Financial Supplement Revised Historical AIG Life and Retirement Segment Results 1Q 2011 4Q 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.
Revised Historical Financial Supplement Contact: Liz Werner Investor Relations (212)770-7074 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... 6-7 AIG Life and Retirement Operating Statistics... 8-9 Retail Total Retail Operating Statistics... 10-11 Life Insurance and A&H Operating Statistics... 12-13 Life Insurance and A&H Reserves... 14 Fixed Annuities Operating Statistics... 15-16 Fixed Annuities Spread Information and Reserves... 17-18 Retirement Income Solutions Operating Statistics... 19-20 Retirement Income Solutions Spread Information and Reserves... 21-22 Institutional Total Institutional Operating Statistics... 23-24 Group Retirement Operating Statistics... 25-26 Group Retirement Spread Information and Reserves... 27-28 Institutional Markets Operating Statistics... 29-30 Institutional Markets Reserves... 31 Notes... 32 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.
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
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. 2012 2011 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 44,384 878 45,262 44,356 848 45,204 Policyholder benefits and claims incurred 31,977 59 32,036 33,450 73 33,523 Interest credited to policyholder account balances 4,362 (22) 4,340 4,467 (35) 4,432 Other expenses 2,721 841 3,562 2,470 810 3,280 Total expenses $ 39,060 $ 878 $ 39,938 $ 40,387 $ 848 $ 41,235 2
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
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 1995. 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, 2012. 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
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
Consolidated Statement of Segment Operations (in millions, except per share data) 1Q12 2Q12 3Q12 4Q12 2012 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) 1,043 936 786 (945) 1,820 Net realized capital gains (losses) (135) 23 161 (51) (2) Legal settlements - - - 17 17 Other income (loss) 2 2 2 (4) 2 Pre-tax income (loss) 910 961 949 (983) 1,837 AIG Life and Retirement Premiums 614 632 584 634 2,464 Policy fees 584 567 580 618 2,349 Net investment income 2,885 2,521 2,597 2,715 10,718 Advisory fee and other income 304 312 319 358 1,293 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 1,311 933 826 1,090 4,160 Legal settlements - - - 154 154 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) 326 670 100 630 Pre-tax income 862 777 889 1,252 3,780 Other operations, operating income 2,328 682 854 260 4,124 Other operations pre-tax income (loss) before net realized capital gains (losses) 2,319 (55) 844 290 3,398 Other operations, net realized capital gains (losses) 417 (61) 47 98 501 Consolidation and elimination adjustments (42) 47 (171) (28) (194) Income from continuing operations before income tax expense (benefit) 4,466 1,669 2,558 629 9,322 Income tax expense (benefit) * 1,081 (491) 734 246 1,570 Income from continuing operations 3,385 2,160 1,824 383 7,752 Income (loss) from discontinued operations, net of tax 64 179 37 (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 208 - - - 208 Other 33 7 5 9 54 Total net income from continuing operations attributable to noncontrolling interests 241 7 5 9 262 Total net income attributable to noncontrolling interests 241 7 5 9 262 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
