AIG 2006 Annual Report Download - page 54

American International Group, Inc. and Subsidiaries
The following table presents the general development of the business of AIG on a consolidated basis, the contributions
made to AIG’s consolidated revenues and operating income and the assets held, in the periods indicated, by its
General Insurance, Life Insurance & Retirement Services, Financial Services and Asset Management operations and
other realized capital gains (losses). For additional information, see Item 6. Selected Financial Data, Management’s
Discussion and Analysis of Financial Condition and Results of Operations and Notes 1 and 2 of Notes to Consolidated
Financial Statements.
Years Ended December 31,
(in millions) 2006 2005 2004 2003 2002
General Insurance operations:
Gross premiums written $ 56,280 $ 52,725 $ 52,046 $ 46,938 $ 36,678
Net premiums written 44,866 41,872 40,623 35,031 26,718
Net premiums earned 43,451 40,809 38,537 31,306 23,595
Net investment income(a) 5,696 4,031 3,196 2,566 2,350
Realized capital gains (losses) 59 334 228 (39) (345)
Operating income(a)(b)(c)(d) 10,412 2,315 3,177 4,502 923
Identifiable assets 167,004 150,667 131,658 117,511 105,891
Statutory measures(e):
Statutory underwriting profit (loss)(b)(c)(d) 4,408 (2,165) (564) 1,559 (1,843)
Loss ratio 64.6 81.1 78.8 73.1 83.1
Expense ratio 24.5 23.6 21.5 19.6 21.8
Combined ratio(d) 89.1 104.7 100.3 92.7 104.9
Life Insurance & Retirement Services operations:
GAAP premiums 30,636 29,400 28,088 23,496 20,694
Net investment income(a) 19,439 18,134 15,269 12,942 11,243
Realized capital gains (losses)(f) 88 (158) 45 362 (295)
Operating income(a) 10,032 8,904 7,925 6,929 5,258
Identifiable assets 534,977 480,622 447,841 372,126 289,914
Insurance in-force at end of year(g) 2,070,600 1,852,833 1,858,094 1,583,031 1,298,592
Financial Services operations:
Interest, lease and finance charges(h) 8,010 10,525 7,495 6,242 6,822
Operating income(h) 524 4,276 2,180 1,182 2,125
Identifiable assets 206,845 166,488 165,995 141,667 128,104
Asset Management operations:
Net investment income from spread-based
products and advisory and management fees 5,814 5,325 4,714 3,651 3,467
Operating income 2,346 2,253 2,125 1,316 1,125
Identifiable assets 97,913 81,080 80,075 64,047 53,732
Other operations:
Realized capital gains (losses) (41) 165 (229) (765) (1,013)
All other(i) (1,586) (2,700) (333) (1,257) (610)
Revenues(j)(k) 113,194 108,905 97,666 79,421 66,171
Total operating income(a)(j)(l) 21,687 15,213 14,845 11,907 7,808
Total assets 979,414 853,051 801,007 675,602 561,131
(a) Includes the effect of out of period adjustments related to the accounting for certain interests in unit investment trusts and other mutual funds (unit
investment trusts). For 2006, the effect was an increase of $490 million in both revenues and operating income for General Insurance and an increase
of $240 million and $169 million in revenues and operating income, respectively, for Life Insurance & Retirement Ser vices.
(b) Includes current year catastrophe-related losses of $2.89 billion and $1.05 billion in 2005 and 2004, respectively. There were no significant
catastrophe-related losses in 2006.
(c) Includes additional losses incurred and net reinstatement premiums related to prior year catastrophes of $199 million and $277 million in 2006 and
2005, respectively.
(d) Operating income was reduced by fourth quarter charges of $1.8 billion, $850 million and $2.1 billion for 2005, 2004 and 2002, respectively,
resulting from the annual review of General Insurance loss and loss adjustment reserves. In 2006, 2005 and 2004, changes in estimates for
asbestos and environmental reser ves were $198 million, $873 million and $850 million, respectively.
(e) Calculated on the basis under which the U.S.-domiciled insurance companies are required to report such measurements to regulatory authorities.
4 AIG 2006 Form 10-K