# AMERICAN INTERNATIONAL GROUP, INC. (AIG) FY 2024 MD&A Verbatim Item 7 Management's Discussion and Analysis from AMERICAN INTERNATIONAL GROUP, INC.'s 10-K for fiscal year 2024. SEC filing source: https://www.sec.gov/Archives/edgar/data/5272/000000527225000012/aig-20241231.htm Accession: 0000005272-25-000012 Filing date: 2025-02-13 Report date: 2024-12-31 Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high Company profile: /company/AIG/ All MD&A years: /company/AIG/mda/ Previous year: /company/AIG/mda/fy2023/ (FY 2023) Next year: /company/AIG/mda/fy2025/ (FY 2025) ITEM 7 | Management’s Discussion and Analysis of Financial Condition and Results of Operations Cautionary Statement Regarding Forward-Looking Information and Factors That May Affect Future Results This Annual Report on Form 10-K and other publicly available documents may include, and members of management may from time to time make and discuss, statements which, to the extent they are not statements of historical or present fact, may constitute “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward‑looking statements are intended to provide management’s current expectations or plans for future operating and financial performance, based on assumptions currently believed to be valid and accurate. Forward-looking statements are often preceded by, followed by or include words such as “will,” “believe,” “anticipate,” “expect,” “expectations,” “intend,” “plan,” “strategy,” “prospects,” “project,” “anticipate,” “should,” “guidance,” “outlook,” “confident,” “focused on achieving,” “view,” “target,” “goal,” “estimate” and other words of similar meaning in connection with a discussion of future operating or financial performance. These statements may include, among other things, projections, goals and assumptions that relate to future actions, prospective services or products, future performance or results of current and anticipated services or products, sales efforts, expense reduction efforts, the outcome of contingencies such as legal proceedings, anticipated organizational, business or regulatory changes, the effect of catastrophic events, both natural and man-made, and macroeconomic and/or geopolitical events, anticipated dispositions, monetization and/or acquisitions of businesses or assets, the successful integration of acquired businesses, management succession and retention plans, exposure to risk, trends in operations and financial results, and other statements that are not historical facts. [[GREPCENT_TABLE]] [["AIG | 2024 Form 10-K","35"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS All forward-looking statements involve risks, uncertainties and other factors that may cause actual results and financial condition to differ, possibly materially, from the results and financial condition expressed or implied in the forward-looking statements. Factors that could cause actual results to differ, possibly materially, from those in specific projections, targets, goals, plans, assumptions and other forward-looking statements include, without limitation: •the impact of adverse developments affecting economic conditions in the markets in which we operate in the U.S. and globally, including financial market conditions, macroeconomic trends, fluctuations in interest rates and foreign currency exchange rates, inflationary pressures, including social inflation, pressures on the commercial real estate market, and an economic slowdown or recession and geopolitical events or conflicts; •the occurrence of catastrophic events, both natural and man-made, which may be exacerbated by the effects of climate change; •disruptions in the availability or accessibility of our or a third party’s information technology systems, including hardware and software, infrastructure or networks, and the inability to safeguard the confidentiality and integrity of customer, employee or company data due to cyberattacks, data security breaches or infrastructure vulnerabilities; •our ability to effectively implement technological advancements, including the use of artificial intelligence (AI), and respond to competitors' AI and other technology initiatives; •the effects of changes in laws and regulations, including those relating to privacy, data protection, cybersecurity and AI, and the regulation of insurance, in the U.S. and other countries in which we operate; •our ability to successfully dispose of, monetize and/or acquire businesses or assets or successfully integrate acquired businesses, and the anticipated benefits thereof; •concentrations in our investment portfolios, including our continuing equity market exposure to Corebridge Financial, Inc. (Corebridge); •our reliance on third-party investment managers; •changes in the valuation of our investments; •our reliance on third parties to provide certain business and administrative services; •availability of adequate reinsurance or access to reinsurance on acceptable terms; •our ability to adequately assess risk and estimate related losses as well as the effectiveness of our enterprise risk management policies and procedures; •changes in judgments or assumptions concerning insurance underwriting and insurance liabilities; •concentrations of our insurance, reinsurance and other risk exposures; •nonperformance or defaults by counterparties; •the effectiveness of strategies to retain and recruit key personnel and to implement effective succession plans; •difficulty in marketing and distributing products through current and future distribution channels; •actions by rating agencies with respect to our credit and financial strength ratings as well as those of its businesses and subsidiaries; •changes in judgments concerning the recognition of deferred tax assets and the impairment of goodwill; •our ability to address evolving global stakeholder expectations and regulatory requirements with respect to environmental, social and governance matters; •the effects of sanctions and the failure to comply with those sanctions; •our ability to effectively implement restructuring initiatives and potential cost-savings opportunities; •changes to sources of or access to liquidity; •changes in accounting principles and financial reporting requirements or their applicability to us; •changes to tax laws in the U.S. and other countries in which we operate; •the outcome of significant legal, regulatory or governmental proceedings; •our ability to effectively execute on sustainability targets and standards; •the impact of epidemics, pandemics and other public health crises and responses thereto; and •such other factors discussed in: –Part I, Item 1A. Risk Factors of this Annual Report; –this Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) of this Annual Report; and –our other filings with the Securities and Exchange Commission (SEC). Forward-looking statements speak only as of the date of this report, or in the case of any document incorporated by reference, the date of that document. We are not under any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Additional information as to factors that may cause actual results to differ materially from those expressed or implied in any forward-looking statements is disclosed from time to time in other filings with the SEC. [[GREPCENT_TABLE]] [["36","AIG | 2024 Form 10-K"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS [[GREPCENT_TABLE]] [["INDEX TO ITEM 7"],["","Page"],["Use of Non-GAAP Measures","38"],["Critical Accounting Estimates","40"],["Executive Summary","47"],["Overview","47"],["Regulatory, Industry and Economic Factors","47"],["Consolidated Results of Operations","48"],["Business Segment Operations","53"],["General Insurance","54"],["Other Operations","61"],["Investments","62"],["Overview","62"],["Investment Highlights in 2024","62"],["Investment Strategies","62"],["Credit Ratings","68"],["Insurance Reserves","70"],["Loss Reserves","70"],["Liquidity and Capital Resources","74"],["Overview","74"],["Liquidity and Capital Resources Highlights","74"],["Analysis of Sources and Uses of Cash","75"],["Liquidity and Capital Resources of AIG Parent and Subsidiaries","76"],["Credit Facilities","77"],["Contractual Obligations","77"],["Off-Balance Sheet Arrangements and Commercial Commitments","78"],["Debt","79"],["Credit Ratings","79"],["Financial Strength Ratings","80"],["Regulation and Supervision","80"],["Dividends","80"],["Repurchases of AIG Common Stock","80"],["Dividend Restrictions","81"],["Enterprise Risk Management","81"],["Overview","81"],["Risk Governance Structure","81"],["Risk Appetite, Limits, Identification and Measurement","81"],["Credit Risk Management","82"],["Market Risk Management","82"],["Liquidity Risk Management","84"],["Operational Risk Management","84"],["Business and Strategy Risks","84"],["Insurance Risks","85"],["Glossary","88"],["Acronyms","90"]] [[/GREPCENT_TABLE]] Throughout the MD&A, we use certain terms and abbreviations, which are summarized in the Glossary and Acronyms. We have incorporated into this discussion a number of cross-references to additional information included throughout this Annual Report to assist readers seeking additional information related to a particular subject. [[GREPCENT_TABLE]] [["AIG | 2024 Form 10-K","37"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Use of Non-GAAP Measures Use of Non-GAAP Measures Throughout this MD&A, we present our financial condition and results of operations in the way we believe will be most meaningful and representative of our business results. Some of the measurements we use are “non-GAAP financial measures” under SEC rules and regulations. GAAP is the acronym for “generally accepted accounting principles” in the United States. The non-GAAP financial measures we present may not be comparable to similarly-named measures reported by other companies. We use the following operating performance measures because we believe they enhance the understanding of the underlying profitability of continuing operations and trends of our segments. We believe they also allow for more meaningful comparisons with our insurance competitors. When we use these measures, reconciliations to the most comparable GAAP measure are provided on a consolidated basis in the Consolidated Results of Operations section of this MD&A. Book value per share, excluding investments related cumulative unrealized gains and losses recorded in Accumulated other comprehensive income (loss) (AOCI) adjusted for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets (collectively, Investments AOCI) (Adjusted book value per share) is used to show the amount of our net worth on a per share basis after eliminating the fair value of investments that can fluctuate significantly from