
Note 6. Investments •Fixed maturity and equity securities •Other invested assets •Short-term investments •Net investment income •Net realized gains (losses) •Allowance for credit losses Note 7. Lending Activities •Mortgage and other loans receivable – net of allowance Note 8. Reinsurance •Reinsurance assets – net of allowance •Retroactive reinsurance Note 9. Deferred Policy Acquisition Costs •Deferred policy acquisition costs •Deferred sales inducements •Amortization of deferred policy acquisition costs Note 10. Variable Interest Entities			Note 11. Derivatives and Hedge Accounting •Derivative assets and liabilities, at fair value Note 12. Goodwill and Other Intangible Assets Note 13. Insurance Liabilities •Liability for unpaid losses and loss adjustment expenses •Discounting of reserves •Future policy benefits •Policyholder contract deposits •Other policyholder funds Note 14. Market Risk Benefits Note 16. Debt •Long-term debt •Debt of consolidated investment entities Note 17. Contingencies, Commitments and Guarantees •Legal contingencies Note 19. Earnings Per Common Share (EPS) Note 23. Income Taxes

Insurance revenues include premiums and policy fees. All premiums and policy fees are presented net of reinsurance, as applicable. Premiums for short-duration contracts are recorded as written on the inception date of the policy. Premiums are earned primarily on a pro rata basis over the term of the related coverage. Sales of extended services contracts are reflected as premiums written and earned on a pro rata basis over the term of the related coverage. In addition, certain miscellaneous income is included as premiums written and earned. The reserve for unearned premiums includes the portion of premiums written relating to the unexpired terms of coverage. Reinsurance premiums are typically earned over the same period as the underlying policies or risks covered by the contract. As a result, the earnings pattern of a reinsurance contract may extend up to 24 months, reflecting the inception dates of the underlying policies throughout the year. Premiums from long-duration life products, other than universal and variable life contracts, are recognized as revenues when due. Premiums from individual and group annuity contracts that are life contingent are recognized as revenues when due.

For limited payment contracts, premiums are due over a significantly shorter period than the period over which benefits are provided. The difference between the gross premium received and recorded as revenue and the net premium is deferred and recognized in Policyholder benefits in a constant relationship to insurance in-force, or for annuities, the amount of expected future policy benefits. This Deferred Profit Liability (DPL) is recorded in the Consolidated Balance Sheets in Future policy benefits for life and accident and health insurance contracts.

Amounts received as payment for investment-oriented contracts such as universal life, variable annuities, fixed annuities, and fixed index annuities, are reported as deposits to Policyholder contract deposits or Separate account liabilities, as applicable. Revenues from these contracts are recorded in policy fees and consist of policy charges for the cost of insurance, policy administration charges, surrender charges and amortization of unearned revenue reserves (URR). Policy fees are recognized as revenues in the period in which they are assessed against policyholders, unless the fees are designed to compensate AIG for services to be provided in the future. Fees deferred as unearned revenue are amortized on a constant level basis over the estimated lives of the contracts, consistent with the amortization of deferred acquisition costs. This URR is recorded in the Consolidated Balance Sheets in Other policyholder funds.

Short-term investments include interest bearing investments, time deposits and other investments with remaining contractual life of less than or equal to one year. Securities included within short-term investments are stated at estimated fair value, while other investments included within short-term investments are stated at amortized cost, which approximates estimated fair value.

Premiums and other receivables – net of allowance for credit losses and disputes include premium balances receivable, amounts due from agents and brokers and policyholders, receivables resulting from sales of securities that had not yet settled, cash collateral posted to derivative counterparties that is not eligible to be netted against derivative liabilities and other receivables.

Deposit assets and liabilities We have entered into certain insurance and reinsurance contracts, primarily in our General Insurance companies, that do not contain sufficient insurance risk to be accounted for as insurance or reinsurance. When we receive premiums on such contracts, the premiums received, after deduction for certain related expenses, are recorded as deposits within Other liabilities in the Consolidated Balance Sheets. Net proceeds of these deposits are invested and generate Net investment income. When we pay premiums on such contracts, the premiums paid are recorded as deposits within Other assets in the Consolidated Balance Sheets. The deposit asset or liability is adjusted as amounts are paid, consistent with the underlying contracts.

