA related to net realized capital (gains) losses. We believe that Operating income (loss) is useful because excluding these volatile items permits investors to better assess the operating performance of the underlying business by highlighting the results from ongoing operations. Although the investment of premiums to generate investment income (or loss) and realized capital gains or losses are integral parts 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 impairments 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. AIG Life and Retirement premiums and deposits is a non-gaap measure which includes life insurance premiums, deposits on annuity contracts and mutual funds. We use this measure because it is a standard measure of performance used in the insurance industry and thus allows for meaningful comparisons with our insurance competitors. Additionally, in some cases, revenues and rates of performance are shown exclusive of partnership income, other enhancements to income, and changes in foreign exchange rates. In all such instances, we believe that excluding these items permits investors to better assess the operating performance of each of our underlying businesses by highlighting the results from ongoing operations and the underlying profitability of our businesses. 5

8 Consolidated Statement of Segment Operations (in millions, except per share data) 1Q12 2Q12 3Q12 4Q AIG Property Casualty Net premiums written $ 8,820 $ 9,095 $ 8,712 $ 7,809 $ 34,436 Net premiums earned 8,688 8,820 8,752 8,613 34,873 Claims and claims adjustment expenses incurred 5,909 6,079 6,252 7,545 25,785 Acquisition expense 1,757 1,733 1,709 1,737 6,936 General operating expense 1,202 1,225 1,232 1,493 5,152 Underwriting loss (180) (217) (441) (2,162) (3,000) Net investment income 1,223 1,153 1,227 1,217 4,820 Operating income (loss) 1, (945) 1,820 Net realized capital gains (losses) (135) (51) (2) Legal settlements Other income (loss) (4) 2 Pre-tax income (loss) (983) 1,837 AIG Life and Retirement Premiums ,464 Policy fees ,349 Net investment income 2,885 2,521 2,597 2,715 10,718 Advisory fee and other income ,293 Total revenues 4,387 4,032 4,080 4,325 16,824 Benefits and expenses 3,076 3,099 3,254 3,235 12,664 Operating income 1, ,090 4,160 Legal settlements Changes in fair value of fixed income securities designated to hedge living benefit liabilities, net of interest expense (19) 70 (3) (11) 37 Change in benefit reserves and DAC, VOBA and SIA related to net realized capital gains (losses) 36 (552) (604) (81) (1,201) Net realized capital gains (losses) (466) Pre-tax income ,252 3,780 Other operations, operating income 2, ,124 Other operations pre-tax income (loss) before net realized capital gains (losses) 2,319 (55) ,398 Other operations, net realized capital gains (losses) 417 (61) Consolidation and elimination adjustments (42) 47 (171) (28) (194) Income from continuing operations before income tax expense (benefit) 4,466 1,669 2, ,322 Income tax expense (benefit) * 1,081 (491) ,570 Income from continuing operations 3,385 2,160 1, ,752 Income (loss) from discontinued operations, net of tax (4,332) (4,052) Net income (loss) 3,449 2,339 1,861 (3,949) 3,700 Less: Net income from continuing operations attributable to noncontrolling interests: Noncontrolling nonvoting, callable, junior and senior preferred interests Other Total net income from continuing operations attributable to noncontrolling interests Total net income attributable to noncontrolling interests Net income (loss) attributable to AIG $ 3,208 $ 2,332 $ 1,856 $ (3,958) $ 3,438 Effective tax rates: Income from continuing operations 24.2% (29.4)% 28.7% 39.1% 16.8% * Reflects deferred tax asset valuation allowance release of $0.3 billion, $1.3 billion, $0.2 billion and $0.1 billion in 1Q12, 2Q12, 3Q12 and 4Q12, respectively. 6

