INVESTMENTS (Tables)

9 Months Ended

Sep. 30, 2020

Investments [Line Items]

Amortized cost or cost and fair value of available for sale securities

		Amortized		Allowance		Gross		Gross
		Cost or		for Credit		Unrealized		Unrealized		Fair
(in millions)		Cost		Losses(a)		Gains		Losses		Value
September 30, 2020
Bonds available for sale:
U.S. government and government sponsored entities	$	4,319	$	-	$	840	$	(24)	$	5,135
Obligations of states, municipalities and political subdivisions		14,027		-		2,162		(16)		16,173
Non-U.S. governments		14,240		(5)		1,046		(107)		15,174
Corporate debt		146,595		(206)		16,897		(1,180)		162,106
Mortgage-backed, asset-backed and collateralized:
RMBS		30,427		(24)		3,088		(77)		33,414
CMBS		14,841		(1)		1,017		(80)		15,777
CDO/ABS		18,021		-		390		(225)		18,186
Total mortgage-backed, asset-backed and collateralized		63,289		(25)		4,495		(382)		67,377
Total bonds available for sale(c)	$	242,470	$	(236)	$	25,440	$	(1,709)	$	265,965
										Other-Than-
		Amortized		Gross		Gross				Temporary
		Cost or		Unrealized		Unrealized		Fair		Impairments
(in millions)		Cost		Gains		Losses		Value		in AOCI(b)
December 31, 2019
Bonds available for sale:
U.S. government and government sponsored entities	$	5,108	$	316	$	(44)	$	5,380	$	-
Obligations of states, municipalities and political subdivisions		13,960		1,390		(32)		15,318		-
Non-U.S. governments		14,042		884		(57)		14,869		(18)
Corporate debt		138,046		12,090		(500)		149,636		7
Mortgage-backed, asset-backed and collateralized:
RMBS		29,802		3,067		(64)		32,805		1,149
CMBS		13,879		576		(25)		14,430		34
CDO/ABS		18,393		348		(93)		18,648		14
Total mortgage-backed, asset-backed and collateralized		62,074		3,991		(182)		65,883		1,197
Total bonds available for sale(c)	$	233,230	$	18,671	$	(815)	$	251,086	$	1,186

(a) Represents the allowance for credit losses that has been recognized. Changes in the allowance for credit losses are recorded through the statements of income and are not recognized in other comprehensive income.

(b) Represents the amount of other-than-temporary impairments recognized in AOCI. Amount includes unrealized gains and losses on impaired securities relating to changes in the fair value of such securities subsequent to the impairment measurement date.

(c) At September 30, 2020 and December 31, 2019, bonds available for sale held by us that were below investment grade or not rated totaled $27.5 billion and $27.8 billion, respectively.

Securities available for sale in a loss position

	Less than 12 Months				12 Months or More				Total
				Gross				Gross				Gross
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(in millions)		Value		Losses		Value		Losses		Value		Losses
September 30, 2020
Bonds available for sale:
U.S. government and government sponsored entities	$	366	$	24	$	-	$	-	$	366	$	24
Obligations of states, municipalities and political
subdivisions		419		11		103		5		522		16
Non-U.S. governments		1,756		56		291		51		2,047		107
Corporate debt		20,936		872		1,096		110		22,032		982
RMBS		3,594		43		163		17		3,757		60
CMBS		2,068		71		185		9		2,253		80
CDO/ABS		5,939		144		3,153		81		9,092		225
Total bonds available for sale	$	35,078	$	1,221	$	4,991	$	273	$	40,069	$	1,494