period to period due to changes in market conditions. In addition, we adjust for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets held by AIG in support of Fortitude Re’s reinsurance obligations to AIG (Fortitude Re funds withheld assets) since these fair value movements are economically transferred to Fortitude Re. Adjusted book value per share is derived by dividing total AIG common shareholders’ equity, excluding Investments AOCI (AIG adjusted common shareholders' equity) by total common shares outstanding. Book Value per share, excluding Goodwill, Value of business acquired (VOBA), Value of distribution channel acquired (VODA) and Other intangible assets (Tangible book value per share) is used to provide a useful measure of the realizable shareholder value on a per share basis. Tangible book value per share is derived by dividing Total AIG common shareholders’ equity, excluding intangible assets (AIG tangible common shareholders’ equity) by total common shares outstanding. Book Value per share, excluding Investments AOCI, Goodwill, VOBA, VODA and Other intangible assets (Adjusted tangible book value per share) is used to provide a useful measure of the realizable shareholder value on a per share basis after eliminating the fair value of investments that can fluctuate significantly from period to period due to changes in market conditions and Fortitude Re funds withheld assets since these fair value movements are economically transferred to Fortitude Re. Adjusted tangible book value per share is derived by dividing AIG adjusted common equity, excluding intangible assets, (AIG adjusted tangible common shareholders’ equity) by total common shares outstanding. Book value per share, excluding Investments AOCI, deferred tax assets (DTA) and AIG’s ownership interest in Corebridge (Core operating book value per share) is used to show the amount of our net worth on a per share basis after eliminating Investments AOCI, DTA and AIG’s ownership interest in Corebridge. We believe this measure is useful to investors because it eliminates the fair value of investments that can fluctuate significantly from period to period due to changes in market conditions. We also exclude the portion of DTA representing U.S. tax attributes related to net operating loss carryforwards (NOLs), corporate alternative minimum tax credits (CAMTCs) and foreign tax credits (FTCs) that have not yet been utilized. Amounts for interim periods are estimates based on projections of full-year attribute utilization. As NOLs, CAMTCs and FTCs are utilized, the corresponding portion of the DTA utilized is included. We exclude AIG’s ownership interest in Corebridge since it is not a core long-term investment for AIG. Core operating book value per share is derived by dividing total AIG common shareholders’ equity, excluding Investments AOCI, DTA and AIG’s ownership interest in Corebridge (AIG core operating shareholders’ equity) by total common shares outstanding. Return on equity – Adjusted after-tax income excluding Investments AOCI (Adjusted return on equity) is used to show the rate of return on common shareholders’ equity excluding Investments AOCI. We believe this measure is useful to investors because it eliminates the fair value of investments which can fluctuate significantly from period to period due to changes in market conditions. Adjusted return on equity is derived by dividing actual or, for interim periods, annualized adjusted after-tax income attributable to AIG common shareholders by average AIG adjusted common shareholders’ equity. Return on Equity – Adjusted After-tax Income, Excluding Goodwill, VOBA, VODA and Other Intangible assets (Return on tangible equity) is used to show the return on AIG tangible common shareholder’s equity, which we believe is a useful measure of realizable shareholder value. We exclude Goodwill, VOBA, VODA and Other intangible assets from AIG common shareholders’ equity to derive AIG tangible common shareholders’ equity. Return on AIG tangible common equity is derived by dividing actual or, for interim periods, annualized adjusted after-tax income attributable to AIG common shareholders by average AIG tangible common shareholders' equity. [[GREPCENT_TABLE]] [["38","AIG | 2024 Form 10-K"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Use of Non-GAAP Measures Return on equity – Adjusted after-tax income excluding Investments AOCI, DTA and AIG’s ownership interest in Corebridge (Core operating return on equity) is used to show the rate of return on common shareholders’ equity excluding Investments AOCI, DTA and AIG’s ownership interest in Corebridge. We believe this measure is useful to investors because it eliminates the fair value of investments that can fluctuate significantly from period to period due to changes in market conditions. We also exclude the portion of DTA representing U.S. tax attributes related to NOLs, CAMTCs and FTCs that have not yet been utilized. Amounts for interim periods are estimates based on projections of full-year attribute utilization. As NOLs, CAMTCs and FTCs are utilized, the corresponding portion of the DTA utilized is included. We exclude AIG’s ownership interest in Corebridge since it is not a core long-term investment for AIG. We believe this metric will provide investors with greater insight as to the underlying profitability of our property and casualty business. Core operating return on equity is derived by dividing actual or, for interim periods, annualized adjusted after-tax income attributable to AIG common shareholders by average AIG core operating shareholders’ equity. Adjusted pre-tax income (APTI) is derived by excluding the items set forth below from income from continuing operations before income tax: •changes in the fair values of equity securities, AIG's investment in Corebridge and gain on sale of shares; •net investment income on Fortitude Re funds withheld assets; •net realized gains and losses on Fortitude Re funds withheld assets; •loss (gain) on extinguishment of debt; •all net realized gains and losses except earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-qualifying (economic) hedging or for asset replication. Earned income on such economic hedges is reclassified from net realized gains and losses to specific APTI line items based on the economic risk being hedged (e.g. net investment income); •income or loss from discontinued operations; •net loss reserve discount benefit (charge); •net results of businesses in run-off; •pension expense related to lump sum payments to former employees; •net gain or loss on divestitures and other; •non-operating litigation reserves and settlements; •restructuring and other costs related to initiatives designed to reduce operating expenses, improve efficiency and simplify our organization; •the portion of favorable or unfavorable prior year reserve development for which we have ceded the risk under retroactive reinsurance agreements and related changes in amortization of the deferred gain; •integration and transaction costs associated with acquiring or divesting businesses; •losses from the impairment of goodwill; •non-recurring costs associated with the implementation of non-ordinary course legal or regulatory changes or changes to accounting principles; and •income from elimination of the international reporting lag. Adjusted after-tax income attributable to AIG common shareholders is derived by excluding the tax effected APTI adjustments described above, dividends on preferred stock and preferred stock redemption premiums, noncontrolling interest on net realized gains (losses), other non-operating expenses and the following tax items from net income attributable to AIG: •deferred income tax valuation allowance releases and charges; •changes in uncertain tax positions and other tax items related to legacy matters having no relevance to our current businesses or operating performance; and •net tax charge related to the enactment of the Tax Cuts and Jobs Act. Ratios: We, along with most property and casualty insurance companies, use the loss ratio, the expense ratio and the combined ratio as measures of underwriting performance. These ratios are relative measurements that describe, for every $100 of net premiums earned, the amount of losses and loss adjustment expenses (which for General Insurance excludes net loss reserve discount), and the amount of other underwriting expenses that would be incurred. A combined ratio of less than 100 indicates underwriting income and a combined ratio of over 100 indicates an underwriting loss. Our ratios are calculated using the relevant segment information calculated under GAAP, and thus may not be comparable to similar ratios calculated for regulatory reporting purposes. The underwriting environment varies across countries and products, as does the degree of litigation activity, all of which affect such ratios. In addition, investment returns, local taxes, cost of capital, regulation, product type and competition can have an effect on pricing and consequently on profitability as reflected in underwriting income and associated ratios. [[GREPCENT_TABLE]] [["AIG | 2024 Form 10-K","39"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Use of Non-GAAP Measures Accident year loss and accident year combined ratios, as adjusted (Accident year loss ratio, ex-CAT and Accident year combined ratio, ex-CAT): both the accident year loss and accident year combined ratios, as adjusted, exclude catastrophe losses and related reinstatement premiums, prior year development, net of premium adjustments, and the impact of reserve discounting. Natural catastrophe losses are generally weather or seismic events, in each case, having a net impact on AIG in excess of $10 million and man-made catastrophe losses, such as terrorism and civil disorders that exceed the $10 million threshold. We believe that as adjusted ratios are meaningful measures of our underwriting results on an ongoing basis as they exclude catastrophes and the impact of reserve discounting which are outside of management’s control. We also exclude prior year development to provide transparency related to current accident year results. Results from discontinued operations, including Corebridge, are excluded from all of these measures. Critical Accounting Estimates The preparation of financial statements in accordance with GAAP requires the application of accounting policies that often involve a significant degree of judgment. [[GREPCENT_TABLE]] [["The accounting policies that we believe are most dependent on the application of estimates and assumptions, which are critical accounting estimates, are related to the determination of:"],["\u2022loss reserves;\u2022reinsurance