9 Consolidated Statement of Segment Operations (in millions, except per share data) 1Q11 2Q11 3Q11 4Q AIG Property Casualty Net premiums written $ 9,166 $ 9,167 $ 8,659 $ 7,848 $ 34,840 Net premiums earned 8,651 9,033 9,043 8,962 35,689 Claims and claims adjustment expenses incurred 7,756 6,680 6,838 6,675 27,949 Acquisition expense 1,536 1,606 1,665 1,657 6,464 General operating expense 962 1,106 1,072 1,266 4,406 Underwriting loss (1,603) (359) (532) (636) (3,130) Net investment income 1,179 1,142 1,024 1,003 4,348 Operating income (loss) (424) ,218 Net realized capital gains Other loss - - (1) (4) (5) Pre-tax income (loss) (374) ,820 AIG Life and Retirement Premiums ,549 Policy fees ,309 Net investment income 2,754 2,461 2,295 2,372 9,882 Advisory fee and other income ,417 Total revenues 4,270 4,029 3,758 4,100 16,157 Benefits and expenses 3,099 3,306 3,287 3,188 12,880 Operating income 1, ,277 Change in benefit reserves and DAC, VOBA and SIA related to net realized capital gains (losses) 16 (48) (163) (132) (327) Net realized capital gains (losses) (220) Pre-tax income ,956 Other operations, operating income (loss) 1, (4,235) 502 (1,774) Other operations pre-tax income (loss) before net realized capital gains (losses) (1,562) 112 (4,244) 979 (4,715) Other operations, net realized capital gains (losses) (435) (25) Consolidation and elimination adjustments (24) (75) 43 Income (loss) from continuing operations before income tax benefit (1,428) 1,711 (2,938) 2, Income tax benefit * (222) (301) (164) (18,737) (19,424) Income (loss) from continuing operations (1,206) 2,012 (2,774) 21,508 19,540 Income (loss) from discontinued operations, net of tax 2, (1,052) 94 1,790 Net income (loss) 1,501 2,053 (3,826) 21,602 21,330 Less: Net income from continuing operations attributable to noncontrolling interests: Noncontrolling nonvoting, callable, junior and senior preferred interests Other (55) Total net income from continuing operations attributable to noncontrolling interests Net income from discontinued operations attributable to noncontrolling interests Total net income attributable to noncontrolling interests Net income (loss) attributable to AIG $ 1,297 $ 1,836 $ (3,990) $ 21,479 $ 20,622 Effective tax rates: Income (loss) from continuing operations 15.5% (17.6)% 5.6% NM NM * Reflects deferred tax asset valuation allowance release of $19.3 billion in 4Q11. 7

10 AIG Life and Retirement Operating Statistics - Revised Historical 2012 Results 1Q12 2Q12 3Q12 4Q Premiums and deposits (1) $ 5,560 $ 5,434 $ 4,785 $ 5,215 $ 20,994 Revenues: Premiums $ 614 $ 632 $ 584 $ 634 $ 2,464 Policy fees ,349 Net investment income: Interest and dividends (2) 2,631 2,361 2,342 2,316 9,650 Alternative investments Call and tender income Other (3) Investment expenses (59) (71) (71) (74) (275) Total net investment income 2,885 2,521 2,597 2,715 10,718 Advisory fee and other income ,293 Total revenues excluding net realized capital gains (losses) 4,387 4,032 4,080 4,325 16,824 Benefits and expenses: Policyholder benefits and claims incurred (4) 1,087 1,093 1,124 1,288 4,592 Interest credited to policyholder account balances (5) 1,062 1,054 1,189 1,035 4,340 Amortization of deferred policy acquisition costs Non deferrable commissions General operating expenses (6) ,615 Commissions and advisory fee expenses Total benefits and expenses 3,076 3,099 3,254 3,235 12,664 Operating income 1, ,090 4,160 Adjustments to arrive at pre-tax income: Legal settlements (7) Changes in fair value of securities designated to hedge living benefit liabilities, net of interest expense (19) 70 (3) (11) 37 Change in benefit reserves and DAC, VOBA and SIA related to net realized capital gains (losses) 36 (552) (604) (81) (1,201) Net realized capital gains (losses) (466) Pre-tax income $ 862 $ 777 $ 889 $ 1,252 $ 3,780 Investment yield: Base (8) 5.50% 5.50% 5.38% 5.33% 5.43% Alternative investments (9) 0.28% 0.07% 0.07% 0.44% 0.21% Other enhancements (10) 0.73% 0.14% 0.41% 0.32% 0.40% Total 6.51% 5.71% 5.86% 6.09% 6.04% Assets under management: General account $ 191,662 $ 196,195 $ 200,249 $ 203,736 $ 203,736 Separate accounts 56,019 54,260 56,729 57,326 57,326 Group retirement and retail mutual funds 17,292 17,299 18,501 18,972 18,972 Stable value wraps (11) ,353 10,353 Total assets under management $ 264,973 $ 267,754 $ 275,479 $ 290,387 $ 290,387 8