	Less than 12 Months				12 Months or More				Total
				Gross				Gross				Gross
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(in millions)		Value		Losses		Value		Losses		Value		Losses
December 31, 2019
Bonds available for sale:
U.S. government and government sponsored entities	$	1,461	$	44	$	63	$	-	$	1,524	$	44
Obligations of states, municipalities and political
subdivisions		672		21		246		11		918		32
Non-U.S. governments		1,105		12		343		45		1,448		57
Corporate debt		11,868		319		2,405		181		14,273		500
RMBS		3,428		28		1,367		36		4,795		64
CMBS		1,877		16		367		9		2,244		25
CDO/ABS		3,920		53		2,571		40		6,491		93
Total bonds available for sale	$	24,331	$	493	$	7,362	$	322	$	31,693	$	815

Amortized cost and fair value of fixed maturity securities available for sale by contractual maturity

	Total Fixed Maturity Securities
	Available for Sale
		Amortized Cost,
(in millions)		Net of Allowance		Fair Value
September 30, 2020
Due in one year or less	$	11,186	$	11,298
Due after one year through five years		42,513		43,869
Due after five years through ten years		41,049		44,725
Due after ten years		84,222		98,696
Mortgage-backed, asset-backed and collateralized		63,264		67,377
Total	$	242,234	$	265,965

Gross realized gains and gross realized losses from sales or maturities of available for sale securities

		Three Months Ended September 30,								Nine Months Ended September 30,
		2020				2019				2020				2019
		Gross		Gross		Gross		Gross		Gross		Gross		Gross		Gross
	Realized		Realized		Realized		Realized		Realized		Realized		Realized		Realized
(in millions)		Gains		Losses		Gains		Losses		Gains		Losses		Gains		Losses
Fixed maturity securities	$	258	$	83	$	198	$	70	$	1,179	$	641	$	464	$	280

Value of other securities measured at fair value based on election of the fair value option

		September 30, 2020				December 31, 2019
		Fair	Percent			Fair	Percent
(in millions)		Value	of Total			Value	of Total
Fixed maturity securities:
U.S. government and government sponsored entities	$	1,870	30	%	$	2,121	28	%
Corporate debt		12	-			18	-
Mortgage-backed, asset-backed and collateralized:
RMBS		488	8			489	7
CMBS		322	5			322	4
CDO/ABS and other collateralized		2,723	43			3,732	50
Total mortgage-backed, asset-backed and collateralized		3,533	56			4,543	61
Total fixed maturity securities		5,415	86			6,682	89
Equity securities		871	14			841	11
Total	$	6,286	100	%	$	7,523	100	%

Carrying amounts values of other invested assets

		September 30,		December 31,
(in millions)		2020		2019
Alternative investments(a) (b)	$	8,391	$	8,845
Investment real estate(c)		8,010		8,491
All other investments(d)		1,514		1,456
Total	$	17,915	$	18,792

(a) At September 30, 2020, included hedge funds of $2.2 billion, private equity funds of $5.9 billion and affordable housing partnerships of $270 million. At December 31, 2019, included hedge funds of $3.3 billion, private equity funds of $5.2 billion and affordable housing partnerships of $331 million.

(b) At September 30, 2020, approximately 63 percent of our hedge fund portfolio is available for redemption in 2020. The remaining 37 percent will be available for redemption between 2021 and 2027.

(c) Net of accumulated depreciation of $780 million and $703 million at September 30, 2020 and December 31, 2019, respectively.

(d) Includes AIG’s 3.5 percent ownership interest in Fortitude Holdings which is recorded using the measurement alternative for equity securities and is carried at cost, which was $100 million as of September 30, 2020.

Components of net investment income

Three Months Ended September 30,	2020						2019
	Excluding Fortitude		Fortitude Re
	Re Funds		Funds Withheld
(in millions)	Withheld Assets		Assets		Total
Available for sale fixed maturity securities, including short-term investments	$	2,209	$	373	$	2,582	$	2,698
Other fixed maturity securities(a)		164		7		171		333
Equity securities		119		-		119		(51)
Interest on mortgage and other loans		443		46		489		495
Alternative investments(b)		455		40		495		115
Real estate		22		-		22		96
Other investments(c)		55		-		55		(143)
Total investment income		3,467		466		3,933		3,543
Investment expenses		125		8		133		135
Net investment income	$	3,342	$	458	$	3,800	$	3,408