assets, including the allowance for credit losses and disputes;\u2022allowance for credit losses on certain investments, primarily on loans and available for sale fixed maturity securities;\u2022fair value measurements of certain financial assets and financial liabilities;\u2022income taxes, in particular the recoverability of our deferred tax asset and establishment of provisions for uncertain tax positions; and\u2022goodwill impairment."]] [[/GREPCENT_TABLE]] These accounting estimates require the use of assumptions about matters, some of which are highly uncertain at the time of estimation. To the extent actual experience differs from the assumptions used, our consolidated financial condition, results of operations and cash flows could be materially affected. LOSS RESERVES Loss reserves represent the accumulation of estimates of unpaid claims, including estimates for claims incurred but not reported and loss adjustment expenses, less applicable discount. We regularly review and update the methods used to determine loss reserve estimates. Because these estimates are subject to the outcome of future events and because loss trends vary and time is often required for changes in trends to be recognized and confirmed, changes in estimates are common. The estimate of loss reserves relies on several key judgments: •the determination of the actuarial methods used as the basis for these estimates; •the relative weights given to these models by product line; •the underlying assumptions used in these models; and •the determination of the appropriate groupings of similar product lines and, in some cases, the disaggregation of dissimilar losses within a product line. Numerous assumptions are made in determining the best estimate of reserves for each line of business, in consideration of expected ultimate losses, loss cost trends and loss development factors, where appropriate. The importance of any one assumption can vary by both line of business and accident year. Because such assumptions may differ from actual experience, there is potential for significant variation in the development of loss reserves. This estimation uncertainty is particularly relevant for long-tail lines of business. All of our methods to calculate net reserves include assumptions about estimated reinsurance recoveries and their collectability. Reinsurance collectability is evaluated independently of the reserving process and appropriate allowances for uncollectible reinsurance are established. [[GREPCENT_TABLE]] [["40","AIG | 2024 Form 10-K"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Critical Accounting Estimates Overview of Loss Reserving Process and Methods Our loss reserves can generally be categorized into two distinct groups: short-tail reserves and long-tail reserves. Short-tail reserves consist principally of U.S. Property and Special Risks, UK/Europe Property and Special Risks, U.S. Personal Insurance, and UK/Europe and Japan Personal Insurance. Long-tail reserves include U.S. Workers’ Compensation, U.S. Excess Casualty, U.S. Other Casualty, U.S. Financial Lines, and UK/Europe Casualty and Financial Lines. Short-Tail Reserves In short-tail lines of business, such as property or personal insurance, where the nature of these claims tends to be higher frequency with short reporting periods, with volatility arising from occasional severe events, the actual losses reported make up a greater proportion of the ultimate loss estimate. During the first few development quarters of an accident year, the expected ultimate losses generally reflect the average loss costs from a period of preceding accident quarters that have been adjusted for changes in rate and loss cost trends, mix of business, known exposure to unreported losses, or other factors affecting the particular line of business. For more mature quarters, specific loss development methods and/or frequency/severity methods may be used to determine the incurred but not reported (IBNR). IBNR for claims arising from catastrophic events or events of unusual severity would be determined taking into account information known by the claims department, using alternative techniques or expected percentages of ultimate loss emergence based on historical emergence of similar events or claim types. Long-Tail Reserves Estimation of loss reserves for our long-tail business is a complex process and depends on a number of factors, including the product line and volume of business, as well as estimates of reinsurance recoveries. Experience in more recent accident years generally provides limited statistical credibility of reported net losses on long-tail business. That is because in the more recent accident years, a relatively low proportion of estimated ultimate net incurred losses are reported or paid. Therefore, IBNR reserves constitute a relatively high proportion of loss reserves. For our long-tail lines, we generally make actuarial and other assumptions with respect to the following: •Loss cost trend factors, which are used to establish expected loss ratios for subsequent accident years based on the projected loss ratios for prior accident years. •Expected loss ratios, which are used for the latest accident year and, in some cases, for accident years prior to the latest accident year. The expected loss ratio also generally reflects the average loss ratio from prior accident years, adjusted for the loss cost trend and the effect of rate changes and other quantifiable factors on the loss ratio. •Loss development factors, which are used to project the reported losses for each accident year to an ultimate basis. Generally, the actual loss development factors observed from prior accident years would be used as a basis to determine the loss development factors for the subsequent accident years. •Tail factors, which are development factors used for certain long-tail lines of business to project future loss development for periods that extend beyond the available development data. The development of losses to the ultimate loss for a given accident year for these lines may take decades and the projection of ultimate losses for an accident year is very sensitive to the tail factors selected beyond a certain age. We record quarterly changes in loss reserves for each product line of business. The overall change in our loss reserves is based on the sum of the changes for all product lines of business. The quarterly loss reserve changes are based on the estimated current loss ratio for each subset of coverage less any amounts paid. Also, any change in estimated ultimate losses from prior accident years deemed to be necessary based on the results of our latest detailed valuation reviews, large loss analyses, or other analytical techniques, either positive or negative, is reflected in the loss reserve and incurred losses for the current quarter. Differences between actual loss emergence in a given period and our expectations based on prior loss reserve estimates are used to monitor reserve adequacy between detailed valuation reviews and may also influence our judgment with respect to adjusting reserve estimates. Details of the Loss Reserving Process The process of determining the current loss ratio for each product line of business is based on a variety of factors. These include considerations such as: prior accident year and policy year loss ratios; rate changes; and changes in coverage, reinsurance, or mix of business. Other considerations include actual and anticipated changes in external factors such as trends in loss costs, inflation, employment rates or unemployment duration or in the legal and claims environment. The current loss ratio for each product line of business is intended to represent our best estimate after reflecting all relevant factors. At the close of each quarter, the assumptions and data underlying the loss ratios are reviewed to determine whether they remain appropriate. This process includes a review of the actual loss experience in the quarter, actual rate changes achieved, actual changes in reinsurance, quantifiable changes in coverage or mix of business, and changes in other factors that may affect the loss ratio. The loss ratio is changed to reflect the revised estimate if this review suggests that the previously determined loss ratio is no longer appropriate and, generally, shorter tailed lines of business are more likely to experience changes than longer tailed lines for immature accident years unless the information is directionally unfavorable. [[GREPCENT_TABLE]] [["AIG | 2024 Form 10-K","41"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Critical Accounting Estimates We conduct a comprehensive loss reserve detailed valuation review at least annually for each product line of business in accordance with Actuarial Standards of Practice. These standards provide that the unpaid loss estimate may be presented in a variety of ways, such as a point estimate, a range of estimates, a point estimate based on the expected value of several reasonable estimates, or a probability distribution of the unpaid loss amount. Our actuarial best estimate for each product line of business represents an expected value generally considering a range of reasonably possible outcomes. The reserve analysis, globally, for each product line of business is performed by a credentialed actuarial team in collaboration with claims, underwriting, business unit management, risk management and senior management. Our actuaries consider the ongoing applicability of prior data groupings and update numerous assumptions, including the analysis and selection of loss development and loss trend factors. They also determine and select the appropriate actuarial or other methods used to develop our best estimate for each business product line, and may employ multiple methods and assumptions for each product line. These data groupings, accident year weights, method selections and assumptions necessarily change over time as business mix changes, development factors mature and become more credible and loss characteristics evolve. We consult with third-party specialists to help inform our judgments as needed. Through the execution of these detailed valuation reviews an actuarial best estimate of the loss reserve is determined. The sum of these estimates for each product line of business yields an overall actuarial best estimate for that line of business. A critical component of our detailed valuation reviews is an internal peer review of our reserving analyses and conclusions, where actuaries independent of the initial review evaluate the reasonableness of assumptions used, methods selected, and weightings given to different methods. In addition, each