11 AIG Life and Retirement Operating Statistics - Revised Historical 2011 Results 1Q11 2Q11 3Q11 4Q Premiums and deposits (1) $ 6,358 $ 6,274 $ 5,878 $ 5,882 $ 24,392 Revenues: Premiums $ 629 $ 669 $ 601 $ 650 $ 2,549 Policy fees ,309 Net investment income: Interest and dividends (2) 2,325 2,099 2,247 2,372 9,043 Alternative investments Call and tender income Other (3) (46) Investment expenses (59) (57) (62) (67) (245) Total net investment income 2,754 2,461 2,295 2,372 9,882 Advisory fee and other income (12) ,417 Total revenues excluding net realized capital gains (losses) 4,270 4,029 3,758 4,100 16,157 Benefits and expenses: Policyholder benefits and claims incurred (4) 1,041 1,227 1,209 1,210 4,687 Interest credited to policyholder account balances (5) 1,089 1,107 1,137 1,099 4,432 Amortization of deferred policy acquisition costs Non deferrable commissions General operating expenses ,542 Commissions and advisory fee expenses Total benefits and expenses 3,099 3,306 3,287 3,188 12,880 Operating income 1, ,277 Adjustments to arrive at pre-tax income: Change in benefit reserves and DAC, VOBA and SIA related to net realized capital gains (losses) 16 (48) (163) (132) (327) Net realized capital gains (losses) (220) Pre-tax income $ 967 $ 766 $ 346 $ 877 $ 2,956 Investment yield: Base (8) 5.04% 5.41% 5.49% 5.44% 5.34% Alternative investments (9) 0.62% 0.39% (0.11)% (0.24)% 0.17% Other enhancements (10) 0.70% (0.16)% (0.17)% 0.13% 0.12% Total 6.36% 5.64% 5.21% 5.33% 5.63% Assets under management: General account $ 181,795 $ 182,915 $ 188,236 $ 189,804 $ 189,804 Separate accounts 56,464 56,098 48,107 51,383 51,383 Group retirement and retail mutual funds 15,683 15,856 14,281 15,737 15,737 Total assets under management $ 253,942 $ 254,869 $ 250,624 $ 256,924 $ 256,924 9

12 AIG Life and Retirement - Retail Operating Statistics - Revised Historical 2012 Results 1Q12 2Q12 3Q12 4Q Premiums and deposits (1) $ 3,363 $ 3,329 $ 2,819 $ 3,001 $ 12,512 Revenues: Premiums $ 390 $ 411 $ 373 $ 350 $ 1,524 Policy fees ,869 Net investment income: Interest and dividends (2) 1,571 1,406 1,401 1,367 5,745 Alternative investments Call and tender income Other (3) Investment expenses (34) (41) (44) (43) (162) Total net investment income 1,671 1,460 1,524 1,557 6,212 Advisory fee and other income ,183 Total revenues excluding net realized capital gains (losses) 2,803 2,610 2,645 2,730 10,788 Benefits and expenses: Policyholder benefits and claims incurred (4) ,791 Interest credited to policyholder account balances (5) ,554 Amortization of deferred policy acquisition costs Non deferrable commissions General operating expenses (6) ,171 Commissions and advisory fee expenses Total benefits and expenses 2,042 2,075 2,097 2,132 8,346 Operating income ,442 Adjustments to arrive at pre-tax income: Legal settlements (7) Changes in fair value of securities designated to hedge living benefit liabilities, net of interest expense (19) 70 (3) (11) 37 Change in benefit reserves and DAC, VOBA and SIA related to net realized capital gains (losses) 127 (85) (119) 20 (57) Net realized capital gains (losses) (385) (179) 105 (1) (460) Pre-tax income $ 484 $ 341 $ 531 $ 712 $ 2,068 10

13 AIG Life and Retirement - Retail Operating Statistics - Revised Historical 2011 Results 1Q11 2Q11 3Q11 4Q Premiums and deposits (1) $ 4,332 $ 4,235 $ 3,587 $ 3,581 $ 15,735 Revenues: Premiums $ 386 $ 403 $ 376 $ 381 $ 1,546 Policy fees ,806 Net investment income: Interest and dividends (2) 1,357 1,247 1,326 1,400 5,330 Alternative investments Call and tender income Other (3) 25 9 (30) 3 7 Investment expenses (35) (32) (37) (38) (142) Total net investment income 1,531 1,400 1,340 1,391 5,662 Advisory fee and other income (12) ,222 Total revenues excluding net realized capital gains (losses) 2,652 2,550 2,423 2,611 10,236 Benefits and expenses: Policyholder benefits and claims incurred (4) ,786 Interest credited to policyholder account balances (5) ,695 Amortization of deferred policy acquisition costs Non deferrable commissions General operating expenses ,123 Commissions and advisory fee expenses Total benefits and expenses 1,987 2,195 2,186 2,024 8,392 Operating income ,844 Adjustments to arrive at pre-tax income (loss): Change in benefit reserves and DAC, VOBA and SIA related to net realized capital gains (losses) 16 (41) (156) (124) (305) Net realized capital gains (losses) (125) 66 (168) 70 (157) Pre-tax income (loss) $ 556 $ 380 $ (87) $ 533 $ 1,382 11

