AIG 2015 Annual Report Download - page 61
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ITEM 7 / EXECUTIVE OVERVIEW
61
Executive Summary
Financial Performance
Commercial Insurance pre-tax operating income decreased in 2015, compared to 2014 primarily due to a higher underwriting
loss in Property Casualty due to an increase in net adverse prior year loss reserve development. In addition net investment
income in Property Casualty and Institutional Markets decreased in 2015 compared to 2014.
Consumer Insurance pre-tax operating income decreased in 2015, compared to 2014, reflecting lower net investment income, less
favorable adjustments related to the update of actuarial assumptions, less favorable mortality experience in Life, and an underwriting
loss in Personal Insurance in 2015. These decreases were partially offset by higher policy and advisory fees in 2015 compared to
2014, driven by growth in separate account assets under management in Retirement.
Our investment portfolio performance declined in 2015, compared to 2014 due to lower income on alternative investments,
primarily related to hedge fund performance, lower income on investments for which the fair value option was elected, and
lower reinvestment yields.
Net realized capital gains increased slightly in 2015, compared to 2014, due to higher net realized capital gains from sales of
equity securities and fair value gains on embedded derivatives related to variable annuity guarantee features, net of hedges,
compared to fair value losses in the prior year, mostly offset by an increase in other-than-temporary impairment charges and
impairments on investments in life settlements.