AIG 2009 Annual Report Download - page 107

American International Group, Inc., and Subsidiaries
The following table provides a summary of reserve activity, including estimates for applicable IBNR, relating to
asbestos and environmental claims separately and combined:
2009 2008 2007
As of or for the Years Ended December 31,
(in millions) Gross Net Gross Net Gross Net
Asbestos:
Liability for unpaid claims and claims adjustment
expense at beginning of year $ 3,443 $ 1,200 $ 3,864 $ 1,454 $ 4,523 $ 1,889
Dispositions(a) (84) (21) ----
Losses and loss expenses incurred(b) 482 151 273 53 96 5
Losses and loss expenses paid(b) (605) (179) (694) (307) (755) (440)
Liability for unpaid claims and claims adjustment
expense at end of year $ 3,236 $ 1,151 $ 3,443 $ 1,200 $ 3,864 $ 1,454
Environmental:
Liability for unpaid claims and claims adjustment
expense at beginning of year $ 417 $ 194 $ 515 $ 237 $ 629 $ 290
Dispositions(a) (37) (7) ----
Losses and loss expenses incurred(b) 24(44) (2) 10 13
Losses and loss expenses paid(b) (44) (32) (54) (41) (124) (66)
Liability for unpaid claims and claims adjustment
expense at end of year $ 338 $ 159 $ 417 $ 194 $ 515 $ 237
Combined:
Liability for unpaid claims and claims adjustment
expense at beginning of year $ 3,860 $ 1,394 $ 4,379 $ 1,691 $ 5,152 $ 2,179
Dispositions(a) (121) (28) ----
Losses and loss expenses incurred(b) 484 155 229 51 106 18
Losses and loss expenses paid(b) (649) (211) (748) (348) (879) (506)
Liability for unpaid claims and claims adjustment
expense at end of year $ 3,574 $ 1,310 $ 3,860 $ 1,394 $ 4,379 $ 1,691
(a) Includes reserves for Transatlantic, which was deconsolidated during the second quarter of 2009 and 21st Century which was sold in the third quarter
of 2009.
(b) All amounts pertain to policies underwritten in prior years, primarily to policies issued in 1984 and prior years.
The current environmental policies that AIG underwrites on a claims-made basis have been excluded from the table
above.
The following table presents the estimate of the gross and net IBNR included in the Liability for unpaid claims and
claims adjustment expense, relating to asbestos and environmental claims separately and combined:
2009 2008 2007
At December 31,
(in millions) Gross Net Gross Net Gross Net
Asbestos $ 2,072 $ 863 $ 2,301 $ 939 $ 2,701 $ 1,145
Environmental 161 71 249 99 325 131
Combined $ 2,233 $ 934 $ 2,550 $ 1,038 $ 3,026 $ 1,276
99 AIG 2009 Form 10-K