LIABILITY FOR UNPAID CLAIMS AND CLAIMS ADJUSTMENT EXPENSE AND FUTURE POLICY BENEFITS FOR LIFE AND ACCIDENT AND HEALTH INSURANCE CONTRACTS AND POLICYHOLDER CONTRACT DEPOSITS (Tables)

12 Months Ended

Dec. 31, 2011

LIABILITY FOR UNPAID CLAIMS AND CLAIMS ADJUSTMENT EXPENSE AND FUTURE POLICY BENEFITS FOR LIFE AND ACCIDENT AND HEALTH INSURANCE CONTRACTS AND POLICYHOLDER CONTRACT DEPOSITS

Schedule of reconciliation of activity in the liability for unpaid claims and claims adjustment expense

Years Ended December 31, (in millions)		2011			2010			2009



Balance, beginning of year:
	Liability for unpaid claims and claims adjustment expense	$	91,151		$	85,386		$	89,258
	Reinsurance recoverable		(19,644	)		(17,487	)		(16,803	)

Total			71,507			67,899			72,455

Foreign exchange effect			353			(126	)		1,416
Acquisitions^(a)			-			1,538			-
Dispositions^(b)			-			(87	)		(9,657	)
Reduction of net loss reserves due to NICO transaction			(1,703	)		-			-

Losses and loss expenses incurred^(c):
	Current year		27,590			24,074			27,354
	Prior years, other than accretion of discount^(d)		195			4,182			2,771
	Prior years, accretion of discount		375			(181	)		313

Total			28,160			28,075			30,438

Losses and loss expenses paid^(c):
	Current year		11,534			9,873			11,079
	Prior years		15,958			15,919			15,673

Total			27,492			25,792			26,752

Activity of discontinued operations			-			-			(1	)

Balance, end of year:
	Net liability for unpaid claims and claims adjustment expense		70,825			71,507			67,899
	Reinsurance recoverable		20,320			19,644			17,487

Total		$	91,145		$	91,151		$	85,386

(a): Represents the acquisition of Fuji on March 31, 2010.
(b): Transatlantic was deconsolidated in 2009, and 21st Century and HSB were sold in 2009.
(c): Includes amounts related to dispositions through the date of disposition.
(d): In 2011, includes $(414) million, $145 million and $413 million related to excess casualty, commercial specialty workers' compensation and environmental, respectively. In 2010, includes $1.1 billion, $793 million and $1.5 billion related to excess casualty, excess workers' compensation and asbestos, respectively. In 2009, includes $1.5 billion, $956 million and $151 million related to excess casualty, excess workers' compensation and asbestos, respectively.

Schedule of components of future policy benefits

At December 31, (in millions)		2011		2010



Future policy benefits:
	Long duration and structured settlement contracts	$	33,322	$	30,992
	Short duration contracts		995		276

Total future policy benefits		$	34,317	$	31,268

Schedule of policyholder contract deposits liabilities

At December 31, (in millions)		2011		2010



Policyholder contract deposits:
	Annuities	$	98,657	$	92,672
	Universal life products		12,917		12,569
	Guaranteed investment contracts		6,788		8,491
	Variable products – fixed account option		3,181		2,217
	Corporate life products		2,239		2,203
	Other investment contracts		3,116		3,221

Total policyholder contract deposits		$	126,898	$	121,373

- Definition

The entire disclosure for the present values of future benefits to be paid to or on behalf of policyholders and related expenses less the present value of future net premiums using assumptions such as estimates of expected investment yields, mortality, morbidity, terminations and expenses, applicable at the time the insurance contracts are made and unpaid claim costs relating to insurance contracts including estimates of costs relating to incurred but not reported claims based on the estimated ultimate cost of settling the claims (including effects of inflation and other societal and economic factors), using past experience adjusted for current trends and any other factors that would modify past experience by element such as business segment, country and interest rate range.

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- Definition

Tabular disclosure of the activity in the reserve for settling insured claims and expenses incurred in the claims settlement process for the period. The estimated liability includes the amount of money that will be required for future payments of (a) claims that have been reported to the insurer, (b) claims related to insured events that have occurred but that have not been reported to the insurer as of the date the liability is estimated, and (c) claim adjustment expenses. Claim adjustment expenses include costs incurred in the claim settlement process such as legal fees; outside adjuster fees; and costs to record, process, and adjust claims.

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