Nine Months Ended September 30,	2020						2019
	Excluding Fortitude		Fortitude Re
	Re Funds		Funds Withheld
(in millions)	Withheld Assets		Assets(d)		Total
Available for sale fixed maturity securities, including short-term investments	$	7,320	$	459	$	7,779	$	8,052
Other fixed maturity securities(a)		475		10		485		941
Equity securities		(16)		-		(16)		6
Interest on mortgage and other loans		1,441		59		1,500		1,511
Alternative investments(b)		309		54		363		879
Real estate		142		-		142		227
Other investments(c)		(159)		-		(159)		(203)
Total investment income		9,512		582		10,094		11,413
Investment expenses		412		8		420		381
Net investment income	$	9,100	$	574	$	9,674	$	11,032

(a) Included in the three- and nine-month periods ended September 30, 2020 were income of $8 million and $206 million, respectively, related to fixed maturity securities measured at fair value that economically hedge liabilities described in (c) below. Included in the three- and nine-month periods ended September 30, 2019 were income of $146 million and $195 million, respectively, for fixed maturity securities measured at fair value through income that economically hedge liabilities as described in (c) below.

(b) Included income from hedge funds, private equity funds and affordable housing partnerships. Hedge funds are recorded as of the balance sheet date. Private equity funds are generally reported on a one-quarter lag.

(c) Included in the three- and nine-month periods ended September 30, 2020 were income of $21 million and a loss of $195 million, respectively, related to liabilities measured at fair value that are economically hedged with fixed maturity securities as described in (a) above. Included in the three- and nine-month periods ended September 30, 2019 were losses of $174 million and $220 million, respectively, related to liabilities measured at fair value that are economically hedged with fixed maturity securities as described in (a) above.

(d) Represents activity subsequent to the deconsolidation of Fortitude Re on June 2, 2020.

Components of net realized capital gains (losses)

Three Months Ended September 30,	2020						2019
	Excluding		Fortitude Re
	Fortitude Re			Funds
	Funds		Withheld
(in millions)	Withheld Assets			Assets		Total
Sales of fixed maturity securities	$	28	$	147	$	175	$	128
Other-than-temporary impairments		-		-		-		(24)
Change in intent(a)		-		-		-		-
Change in allowance for credit losses on fixed maturity securities		(77)		(4)		(81)		-
Change in allowance for credit losses on loans		(13)		2		(11)		(25)
Foreign exchange transactions		250		7		257		(203)
Variable annuity embedded derivatives, net of related hedges		(148)		-		(148)		311
All other derivatives and hedge accounting		(626)		(120)		(746)		466
Other		88		-		88		276
Net realized capital gains (losses) – excluding Fortitude Re funds
withheld embedded derivative		(498)		32		(466)		929
Net realized capital gains (losses) on Fortitude Re funds withheld embedded
derivative		-		(656)		(656)		-
Net realized capital gains (losses)	$	(498)	$	(624)	$	(1,122)	$	929

Nine Months Ended September 30,	2020						2019
	Excluding		Fortitude Re
	Fortitude Re			Funds
	Funds		Withheld
(in millions)	Withheld Assets		Assets(b)			Total
Sales of fixed maturity securities	$	269	$	269	$	538	$	184
Other-than-temporary impairments		-		-		-		(137)
Change in intent(a)		(3)		-		(3)		-
Change in allowance for credit losses on fixed maturity securities		(299)		(11)		(310)		-
Change in allowance for credit losses on loans		(73)		6		(67)		(35)
Foreign exchange transactions		40		10		50		(242)
Variable annuity embedded derivatives, net of related hedges		1,034		-		1,034		10
All other derivatives and hedge accounting		365		(146)		219		601
Other		97		-		97		506
Net realized capital gains – excluding Fortitude Re funds
withheld embedded derivative		1,430		128		1,558		887
Net realized capital gains (losses) on Fortitude Re funds withheld embedded
derivative		-		(1,493)		(1,493)		-
Net realized capital gains (losses)	$	1,430	$	(1,365)	$	65	$	887

(a) For the three- and nine-month periods ended September 30, 2019, the change in intent was included in Other-than-temporary impairments.

