American International Group, Inc. Financial Supplement Third Quarter 2009

Transcription

1 Financial Supplement Third Quarter 2009 This report should be read in conjunction with AIG's Quarterly Report on Form 10-Q for the quarter ended September 30, 2009 filed with the Securities and Exchange Commission.

2 Financial Supplement Table of Contents Consolidated Consolidated Statement of Operations...1 Consolidated Statement of Segment Operations Significant Items, Affecting Adjusted Net Loss Summary of Non-qualifying derivative hedging activities...6 Consolidated Balance Sheet...7 Debt and Capital...8 U.S. Government Support...9 Capital Structure...10 Book Value per Share...11 General Insurance General Insurance Operating Statistics...12 AIG Commercial Insurance Operating Statistics...13 AIG Commercial Insurance Gross Premiums Written by Line of Business...14 Foreign General Insurance Operating Statistics...15 Foreign General Insurance Gross Premiums Written...16 General Insurance Notes...17 Life Insurance & Retirement Services Life Insurance & Retirement Services Operating Statistics...18 Domestic Life Insurance & Retirement Services Operating Statistics...19 Domestic Life Insurance Product Statistics Domestic Life Insurance Other Data...22 Domestic Life Insurance Deferred Policy Acquisition Costs, Sales Inducements and Value of Business Acquired Domestic Life Insurance Notes...25 Domestic Retirement Services Product Statistics Domestic Retirement Services Deposits...28 Domestic Retirement Services Spread Information Domestic Retirement Services Deferred Policy Acquisition Costs, Sales Inducements and Value of Business Acquired...31 Domestic Retirement Services Individual Variable Annuities Guaranteed Benefits Domestic Retirement Services Notes...34 Foreign Life Insurance & Retirement Services Operating Statistics...35 Foreign Life Insurance & Retirement Services Product Statistics Japan and Other Product Statistics Asia Product Statistics Foreign Life Insurance & Retirement Services Premium Statistics Foreign Life Insurance & Retirement Services Premiums, Deposits and Other Considerations Foreign Life Insurance & Retirement Services Reserves...46 Foreign Life Insurance & Retirement Services Deferred Policy Acquisition Costs, Sales Inducements and Value of Business Acquired Foreign Life Insurance & Retirement Services Notes...49 Life Insurance & Retirement Services Net Realized Capital Gains (Losses)...50 Financial Services Financial Services Operating Statistics...51 Consumer Finance Operating Statistics...52 Consumer Finance Other Data...53 Financial Services Notes...54 American General Finance Real Estate Portfolio...55 Asset Management Asset Management Operating Statistics...56 Asset Management Notes...57 Other Other...58 Other Notes...59 Parent Company Financial Statements Pre Tax Realized Gains (Losses) by Source by Business Segment..64 Investment and Credit Information Cash and Investments by Segment AIGFP Balance Sheet...69 Other Invested Assets by Segment...70 Return on Average Partnerships and Mutual Funds Assets by Segment.71 AIG Insurance Investment Portfolios Comment on Regulation G...74 American International Group, Inc. Investor Relations Teri L. Watson, Vice President (212)

3 Consolidated Statement of Operations (in millions, except per share data) Three Months Ended Nine Months Ended Sept. 30, Sept. 30, June 30, Sequential Sept. 30, Sept. 30, % Chg 2009 % Chg % Chg Revenues: Premiums and other considerations $ 16,041 $ 21,082 (23.9)% $ 17,769 (9.7)% $ 52,630 $ 63,489 (17.1) % Net investment income 8,656 2, ,785 (1.5) 19,724 14, Net realized capital losses: (1) (2) Total other-than-temporary impairments on available for sale securities (1,148) (19,706) NM (1,190) NM (6,199) (31,966) NM Portion of other-than-temporary impairments on available for sale fixed maturity securities recognized in Accumulated other comprehensive loss (11) - NM 369 NM NM Net other-than-temporary impairments on available for sale securities recognized in net income (loss) (1,159) (19,706) NM (821) NM (5,841) (31,966) NM Other realized capital gains (losses) (1,778) 1,394 NM (478) NM (1,497) 1,484 NM Total net realized capital losses (2,937) (18,312) NM (1,299) NM (7,338) (30,482) NM Unrealized market valuation gains (losses) on AIGFP super senior credit default swap portfolio 959 (7,054) NM ,143 (21,726) NM Other income (1)(2) 3,330 2, ,634 (8.4) 9,873 8, Total revenues (1) 26, NM 29,525 (11.8) 76,032 34, Benefits, claims and expenses: Policyholder benefits and claims incurred 15,882 17,189 (7.6) 17,273 (8.1) 49,198 51,521 (4.5) Policy acquisition and other insurance expenses 4,812 6,782 (29.0) 5,578 (13.7) 15,569 18,166 (14.3) Interest expense 2,510 2, ,600 (3.5) 7,955 4, Restructuring expenses and related asset impairment and other expenses NM ,076 - NM Other expenses 2,681 2,815 (4.8) 2, ,490 8,478 (11.7) Total benefits, claims and expenses 26,256 29,083 (9.7) 28,206 (6.9) 81,288 83,067 (2.1) Income (loss) before income tax benefit (207) (28,185) NM 1,319 NM (5,256) (48,205) NM Income tax benefit (192) (3,480) NM (526) NM (1,953) (10,374) NM Net income (loss) (15) (24,705) NM 1,845 NM (3,303) (37,831) NM Less: net income (loss) attributable to noncontrolling interest (470) (237) NM 23 NM (1,227) (201) NM Net income (loss) attributable to AIG $ 455 $ (24,468) NM % $ 1,822 (75.0)% $ (2,076) $ (37,630) NM % Net income (loss) attributable to AIG common shareholders $ 92 $ (24,468) NM % $ 311 (70.4)% $ (3,371) $ (37,630) NM % Income (loss) per common share attributable to AIG: (3) Basic $ 0.68 $ (181.02) NM % $ 2.30 (70.4)% $ (24.92) $ (287.99) NM % Diluted 0.68 (181.02) NM 2.30 (70.4) $ (24.92) $ (287.99) NM % Dividends declared per common share (3) $ - $ - NM % $ - NM% $ - $ 8.33 NM % Weighted average shares outstanding: (3) Basic Diluted Notes: (1) Includes gains (losses) from hedging activities that did not qualify for hedge accounting, including the related foreign exchange gains and losses. (Refer to page 6) (2) Includes other-than-temporary impairment charges. (Refer to page 64) (3) On June 30, 2009 AIG s stockholders approved a one-for-twenty reverse stock split, which became effective on June 30, All periods presented have been adjusted to give effect to this reverse split. 1

