SEGMENT INFORMATION

12 Months Ended

Dec. 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.

Prior to the fourth quarter of 2020, we reported our results as follows:

 General Insurance included our North America and International operating segments;

 Life and Retirement included our Individual Retirement, Group Retirement, Life Insurance and Institutional Markets operating segments;

 Other operations consisted primarily of businesses and items not allocated to our operating segments, amortization of value of distribution network acquired (VODA) related to the Validus and Glatfelter acquisitions and Interest expense attributable to AIG; and long-term debt as well as debt associated with consolidated investment entities; and

 Legacy Portfolio included exited or discontinued product lines, policy forms or distribution channels.

In the fourth quarter of 2020, our chief operating decision makers modified their view of our businesses and how they allocate resources and assess performance. Prior periods’ presentation has been revised to conform to our new structure. The new operating structure no longer includes a Legacy segment. We now report the results of our businesses as follows:

General Insurance

General Insurance business is presented as two operating segments:

 North America – consists of insurance businesses in the United States, Canada, Bermuda, and our global reinsurance business, AIG Re. The results of Validus Reinsurance, Ltd., Western World Insurance Group, Inc. and Glatfelter were included as of their respective acquisition dates.

 International – consists of regional insurance businesses in Japan, the United Kingdom, Europe, Middle East and Africa (EMEA region), Asia Pacific, Latin America and Caribbean, and China. International also includes the results of Talbot Holdings, Ltd (Talbot), as of its acquisition date, as well as AIG’s global specialty business.

North America and International operating segments consist of the following products:

– Commercial Lines – consists of Liability, Financial Lines, Property and Global Specialty.

– Personal Insurance – consists of Personal Lines and Accident & 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, financial planning and advisory services, and plan administrative and compliance 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. Certain run-off life insurance portfolios previously reported in our Legacy segment have been realigned into the Life Insurance operating segment.

 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). The run-off high net worth (private placement variable universal life and private placement variable annuity) and structured settlement portfolios previously reported in our Legacy segment have been realigned into the Institutional Markets operating segment.

On October 26, 2020, AIG announced its intention to separate its Life and Retirement business from AIG.

Other Operations

Other Operations primarily consists of income from assets held by AIG Parent and other corporate subsidiaries, deferred tax assets related to tax attributes, corporate expenses and intercompany eliminations, our institutional asset management business and results of our consolidated investment entities, General Insurance portfolios in run-off previously reported within Legacy as well as the historical results of our legacy insurance lines ceded to Fortitude Re.

The accounting policies of the segments are the same as those described in Note 2. 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. Legal entities are attributed to each segment based upon the predominance of activity in that legal entity. 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:

												Adjusted
				Net	Underwriting							Pre-tax
	Adjusted			Investment		Income		Interest	Amortization			Income
(in millions)		Revenues		Income		(Loss)		Expense		of DAC		(Loss)
2020
General Insurance
North America	$	10,302			$	(1,301)			$	1,365
International		13,360				277				2,173
Net investment income		2,925	$	2,925		-				-
Total General Insurance	$	26,587	$	2,925	$	(1,024)	$	-	$	3,538	$	1,901
Life and Retirement
Individual Retirement		5,714		4,131		-		72		590		1,938
Group Retirement		2,970		2,236		-		42		7		1,013
Life Insurance		4,877		1,526		-		30		30		142
Institutional Markets		3,714		988		-		11		5		438
Total Life and Retirement		17,275		8,881		-		155		632		3,531
Other Operations		1,385		1,087		-		1,306		50		(1,963)
AIG consolidation and eliminations		(562)		(572)		-		(70)		-		(466)
Total	$	44,685	$	12,321	$	(1,024)	$	1,391	$	4,220	$	3,003
Reconciling items to pre-tax income (loss):
Changes in fair value of securities used to hedge guaranteed
living benefits		56		56		-		-		-		41
Changes in benefit reserves and DAC, VOBA and SIA related to
net realized capital gains (losses)		-		-		-		-		(9)		12
Changes in the fair value of equity securities		200		200		-		-		-		200
Other income (expense) - net		49		99		-		99		-		-
Loss on extinguishment of debt		-		-		-		-		-		(12)
Net investment income on Fortitude Re funds withheld assets(a)		1,053		1,053		-		-		-		1,053
Net realized capital gains (losses) on Fortitude Re funds withheld assets(a)		463		-		-		-		-		463
Net realized capital gains (losses) on Fortitude Re funds withheld
embedded derivative(a)		(2,645)		-		-		-		-		(2,645)
Net realized capital gains (losses)(b)		(148)		(98)		-		(33)		-		(97)
Loss from divested businesses		-		-		-		-		-		(8,525)
Non-operating litigation reserves and settlements		23		-		-		-		-		21
Unfavorable prior year development and related amortization
changes ceded under retroactive reinsurance agreements		-		-		-		-		-		221
Net loss reserve discount charge		-		-		-		-		-		(516)
Integration and transaction costs associated with acquiring or divesting
businesses		-		-		-		-		-		(12)
Restructuring and other costs		-		-		-		-		-		(435)
Non-recurring costs related to regulatory or accounting changes		-		-		-		-		-		(65)
Revenues and pre-tax income (loss)	$	43,736	$	13,631	$	(1,024)	$	1,457	$	4,211	$	(7,293)
2019
General Insurance
North America	$	12,136			$	(365)			$	1,923
International		14,302				454				2,559
Net investment income		3,444	$	3,444		-				-
Total General Insurance	$	29,882	$	3,444	$	89	$	-	$	4,482	$	3,533
Life and Retirement
Individual Retirement		5,643		4,122		-		77		449		1,977
Group Retirement		2,947		2,240		-		44		81		937
Life Insurance		4,825		1,483		-		30		137		331
Institutional Markets		2,941		888		-		11		5		308
Total Life and Retirement		16,356		8,733		-		162		672		3,553
Other Operations		3,060		2,598		-		1,260		64		(1,312)
AIG consolidation and eliminations		(388)		(385)		-		(55)		-		(304)
Total	$	48,910	$	14,390	$	89	$	1,367	$	5,218	$	5,470

