AIG 2014 Annual Report Download - page 138

ITEM 7 / INVESTMENTS
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121
For the Year Ended December 31, 2012
Rating:
AAA $ - $ - $ - $ 2 $ - $ 2
AA 10 - - - - 10
A - 2 - 4 - 6
BBB - - - - - -
Below investment grade 432 5 208 26 - 671
Non-rated - - - 34 327 361
Total $ 442 $ 7 $ 208 $ 66 $ 327 $ 1,050
* Includes other-than-temporary impairment charges on private equity funds, hedge funds and direct private equity investments.
We recorded other-than-temporary impairment charges in the years ended December 31, 2014, 2013 and 2012 related to:
• issuer-specific credit events;
• securities for which we have changed our intent from hold to sell;
• declines due to foreign exchange rates;
• adverse changes in estimated cash flows on certain structured securities; and
• securities that experienced severe market valuation declines.
In addition, impairments are recorded on real estate and investments in life settlements.
There was no significant impact to our consolidated financial condition or results of operations from other-than-temporary
impairment charges for any one single credit. Also, no individual other-than-temporary impairment charge exceeded 0.01,
0.02 percent and 0.11 percent of total equity at December 31, 2014, 2013 and 2012, respectively.
In periods subsequent to the recognition of an other-than-temporary impairment charge for available for sale fixed maturity
securities that is not foreign-exchange related, we generally prospectively accrete into earnings the difference between the
new amortized cost and the expected undiscounted recoverable value over the remaining life of the security. The accretion that
was recognized for these securities in earnings was $725 million in 2014, $774 million in 2013 and $915 million in 2012. For a
discussion of our other-than-temporary impairment accounting policy, see Note 6, Investments to the Consolidated Financial
Statements.
The following table shows the aging of the pre-tax unrealized losses of fixed maturity and equity securities, the extent
to which the fair value is less than amortized cost or cost, and the number of respective items in each category:
December 31, 2014 Less Than or Equal Greater Than 20% Greater Than 50%
to 20% of Cost(b) to 50% of Cost(b) of Cost(b) Tot al
Aging(a) Unrealized
Unrealized Unrealized Unrealized
(dollars in millions) Cost(c) Loss Items(e) Cost(c) Loss Items(e) Cost(c) Loss Items(e)
Cost(c) Loss(d) Items(e)
Investment grade
bonds
0-6 months $ 15,717 $ 349 2,057 $45 $10 2 $ - $ - - $ 15,762 $359 2,059
7-11 months 950 20 203 13 3 2 -- - 963 23 205
12 months or more 19,730 789 1,642 150 42 41 30 20 7 19,910 851 1,690
Tot al $ 36,397 $ 1,158 3,902 $208 $55 45 $30 $20 7 $ 36,635 $1,233 3,954
Below investment
grade bonds
0-6 months $ 6,041 $ 187 1,634 $143 $37 56 $ 7 $ 4 3 $ 6,191 $228 1,693
7-11 months 1,185 49 299 17 411 53 4 1,207 56 314
12 months or more 3,270 220 381 245 78 48 64 4 3,521 302 433
Tot al $ 10,496 $ 456 2,314 $405 $119 115 $18 $11 11 $ 10,919 $586 2,440