4 Consolidated Statement of Segment Operations (in millions, except per share data) Three Months Ended Nine Months Ended Sept. 30, Sept. 30, June 30, Sequential Sept. 30, Sept. 30, % Chg 2009 % Chg % Chg General insurance Net premiums written $ 8,076 $ 9,277 (12.9)% $ 7, % $ 23,734 $ 28,545 (16.9)% Net premiums earned 7,939 9,294 (14.6) 8,024 (1.1) 24,244 27,836 (12.9) Claims and claims adjustment expenses incurred 5,996 7,110 (15.7) 5, ,426 19,357 (10.0) Underwriting expenses 2,355 2,601 (9.5) 2, ,805 7,365 (7.6) Underwriting profit (loss) (1) (412) (417) NM 148 NM 13 1,114 (98.8) Net investment income 1, ,456 2,457 (0.0) Income before net realized capital gains (losses) NM 1,016 (28.9) 2,469 3,571 (30.9) Net realized capital gains (losses) (2) 92 (1,366) NM (45) NM (561) (2,105) NM Operating income (loss) 814 (1,261) NM 971 (16.2) 1,908 1, Life insurance & retirement services Premiums and other considerations 7,852 9,354 (16.1) 8,119 (3.3) 24,306 28,257 (14.0) Deposits and other considerations not included in revenues under GAAP 5,838 12,935 (54.9) 4, ,876 44,866 (62.4) Premiums, deposits and other considerations 13,690 22,290 (38.6) 12, ,182 73,123 (43.7) Net investment income 6,272 2, ,581 (4.7) 16,483 11, Income before net realized capital gains (losses) 2,213 1, , ,969 6,159 (19.3) Net realized capital gains (losses) (2) (932) (16,341) NM 285 NM (3,755) (25,720) NM Operating income (loss) 1,281 (15,329) NM 1,806 (29.1) 1,214 (19,561) NM Financial services Operating income (loss), excluding non-qualifying derivative hedging activities and net realized capital gains (losses) (3) (4) 1,560 (8,347) NM (103) NM 367 (22,772) NM Non-qualifying derivative hedging activities (2) (3) 177 NM 4 NM 3 61 (95.1) Net realized capital gains (losses) (2) (657) (33) NM 10 NM (681) (169) NM Operating income (loss) 900 (8,203) NM (89) NM (311) (22,880) NM Asset management Operating income (loss) before net realized capital gains (losses) (1,066) (28) NM (300) NM (1,847) 276 NM Net realized capital gains (losses) (2) (1,169) (1,116) NM 78 NM (1,243) (2,985) NM Operating loss (2,235) (1,144) NM (222) NM (3,090) (2,709) NM Other before net realized capital gains (losses) (579) (2,559) NM (931) NM (4,875) (4,273) NM Other net realized capital gains (losses) (2) (759) (153) NM (394) NM (260) (485) NM Consolidation and elimination adjustments (2) (5) (20.0) (33.3) Income (loss) before income tax benefit (207) (28,185) NM 1,319 NM (5,256) (48,205) NM Income tax benefit (6) (192) (3,480) NM (526) NM (1,953) (10,374) NM Net income (loss) (15) (24,705) NM 1,845 NM (3,303) (37,831) NM Less: Net income (loss) attributable to noncontrolling interest: Income (loss) before net realized capital gains (losses) (373) (140) NM - NM (1,132) (97) NM Net realized capital gains (losses) (97) (97) NM 23 NM (95) (104) NM Net income (loss) attributable to AIG 455 (24,468) NM 1,822 (75.0) (2,076) (37,630) NM Net realized capital gains (losses), net of tax (1,798) (15,056) NM (859) NM (5,288) (23,038) NM Non-qualifying derivative hedging activities, excluding net realized gains (losses), net of tax (2) 344 (172) NM 676 (49.1) 902 (470) NM Adjusted net income (loss) (7) $ 1,909 $ (9,240) NM % $ 2,005 (4.8) % $ 2,310 $ (14,122) NM % Income (loss) per common share - diluted : Net income (loss) attributable to AIG $ 0.68 $ (181.02) NM $ 2.30 (70.4) (24.92) (287.99) NM Adjusted net income (loss) (7) $ 2.85 $ (68.36) NM $ (108.08) NM Weighted average shares outstanding - diluted Effective tax rates (8): Income (loss) before income tax and noncontrolling interest 92.8% 12.3% (40.0)% 37.1% 21.5% Net income (loss) attributable to AIG (16.2)% 12.3% (45.0)% 47.3% 21.7% Adjusted net income (loss) (7) 28.0% 2.5% (29.4)% (24.0)% 16.9% Return on equity attributable to AIG (9): 11.0% (131.1)% 13.2% 4.9% (61.8)% (See Accompanying Notes on Page 3) 2

5 Consolidated Statement of Segment Operations Notes (1) Underwriting profit (loss) is statutory underwriting profit (loss) adjusted for changes in the deferral of policy acquisition costs that are necessary to present the financial statements in accordance with GAAP. (2) Includes gains (losses) from hedging activities that did not qualify for hedge accounting, including the related foreign exchange gains and losses. Refer to page 6. (3) Includes unrealized market valuation gains and losses on Capital Markets super senior credit default swap portfolio. Refer to page 51. (4) Includes the pre-tax effect of changes in pre-tax credit spreads on the valuation of Capital Markets assets and liabilities. Refer to page 54. (5) Includes the income from certain AIG managed partnerships, private equity and real estate funds that are consolidated. Such income is offset in net loss attributable to noncontrolling interests, which is not a component of operating income, on the consolidated statement of income (loss). (6) Includes a change in estimated U.S. tax liability with respect to the potential sale of subsidiaries, partially offset by an increase in the valuation allowance and reserve for uncertain tax positions. (7) Adjusted net income (loss) excludes net realized capital gains (losses) and derivative instruments and hedging activities that did not qualify for hedge accounting, net of tax. (8) The calculation of the effective tax rates is as follows: Three Months Ended September 30, 2009 Nine Months Ended September 30, 2009 Pre-tax Income Tax Net Effective Pre-tax Income Tax Net Effective Income (loss) Expense (benefit) Income (loss) Tax Rate Income (loss) Expense (benefit) Income (loss) Tax Rate Income (Loss) before income tax expense (benefit) $ (207) $ (192) $ (15) 92.8% $ (5,256) $ (1,953) $ (3,303) 37.1% Noncontrolling interest , ,227 Net income (loss) attributable to AIG 391 (64) % (3,939) (1,863) (2,076) 47.3% Net realized capital gains (losses) 2, ,798 7,191 1,903 5,288 Non-qualifying derivative hedging activities gains (losses) (529) (185) (344) (1,388) (486) (902) Adjusted net income (loss) $ 2,649 $ 740 $ 1, % $ 1,864 $ (446) $ 2, % (9) Return on equity is annualized net income (loss) attributable to AIG, expressed as a percentage of average AIG shareholders' equity. Return on equity, as adjusted, is annualized adjusted net income (loss) expressed as a percentage of average AIG shareholders equity, adjusted to exclude the effects of non-qualifying derivative hedging activities that did not qualify for hedge accounting of $(917) million and $(570) million, respectively, and accumulated other comprehensive income of $5.2 billion, and $6.4 billion, respectively, in the three and nine months ended September 30, Three Months Ended Nine Months Ended September 30, 2009 September 30, 2009 Return on equity, GAAP basis 2.8% -4.8% Adjustments related to: Non-qualifying derivative hedging activities and net realized capital gains (losses) 9.1% 10.3% Accumulated other comprehensive income -0.9% -0.6% Return on equity, as adjusted 11.0% 4.9% * Return on equity including noncontrolling interest was (.09)% and (7.0)% on a GAAP basis for the three and nine months ended September 30, 2009 and 7.8% and 2.1% on an adjusted basis for the three and nine months ended September 30,