Consolidated Statement of Segment Operations (in millions, except per share data) 1Q11 2Q11 3Q11 4Q11 2011 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) 783 492 367 1,218 Net realized capital gains 50 43 60 454 607 Other loss - - (1) (4) (5) Pre-tax income (loss) (374) 826 551 817 1,820 AIG Life and Retirement Premiums 629 669 601 650 2,549 Policy fees 582 578 560 589 2,309 Net investment income 2,754 2,461 2,295 2,372 9,882 Advisory fee and other income 305 321 302 489 1,417 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 1,171 723 471 912 3,277 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) 91 38 97 6 Pre-tax income 967 766 346 877 2,956 Other operations, operating income (loss) 1,824 135 (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) 299 173 12 Consolidation and elimination adjustments (24) 32 110 (75) 43 Income (loss) from continuing operations before income tax benefit (1,428) 1,711 (2,938) 2,771 116 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 2,707 41 (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 252 141 145 96 634 Other (55) 64 19 26 54 Total net income from continuing operations attributable to noncontrolling interests 197 205 164 122 688 Net income from discontinued operations attributable to noncontrolling interests 7 12-1 20 Total net income attributable to noncontrolling interests 204 217 164 123 708 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
AIG Life and Retirement Operating Statistics - Revised Historical 2012 Results 1Q12 2Q12 3Q12 4Q12 2012 Premiums and deposits (1) $ 5,560 $ 5,434 $ 4,785 $ 5,215 $ 20,994 Revenues: Premiums $ 614 $ 632 $ 584 $ 634 $ 2,464 Policy fees 584 567 580 618 2,349 Net investment income: Interest and dividends (2) 2,631 2,361 2,342 2,316 9,650 Alternative investments 282 170 170 332 954 Call and tender income 12 20 72 42 146 Other (3) 19 41 84 99 243 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 304 312 319 358 1,293 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 205 229 202 176 812 Non deferrable commissions 117 121 108 117 463 General operating expenses (6) 408 397 423 387 1,615 Commissions and advisory fee expenses 197 205 208 232 842 Total benefits and expenses 3,076 3,099 3,254 3,235 12,664 Operating income 1,311 933 826 1,090 4,160 Adjustments to arrive at pre-tax income: Legal settlements (7) - - - 154 154 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) 326 670 100 630 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) - - - 10,353 10,353 Total assets under management $ 264,973 $ 267,754 $ 275,479 $ 290,387 $ 290,387 8
AIG Life and Retirement Operating Statistics - Revised Historical 2011 Results 1Q11 2Q11 3Q11 4Q11 2011 Premiums and deposits (1) $ 6,358 $ 6,274 $ 5,878 $ 5,882 $ 24,392 Revenues: Premiums $ 629 $ 669 $ 601 $ 650 $ 2,549 Policy fees 582 578 560 589 2,309 Net investment income: Interest and dividends (2) 2,325 2,099 2,247 2,372 9,043 Alternative investments 413 309 89 31 842 Call and tender income 34 97 67 24 222 Other (3) 41 13 (46) 12 20 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) 305 321 302 489 1,417 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 235 240 243 148 866 Non deferrable commissions 132 134 138 138 542 General operating expenses 400 381 356 405 1,542 Commissions and advisory fee expenses 202 217 204 188 811 Total benefits and expenses 3,099 3,306 3,287 3,188 12,880 Operating income 1,171 723 471 912 3,277 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) 91 38 97 6 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
