AIG 2012 Annual Report Download - page 116

.....................................................................................................................................................................................
The following table presents survival ratios for asbestos and environmental claims, separately and
combined, which were based upon a three-year average payment:
Survival ratios:
Asbestos 9.1 10.3 8.6 9.2
Environmental 3.0 3.1 3.7 3.2
Combined 8.4 9.3 8.1 8.4
* Survival ratios are calculated consistent with the basis on historical reserve excluding the effects of the NICO reinsurance transaction.
AIG Life and Retirement
AIG Life and Retirement Highlights
The results of AIG Life and Retirement for 2012 and 2011 reflected the following:
• Disciplined spread management, primarily through the effect of reinvestment during 2011 of significant amounts of
cash and short term investments and crediting rate changes, resulted in improvements in base net investment
spreads for 2012. Private equity and hedge fund investment income increased $112 million in 2012 compared to
2011.
• Investment income from the ML II investment prior to its liquidation and distribution in March 2012 increased
$200 million in 2012 compared to 2011.
• More favorable separate account performance driven in large part by equity markets had a positive effect on
policyholder benefits and DAC amortization expenses for 2012.
• Reserve increases related to enhanced death claim practices in connection with the resolution of multi-state
examinations were lower in 2012 compared to 2011.
• Higher net realized capital gains from the sale of investments were reflected in 2012 in conjunction with a program
to utilize capital loss tax carryforwards. The sales of securities in unrealized gain positions that support certain
payout annuity products, and subsequent reinvestment of the proceeds at generally lower yields, triggered loss
recognition accruals in 2012.
AIG Life and Retirement Operations
Commencing in the third quarter of 2012, the SunAmerica segment was renamed AIG Life and Retirement, although
certain existing brands will continue to be used in the marketplace.
AIG Life and Retirement presents its business in two operating segments:
•Life Insurance, which focuses on mortality and morbidity-based protection products, and
•Retirement Services, which focuses on investment, retirement savings and income solution products.
..................................................................................................................................................................................................................................
AIG 2012 Form 10-K 99
Years Ended December 31, 2012 2011 2010
Gross Net*Gross Net*Gross Net
9.6 8.7
4.5 4.4
9.0 8.1
ITEM 7 / RESULTS OF OPERATIONS