14 AIG Life and Retirement - Retail Life Insurance and A&H Operating Statistics - Revised Historical 2012 Results 1Q12 2Q12 3Q12 4Q Premiums and deposits (1) $ 839 $ 857 $ 827 $ 858 $ 3,381 Revenues: Premiums $ 363 $ 375 $ 354 $ 331 $ 1,423 Policy fees ,324 Net investment income: Interest and dividends (2) ,970 Alternative investments Call and tender income Other (3) Investment expenses (15) (18) (14) (17) (64) Total net investment income ,069 Advisory fee and other income Total revenues excluding net realized capital gains (losses) 1,234 1,196 1,186 1,201 4,817 Benefits and expenses: Policyholder benefits and claims incurred (4) ,515 Interest credited to policyholder account balances (5) Amortization of deferred policy acquisition costs Non deferrable commissions General operating expenses (6) Total benefits and expenses 1, ,051 1,113 4,157 Operating income $ 213 $ 224 $ 135 $ 88 $

15 AIG Life and Retirement - Retail Life Insurance and A&H Operating Statistics - Revised Historical 2011 Results 1Q11 2Q11 3Q11 4Q Premiums and deposits (1) $ 852 $ 871 $ 828 $ 867 $ 3,418 Revenues: Premiums $ 366 $ 372 $ 356 $ 344 $ 1,438 Policy fees ,308 Net investment income: Interest and dividends (2) ,818 Alternative investments Call and tender income Other (3) 15 5 (3) 6 23 Investment expenses (15) (13) (13) (14) (55) Total net investment income ,927 Advisory fee and other income (12) Total revenues excluding net realized capital gains (losses) 1,207 1,176 1,126 1,204 4,713 Benefits and expenses: Policyholder benefits and claims incurred (4) ,438 Interest credited to policyholder account balances (5) Amortization of deferred policy acquisition costs Non deferrable commissions General operating expenses Total benefits and expenses 971 1, ,053 4,031 Operating income $ 236 $ 120 $ 175 $ 151 $

16 AIG Life and Retirement - Retail Life Insurance and A&H Reserves - Revised Historical 2012 and 2011 Results 1Q12 2Q12 3Q12 4Q Reserve rollforward: Balance at beginning of period, gross $ 25,945 $ 26,075 $ 26,143 $ 26,338 $ 25,945 Premiums and deposits ,381 Surrenders and withdrawals (216) (189) (177) (202) (784) Death, and other contract benefits (130) (140) (135) (185) (590) Subtotal ,007 Cost of funds Change in fair value of the underlying assets, net of fees (99) (177) (52) (197) (525) Other reserve changes (386) (408) (386) (253) (1,433) Balance at end of period 26,075 26,143 26,338 26,479 26,479 Reinsurance ceded (1,139) (1,130) (1,120) (1,137) (1,137) Total insurance reserves $ 24,936 $ 25,013 $ 25,218 $ 25,342 $ 25,342 1Q11 2Q11 3Q11 4Q Reserve rollforward: Balance at beginning of period, gross $ 25,641 $ 25,734 $ 25,816 $ 25,819 $ 25,641 Premiums and deposits ,418 Surrenders and withdrawals (182) (195) (175) (256) (808) Death, and other contract benefits (94) (112) (111) (119) (436) Subtotal ,174 Cost of funds Change in fair value of the underlying assets, net of fees (132) (164) (258) (111) (665) Other reserve changes (473) (450) (404) (383) (1,710) Balance at end of period 25,734 25,816 25,819 25,945 25,945 Reinsurance ceded (1,138) (1,139) (1,134) (1,151) (1,151) Total insurance reserves $ 24,596 $ 24,677 $ 24,685 $ 24,794 $ 24,794 14

17 AIG Life and Retirement - Retail Fixed Annuities Operating Statistics - Revised Historical 2012 Results 1Q12 2Q12 3Q12 4Q Premiums and deposits (1) $ 613 $ 491 $ 192 $ 265 $ 1,561 Revenues: Premiums $ 28 $ 36 $ 18 $ 19 $ 101 Policy fees Net investment income: Interest and dividends (2) ,489 Alternative investments Call and tender income 3 (2) Other (3) Investment expenses (17) (22) (29) (23) (91) Total net investment income 1, ,794 Advisory fee and other income Total revenues excluding net realized capital gains (losses) 1, ,929 Benefits and expenses: Policyholder benefits and claims incurred Interest credited to policyholder account balances (5) ,962 Amortization of deferred policy acquisition costs Non deferrable commissions General operating expenses (1) 103 Total benefits and expenses ,640 Operating income $ 380 $ 251 $ 260 $ 398 $ 1,289 15

