AIG 2005 Annual Report Download - page 47

AIG ■2005 Annual Report 45
Compound
Annual
(in millions) Growth Rate
Years Ended December 31, 2005 2004 2003 2002 2001 2001–2005
General Insurance operations:
Gross premiums written $ 52,725 $ 52,046 $ 46,938 $ 36,678 $ 28,341 16.8%
Net premiums written 41,872 40,623 35,031 26,718 19,793 20.6
Net premiums earned 40,809 38,537 31,306 23,595 18,661 21.6
Underwriting profit (loss)(a) (2,050) (247) 1,975 (1,082) (777) —
Net investment income 4,031 3,196 2,566 2,350 2,551 12.1
Operating income before realized capital gains (losses) 1,981 2,949 4,541 1,268 1,774 2.8
Realized capital gains (losses) 334 228 (39) (345) (189) —
General Insurance operating income 2,315 3,177 4,502 923 1,585 9.9
Life Insurance & Retirement Services operations:
GAAP premiums 29,400 28,088 23,496 20,694 19,600 10.7
Net investment income 18,134 15,269 12,942 11,243 10,451 14.8
Operating income before realized capital gains (losses) 9,062 7,880 6,567 5,553 5,033 15.8
Realized capital gains (losses) (218) 43 240 (372) (400) —
Life Insurance & Retirement Services operating income 8,844 7,923 6,807 5,181 4,633 17.5
Financial Services operating income 4,276 2,180 1,182 2,125 1,769 24.7
Asset Management operating income 2,253 2,125 1,316 1,125 1,019 21.9
Other realized capital gains (losses) 225 (227) (643) (936) (321) —
Other income (deductions) — net (2,700) (333) (1,257) (610) (751) —
Acquisition, restructuring and related charges —— — — (2,017) —
Income before income taxes, minority interest
and cumulative effect of accounting changes 15,213 14,845 11,907 7,808 5,917 26.6
Income taxes 4,258 4,407 3,556 1,919 1,594 —
Income before minority interest and cumulative
effect of accounting changes 10,955 10,438 8,351 5,889 4,323 26.2
Minority interest (478) (455) (252) (160) (101) —
Cumulative effect of accounting changes(b) —(144) 9 — (136) —
Net income(c) $ 10,477 $ 9,839 $ 8,108 $ 5,729 $ 4,086 26.5%
* Includes reconciliation of certain non-GAAP financial measures in accordance with SEC Regulation G.
(a) Underwriting profit (loss), a GAAP measure, is statutory underwriting profit (loss)adjusted primarily for changes in the deferral of policy acquisition
costs. This adjustment is necessary to present the financial statements in accordance with GAAP.
(b) Represents a net benefit (expense) for the cumulative effect of adoption of accounting pronouncements related to the adoption of the American Institute of
Certified Public Accountants Statement of Position 03-1, “Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration
Contracts and for Separate Accounts” (SOP 03-1) in 2004; FIN 46R, “Consolidation of Variable Interest Entities,” in 2003; FAS 133, “Accounting for
Derivative Instruments and Hedging Activities,” and EITF 99-20, “Recognition of Interest Income and Impairment on Purchased and Retained Beneficial
Interests in Securitized Financial Assets”, in 2001.
(c) 2005 net income includes catastrophe losses of $2.11 billion,a General Insurance fourth quarter reserve charge of $1.19 billion, and settlement charges of
$1.15 billion. 2004 net income includes catastrophe losses of $729 million, and $553 million for the change in estimate for asbestos and environmental
exposures. 2002 net income includes the General Insurance loss reserve charge of $1.34 billion. 2001 net income includes catastrophe losses of $581 million
and restructuring charges of $1.38 billion.
AMERICAN INTERNATIONAL GROUP, INC. AND SUBSIDIARIES
Five Year Summary
of Consolidated Operations*