(b) Represents activity subsequent to the deconsolidation of Fortitude Re on June 2, 2020.

Schedule of increase (decrease) in unrealized appreciation (depreciation) of available for sale securities and other investments

The following table presents the increase (decrease) in unrealized appreciation (depreciation) of our available for sale securities and other investments:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)		2020		2019		2020		2019
Increase (decrease) in unrealized appreciation (depreciation) of investments:
Fixed maturity securities	$	2,373	$	4,377	$	5,875	$	16,265
Other investments		1		-		1		(68)
Total increase (decrease) in unrealized appreciation (depreciation) of investments	$	2,374	$	4,377	$	5,876	$	16,197

The following table summarizes the unrealized gains and losses recognized in Net Investment Income during the reporting period on equity securities still held at the reporting date:

Three Months Ended September 30,	2020						2019
				Other						Other
			Invested						Invested
(in millions)		Equities		Assets		Total		Equities		Assets		Total
Net gains and losses recognized during the period on equity securities	$	119	$	464	$	583	$	(51)	$	105	$	54
Less: Net gains and losses recognized during the period on equity
securities sold during the period		(3)		(5)		(8)		18		13		31
Unrealized gains and losses recognized during the reporting
period on equity securities still held at the reporting date	$	122	$	469	$	591	$	(69)	$	92	$	23
Nine Months Ended September 30,	2020						2019
				Other						Other
			Invested						Invested
(in millions)		Equities		Assets		Total		Equities		Assets		Total
Net gains and losses recognized during the period on equity securities	$	(16)	$	264	$	248	$	6	$	615	$	621
Less: Net gains and losses recognized during the period on equity
securities sold during the period		14		10		24		30		169		199
Unrealized gains and losses recognized during the reporting
period on equity securities still held at the reporting date	$	(30)	$	254	$	224	$	(24)	$	446	$	422

Rollforward of changes in allowance for credit losses on available for sale fixed maturity securities by major ivnvestment category

	Three Months Ended						Nine Months Ended
	September 30, 2020						September 30, 2020
				Non-						Non-
(in millions)	Structured		Structured			Total	Structured		Structured			Total
Balance, beginning of period*	$	37	$	161	$	198	$	7	$	-	$	7
Additions:
Securities for which allowance for credit losses were not
previously recorded		1		30		31		36		294		330
Purchases of available for sale debt securities accounted for
as purchased credit deteriorated assets		-		-		-		26		-		26
Accretion of available for sale debt securities accounted for
as purchased credit deteriorated assets		-		-		-		1		-		1
Reductions:
Securities sold during the period		(2)		(5)		(7)		(3)		(10)		(13)
Intent to sell security or more likely than not will be required to
sell the security before recovery of its amortized cost basis		-		-		-		-		-		-
Additional net increases or decreases to the allowance for
credit losses on securities that had an allowance recorded
in a previous period, for which there was no intent to sell
before recovery amortized cost basis		(10)		67		57		(41)		34		(7)
Write-offs charged against the allowance		-		(43)		(43)		-		(108)		(108)
Recoveries of amounts previously written off		-		-		-		-		-		-
Other		-		-		-		-		-		-
Balance, end of period	$	26	$	210	$	236	$	26	$	210	$	236

* The beginning balance incorporates the Day 1 gross up on PCD assets held as of January 1, 2020.

