AIG 2007 Annual Report Download - page 117

American International Group, Inc. and Subsidiaries
(American General Life and Accident Insurance Company (AGLA)
Domestic Retirement Services
(The Variable Annuity Life Insurance Company (VALIC) (AIG SunAmerica Life Assurance Company (AIG SunAmerica)
(AIG Annuity Insurance Company (AIG Annuity)
Life Insurance & Retirement Services Results
Life Insurance & Retirement Services results for 2007, 2006 and 2005 were as follows:
Premiums Net Net Realized
and Other Investment Capital Gains Total Operating
(in millions) Considerations Income (Losses) Revenues Income
2007
Foreign Life Insurance & Retirement Services $26,601 $11,849 $ (187) $38,263 $ 6,197
Domestic Life Insurance 5,836 3,995 (803) 9,028 642
Domestic Retirement Services 1,190 6,497 (1,408) 6,279 1,347
Total $33,627 $22,341 $(2,398) $53,570 $ 8,186
2006
Foreign Life Insurance & Retirement Services* $24,166 $ 9,758 $ 707 $34,631 $ 6,881
Domestic Life Insurance 5,543 3,778 (215) 9,106 917
Domestic Retirement Services 1,057 6,488 (404) 7,141 2,323
Total $30,766 $20,024 $ 88 $50,878 $10,121
2005
Foreign Life Insurance & Retirement Services $23,117 $ 8,718 $ 84 $31,919 $ 5,306
Domestic Life Insurance 5,447 3,733 35 9,215 1,495
Domestic Retirement Services 937 6,226 (277) 6,886 2,164
Total $29,501 $18,677 $ (158) $48,020 $ 8,965
Percentage Increase/(Decrease) 2007 vs. 2006:
Foreign Life Insurance & Retirement Services 10% 21% —% 10% (10)%
Domestic Life Insurance 5 6 — (1) (30)
Domestic Retirement Services 13 — — (12) (42)
Total 9% 12% —% 5% (19)%
Percentage Increase/(Decrease) 2006 vs. 2005:
Foreign Life Insurance & Retirement Services 5% 12% —% 8% 30%
Domestic Life Insurance 2 1 — (1) (39)
Domestic Retirement Services 13 4 — 4 7
Total 4% 7% —% 6% 13%
* Included an out of period UCITS adjustment which increased net investment income by $240 million and operating income by $169 million.
losses resulting from other-than-temporary impairment charges of
The following table presents the gross insurance in force
$2.8 billion and losses on derivative instruments not qualifying for
for Life Insurance & Retirement Services at December 31,
hedge accounting treatment of $381 million compared to an other-
2007, 2006 and 2005:
than-temporary impairment charge of $641 million and gains on
(in millions) 2007 2006 2005 derivative instruments of $268 million in 2006. In addition, net
Foreign
*
$1,327,251 $1,162,699 $1,027,682
investment income and certain products were negatively affected
Domestic 984,794 907,901 825,151
by the volatile markets. Life Insurance & Retirement Services
Total $2,312,045 $2,070,600 $1,852,833
continued its ongoing project to increase standardization of AIG’s
actuarial systems and processes throughout the world. Significant
* Includes increases (decreases) of $55.1 billion, $41.5 billion and
$(76.5) billion related to changes in foreign exchange rates at progress was made on these initiatives, with only a minimal effect
December 31, 2007, 2006 and 2005, respectively. on operating income in this segment. Premiums and other
considerations increased in 2007 compared to 2006 despite a
2007 and 2006 Comparison very competitive marketplace and a relatively flat yield curve for
most of the year.
The severe credit market disruption was a key driver of operating
results in 2007 principally due to significant net realized capital
AIG 2007 Form 10-K 63