AIG Life and Retirement - Retail Operating Statistics - Revised Historical 2012 Results 1Q12 2Q12 3Q12 4Q12 2012 Premiums and deposits (1) $ 3,363 $ 3,329 $ 2,819 $ 3,001 $ 12,512 Revenues: Premiums $ 390 $ 411 $ 373 $ 350 $ 1,524 Policy fees 463 453 458 495 1,869 Net investment income: Interest and dividends (2) 1,571 1,406 1,401 1,367 5,745 Alternative investments 112 70 67 121 370 Call and tender income 9 4 46 28 87 Other (3) 13 21 54 84 172 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 279 286 290 328 1,183 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) 652 665 697 777 2,791 Interest credited to policyholder account balances (5) 651 651 643 609 2,554 Amortization of deferred policy acquisition costs 178 198 181 170 727 Non deferrable commissions 66 73 61 72 272 General operating expenses (6) 299 286 311 275 1,171 Commissions and advisory fee expenses 196 202 204 229 831 Total benefits and expenses 2,042 2,075 2,097 2,132 8,346 Operating income 761 535 548 598 2,442 Adjustments to arrive at pre-tax income: Legal settlements (7) - - - 106 106 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
AIG Life and Retirement - Retail Operating Statistics - Revised Historical 2011 Results 1Q11 2Q11 3Q11 4Q11 2011 Premiums and deposits (1) $ 4,332 $ 4,235 $ 3,587 $ 3,581 $ 15,735 Revenues: Premiums $ 386 $ 403 $ 376 $ 381 $ 1,546 Policy fees 457 452 430 467 1,806 Net investment income: Interest and dividends (2) 1,357 1,247 1,326 1,400 5,330 Alternative investments 164 130 42 12 348 Call and tender income 20 46 39 14 119 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) 278 295 277 372 1,222 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) 592 750 748 696 2,786 Interest credited to policyholder account balances (5) 650 677 700 668 2,695 Amortization of deferred policy acquisition costs 181 215 207 130 733 Non deferrable commissions 66 66 66 65 263 General operating expenses 301 274 266 282 1,123 Commissions and advisory fee expenses 197 213 199 183 792 Total benefits and expenses 1,987 2,195 2,186 2,024 8,392 Operating income 665 355 237 587 1,844 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
AIG Life and Retirement - Retail Life Insurance and A&H Operating Statistics - Revised Historical 2012 Results 1Q12 2Q12 3Q12 4Q12 2012 Premiums and deposits (1) $ 839 $ 857 $ 827 $ 858 $ 3,381 Revenues: Premiums $ 363 $ 375 $ 354 $ 331 $ 1,423 Policy fees 332 323 316 353 1,324 Net investment income: Interest and dividends (2) 528 477 489 476 1,970 Alternative investments 22 29 20 32 103 Call and tender income 4 6 10 3 23 Other (3) - 4 11 22 37 Investment expenses (15) (18) (14) (17) (64) Total net investment income 539 498 516 516 2,069 Advisory fee and other income - - - 1 1 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) 622 564 644 685 2,515 Interest credited to policyholder account balances (5) 122 125 118 120 485 Amortization of deferred policy acquisition costs 93 86 87 112 378 Non deferrable commissions 30 35 24 30 119 General operating expenses (6) 154 162 178 166 660 Total benefits and expenses 1,021 972 1,051 1,113 4,157 Operating income $ 213 $ 224 $ 135 $ 88 $ 660 12
AIG Life and Retirement - Retail Life Insurance and A&H Operating Statistics - Revised Historical 2011 Results 1Q11 2Q11 3Q11 4Q11 2011 Premiums and deposits (1) $ 852 $ 871 $ 828 $ 867 $ 3,418 Revenues: Premiums $ 366 $ 372 $ 356 $ 344 $ 1,438 Policy fees 333 323 309 343 1,308 Net investment income: Interest and dividends (2) 467 433 445 473 1,818 Alternative investments 37 35 22 12 106 Call and tender income 4 21 10-35 Other (3) 15 5 (3) 6 23 Investment expenses (15) (13) (13) (14) (55) Total net investment income 508 481 461 477 1,927 Advisory fee and other income (12) - - - 40 40 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) 561 663 573 641 2,438 Interest credited to policyholder account balances (5) 122 132 123 128 505 Amortization of deferred policy acquisition costs 84 80 84 97 345 Non deferrable commissions 31 33 33 33 130 General operating expenses 173 148 138 154 613 Total benefits and expenses 971 1,056 951 1,053 4,031 Operating income $ 236 $ 120 $ 175 $ 151 $ 682 13