Reconciling items to pre-tax income:
Changes in fair value of securities used to hedge guaranteed
living benefits		228		228		-		-		-		194
Changes in benefit reserves and DAC, VOBA and SIA related to
net realized capital gains (losses)		-		-		-		-		(54)		56
Changes in the fair value of equity securities		158		158		-		-		-		158
Other income (expense) - net		46		85		-		87		-		-
Loss on extinguishment of debt		-		-		-		-		-		(32)
Net realized capital gains (losses)(b)		395		(242)		-		(37)		-		456
Loss from divested businesses		-		-		-		-		-		(75)
Non-operating litigation reserves and settlements		9		-		-		-		-		2
Favorable prior year development and related amortization
changes ceded under retroactive reinsurance agreements		-		-		-		-		-		267
Net loss reserve discount charge		-		-		-		-		-		(955)
Integration and transaction costs associated with acquiring or divesting
businesses		-		-		-		-		-		(24)
Restructuring and other costs		-		-		-		-		-		(218)
Non-recurring costs related to regulatory or accounting changes		-		-		-		-		-		(12)
Revenues and pre-tax income	$	49,746	$	14,619	$	89	$	1,417	$	5,164	$	5,287
2018
General Insurance
North America	$	11,815			$	(2,430)			$	1,744
International		15,690				(707)				2,852
Net investment income		2,843	$	2,843		-				-
Total General Insurance	$	30,348	$	2,843		(3,137)	$	-		4,596	$	(294)
Life and Retirement
Individual Retirement		5,332		3,821		-		82		630		1,678
Group Retirement		2,894		2,175		-		42		95		936
Life Insurance		4,522		1,450		-		29		(30)		472
Institutional Markets		1,932		792		-		13		5		257
Total Life and Retirement		14,680		8,238		-		166		700		3,343
Other Operations		2,866		2,406		-		1,091		94		(1,489)
AIG consolidation and eliminations		103		114		-		83		-		39
Total	$	47,997	$	13,601	$	(3,137)	$	1,340	$	5,390	$	1,599
Reconciling items to pre-tax income:
Changes in fair value of securities used to hedge guaranteed
living benefits		(128)		(128)		-		-		-		(154)
Changes in benefit reserves and DAC, VOBA and SIA related to
net realized capital gains (losses)		-		-		-		-		(4)		6
Changes in the fair value of equity securities		(184)		(184)		-		-		-		(184)
Other income (expense) - net		(53)		-		-		-		-		-
Loss on extinguishment of debt		-		-		-		-		-		(7)
Net realized capital losses(b)		(254)		(203)		-		(31)		-		(199)
Income from divested businesses		-		-		-		-		-		38
Non-operating litigation reserves and settlements		11		-		-		-		-		(19)
Unfavorable prior year development and related amortization
changes ceded under retroactive reinsurance agreements		-		-		-		-		-		(675)
Net loss reserve discount benefit		-		-		-		-		-		371
Integration and transaction costs associated with acquiring or divesting
businesses		-		-		-		-		-		(124)
Restructuring and other costs		-		-		-		-		-		(395)
Non-recurring costs related to regulatory or accounting changes		-		-		-		-		-		-
Revenues and pre-tax income	$	47,389	$	13,086	$	(3,137)	$	1,309	$	5,386	$	257

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

(b) 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 and net realized gains and losses on Fortitude Re funds withheld assets held by AIG in support of Fortitude Re’s reinsurance obligations to AIG (Fortitude Re funds withheld assets).

The following table presents AIG’s year-end identifiable assets and capital expenditures by segment:

	Year-End Identifiable Assets				Capital Expenditures
(in millions)		2020		2019		2020		2019
General Insurance	$	156,590	$	156,358	$	156	$	105
Life and Retirement		396,275		371,742		107		104
Other Operations		33,616		(3,036)		90		95
Total Assets	$	586,481	$	525,064	$	353	$	304

The following table presents AIG’s consolidated total revenues and real estate and other fixed assets, net of accumulated depreciation, by major geographic area:

							Real Estate and Other Fixed Assets,
	Total Revenues*						Net of Accumulated Depreciation
(in millions)		2020		2019		2018		2020		2019		2018
North America	$	30,204	$	36,930	$	31,376	$	1,230	$	1,333	$	1,479
International		13,532		12,816		16,013		610		620		693
Consolidated	$	43,736	$	49,746	$	47,389	$	1,840	$	1,953	$	2,172

*Revenues are generally reported according to the geographic location of the segment. International revenues consists of revenues from our General Insurance International operating segment.