AIG 2010 Annual Report Download - page 128

American International Group, Inc., and Subsidiaries
The improvement in the pre-tax results for SunAmerica in 2010 compared to 2009 reflected a decline in net
realized capital losses due principally to a significant decline in other-than-temporary impairments, and an increase
in net realized gains from the sale of investments in 2010 partially offset by affordable housing partnership
impairments and an increase in fair value losses on derivatives primarily used to hedge the effect of interest rate
and foreign exchange movements on GIC reserves. See Results of Operations — Consolidated Results —
Premiums and Other Considerations; — Net Investment Income; and — Net Realized Capital Gains (Losses).
2009 and 2008 Comparison
SunAmerica reported an increase in operating income in 2009 compared to 2008 primarily due to the following:
• higher net investment income as a result of improved partnership returns ($264 million of income in 2009
compared with losses of $1.2 billion in 2008) as well as lower losses from valuation adjustments from the
investment in ML II, which offset the negative effects of higher liquidity in the investment portfolios;
• lower DAC and SIA amortization and related reserve strengthening charges of $611 million in 2009
primarily due to reductions in the long-term growth assumptions for group retirement products and
individual variable annuities, and projected increases in surrenders for individual fixed annuities, compared
to DAC and SIA charges and related reserve strengthening of $1.5 billion in 2008.
The reduction in the pre-tax loss for SunAmerica in 2009 compared to 2008 reflected a decline in net realized
capital losses due principally to a significant decline in other-than-temporary impairments in 2009. See Results of
Operations — Consolidated Results — Premiums and Other Considerations; — Net Investment Income;
and — Net Realized Capital Gains (Losses).
Sales and Deposits
The following table summarizes SunAmerica sales and deposits by product(a):
Percentage Increase/(Decrease)
Years Ended December 31,
(in millions) 2010 2009 2008 2010 vs. 2009 2009 vs. 2008
Life insurance:
Periodic premiums $ 236 $ 224 $ 527 5% (57)%
Single premiums and unscheduled deposits 167 81 288 106 (72)
Total life insurance 403 305 815 32 (63)
Group retirement product deposits 6,309 6,201 7,181 2 (14)
Individual fixed annuity deposits(b) 5,079 6,231 8,373 (18) (26)
Individual variable annuity deposits 2,072 891 3,455 133 (74)
Retail mutual funds 1,101 782 922 41 (15)
Payout annuity deposits 675 616 2,585 10 (76)
Group life and health premiums 85 97 132 (12) (27)
Individual annuities runoff 108 67 83 61 (19)
Total sales and deposits $ 15,832 $ 15,190 $ 23,546 4% (35)%
(a) Includes divested operations in 2009. Life insurance sales include periodic premiums from new business expected to be collected over a
one-year period and single premiums and unscheduled deposits from new and existing policyholders. Annuity sales represent deposits from new
and existing customers. Sales of group accident and health insurance represent annualized first-year premium from new policies.
(b) Includes fixed annuity deposits sold through independent life insurance distribution channels.
2010 and 2009 Comparison
Total sales and deposits increased in 2010 compared to 2009 as improved sales from life insurance, group
retirement products and individual variable annuities offset a decline in individual fixed annuity deposits. Life
insurance sales increased in 2010 compared to 2009 driven by term and universal life products sold through
independent and career distribution networks. Group Retirement deposits increased for 2010 primarily due to
112 AIG 2010 Form 10-K