AIG Life and Retirement - Retail Life Insurance and A&H Reserves - Revised Historical 2012 and 2011 Results 1Q12 2Q12 3Q12 4Q12 2012 Reserve rollforward: Balance at beginning of period, gross $ 25,945 $ 26,075 $ 26,143 $ 26,338 $ 25,945 Premiums and deposits 839 857 827 858 3,381 Surrenders and withdrawals (216) (189) (177) (202) (784) Death, and other contract benefits (130) (140) (135) (185) (590) Subtotal 493 528 515 471 2,007 Cost of funds 122 125 118 120 485 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 4Q11 2011 Reserve rollforward: Balance at beginning of period, gross $ 25,641 $ 25,734 $ 25,816 $ 25,819 $ 25,641 Premiums and deposits 852 871 828 867 3,418 Surrenders and withdrawals (182) (195) (175) (256) (808) Death, and other contract benefits (94) (112) (111) (119) (436) Subtotal 576 564 542 492 2,174 Cost of funds 122 132 123 128 505 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
AIG Life and Retirement - Retail Fixed Annuities Operating Statistics - Revised Historical 2012 Results 1Q12 2Q12 3Q12 4Q12 2012 Premiums and deposits (1) $ 613 $ 491 $ 192 $ 265 $ 1,561 Revenues: Premiums $ 28 $ 36 $ 18 $ 19 $ 101 Policy fees 8 8 7 10 33 Net investment income: Interest and dividends (2) 978 859 841 811 3,489 Alternative investments 77 34 34 66 211 Call and tender income 3 (2) 35 25 61 Other (3) 11 17 37 59 124 Investment expenses (17) (22) (29) (23) (91) Total net investment income 1,052 886 918 938 3,794 Advisory fee and other income - - - 1 1 Total revenues excluding net realized capital gains (losses) 1,088 930 943 968 3,929 Benefits and expenses: Policyholder benefits and claims incurred 65 74 58 58 255 Interest credited to policyholder account balances (5) 507 494 498 463 1,962 Amortization of deferred policy acquisition costs 89 77 85 44 295 Non deferrable commissions 8 4 7 6 25 General operating expenses 39 30 35 (1) 103 Total benefits and expenses 708 679 683 570 2,640 Operating income $ 380 $ 251 $ 260 $ 398 $ 1,289 15
AIG Life and Retirement - Retail Fixed Annuities Operating Statistics - Revised Historical 2011 Results 1Q11 2Q11 3Q11 4Q11 2011 Premiums and deposits (1) $ 2,246 $ 2,131 $ 1,380 $ 1,161 $ 6,918 Revenues: Premiums $ 20 $ 30 $ 19 $ 37 $ 106 Policy fees 7 11 6 8 32 Net investment income: Interest and dividends (2) 838 763 830 867 3,298 Alternative investments 118 85 17-220 Call and tender income 16 23 24 14 77 Other (3) 9 3 (29) (4) (21) Investment expenses (20) (17) (22) (20) (79) Total net investment income 961 857 820 857 3,495 Advisory fee and other income (12) - - - 70 70 Total revenues excluding net realized capital gains (losses) 988 898 845 972 3,703 Benefits and expenses: Policyholder benefits and claims incurred 52 73 59 79 263 Interest credited to policyholder account balances (5) 502 515 527 514 2,058 Amortization of deferred policy acquisition costs 77 100 84 46 307 Non deferrable commissions 9 8 5 8 30 General operating expenses 34 33 32 33 132 Total benefits and expenses 674 729 707 680 2,790 Operating income $ 314 $ 169 $ 138 $ 292 $ 913 16
AIG Life and Retirement - Retail Fixed Annuities Spread Information and Reserves - Revised Historical 2012 Results 1Q12 2Q12 3Q12 4Q12 2012 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 613 491 192 265 1,561 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) 466 458 460 452 1,836 Change in fair value of the underlying assets, net of fees 41 84 27 83 235 Other reserve changes (including loss recognition) 105 70 116 44 335 Balance at end of period 61,027 60,494 59,821 58,978 58,978 Reserves related to unrealized investment appreciation 369 407 442 456 456 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
