AIG 2009 Annual Report Download - page 15

American International Group, Inc., and Subsidiaries
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, 2009:
(in millions) 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Gross Liability, End of Year $37,278 $39,222 $42,629 $48,173 $53,388 $63,430 $79,279 $82,263 $87,929 $91,832 $88,041
Reinsurance Recoverable,
End of Year 10,567 12,251 15,201 17,327 15,644 14,624 19,693 17,369 16,212 16,803 17,487
Net Liability, End of Year 26,711 26,971 27,428 30,846 37,744 48,806 59,586 64,894 71,717 75,029 70,554
Reestimated Gross Liability 64,160 71,146 76,143 77,873 78,829 79,883 86,444 86,462 92,086 94,932
Reestimated Reinsurance
Recoverable 21,433 23,464 24,109 23,956 21,529 19,652 22,572 19,159 17,768 17,132
Reestimated Net Liability 42,727 47,682 52,034 53,917 57,300 60,231 63,872 67,303 74,318 77,800
Cumulative Gross
Redundancy/(Deficiency) (26,882) (31,924) (33,514) (29,700) (25,441) (16,453) (7,165) (4,199) (4,157) (3,100)
* During 2009, Transatlantic Holdings, Inc. (Transatlantic) was deconsolidated and 21st Century Insurance Group and Agency Auto Division
(excluding AIG Private Client Group) (21st Century) and HSB Group, Inc. (HSB) were sold. Immediately preceding these sales, the loss and loss
expense reserves for these entities totaled $9.7 billion. As a result of the sales and deconsolidation, these obligations ceased being the responsibility of
AIG. The sales and deconsolidation are reflected in the table above as a reduction in December 31, 2009 net reserves of $9.7 billion and as a
$8.6 billion increase in paid losses for the years 1999 through 2008 to reflect no impact on incurred losses for these periods.
Analysis of Consolidated Losses and Loss Expense Reserve Development Excluding Asbestos and Environmental
Losses and Loss Expense Reserve Development
The following table presents for each calendar year the losses and loss expense reserves and the development thereof
excluding those with respect to asbestos and environmental claims. See also Management’s Discussion and Analysis of
Financial Condition and Results of Operations — Results of Operations — Segment Results — General Insurance
Operations — Liability for unpaid claims and claims adjustment expense.*
(in millions) 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Net Reserves Held $24,745 $24,829 $25,286 $28,651 $35,559 $45,742 $55,226 $60,451 $67,597 $71,062 $66,588
Discount (in Reserves Held) 1,075 1,287 1,423 1,499 1,516 1,553 2,110 2,264 2,429 2,574 2,655
Net Reserves Held
(Undiscounted) 25,820 26,116 26,709 30,150 37,075 47,295 57,336 62,715 70,026 73,636 69,243
Paid (Cumulative) as of:
One year later 8,195 9,515 10,861 10,632 11,999 14,718 15,047 14,356 16,183 24,028
Two years later 14,376 16,808 17,801 18,283 21,419 23,906 24,367 23,535 31,204
Three years later 19,490 21,447 23,430 25,021 28,129 30,320 31,163 33,555
Four years later 22,521 25,445 28,080 29,987 32,686 35,481 39,009
Five years later 25,116 28,643 31,771 33,353 36,601 41,600
Six years later 27,266 31,315 34,238 36,159 41,198
Seven years later 29,162 33,051 36,353 39,637
Eight years later 30,279 34,543 39,055
Nine years later 31,469 36,752
Ten years later 33,101
7 AIG 2009 Form 10-K