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Reinsurance (Tables)
9 Months Ended
Sep. 30, 2022
Insurance [Abstract]  
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:
September 30, 2022December 31, 2021
(in millions)Carrying
Value
Fair
Value
Carrying
Value
Fair
Value
Corresponding Accounting Policy
Fixed maturity securities - available for sale(a)
$19,247 $19,247 $31,815 $31,815 Fair value through other comprehensive income (loss)
Fixed maturity securities - fair value option3,800 3,800 1,983 1,983 Fair value through net investment income
Commercial mortgage loans4,076 3,830 3,637 3,859 Amortized cost
Real estate investments139 364 201 395 Amortized cost
Private equity funds / hedge funds1,861 1,861 1,606 1,606 Fair value through net investment income
Policy loans357 357 380 380 Amortized cost
Short-term investments160 160 50 50 Fair value through net investment income
Funds withheld investment assets29,640 29,619 39,672 40,088 
Derivative assets, net(b)
97 97 81 81 Fair value through net realized gains (losses)
Other(c)
708 708 602 602 Amortized cost
Total$30,445 $30,424 $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 $(7.7) billion ($(6.1) billion after-tax) and $(2.1) billion ($(1.6) billion after-tax), respectively for the nine months ended September 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 $366 million and $19 million, respectively, as of September 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
September 30,
Nine Months Ended
September 30,
(in millions)2022202120222021
Net underwriting income
$ $— $ $— 
Net investment income - Fortitude Re funds withheld assets155 495 634 1,488 
Net realized gains (losses) on Fortitude Re funds withheld assets:
Net realized gains (losses) - Fortitude Re funds withheld assets(86)190 (312)536 
Net realized gains (losses) - Fortitude Re embedded derivative1,757 (209)7,851 117 
Net realized gains (losses) on Fortitude Re funds withheld assets1,671 (19)7,539 653 
Income from continuing operations before income tax expense1,826 476 8,173 2,141 
Income tax expense(a)
383 99 1,716 449 
Net income
1,443 377 6,457 1,692 
Change in unrealized depreciation of all other investments(a)
(1,317)(360)(6,111)(1,645)
Comprehensive income$126 $17 $346 $47 
(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 September 30,20222021
(in millions)General InsuranceLife and RetirementTotalGeneral InsuranceLife and RetirementTotal
Balance, beginning of period$284 $107 $391 $287 $87 $374 
Addition to (release of) allowance for expected credit losses and disputes, net4 1 5 15 20 
Write-offs charged against the allowance for credit losses and disputes(1) (1)(8)— (8)
Recoveries of amounts previously written off   — — — 
Other changes(1) (1)— 
Balance, end of period$286 $108 $394 $286 $102 $388 
Nine Months Ended September 30,20222021
(in millions)General InsuranceLife and RetirementTotalGeneral InsuranceLife and RetirementTotal
Balance, beginning of year$281 $101 $382 $292 $83 $375 
Addition to (release of) allowance for expected credit losses and disputes, net5 7 12 19 24 
Write-offs charged against the allowance for credit losses and disputes(3) (3)(15)— (15)
Recoveries of amounts previously written off2  2 — — — 
Other changes1  1 — 
Balance, end of period$286 $108 $394 $286 $102 $388