SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2020

SEGMENT INFORMATION

SEGMENT INFORMATION

3. Segment Information

We report our results of operations consistent with the manner in which our chief operating decision makers review the business to assess performance and allocate resources, as follows:

General Insurance

General Insurance business is presented as two operating segments:

North America — consists of insurance businesses in the United States, Canada and Bermuda. This also includes the results of Validus Reinsurance, Ltd. (Validus), Western World Insurance Group, Inc. and Glatfelter Insurance Group (Glatfelter).

International — consists of regional insurance businesses in Japan, the UK, Europe, Asia Pacific, Latin America and Caribbean, Middle East and Africa, and China. This also includes the results of Talbot Holdings, Ltd.

Results are presented before internal reinsurance transactions. North America and International operating segments consist of the following products:

–Commercial Lines — consists of Liability, Financial Lines, Property and Special Risks.

–Personal Insurance — consists of Personal Lines and Accident and Health.

Life and Retirement

Life and Retirement business is presented as four operating segments:

Individual Retirement — consists of fixed annuities, fixed index annuities, variable annuities and retail mutual funds.

Group Retirement — consists of group mutual funds, group annuities, individual annuity and investment products, and financial planning and advisory services.

Life Insurance — primary products in the U.S. include term life and universal life insurance. International operations include distribution of life and health products in the UK and Ireland.

Institutional Markets — consists of stable value wrap products, structured settlement and pension risk transfer annuities, corporate- and bank-owned life insurance and guaranteed investment contracts (GICs).

Other Operations

Other Operations consists primarily of:

Income from assets held by AIG Parent and other corporate subsidiaries.

General operating expenses not attributable to AIG reporting segments.

Certain compensation expenses attributable to Other Operations and reporting segments.

Amortization of value of distribution network acquired related to the Validus and Glatfelter acquisitions.

Interest expense attributable to AIG long-term debt as well as debt associated with consolidated investment entities.

Results also include Blackboard U.S. Holdings, Inc. — and its subsidiaries which are focused on delivering commercial insurance solutions using digital technology, data analytics and automation. At the end of March 2020, AIG decided to place Blackboard into run-off.

Legacy Portfolio

Legacy Portfolio represents exited or discontinued product lines, policy forms or distribution channels. Effective February 2018, our Bermuda domiciled composite reinsurer, Fortitude Re, is included in our Legacy Portfolio.

Legacy Life and Retirement Run-Off Lines — Reserves consist of certain structured settlements, pension risk transfer annuities and single premium immediate annuities written prior to April 2012. Also includes exposures to whole life, long-term care and exited accident & health product lines.

Legacy General Insurance Run-Off Lines — Reserves consist of excess workers’ compensation, environmental exposures and exposures to other products within General Insurance that are no longer actively marketed. Also includes the remaining reserves in Eaglestone Reinsurance Company.

Legacy Investments — Includes investment classes that we have placed into run-off including holdings in direct investments as well as investments in global capital markets and global real estate.

We evaluate segment performance based on adjusted revenues and adjusted pre-tax income (loss). Adjusted revenues and adjusted pre-tax income (loss) are derived by excluding certain items from total revenues and net income (loss) attributable to AIG, respectively. These items generally fall into one or more of the following broad categories: legacy matters having no relevance to our current businesses or operating performance; adjustments to enhance transparency to the underlying economics of transactions; and measures that we believe to be common to the industry. For the items excluded from adjusted revenues and adjusted pre-tax income (loss) see the table below.

The following table presents AIG’s continuing operations by operating segment:

Three Months Ended March 31,	2020				2019
				Adjusted				Adjusted
		Total		Pre-tax		Total		Pre-tax
(in millions)		Revenues		Income (Loss)		Revenues		Income (Loss)
General Insurance
North America	$	3,414	$	409	$	4,098	$	934
International		3,253		92		3,704		334
Total General Insurance		6,667		501		7,802		1,268
Life and Retirement
Individual Retirement		1,370		306		1,351		508
Group Retirement		694		143		709		232
Life Insurance		1,091		55		1,073		116
Institutional Markets		1,017		70		1,071		68
Total Life and Retirement		4,172		574		4,204		924
Other Operations		162		(451)		139		(387)
Legacy Portfolio		264		(368)		706		112
AIG Consolidation and elimination		(145)		(84)		(97)		(70)
Total AIG Consolidated adjusted revenues and adjusted pre-tax income		11,120		172		12,754		1,847
Reconciling items from adjusted pre-tax income to pre-tax income:
Changes in fair value of securities used to hedge guaranteed living benefits		14		(7)		105		96
Changes in benefit reserves and DAC, VOBA and SIA related to net realized
capital gains (losses)		-		(538)		-		99
Changes in the fair value of equity securities		(191)		(191)		79		79
Professional fees related to regulatory or accounting changes		-		(13)		-		-
Other income (expense) - net		9		-		7		-
Gain (loss) on extinguishment of debt		-		(17)		-		2
Net realized capital gains (losses)*		3,485		3,502		(489)		(474)
Income (loss) from divested businesses		-		(216)		-		6
Non-operating litigation reserves and settlements		6		6		-		(1)
Favorable prior year development and related amortization
changes ceded under retroactive reinsurance agreements		-		8		-		27
Net loss reserve discount charge		-		(56)		-		(473)
Integration and transaction costs associated with acquired businesses		-		(2)		-		(7)
Restructuring and other costs		-		(90)		-		(47)
Revenues and Pre-tax income	$	14,443	$	2,558	$	12,456	$	1,154

*Includes all net realized capital gains and losses except earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-qualifying (economic) hedging or for asset replication.