AIG 2005 Annual Report Download - page 45

AIG ■2005 Annual Report 43
Life Insurance Percent
(in millions) General & Retirement Financial Asset of
December 31, 2005 Insurance Services Services Management Other Total Total
Cash and Invested Assets:
Fixed maturities $ 72,398 $ 274,238 $ 1,307 $37,737 $ — $ 385,680 55.8%
Equity securities 6,562 16,318 10 639 59 23,588 3.4
Mortgage loans on real estate, policy and
collateral loans 19 18,406 1,792 4,594 98 24,909 3.6
Securities lending collateral 4,931 42,991 — 11,549 — 59,471 8.6
Other invested assets 6,272 7,777 2,751 10,459 8 27,267 3.9
Flight equipment — — 36,245 — — 36,245 5.2
Finance receivables — — 27,995 — — 27,995 4.0
Unrealized gain on swaps, options and
forward transactions — — 18,695 — — 18,695 2.7
Securities available for sale — — 37,511 — — 37,511 5.4
Securities purchased under agreements
to resell — 28 14,519 — — 14,547 2.1
Trading securities — — 6,499 — — 6,499 1.0
Investment income due and accrued 1,232 4,073 18 402 2 5,727 0.8
Real estate 603 2,729 24 1,710 32 5,098 0.7
Other, including cash and short-term investments 2,787 6,844 3,009 5,815 80 18,535 2.8
Total $ 94,804 $ 373,404 $ 150,375 $72,905 $279 $ 691,767 100.0%
December 31, 2004
Cash and Invested Assets:
Fixed maturities $ 62,670 $ 260,202 $ 1,344 $41,461 $ — $ 365,677 56.3%
Equity securities 5,631 11,845 9 177 44 17,706 2.7
Mortgage loans on real estate, policy and
collateral loans 22 16,858 1,511 5,093 — 23,484 3.6
Securities lending collateral 4,889 34,923 — 9,357 — 49,169 7.6
Other invested assets 5,604 7,072 2,230 8,316 337 23,559 3.6
Flight equipment — — 32,130 — — 32,130 4.9
Finance receivables — — 23,574 — — 23,574 3.6
Unrealized gain on swaps, options and
forward transactions — — 22,670 — — 22,670 3.5
Securities available for sale — — 31,225 — — 31,225 4.8
Securities purchased under agreements
to resell — — 26,272 — — 26,272 4.0
Trading securities — — 2,746 — — 2,746 0.4
Investment income due and accrued 997 4,035 63 461 — 5,556 0.9
Real estate 592 3,007 26 326 28 3,979 0.6
Other, including cash and short-term investments 2,113 5,515 4,766 9,679 5 22,078 3.5
Total $ 82,518 $ 343,457 $ 148,566 $74,870 $414 $ 649,825 100.0%
were very well correlated with risks, as
lower rated bonds (especially emerging
markets) generally outperformed higher
quality securities. While U.S. public equity
performance for the year was modest, pri-
vate equity returns remained good as the
strength of the high yield bond market and
leveraged loan market, as well as an uptick
in mergers and acquisitions activity, served
to maintain private market valuations.
curve flattened substantially as increases
in short-term rates were not echoed in the
longer maturity part of the curve.
Overseas, the general picture was much
the same, as demand, liquidity, economic
growth and low inflation all served to
underpin both stock and bond valuations.
From a macro viewpoint, 2005, like
2004, was a year that generally rewarded
risk. While there were exceptions, returns
particular strength in Latin America and
Japan. U.S. markets generally lagged in
relation to other global equity markets.
Long-term global interest rates, while dis-
playing a fair degree of intra-year volatility,
ended 2005 close to where they began, as
subdued global inflation and central bank
policy in most of the developed world
markets dampened pressure on interest
rates. In the U.S. market, the interest rate
Domestic General,
Life Insurance &
Retirement
Services and
Asset Management
Bond Portfolio
Ratings
AAA 35%
AA 15%
A 24%
BBB 20%
Lower 5%
Non-rated 1%
Composition
of Cash and
Invested Assets
at December 31,
2005
Taxable
fixed maturities 48.6%
Tax-exempt
fixed maturities 7.2%
Equity securities 3.4%
Flight equipment 5.2%
Other financial
services assets 15.4%
Mortgage loans,
policy and
collateral loans,
and real estate 4.3%
Cash and other
short-term
investments 15.9%