18 AIG Life and Retirement - Retail Fixed Annuities Operating Statistics - Revised Historical 2011 Results 1Q11 2Q11 3Q11 4Q Premiums and deposits (1) $ 2,246 $ 2,131 $ 1,380 $ 1,161 $ 6,918 Revenues: Premiums $ 20 $ 30 $ 19 $ 37 $ 106 Policy fees Net investment income: Interest and dividends (2) ,298 Alternative investments Call and tender income Other (3) 9 3 (29) (4) (21) Investment expenses (20) (17) (22) (20) (79) Total net investment income ,495 Advisory fee and other income (12) Total revenues excluding net realized capital gains (losses) ,703 Benefits and expenses: Policyholder benefits and claims incurred Interest credited to policyholder account balances (5) ,058 Amortization of deferred policy acquisition costs Non deferrable commissions General operating expenses Total benefits and expenses ,790 Operating income $ 314 $ 169 $ 138 $ 292 $

19 AIG Life and Retirement - Retail Fixed Annuities Spread Information and Reserves - Revised Historical 2012 Results 1Q12 2Q12 3Q12 4Q Net investment spreads: Base (8) 5.26% 5.31% 5.12% 5.12% 5.20% Alternative investments (9) 0.25% 0.04% 0.04% 0.23% 0.15% Other enhancements (10) 0.73% (0.03)% 0.39% 0.39% 0.37% Total yield 6.24% 5.32% 5.55% 5.74% 5.72% Cost of funds (a) 3.13% 3.13% 3.15% 3.14% 3.14% Net spread rate, as reported 3.11% 2.19% 2.40% 2.60% 2.58% Base net investment spread (b) 2.13% 2.18% 1.97% 1.98% 2.06% Reserve rollforward: Balance at beginning of period, gross $ 61,404 $ 61,027 $ 60,494 $ 59,821 $ 61,404 Premiums and deposits ,561 Surrenders and withdrawals (967) (953) (847) (1,032) (3,799) Death, and other contract benefits (635) (683) (621) (655) (2,594) Subtotal (989) (1,145) (1,276) (1,422) (4,832) Cost of funds (a) ,836 Change in fair value of the underlying assets, net of fees Other reserve changes (including loss recognition) Balance at end of period 61,027 60,494 59,821 58,978 58,978 Reserves related to unrealized investment appreciation Reinsurance ceded (389) (386) (372) (372) (372) Total insurance reserves $ 61,007 $ 60,515 $ 59,891 $ 59,062 $ 59,062 (a) Excludes the amortization of sales inducement assets. (b) Excludes impact of alternative investments and other enhancements. 17

20 AIG Life and Retirement - Retail Fixed Annuities Spread Information and Reserves - Revised Historical 2011 Results 1Q11 2Q11 3Q11 4Q Net investment spreads: Base (8) 4.68% 5.14% 5.30% 5.24% 5.09% Alternative investments (9) 0.51% 0.34% (0.11)% (0.20)% 0.14% Other enhancements (10) 0.77% (0.32)% (0.34)% 0.05% 0.03% Total yield 5.96% 5.16% 4.85% 5.09% 5.26% Cost of funds (a) 3.32% 3.27% 3.31% 3.28% 3.30% Net spread rate, as reported 2.64% 1.89% 1.54% 1.81% 1.96% Base net investment spread (b) 1.36% 1.87% 1.99% 1.96% 1.79% Reserve rollforward: Balance at beginning of period, gross $ 58,283 $ 59,630 $ 60,707 $ 61,162 $ 58,283 Premiums and deposits 2,246 2,131 1,380 1,161 6,918 Surrenders and withdrawals (914) (996) (908) (966) (3,784) Death, and other contract benefits (556) (620) (552) (538) (2,266) Subtotal (80) (343) 868 Cost of funds (a) ,926 Change in fair value of the underlying assets, net of fees Other reserve changes (including loss recognition) (7) Balance at end of period 59,630 60,707 61,162 61,404 61,404 Reserves related to unrealized investment appreciation Reinsurance ceded (392) (390) (389) (388) (388) Total insurance reserves $ 59,238 $ 60,317 $ 61,082 $ 61,376 $ 61,376 (a) Excludes the amortization of sales inducement assets. (b) Excludes impact of alternative investments and other enhancements. 18

21 AIG Life and Retirement - Retail Retirement Income Solutions Operating Statistics - Revised Historical 2012 Results 1Q12 2Q12 3Q12 4Q Premiums and deposits (1) $ 1,162 $ 1,361 $ 1,060 $ 1,263 $ 4,846 Revenues: Policy fees $ 118 $ 118 $ 129 $ 132 $ 497 Net investment income: Interest and dividends (2) Alternative investments Call and tender income Other (3) Investment expenses (2) (1) (1) (3) (7) Total net investment income Advisory fee and other income Total revenues excluding net realized capital gains (losses) Benefits and expenses: Policyholder benefits and claims incurred (13) (35) 27 (5) Interest credited to policyholder account balances (5) Amortization of deferred policy acquisition costs (4) Non deferrable commissions General operating expenses Commissions and advisory fee expenses Total benefits and expenses Operating income $ 166 $ 50 $ 144 $ 109 $

