INSURANCE LIABILITIES (Tables)

6 Months Ended

Jun. 30, 2020

Claims Development [Line Items]

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

The following table presents the roll-forward of activity in Loss Reserves:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions)		2020		2019		2020		2019
Liability for unpaid loss and loss adjustment expenses, beginning of period	$	77,747	$	82,496	$	78,328	$	83,639
Reinsurance recoverable		(31,114)		(31,784)		(31,069)		(31,690)
Initial allowance upon CECL adoption		-		-		164		-
Net Liability for unpaid loss and loss adjustment expenses, beginning of period		46,633		50,712		47,423		51,949
Losses and loss adjustment expenses incurred:
Current year		4,248		4,272		8,359		8,569
Prior years, excluding discount and amortization of deferred gain		(25)		(132)		(26)		(147)
Prior years, discount charge (benefit)		34		244		110		741
Prior years, amortization of deferred gain on retroactive reinsurance(a)		(76)		(56)		(151)		(142)
Total losses and loss adjustment expenses incurred		4,181		4,328		8,292		9,021
Losses and loss adjustment expenses paid:
Current year		(910)		(1,060)		(1,252)		(1,377)
Prior years		(3,790)		(4,127)		(8,141)		(9,766)
Total losses and loss adjustment expenses paid		(4,700)		(5,187)		(9,393)		(11,143)
Other changes:
Foreign exchange effect		(39)		(209)		(269)		7
Allowance for credit losses		-		-		-		-
Retroactive reinsurance adjustment (net of discount)(b)		138		80		160		(110)
Fortitude sale and reinsurance adjustment(c)		(3,818)		-		(3,818)		-
Total other changes		(3,719)		(129)		(3,927)		(103)
Liability for unpaid loss and loss adjustment expenses, end of period:
Net liability for unpaid losses and loss adjustment expenses		42,395		49,724		42,395		49,724
Reinsurance recoverable		35,458		31,333		35,458		31,333
Total	$	77,853	$	81,057	$	77,853	$	81,057

(a)Includes $12 million and $6 million for the retroactive reinsurance agreement with National Indemnity Company (NICO), a subsidiary of Berkshire Hathaway Inc. (Berkshire), covering U.S. asbestos exposures for the three-month periods ended June 30, 2020 and 2019, respectively, and $20 million and $15 million for the six-month periods ended June 30, 2020 and 2019, respectively(b)Includes benefit (charge) from change in discount on retroactive reinsurance in the amount of $(14) million and $125 million for the three-month periods ended June 30, 2020 and 2019, respectively, and $58 million and $432 million for the six-month periods ended June 30, 2020 and 2019, respectively.(c)On June 2, 2020, AIG completed the Majority Interest Fortitude Sale. Concurrent with the Majority Interest Fortitude Sale, AIG established a reinsurance recoverable. Refer to Note 1 for additional information.

Schedule of components of the loss reserve discount

	June 30, 2020						December 31, 2019
	North						North
	America						America
	Commercial			Legacy			Commercial			Legacy
(in millions)	Insurance			Portfolio(b)		Total	Insurance			Portfolio		Total
U.S. workers' compensation	$	2,080	$	-	$	2,080	$	2,134	$	666	$	2,800
Retroactive reinsurance		(1,193)		-		(1,193)		(1,251)		-		(1,251)
Total reserve discount(a)	$	887	$	-	$	887	$	883	$	666	$	1,549

(a)Excludes $164 million and $172 million of discount related to certain long tail liabilities in the UK at June 30, 2020 and December 31, 2019, respectively.(b)On June 2, 2020, we completed the Majority Interest Fortitude Sale. Refer to Note 1 for additional information.

Schedule of loss reserve discount and loss reserve discount benefit (charge)

Three Months Ended June 30,	2020						2019
	North						North
	America						America
	Commercial			Legacy			Commercial			Legacy
(in millions)	Insurance			Portfolio(c)		Total	Insurance			Portfolio		Total
Current accident year	$	18	$	-	$	18	$	32	$	-	$	32
Accretion and other adjustments to prior year discount		(25)		(9)		(34)		8		(11)		(3)
Effect of interest rate changes		-		-		-		(170)		(71)		(241)
Net reserve discount benefit (charge)		(7)		(9)		(16)		(130)		(82)		(212)
Change in discount on loss reserves ceded under retroactive
reinsurance		(14)		-		(14)		125		-		125
Net change in total reserve discount(a)	$	(21)	$	(9)	$	(30)	$	(5)	$	(82)	$	(87)
Six Months Ended June 30,	2020						2019
	North						North
	America						America
	Commercial			Legacy			Commercial			Legacy
(in millions)	Insurance			Portfolio(c)		Total	Insurance			Portfolio		Total
Current accident year	$	38	$	-	$	38	$	56	$	-	$	56
Accretion and other adjustments to prior year discount		(92)		(18)		(110)		(243)		(24)		(267)
Effect of interest rate changes		-		-		-		(337)		(137)		(474)
Net reserve discount benefit (charge)		(54)		(18)		(72)		(524)		(161)		(685)
Change in discount on loss reserves ceded under retroactive
reinsurance		58		-		58		432		-		432
Net change in total reserve discount(b)	$	4	$	(18)	$	(14)	$	(92)	$	(161)	$	(253)

(a)Excludes $(6) million and $(9) million discount related to certain long tail liabilities in the UK for the three-month periods ended June 30, 2020 and 2019, respectively.

(b)Excludes $(8) million and $26 million discount related to certain long tail liabilities in the UK for the six-month periods ended June 30, 2020 and 2019, respectively.

(c)On June 2, 2020, we completed the Majority Interest Fortitude Sale. Refer to Note 1 for additional information.