AIG Life and Retirement - Retail Fixed Annuities Spread Information and Reserves - Revised Historical 2011 Results 1Q11 2Q11 3Q11 4Q11 2011 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 776 515 (80) (343) 868 Cost of funds (a) 473 477 490 486 1,926 Change in fair value of the underlying assets, net of fees 79 73 52 51 255 Other reserve changes (including loss recognition) 19 12 (7) 48 72 Balance at end of period 59,630 60,707 61,162 61,404 61,404 Reserves related to unrealized investment appreciation - - 309 360 360 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
AIG Life and Retirement - Retail Retirement Income Solutions Operating Statistics - Revised Historical 2012 Results 1Q12 2Q12 3Q12 4Q12 2012 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) 66 69 72 79 286 Alternative investments 11 8 13 22 54 Call and tender income 2-1 - 3 Other (3) 1-5 3 9 Investment expenses (2) (1) (1) (3) (7) Total net investment income 78 76 90 101 345 Advisory fee and other income 32 32 33 34 131 Total revenues excluding net realized capital gains (losses) 228 226 252 267 973 Benefits and expenses: Policyholder benefits and claims incurred (13) (35) 27 (5) 34 21 Interest credited to policyholder account balances (5) 21 32 27 26 106 Amortization of deferred policy acquisition costs (4) 35 9 13 53 Non deferrable commissions 28 34 30 36 128 General operating expenses 50 46 45 48 189 Commissions and advisory fee expenses 2 2 2 1 7 Total benefits and expenses 62 176 108 158 504 Operating income $ 166 $ 50 $ 144 $ 109 $ 469 19
AIG Life and Retirement - Retail Retirement Income Solutions Operating Statistics - Revised Historical 2011 Results 1Q11 2Q11 3Q11 4Q11 2011 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) 51 51 52 60 214 Alternative investments 10 10 2-22 Call and tender income - 2 5-7 Other (3) - 1 1 1 3 Investment expenses - (2) (2) (4) (8) Total net investment income 61 62 58 57 238 Advisory fee and other income (12) 31 32 30 36 129 Total revenues excluding net realized capital gains (losses) 204 209 199 204 816 Benefits and expenses: Policyholder benefits and claims incurred (13) (23) 14 117 (24) 84 Interest credited to policyholder account balances (5) 26 29 50 26 131 Amortization of deferred policy acquisition costs 20 35 39 (13) 81 Non deferrable commissions 26 25 28 24 103 General operating expenses 47 50 42 46 185 Commissions and advisory fee expenses 1 2 2 1 6 Total benefits and expenses 97 155 278 60 590 Operating income (loss) $ 107 $ 54 $ (79) $ 144 $ 226 20
AIG Life and Retirement - Retail Retirement Income Solutions Spread Information and Reserves - Revised Historical 2012 Results 1Q12 2Q12 3Q12 4Q12 2012 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 225 545 225 360 1,355 Change in fair value of the underlying assets, net of fees 1,967 (594) 1,168 246 2,787 Cost of funds (a) 24 26 26 26 102 Other reserve changes (11) - 1 11 1 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
AIG Life and Retirement - Retail Retirement Income Solutions Spread Information and Reserves - Revised Historical 2011 Results 1Q11 2Q11 3Q11 4Q11 2011 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 824 904 857 889 3,474 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) 23 23 24 25 95 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
