AIG 2006 Annual Report Download - page 61

American International Group, Inc. and Subsidiaries
insurance investment operations, which are summarized in the
following table.
The following table summarizes the investment results of the insurance operations.
Annual Average Cash and Invested Assets
Cash
(including Return on Return on
Years Ended December 31, short-term Invested Average Cash Average
(in millions) investments) Assets(a)(b) Total and Assets(c) Assets(d)
General Insurance:
2006 $3,201 $102,231 $105,432 5.4% 5.6%
2005 2,450 86,211 88,661 4.5 4.7
2004 2,012 73,338 75,350 4.2 4.4
2003 1,818 59,855 61,673 4.2 4.3
2002 1,537 47,477 49,014 4.8 5.0
Life Insurance & Retirement Services:
2006 $7,205 $384,724 $391,929 5.0% 5.1%
2005 6,180 352,250 358,430 5.1 5.1
2004 5,089 307,659 312,748 4.9 5.0
2003 4,680 247,608 252,288 5.1 5.2
2002 3,919 199,750 203,669 5.5 5.6
(a) Including investment income due and accrued and real estate.
(b) Includes collateral assets invested under the securities lending program.
(c) Net investment income divided by the annual average sum of cash and invested assets.
(d) Net investment income divided by the annual average invested assets.
AIG’s worldwide insurance investment policy places primary Capital Markets
emphasis on investments in government and other high quality,
The Capital Markets operations of AIG are conducted primarily
fixed income securities in all of its portfolios and, to a lesser
through AIGFP, which engages as principal in standard and
extent, investments in high yield bonds, common stocks, real
customized interest rate, currency, equity, commodity, energy and
estate, hedge funds and partnerships, in order to enhance returns
credit products with top-tier corporations, financial institutions,
on policyholders’ funds and generate net investment income. The
governments, agencies, institutional investors, and high-net-worth
ability to implement this policy is somewhat limited in certain
individuals throughout the world. AIGFP also invests in a diversi-
territories as there may be a lack of adequate long-term
fied portfolio of securities and principal investments and engages
investments or investment restrictions may be imposed by the
in borrowing activities that include issuing standard and structured
local regulatory authorities.
notes and other securities and entering into guaranteed invest-
ment agreements (GIAs). See also Note 2 of Notes to Consoli-
Financial Services Operations dated Financial Statements.
AIG’s Financial Services subsidiaries engage in diversified activi-
ties including aircraft and equipment leasing, capital markets, Consumer Finance
consumer finance and insurance premium finance. Together, the
Consumer Finance operations include AGF as well as AIGCFG. AGF
Aircraft Leasing, Capital Markets and Consumer Finance opera-
provides a wide variety of consumer finance products, including
tions generate the majority of the revenues produced by the
real estate and non-real estate loans, retail sales finance and
Financial Services operations. Imperial A.I. Credit Companies also
credit-related insurance to customers in the United States, Puerto
contribute to Financial Services income. This operation engages
Rico, and the U.S. Virgin Islands. AIGCFG, through its subsidiaries,
principally in insurance premium financing for both AIG’s custom-
is engaged in developing a multi-product consumer finance
ers and those of other insurers.
business with an emphasis on emerging markets.
Aircraft Leasing Asset Management Operations
AIG’s Aircraft Leasing operations represent the operations of ILFC,
AIG’s Asset Management operations comprise a wide variety of
which generates its revenues primarily from leasing new and used
investment-related services and investment products, including
commercial jet aircraft to foreign and domestic airlines. Revenues
institutional and retail asset management, broker-dealer services
also result from the remarketing of commercial jets for its own
and institutional spread-based investment business. Such ser-
account, and remarketing and fleet management services for
vices and products are offered to individuals and institutions both
airlines and for financial institutions. See also Note 2 of Notes to
domestically and overseas. Asset Management’s spread-based
Consolidated Financial Statements.
Form 10-K 2006 AIG 11