AIG 2005 Annual Report Download - page 101

AMERICAN INTERNATIONAL GROUP, INC. AND SUBSIDIARIES
regulations restrict the types of assets in which an insurance transactions as end users. See also the discussion under
company may invest. When permitted by regulatory authorities ‘‘Derivatives’’ herein.
and when deemed necessary to protect insurance assets, In certain jurisdictions, significant regulatory and/or foreign
including invested assets, from adverse movements in foreign governmental barriers exist which may not permit the immedi-
currency exchange rates, interest rates and equity prices, AIG ate free flow of funds between insurance subsidiaries or from
and its insurance subsidiaries may enter into derivative the insurance subsidiaries to AIG parent.
The following tables summarize the composition of AIG’s insurance and asset management invested assets by segment, at
December 31, 2005 and 2004:
Life Percent
Insurance & Distribution
General Retirement Asset Percent
(dollars in millions) Insurance Services Management Total of Total Domestic Foreign
2005
Fixed maturities:
Available for sale, at market value $ 50,870 $ 273,165 $ 34,174 $ 358,209 66.2% 59.2% 40.8%
Held to maturity, at amortized cost 21,528 — — 21,528 4.0 100.0 —
Trading securities, at market value — 1,073 3,563 4,636 0.9 3.3 96.7
Equity securities:
Common stocks, at market value 4,930 15,558 639 21,127 3.9 18.6 81.4
Preferred stocks, at market value 1,632 760 — 2,392 0.4 88.8 11.2
Mortgage loans on real estate, policy and collateral loans 19 18,406 4,594 23,019 4.3 65.5 34.5
Short-term investments, including time deposits, and cash 2,787 6,844 5,815 15,446 2.8 26.1 73.9
Real estate 603 2,729 1,710 5,042 0.9 45.2 54.8
Investment income due and accrued 1,232 4,073 402 5,707 1.1 56.9 43.1
Securities lending collateral 4,931 42,991 11,549 59,471 11.0 87.3 12.7
Other invested assets 6,272 7,805 10,459 24,536 4.5 85.7 14.3
Total $ 94,804 $ 373,404 $ 72,905 $ 541,113 100.0% 62.3% 37.7%
2004
Fixed maturities:
Available for sale, at market value $44,376 $259,602 $39,077 $343,055 68.5% 61.2% 38.8%
Held to maturity, at amortized cost 18,294 – – 18,294 3.7 100.0 –
Trading securities, at market value – 600 2,384 2,984 0.6 1.2 98.8
Equity securities:
Common stocks, at market value 4,165 11,280 177 15,622 3.1 21.9 78.1
Preferred stocks, at market value 1,466 565 – 2,031 0.4 91.9 8.1
Mortgage loans on real estate, policy and collateral loans 22 16,858 5,093 21,973 4.4 65.6 34.4
Short-term investments, including time deposits, and cash 2,113 5,515 9,679 17,307 3.4 37.1 62.9
Real estate 592 3,007 326 3,925 0.8 22.8 77.2
Investment income due and accrued 997 4,035 461 5,493 1.1 57.3 42.7
Securities lending collateral 4,889 34,923 9,357 49,169 9.8 86.7 13.3
Other invested assets 5,604 7,072 8,316 20,992 4.2 86.7 13.3
Total $82,518 $343,457 $74,870 $500,845 100.0% 63.8% 36.2%
on the basis of AIG’s internal analysis, were equivalent from a
Credit Quality credit standpoint to securities so rated. Approximately five per-
At December 31, 2005, approximately 61 percent of the fixed cent were below investment grade or not rated at that date. A
maturities investments were domestic securities. Approximately large portion of the foreign fixed income portfolio are
35 percent of such domestic securities were rated AAA by one sovereign fixed maturity securities supporting the policy liabili-
or more of the principal rating agencies. Approximately ties in the country of issuance.
six percent were below investment grade or not rated. Any fixed income security may be subject to downgrade for
A significant portion of the foreign fixed income portfolio is a variety of reasons subsequent to any balance sheet date.
rated by Moody’s, S&P or similar foreign services. Similar
credit quality rating services are not available in all overseas Valuation of Invested Assets
locations. AIG reviews the credit quality of the foreign
AIG has the ability to hold any fixed maturity security to its
portfolio nonrated fixed income investments, including mort-
stated maturity, including those fixed maturity securities
gages. At December 31, 2005, approximately 19 percent of the
classified as available for sale. Therefore, the decision to sell
foreign fixed income investments were either rated AAA or,
AIG m Form 10-K 49