Reinsurance (Tables)

6 Months Ended

Jun. 30, 2022

Summary of Assets Supporting Funds Withheld Arrangements

There is a diverse pool of assets supporting the funds withheld arrangements with Fortitude Re. The following summarizes the composition of the pool of assets:


	June 30, 2022				December 31, 2021
(in millions)	Carrying Value			Fair Value	Carrying Value			Fair Value	Corresponding Accounting Policy
Fixed maturity securities - available for sale(a)	$	21,982	$	21,982	$	31,815	$	31,815	Fair value through other comprehensive income (loss)
Fixed maturity securities - fair value option		3,309		3,309		1,983		1,983	Fair value through net investment income
Commercial mortgage loans		4,126		4,010		3,637		3,859	Amortized cost
Real estate investments		168		422		201		395	Amortized cost
Private equity funds / hedge funds		1,794		1,794		1,606		1,606	Fair value through net investment income
Policy loans		364		364		380		380	Amortized cost
Short-term investments		135		135		50		50	Fair value through net investment income
Funds withheld investment assets		31,878		32,016		39,672		40,088
Derivative assets, net(b)		94		94		81		81	Fair value through net realized gains (losses)
Other(c)		860		860		602		602	Amortized cost
Total	$	32,832	$	32,970	$	40,355	$	40,771

(a)The change in the net unrealized gains (losses) on available for sale securities related to the Fortitude Re funds withheld assets was $(6.1) billion ($(4.8) billion after-tax) and $(1.6) billion ($(1.3) billion after-tax), respectively for the six months ended June 30, 2022 and 2021.

(b)The derivative assets and liabilities have been presented net of cash collateral. The derivative assets and liabilities supporting the Fortitude Re funds withheld arrangements had a fair market value of $369 million and $20 million, respectively, as of June 30, 2022. The derivative assets and liabilities supporting the Fortitude Re funds withheld arrangements had a fair market value of $389 million and $10 million, respectively, as of December 31, 2021. These derivative assets and liabilities are fully collateralized either by cash or securities.

(c)Primarily comprised of Cash and Accrued investment income.

Summary of The Impact of Funds Withheld Arrangements

The impact of the funds withheld arrangements with Fortitude Re was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)		2022		2021		2022		2021
Net underwriting income	$	—	$	—	$	—	$	—
Net investment income - Fortitude Re funds withheld assets		188		507		479		993
Net realized gains (losses) on Fortitude Re funds withheld assets:
Net realized gains (losses) - Fortitude Re funds withheld assets		(86)		173		(226)		346
Net realized gains (losses) - Fortitude Re embedded derivatives		2,776		(2,056)		6,094		326
Net realized gains (losses) on Fortitude Re funds withheld assets		2,690		(1,883)		5,868		672
Income (loss) from continuing operations before income tax expense (benefit)		2,878		(1,376)		6,347		1,665
Income tax expense (benefit)		605		(289)		1,333		350
Income tax expense (benefit)(a)		2,273		(1,087)		5,014		1,315
Change in unrealized appreciation (depreciation) of all other investments(a)		(2,156)		1,055		(4,794)		(1,285)
Comprehensive income (loss)	$	117	$	(32)	$	220	$	30

(a)The income tax expense (benefit) and the tax impact in AOCI was computed using AIG’s U.S. statutory tax rate of 21 percent.

Reinsurance Recoverable, Allowance for Credit Loss

The following table presents a rollforward of the reinsurance recoverable allowance:


Three Months Ended June 30,		2022						2021
(in millions)	General Insurance		Life and Retirement			Total	General Insurance		Life and Retirement			Total
Balance, beginning of period	$	286	$	105	$	391	$	291	$	87	$	378
Addition to (release of) allowance for expected credit losses and disputes, net		(4)		2		(2)		(1)		—		(1)
Write-offs charged against the allowance for credit losses and disputes		—		—		—		(3)		—		(3)
Recoveries of amounts previously written off		2		—		2		—		—		—
Other changes		—		—		—		—		—		—
Balance, end of period	$	284	$	107	$	391	$	287	$	87	$	374
Six Months Ended June 30,		2022						2021
(in millions)	General Insurance		Life and Retirement			Total	General Insurance		Life and Retirement			Total
Balance, beginning of year	$	281	$	101	$	382	$	292	$	83	$	375

Addition to (release of) allowance for expected credit losses and disputes, net		1		6		7		—		4		4
Write-offs charged against the allowance for credit losses and disputes		(2)		—		(2)		(7)		—		(7)
Recoveries of amounts previously written off		2		—		2		—		—		—
Other changes		2		—		2		2		—		2
Balance, end of period	$	284	$	107	$	391	$	287	$	87	$	374