6 Significant Items, Affecting Adjusted Net Income (Loss) Significant items affecting the third quarter of 2009: Life Insurance & Total Total General Retirement Financial Asset Company Company Insurance Services Services Management Other Pre-tax After-tax FRBNY credit line interest and amortization $ - $ - $ (502) $ - $ (750) $ (1,252) $ (814) Market volatility-related: AIGFP credit valuation adjustment AIGFP operating results, including unrealized market valuation gains Gains related to retained Maiden Lane interests ,162 1, Total market volatility-related activities $ - $ 224 $ 1,582 $ 24 $ 1,162 $ 2,992 $ 1,946 Other: Asset management real estate impairments (506) - (506) (262) Goodwill impairments (681) - (681) (181) Discrete period tax items Total Other $ - $ - $ - $ (1,187)$ - $ (1,187)$ (424) Significant items affecting the third quarter of 2008: FRBNY credit line interest and amortization $ - $ - $ - $ - $ (802) $ (802) $ (521) Market volatility-related: AIGFP credit valuation adjustment - - (1,085) - - (1,085) (705) AIGFP operating results, including unrealized market valuation losses - - (6,701) - - (6,701) (4,356) Total market volatility-related activities $ - $ - $ (7,786) $ - $ - $ (7,786) $ (5,061) Other: Goodwill impairments - - (432) - - (432) (432) Discrete period tax items (3,628) Total Other $ - $ - $ (432) $ - $ - $ (432) $ (4,060) 4

7 Significant items affecting the first nine months of 2009: American International Group, Inc. Significant Items, Affecting Adjusted Net Income (Loss) Life Insurance & Total Total General Retirement Financial Asset Company Company Insurance Services Services Management Other Pre-tax After-tax FRBNY credit line interest and amortization $ - $ - $ (1,964)$ - $ (2,192)$ (4,156) $ (2,702) Market volatility-related: AIGFP credit valuation adjustment - - 2, ,391 1,554 AIGFP operating results, including unrealized market valuation gains - - (419) - - (419) (272) Gains (losses) related to retained Maiden Lane interests - (116) - (13) Total market volatility-related activities $ - $ (116) $ 1,972 $ (13)$ 223 $ 2,066 $ 1,343 Other: Asset Management real estate impairments (985) - (985) (484) Goodwill impairments (690) - (690) (190) Discrete period tax items Total Other $ - $ - $ - $ (1,675) $ - $ (1,675) $ (358) Significant items affecting the first nine months of 2008: FRBNY credit line interest and amortization $ - $ - $ - $ - $ (802) $ (802) $ (521) Market volatility-related: AIGFP credit valuation adjustment - - (1,640) - - (1,640) (1,066) AIGFP operating results, including unrealized market valuation losses - - (21,422) - - (21,422) (13,924) Total market volatility-related activities $ - $ - $ (23,062) $ - $ - $ (23,062) $ (14,990) Other: Goodwill impairments - - (432) - - (432) (432) Discrete period tax items (4,343) Total Other $ - $ - $ (432) $ - $ - $ (432) $ (4,775) 5

8 Summary of Non-qualifying Derivative Hedging Activities (1) (in millions) Three Months Ended Nine Months Ended Sept. 30, Sept. 30, June 30, Sept. 30, Sept. 30, Effect on operating income (loss) before net realized capital gains (losses): Financial Services $ (3) $ 177 $ 4 $ 3 $ 61 Intercompany Eliminations (2) 593 (1,226) 1,317 1,612 (1,184) Foreign Exchange Rates on Economically Hedged Debt Exposures for Financial Services (3): (61) 784 (280) (227) 400 Total pre-tax effect 529 (265) 1,041 1,388 (723) Total after-tax effect 344 (172) (470) Effect on net realized capital gains (losses) (4): Financial Services (108) (43) Asset Management (5) (677) General Insurance (46) (36) (6) Life Insurance & Retirement Services (6) (185) (311) (521) (1,336) (304) Other (198) (34) (192) Eliminations and Reclassifications (7) (1,325) (962) 1,062 Total pre-tax effect (670) 1,446 (874) (648) 1,428 Total after-tax effect (435) 940 (568) (421) 928 Non-qualifying derivative hedging activities effect on total income: Total pre-tax effect (141) 1, Total after tax-effect $ (91) $ 768 $ 108 $ 481 $ 458 Note: (1) This schedule summarizes the effect of derivative gains and losses on operating income that are effective economic hedges of investments and borrowings that did not qualify for hedge accounting. Since hedge accounting has not been applied to the periods presented, an offsetting gain or loss on the hedged exposure has not been recognized in operating income. The mismatch in the earnings recognition on the derivatives and the hedged exposures has resulted in increased volatility in the operating results that does not reflect properly the effectiveness of these hedging activities. (2) Represents the elimination of revenues reported in the Financial Services segment from intercompany hedging activities. (3) Represents the reclassification of revenues reported in the Financial Services segment arising from foreign exchange rate movements on economically hedged exposures. (4) In general, for the three months ended September 30, 2009, AIG derivatives decreased in value as AIG credit spreads continued to narrow. As AIG credit spreads narrow, AIG records a loss on its derivative liabilities. Counterparty credit spreads remained stable in the three months ended September 30, 2009 compared to the three months ended June 30, 2009; therefore, the value of derivative assets were stable. (5) Derivatives in the Asset Management segment are mainly short the U.S. dollar and long foreign currencies. A large part of the loss on derivatives in this segment is due to dollar strengthening against the Pound Sterling in the three months ended September 30, This more then offsets derivative gains due to the dollar weakening against the Euro and Yen. (6) Exchange traded contracts used to hedge the Guaranteed Minimum Living Benefit program at SunAmerica Annuity and Life Assurance Company continued to report losses in the three months ended September 30, These contracts are short global equity markets and long global bond markets. As global equity markets continued to rally in the third quarter the loss on these contracts increased in the three months ended September 30, (7) Represents the elimination of net realized capital gains (losses) from intercompany hedging activities and the reclassification of foreign exchange rates on economically hedged exposures. 6