The cost of buildings and furniture and equipment is depreciated principally on the straight-line basis over their estimated useful lives (maximum of 40 years for buildings and 10 years for furniture and fixtures). Expenditures for maintenance and repairs are charged to income as incurred and expenditures for improvements are capitalized and depreciated. We periodically assess the carrying amount of our real estate for purposes of determining any asset impairment. Capitalized software costs, which represent costs directly related to obtaining, developing or upgrading internal use software, are capitalized and amortized using the straight-line method over a period generally not exceeding ten years.

Separate accounts represent funds for which investment income and investment gains and losses accrue directly to the policyholders who bear the investment risk. Each account has specific investment objectives and the assets are carried at fair value. The assets of each account are legally segregated and are not subject to claims that arise from any of our other businesses. The liabilities for these accounts are equal to the account assets. Separate accounts may also include deposits for funds held under stable value wrap funding agreements, although the majority of stable value wrap sales are measured based on the notional amount included in assets under management and do not include the receipt of funds. For additional information on separate accounts, see Note 15.

Other liabilities consist of other funds on deposit, other payables, securities sold under agreements to repurchase, securities sold but not yet purchased, liabilities resulting from purchases of securities that have not yet settled, derivative liabilities, cash collateral received from derivative counterparties that contractually cannot be netted against derivative assets, allowance for credit losses in relation to off-balance sheet commitments and deferred gains on retroactive reinsurance agreements.

Foreign currency Financial statement accounts expressed in foreign currencies are translated into U.S. dollars. Functional currency assets and liabilities are translated into U.S. dollars generally using rates of exchange prevailing at the balance sheet date of each respective subsidiary and the related translation adjustments are recorded as a separate component of Accumulated other comprehensive income, net of any related taxes, in Total AIG shareholders’ equity. Income statement accounts expressed in functional currencies are translated using average exchange rates during the period. Functional currencies are generally the currencies of the local operating environment. Financial statement accounts expressed in currencies other than the functional currency of a consolidated entity are remeasured into that entity’s functional currency resulting in exchange gains or losses recorded in income. The adjustments resulting from translation of financial statements of foreign entities operating in highly inflationary economies are recorded in income.

The Company adopted the standard on January 1, 2023 using the modified retrospective transition method relating to liabilities for traditional and limited payment contracts and deferred policy acquisition costs. The Company also adopted the standard in relation to MRBs on a full retrospective basis. As of the Transition Date, the impact of the adoption of the standard was a net decrease to beginning Accumulated other comprehensive income (loss) (AOCI) of $2.2 billion and a net increase to beginning Retained earnings of $933 million primarily driven by (1) changes related to MRBs in our Individual Retirement and Group Retirement operating segments, including the impact of non-performance risk adjustments which reclassified the portion of the changes in fair value attributable to non-performance risk from Retained earnings to AOCI, (2) changes to the discount rate used to measure the liability for future policy benefits which most significantly impacted our Life Insurance and Institutional Markets operating segments, and (3) the removal of balances recorded in AOCI related to changes in unrealized appreciation (depreciation) on investments.

The accounting for the Fortitude Reinsurance Company Ltd. (Fortitude Re) reinsurance assets, including the discount rates, continued to be calculated using the same methodology and assumptions as the direct policies, and therefore have been recalculated on an LDTI basis. The accounting for reinsurance transactions between AIG and Fortitude Re structured as modified coinsurance (modco) remained unchanged.

Market risk benefits: The standard requires the measurement of all MRBs (e.g., living benefit and death benefit guarantees associated with variable annuities) associated with deposit (or account balance) contracts at fair value at each reporting period. Changes in fair value compared to prior periods are recorded and presented separately within the income statement, with the exception of our own credit risk changes (non-performance adjustments), which are recognized in Other comprehensive income (loss) (OCI). MRBs impacted both Retained earnings and AOCI upon transition.

