AIG 2010 Annual Report Download - page 127

American International Group, Inc., and Subsidiaries
SunAmerica Results
The following table presents SunAmerica results:
Percentage Increase/(Decrease)
Years Ended December 31,
(in millions) 2010 2009 2008 2010 vs. 2009 2009 vs. 2008
Domestic Life Insurance:
Premiums and other considerations $ 4,096 $ 4,252 $ 6,248 (4)% (32)%
Net investment income 4,313 3,819 3,823 13 -
Policyholder benefits and claims incurred 5,120 5,027 6,869 2 (27)
Policy acquisition and other expenses 1,775 1,748 1,840 2 (5)
Operating income 1,514 1,296 1,362 17 (5)
Benefit (amortization) of DAC, VOBA and SIA
related to net realized capital gains (losses) (45) 35 364 - -
Net realized capital losses (75) (712) (11,554) - -
Goodwill impairment charges -- (402) - -
Pre-tax income (loss) $ 1,394 $ 619 $ (10,230) 125% -%
Domestic Retirement Services:
Premiums and other considerations $ 1,134 $ 1,075 $ 1,396 5% (23)%
Net investment income 6,455 5,734 5,311 13 8
Policyholder benefits and claims incurred 3,636 4,065 5,076 (11) (20)
Policy acquisition and other expenses 1,419 1,732 2,823 (18) (39)
Operating income (loss) 2,534 1,012 (1,192) 150 -
Benefit (amortization) of DAC, VOBA and SIA
related to net realized capital gains (losses) (40) 73 2,150 - -
Net realized capital losses (1,176) (2,802) (24,858) - -
Goodwill impairment charges -(81) (818) - -
Pre-tax income (loss) $ 1,318 $ (1,798) $ (24,718) -% -%
Total SunAmerica:
Premiums and other considerations $ 5,230 $ 5,327 $ 7,644 (2)% (30)%
Net investment income 10,768 9,553 9,134 13 5
Policyholder benefits and claims incurred 8,756 9,092 11,945 (4) (24)
Policy acquisition and other expenses 3,194 3,480 4,663 (8) (25)
Operating income 4,048 2,308 170 75 —
Benefit (amortization) of DAC, VOBA and SIA
related to net realized capital gains (losses) (85) 108 2,514 - -
Net realized capital losses (1,251) (3,514) (36,412) - -
Goodwill impairment charges -(81) (1,220) - -
Pre-tax income (loss) $ 2,712 $ (1,179) $ (34,948) -% -%
2010 and 2009 Comparison
SunAmerica reported an increase in operating income in 2010 compared to 2009 primarily due to the following:
• higher net investment income due to a $699 million increase in partnership income, a $539 million
increase in valuation gains on ML II and higher call and tender income of $279 million; and
• DAC and SIA amortization unlocking and related reserve strengthening charges of $611 million in 2009
primarily due to reductions in the long-term growth assumptions and deteriorated equity market
conditions early in 2009 for group retirement products and individual variable annuities, and projected
increases in surrenders for individual fixed annuities. The 2010 unlocking and reserve strengthening was
not significant.
AIG 2010 Form 10-K 111