SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2018

3. Segment Information

We report our results of operations consistent with the manner in which our chief operating decision makers review the business to assess performance and allocate resources, as follows.

General Insurance

General Insurance business is presented as two operating segments:

North America — consists of insurance businesses in the United States, Canada and Bermuda.
International — consists of insurance businesses in Japan, the United Kingdom, Europe, Asia Pacific, Latin America, Puerto Rico, Australia, the Middle East and Africa.

Results are presented before internal reinsurance transactions. North America and International operating segments consist of the following products:

– Commercial Lines — consists of Liability, Financial Lines, Property and Special Risks.

– Personal Insurance — consists of Personal Lines and Accident and Health.

Life and Retirement

Life and Retirement business is presented as four operating segments:

Individual Retirement — consists of fixed annuities, fixed index annuities, variable annuities and retail mutual funds.
Group Retirement — consists of group mutual funds, group fixed annuities, group variable annuities, individual annuity and investment products, financial planning and advisory services.
Life Insurance — primary products in the U.S. include term life and universal life insurance. International operations include distribution of life and health products in the UK and Ireland.
Institutional Markets — consists of stable value wrap products, structured settlement and pension risk transfer annuities, corporate- and bank-owned life insurance and guaranteed investment contracts (GICs).

Other Operations

Other Operations category consists of:

Income from assets held by AIG Parent and other corporate subsidiaries.
General operating expenses not attributable to specific reporting segments.
Interest expense.
Blackboard — a data-enabled, digital subsidiary that provides the commercial insurance industry with alternative solutions using digital technology, data analytics and automation.
Fuji Life — consists of term insurance, life insurance, endowment policies and annuities. The sale of this business was completed on April 30, 2017.

Legacy Portfolio

Legacy Portfolio segment consists of:

Legacy Insurance Lines represent exited or discontinued product lines, policy forms or distribution channels. Effective February 2018, our newly formed Bermuda domiciled composite reinsurer, DSA Reinsurance Company, Ltd. (DSA Re) is included in our Legacy Portfolio.

Legacy General Insurance Run-Off Lines — consists of asbestos and environmental exposures and other exposures within certain Property and Casualty profit centers no longer actively marketed, including excess workers’ compensation, environmental impairment liability, public entity liability, accident & health, physicians and surgeons professional liability, and various other workers’ compensation and general liability exposures.
Legacy Life and Retirement Run-Off Lines — include whole life, long-term care and exited accident & health product lines. Also includes certain structured settlement, pension risk transfer annuities and single premium immediate annuities written prior to April 2012.
Legacy Investments — include investment classes that we have placed into run-off.

We evaluate segment performance based on adjusted revenues and adjusted pre-tax income (loss). Adjusted revenues and adjusted pre-tax income (loss) are derived by excluding certain items from total revenues and net income (loss) attributable to AIG, respectively. For the items excluded from adjusted revenues and adjusted pre-tax income (loss) see the table below.

The following table presents AIG’s continuing operations by operating segment:

Three Months Ended March 31,	2018				2017
				Adjusted				Adjusted
		Total		Pre-tax		Total		Pre-tax
(in millions)		Revenues		Income (Loss)		Revenues		Income (Loss)
General Insurance
North America	$	3,340	$	320	$	3,840	$	828
International		4,104		190		3,698		233
Total General Insurance		7,444		510		7,538		1,061
Life and Retirement
Individual Retirement		1,361		499		1,373		539
Group Retirement		761		282		718		243
Life Insurance		1,061		52		1,013		54
Institutional Markets		277		59		599		62
Total Life and Retirement		3,460		892		3,703		898
Other Operations		150		(342)		474		(308)
Legacy Portfolio		836		145		1,084		342
AIG Consolidation and elimination		(62)		11		(64)		48
Total AIG Consolidated adjusted revenues and adjusted pre-tax income		11,828		1,216		12,735		2,041
Reconciling Items from adjusted pre-tax income to pre-tax income:
Changes in fair value of securities used to hedge guaranteed
living benefits		(77)		(77)		11		11
Changes in benefit reserves and DAC, VOBA and SIA related to
net realized capital gains		-		(31)		-		53
Other income (expense) - net		(11)		-		(9)		-
Gain (Loss) on extinguishment of debt		-		(4)		-		1
Net realized capital losses^*		(29)		(19)		(115)		(115)
Income (loss) from divested businesses		-		8		-		(100)
Non-operating litigation reserves and settlements		1		(13)		10		6
(Unfavorable) favorable prior year development and related amortization
changes ceded under retroactive reinsurance agreements		-		(34)		-		(14)
Net loss reserve discount benefit (charge)		-		205		-		25
Restructuring and other costs		-		(24)		-		(181)
Revenues and Pre-tax income	$	11,712	$	1,227	$	12,632	$	1,727

* Includes all net realized capital gains and losses except earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-qualifying (economic) hedging or for asset replication.