AIG 2008 Annual Report Download - page 176

An aging of the pre-tax unrealized losses of fixed maturity and equity securities, distributed as a
percentage of cost relative to unrealized loss (the extent by which the fair value is less than amortized cost or
cost), including the number of respective items was as follows:
Aging(a) Cost(c)
Unrealized
Loss Items Cost(c)
Unrealized
Loss Items Cost(c)
Unrealized
Loss(g) Items Cost(c)
Unrealized
Loss(d) Items
Less than or equal
to 20% of Cost(b)
Greater than 20%
to 50% of Cost(b)
Greater than 50%
of Cost(b) Total
At December 31, 2008
(Dollars in millions)
Investment grade bonds
0-6 months . ....... $ 65,631 $ 3,679 9,213 $10,800 $ 3,076 1,803 $ 772 $ 198 33 $ 77,203 $ 6,953 11,049
7-12 months. ....... 44,863 3,119 6,295 12,152 3,269 1,291 667 368 62 57,682 6,756 7,648
⬎12 months ....... 32,604 2,976 4,707 20,330 5,920 2,534 1,550 889 93 54,484 9,785 7,334
Total . . ............ $143,098 $ 9,774 20,215 $43,282 $12,265 5,628 $2,989 $1,455 188 $189,369 $23,494 26,031
Below investment grade
bonds
0-6 months . ....... $ 4,785 $ 189 1,925 $ 668 $ 182 131 $ — $ — — $ 5,453 $ 371 2,056
7-12 months. ....... 1,556 88 501 602 164 78 — — — 2,158 252 579
⬎12 months ....... 1,339 66 272 489 142 130 — — — 1,828 208 402
Total . . ............ $ 7,680 $ 343 2,698 $ 1,759 $ 488 339 $ — $ — — $ 9,439 $ 831 3,037
Total bonds
0-6 months . ....... $ 70,416 $ 3,868 11,138 $11,468 $ 3,258 1,934 $ 772 $ 198 33 $ 82,656 $ 7,324 13,105
7-12 months. ....... 46,419 3,207 6,796 12,754 3,433 1,369 667 368 62 59,840 7,008 8,227
⬎12 months ....... 33,943 3,042 4,979 20,819 6,062 2,664 1,550 889 93 56,312 9,993 7,736
Total(e) ............ $150,778 $10,117 22,913 $45,041 $12,753(f) 5,967 $2,989 $1,455 188 $198,808 $24,325 29,068
Equity securities
0-6 months . ....... $ 1,835 $ 165 38,389 $ 1,072 $ 349 960 $ 4 $ 2 89 $ 2,911 $ 516 39,438
7-12 months. ....... 386 43 244 446 156 300 6 4 47 838 203 591
⬎12 months ....... — — — — — — — — — — — —
Total . . ............ $ 2,221 $ 208 38,633 $ 1,518 $ 505 1,260 $ 10 $ 6 136 $ 3,749 $ 719 40,029
(a) Represents the number of consecutive months that fair value has been less than cost by any amount.
(b) Represents the percentage by which fair value is less than cost at the balance sheet date.
(c) For bonds, represents amortized cost.
(d) The effect on net income of unrealized losses after taxes will be mitigated upon realization because certain
realized losses will be charged to participating policyholder accounts, or realization will result in current
decreases in the amortization of certain DAC.
(e) Includes securities lending invested collateral.
(f) Of this $12.8 billion, $4.5 billion relates to RMBS, CMBS, CDOs and ABS with unrealized losses greater than
25 percent; and $791 million relates to RMBS, CMBS, CDOs and ABS with unrealized losses between
20 percent and 25 percent. The balance represents all other classes of fixed maturity securities.
(g) Total bonds unrealized loss of $1.5 billion represents CMBS not deemed other than temporarily impaired based
on credit analysis.
170 AIG 2008 Form 10-K
American International Group, Inc., and Subsidiaries