Discount rate assumption: The standard requires the discount rate assumption for the liability for future policy benefits to be updated at the end of each reporting period using an upper-medium grade (low credit risk) fixed income instrument yield that maximizes the use of observable market inputs. Upon transition, the Company had an adjustment to AOCI due to the fact that the market upper-medium grade (low credit risk) interest rates as of the Transition Date differed from reserve interest accretion rates.

Following adoption of the standard, the impact of changes to discount rates are recognized through OCI. Changes resulting from updating the discount rate each reporting period primarily impact term life insurance and other traditional life insurance products, as well as pension risk transfer (PRT) and structured settlement products. For additional information on the discount rate assumption under accounting for Long-Duration Contracts Standard, see Note 13.

•Requires the review and, if necessary, update of future policy benefit assumptions at least annually for traditional and limited pay long duration contracts, with the recognition and parenthetical presentation of any resulting re-measurement gain or loss in Policyholder benefits and losses incurred (except for discount rate changes as noted above) in the Consolidated Statements of Income (Loss). For additional information, see Note 13.

•Increases disclosures of disaggregated rollforwards of several balances, including but not limited to liabilities for future policy benefits, deferred acquisition costs, account balances, MRBs, separate account liabilities and information about significant inputs, judgments and methods used in measurement and changes thereto and impact of those changes.


	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


	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


	Year Ended December 31, 2022	Year Ended December 31, 2021
			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			$	31,857	$	(1)	$	31,856	$	31,259	$	26	$	31,285
Policy fees			2,972		(59)		2,913		3,051		(46)		3,005
Total net realized gains (losses)			8,991		(1,927)		7,064		2,151		120		2,271
Total revenues			56,437		(1,987)		54,450		52,057		100		52,157
Benefits, losses and expenses:
Policyholder benefits and losses incurred			22,771		(595)		22,176		24,388		(603)		23,785
Change in the fair value of market risk benefits, net			—		(958)		(958)		—		(447)		(447)
Interest credited to policyholder account balances			3,709		35		3,744		3,557		13		3,570
Amortization of deferred acquisition costs			4,970		(413)		4,557		4,573		(49)		4,524
General operating and other expenses			9,195		(73)		9,122		8,790		(62)		8,728
Total benefits, losses and expenses			42,155		(2,004)		40,151		39,958		(1,148)		38,810
Income from continuing operations before income tax expense (benefit)			14,282		17		14,299		12,099		1,248		13,347
Income tax expense			3,006		19		3,025		2,176		265		2,441
Income (loss) from continuing operations			11,276		(2)		11,274		9,923		983		10,906
Net income (loss)			11,275		(2)		11,273		9,923		983		10,906
Net income from continuing operations attributable to noncontrolling interests			999		47		1,046		535		4		539
Net income (loss) attributable to AIG			10,276		(49)		10,227		9,388		979		10,367
Net income (loss) attributable to AIG common shareholders			10,247		(49)		10,198		9,359		979		10,338
Income (loss) per common share attributable to AIG common shareholders:
Common stock - Basic			13.16		(0.06)		13.10		10.95		1.15		12.10
Common stock - Diluted			13.01		(0.07)		12.94		10.82		1.13		11.95


	Year Ended December 31, 2022	Year Ended December 31, 2021
		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			$	11,275		$	(2)		$	11,273		$	9,923	$	983	$	10,906
Other comprehensive income (loss), net of tax
Change in unrealized appreciation (depreciation) of fixed maturity securities on which allowance for credit losses was taken			(87)			(7)			(94)			35		9		44
Change in unrealized appreciation (depreciation) of all other investments			(32,775)			(5,633)			(38,408)			(6,001)		(1,150)		(7,151)
Change in fair value of market risk benefits attributable to changes in our own credit risk			—			1,294			1,294			—		179		179
Change in the discount rates used to measure traditional and limited payment long-duration insurance contracts			—			5,544			5,544			—		1,361		1,361
Change in foreign currency translation adjustments			(514)			(99)			(613)			(187)		7		(180)
Other comprehensive income (loss)			(33,402)			1,099			(32,303)			(5,830)		406		(5,424)
Comprehensive income (loss)			(22,127)			1,097			(21,030)			4,093		1,389		5,482
Comprehensive income (loss) attributable to noncontrolling interests			(1,584)			130			(1,454)			430		10		440
Comprehensive income (loss) attributable to AIG			(20,543)			967			(19,576)			3,663		1,379		5,042