9 Consolidated Balance Sheet (in millions) September 30, December 31, Assets: Investments Fixed maturity securities * $ 412,343 $ 404,134 Equity securities 24,754 21,143 Mortgage and other loans receivable, net of allowance 31,985 34,687 Finance receivables, net of allowance 23,861 30,949 Flight equipment primarily under operating leases, net of accumulated depreciation 44,383 43,395 Other invested assets 43,249 51,978 Securities purchased under agreements to resell, at fair value 2,181 3,960 Short-term investments 55,170 46,666 Total investments 637, ,912 Cash 4,957 8,642 Investment income due and accrued 6,020 5,999 Premiums and insurance balances receivable, net of allowance 15,481 17,330 Reinsurance assets, net of allowance 22,697 23,495 Trade receivables 1,246 1,901 Current and deferred income taxes 4,966 11,734 Deferred policy acquisition costs 44,007 45,782 Real estate and other fixed assets, net of accumulated depreciation 4,543 5,566 Unrealized gain on swaps, options and forward transactions, at fair value 10,730 13,773 Goodwill 5,847 6,952 Other assets, including prepaid commitment asset 26,371 31,190 Separate account assets, at fair value 59,553 51,142 Total assets $ 844,344 $ 860,418 Liabilities: Liability for unpaid claims and claims adjustment expense $ 81,599 $ 89,258 Unearned premiums 23,126 25,735 Future policy benefits for life and accident and health insurance contracts 148, ,334 Policyholder contract deposits 220, ,700 Other policyholder funds 14,122 13,240 Commissions, expenses and taxes payable 4,730 5,436 Insurance balances payable 4,920 3,668 Funds held by companies under reinsurance treaties 1,593 2,133 Securities sold under agreements to repurchase, at fair value 3,285 5,262 Trade payables Securities and spot commodities sold but not yet purchased, at fair value 1,036 2,693 Unrealized loss on swaps, options and forward transactions, at fair value 5,292 6,238 Trust deposits and deposits due to banks and other depositors 3,181 4,498 Commercial paper and other short-term debt Federal Reserve Bank of New York Commercial Paper Funding Facility 9,607 15,105 Federal Reserve Bank of New York credit facility 41,009 40,431 Other long-term debt 122, ,054 Securities lending payable 1,080 2,879 Other liabilities 21,300 22,296 Separate account liabilities 59,553 51,142 Total liabilities 766, ,692 Commitments, contingencies and guarantees - - Redeemable noncontrolling interest in partially owned consolidated subsidiaries 1,158 1,921 AIG shareholders' equity: Preferred Stock, Series E 41,605 - Preferred Stock, Series F 3,041 - Preferred Stock, Series C 23,000 - Preferred Stock, Series D - 40,000 Common stock Additional paid-in capital 14,664 39,488 Unrealized appreciation (depreciation) of fixed maturity investments on which other-than-temporary credit impairments were taken, net of tax (1,938) (599) Unrealized appreciation (depreciation) of all other investments, net of tax 3,895 (3,853) Net derivative gains (losses) arising from Cash flow hedging activities, net of tax (146) (191) Foreign currency translation adjustments, net of tax 465 (187) Retirement plan liabilities adjustment, net of tax (1,351) (1,498) Accumulated deficit (2,618) (12,368) Treasury stock, at cost (8,273) (8,450) Total AIG shareholders' equity 72,712 52,710 Noncontrolling interest 3,825 8,095 Total equity 76,537 60,805 Total liabilities and equity $ 844,344 $ 860,418 * Includes investments in Maiden Lane II and Maiden Lane III of $684 million and $4.3 billion, respectively as of September 30,

10 Debt and Capital Debt and Hybrid Capital Interest Expense (a) Sept. 30, Dec. 31, Inc. Three Months Ended Nine Months Ended (Dec.) Sept. 30, 2009 Sept. 30, 2008 Sept. 30, 2009 Sept. 30, 2008 Financial debt: FRBNY Facility $ 41,009 $ 40, % $ 1,252 $ 802 $ 4,156 $ 802 AIG notes and bonds payable 11,457 11,756 (2.5) AIG loans and mortgage payable (6.0) AIG LH notes and bonds payable Liabilities connected to trust preferred stock 1,339 1,415 (5.4) AIG loans to financial services subsidiaries (1,415) (1,881) (24.8) - (b) - (b) - (b) - (b) Net (deposit) / loan with AIG Funding (5,293) (1,380) NM - (b) - (b) - (b) - (b) Total 48,286 51,555 (6.3) 1, ,674 1,438 Operating debt: AIG Funding commercial paper 3,374 6,856 (50.8) MIP matched notes and bonds payable 13,596 14,446 (5.9) Series AIGFP matched notes and bonds payable 4,019 4,660 (13.8) AIGFP borrowings (c) 21,496 30,200 (28.8) ILFC borrowings 29,270 32,794 (10.7) ,165 AGF borrowings 21,948 23,626 (7.1) AIGCFG borrowings 908 1,720 (47.2) Other Subsidiaries (57.5) Borrowings of consolidated investments 5,017 5,850 (14.2) AIG loans to financial services subsidiaries 1,415 1,881 (24.8) - (b) - (b) - (b) - (b) Net (deposit) / loan with AIG Funding 5,293 1,380 NM - (b) - (b) - (b) - (b) Total 106, ,083 (14.1) 783 1,011 2,474 2,975 Hybrid - debt securities: Junior subordinated debt 12,026 11,685 (e) Hybrid - mandatorily convertible units: Junior subordinated debt attributable to equity units 5,880 5,880 (d) (e) Total $ 172,813 $ 193,203 (10.6)% $ 2,517 $ 2,323 $ 8,054 $ 5,017 AIG capitalization: Total equity (f) $ 76,537 $ 60, % Hybrid - debt securities 12,026 11,685 (e) 2.9 Hybrid - mandatorily convertible units 5,880 5,880 (d) (e) - Total consolidated equity and hybrid capital 94,443 78, Financial debt 48,286 51,555 (6.3) Total capital $ 142,729 $ 129, % Ratios: Total equity / Total capital 53.6% 46.8% Hybrid - debt securities / Total capital 8.4% 9.0% Hybrid - mandatorily convertible units / Total capital 4.1% 4.5% Financial debt / Total capital 33.8% 39.7% (a) Includes $7 million, $26 million, $99 million, and $115 million of interest expense in the three-month periods ended September 30, 2009 and 2008 and nine-month periods ended September 30, 2009 and 2008, respectively, reported in Other Income (loss) and Policy acquisition and other insurance expenses on the Consolidated Statement of Income (Loss). (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 Income (Loss). Contractual interest payments amounted to $435.2 million and $2.1 billion for the nine months ended September 30, 2009 and twelve months ended December 31, 2008, respectively. (d) The equity units consist of an ownership interest in AIG junior subordinated debentures and a stock purchase contract obligating the holder of an equity unit to purchase, and obligating AIG to sell, a variable number of shares of AIG common stock on three dates in (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. (f) Includes unrealized appreciation / depreciation of investments. 8