AIG Life and Retirement - Institutional Operating Statistics - Revised Historical 2012 Results 1Q12 2Q12 3Q12 4Q12 2012 Premiums and deposits (1) $ 2,197 $ 2,105 $ 1,966 $ 2,214 $ 8,482 Revenues: Premiums $ 224 $ 221 $ 211 $ 284 $ 940 Policy fees 121 114 122 123 480 Net investment income: Interest and dividends (2) 1,060 955 941 949 3,905 Alternative investments 170 100 103 211 584 Call and tender income 3 16 26 14 59 Other (3) 6 20 30 15 71 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 25 26 29 30 110 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) 435 428 427 511 1,801 Interest credited to policyholder account balances (5) 411 403 546 426 1,786 Amortization of deferred policy acquisition costs 27 31 21 6 85 Non deferrable commissions 51 48 47 45 191 General operating expenses 109 111 112 112 444 Commissions and advisory fee expenses 1 3 4 3 11 Total benefits and expenses 1,034 1,024 1,157 1,103 4,318 Operating income 550 398 278 492 1,718 Adjustments to arrive at pre-tax income: Legal settlements (7) - - - 48 48 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) 505 565 101 1,090 Pre-tax income $ 378 $ 436 $ 358 $ 540 $ 1,712 23
AIG Life and Retirement - Institutional Operating Statistics - Revised Historical 2011 Results 1Q11 2Q11 3Q11 4Q11 2011 Premiums and deposits (1) $ 2,026 $ 2,039 $ 2,291 $ 2,301 $ 8,657 Revenues: Premiums $ 243 $ 266 $ 225 $ 269 $ 1,003 Policy fees 125 126 130 122 503 Net investment income: Interest and dividends (2) 968 852 921 972 3,713 Alternative investments 249 179 47 19 494 Call and tender income 14 51 28 10 103 Other (3) 16 4 (16) 9 13 Investment expenses (24) (25) (25) (29) (103) Total net investment income 1,223 1,061 955 981 4,220 Advisory fee and other income (12) 27 26 25 117 195 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) 449 477 461 514 1,901 Interest credited to policyholder account balances (5) 439 430 437 431 1,737 Amortization of deferred policy acquisition costs 54 25 36 18 133 Non deferrable commissions 66 68 72 73 279 General operating expenses 99 107 90 123 419 Commissions and advisory fee expenses 5 4 5 5 19 Total benefits and expenses 1,112 1,111 1,101 1,164 4,488 Operating income 506 368 234 325 1,433 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) 25 206 27 163 Pre-tax income $ 411 $ 386 $ 433 $ 344 $ 1,574 24
AIG Life and Retirement - Institutional Group Retirement Operating Statistics - Revised Historical 2012 Results 1Q12 2Q12 3Q12 4Q12 2012 Premiums and deposits (1) $ 1,844 $ 1,738 $ 1,623 $ 1,823 $ 7,028 Revenues: Premiums $ 5 $ 5 $ 5 $ 4 $ 19 Policy fees 86 86 90 93 355 Net investment income: Interest and dividends (2) 566 527 512 515 2,120 Alternative investments 67 38 37 77 219 Call and tender income 4 12 5 11 32 Other (3) 6 10 15 5 36 Investment expenses (10) (11) (13) (14) (48) Total net investment income 633 576 556 594 2,359 Advisory fee and other income (12) 25 26 29 30 110 Total revenues excluding net realized capital gains (losses) 749 693 680 721 2,843 Benefits and expenses: Policyholder benefits and claims incurred 16 15 12 12 55 Interest credited to policyholder account balances (5) 295 297 298 299 1,189 Amortization of deferred policy acquisition costs 22 25 15 4 66 Non deferrable commissions 18 17 16 17 68 General operating expenses 72 71 70 78 291 Commissions and advisory fee expenses 1 3 4 3 11 Total benefits and expenses 424 428 415 413 1,680 Operating income $ 325 $ 265 $ 265 $ 308 $ 1,163 25
