AIG 2007 Annual Report Download - page 62

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 — Operating Review — General Insurance Operations — Reserve for
Losses and Loss Expenses.
(in millions) 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Net Reserves Held $ 20,901 $ 25,418 $ 25,636 $ 25,684 $ 26,005 $ 29,347 $ 36,228 $ 47,254 $ 57,476 $62,630 $69,288
Discount (in Reserves Held) 619 897 1,075 1,287 1,423 1,499 1,516 1,553 2,110 2,264 2,429
Net Reserves Held (Undiscounted) 21,520 26,315 26,711 26,971 27,428 30,846 37,744 48,807 59,586 64,894 71,717
Paid (Cumulative) as of:
One year later 5,607 7,205 8,266 9,709 11,007 10,775 12,163 14,910 15,326 14,862
Two years later 9,754 12,382 14,640 17,149 18,091 18,589 21,773 24,377 25,152
Three years later 12,939 16,599 19,901 21,930 23,881 25,513 28,763 31,296
Four years later 15,484 20,263 23,074 26,090 28,717 30,757 33,825
Five years later 17,637 22,303 25,829 29,473 32,685 34,627
Six years later 18,806 24,114 28,165 32,421 35,656
Seven years later 19,919 25,770 30,336 34,660
Eight years later 21,089 27,309 31,956
Nine years later 22,177 28,626
Ten years later 23,096
(in millions) 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Net Reserves Held (undiscounted) $ 21,520 $ 26,315 $ 26,711 $ 26,971 $ 27,428 $ 30,846 $ 37,744 $ 48,807 $ 59,586 $64,894 $71,717
Undiscounted Liability as of:
One year later 21,563 25,897 26,358 26,979 31,112 32,913 40,931 53,486 59,533 64,238
Two years later 21,500 25,638 27,023 30,696 33,363 37,583 49,463 55,009 60,126
Three years later 21,264 26,169 29,994 32,732 37,964 46,179 51,497 56,047
Four years later 21,485 28,021 31,192 36,210 45,203 48,427 52,964
Five years later 22,405 28,607 33,910 41,699 47,078 49,855
Six years later 22,720 30,632 38,087 43,543 48,273
Seven years later 24,209 33,861 39,597 44,475
Eight years later 26,747 34,986 40,217
Nine years later 27,765 35,556
Ten years later 28,104
Net Redundancy/(Deficiency) (6,584) (9,241) (13,506) (17,504) (20,845) (19,009) (15,220) (7,240) (540) 656
Remaining Reserves (Undiscounted) 5,008 6,930 8,261 9,815 12,617 15,228 19,139 24,751 34,974 49,376
Remaining Discount 418 499 591 705 851 1,005 1,155 1,319 1,563 1,937
Remaining Reserves 4,590 6,431 7,670 9,110 11,766 14,223 17,984 23,432 33,411 47,439
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, 2007:
(in millions) 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Gross Liability, End of Year $ 32,049 $ 36,973 $ 37,278 $ 39,222 $ 42,629 $ 48,173 $ 53,387 $ 63,431 $ 79,279 $82,263 $87,929
Reinsurance Recoverable, End of Year 10,529 10,658 10,567 12,251 15,201 17,327 15,643 14,624 19,693 17,369 16,212
Net Liability, End of Year 21,520 26,315 26,711 26,971 27,428 30,846 37,744 48,807 59,586 64,894 71,717
Reestimated Gross Liability 44,844 54,284 60,212 66,308 70,680 72,234 72,944 74,434 80,941 81,695
Reestimated Reinsurance Recoverable 16,740 18,729 19,995 21,833 22,407 22,379 19,980 18,386 20,816 17,457
Reestimated Net Liability 28,104 35,555 40,217 44,475 48,273 49,855 52,964 56,048 60,125 64,238
Cumulative Gross
Redundancy/(Deficiency) (12,795) (17,311) (22,934) (27,086) (28,051) (24,061) (19,557) (11,003) (1,662) 568
8AIG 2007 Form 10-K