INVESTMENTS (Tables)

12 Months Ended

Dec. 31, 2017

INVESTMENTS

The amortized cost or cost and fair value of AIG's available for sale securities and other invested assets carried at fair value

										Other-Than-
		Amortized		Gross		Gross				Temporary
		Cost or		Unrealized		Unrealized		Fair		Impairments
(in millions)		Cost		Gains		Losses		Value		in AOCI(a)
December 31, 2017
Bonds available for sale:
U.S. government and government sponsored entities	$	2,532	$	160	$	(36)	$	2,656	$	-
Obligations of states, municipalities and political subdivisions		17,377		1,297		(30)		18,644		-
Non-U.S. governments		15,059		717		(117)		15,659		-
Corporate debt		126,310		8,666		(800)		134,176		17
Mortgage-backed, asset-backed and collateralized:
RMBS		34,181		3,273		(220)		37,234		1,568
CMBS		13,538		408		(105)		13,841		42
CDO/ABS		16,464		370		(52)		16,782		29
Total mortgage-backed, asset-backed and collateralized		64,183		4,051		(377)		67,857		1,639
Total bonds available for sale(b)		225,461		14,891		(1,360)		238,992		1,656
Equity securities available for sale:
Common stock		703		379		(21)		1,061		-
Preferred stock		504		29		-		533		-
Mutual funds		98		16		-		114		-
Total equity securities available for sale		1,305		424		(21)		1,708		-
Total	$	226,766	$	15,315	$	(1,381)	$	240,700	$	1,656
December 31, 2016
Bonds available for sale:
U.S. government and government sponsored entities	$	1,870	$	148	$	(26)	$	1,992	$	-
Obligations of states, municipalities and political subdivisions		24,025		1,001		(254)		24,772		-
Non-U.S. governments		14,018		773		(256)		14,535		-
Corporate debt		126,648		7,271		(1,739)		132,180		(31)
Mortgage-backed, asset-backed and collateralized:
RMBS		35,311		2,541		(478)		37,374		1,212
CMBS		14,054		409		(192)		14,271		45
CDO/ABS		16,315		278		(180)		16,413		39
Total mortgage-backed, asset-backed and collateralized		65,680		3,228		(850)		68,058		1,296
Total bonds available for sale(b)		232,241		12,421		(3,125)		241,537		1,265
Equity securities available for sale:
Common stock		708		369		(12)		1,065		-
Preferred stock		748		4		-		752		-
Mutual funds		241		23		(3)		261		-
Total equity securities available for sale		1,697		396		(15)		2,078		-
Total	$	233,938	$	12,817	$	(3,140)	$	243,615	$	1,265

(a) Represents the amount of other-than-temporary impairments recognized in Accumulated other comprehensive income. Amount includes unrealized gains and losses on impaired securities relating to changes in the fair value of such securities subsequent to the impairment measurement date.

(b)At December 31,2017 and 2016, bonds available for sale held by us that were below investment grade or not rated totaled $31.5billion and $33.6billion, respectively.

The fair value and gross unrealized losses on AIG's available for sale securities, aggregated by major investment category and length of time that individual securities have been in a continuous unrealized loss position

	Less than 12 Months				12 Months or More				Total
				Gross				Gross				Gross
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(in millions)		Value		Losses		Value		Losses		Value		Losses
December 31, 2017
Bonds available for sale:
U.S. government and government sponsored entities	$	770	$	23	$	332	$	13	$	1,102	$	36
Obligations of states, municipalities and political
subdivisions		586		6		646		24		1,232		30
Non-U.S. governments		3,511		54		857		63		4,368		117
Corporate debt		15,578		453		7,291		347		22,869		800
RMBS		6,212		99		3,790		121		10,002		220
CMBS		3,408		46		1,389		59		4,797		105
CDO/ABS		1,455		24		822		28		2,277		52
Total bonds available for sale		31,520		705		15,127		655		46,647		1,360
Equity securities available for sale:
Common stock		136		21		-		-		136		21
Mutual funds		1		-		-		-		1		-
Total equity securities available for sale		137		21		-		-		137		21
Total	$	31,657	$	726	$	15,127	$	655	$	46,784	$	1,381
December 31, 2016
Bonds available for sale:
U.S. government and government sponsored entities	$	720	$	26	$	-	$	-	$	720	$	26
Obligations of states, municipalities and political
subdivisions		5,814		221		231		33		6,045		254
Non-U.S. governments		3,865		162		489		94		4,354		256
Corporate debt		28,184		1,013		6,080		726		34,264		1,739
RMBS		8,794		252		4,045		226		12,839		478
CMBS		4,469		152		479		40		4,948		192
CDO/ABS		5,362		102		1,961		78		7,323		180
Total bonds available for sale		57,208		1,928		13,285		1,197		70,493		3,125
Equity securities available for sale:
Common stock		125		12		-		-		125		12
Mutual funds		64		3		-		-		64		3
Total equity securities available for sale		189		15		-		-		189		15
Total	$	57,397	$	1,943	$	13,285	$	1,197	$	70,682	$	3,140

