SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2019

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. This also includes the results of Validus Reinsurance, Ltd., Western World Insurance Group, Inc. and Glatfelter Insurance Group. as of their respective acquisition dates.
International — consists of insurance businesses in Japan, the United Kingdom, Europe, Asia Pacific, Latin America, Puerto Rico, Australia, the Middle East and Africa. This also includes the results of Talbot Holdings, Ltd. as of its acquisition date.

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 annuities, individual annuity and investment products, and 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 subsidiary focused on delivering commercial insurance solutions using digital technology, data analytics and automation.

Legacy Portfolio

Legacy Portfolio represents exited or discontinued product lines, policy forms or distribution channels. Effective February 2018, our Bermuda domiciled composite reinsurer, Fortitude Reinsurance Company Ltd. (Fortitude Re), is included in our Legacy Portfolio.

Legacy Life and Retirement Run-Off Lines — Reserves consist of certain structured settlements, pension risk transfer annuities and single premium immediate annuities written prior to April 2012. Also includes exposures to whole life, long-term care and exited accident & health product lines.
Legacy General Insurance Run-Off Lines — Reserves consist of excess workers’ compensation, environmental exposures and exposures to other products within General Insurance that are no longer actively marketed. Also includes the remaining reserves in Eaglestone Reinsurance Company (Eaglestone).
Legacy Investments — Includes investment classes that we have placed into run-off including holdings in direct investments as well as investments in global capital markets and global real estate.

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. Beginning in the first quarter of 2019, on a prospective basis, the changes in the fair value of equity securities are excluded from adjusted pre-tax income (loss). 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,	2019				2018
				Adjusted				Adjusted
		Total		Pre-tax		Total		Pre-tax
(in millions)		Revenues		Income (Loss)		Revenues		Income (Loss)
General Insurance
North America	$	4,098	$	934	$	3,340	$	320
International		3,704		334		4,104		190
Total General Insurance		7,802		1,268		7,444		510
Life and Retirement
Individual Retirement		1,351		508		1,361		499
Group Retirement		709		232		761		282
Life Insurance		1,073		116		1,061		52
Institutional Markets		1,071		68		277		59
Total Life and Retirement		4,204		924		3,460		892
Other Operations		203		(387)		150		(342)
Legacy Portfolio		706		112		836		145
AIG Consolidation and elimination		(161)		(70)		(62)		11
Total AIG Consolidated adjusted revenues and adjusted pre-tax income		12,754		1,847		11,828		1,216
Reconciling Items from adjusted pre-tax income to pre-tax income:
Changes in fair value of securities used to hedge guaranteed
living benefits		105		96		(77)		(77)
Changes in benefit reserves and DAC, VOBA and SIA related to
net realized capital gains		-		99		-		(31)
Changes in the fair value of equity securities		79		79		-		-
Other income (expense) - net		7		-		(11)		-
Gain (Loss) on extinguishment of debt		-		2		-		(4)
Net realized capital losses^*		(489)		(474)		(29)		(19)
Income (loss) from divested businesses		-		6		-		8
Non-operating litigation reserves and settlements		-		(1)		1		(13)
(Unfavorable) favorable prior year development and related amortization
changes ceded under retroactive reinsurance agreements		-		27		-		(34)
Net loss reserve discount benefit (charge)		-		(473)		-		205
Integration and transaction costs associated with acquired businesses		-		(7)		-		-
Restructuring and other costs		-		(47)		-		(24)
Revenues and Pre-tax income	$	12,456	$	1,154	$	11,712	$	1,227

* 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.