22 AIG Life and Retirement - Retail Retirement Income Solutions Operating Statistics - Revised Historical 2011 Results 1Q11 2Q11 3Q11 4Q Premiums and deposits (1) $ 824 $ 904 $ 857 $ 889 $ 3,474 Revenues: Policy fees $ 112 $ 115 $ 111 $ 111 $ 449 Net investment income: Interest and dividends (2) Alternative investments Call and tender income Other (3) Investment expenses - (2) (2) (4) (8) Total net investment income Advisory fee and other income (12) Total revenues excluding net realized capital gains (losses) Benefits and expenses: Policyholder benefits and claims incurred (13) (23) (24) 84 Interest credited to policyholder account balances (5) Amortization of deferred policy acquisition costs (13) 81 Non deferrable commissions General operating expenses Commissions and advisory fee expenses Total benefits and expenses Operating income (loss) $ 107 $ 54 $ (79) $ 144 $

23 AIG Life and Retirement - Retail Retirement Income Solutions Spread Information and Reserves - Revised Historical 2012 Results 1Q12 2Q12 3Q12 4Q Net investment spreads: Base (8) 5.03% 5.04% 5.09% 5.15% 5.08% Alternative investments (9) 0.45% 0.03% 0.29% 0.67% 0.37% Other enhancements (10) 0.56% 0.08% 0.50% 0.22% 0.33% Total yield 6.04% 5.15% 5.88% 6.04% 5.78% Cost of funds (a) 2.63% 2.51% 2.42% 2.24% 2.44% Net spread rate, as reported 3.41% 2.64% 3.46% 3.80% 3.34% Base net investment spread (b) 2.40% 2.53% 2.67% 2.91% 2.64% Reserve rollforward: Balance at beginning of period, gross $ 26,826 $ 29,031 $ 29,008 $ 30,428 $ 26,826 Premiums and deposits 1,162 1,361 1,060 1,263 4,846 Surrenders and withdrawals (809) (693) (716) (762) (2,980) Death, and other contract benefits (128) (123) (119) (141) (511) Subtotal ,355 Change in fair value of the underlying assets, net of fees 1,967 (594) 1, ,787 Cost of funds (a) Other reserve changes (11) Balance at end of period 29,031 29,008 30,428 31,071 31,071 Reinsurance ceded (7) (6) (5) (5) (5) Total insurance reserves $ 29,024 $ 29,002 $ 30,423 $ 31,066 $ 31,066 (a) Excludes the amortization of sales inducement assets. (b) Excludes impact of alternative investments and other enhancements. 21

24 AIG Life and Retirement - Retail Retirement Income Solutions Spread Information and Reserves - Revised Historical 2011 Results 1Q11 2Q11 3Q11 4Q Net investment spreads: Base (8) 5.06% 5.41% 4.94% 4.84% 5.05% Alternative investments (9) 1.02% 0.68% (0.67)% (0.30)% 0.12% Other enhancements (10) 0.26% (0.12)% 0.45% 0.20% 0.20% Total yield 6.34% 5.97% 4.72% 4.74% 5.37% Cost of funds (a) 3.10% 2.84% 2.91% 2.70% 2.88% Net spread rate, as reported 3.24% 3.13% 1.81% 2.04% 2.49% Base net investment spread (b) 1.96% 2.57% 2.03% 2.14% 2.17% Reserve rollforward: Balance at beginning of period, gross $ 27,527 $ 28,272 $ 28,087 $ 25,604 $ 27,527 Premiums and deposits ,474 Surrenders and withdrawals (878) (878) (738) (693) (3,187) Death, and other contract benefits (118) (128) (131) (124) (501) Subtotal (172) (102) (12) 72 (214) Change in fair value of the underlying assets, net of fees 897 (92) (2,505) 1,131 (569) Cost of funds (a) Other reserve changes (3) (14) 10 (6) (13) Balance at end of period 28,272 28,087 25,604 26,826 26,826 Reinsurance ceded (8) (7) (13) (12) (12) Total insurance reserves $ 28,264 $ 28,080 $ 25,591 $ 26,814 $ 26,814 (a) Excludes the amortization of sales inducement assets. (b) Excludes impact of alternative investments and other enhancements. 22