detailed valuation review is subjected to a review and challenge process by specialists in our Enterprise Risk Management (ERM) group. For certain product lines, we measure sensitivities and determine explicit ranges around the actuarial best estimate using multiple methodologies and varying assumptions. Where we have ranges, we use them to inform our selection of best estimates of loss reserves by product line of business. Our range of reasonable estimates is not intended to cover all possibilities or extreme values and is based on known data and facts at the time of estimation. Actuarial and Other Methods for Our Lines of Business Our actuaries determine the appropriate actuarial methods and segmentation. This determination is based on a variety of factors including the nature of the losses associated with the product line of business, such as the frequency or severity of the claims. In addition to determining the actuarial methods, the actuaries determine the appropriate loss reserve groupings of data. This determination is a judgmental, dynamic process and refinements to the groupings are made every year. The groupings may change to reflect observed or emerging patterns within and across product lines, or to differentiate risk characteristics (for example, size of deductibles and extent of third-party claims specialists used by our insureds). As an example of reserve segmentation, we write many unique subsets of professional liability insurance, which cover different products, industry segments, and coverage structures. While for pricing or other purposes, it may be appropriate to evaluate the profitability of each subset individually, we believe it is appropriate to combine the subsets into larger groups for reserving purposes to produce a greater degree of credibility in the loss experience. This determination of data segmentation and related actuarial methods is assessed, reviewed and updated at least annually. The actuarial methods we use most commonly include paid and incurred loss development methods, expected loss ratio methods, including “Bornhuetter Ferguson” and “Cape Cod,” and frequency/severity models. Loss development methods utilize the actual loss development patterns from prior accident years updated through the current year to project the reported losses to an ultimate basis for all accident years. We also use this information to update our current accident year loss selections. Loss development methods are generally most appropriate for lines of business that exhibit a stable pattern of loss development from one accident year to the next, and for which the components of the product line have similar development characteristics. Expected loss ratio methods rely on the application of an expected loss ratio to the earned premium for the product line of business to determine the liability for loss reserves and loss adjustment expenses. We generally use expected loss ratio methods in cases where the reported loss data lacked sufficient credibility to utilize loss development methods, such as for new product lines of business or for long-tail product lines at early stages of loss development. Frequency/severity models may be used where sufficient frequency counts are available to apply such approaches. A key advantage of loss development methods is that they respond more quickly to any actual changes in loss costs for the product line of business. Therefore, if loss experience is unexpectedly deteriorating or improving, the loss development method gives full credibility to the changing experience. Expected loss ratio methods would be slower to respond to the change, as they would continue to give more weight to a prior expected loss ratio, until enough evidence emerged to modify the expected loss ratio to reflect the changing loss experience. On the other hand, loss development methods have the disadvantage of overreacting to changes in reported losses if the loss experience is anomalous due to the various key factors described above and the inherent volatility in some of the lines. For example, the presence or absence of large losses at the early stages of loss development could cause the loss development method to overreact to the favorable or unfavorable experience by assuming it is a fundamental shift in the development pattern. In these instances, expected loss ratio methods such as Bornhuetter Ferguson have the advantage of recognizing large losses without extrapolating unusual large loss activity onto the unreported portion of the losses for the accident year. [[GREPCENT_TABLE]] [["42","AIG | 2024 Form 10-K"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Critical Accounting Estimates The Cape Cod method is a hybrid between the loss development and Bornhuetter Ferguson methods, where the historic loss data and loss development factor assumptions are used to determine the expected loss ratio estimate in the Bornhuetter Ferguson method. Where appropriate, supplemental analysis for the given line of business may be performed in addition to the above described techniques such as Shareholder Class Action suit analysis for Directors and Officers (D&O) coverages. Frequency/severity methods generally rely on the determination of an ultimate number of claims and an average severity for each claim for each accident year. Multiplying the estimated ultimate number of claims for each accident year by the expected average severity of each claim produces the estimated ultimate loss for the accident year. Frequency/severity methods generally require a sufficient volume of claims in order for the average severity to be predictable. Average severity for subsequent accident years is generally determined by applying an estimated annual loss cost trend to the estimated average claim severity from prior accident years. In certain cases, a structural approach may also be used to predict the ultimate loss cost. Frequency/severity methods have the advantage that ultimate claim counts can generally be estimated more quickly and accurately than can ultimate losses. Thus, if the average claim severity can be accurately estimated, these methods can more quickly respond to changes in loss experience than other methods. However, for average severity to be predictable, the product line of business must consist of homogenous types of claims for which loss severity trends from one year to the next are reasonably consistent and where there are limited changes to deductible levels or limits. Generally these methods work best for high frequency, low severity product lines of business such as personal auto. However, frequency and severity metrics are also used to test the reasonability of results for other product lines of business and provide indications of underlying trends in the data. In addition, ultimate claim counts can be used as an alternative exposure measure to earned premiums in the Cape Cod method. The estimation of liability for loss reserves and loss adjustment expenses relating to asbestos and environmental pollution losses on insurance policies written many years ago is typically subject to greater uncertainty than other types of losses. This is due to inconsistent court decisions, as well as judicial interpretations and legislative actions that in some cases have tended to broaden coverage beyond the original intent of such policies or have expanded theories of liability. In addition, reinsurance recoverable balances relating to asbestos and environmental loss reserves are subject to greater uncertainty due to the underlying age of the claim, underlying legal issues surrounding the nature of the coverage, and determination of proper policy period. For these reasons, these balances tend to be subject to increased levels of disputes and legal collection activity when actually billed. The insurance industry as a whole is engaged in extensive litigation over these coverage and liability issues and is thus confronted with a continuing uncertainty in its efforts to quantify these exposures. We continue to receive claims asserting injuries and damages from toxic waste, hazardous substances, and other environmental pollutants and alleged claims to cover the cleanup costs of hazardous waste dump sites, referred to collectively as environmental claims, and indemnity claims asserting injuries from asbestos. The vast majority of these asbestos and environmental losses emanate from policies written in 1984 and prior years. Commencing in 1985, standard policies contained absolute exclusions for pollution-related damage and asbestos. The current environmental policies that we specifically price and underwrite for environmental risks on a claims-made basis have been excluded from the analysis. Nevertheless, most of these legacy exposures have been heavily reinsured with very highly rated reinsurers. The majority of our remaining exposures for asbestos and environmental losses are related to excess casualty coverages, not primary coverages. The litigation costs are treated in the same manner as indemnity amounts, with litigation expenses included within the limits of the liability we incur. Individual significant loss reserves, where future litigation costs are reasonably determinable, are established on a case-by-case basis. [[GREPCENT_TABLE]] [["AIG | 2024 Form 10-K","43"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Critical Accounting Estimates Key Assumptions of our Actuarial Methods by Line of Business [[GREPCENT_TABLE]] [["Line of Business or Category","Key Assumptions"],["U.S. Workers\u2019Compensation","We generally use a combination of loss development and expected loss ratio methods for U.S. Workers\u2019 Compensation as this is a long-tail line of business. The tail factor is typically the most critical assumption, and small changes in the selected tail factor can have a material effect on our carried reserves. For example, the tail factors beyond twenty years for guaranteed cost business could vary by 1 percentage point below to 2.5 percentage points above those indicated in the 2024 detailed valuation review. For excess of deductible business, in our judgment, it is reasonably possible that tail factors beyond twenty years could vary by 1.5 percentage points below to 3 percentage points above those indicated in the 2024 detailed valuation review."],["U.S. Excess Casualty","We utilize various loss cost trend assumptions for different segments of the portfolio. In our judgment, after evaluating the historical loss cost trends from prior accident years since the early 1990s, it is reasonably possible that actual loss cost trends applicable to the year-end 2024 detailed valuation review for U.S. Excess Casualty may range 5 percentage