The amortized cost and fair value of fixed maturity securities available for sale by contractual maturity

	Total Fixed Maturity Securities				Fixed Maturity Securities in a Loss
December 31, 2017	Available for Sale				Position Available for Sale
(in millions)		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	7,932	$	8,071	$	1,526	$	1,515
Due after one year through five years		47,179		49,093		7,764		7,571
Due after five years through ten years		42,617		43,944		11,559		11,143
Due after ten years		63,550		70,027		9,705		9,342
Mortgage-backed, asset-backed and collateralized		64,183		67,857		17,453		17,076
Total	$	225,461	$	238,992	$	48,007	$	46,647
December 31, 2016
Due in one year or less	$	7,796	$	7,994	$	604	$	581
Due after one year through five years		49,200		51,958		6,002		5,841
Due after five years through ten years		43,308		44,226		16,045		15,332
Due after ten years		66,257		69,301		25,007		23,629
Mortgage-backed, asset-backed and collateralized		65,680		68,058		25,960		25,110
Total	$	232,241	$	241,537	$	73,618	$	70,493

The gross realized gains and gross realized losses from sales of AIG's available for sale securities

	Years Ended December 31,
		2017				2016				2015
		Gross		Gross		Gross		Gross	Gross		Gross
	Realized		Realized		Realized		Realized		Realized		Realized
(in millions)		Gains		Losses		Gains		Losses	Gains		Losses
Fixed maturity securities	$	725	$	300	$	801	$	800	$	517	$	423
Equity securities		107		19		1,072		15		1,060		28
Total	$	832	$	319	$	1,873	$	815	$	1,577	$	451

The fair value of AIG's other securities

		December 31, 2017				December 31, 2016
		Fair	Percent			Fair	Percent
(in millions)		Value	of Total			Value	of Total
Fixed maturity securities:
U.S. government and government sponsored entities	$	2,802	21	%	$	2,939	20	%
Obligations of states, municipalities and political subdivisions		-	-			-	-
Non-U.S. governments		57	1			51	-
Corporate debt		1,909	14			1,772	12
Mortgage-backed, asset-backed and collateralized:
RMBS		1,885	14			2,025	14
CMBS		559	4			603	4
CDO/ABS and other collateralized*		5,560	42			6,608	47
Total mortgage-backed, asset-backed and collateralized		8,004	60			9,236	65
Total fixed maturity securities		12,772	96			13,998	97
Equity securities		589	4			482	3
Total	$	13,361	100	%	$	14,480	100	%

*Includes $251 million and $421million of U.S. government agency backed ABS at December 31, 2017 and 2016, respectively.

Components of other invested assets

December 31,
(in millions)		2017		2016
Alternative investments(a) (b)	$	11,308	$	13,379
Investment real estate(c)		8,258		6,900
Aircraft asset investments(d)		206		321
Investments in life settlements		-		2,516
All other investments		1,050		1,422
Total	$	20,822	$	24,538

(a) At December 31,2017, included hedge funds of $5.8 billion, private equity funds of $5.0 billion, and affordable housing partnerships of $543 million. At December 31, 2016, included hedge funds of $7.2 billion, private equity funds of $5.5 billion, and affordable housing partnerships of $625 million.

(b) Approximately 75 percent of our hedge fund portfolio is available for redemption in 2018, an additional 25 percent will be available between 2019 and 2024.

