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REINSURANCE (Tables)
 12 Months Ended
Dec. 31, 2020
Effects of Reinsurance [Line Items]  
Summary of the composition of pool of assets

December 31, 2020

 

Carrying

 

Fair

 

 

(in millions)

 

Value

 

Value

 

Corresponding Accounting Policy

Fixed maturity securities - available for sale(a)

$

36,047

$

36,047

 

Fair value through other comprehensive income

Fixed maturity securities - fair value option

 

200

 

200

 

Fair value through net investment income

Commercial mortgage loans

 

3,679

 

4,010

 

Amortized cost

Real estate investments

 

358

 

585

 

Amortized cost

Private equity funds / hedge funds

 

1,168

 

1,168

 

Fair value through net investment income

Policy loans

 

413

 

413

 

Amortized cost

Short-term Investments

 

34

 

34

 

Fair value through net investment income

Funds withheld investment assets

 

41,899

 

42,457

 

 

Derivative assets, net(b)

 

(1)

 

(1)

 

Fair value through realized capital gains (losses)

Other(c)

 

604

 

604

 

Amortized cost

Total

$

42,502

$

43,060

 

 

(a) The change in the net unrealized gains (losses) on available for sale securities related to the Fortitude Re funds withheld assets was $1.0 billion ($812 million after-tax) during the post deconsolidation period (June 2, 2020-December 31, 2020).

 

(b) The derivative assets have been presented net of collateral. The derivative assets supporting the Fortitude Re funds withheld arrangements had a fair market value of $357 million as of December 31, 2020. These derivative assets are fully collateralized.

(c) Primarily comprised of Cash and Accrued investment income.
Summary of the impact of modco and funds withheld

 

 

 

Twelve Months Ended

(in millions)

 

 

December 31, 2020

Net underwriting income

 

 

 

$

-

Net investment income - Fortitude Re funds withheld assets

 

 

 

 

1,053

Net realized capital losses on Fortitude Re funds withheld assets:

 

 

 

 

 

Net realized capital gains - Fortitude Re funds withheld assets

 

 

 

 

463

Net realized capital losses - Fortitude Re embedded derivatives

 

 

 

 

(2,645)

Net realized capital losses on Fortitude Re funds withheld assets

 

 

 

 

(2,182)

Loss from continuing operations before income tax benefit

 

 

 

 

(1,129)

Income tax benefit(a)

 

 

 

 

(237)

Net loss

 

 

 

 

(892)

Change in unrealized appreciation of all other investments(a)

 

 

 

 

812

Comprehensive loss

 

 

 

$

(80)

(a)The income tax expense (benefit) and the tax impact in accumulated other comprehensive income was computed using AIG’s U.S. statutory tax rate of 21 percent.
Supplemental information for gross loss and benefit reserves net of ceded reinsurance

At December 31,

 

2020

 

 

2019

 

 

As

 

Net of

 

 

As

 

Net of

(in millions)

 

Reported

Reinsurance

 

 

Reported

Reinsurance

Liability for unpaid losses and loss adjustment expenses

$

(77,720)

$

(43,154)

 

$

(78,328)

$

(47,259)

Future policy benefits for life and accident and health insurance contracts

 

(51,097)

 

(25,121)

 

 

(50,512)

 

(49,670)

Policyholder contract deposits

 

(160,251)

 

(155,072)

 

 

(151,869)

 

(150,944)

Reserve for unearned premiums

 

(18,660)

 

(14,606)

 

 

(18,269)

 

(15,067)

Other policyholder funds

 

(3,548)

 

(2,933)

 

 

(3,428)

 

(3,420)

Reinsurance assets(a)

 

70,390

 

 

 

 

36,046

 

 

(a)Reinsurance assets excludes (i) allowance for credit losses and disputes of $326 million (of which $135 million pertains to CECL reserve for Liability for unpaid losses and loss adjustment expenses) and $151 million for the years ended December 31, 2020 and 2019, respectively, (ii) paid loss recoveries of $3,157 million and $1,970 million for the years ended December 31, 2020 and 2019, respectively, and (iii) policy and contract claims recoverable of $320 million and $112 million for the years ended December 31, 2020 and 2019, respectively.
Schedule of long-duration insurance in force ceded to other insurance companies

At December 31,

 

 

 

 

 

 

(in millions)

 

2020

 

2019

 

2018

Long-duration insurance in force ceded

$

292,517

$

264,732

$

228,846
Schedule of rollfoward of allowance for credit losses

Year Ended December 31, 2020

 

General

 

Life and

 

 

(in millions)

Insurance

Retirement

 

Total

Balance, beginning of period

$

111

$

40

$

151

Initial allowance upon CECL adoption

 

202

 

22

 

224

Current period provision for expected credit losses and disputes

 

(12)

 

21

 

9

Write-offs charged against the allowance for credit losses and disputes

 

(9)

 

-

 

(9)

Balance, end of year

$

292

$

83

$

375
Short-Duration Reinsurance  
Effects of Reinsurance [Line Items]  
Schedule of insurance premiums written and earned

 

Years Ended December 31,

(in millions)

 

2020

 

2019

 

2018

Premiums written:

 

 

 

 

 

 

Direct

$

28,521

$

29,338

$

30,368

Assumed

 

5,947

 

5,808

 

4,186

Ceded

 

(11,012)

 

(9,692)

 

(7,757)

Net

$

23,456

$

25,454

$

26,797

Premiums earned:

 

 

 

 

 

 

Direct

$

28,596

$

30,017

$

31,450

Assumed

 

5,984

 

6,395

 

4,638

Ceded

 

(10,435)

 

(9,526)

 

(8,164)

Net

$

24,145

$

26,886

$

27,924
Long-Duration Reinsurance  
Effects of Reinsurance [Line Items]  
Schedule of insurance premiums written and earned

Years Ended December 31,

 

 

 

 

 

 

(in millions)

 

2020

 

2019

 

2018

Premiums

 

 

 

 

 

 

Direct

$

4,381

$

4,363

$

3,489

Assumed

 

1,058

 

228

 

56

Ceded

 

(1,061)

 

(916)

 

(855)

Net

$

4,378

$

3,675

$

2,690

Policy Fees

 

 

 

 

 

 

Direct

$

2,957

$

3,016

$

2,792

Assumed

 

-

 

-

 

-

Ceded

 

(40)

 

(1)

 

(1)

Net

$

2,917

$

3,015

$

2,791