AIG 2011 Annual Report Download - page 29

The net redundancy (deficiency) depicted in the middle of the table presents the aggregate change in estimates
over the period of years subsequent to the balance sheet date reflected at the top of the respective column
heading. For example, in the first table, the net loss reserve deficiency of $28.0 billion for 2001 is the difference
between the original undiscounted reserve of $27.4 billion at December 31, 2001 and the $55.4 billion of
re-estimated reserves at December 31, 2011. The net redundancy (deficiency) amounts are cumulative; in other
words, the amount shown for the 2010 balance sheet date includes the amount shown for the 2009 balance sheet
date. Conditions and trends that have affected development of the liability in the past may not necessarily occur in
the future. Accordingly, it generally is not appropriate to extrapolate future development based on this table.
The bottom portion of the table presents the cumulative amounts paid during successive years related to the
undiscounted loss reserves. For example, AIG has paid a total of $45.6 billion of the $55.4 billion in re-estimated
reserves for December 31, 2001 at December 31, 2011, resulting in remaining undiscounted reserves of $9.8 billion
for 2001. Also included in this section are the remaining undiscounted and discounted net loss reserves for each
year.
The following table presents for each calendar year the loss reserves and the development thereof including those
with respect to asbestos and environmental claims.(a)
(in millions) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Net Reserves Held(b) $26,005 $29,347 $36,228 $47,253 $57,476 $62,630 $69,288 $72,455 $67,899 $71,507 $70,825
Discount (in Reserves Held) 1,423 1,499 1,516 1,553 2,110 2,264 2,429 2,574 2,655 3,217 3,183
Net Reserves Held
(Undiscounted) 27,428 30,846 37,744 48,806 59,586 64,894 71,717 75,029 70,554 74,724 $74,008
Net undiscounted Reserve
re-estimated as of:
One year later 31,112 32,913 40,931 53,486 59,533 64,238 71,836 77,800 74,736 74,919
Two years later 33,363 37,583 49,463 55,009 60,126 64,764 74,318 82,043 74,529
Three years later 37,964 46,179 51,497 56,047 61,242 67,303 78,275 81,719
Four years later 45,203 48,427 52,964 57,618 63,872 70,733 78,245
Five years later 47,078 49,855 54,870 60,231 67,102 70,876
Six years later 48,273 51,560 57,300 63,348 67,518
Seven years later 49,803 53,917 60,283 63,928
Eight years later 52,034 56,827 60,879
Nine years later 54,847 57,410
Ten years later 55,437
Net Redundancy/
(Deficiency) (28,009) (26,564) (23,135) (15,122) (7,932) (5,982) (6,528) (6,690) (3,975) (195)
Paid (Cumulative) as of:
One year later 11,007 10,775 12,163 14,910 15,326 14,862 16,531 24,267 15,919 17,661
Two years later 18,091 18,589 21,773 24,377 25,152 24,388 31,791 36,164 28,428
Three years later 23,881 25,513 28,763 31,296 32,295 34,647 40,401 46,856
Four years later 28,717 30,757 33,825 36,804 40,380 40,447 48,520
Five years later 32,685 34,627 38,087 43,162 44,473 46,474
Six years later 35,656 37,778 42,924 46,330 49,552
Seven years later 38,116 41,493 45,215 50,462
Eight years later 41,055 43,312 48,866
Nine years later 42,591 46,622
Ten years later 45,625
Remaining Reserves
(Undiscounted) 9,812 10,788 12,013 13,466 17,966 24,402 29,725 34,863 46,101 57,258
Remaining Discount 806 950 1,073 1,182 1,321 1,507 1,772 2,086 2,464 2,841
Remaining Reserves $ 9,006 $ 9,838 $10,940 $12,284 $16,645 $22,895 $27,953 $32,777 $43,637 $54,417
AIG 2011 Form 10-K 15