Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2023

Accounting Standards Update and Change in Accounting Principle

The following table presents the impacts in connection with the adoption of LDTI effective as of January 1, 2021 as well as cross references to the applicable notes herein for additional information:


	Pre-Adoption, December 31, 2020		Cumulative Effect Adjustment as of January 1, 2021		Updated Balances Post-Adoption of LDTI
(in millions)


Reinsurance assets - Fortitude Re, net of allowance for credit losses and disputes(a)	$	34,578	$	7,666	$	42,244
Reinsurance assets - other, net of allowance for credit losses and disputes(a)	38,963		469		39,432
Deferred income taxes	12,624		339		12,963
Deferred policy acquisition costs(b)	9,805		3,150		12,955
Market risk benefit assets(c)	—		338		338
Other assets, net of allowance for credit losses(d)	13,122		398		13,520
Total assets	586,481		12,360		598,841

Future policy benefits for life and accident and health insurance contracts(e)	56,878		10,486		67,364
Policyholder contract deposits(e)	154,470		(6,247)		148,223
Market risk benefit liabilities(c)	—		8,739		8,739
Other policyholder funds(f)	3,548		248		3,796
Other liabilities(g)	27,122		398		27,520
Total liabilities	519,282		13,624		532,906

Retained earnings	15,504		933		16,437
Accumulated other comprehensive income (loss)	13,511		(2,197)		11,314
Total AIG Shareholders' equity	66,362		(1,264)		65,098

Total equity	67,199		(1,264)		65,935
Total liabilities and equity	586,481		12,360		598,841

(a)For additional information on the transition impacts associated with LDTI, see Note 8.

(b)For additional information on the transition impacts associated with LDTI, see Note 9.

(c)For additional information on the transition impacts associated with LDTI, see Note 13.

(d)Other assets include deferred sales inducement assets. For additional information on the transition impacts associated with LDTI, see Note 9.

(e)For additional information on the transition impacts associated with LDTI, see Note 12.

(f)Other policyholder funds include URR. For additional information on the transition impacts associated with LDTI, see Note 12.

(g)Other liabilities include deferred cost of reinsurance liabilities. For additional information on the transition impacts associated with LDTI, see Note 8.

The following table presents the impacts in connection with the adoption of LDTI effective as of January 1, 2021 on our previously reported Condensed Consolidated Balance Sheets as of December 31, 2022:


	As Previously Reported		Effect of Change		Updated Balances Post-Adoption of LDTI
(in millions)


Reinsurance assets - Fortitude Re, net of allowance for credit losses and disputes	$	32,159	$	(1,408)	$	30,751
Reinsurance assets - other, net of allowance for credit losses and disputes	39,434		(463)		38,971
Deferred income taxes	15,144		(340)		14,804
Deferred policy acquisition costs	15,518		(2,661)		12,857
Market risk benefit assets	—		796		796
Other assets, net of allowance for credit losses	12,714		(330)		12,384
Total assets	526,634		(4,406)		522,228

Future policy benefits for life and accident and health insurance contracts	59,223		(7,309)		51,914
Policyholder contract deposits	158,891		(2,907)		155,984
Market risk benefit liabilities	—		4,736		4,736
Other policyholder funds	3,909		(446)		3,463
Other liabilities	26,456		301		26,757
Total liabilities	484,399		(5,625)		478,774
Additional paid-in capital	80,284		(369)		79,915
Retained earnings	33,032		1,861		34,893
Accumulated other comprehensive income (loss)	(22,092)		(524)		(22,616)
Total AIG Shareholders' equity	40,002		968		40,970
Non-redeemable noncontrolling interests	2,233		251		2,484
Total equity	42,235		1,219		43,454
Total liabilities and equity	526,634		(4,406)		522,228

The following table presents the impacts in connection with the adoption of LDTI on our previously reported Condensed Consolidated Statements of Income (Loss):


	Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
	As Previously Reported		Effect of Change		Updated Balances Post- Adoption of LDTI			As Previously Reported		Effect of Change		Updated Balances Post- Adoption of LDTI
(in millions, except per common share data)
Revenues:
Premiums	$	7,832	$	(4)	$	7,828		$	22,458	$	2	$	22,460
Policy fees	732		3		735			2,238		(45)		2,193
Total net realized gains (losses)	3,175		(603)		2,572			10,986		(2,203)		8,783
Total revenues	14,602		(604)		13,998			44,851		(2,246)		42,605
Benefits, losses and expenses:
Policyholder benefits and losses incurred	6,187		(138)		6,049			16,565		(472)		16,093
Change in the fair value of market risk benefits, net	—		(435)		(435)			—		(713)		(713)
Interest credited to policyholder account balances	951		8		959			2,738		11		2,749
Amortization of deferred acquisition costs	1,248		(78)		1,170			3,983		(560)		3,423
General operating and other expenses	2,093		(18)		2,075			6,497		(52)		6,445
Total benefits, losses and expenses	10,755		(661)		10,094			30,848		(1,786)		29,062
Income (loss) from continuing operations before income tax expense (benefit)	3,847		57		3,904			14,003		(460)		13,543
Income tax expense (benefit)	806		11		817			2,913		(97)		2,816
Income (loss) from continuing operations	3,041		46		3,087			11,090		(363)		10,727
Net income (loss)	3,041		46		3,087			11,089		(363)		10,726
Net income (loss) from continuing operations attributable to noncontrolling interests	332		7		339			1,084		(33)		1,051
Net income (loss) attributable to AIG	2,709		39		2,748			10,005		(330)		9,675
Net income (loss) attributable to AIG common shareholders	2,702		39		2,741			9,983		(330)		9,653
Income (loss) per common share attributable to AIG common shareholders:
Common stock - Basic	3.54		0.05		3.59			12.64		(0.42)		12.22
Common stock - Diluted	3.50		0.05		3.55			12.49		(0.41)		12.08

The following table presents the impacts in connection with the adoption of LDTI on our previously reported Condensed Consolidated Statements of Comprehensive Income (Loss):


	Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
	As Previously Reported		Effect of Change		Updated Balances Post- Adoption of LDTI			As Previously Reported		Effect of Change		Updated Balances Post- Adoption of LDTI
(in millions)

Net income	$	3,041	$	46	$	3,087		$	11,089	$	(363)	$	10,726
Other comprehensive income (loss), net of tax
Change in unrealized appreciation (depreciation) of fixed maturity securities on which allowance for credit losses was taken	(73)		(1)		(74)			(78)		(5)		(83)
Change in unrealized appreciation (depreciation) of all other investments	(8,324)		(1,180)		(9,504)			(34,469)		(5,958)		(40,427)
Change in fair value of market risk benefits attributable to changes in our own credit risk	—		253		253			—		1,617		1,617
Change in the discount rates used to measure traditional and limited payment long-duration insurance contracts	—		1,725		1,725			—		5,885		5,885
Change in foreign currency translation adjustments	(591)		(130)		(721)			(877)		(185)		(1,062)
Other comprehensive income (loss)	(8,973)		667		(8,306)			(35,388)		1,354		(34,034)
Comprehensive income (loss)	(5,932)		713		(5,219)			(24,299)		991		(23,308)
Comprehensive income (loss) attributable to noncontrolling interests	(464)		86		(378)			(1,784)		108		(1,676)
Comprehensive income (loss) attributable to AIG	(5,468)		627		(4,841)			(22,515)		883		(21,632)

The following table presents the impacts in connection with the adoption of LDTI on our previously reported Condensed Consolidated Statements of Cash Flows:


Nine Months Ended September 30, 2022		As Previously Reported		Effect of Change	Updated Balances Post-Adoption of LDTI
(in millions)
Cash flows from operating activities:
Net income	$	11,089	$	(363)	$	10,726
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Noncash revenues, expenses, gains and losses included in income (loss):
Unrealized gains in earnings - net		(2,738)		2,567		(171)
Change in the fair value of market risk benefits in earnings, net		—		(1,032)		(1,032)
Depreciation and other amortization		3,918		(597)		3,321
Changes in operating assets and liabilities:
Insurance reserves		1,720		(1,286)		434
Premiums and other receivables and payables - net		(8,914)		(39)		(8,953)
Reinsurance assets, net		200		1,117		1,317
Capitalization of deferred policy acquisition costs		(3,704)		(52)		(3,756)
Current and deferred income taxes - net		2,424		(97)		2,327
Other, net		(822)		(269)		(1,091)
Total adjustments		(7,072)		312		(6,760)
Net cash provided by operating activities		4,018		(51)		3,967
Cash flows from financing activities:
Policyholder contract deposits		19,779		52		19,831


Net cash used in financing activities		(1,571)		52		(1,519)