points lower or higher than this estimated loss trend. The loss cost trend assumption is critical for the U.S. Excess Casualty line of business due to the long-tail nature of the losses, and it is applied across many accident years. Thus, there is the potential for the loss reserves with respect to a number of accident years (the expected loss ratio years) to be significantly affected by changes in loss cost trends that were initially relied upon in setting the loss reserves. These changes in loss trends could be attributable to changes in inflation or in the judicial environment, or in other social or economic conditions affecting losses.U.S. Excess Casualty is a long-tail line of business and any deviation 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. Mass tort claims in particular may develop over a very extended period and impact multiple accident years, so we usually select a separate pattern for them. Thus, there is the potential for the loss reserves with respect to a number of accident years to be significantly affected by changes in loss development factors that were initially relied upon in setting the reserves. In our judgment, after evaluating the historical loss development factors from prior accident years since the early 1990s, it is reasonably possible that the actual loss development factors could vary by an amount equivalent to a six month shift from those actually utilized in the year-end 2024 detailed valuation review. This would impact projections both for accident years where the selections were directly based on loss development methods as well as the a priori loss ratio assumptions for accident years with selections based on Bornhuetter Ferguson or Cape Cod methods. Similar to loss cost trends, these changes in loss development factors could be attributable to changes in inflation or in the judicial environment, or in other social or economic conditions affecting losses.Given the very long-tail nature of this business, the tail factor selection can also have material impact on our carried reserves. The sensitivity around tail selection may also be a proxy for the sensitivity of a calendar year impact of monetary inflation on unpaid losses. It is reasonably possible for the tail factors for Excess Casualty could vary by 2 percentage points below to 3.5 percentage points above those indicated in the 2024 detailed valuation review."],["U.S. Other Casualty","The key assumptions for other casualty lines are similar to U.S. Excess Casualty, as the underlying business is long-tailed and can be subject to variability in loss cost trends and changes in loss development factors. These may differ significantly by line of business as coverages such as general liability, medical malpractice and environmental may be subject to different risk drivers."],["U.S. Financial Lines","The loss cost trends for U.S. D&O liability business vary by year and subset. After evaluating the historical loss cost levels from prior accident years since the early 1990s, including the potential effect of losses relating to the credit crisis, in our judgment, it is reasonably possible that the actual variation in loss cost levels for these subsets could vary by approximately 10 percentage points lower or higher on a year-over-year basis than the assumptions actually utilized in the year-end 2024 reserve review. Because the U.S. D&O business has exhibited highly volatile loss trends from one accident year to the next, there is the possibility of an exceptionally high deviation. In our analysis, the effects of loss cost trend assumptions affect the results through the a priori loss ratio assumptions used for the Bornhuetter Ferguson and Cape Cod methods, which impact the projections for the more recent accident years.The selected loss development factors are also an important assumption, but are less critical than for U.S. Excess Casualty. Because these lines are written on a claims made basis, the loss reporting and development tail is much shorter than for U.S. Excess Casualty. However, the high severity nature of the losses does create the potential for significant deviations in loss development patterns from one year to the next. Similar to U.S. Excess Casualty, after evaluating the historical loss development factors from prior accident years since the early 1990s, in our judgment, it is reasonably possible that actual loss development factors could change by an amount equivalent to a shift by six months from those actually utilized in the year-end 2024 reserve review."],["UK/Europe Casualty andFinancial Lines","Similar to U.S. business, UK/Europe Casualty and Financial Lines can be significantly impacted by loss cost trends and changes in loss development factors. The variation in such factors can differ significantly by product and region, however the range of potential impacts is much lower than that of other lines of business noted above."],["U.S. and UK/EuropeProperty and SpecialRisks","For shorter-tail lines such as Property and Special Risks, variance in outcomes for individual large claims or events typically has a greater impact on results than does changes in actuarial assumptions or methodology. This is because a greater proportion of the ultimate loss, at any stage of development, is composed of reported losses than IBNR reserves. These outcomes generally relate to unique characteristics of events such as catastrophes or losses with significant business interruption claims."],["U.S., UK/Europe and Japan Personal Insurance","Personal Insurance is short-tailed in nature similar to Property and Special Risks but less volatile. Variance in estimates can result from unique events such as catastrophes. In addition, some subsets of this business, such as auto liability, can be impacted by changes in loss development factors and loss cost trends."]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["44","AIG | 2024 Form 10-K"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Critical Accounting Estimates The following sensitivity analysis table summarizes the effect on the loss reserve position of using certain alternative loss cost trend (for accident years where we use expected loss ratio methods) or loss development factor assumptions rather than the assumptions actually used in determining our estimates in the year-end loss reserve analyses in 2024: [[GREPCENT_TABLE]] [["December 31, 2024","","Increase (Decrease) to Loss Reserves","","","","","Increase (Decrease) to Loss Reserves"],["(in millions)"],["Loss cost trends:","","","","","Loss development factors:"],["U.S. Excess Casualty:","","","","","U.S. Excess Casualty:"],["5.0 percentage points increase","$","850","","","","3.5 percentage points tail factor increase","$","1,200"],["5.0 percentage points decrease","","(600)","","","","2.0 percentage points tail factor decrease","","(750)"],["","","","","","U.S. Excess Casualty:"],["","","","","","6-months slower","","600"],["","","","","","6-months faster","","(550)"],["U.S. Financial Lines (D&O)","","","","","U.S. Financial Lines (D&O)"],["10.0 percentage points increase","","850","","","","6-months slower","","600"],["10.0 percentage points decrease","","(600)","","","","6-months faster","","(500)"],["","","","","","U.S. Workers' Compensation:"],["","","","","","Tail factor increase(a)","","900"],["","","","","","Tail factor decrease(b)","","(550)"]] [[/GREPCENT_TABLE]] (a)Tail factor increase of 2.5 percentage points for guaranteed cost business and 3 percentage points for deductible business. (b)Tail factor decrease of 1 percentage point for guaranteed cost business and 1.5 percentage points for deductible business. For additional information on our reserving process and methodology, see Note 13 to the Consolidated Financial Statements. REINSURANCE ASSETS In the ordinary course of business, our insurance companies may use both treaty and facultative reinsurance to minimize their net loss exposure to any single catastrophic loss event or to an accumulation of losses from a number of smaller events or to provide greater diversification of our businesses. Reinsurance assets include the balances due from reinsurance and insurance companies under the terms of our reinsurance agreements for paid and unpaid losses and loss adjustment expenses incurred, ceded unearned premiums and ceded future policy benefits for life and accident and health insurance contracts and benefits paid and unpaid. The estimation of reinsurance recoverables involves a significant amount of judgment. Reinsurance assets include reinsurance recoverables on unpaid losses and loss adjustment expenses that are estimated as part of our loss reserving process and, consequently, are subject to similar judgments and uncertainties as the estimation of gross loss reserves. For additional information on reinsurance, see Note 8 to the Consolidated Financial Statements. ALLOWANCE FOR CREDIT LOSSES ON CERTAIN INVESTMENTS We maintain an allowance for the expected lifetime credit losses of commercial and residential mortgage loans and available for sale securities. The sufficiency of this allowance is reviewed quarterly using both quantitative and qualitative considerations, which are subject to risks and uncertainties. These considerations and the overall methodology used to estimate the allowance for credit losses are discussed in more detail in Note 6 and Note 7 to the Consolidated Financial Statements for available for sale securities and Commercial and residential loans, respectively. FAIR VALUE MEASUREMENTS OF CERTAIN FINANCIAL ASSETS AND FINANCIAL LIABILITIES Assets and liabilities recorded at fair value in the Consolidated Balance Sheets are measured and classified in a hierarchy for disclosure purposes consisting of three levels based on the observability of inputs available in the marketplace used to measure the fair value. We classify fair value measurements for certain assets and liabilities as Level 3 when they require significant unobservable inputs in their valuation. We consider unobservable inputs to be those for which market data is not available. Our assessment of the significance of a particular input to the fair value measurement of an asset or liability requires judgment. For additional information about the valuation methodologies of financial instruments measured at fair value, see Note 5 to the Consolidated Financial Statements. [[GREPCENT_TABLE]] [["AIG | 2024 Form 10-K","45"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Critical Accounting Estimates INCOME TAXES Deferred income taxes represent the tax effect of the differences between the amounts recorded in our Consolidated Financial Statements and the tax basis of assets and liabilities. Our assessment