Rollforward of the cumulative credit losses in other-than-temporary impairments recognized in earnings

	Three Months Ended		Nine Months Ended
(in millions)	September 30, 2019		September 30, 2019
Balance, beginning of period	$	34	$	-
Increases due to:
Credit impairments on new securities subject to impairment losses		10		105
Additional credit impairments on previously impaired securities		8		14
Reductions due to:
Credit impaired securities fully disposed for which there was no
prior intent or requirement to sell		(3)		(62)
Accretion on securities previously impaired due to credit*		(7)		(15)
Balance, end of period	$	42	$	42

Represents both accretion recognized due to changes in cash flows expected to be collected over the remaining expected term of the credit impaired securities and the accretion due to the passage of time.

Reconciliation of purchase price to unpaid principal balance of securities purchased with credit deterioration

(in millions)	September 30, 2020
Unpaid principal balance	$	644
Allowance for expected credit losses at acquisition		(26)
Purchase (discount) premium		(149)
Purchase price	$	469

Schedule of purchased credit impaired (PCI) securities, at acquisition date

(in millions)	At Date of Acquisition
Contractually required payments (principal and interest)	$	35,139
Cash flows expected to be collected*		28,720
Recorded investment in acquired securities		19,382

*Represents undiscounted expected cash flows, including both principal and interest.

Schedule of purchased credit impaired (PCI) securities, at reporting date

(in millions)	December 31, 2019
Outstanding principal balance	$	10,476
Amortized cost		6,970
Fair value		8,664

Activity for accretable yield on purchased credit Impaired (PCI) securities

The following table presents activity for the accretable yield on PCI securities:

	Three Months Ended		Nine Months Ended
(in millions)	September 30, 2019		September 30, 2019
Balance, beginning of period	$	6,402		$	7,210
Newly purchased PCI securities		4			17
Accretion		(172)			(495)
Effect of changes in interest rate indices		(278)			(678)
Net reclassification from (to) non-accretable difference,
including effects of prepayments		(162)			(260)
Balance, end of period	$	5,794		$	5,794

Schedule of fair value of securities pledged to counterparties under secured financing transactions

(in millions)		September 30, 2020		December 31, 2019
Fixed maturity securities available for sale	$	3,664	$	3,030

Schedule of fair value of securities pledged under repurchase agreements by collateral type and by remaining contractual maturity

	Remaining Contractual Maturity of the Agreements
(in millions)	Overnight and Continuous			up to 30 days		31 - 90 days		91 - 364 days		365 days or greater		Total
September 30, 2020
Bonds available for sale:
Non-U.S. governments	$	107	$	-	$	-	$	-	$	-	$	107
Corporate debt		147		98		-		-		-		245
Total	$	254	$	98	$	-	$	-	$	-	$	352
December 31, 2019
Bonds available for sale:
Non-U.S. governments	$	2	$	71	$	-	$	-	$	-	$	73
Corporate debt		22		55		82		-		-		159
Total	$	24	$	126	$	82	$	-	$	-	$	232

	Remaining Contractual Maturity of the Agreements
(in millions)		Overnight and Continuous		up to 30 days		31 - 90 days		91 - 364 days		365 days or greater		Total
September 30, 2020
Bonds available for sale:
Obligations of states, municipalities and political
subdivisions	$	-	$	102	$	-	$	-	$	-	$	102
Corporate debt		-		1,428		1,379		-		-		2,807
RMBS		-		403		-		-		-		403
Total	$	-	$	1,933	$	1,379	$	-	$	-	$	3,312
December 31, 2019
Bonds available for sale:
Obligations of states, municipalities and political
subdivisions	$	-	$	-	$	386	$	-	$	-	$	386
Corporate debt		-		1,071		947		-		-		2,018
RMBS		-		-		-		394		-		394
Total	$	-	$	1,071	$	1,333	$	394	$	-	$	2,798

Schedule of fair value of securities pledged to the entity under reverse repurchase agreements

(in millions)		September 30, 2020		December 31, 2019
Securities collateral pledged to us	$	5,076	$	2,567
Amount sold or repledged by us		-		121