11 U.S. Government Support As of September 30, 2009 (in millions) Original Amount of Balance Outstanding Assistance Authorized Increase Remaining Available Balance Description of Support Debt Equity September 30, 2009 June 30, 2009 (Decrease) September 30, 2009 Federal Reserve FRBNY Revolving Credit Facility: $60,000 $35,800 $40,000 ($4,200) $24,200 FRBNY created this facility to enhance the liquidity of AIG and its subsidiaries. In consideration for the facility, Series C preferred stock was issued at a purchase price of $0.5 million to a trust for the sole benefit of the United States Treasury. The Series C preferred stock, when aggregated with any other securities convertible into or exchangeable for the common stock of AIG owned by the Department of the Treasury and any common stock of AIG directly owned by the Department of the Treasury, represents approximately 79.8 percent of each of (i) the voting power of AIG's shareholders entitled to vote on any particular matter and (ii) the aggregate dividend rights of the outstanding shares of AIG common stock and the Series C preferred stock. (a) FRBNY Facility Interest and Fees: 5,209 4, Accrued compounding interest and fees owed by AIG paid with additional borrowings (paid in kind) Maiden Lane II Loan: 22,500 16,801 17,712 (911) FRBNY created this SPV to provide AIG liquidity by purchasing residential mortgage-backed securities from AIG life insurance companies. FRBNY provided a loan to the SPV for the purchases. It also terminated a previously established securities lending program with AIG. The actual amount funded was $19,494. Maiden Lane III Loan: 30,000 19,855 22,614 (2,759) FRBNY created this SPV to provide AIG liquidity by purchasing CDOs from AIG Financial Products counterparties in connection with the termination of credit default swaps. FRBNY again provided a loan to the SPV for the purchases. The actual amount funded was $24,339. Treasury Series D/E Shares: 40,000 41,605 41,605 - Treasury purchased Series D cumulative preferred stock from AIG. AIG used the proceeds to pay down the FRBNY Revolving Credit Facility. These shares were later exchanged for Series E noncumulative preferred shares. Unpaid dividends on the series D shares were added to the Treasury's equity in the Series E shares. Series F Shares: (b) 29,835 3,041 1,150 1,891 26,629 Through the purchase of AIG's Series F noncumulative preferred shares, the Department of the Treasury has committed for five years to provide immediately available funds to AIG in an amount of up to $ billion, subject to certain conditions. The liquidation preference of each share of the Series F preferred stock will increase by the pro rata amount of any drawdown on the commitment. Total authorized and outstanding assistance (c) $112,500 $69,835 $122,311 $127,897 ($5,586) $50,829 Less: Maiden Lane II and Maiden Lane III loans (36,656) (40,326) (3,670) Amounts reflected on AIG's consolidated balance sheet $85,655 $87,571 ($1,916) * Refer to page 10 for discussion of capital structure and ranking of obligations. (a) The facility was initially $85 billion, but was reduced to $60 billion in November (b) Balance outstanding at September 30, 2009, includes Series F drawdown of $3,206 million and Series F commitment fee of $(165) million. (c) Does not include AIG s participation in the Federal Reserve s Commercial Paper Funding Facility. 9

12 AMERICAN INTERNATIONAL GROUP, INC. CAPITAL STRUCTURE Note that all obligations within the same level rank pari passu (equally and without preference) unless otherwise noted. LEVEL RANK LEVEL NAME DESCRIPTION OF OBLIGATION ONE SECURED FRBNY Facility o AIG Senior Debt Securities (including MIP and Series AIGFP ) TWO SENIOR UNSECURED o Guarantees by AIG of subsidiary indebtedness and payment obligations (1) o Series A-1 through A-8 junior subordinated debentures (aka hybrid securities ) THREE JUNIOR SUBORDINATED o Series B-1, B-2 and B-3 junior subordinated debentures (aka debt issued as part of Equity Units ) SENIOR PREFERRED STOCK FOUR o Series E Preferred Stock (2) Senior TARP Fixed Rate Non Cumulative Perpetual Preferred Stock o Series F Preferred Stock (3) JUNIOR PREFERRED STOCK FIVE Perpetual, Convertible, Participating Preferred Stock o Series C Preferred Stock SIX COMMON STOCK Common Stock, par value $2.50 per share (1) Note that the guarantees by AIG of the American General (i.e., AIG Life Holdings (US), Inc.) trust preferred securities (American General Capital II, American General Institutional Capital A and American General Institutional Capital B) are subordinate to the guarantees by AIG of the American General (i.e., AIG Life Holdings (US), Inc.) senior debt but no payments may be made on these guarantees if the entities are prohibited from making payments on these securities. (2) On April 17, 2009, AIG entered into an exchange agreement with the U.S. Department of the Treasury pursuant to which, among other things, the U.S. Department of the Treasury exchanged 4,000,000 shares of the Series D Preferred Stock for 400,000 shares of AIG s Series E Fixed Rate Non-Cumulative Perpetual Preferred Stock, par value $5.00 per share (the Series E Preferred Stock ). (3) On April 17, 2009, AIG entered into a purchase agreement with the U.S. Department of the Treasury pursuant to which, among other things, AIG issued and sold to the U.S. Department of the Treasury 300,000 shares of Series F Fixed Rate Non-Cumulative Perpetual Preferred Stock, par value $5.00 per share (the Series F Preferred Stock ), each share with a zero initial liquidation preference, and a warrant to purchase up to 3,000 shares of AIG s common stock, par value $2.50 per share. Pursuant to the purchase agreement, the U.S. Department of the Treasury has committed for five years to provide immediately available funds in an amount up to $ billion so long as on the applicable drawdown date (i) AIG is not a debtor in a pending case under Title 11 of the United States Code and (ii) the AIG Credit Facility Trust, a trust established for the sole benefit of the U.S. Treasury, and the U.S. Department of the Treasury in the aggregate beneficially own more than 50 percent of the aggregate voting power of AIG s voting securities. The liquidation preference of each share of the AIG Series F Preferred Stock increases by the pro rata amount of any drawdown on the commitment. 10