of net deferred income taxes represents management’s best estimate of the tax consequences of various events and transactions, which can themselves be based on other accounting estimates, resulting in incremental uncertainty in the estimation process. Deferred Tax Asset Recoverability The evaluation of the recoverability of our deferred tax asset and the need for a valuation allowance requires us to weigh all positive and negative evidence to reach a conclusion that it is more likely than not that all or some portion of the deferred tax asset will not be realized. The weight given to the evidence is commensurate with the extent to which it can be objectively verified. As such, changes in tax laws in countries where we transact business can impact our deferred tax asset valuation allowance. We consider multiple factors to reliably estimate future taxable income so we can determine the extent of our ability to realize net operating losses, foreign tax credits, realized capital loss and other carryforwards. These factors include forecasts of future income for each of our businesses, which incorporate forecasts of future statutory income for our insurance companies, and actual and planned business and operational changes, both of which include assumptions about future macroeconomic and AIG-specific conditions and events. We subject the forecasts to stresses of key assumptions and evaluate the effect on tax attribute utilization. We also apply stresses to our assumptions about the effectiveness of relevant prudent and feasible tax planning strategies. In performing our assessment of recoverability, we consider tax laws governing the utilization of net operating loss, capital loss and foreign tax credit carryforwards in each applicable jurisdiction. These tax laws are subject to change, resulting in incremental uncertainty in our assessment of recoverability. Uncertain Tax Positions Uncertain tax positions represent AIG’s liability for income taxes on tax years subject to review by the Internal Revenue Service (IRS) or other tax authorities. We determine whether it is more likely than not that a tax position will be sustained, based on technical merits, upon examination by the relevant taxing authorities before any part of the benefit can be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement. The completion of review, or the expiration of federal statute of limitations for a given audit period could result in an adjustment to the liability for income taxes. For a discussion of our framework for assessing the recoverability of our deferred tax asset and other tax topics, see Note 21 to the Consolidated Financial Statements. GOODWILL IMPAIRMENT Goodwill represents the future economic benefits arising from assets acquired in a business combination that are not individually identified and separately recognized. Goodwill is tested for impairment annually, or more frequently if circumstances indicate an impairment may have occurred. A qualitative assessment may be performed, considering whether events or circumstances exist that lead to a determination that it is not more likely than not that the fair value of a segment is less than its carrying value. If management elects to perform a quantitative assessment to determine recoverability of carrying value or is compelled to do so based on the results of a qualitative assessment, the estimate of fair value involves applying one or a combination of common valuation approaches. These include discounted expected future cash flows, market-based earnings multiples and external appraisals, among other methods, all of which require management judgment and are subject to uncertainty, primarily as it relates to assumptions around business growth, earnings projections, and cost of capital. For additional information on goodwill impairment, see Part I, Item 1A. Risk Factors – Estimates and Assumptions and Note 12 to the Consolidated Financial Statements. [[GREPCENT_TABLE]] [["46","AIG | 2024 Form 10-K"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Executive Summary Executive Summary OVERVIEW This overview of the MD&A highlights selected information and may not contain all of the information that is important to current or potential investors in our securities. You should read this Annual Report in its entirety for a more detailed description of events, trends, uncertainties, risks and critical accounting estimates affecting us. REGULATORY, INDUSTRY AND ECONOMIC FACTORS Regulatory Environment Our operations around the world are subject to regulation by many different types of regulatory authorities, including insurance and securities regulators in the United States and abroad. The insurance and financial services industries are generally subject to close regulatory scrutiny and supervision. For information regarding our regulation and supervision by different regulatory authorities in the United States and abroad, see Part I, Item 1. Business – Regulation and Part I, Item 1A. Risk Factors – Regulation and Note 21 to the Consolidated Financial Statements. Impact of Changes in the Interest Rate Environment Certain U.S. benchmark rates continued to fluctuate in 2024 as markets reacted to change in inflation trends, geopolitical risk and the decisions of the Board of Federal Reserve System. Our Net investment income is impacted by market interest rates as well as the deployment of asset allocation strategies to enhance yield, manage duration and interest rate risk. The changes in interest rates and credit spreads impact our ability to reinvest future cash flows at rates equal or greater than the rates on sales and maturities. For additional information on our investment and asset-liability management strategies, see Investments. Impact of Currency Volatility Currency volatility remains acute. Strengthening of the U.S. dollar against the Euro, British pound and the Japanese yen (the Major Currencies) impacts income for our businesses with substantial international operations. In particular, growth trends in net premiums written reported in U.S. dollars can differ significantly from those measured in original currencies. The net effect on underwriting results, however, is significantly mitigated, as both revenues and expenses are similarly affected. These currencies may continue to fluctuate, especially as a result of central bank responses to inflation, concerns regarding future economic growth and other macroeconomic factors, and such fluctuations will affect net premiums written growth trends reported in U.S. dollars, as well as financial statement line item comparability. General Insurance businesses are transacted in most major foreign currencies. The following table presents the average of the quarterly weighted average exchange rates of the Major Currencies, which have the most significant impact on our businesses: [[GREPCENT_TABLE]] [["Years Ended December 31,","","","","","","","Percentage Change"],["Rate for 1 USD","","","","","","2024","2023","2022","","2024 vs 2023","","2023 vs 2022"],["Major Currency:"],["GBP","","","","","","","0.78","","0.81","","0.81","","","(4)","%","","\u2014","%"],["EUR","","","","","","","0.92","","0.93","","0.95","","","(1)","%","","(2)","%"],["JPY","","","","","","","150.61","","139.79","","129.67","","","8","%","","8","%"]] [[/GREPCENT_TABLE]] Unless otherwise noted, references to the effects of foreign exchange in the General Insurance discussion of results of operations are with respect to movements in the Major Currencies included in the preceding table. [[GREPCENT_TABLE]] [["AIG | 2024 Form 10-K","47"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Consolidated Results of Operations Consolidated Results of Operations The following section provides a comparative discussion of our consolidated results of operations on a reported basis for the three-year period ended December 31, 2024. Factors that relate primarily to a specific business are discussed in more detail within the business segment operations section. For information regarding the critical accounting estimates that affect our results of operations, see Critical Accounting Estimates above. The following table presents our consolidated results of operations and other key financial metrics: [[GREPCENT_TABLE]] [["Years Ended December 31,","","","","","","","","","","","","","","Percentage Change"],["(in millions)","","","","","","","","2024","","2023","","2022","","2024 vs 2023","","2023 vs 2022"],["Revenues:"],["Premiums","","","","","","","","$","23,537","","","$","25,564","","","$","26,765","","","(8)","","%","(4)","","%"],["Net investment income:"],["Net investment income - excluding Fortitude Re funds withheld assets","","","","","","","","4,111","","","3,266","","","2,317","","","26","","","41"],["Net investment income - Fortitude Re funds withheld assets","","","","","","","","144","","","180","","","53","","","(20)","","","240"],["Total net investment income","","","","","","","","4,255","","","3,446","","","2,370","","","23","","","45"],["Net realized gains (losses):"],["Net realized losses - excluding Fortitude Re funds withheld assets and embedded derivative","","","","","","","","(434)","","","(734)","","","(207)","","","41","","","(255)"],["Net realized losses on Fortitude Re funds withheld assets","","","","","","","","(39)","","","(71)","","","(99)","","","45","","","28"],["Net realized gains (losses) on Fortitude Re funds withheld embedded derivative","","","","","","","","(75)","","","(273)","","","1,133","","","73","","","NM"],["Total net realized gains (losses)","","","","","","","","(548)","","","(1,078)","","","827","","","49","","","NM"],["Other income","","","","","","","","7","","","6","","","34","","","17","","","(82)"],["Total revenues","","","","","","","","27,251","","","27,938","","","29,996","","","(2)","","","(7)"],["Benefits, losses and expenses:"],["Losses and loss adjustment expenses incurred","","","","","","","","14,567","","","15,393","","","15,461","","","(5)","","","\u2014"],["Amortization of deferred policy acquisition costs","","","","","","","","3,425","","","3,771","","","3,545","","","(9)","","","6"],["General operating and other expenses","","","","","","","","5,529","","","5,399","","","6,159","","","2","","","(12)"],["Interest expense","","","","","","","","462","","","516","","","603","","","(10)","","","(14)"],["(Gain) loss on extinguishment of debt","","","","","","","","14","","","(37)","","","303","","","NM","","NM"],["Net (gain) loss on divestitures and other","","","","","","","","(616)","","","29","","","153","","","NM","","(81)"],["Total benefits, losses and expenses","","","","","","","","23,381","","","25,071","","","26,224","","","(7)","","","(4)"],["Income