25 AIG Life and Retirement - Institutional Operating Statistics - Revised Historical 2012 Results 1Q12 2Q12 3Q12 4Q Premiums and deposits (1) $ 2,197 $ 2,105 $ 1,966 $ 2,214 $ 8,482 Revenues: Premiums $ 224 $ 221 $ 211 $ 284 $ 940 Policy fees Net investment income: Interest and dividends (2) 1, ,905 Alternative investments Call and tender income Other (3) Investment expenses (25) (30) (27) (31) (113) Total net investment income 1,214 1,061 1,073 1,158 4,506 Advisory fee and other income Total revenues excluding net realized capital gains (losses) 1,584 1,422 1,435 1,595 6,036 Benefits and expenses: Policyholder benefits and claims incurred (4) ,801 Interest credited to policyholder account balances (5) ,786 Amortization of deferred policy acquisition costs Non deferrable commissions General operating expenses Commissions and advisory fee expenses Total benefits and expenses 1,034 1,024 1,157 1,103 4,318 Operating income ,718 Adjustments to arrive at pre-tax income: Legal settlements (7) Change in benefit reserves and DAC, VOBA and SIA related to net realized capital gains (losses) (91) (467) (485) (101) (1,144) Net realized capital gains (losses) (81) ,090 Pre-tax income $ 378 $ 436 $ 358 $ 540 $ 1,712 23

26 AIG Life and Retirement - Institutional Operating Statistics - Revised Historical 2011 Results 1Q11 2Q11 3Q11 4Q Premiums and deposits (1) $ 2,026 $ 2,039 $ 2,291 $ 2,301 $ 8,657 Revenues: Premiums $ 243 $ 266 $ 225 $ 269 $ 1,003 Policy fees Net investment income: Interest and dividends (2) ,713 Alternative investments Call and tender income Other (3) 16 4 (16) 9 13 Investment expenses (24) (25) (25) (29) (103) Total net investment income 1,223 1, ,220 Advisory fee and other income (12) Total revenues excluding net realized capital gains (losses) 1,618 1,479 1,335 1,489 5,921 Benefits and expenses: Policyholder benefits and claims incurred (4) ,901 Interest credited to policyholder account balances (5) ,737 Amortization of deferred policy acquisition costs Non deferrable commissions General operating expenses Commissions and advisory fee expenses Total benefits and expenses 1,112 1,111 1,101 1,164 4,488 Operating income ,433 Adjustments to arrive at pre-tax income: Change in benefit reserves and DAC, VOBA and SIA related to net realized capital gains (losses) - (7) (7) (8) (22) Net realized capital gains (losses) (95) Pre-tax income $ 411 $ 386 $ 433 $ 344 $ 1,574 24

27 AIG Life and Retirement - Institutional Group Retirement Operating Statistics - Revised Historical 2012 Results 1Q12 2Q12 3Q12 4Q Premiums and deposits (1) $ 1,844 $ 1,738 $ 1,623 $ 1,823 $ 7,028 Revenues: Premiums $ 5 $ 5 $ 5 $ 4 $ 19 Policy fees Net investment income: Interest and dividends (2) ,120 Alternative investments Call and tender income Other (3) Investment expenses (10) (11) (13) (14) (48) Total net investment income ,359 Advisory fee and other income (12) Total revenues excluding net realized capital gains (losses) ,843 Benefits and expenses: Policyholder benefits and claims incurred Interest credited to policyholder account balances (5) ,189 Amortization of deferred policy acquisition costs Non deferrable commissions General operating expenses Commissions and advisory fee expenses Total benefits and expenses ,680 Operating income $ 325 $ 265 $ 265 $ 308 $ 1,163 25

28 AIG Life and Retirement - Institutional Group Retirement Operating Statistics - Revised Historical 2011 Results 1Q11 2Q11 3Q11 4Q Premiums and deposits (1) $ 1,702 $ 1,705 $ 1,982 $ 1,923 $ 7,312 Revenues: Premiums $ 4 $ 3 $ 5 $ 4 $ 16 Policy fees Net investment income: Interest and dividends (2) ,946 Alternative investments Call and tender income Other (3) 2 (1) (16) - (15) Investment expenses (10) (11) (11) (11) (43) Total net investment income ,159 Advisory fee and other income (12) Total revenues excluding net realized capital gains (losses) ,677 Benefits and expenses: Policyholder benefits and claims incurred Interest credited to policyholder account balances (5) ,228 Amortization of deferred policy acquisition costs Non deferrable commissions General operating expenses Commissions and advisory fee expenses Total benefits and expenses ,772 Operating income $ 267 $ 247 $ 145 $ 246 $

