AIG 2006 Annual Report Download - page 59

American International Group, Inc. and Subsidiaries
Analysis of Consolidated Losses and Loss Expense Reserve Development Excluding Asbestos and
Environmental Losses and Loss Expense Reserve Development
The following table presents for each calendar year the losses and loss expense reserves and the development thereof
excluding 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 $19,753 $20,113 $24,554 $24,745 $24,829 $25,286 $28,650 $35,559 $45,742 $55,227 $60,451
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) 20,146 20,732 25,451 25,820 26,116 26,709 30,149 37,075 47,295 57,336 62,715
Paid (Cumulative) as of:
One year later 5,603 5,467 7,084 8,195 9,515 10,861 10,632 11,999 14,718 15,047
Two years later 8,996 9,500 12,190 14,376 16,808 17,801 18,283 21,419 23,906
Three years later 11,582 12,618 16,214 19,490 21,447 23,430 25,021 28,129
Four years later 13,724 14,972 19,732 22,521 25,445 28,080 29,987
Five years later 15,460 16,983 21,630 25,116 28,643 31,771
Six years later 16,792 18,014 23,282 27,266 31,315
Seven years later 17,519 18,972 24,753 29,162
Eight years later 18,149 19,960 26,017
Nine years later 18,873 20,779
Ten years later 19,471
(in millions) 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Net Reserves Held
(undiscounted) $20,146 $20,732 $25,451 $ 25,820 $ 26,116 $ 26,709 $ 30,149 $ 37,075 $47,295 $57,336 $62,715
Undiscounted Liability as
of:
One year later 19,904 20,576 24,890 25,437 26,071 30,274 32,129 39,261 51,048 57,077
Two years later 19,788 20,385 24,602 26,053 29,670 32,438 35,803 46,865 52,364
Three years later 19,777 20,120 25,084 28,902 31,619 36,043 43,467 48,691
Four years later 19,530 20,301 26,813 30,014 34,102 42,348 45,510
Five years later 19,633 21,104 27,314 31,738 38,655 44,018
Six years later 20,070 21,336 28,345 34,978 40,294
Seven years later 20,188 21,836 30,636 36,283
Eight years later 20,515 23,441 31,556
Nine years later 21,858 24,261
Ten years later 22,486
Net
Redundancy/(Deficiency) (2,340) (3,529) (6,105) (10,463) (14,178) (17,309) (15,361) (11,616) (5,069) 259
Remaining Reserves
(undiscounted) 3,015 3,482 5,539 7,121 8,979 12,247 15,523 20,562 28,458 42,030
Remaining Discount 360 427 517 623 748 894 1,079 1,265 1,484 1,809
Remaining Reserves 2,655 3,055 5,022 6,498 8,231 11,353 14,444 19,297 26,974 40,221
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 $30,302 $29,740 $34,474 $ 34,666 $ 36,777 $ 40,400 $ 46,036 $ 51,363 $59,897 $73,912 $77,211
Reinsurance
Recoverable,
End of Year 10,156 9,008 9,023 8,846 10,661 13,691 15,887 14,288 12,602 16,576 14,495
Net Liability, End of Year 20,146 20,732 25,451 25,820 26,116 26,709 30,149 37,075 47,295 57,336 62,715
Reestimated Gross
Liability 32,186 34,940 44,281 50,004 55,974 60,289 61,735 62,488 64,772 73,241
Reestimated
Reinsurance
Recoverable 9,699 10,679 12,725 13,722 15,680 16,270 16,225 13,797 12,409 16,164
Reestimated Net Liability 22,487 24,261 31,556 36,282 40,294 44,019 45,510 48,691 52,363 57,077
Cumulative Gross
Redundancy/(Deficiency) (1,884) (5,200) (9,807) (15,338) (19,197) (19,889) (15,699) (11,125) (4,875) 671
Form 10-K 2006 AIG 9