AIG 2010 Annual Report Download - page 343

American International Group, Inc., and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table presents the future minimum lease payments under operating leases:
At December 31, 2010
(in millions)
2011 $ 429
2012 362
2013 295
2014 233
2015 189
Remaining years after 2015 546
Total $2,054
Rent expense was $587 million, $733 million and $896 million for the years ended December 31, 2010, 2009 and
2008, respectively. These amounts include $118 million, $206 million and $225 million attributable to discontinued
operations for the years ended December 31, 2010, 2009 and 2008, respectively.
Other Commitments
In the normal course of business, AIG enters into commitments to invest in limited partnerships, private
equities, hedge funds and mutual funds and to purchase and develop real estate in the U.S. and abroad. These
commitments totaled $4.1 billion at December 31, 2010.
AIG is obligated, subject to certain conditions, to make any payment that is not promptly paid with respect to
the benefits accrued by certain employees of AIG and its subsidiaries under the SICO Plans (as discussed in
(c) below under ‘‘Benefits Provided by Starr International Company, Inc.’’).
(c) Contingencies
Liability for unpaid claims and claims adjustment expense
Although AIG regularly reviews the adequacy of the established Liability for unpaid claims and claims
adjustment expense, there can be no assurance that AIG’s ultimate Liability for unpaid claims and claims
adjustment expense will not develop adversely and materially exceed AIG’s current Liability for unpaid claims and
claims adjustment expense. Estimation of ultimate net claims, claims adjustment expenses and Liability for unpaid
claims and claims adjustment expense is a complex process for long-tail casualty lines of business, which include
excess and umbrella liability, D&O, professional liability, medical malpractice, workers’ compensation, general
liability, products liability and related classes, as well as asbestos and environmental exposures. Generally, actual
historical loss development factors are used to project future loss development. However, there can be no
assurance that future loss development patterns will be the same as in the past. Moreover, any deviation in loss
cost trends or in loss development factors might not be discernible for an extended period of time subsequent to
the recording of the initial loss reserve estimates for any accident year. Thus, there is the potential for reserves
with respect to a number of years to be significantly affected by changes in loss cost trends or loss development
factors that were relied upon in setting the reserves. These changes in loss cost trends or loss development factors
could be attributable to changes in inflation, in labor and material costs or in the judicial environment, or in other
social or economic phenomena affecting claims.
Benefits Provided by Starr International Company, Inc.
SICO has provided a series of two-year Deferred Compensation Profit Participation Plans (SICO Plans) to
certain AIG employees. The SICO Plans were created in 1975 when the voting shareholders and Board of
Directors of SICO, a private holding company whose principal asset is AIG Common Stock, decided that a
AIG 2010 Form 10-K 327