13 Book Value per Share (dollars in millions, except per share amounts) (2 3) (2) Book Value Per Share, (1) Total AIG Shareholders' (3) (1 3) Excluding Unrealized Pro Forma Total AIG Equity, excluding Total Common Book Value Appreciation on Book Value Shareholders' Unrealized Appreciation Shares Per Share Investments Per Share (A) Equity on Investments Outstanding December 31, 2005 $ $ $ - $ 86,317 $ 77, ,832,339 December 31, ,677 91, ,059,810 December 31, ,801 91, ,479,203 December 31, ,710 57, ,483,454 March 31, ,759 52, ,539,694 June 30, ,958 68, ,569,378 September 30, ,712 70, ,603,179 (A) At September 30, 2009, pro forma book value per share computed assuming adjustment to AIG shareholders' equity for U.S. Treasury Equity Investments as follows: ($72,712) ($41,605) ($3,206) Total AIG Shareholders' equity - Series E preferred (including cumulative dividends on Series D preferred) - Series F draw down Total common shares outstanding + common shares issued upon assumed conversion of Series C Preferred Stock (134,603,179) (562,868,096) = $

14 General Insurance Operating Statistics Three Months Ended Nine Months Ended Sept. 30, Sept. 30, June 30, Sequential Sept. 30, Sept. 30, % Chg 2009 % Chg % Chg Gross premiums written $ 10,867 $ 12,387 (12.3) % $ 10, % $ 32,233 $ 38,783 (16.9) % Ceded premiums written 2,791 3,110 (10.3) 2, ,499 10,238 (17.0) Net premiums written 8,076 9,277 (12.9) 7, ,734 28,545 (16.9) Net premiums earned 7,939 9,294 (14.6) 8,024 (1.1) 24,244 27,836 (12.9) Paid losses 5,850 5, ,958 (1.8) 17,699 16, Change in net loss reserves (46.5) 653 (39.8) 710 2,704 (73.7) Less foreign exchange effect 247 (647) NM 972 (74.6) 983 (434) NM Claims and claims adjustment expenses incurred (1) (2) 5,996 7,110 (15.7) 5, ,426 19,357 (10.0) Statutory underwriting expenses 2,429 2,574 (5.6) 2, ,859 7,524 (8.8) Statutory underwriting profit (loss) (486) (390) NM 163 NM (41) 955 NM Change in deferred acquisition costs 74 (27) NM (15) NM (66.0) Underwriting profit (loss) (412) (417) NM 148 NM 13 1,114 (98.8) Net investment income Interest and dividends 864 1,044 (17.2) ,657 3,083 (13.8) Partnership income 171 (235) NM (100) NM (327) (186) NM Mutual funds 63 (271) NM 118 (46.6) 147 (307) NM Securities lending - 2 NM (9) NM - 3 NM Other investment income (3) (35.8) 64 (4.7) (25.2) Investment expense (25) (113) (77.9) (56) (55.4) (193) (366) (47.3) Total 1, ,456 2,457 (0.0) Operating income (loss) before net realized capital gains (losses) NM 1,016 (28.9) 2,469 3,571 (30.9) Net realized capital gains (losses) 92 (1,366) NM (45) NM (561) (2,105) NM Operating income (loss) $ 814 $ (1,261) NM % $ 971 (16.2) % $ 1,908 $ 1, % Net loss and loss expense reserve (at period end) $ 60, % $ 60,711 $ 61,526 (1.3) % GAAP Underwriting ratios: Loss ratio (2) Expense ratio Combined ratio Combined ratio excluding significant current year catastrophe-related losses Foreign exchange effect on worldwide growth: Net premiums written Growth in original currency (4) (12.0) % (14.4)% Foreign exchange effect (0.9) (2.5) Growth as reported in U.S. $ (12.9) % (16.9)% (See Accompanying Notes on Page 17) 12

15 AIG Commercial Insurance Operating Statistics Three Months Ended Nine Months Ended Sept. 30, Sept. 30, June 30, Sequential Sept. 30, Sept. 30, % Chg 2009 % Chg % Chg Net premiums written $ 5,002 $ 5,630 (11.2) % $ 4, % $ 14,154 $ 16,833 (15.9) % Net premiums earned 4,807 5,762 (16.6) 4,948 (2.8) 14,982 17,096 (12.4) Claims and claims adjustment expenses incurred (1) 4,077 5,015 (18.7) 3, ,121 13,460 (9.9) Statutory underwriting expenses 1,104 1,211 (8.8) ,120 3,562 (12.4) Statutory underwriting profit (loss) (374) (464) NM 6 NM (259) 74 NM Change in deferred acquisition costs 68 (52) NM 3 NM (59) (32) NM Underwriting profit (loss) (306) (516) NM 9 NM (318) 42 NM Net investment income Interest and dividends (13.9) 672 (3.1) 1,994 2,248 (11.3) Partnership income 163 (170) NM (56) NM (214) (193) NM Mutual funds 19 (60) NM 27 (29.6) 34 (80) NM Securities lending - 2 NM (9) NM - 3 NM Other investment income (3) (13.9) (4.0) Investment expense (6) (83) (92.8) (39) (84.6) (123) (274) (55.1) Total ,834 1,853 (1.0) Operating income before net realized capital gains (losses) NM 654 (10.9) 1,516 1,895 (20.0) Net realized capital gains (losses) (1) (1,053) NM (71) NM (575) (1,752) NM Operating income (loss) $ 582 $ (1,052) NM% $ 583 (0.2)% $ 941 $ 143 NM% GAAP Underwriting ratios: Loss ratio Expense ratio Combined ratio Combined ratio excluding significant current year catastrophe-related losses (See Accompanying Notes on Page 17) 13

