AIG 2006 Annual Report Download - page 58

American International Group, Inc. and Subsidiaries
Analysis of Consolidated Losses and Loss Expense Reserve Development
The following table presents for each calendar year the losses and loss expense reserves and the development thereof
including those with respect to asbestos and environmental claims. See also Management’s Discussion and Analysis of
Financial Condition and Results of Operations.
(in millions) 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Net Reserves Held $20,496 $20,901 $25,418 $25,636 $25,684 $26,005 $29,347 $36,228 $47,254 $57,476 $62,630
Discount (in Reserves Held) 393 619 897 1,075 1,287 1,423 1,499 1,516 1,553 2,110 2,264
Net Reserves Held
(Undiscounted) 20,889 21,520 26,315 26,711 26,971 27,428 30,846 37,744 48,807 59,586 64,894
Paid (Cumulative) as of:
One year later 5,712 5,607 7,205 8,266 9,709 11,007 10,775 12,163 14,910 15,326
Two years later 9,244 9,754 12,382 14,640 17,149 18,091 18,589 21,773 24,377
Three years later 11,943 12,939 16,599 19,901 21,930 23,881 25,513 28,763
Four years later 14,152 15,484 20,263 23,074 26,090 28,717 30,757
Five years later 16,077 17,637 22,303 25,829 29,473 32,685
Six years later 17,551 18,806 24,114 28,165 32,421
Seven years later 18,415 19,919 25,770 30,336
Eight years later 19,200 21,089 27,309
Nine years later 20,105 22,177
Ten years later 20,972
(in millions) 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Net Reserves Held
(undiscounted) $20,889 $21,520 $26,315 $ 26,711 $ 26,971 $ 27,428 $ 30,846 $ 37,744 $48,807 $59,586 $64,894
Undiscounted Liability as
of:
One year later 20,795 21,563 25,897 26,358 26,979 31,112 32,913 40,931 53,486 59,533
Two years later 20,877 21,500 25,638 27,023 30,696 33,363 37,583 49,463 55,009
Three years later 20,994 21,264 26,169 29,994 32,732 37,964 46,179 51,497
Four years later 20,776 21,485 28,021 31,192 36,210 45,203 48,427
Five years later 20,917 22,405 28,607 33,910 41,699 47,078
Six years later 21,469 22,720 30,632 38,087 43,543
Seven years later 21,671 24,209 33,861 39,597
Eight years later 22,986 26,747 34,986
Nine years later 25,264 27,765
Ten years later 26,091
Net
Redundancy/(Deficiency) (5,202) (6,245) (8,671) (12,886) (16,572) (19,650) (17,581) (13,753) (6,202) 53
Remaining Reserves
(Undiscounted) 5,119 5,588 7,677 9,261 11,122 14,393 17,670 22,734 30,632 44,207
Remaining Discount 360 427 517 623 748 894 1,079 1,265 1,484 1,809
Remaining Reserves 4,759 5,161 7,160 8,638 10,374 13,499 16,591 21,469 29,148 42,398
The following table presents the gross liability (before discount), reinsurance recoverable and net liability recorded at
each year end and the reestimation of these amounts as of December 31, 2006.
(in millions) 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Gross Liability, End of
Year $32,605 $ 32,049 $ 36,973 $ 37,278 $ 39,222 $ 42,629 $ 48,173 $ 53,387 $63,431 $79,279 $82,263
Reinsurance Recoverable,
End of Year 11,716 10,529 10,658 10,567 12,251 15,201 17,327 15,643 14,624 19,693 17,369
Net Liability, End of Year 20,889 21,520 26,315 26,711 26,971 27,428 30,846 37,744 48,807 59,586 64,894
Reestimated Gross
Liability 41,685 43,993 53,004 58,320 63,768 67,554 68,657 69,007 70,895 78,946
Reestimated Reinsurance
Recoverable 15,594 16,227 18,018 18,723 20,224 20,476 20,229 17,511 15,886 19,413
Reestimated Net Liability 26,091 27,766 34,986 39,597 43,544 47,078 48,428 51,496 55,009 59,533
Cumulative Gross
Redundancy/(Deficiency) (9,080) (11,944) (16,031) (21,042) (24,546) (24,925) (20,484) (15,620) (7,464) 333
8 AIG 2006 Form 10-K