(c) Net of accumulated depreciation of $515 million and $451 million in 2017 and 2016, respectively.

(d) Consists of investments in aircraft equipment held in a consolidated trust.

The carrying value and ownership percentage of AIA and equity method investments

		2017			2016
		Carrying	Ownership		Carrying	Ownership
(in millions, except percentages)		Value	Percentage		Value	Percentage
Equity method investments	$	9,050	Various	$	10,756	Various

Components of net investment income

Years Ended December 31,
(in millions)		2017		2016		2015
Available for sale fixed maturity securities, including short-term investments	$	10,435	$	11,314	$	11,331
Other fixed maturity securities		660		331		1
Equity securities		34		(5)		99
Interest on mortgage and other loans		1,661		1,526		1,417
Alternative investments*		1,475		693		1,120
Real estate		144		150		181
Other investments		290		509		432
Total investment income		14,699		14,518		14,581
Investment expenses		520		453		528
Net investment income	$	14,179	$	14,065	$	14,053

* Includes income from hedge funds, private equity funds and affordable housing partnerships.Hedge funds for which we elected the fair value option are recorded as of the balance sheet date. Other hedge funds are generally reported on a one-month lag, while private equity funds are generally reported on a one-quarter lag.

Components of net realized capital gains (losses)

Years Ended December 31,
(in millions)		2017		2016		2015
Sales of fixed maturity securities	$	425	$	1	$	94
Sales of equity securities(a)		88		1,057		1,032
Other-than-temporary impairments:
Severity		(2)		(15)		(13)
Change in intent		(9)		(46)		(233)
Foreign currency declines		(11)		(18)		(57)
Issuer-specific credit events		(234)		(433)		(348)
Adverse projected cash flows		(4)		(47)		(20)
Provision for loan losses		(50)		10		(58)
Foreign exchange transactions		489		(1,226)		416
Variable annuity embedded derivatives, net of related hedges		(1,374)		(1,243)		320
All other derivatives and hedge accounting		(368)		299		78
Impairments on investments in life settlements		(360)		(397)		(540)
Other(b)		30		114		105
Net realized capital gains (losses)	$	(1,380)	$	(1,944)	$	776

(a) In 2016 and 2015 includes realized gains on the sale of a portion of our holdings in People’s Insurance Company (Group) of China Limited and PICC Property & Casualty Company Limited (collectively, our PICC Investment).

(b)In 2016, primarily includes $107 million of realized gains due to a purchase price adjustment on the sale of Class B shares of Prudential Financial, Inc. and losses of $253 million from the sale of a portion of our Life Settlements portfolio. In 2015, primarily includes $357 million of realized gains due to the sale of common shares of SpringLeaf Holdings (now known as OneMain Holdings, Inc.), $428 million of realized gains due to the sale of Class B shares of Prudential Financial, Inc. and $463 million of realized losses due to the sale of ordinary shares of AerCap.

Schedule of increase (decrease) in unrealized appreciation (depreciation) of available for sale securities and other investments

	Years Ended
	December 31,
(in millions)		2017		2016
Increase (decrease) in unrealized appreciation (depreciation) of investments:
Fixed maturity securities	$	4,235	$	2,019
Equity securities		22		(1,155)
Other investments		(195)		(259)
Total increase (decrease) in unrealized appreciation (depreciation) of investments*	$	4,062	$	605

* Excludes net unrealized gains (losses) attributable to businesses held for sale.

Credit impairments recognized in earnings for available for sale fixed maturity securities

Years Ended December 31,
(in millions)		2017		2016		2015
Balance, beginning of year	$	1,098	$	1,747	$	2,659
Increases due to:
Credit impairments on new securities subject to impairment losses		122		204		111
Additional credit impairments on previously impaired securities		74		212		109
Reductions due to:
Credit impaired securities fully disposed of for which there was no
prior intent or requirement to sell		(99)		(296)		(399)
Credit impaired securities for which there is a current intent or
anticipated requirement to sell		-		-		2
Accretion on securities previously impaired due to credit*		(669)		(767)		(735)
Divested businesses		-		(2)		-
Balance, end of year	$	526	$	1,098	$	1,747

* Represents both accretion recognized due to changes in cash flows expected to be collected over the remaining expected term of the credit impaired securities and the accretion due to the passage of time.

