AIG 2007 Annual Report Download - page 204

American International Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements Continued
2. Segment Information
Continued
(c) Represents the sum of General Insurance net premiums earned, Life Insurance & Retirement Services premiums and other considerations, net
investment income, Financial Services interest, lease and finance charges, Asset Management investment income from spread-based products and
management, advisory and incentive fees, and realized capital gains (losses).
(d) In 2007, 2006 and 2005, includes other-than-temporary impairment charges of $4.7 billion, $944 million and $598 million, respectively.
(e) Both revenues and operating income (loss) include an unrealized market valuation loss of $11.5 billion on AIGFP’s super senior credit default swap
portfolio and an other-than-temporar y impairment charge of $643 million on AIGFP’s available for sale investment securities reported in other income.
(f) Includes settlement costs of $1.64 billion as described in Note 12(a) Litigation and Investigations herein.
The following table summarizes AIG’s General Insurance operations by major internal reporting unit for the years ended
December 31, 2007, 2006 and 2005:
General Insurance
Domestic Foreign Total Consolidation Total
Brokerage Personal Mortgage General Reportable and General
(in millions) Group Transatlantic Lines Guaranty Insurance Segment Eliminations Insurance
2007
Total revenues $ 27,653 $ 4,382 $4,924 $1,041 $13,715 $ 51,715 $ (7) $ 51,708
Losses & loss expenses incurred 15,948 2,638 3,660 1,493 6,243 29,982 — 29,982
Underwriting expenses 4,400 1,083 1,197 185 4,335 11,200 — 11,200
Operating income (loss)(a) 7,305 661 67 (637) 3,137 10,533 (7) 10,526
Depreciation expense 97 2 70 6 125 300 — 300
Capital expenditures 93 4 81 21 155 354 — 354
Year-end identifiable assets 112,675 15,484 5,930 4,550 48,728 187,367 (5,659) 181,708
2006
Total revenues(b) $ 27,419 $ 4,050 $4,871 $ 877 $11,999 $ 49,216 $ (10) $ 49,206
Losses & loss expenses incurred 16,779 2,463 3,306 349 5,155 28,052 — 28,052
Underwriting expenses 4,795 998 1,133 200 3,616 10,742 — 10,742
Operating income(a)(b) 5,845 589 432 328 3,228 10,422 (10) 10,412
Depreciation expense 100 2 52 5 115 274 — 274
Capital expenditures 125 2 94 11 143 375 — 375
Year-end identifiable assets 104,866 14,268 5,391 3,604 43,879 172,008 (5,004) 167,004
2005
Total revenues $ 25,171 $ 3,766 $4,848 $ 655 $10,719 $ 45,159 $ 15 $ 45,174
Losses & loss expenses incurred 21,466 2,877 3,566 139 5,043 33,091 — 33,091
Underwriting expenses 4,525 928 1,087 153 3,075 9,768 — 9,768
Operating income (loss)(a)(c) (820)(d) (39) 195 363 2,601 2,300 15 2,315
Depreciation expense 114 2 48 4 105 273 — 273
Capital expenditures 119 2 94 6 196 417 — 417
Year-end identifiable assets 95,829 12,365 5,245 3,165 39,044 155,648 (4,981) 150,667
(a) Catastrophe-related losses in 2007 and 2005 by repor ting unit were as follows. There were no significant catastrophe-related losses in 2006.
2007 2005
Insurance Net
Related Reinstatement Insurance Net Reinstatement
(in millions) Losses Premium Cost Related Losses Premium Cost
Reporting Unit:
DBG $113 $ (13) $1,811 $136
Transatlantic 11 (1) 463 45
Personal Lines 61 14 112 2
Mortgage Guaranty ——10 —
Foreign General Insurance 90 1 229 80
Total $275 $ 1 $2,625 $263
(b) Includes the effect of out of period adjustments related to the accounting for cer tain interests in unit investment trusts (UCITS). For DBG, the effect
was an increase of $66 million in both revenues and operating income and for Foreign General Insurance, the effect was an increase of $424 million in
both revenues and operating income.
(c) Includes the fourth quarter 2005 increase in net reserves of approximately $1.8 billion resulting from the annual review of General Insurance loss and
loss adjustment reserves.
(d) Includes $291 million of expenses related to changes in estimates for uncollectible reinsurance and other premium balances, and $100 million of
accrued expenses in connection with certain workers compensation insurance policies written between 1985 and 1996.
150 AIG 2007 Form 10-K