16 AIG Commercial Insurance Nine Months Ended September 30, 2009 Gross Premiums Written by Line of Business Management / Professional Liability 8.1% Commercial Umbrella / Excess 8.0% Aviation 1.8% Programs 5.1% Multinational P&C 6.0% A&H Products 5.9% Environmental 2.4% All Other * 12.5% Property 19.6% Workers Compensation 13.9% General Liability / Auto Liability 16.7% Gross Premiums Written $17.7 billion * All Other includes $873 million from the Private Client Group 14

17 Foreign General Insurance Operating Statistics Three Months Ended Nine Months Ended Sept. 30, Sept. 30, June 30, Sequential Sept. 30, Sept. 30, % Chg 2009 % Chg % Chg Net premiums written $ 3,074 $ 3,647 (15.7) % $ 2, % $ 9,580 $ 11,712 (18.2) % Net premiums earned 3,132 3,532 (11.3) 3, ,262 10,740 (13.8) Claims and claims adjustment expenses incurred (1) (2) 1,919 2,095 (8.4) 1, ,305 5,897 (10.0) Statutory underwriting expenses 1,325 1,363 (2.8) 1, ,739 3,962 (5.6) Statutory underwriting profit (112) 74 NM 157 NM (75.3) Change in deferred acquisition costs 6 25 (76.0) (18) NM (40.8) Underwriting profit (loss) (106) 99 NM 139 NM 331 1,072 (69.1) Net investment income Interest and dividends (26.0) (20.6) Partnership income 8 (65) NM (44) NM (113) 7 NM Mutual funds 44 (211) NM 91 (51.6) 113 (227) NM Other investment income (3) (1) 23 NM 14 NM (64.2) Investment expense (19) (30) (36.7) (17) 11.8 (70) (92) (23.9) Total NM Operating income before net realized capital gains (losses) (61.6) 953 1,676 (43.1) Net realized capital gains (losses) 93 (313) NM (353) NM Operating income (loss) (5) $ 232 $ (209) NM % $ 388 (40.2) % $ 967 $ 1,323 (26.9) % GAAP Underwriting ratios: Loss ratio (2) Expense ratio Combined ratio Combined ratio excluding significant current year catastrophe-related losses Foreign exchange effect on Foreign General's growth: Net premiums written Growth in original currency (4) (13.2) % (12.2) % Foreign exchange effect (2.5) (6.0) Growth as reported in U.S. $ (15.7) % (18.2) % (See Accompanying Notes on Page 17) 15

18 Foreign General Insurance Gross Premiums Written Nine Months Ended September 30, 2009 Gross Premiums Written by Division Gross Premiums Written by Region Accident & Health 20.0% Personal Lines 12.1% Other / Service Business 3.6% Aviation 2.6% Marine and Energy 20.1% U.K. / Ireland 33.6% Africa / Middle East / Mediterranean / South Asia 4.0% Asia / Australasia 9.0% Lloyd's 5.6% Specialty Lines 16.4% Casualty 12.6% Property 7.0% Americas 7.9% Far East 20.2% Europe 25.3% Gross Premiums Written $14.9 billion 16

19 General Insurance Notes (1) Includes significant current year catastrophe-related losses and net reinstatement premiums as follows: Three Months Ended Sept. 30, 2009 Three Months Ended Sept. 30, 2008 Nine Months Ended Sept. 30, 2009 Nine Months Ended Sept. 30, 2008 (in millions) AIG Commercial Insurance $55 $1,101 $55 $1,258 Foreign General Total $55 $1,234 $55 $1,396 (2) Total General Insurance and Foreign General both include changes in future policy benefits for certain accident and health insurance contracts. (3) Other investment income is comprised principally of real estate income and changes in market value associated with trading portfolios. (4) Computed using a constant exchange rate for each period. (5) Income statement accounts expressed in non-functional currencies are translated into U.S. dollars using average exchange rates. 17

20 Life Insurance & Retirement Services Operating Statistics (a) Premiums, deposits and other considerations Revenues: Premiums and other considerations Net investment income Interest and dividends (b) Partnership income (loss) excluding synfuels Partnership loss - synfuels Mutual funds Trading account gains (losses) (d) Other Investment expenses Net investment income before policyholder investment income and trading gains (losses) Net investment income related to policyholder investment income and trading gains (losses) Total net investment income Total revenues excluding net realized capital gains (losses) and policyholder investment income and trading gains (losses) Total revenues excluding net realized capital gains (losses) Benefits and expenses: Policyholder benefits and claims incurred before the effect of policyholder benefits and claims incurred related to policyholder investment income and trading gains (losses) Policyholder benefits and claims incurred related to policyholder investment income and trading gains (losses) Policyholder benefits and claims incurred Policy acquisition and other insurance expense Total benefits and expenses Operating income excluding net realized capital gains (losses) Net realized capital gains (losses) Operating income (loss) Foreign exchange effect on worldwide growth: Premiums, deposits and other considerations Growth in original currency (c) Foreign exchange effect Growth as reported in U.S. $ Premiums and other considerations Growth in original currency (c) Foreign exchange effect Growth as reported in U.S. $ Gross life insurance in force (at period end) Three Months Ended Nine Months Ended Sept. 30, Sept. 30, June 30, Sequential Sept. 30, Sept. 30, % Chg 2009 % Chg % Chg $ 13,690 $ 22,290 (38.6) % $ 12, % $ 41,182 $ 73,123 (43.7) % $ 7,852 $ 9,354 (16.1) % $ 8,119 (3.3) % $ 24,306 $ 28,257 (14.0) % 4,658 5,271 (11.6) 4, ,261 14,890 (10.9) 104 (571) NM 8 NM (172) (441) NM - (2) NM - NM - (10) NM 90 (365) NM 141 (36.2) 176 (368) NM 19 (501) NM (15) (722) NM (47.9) 114 (14.0) (33.3) (109) (113) (3.5) (113) (3.5) (334) (375) (10.9) 4,860 3, , ,243 13,464 (1.6) 1,412 (1,562) NM 2,136 (33.9) 3,240 (1,730) NM 6,272 2, ,581 (4.7) 16,483 11, ,712 13,261 (4.1) 12, ,549 41,721 (10.0) 14,124 11, ,700 (3.9) 40,789 39, ,776 9,043 (14.0) 7,915 (1.8) 23,975 26,812 (10.6) 1,412 (1,562) NM 2,136 (33.9) 3,240 (1,730) NM 9,188 7, ,051 (8.6) 27,215 25, ,723 3,206 (15.1) 3,128 (12.9) 8,605 8,750 (1.7) 11,911 10, ,179 (9.6) 35,820 33, ,213 1, , ,969 6,159 (19.3) (932) (16,341) NM 285 NM (3,755) (25,720) NM $ 1,281 $ (15,329) NM % $ 1,806 (29.1) % $ 1,214 $ (19,561) NM % (37.8) % (42.4) % (0.8) (1.3) (38.6) (43.7) (14.7) (11.6) (1.4) (2.4) (16.1) % (14.0) % $ 2,413, % $ 2,433,944 $ 2,422, % (a) Certain amounts have been reclassified in 2008 to conform to the 2009 presentation. (b) For three months ended September 30, 2009 and June 30, 2009 and nine months ended September 30, 2009 interest and dividends include gains (losses) of $224 million, $(105) million and $(115) million, respectively, related to AIG's retained interest in Maiden Lane II. (c) Computed using a constant exchange rate for each period. (d) Consists of trading account gains (losses) associated with certain investment-linked products in the U.K. 18

