AIG 2011 Annual Report Download - page 119

The following table provides a summary of reserve activity, including estimates for applicable IBNR, relating to
asbestos and environmental claims separately and combined:
2011 2010 2009
As of or for the Year Ended December 31,
(in millions) Gross Net Gross Net Gross Net
Asbestos:
Liability for unpaid claims and claims adjustment
expense at beginning of year $ 5,526 $ 2,223 $ 3,236 $ 1,151 $ 3,443 $ 1,200
Dispositions --(17) (8) (84) (21)
Losses and loss expenses incurred 192* 76* 2,940 1,317 482 151
Losses and loss expenses paid (492) (236) (633) (237) (605) (179)
Other changes - 177 ----
Liability for unpaid claims and claims adjustment
expense at end of year 5,226 2,240 5,526 2,223 3,236 1,151
Reduction of net loss reserves due to NICO
transaction - (1,703) ----
Liability for unpaid claims and claims adjustment
expense at end of year, reflecting NICO transaction $ 5,226 $ 537 $ 5,526 $ 2,223 $ 3,236 $ 1,151
Environmental:
Liability for unpaid claims and claims adjustment
expense at beginning of year $ 240 $ 127 $ 338 $ 159 $ 417 $ 194
Dispositions --(27) (10) (37) (7)
Losses and loss expenses incurred 33 27 23 24 2 4
Losses and loss expenses paid (69) (35) (94) (46) (44) (32)
Liability for unpaid claims and claims adjustment
expense at end of year $ 204 $ 119 $ 240 $ 127 $ 338 $ 159
Combined:
Liability for unpaid claims and claims adjustment
expense at beginning of year $ 5,766 $ 2,350 $ 3,574 $ 1,310 $ 3,860 $ 1,394
Dispositions --(44) (18) (121) (28)
Losses and loss expenses incurred 225 103 2,963 1,341 484 155
Losses and loss expenses paid (561) (271) (727) (283) (649) (211)
Other changes - 177 ----
Liability for unpaid claims and claims adjustment
expense at end of year 5,430 2,359 5,766 2,350 3,574 1,310
Reduction of net loss reserves due to NICO
transaction - (1,703) ----
Liability for unpaid claims and claims adjustment
expense at end of year, reflecting NICO transaction $ 5,430 $ 656 $ 5,766 $ 2,350 $ 3,574 $ 1,310
* Primarily represents accretion of discount.
The following table presents the estimate of the gross and net IBNR included in the Liability for unpaid claims
and claims adjustment expense, relating to asbestos and environmental claims separately and combined:
2011 2010 2009
At December 31,
(in millions) Gross Net Gross Net Gross Net
Asbestos $ 3,685 $ 1,653 $ 4,520 $ 1,964 $ 2,072 $ 863
Environmental 57 28 93 38 161 71
Combined $ 3,742 $ 1,681 $ 4,613 $ 2,002 $ 2,233 $ 934
AIG 2011 Form 10-K 105