Schedule of Purchased Credit Impaired (PCI) Securities, at acquisition date

(in millions)	At Date of Acquisition
Contractually required payments (principal and interest)	$	36,642
Cash flows expected to be collected*		30,040
Recorded investment in acquired securities		20,267

*Represents undiscounted expected cash flows, including both principal and interest.

Schedule of Purchased Credit Impaired (PCI) Securities, at reporting date

		December 31,		December 31,
(in millions)		2017		2016
Outstanding principal balance	$	14,718	$	16,728
Amortized cost		10,492		11,987
Fair value		12,293		12,922

Activity for accretable yield on Purchased Credit Impaired (PCI) Securities

Years Ended December 31,
(in millions)		2017		2016
Balance, beginning of year	$	7,498	$	6,846
Newly purchased PCI securities		190		707
Disposals		(18)		-
Accretion		(797)		(842)
Effect of changes in interest rate indices		(34)		39
Net reclassification from (to) non-accretable difference, including effects of prepayments		662		748
Balance, end of year	$	7,501	$	7,498

Schedule of fair value of securities pledged to counterparties under secured financing transactions

(in millions)		December 31, 2017		December 31, 2016
Fixed maturity securities available for sale	$	2,911	$	2,389
Other bond securities, at fair value	$	1,585	$	1,799

Transfer of Certain Financial Assets Accounted for as Secured Borrowings

	Remaining Contractual Maturity of the Agreements
(in millions)	Overnight and Continuous			up to 30 days		31 - 90 days		91 - 364 days		365 days or greater		Total
December 31, 2017
Bonds available for sale:
Non-U.S. governments	$	-	$	7	$	19	$	-	$	-	$	26
Corporate debt		-		13		35		-		-		48
Other bond securities:
U.S. government and government sponsored entities		44		-		-		-		-		44
Non-U.S. governments		-		-		11		-		-		11
Corporate debt		-		387		1,065		-		-		1,452
Total	$	44	$	407	$	1,130	$	-	$	-	$	1,581
December 31, 2016
Other bond securities:
Non-U.S. governments	$	-	$	-	$	-	$	51	$	-	$	51
Corporate debt		-		163		860		725		-		1,748
Total	$	-	$	163	$	860	$	776	$	-	$	1,799

	Remaining Contractual Maturity of the Agreements
(in millions)		Overnight and Continuous		up to 30 days		31 - 90 days		91 - 364 days		365 days or greater		Total
December 31, 2017
Bonds available for sale:
Obligations of states, municipalities and political
subdivisions	$	-	$	-	$	-	$	-	$	-	$	-
Non-U.S. governments		-		-		18		-		-		18
Corporate debt		-		588		2,231		-		-		2,819
CMBS		-		-		-		-		-		-
Other bond securities:
Non-U.S. governments		-		-		22		-		-		22
Corporate debt		-		-		56		-		-		56
Total	$	-	$	588	$	2,327	$	-	$	-	$	2,915
December 31, 2016
Bonds available for sale:
Obligations of states, municipalities and political
subdivisions	$	-	$	21	$	-	$	-	$	-	$	21
Non-U.S. governments		-		-		50		-		-		50
Corporate debt		-		791		1,466		-		-		2,257
CMBS		-		-		61		-		-		61
Total	$	-	$	812	$	1,577	$	-	$	-	$	2,389

Schedule of fair value of securities pledged to the entity under reverse repurchase agreements

(in millions)		December 31, 2017		December 31, 2016
Securities collateral pledged to us	$	2,227	$	1,434
Amount sold or repledged by us		46		11

Investment [Line Items]

Summarized financial information of AIG's equity method investees

Years Ended December 31,
(in millions)		2017		2016		2015
Operating results:
Total revenues	$	13,066	$	9,512	$	22,055
Total expenses		(6,835)		(7,361)		(3,898)
Net income	$	6,231	$	2,151	$	18,157
At December 31,
(in millions)				2017		2016
Balance sheet:
Total assets			$	132,708	$	158,306
Total liabilities			$	(35,585)	$	(37,336)