21 Premiums, deposits and other considerations Revenues: Premiums and other considerations Net investment income: Interest and dividends* Partnership income (loss) excluding synfuels Partnership loss - synfuels Mutual funds Other Investment expenses Net investment income before policyholder investment income and trading gains (losses) Net investment income related to policyholder investment income and trading gains (losses) American International Group, Inc. Domestic Life Insurance & Retirement Services Operating Statistics Three Months Ended Nine Months Ended Sept. 30, Sept. 30, June 30, Sequential Sept. 30, Sept. 30, % Chg 2009 % Chg % Chg $ 4,257 $ 6,915 (38.4) % $ 3, % $ 13,176 $ 21,750 (39.4) % $ 1,230 $ 1,995 (38.3) % $ 1,282 (4.1) % $ 3,907 $ 5,760 (32.2) % 2,341 2,491 (6.0) 2, ,504 7,170 (9.3) 98 (531) NM (108) (412) NM - (2) NM - NM - (10) NM 1 (3) NM 4 (75.0) 6 (2) NM (29) (33) (12.1) (25) 16.0 (85) (96) (11.5) 2,449 1, , ,431 6,735 (4.5) - (73) NM - NM (12) (85) NM Total net investment income 2,449 1, , ,419 6,650 (3.5) Total revenues excluding net realized capital gains (losses) and policyholder investment income and trading gains (losses) 3,679 3,939 (6.6) 3, ,338 12,495 (17.3) Total revenues excluding net realized capital gains (losses) 3,679 3,866 (4.8) 3, ,326 12,410 (16.8) Benefits and expenses: Policyholder benefits and claims incurred before the effect of policyholder benefits and claims incurred related to policyholder investment income and trading gains (losses) Policyholder benefits and claims incurred related to policyholder investment income and trading gains (losses) Policyholder benefits and claims incurred Policy acquisition and other insurance expense Total benefits and expenses Operating income (loss) before net realized capital gains (losses) Net realized capital gains (losses) Operating income (loss) 2,026 2,869 (29.4) 2,152 (5.9) 6,680 8,174 (18.3) - (73) NM - NM (12) (85) NM 2,026 2,796 (27.5) 2,152 (5.9) 6,668 8,089 (17.6) 576 1,020 (43.5) 983 (41.4) 2,441 2, ,602 3,816 (31.8) 3,135 (17.0) 9,109 10,352 (12.0) 1, NM ,217 2,058 (40.9) (950) (12,886) NM 177 NM (2,852) (20,634) NM $ 127 $ (12,836) NM % $ 445 (71.5) % $ (1,635) $ (18,576) NM % Gross life insurance in force (at period end) $ 969,025 (1.1) % $ 958,839 $ 1,027,600 (6.7) % Assets under management: Cash and investments 141, , ,870 (17.3) Separate account reserves 44, ,677 54,916 (9.5) Group retirement mutual funds 7, ,260 7, Total assets under management $ 192, % $ 208,261 $ 244,353 (14.8) % * For three months ended September 30, 2009 and June 30, 2009 and nine months ended September 30, 2009 interest and dividends include gains (losses) of $219 million, $(102) million and $(112) million, respectively, related to AIG's economic retained interest in Maiden Lane II. 19

22 Domestic Life Insurance Product Statistics Premiums, deposits and other considerations (1): Life insurance Home service Group life/health Payout annuities Individual fixed and runoff annuities Total premiums, deposits and other considerations Premiums and other considerations: Life insurance Home service Group life/health Payout annuities (2) Individual fixed and runoff annuities Total premiums and other considerations Net investment income (3) (4): Life insurance Home service Group life/health Payout annuities Individual fixed and runoff annuities Total net investment income Policyholder benefits and claims incurred excluding amortization of sales inducement related to net realized capital gains (losses): Life insurance Home service Group life/health Payout annuities Individual fixed and runoff annuities Total policyholder benefits and claims incurred excluding amortization of sales inducements related to net realized capital gains (losses) Policy acquisition and other insurance expenses excluding amortization of deferred acquisition costs and VOBA related to net realized capital gains (losses): Life insurance Home service Group life/health Payout annuities Individual fixed and runoff annuities Total policy acquisition and other insurance expenses excluding amortization of deferred acquisition costs and VOBA related to net realized capital gains (losses) Three Months Ended Nine Months Ended Sept. 30, Sept. 30, June 30, Sequential Sept. 30, Sept. 30, % Chg 2009 % Chg % Chg $ 579 $ 691 (16.2) % $ 623 (7.1) % $ 1,856 $ 2,215 (16.2) % (14.6) 240 (7.5) (14.2) 195 (7.2) (8.7) (71.0) ,896 (65.2) (46.9) 199 (4.0) (16.2) 1,398 2,297 (39.1) 1,470 (4.9) 4,418 6,177 (28.5) (10.7) 590 (6.6) 1,734 1, (4.2) 182 (0.5) (3.0) (13.0) 192 (6.3) (8.5) (83.0) ,292 (78.6) 6 8 (25.0) 14 (57.1) ,012 1,574 (35.7) 1,059 (4.4) 3,161 4,238 (25.4) ,119 (16.8) (3.8) (5.5) 308 (5.2) (13.7) 97 (9.3) (6.8) 1,012 1,018 (0.6) ,745 2,955 (7.1) (2.0) ,553 1,595 (2.6) (3.0) 167 (3.0) (1.0) (20.7) 146 (2.7) (12.9) (55.6) ,024 1,969 (48.0) (4.8) ,211 1,701 (28.8) 1, ,705 4,754 (22.1) (1.3) 237 (4.2) (17.9) 78 (11.5) (7.6) (58.3) 11 (9.1) (49.3) (30.0) 18 (22.2) (22.4) $ 423 $ 454 (6.8) % $ 442 (4.3) % $ 1,320 $ 1, % (See Accompanying Notes on Page 25) 20