AIG Life and Retirement - Institutional Group Retirement Operating Statistics - Revised Historical 2011 Results 1Q11 2Q11 3Q11 4Q11 2011 Premiums and deposits (1) $ 1,702 $ 1,705 $ 1,982 $ 1,923 $ 7,312 Revenues: Premiums $ 4 $ 3 $ 5 $ 4 $ 16 Policy fees 85 88 93 82 348 Net investment income: Interest and dividends (2) 488 456 486 516 1,946 Alternative investments 111 76 8 11 206 Call and tender income 11 37 13 4 65 Other (3) 2 (1) (16) - (15) Investment expenses (10) (11) (11) (11) (43) Total net investment income 602 557 480 520 2,159 Advisory fee and other income (12) 27 26 25 76 154 Total revenues excluding net realized capital gains (losses) 718 674 603 682 2,677 Benefits and expenses: Policyholder benefits and claims incurred 12 15 25 10 62 Interest credited to policyholder account balances (5) 303 304 312 309 1,228 Amortization of deferred policy acquisition costs 50 21 34 14 119 Non deferrable commissions 26 24 25 28 103 General operating expenses 55 59 57 70 241 Commissions and advisory fee expenses 5 4 5 5 19 Total benefits and expenses 451 427 458 436 1,772 Operating income $ 267 $ 247 $ 145 $ 246 $ 905 26
AIG Life and Retirement - Institutional Group Retirement Spread Information and Reserves - Revised Historical 2012 Results 1Q12 2Q12 3Q12 4Q12 2012 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 227 238 52 (215) 302 Change in fair value of the underlying assets, net of fees 3,614 (1,321) 1,899 641 4,833 Cost of funds (a) 295 297 298 299 1,189 Other reserve changes 17 15 14 16 62 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
AIG Life and Retirement - Institutional Group Retirement Spread Information and Reserves - Revised Historical 2011 Results 1Q11 2Q11 3Q11 4Q11 2011 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 116 167 448 357 1,088 Change in fair value of the underlying assets, net of fees 1,766 76 (5,256) 2,573 (841) Cost of funds (a) 303 304 312 309 1,228 Other reserve changes 14 20 18 16 68 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
AIG Life and Retirement - Institutional Institutional Markets Operating Statistics - Revised Historical 2012 Results 1Q12 2Q12 3Q12 4Q12 2012 Premiums and deposits (1) $ 181 $ 194 $ 178 $ 221 $ 774 Revenues: Premiums $ 98 $ 100 $ 96 $ 164 $ 458 Policy fees 29 23 26 24 102 Net investment income: Interest and dividends (2) 470 409 410 415 1,704 Alternative investments 102 62 64 133 361 Call and tender income (1) 4 20 3 26 Other (3) - 9 15 8 32 Investment expenses (13) (17) (12) (15) (57) Total net investment income 558 467 497 544 2,066 Total revenues excluding net realized capital gains (losses) 685 590 619 732 2,626 Benefits and expenses: Policyholder benefits and claims incurred 337 339 336 420 1,432 Interest credited to policyholder account balances (5) 109 100 241 121 571 Amortization of deferred policy acquisition costs 1 2 2 (2) 3 Non deferrable commissions 11 10 11 7 39 General operating expenses 14 16 16 10 56 Total benefits and expenses 472 467 606 556 2,101 Operating income $ 213 $ 123 $ 13 $ 176 $ 525 29
AIG Life and Retirement - Institutional Institutional Markets Operating Statistics - Revised Historical 2011 Results 1Q11 2Q11 3Q11 4Q11 2011 Premiums and deposits (1) $ 162 $ 163 $ 135 $ 199 $ 659 Revenues: Premiums $ 101 $ 117 $ 72 $ 112 $ 402 Policy fees 29 26 26 28 109 Net investment income: Interest and dividends (2) 441 361 399 418 1,619 Alternative investments 136 103 38 6 283 Call and tender income 3 12 15 6 36 Other (3) 12 4-9 25 Investment expenses (12) (12) (13) (16) (53) Total net investment income 580 468 439 423 1,910 Advisory fee and other income (12) - - - 37 37 Total revenues excluding net realized capital gains (losses) 710 611 537 600 2,458 Benefits and expenses: Policyholder benefits and claims incurred 335 346 323 361 1,365 Interest credited to policyholder account balances (5) 130 120 119 115 484 Amortization of deferred policy acquisition costs 2 2 1 2 7 Non deferrable commissions 11 9 11 9 40 General operating expenses 11 14 (2) 13 36 Total benefits and expenses 489 491 452 500 1,932 Operating income $ 221 $ 120 $ 85 $ 100 $ 526 30