from continuing operations before income tax expense","","","","","","","","3,870","","","2,867","","","3,772","","","35","","","(24)"],["Income tax expense:"],["Current","","","","","","","","657","","","176","","","(452)","","","273","","","NM"],["Deferred","","","","","","","","513","","","(50)","","","1,334","","","NM","","NM"],["Income tax expense","","","","","","","","1,170","","","126","","","882","","","NM","","(86)"],["Income from continuing operations","","","","","","","","2,700","","","2,741","","","2,890","","","(1)","","","(5)"],["Income (loss) from discontinued operations, net of income taxes","","","","","","","","(3,626)","","","1,137","","","8,383","","","NM","","(86)"],["Net income (loss)","","","","","","","","(926)","","","3,878","","","11,273","","","NM","","(66)"],["Less: Net income attributable to noncontrolling interests","","","","","","","","478","","","235","","","1,046","","","103","","","(78)"],["Net income (loss) attributable to AIG","","","","","","","","(1,404)","","","3,643","","","10,227","","","NM","","(64)"],["Less: Dividends on preferred stock and preferred stock redemption premiums","","","","","","","","22","","","29","","","29","","","(24)","","","\u2014"],["Net income (loss) attributable to AIG common shareholders","","","","","","","","$","(1,426)","","","$","3,614","","","$","10,198","","","NM","%","(65)","","%"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["Years Ended December 31,","2024","2023","2022"],["Return on equity","(3.2)","%","8.6","%","20.7","%"],["Adjusted return on equity","6.6","","5.6","","3.6"],["Return on tangible equity","8.1","","8.5","","N/A"],["Core operating return on equity","9.1","","9.6","","N/A"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["48","AIG | 2024 Form 10-K"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Consolidated Results of Operations [[GREPCENT_TABLE]] [["(in millions, except per share data)","December 31, 2024","","December 31, 2023"],["Balance sheet data:"],["Total assets","$","161,322","","","$","539,306"],["Long-term debt","8,764","","","10,375"],["Debt of consolidated investment entities","158","","","231"],["Total AIG shareholders\u2019 equity","42,521","","","45,351"],["Book value per share","70.16","","","65.14"],["Adjusted book value per share","73.79","","","78.50"],["Tangible book value per share","63.98","","","59.60"],["Adjusted tangible book value per share","67.62","","","72.96"],["Core operating book value per share","61.75","","","52.74"]] [[/GREPCENT_TABLE]] NET INCOME (LOSS) ATTRIBUTABLE TO AIG COMMON SHAREHOLDERS Years Ended December 31, 2024 and 2023 Comparison Net income (loss) attributable to AIG common shareholders decreased $5.0 billion due to the following: •a decrease in Income (loss) from discontinued operations, net of income taxes of $4.8 billion as a result of the deconsolidation of Corebridge; •a decrease in underwriting income driven by unfavorable prior year reserve development of $254 million, which does not reflect the benefit of recoveries under a retroactive adverse development cover, as well as the sales of AIG Re and Crop Risk Services, Inc. (CRS), partially offset by improved portfolio performance and growth; •an increase in net income attributable to noncontrolling interest of $243 million primarily driven by Corebridge; and •an increase in income tax expense of $1.0 billion as a result of higher income before taxes and discrete tax benefits in the prior year primarily related to a reduction in the valuation allowance and developments related to the potential resolution of an IRS audit matter. The decrease in Net income (loss) attributable to AIG common shareholders was partially offset by the following: •an increase in Net investment income of $809 million primarily driven by dividends received from Corebridge of $162 million and changes in its stock price and gain on sale of shares of $439 million, higher income on available for sale fixed maturity securities of $121 million and an increase in the fair value of equity securities of $96 million; and •an increase in Net realized gains excluding Fortitude Re funds withheld assets and embedded derivative of $300 million, primarily driven by a $85 million decrease in losses from sales of securities, lower derivative and hedge activity losses of $103 million and a $132 million increase in foreign exchange gains, partially offset by lower sales on alternative investments of $45 million. Years Ended December 31, 2023 and 2022 Comparison Net income (loss) attributable to AIG common shareholders decreased $6.6 billion due to the following: •decrease in Income (loss) from discontinued operations, net of income taxes of $7.2 billion as a result of the decrease in net income of Corebridge; •decrease in Net realized gains on Fortitude Re funds withheld embedded derivative of $1.4 billion driven by interest rate movements; •decrease in Net realized gains excluding Fortitude Re funds withheld assets and embedded derivative of $527 million, driven by $324 million decrease in other derivative and hedge accounting, $142 million decrease in foreign exchange transactions and losses on sales of securities of $103 million; and •decrease in Income tax expense of $756 million primarily attributable to lower income from continuing operations. The decrease in Net income (loss) attributable to AIG common shareholders was partially offset by the following: •higher net investment income of $1.1 billion primarily driven by higher income on available for sale fixed maturity securities of $884 million and an increase in fair value of fixed maturity securities where we elected the fair value option of $420 million as a result of the higher rate environment; •lower income attributable to noncontrolling interest of $811 million driven by the decline in net income at Corebridge; and •higher underwriting income in General Insurance of $387 million, including $86 million attributable to eliminating the international reporting lag, reflecting the continued earn-in of positive rate change, strong renewal retentions and new business production, as well as increased favorable prior year development and lower catastrophe losses. Underwriting income was negatively impacted by unfavorable movements in foreign exchange. For additional information on the elimination of the international reporting lag, see Note 1 to the to the Consolidated Financial Statements. [[GREPCENT_TABLE]] [["AIG | 2024 Form 10-K","49"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Consolidated Results of Operations INCOME TAX EXPENSE ANALYSIS For the years ended December 31, 2024, 2023 and 2022, the effective tax rate on income (loss) from continuing operations was 30.2 percent, 4.4 percent and 23.4 percent, respectively. For additional information, see Note 21 to the Consolidated Financial Statements. NON-GAAP RECONCILIATIONS The following table presents reconciliations of Book value per share to Adjusted book value per share, Tangible book value per share and Core operating book value per share, which are non-GAAP measures. For additional information, see Use of Non-GAAP Measures. [[GREPCENT_TABLE]] [["","December 31,"],["(in millions, except per share data)","","2024","","2023","","2022"],["Total AIG shareholders' equity","$","42,521","","$","45,351","","$","40,970"],["Preferred equity","","\u2014","","","485","","","485"],["Total AIG common shareholders' equity","","42,521","","","44,866","","","40,485"],["Less: Investments related AOCI","","(2,872)","","","(10,994)","","","(20,811)"],["Add: Cumulative unrealized gains and losses related to Fortitude Re funds withheld assets","","(667)","","","(1,791)","","","(2,862)"],["Subtotal: Investments AOCI","","(2,205)","","","(9,203)","","","(17,949)"],["AIG adjusted common shareholders' equity","$","44,726","","$","54,069","","$","58,434"],["Total AIG common shareholders' equity","$","42,521","","$","44,866","","$","40,485"],["Less Intangible Assets:"],["Goodwill","","3,373","","","3,422","","","3,751"],["Value of distribution channel acquired","","127","","","145","","","273"],["Other intangibles","","243","","","249","","","415"],["Total intangibles assets","","3,743","","","3,816","","","4,439"],["AIG tangible common shareholders' equity","$","38,778","","$","41,050","","$","36,046"],["AIG adjusted common shareholders' equity","$","44,726","","$","54,069","","$","58,434"],["Total intangibles assets","","3,743","","","3,816","","","4,439"],["AIG adjusted tangible common shareholders' equity","$","40,983","","$","50,253","","$","53,995"],["Total AIG common shareholders' equity","$","42,521","","$","44,866","","$","40,485"],["Less: AIG's ownership interest in Corebridge","","3,810","","","6,738","","","8,690"],["Less: Investments related AOCI - AIG","","(2,872)","","","(3,084)","","","(1,693)"],["Add: Cumulative unrealized gains and losses related to Fortitude Re funds withheld assets - AIG","","(667)","","","(573)","","","(682)"],["Subtotal: Investments AOCI - AIG","","(2,205)","","","(2,511)","","","(1,011)"],["Less: Deferred tax assets","","3,489","","","4,313","","","4,518"],["AIG core operating shareholders' equity","$","37,427","","$","36,326","","$","28,288"],["Total common shares outstanding","","606.1","","","688.8","","","734.1"],["Book value per share","$","70.16","","$","65.14","","$","55.15"],["Adjusted book value per share","","73.79","","","78.50","","","79.60"],["Tangible book value per share","","63.98","","","59.60","","","49.10"],["Adjusted tangible book value per share","","67.62","","","72.96","","","73.55"],["Core operating book value per share","","61.75","","","52.74","","","38.53"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["50","AIG | 2024 Form 10-K"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Consolidated Results of Operations The following table presents reconciliations of Return on equity to Adjusted return on equity, Tangible return on equity and Core operating return on equity, which are non-GAAP measures. For additional information, see Use of Non-GAAP Measures. [[GREPCENT_TABLE]] [["Years Ended December 31,"],["(dollars in millions)","","","","","","","2024","","","2023","","","2022"],["Actual or annualized net income (loss) attributable to AIG common shareholders","","","","","","$","(1,426)","","$","3,614","","$","10,198"],["Actual or annualized adjusted after-tax income attributable to AIG common shareholders","","","","","","$","3,254","","$","3,205","","$","2,121"],["Average AIG common shareholders' equity","","","","","","$","44,051","","$","41,930","","$","49,338"],["Less: Average investments AOCI","","","","","","","(5,132)","","","(14,836)","","","(9,003)"],["Average AIG adjusted common