AIG 2011 Annual Report Download - page 294

American International Group, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
underwriting and timing risk, and a reasonable possibility of a significant loss for the assuming entity. Similar risk
transfer criteria are used to determine whether directly written insurance contracts should be accounted for as
insurance or as a deposit.
The following table presents short-duration insurance premiums written and earned:
Years Ended Chartis Other Businesses*Eliminations Total
December 31,
(in millions) 2011 2010 2009 2011 2010*2009*2011 2010 2009 2011 2010 2009
Premiums written:
Direct $ 41,710 $ 38,965 $ 38,461 $ 898 $ 927 $ 2,195 $-$-$ -$ 42,608 $ 39,892 $ 40,656
Assumed 3,031 2,442 2,061 -(2) 2,628 2- (657) 3,033 2,440 4,032
Ceded (9,901) (9,795) (9,869) (97) (169) (631) (2) - 657 (10,000) (9,964) (9,843)
Total $ 34,840 $ 31,612 $ 30,653 $ 801 $ 756 $ 4,192 $-$-$ -$ 35,641 $ 32,368 $ 34,845
Premiums earned:
Direct $ 42,878 $ 39,082 $ 40,859 $ 835 $ 1,065 $ 2,288 $-$-$ -$ 43,713 $ 40,147 $ 43,147
Assumed 3,294 2,488 2,192 55 80 2,740 (46) - (657) 3,303 2,568 4,275
Ceded (10,483) (9,049) (10,790) (98) (170) (689) 46 - 657 (10,535) (9,219) (10,822)
Total $ 35,689 $ 32,521 $ 32,261 $ 792 $ 975 $ 4,339 $-$-$ -$ 36,481 $ 33,496 $ 36,600
* Includes results of Mortgage Guaranty and in 2009 only, also includes results of Transatlantic Holdings, Inc. (Transatlantic), which was
deconsolidated during 2009, and 21st Century Insurance Group (including Agency Auto Division and excluding Chartis Private Client Group)
(21st Century) and HSB Group, Inc. (HSB), which were sold during 2009.
For the years ended December 31, 2011, 2010 and 2009, reinsurance recoveries, which reduced loss and loss
expenses incurred, amounted to $6.1 billion, $8.0 billion and $8.9 billion, respectively.
Long-duration reinsurance is effected principally under yearly renewable term treaties. The premiums with
respect to these treaties are earned over the contract period in proportion to the protection provided. Amounts
recoverable from reinsurers on long-duration contracts are estimated in a manner consistent with the assumptions
used for the underlying policy benefits and are presented as a component of Reinsurance assets.
The following table presents premiums for AIG’s long-duration insurance and retirement services operations:
SunAmerica Divested Businesses*Eliminations Total
Years Ended December 31,
(in millions) 2011 2010 2009 2011 2010 2009 2011 2010 2009 2011 2010 2009
Gross premiums $ 3,104 $ 3,141 $ 3,438 $17 $ 9,670 $ 9,572 $-$-$(4)$ 3,121 $ 12,811 $ 13,006
Ceded premiums (591) (621) (767) (6) (435) (342) --4(597) (1,056) (1,105)
Total $ 2,513 $ 2,520 $ 2,671 $11 $ 9,235 $ 9,230 $-$-$ -$ 2,524 $ 11,755 $ 11,901
* Primarily represents results of AIA, which was deconsolidated during 2010.
Long-duration reinsurance recoveries, which reduced death and other benefits, approximated $611 million,
$810 million and $638 million, respectively, for the years ended December 31, 2011, 2010 and 2009.
The following table presents long-duration insurance in force ceded to other insurance companies:
At December 31,
(in millions) 2011 2010*2009*
Long-duration insurance in force ceded $ 140,156 $ 148,605 $ 339,183
* Excludes amounts related to held-for-sale entities.
280 AIG 2011 Form 10-K
LONG-DURATION REINSURANCE