	Year Ended December 31, 2022				Year Ended December 31, 2021
	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)
Cash flows from operating activities:
Net income	$	11,275	$	(2)	$	11,273	$	9,923	$	983	$	10,906
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	(1,392)		2,486		1,094		(1,889)		1,016		(873)
Change in the fair value of market risk benefits in earnings, net	—		(1,481)		(1,481)		—		(1,427)		(1,427)
Depreciation and other amortization	4,848		(439)		4,409		4,633		(91)		4,542
Changes in operating assets and liabilities:
Insurance reserves	(2,332)		(1,505)		(3,837)		5,127		(655)		4,472
Premiums and other receivables and payables - net	(10,193)		(29)		(10,222)		(655)		(69)		(724)
Reinsurance assets, net	2,843		1,135		3,978		(1,241)		197		(1,044)
Capitalization of deferred policy acquisition costs	(4,649)		(73)		(4,722)		(4,906)		(63)		(4,969)
Current and deferred income taxes - net	2,260		19		2,279		1,314		265		1,579
Other, net	340		(184)		156		(1,322)		(212)		(1,534)
Total adjustments	(7,069)		(71)		(7,140)		(3,644)		(1,039)		(4,683)
Net cash provided by operating activities	4,207		(73)		4,134		6,279		(56)		6,223
Cash flows from financing activities:
Policyholder contract deposits	26,508		74		26,582		25,424		56		25,480


Net cash used in financing activities	(676)		74		(602)		(3,735)		56		(3,679)

In March 2022, the FASB issued an accounting standard update that eliminates the accounting guidance for troubled debt restructurings for creditors and amends the guidance on “vintage disclosures” to require disclosure of current-period gross write-offs by year of origination. The standard also updates the requirements for accounting for credit losses by adding enhanced disclosures for creditors related to loan refinancings and restructurings for borrowers experiencing financial difficulty. The Company adopted the standard prospectively as of January 1, 2023 and the standard did not have a material impact on our reported consolidated financial condition, results of operations, or cash flows. For the updated required disclosures, see Note 7.

In December 2023, the FASB issued an accounting standard update to address improvements to income tax disclosures. The standard requires disaggregated information about a company’s effective tax rate reconciliation as well as information on income taxes paid. The standard is effective for public companies for annual periods beginning after December 15, 2024, with early adoption permitted. The standard will be applied on a prospective basis with the option to apply the standard retrospectively. We are assessing the impact of this standard.

In November 2023, the FASB issued an accounting standard update to address improvements to reportable segment disclosures. The standard primarily requires the following disclosure on an annual and interim basis: (i) significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss; and (ii) other segment items and description of its composition. The standard also requires current annual disclosures about a reportable segment's profits or losses and assets to be disclosed in interim periods and the title and position of the CODM with an explanation of how the CODM uses the reported measure(s) of segment profits or losses in assessing segment performance. The guidance is effective for public companies for fiscal years beginning after December 15, 2023 and interim periods in fiscal years within fiscal years beginning after December 15, 2024, with early adoption permitted. The amendment is applied retrospectively to all prior periods presented. We are assessing the impact of this standard.

On June 30, 2022, the FASB issued an accounting standards update to address diversity in practice by clarifying that a contractual sale restriction should not be considered in the measurement of the fair value of an equity security. It also requires entities with investments in equity securities subject to contractual sale restrictions to disclose certain qualitative and quantitative information about such securities. The guidance is effective for public companies for fiscal years beginning after December 15, 2023 and interim periods within those years, with early adoption permitted. For entities other than investment companies, the accounting standards update applies prospectively, with any adjustments resulting from adoption recognized in earnings on the date of adoption. We are assessing the impact of this standard.