AIG 2013 Annual Report Download - page 274

The following table presents further information regarding investments in life settlements:
Remaining Life Expectancy of Insureds:
0 – 1 year
1 – 2 years
2 – 3 years
3 – 4 years
4 – 5 years
Thereafter
Total
Remaining life expectancy for year 0-1 references policies whose current life expectancy is less than 12 months as
of the valuation date. Remaining life expectancy is not an indication of expected maturity. Actual maturity dates in
any category may vary significantly (either earlier or later) from the remaining life expectancies reported above.
At December 31, 2013, management’s best estimate of the life insurance premiums required to keep the investments
in life settlements in force, payable in the 12 months ending December 31, 2014 and the four succeeding years
ending December 31, 2018 are $549 million, $575 million, $590 million, $613 million and $638 million, respectively.
Net investment income represents income primarily from the following sources:
• Interest income and related expenses, including amortization of premiums and accretion of discounts on bonds
with changes in the timing and the amount of expected principal and interest cash flows reflected in the yield, as
applicable.
• Dividend income from common and preferred stock and distributions from other investments.
• Realized and unrealized gains and losses from investments in other securities and investments for which we
elected the fair value option.
• Earnings from private equity funds and hedge fund investments accounted for under the equity method.
• The difference between the carrying amount of an investment in life settlements and the life insurance proceeds of
the underlying life insurance policy recorded in income upon the death of the insured.
• Changes in the fair values of our interests in ML II, AIA and MetLife securities prior to sale and change in the fair
value of our interests in ML III prior to the FRBNY liquidation of ML III assets.
Net Investment Income
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AIG 2013 Form 10-K256
ITEM 8 / NOTE 6. INVESTMENTS
December 31, 2013
Number of Carrying Face Value
(dollars in millions) Contracts Value (Death Benefits)
1$ – $ –
95 10
26 14 29
72 41 84
138 119 289
5,030 3,422 16,328
5,276 $ 3,601 $ 16,740
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