29 AIG Life and Retirement - Institutional Group Retirement Spread Information and Reserves - Revised Historical 2012 Results 1Q12 2Q12 3Q12 4Q Net investment spreads: Base (8) 5.19% 5.23% 5.01% 4.95% 5.09% Alternative investments (9) 0.34% 0.05% 0.08% 0.45% 0.23% Other enhancements (10) 0.59% 0.24% 0.25% 0.19% 0.32% Total yield 6.12% 5.52% 5.34% 5.59% 5.64% Cost of funds (a) 3.28% 3.27% 3.26% 3.26% 3.27% Net spread rate, as reported 2.84% 2.25% 2.08% 2.33% 2.37% Base net investment spread (b) 1.91% 1.96% 1.75% 1.69% 1.82% Reserve rollforward: Balance at beginning of period $ 69,676 $ 73,829 $ 73,058 $ 75,321 $ 69,676 Premiums and deposits 1,844 1,738 1,623 1,823 7,028 Surrenders and withdrawals (1,515) (1,401) (1,478) (1,931) (6,325) Death, and other contract benefits (102) (99) (93) (107) (401) Subtotal (215) 302 Change in fair value of the underlying assets, net of fees 3,614 (1,321) 1, ,833 Cost of funds (a) ,189 Other reserve changes Total insurance reserves $ 73,829 $ 73,058 $ 75,321 $ 76,062 $ 76,062 (a) Excludes the amortization of sales inducement assets. (b) Excludes the impact of alternative investments and other enhancements. 27

30 AIG Life and Retirement - Institutional Group Retirement Spread Information and Reserves - Revised Historical 2011 Results 1Q11 2Q11 3Q11 4Q Net investment spreads: Base (8) 4.68% 5.14% 5.22% 5.25% 5.07% Alternative investments (9) 0.82% 0.47% (0.21)% (0.20)% 0.22% Other enhancements (10) 0.64% 0.05% (0.24)% 0.07% 0.13% Total yield 6.14% 5.66% 4.77% 5.12% 5.42% Cost of funds (a) 3.54% 3.57% 3.61% 3.51% 3.56% Net spread rate, as reported 2.60% 2.09% 1.16% 1.61% 1.86% Base net investment spread (b) 1.14% 1.57% 1.61% 1.74% 1.51% Reserve rollforward: Balance at beginning of period $ 68,133 $ 70,332 $ 70,899 $ 66,421 $ 68,133 Premiums and deposits 1,702 1,705 1,982 1,923 7,312 Surrenders and withdrawals (1,503) (1,448) (1,448) (1,454) (5,853) Death, and other contract benefits (83) (90) (86) (112) (371) Subtotal ,088 Change in fair value of the underlying assets, net of fees 1, (5,256) 2,573 (841) Cost of funds (a) ,228 Other reserve changes Total insurance reserves $ 70,332 $ 70,899 $ 66,421 $ 69,676 $ 69,676 (a) Excludes the amortization of sales inducement assets. (b) Excludes the impact of alternative investments and other enhancements. 28

31 AIG Life and Retirement - Institutional Institutional Markets Operating Statistics - Revised Historical 2012 Results 1Q12 2Q12 3Q12 4Q Premiums and deposits (1) $ 181 $ 194 $ 178 $ 221 $ 774 Revenues: Premiums $ 98 $ 100 $ 96 $ 164 $ 458 Policy fees Net investment income: Interest and dividends (2) ,704 Alternative investments Call and tender income (1) Other (3) Investment expenses (13) (17) (12) (15) (57) Total net investment income ,066 Total revenues excluding net realized capital gains (losses) ,626 Benefits and expenses: Policyholder benefits and claims incurred ,432 Interest credited to policyholder account balances (5) Amortization of deferred policy acquisition costs (2) 3 Non deferrable commissions General operating expenses Total benefits and expenses ,101 Operating income $ 213 $ 123 $ 13 $ 176 $

32 AIG Life and Retirement - Institutional Institutional Markets Operating Statistics - Revised Historical 2011 Results 1Q11 2Q11 3Q11 4Q Premiums and deposits (1) $ 162 $ 163 $ 135 $ 199 $ 659 Revenues: Premiums $ 101 $ 117 $ 72 $ 112 $ 402 Policy fees Net investment income: Interest and dividends (2) ,619 Alternative investments Call and tender income Other (3) Investment expenses (12) (12) (13) (16) (53) Total net investment income ,910 Advisory fee and other income (12) Total revenues excluding net realized capital gains (losses) ,458 Benefits and expenses: Policyholder benefits and claims incurred ,365 Interest credited to policyholder account balances (5) Amortization of deferred policy acquisition costs Non deferrable commissions General operating expenses (2) Total benefits and expenses ,932 Operating income $ 221 $ 120 $ 85 $ 100 $