AIG 2006 Annual Report Download - page 43

Annual Report 2006 AIG 414141
Compound
Annual
(in millions) Growth Rate
Years Ended December 31, 2006 2005 2004 2003 2002 2002–2006
General Insurance operations:
Gross premiums written $56,280 $ 52,725 $52,046 $ 46,938 $36,678 11.3%
Net premiums written 44,866 41,872 40,623 35,031 26,718 13.8
Net premiums earned 43,451 40,809 38,537 31,306 23,595 16.5
Underwriting profit (loss)(a) 4,657 (2,050) (247) 1,975 (1,082) —
Net investment income 5,696 4,031 3,196 2,566 2,350 24.8
Operating income before realized capital gains (losses) 10,353 1,981 2,949 4,541 1,268 69.0
Realized capital gains (losses) 59 334 228 (39) (345) —
General Insurance operating income 10,412 2,315 3,177 4,502 923 83.3
Life Insurance & Retirement Services operations:
GAAP premiums 30,636 29,400 28,088 23,496 20,694 10.3
Net investment income 19,439 18,134 15,269 12,942 11,243 14.7
Operating income before realized capital gains (losses) 9,944 9,062 7,880 6,567 5,553 15.7
Realized capital gains (losses) 88 (158) 45 362 (295) —
Life Insurance & Retirement Services operating income 10,032 8,904 7,925 6,929 5,258 17.5
Financial Services operating income, excluding FAS 133
gains (losses) 2,346 2,262 2,329 2,146 1,885 5.6
FAS 133 gains (losses) (1,822) 2,014 (149) (964) 240 —
Financial Services operating income 524 4,276 2,180 1,182 2,125 (29.5)
Asset Management operating income, excluding FAS 133
gains (losses), FIN 46(R) and EITF 04-5 1,748 1,992 1,617 1,086 987 15.4
FAS 133 gains (losses), FIN 46(R) and EITF 04-5 598 261 508 230 138 —
Asset Management operating income 2,346 2,253 2,125 1,316 1,125 20.2
Other realized capital gains (losses) (41) 165 (229) (765) (1,013) —
Other income (deductions)— net (1,586) (2,700) (333) (1,257) (610) —
Income beforeincome taxes, minority interest
and cumulative effect of accounting changes 21,687 15,213 14,845 11,907 7,808 29.1
Income taxes 6,537 4,258 4,407 3,556 1,919 —
Income beforeminority interest and cumulative
effect of accounting changes 15,150 10,955 10,438 8,351 5,889 26.6
Minority interest (1,136) (478) (455) (252) (160) —
Cumulative effect of accounting changes(b) 34 — (144) 9 ——
Net income(c) $14,048 $ 10,477 $ 9,839 $ 8,108 $ 5,729 25.1%
* Includes reconciliation of certain non-GAAP financial measures in accordance with SEC Regulation G.
(a) Underwriting profit (loss) is statutory underwriting profit (loss) adjusted primarily for changes in the deferral of policy acquisition costs. This adjustment is
necessary to present the financial statements in accordance with GAAP.
(b) Represents a net benefit (expense) for the cumulative effect of adoption of accounting pronouncements related to FAS 123R “Share-Based Payment”
in 2006; the adoption of the American Institute of Certified Public Accountants Statement of Position 03-1, “Accounting and Reporting by Insurance
Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts” (SOP 03-1) in 2004; FIN 46(R), “Consolidation of Variable
Interest Entities,” in 2003.
(c) 2005 net income included current year catastrophe-related losses of $2.11 billion, a General Insurance fourth quarter reserve charge of $1.19 billion, and
settlement charges of $1.15 billion. 2004 net income included current year catastrophe-related losses of $729 million, and $553 million for the change in
estimate for asbestos and environmental reserves. 2002 net income included the General Insurance loss reserve charge of $1.34 billion.
Five Year Summary of Consolidated Operations*
American International Group, Inc. and Subsidiaries