AIG 2005 Annual Report Download - page 61

AMERICAN INTERNATIONAL GROUP, INC. AND SUBSIDIARIES
Analysis of Consolidated Losses and Loss Expense Reserve Development Excluding Asbestos and
Environmental Losses and Loss Expense Reserve Development
The following table presents for each calendar year the losses and loss expense reserves and the development thereof excluding
those with respect to asbestos and environmental claims. See also Management’s Discussion and Analysis of Financial Condition
and Results of Operations.
(in millions) 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Net Reserves Held $19,247 $19,753 $20,113 $24,554 $24,745 $24,829 $25,286 $28,650 $35,559 $45,742 $55,227
Discount (in Reserves Held) 217 393 619 897 1,075 1,287 1,423 1,499 1,516 1,553 2,110
Net Reserves Held
(Undiscounted) 19,464 20,146 20,732 25,451 25,820 26,116 26,709 30,149 37,075 47,295 57,336
Paid (Cumulative) as of:
One year later 5,309 5,603 5,467 7,084 8,195 9,515 10,861 10,632 11,999 14,718
Two years later 8,771 8,996 9,500 12,190 14,376 16,808 17,801 18,283 21,419
Three years later 11,013 11,582 12,618 16,214 19,490 21,447 23,430 25,021
Four years later 12,645 13,724 14,972 19,732 22,521 25,445 28,080
Five years later 14,139 15,460 16,983 21,630 25,116 28,643
Six years later 15,404 16,792 18,014 23,282 27,266
Seven years later 16,355 17,519 18,972 24,753
Eight years later 16,798 18,149 19,960
Nine years later 17,230 18,873
Ten years later 17,826
(in millions) 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Net Reserves Held
(undiscounted) $19,464 $20,146 $20,732 $25,451 $25,820 $26,116 $26,709 $30,149 $37,075 $47,295 $57,336
Undiscounted Liability as of:
One year later 18,937 19,904 20,576 24,890 25,437 26,071 30,274 32,129 39,261 51,048
Two years later 18,883 19,788 20,385 24,602 26,053 29,670 32,438 35,803 46,865
Three years later 18,680 19,777 20,120 25,084 28,902 31,619 36,043 43,467
Four years later 18,830 19,530 20,301 26,813 30,014 34,102 42,348
Five years later 18,651 19,633 21,104 27,314 31,738 38,655
Six years later 18,574 20,070 21,336 28,345 34,978
Seven years later 18,844 20,188 21,836 30,636
Eight years later 18,984 20,515 23,441
Nine years later 19,173 21,858
Ten years later 20,379
Net Redundancy/(Deficiency) (915) (1,712) (2,709) (5,185) (9,158) (12,539) (15,639) (13,318) (9,790) (3,753)
Remaining Reserves
(undiscounted) 2,553 2,985 3,482 5,883 7,712 10,012 14,269 18,446 25,447 36,330
Remaining Discount 252 299 358 459 568 690 846 999 1,212 1,568
Remaining Reserves 2,301 2,686 3,124 5,424 7,144 9,322 13,423 17,447 24,235 34,762
The table below shows the gross liability (before discount), reinsurance recoverable and net liability recorded at each year-end
and the reestimation of these amounts as of December 31, 2005.
(in millions) 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Gross Liability, End of Year $30,356 $30,302 $29,740 $34,474 $34,666 $36,777 $40,400 $46,036 $51,363 $59,897 $73,912
Reinsurance Recoverable,
End of Year 10,892 10,156 9,008 9,023 8,846 10,661 13,691 15,887 14,288 12,602 16,576
Net Liability, End of Year 19,464 20,146 20,732 25,451 25,820 26,116 26,709 30,149 37,075 47,295 57,336
Reestimated Gross Liability 30,452 31,660 34,226 43,461 48,886 54,534 58,776 59,813 60,788 63,544
Reestimated Reinsurance
Recoverable 10,073 9,802 10,785 12,825 13,908 15,879 16,428 16,346 13,923 12,496
Reestimated Net Liability 20,379 21,858 23,441 30,636 34,978 38,655 42,348 43,467 46,865 51,048
Cumulative Gross
Redundancy/(Deficiency) (96) (1,358) (4,486) (8,987) (14,220) (17,757) (18,376) (13,777) (9,425) (3,647)
AIG m Form 10-K 9