shareholders' equity","","","","","","$","49,183","","$","56,766","","$","58,341"],["Average AIG common shareholders' equity","","","","","","$","44,051","","$","41,930"],["Less: Average intangibles","","","","","","","3,797","","","4,070"],["Average AIG tangible common shareholders' equity","","","","","","$","40,254","","$","37,860"],["Average AIG common shareholders' equity","","","","","","$","44,051","","$","41,930"],["Less: Average AIG's ownership interest in Corebridge","","","","","","","6,770","","","7,376"],["Less: Average Investments AOCI - AIG","","","","","","","(2,351)","","","(3,254)"],["Less: Average deferred tax assets","","","","","","","3,998","","","4,322"],["Average AIG core operating shareholders' equity","","","","","","$","35,634","","$","33,486"],["Return on equity","","","","","","","(3.2)","","%","8.6","","%","20.7","","%"],["Adjusted return on equity","","","","","","","6.6","","","5.6","","","3.6"],["Return on tangible equity","","","","","","","8.1","","","8.5","","","N/A"],["Core operating return on equity","","","","","","","9.1","","","9.6","","","N/A"]] [[/GREPCENT_TABLE]] The following table presents a reconciliation of pre-tax income (loss)/net income (loss) attributable to AIG to adjusted pre-tax income (loss)/adjusted after-tax income (loss) attributable to AIG: [[GREPCENT_TABLE]] [["Years Ended December 31,","2024","","2023","","2022"],["(in millions, except per common share data)","","Pre-tax","Total Tax (Benefit) Charge","Non- controlling Interests(a)","","After Tax","","","Pre-tax","Total Tax (Benefit) Charge","Non- controlling Interests(a)","","After Tax","","","Pre-tax","Total Tax (Benefit) Charge","Non- controlling Interests(a)","","After Tax"],["Pre-tax income/net income (loss), including noncontrolling interests","$","3,870","","$","1,170","","$","\u2014","","$","(926)","","","$","2,867","","$","126","","$","\u2014","","$","3,878","","","$","3,772","","$","882","","$","\u2014","","$","11,273"],["Noncontrolling interests(a)","","","","","","(478)","","","(478)","","","","","","","","(235)","","","(235)","","","","","","","","(1,046)","","","(1,046)"],["Pre-tax income/net income (loss) attributable to AIG - including discontinued operations","$","3,870","","$","1,170","","$","(478)","","$","(1,404)","","","$","2,867","","$","126","","$","(235)","","$","3,643","","","$","3,772","","$","882","","$","(1,046)","","$","10,227"],["Dividends on preferred stock and preferred stock redemption premiums","","","","","","","","22","","","","","","","","","","29","","","","","","","","","","29"],["Net income (loss) attributable to AIG common shareholders","","","","","","","$","(1,426)","","","","","","","","","$","3,614","","","","","","","","","$","10,198"],["Changes in uncertain tax positions and other tax adjustments","","","","(239)","","","\u2014","","","239","","","","","","176","","","\u2014","","","(176)","","","","","","(147)","","","\u2014","","","147"],["Deferred income tax valuation allowance releases(b)","","","","30","","","\u2014","","","(30)","","","","","","365","","","\u2014","","","(365)","","","","","","174","","","\u2014","","","(174)"],["Changes in the fair values of equity securities, AIG's investment in Corebridge and gain on sale of shares","","(586)","","","(123)","","","\u2014","","","(463)","","","","(53)","","","(11)","","","\u2014","","","(42)","","","","(29)","","","(6)","","","\u2014","","","(23)"],["(Gain) loss on extinguishment of debt and preferred stock redemption premiums","","14","","","3","","","\u2014","","","26","","","","(37)","","","(8)","","","\u2014","","","(29)","","","","303","","","64","","","\u2014","","","239"],["Net investment income on Fortitude Re funds withheld assets","","(144)","","","(30)","","","\u2014","","","(114)","","","","(180)","","","(38)","","","\u2014","","","(142)","","","","(53)","","","(11)","","","\u2014","","","(42)"],["Net realized losses on Fortitude Re funds withheld assets","","39","","","8","","","\u2014","","","31","","","","71","","","15","","","\u2014","","","56","","","","99","","","21","","","\u2014","","","78"],["Net realized losses on Fortitude Re funds withheld embedded derivative","","75","","","16","","","\u2014","","","59","","","","273","","","57","","","\u2014","","","216","","","","(1,133)","","","(238)","","","\u2014","","","(895)"],["Net realized losses(c)","","428","","","95","","","\u2014","","","333","","","","743","","","128","","","\u2014","","","615","","","","268","","","56","","","\u2014","","","212"],["(Income) loss from discontinued operations","","","","","","","","3,626","","","","","","","","","","(1,137)","","","","","","","","","","(8,383)"],["Net gain on divestitures and other","","(616)","","","(128)","","","\u2014","","","(488)","","","","29","","","149","","","\u2014","","","(120)","","","","153","","","32","","","\u2014","","","121"],["Non-operating litigation reserves and settlements","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","","1","","","\u2014","","","\u2014","","","1","","","","(16)","","","(3)","","","\u2014","","","(13)"],["Unfavorable (favorable) prior year development and related amortization changes ceded under retroactive reinsurance agreements","","105","","","22","","","\u2014","","","83","","","","(62)","","","(13)","","","\u2014","","","(49)","","","","(160)","","","(34)","","","\u2014","","","(126)"],["Net loss reserve discount (benefit) charge","","226","","","47","","","\u2014","","","179","","","","195","","","41","","","\u2014","","","154","","","","(703)","","","(148)","","","\u2014","","","(555)"],["Net results of businesses in run-off(d)","","111","","","24","","","\u2014","","","87","","","","31","","","7","","","\u2014","","","24","","","","(25)","","","(5)","","","\u2014","","","(20)"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["AIG | 2024 Form 10-K","51"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Consolidated Results of Operations [[GREPCENT_TABLE]] [["Years Ended December 31,","2024","","2023","","2022"],["(in millions, except per common share data)","","Pre-tax","Total Tax (Benefit) Charge","Non- controlling Interests(a)","","After Tax","","","Pre-tax","Total Tax (Benefit) Charge","Non- controlling Interests(a)","","After Tax","","","Pre-tax","Total Tax (Benefit) Charge","Non- controlling Interests(a)","","After Tax"],["Pension expense related to lump sum payments to former employees","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","","71","","","15","","","\u2014","","","56","","","","59","","","12","","","\u2014","","","47"],["Integration and transaction costs associated with acquiring or divesting businesses","","39","","","8","","","\u2014","","","31","","","","6","","","1","","","\u2014","","","5","","","","12","","","3","","","\u2014","","","9"],["Restructuring and other costs(e)","","745","","","156","","","\u2014","","","589","","","","356","","","75","","","\u2014","","","281","","","","423","","","89","","","\u2014","","","334"],["Non-recurring costs related to regulatory or accounting changes","","18","","","4","","","\u2014","","","14","","","","22","","","5","","","\u2014","","","17","","","","26","","","5","","","\u2014","","","21"],["Net impact from elimination of international reporting lag(f)","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","","(12)","","","(3)","","","\u2014","","","(9)","","","","(127)","","","(27)","","","\u2014","","","(100)"],["Noncontrolling interests(a)","","","","","","478","","","478","","","","","","","","235","","","235","","","","","","","","1,046","","","1,046"],["Adjusted pre-tax income/Adjusted after-tax income attributable to AIG common shareholders","$","4,324","","$","1,063","","$","\u2014","","$","3,254","","","$","4,321","","$","1,087","","$","\u2014","","$","3,205","","","$","2,869","","$","719","","$","\u2014","","$","2,121"],["Weighted average diluted shares outstanding","","","","","","","","657.3","","","","","","","","","","725.2","","","","","","","","","","787.9"],["Income (loss) per common share attributable to AIG common shareholders (diluted)","","","","","","","$","(2.17)","","","","","","","","","$","4.98","","","","","","","","","$","12.94"],["Adjusted after-tax income per common share attributable to AIG common shareholders (diluted)","","","","","","","$","4.95","","","","","","","","","$","4.42","","","","","","","","","$","2.69"]] [[/GREPCENT_TABLE]] (a)Noncontrolling interest primarily relates to Corebridge and is the portion of Corebridge earnings that AIG did not own. Corebridge is consolidated until June 9, 2024. The historical results of Corebridge owned by AIG are reflected in the Income (loss) from discontinued operations, net of income taxes. (b)The year ended December 31, 2023 includes a valuation allowance release related to a portion of certain tax attribute carryforwards of AIG's U.S. federal consolidated income tax group, as well as valuation allowance changes in certain foreign jurisdictions. (c)Includes all net realized gains and losses except earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-qualifying (economic) hedging or for asset replication and net realized gains and losses on Fortitude Re funds withheld assets. (d)In the fourth quarter of 2024, AIG realigned and began excluding the net results of run-off businesses previously reported in Other Operations from Adjusted pre-tax income. Historical results have been recast to reflect these changes. (e)In the year ended December 31, 2024, Restructuring and other costs increased primarily as a result of employee-related costs, including severance, and real estate impairment charges. (f)For additional information, see Note 1 to the Consolidated Financial Statements. PRE-TAX INCOME (LOSS) COMPARISON Pre-tax income (loss) was $3.9 billion, $2.9 billion and $3.8 billion in the years ended December 31, 2024, 2023 and 2022, respectively. For the main drivers impacting AIG’s results of operations, see – Net Income (Loss) Attributable to AIG Common Shareholders above. ADJUSTED PRE-TAX INCOME (LOSS) COMPARISON Adjusted pre-tax income (loss) was $4.3 billion, $4.3 billion and $2.9 billion in the years ended December 31, 2024, 2023 and 2022, respectively. For the main drivers impacting AIG’s adjusted pre-tax income (loss), see Business Segment Operations. [[GREPCENT_TABLE]] [["52","AIG | 2024 Form 10-K"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Consolidated Results of Operations The following table presents a reconciliation of General Insurance and Other Operations Net investment income and other/pre-tax income (loss) to Net investment income and other, APTI basis/adjusted pre-tax income (loss): [[GREPCENT_TABLE]] [["Years Ended December 31,","2024","","2023","","2022"],["","General Insurance","","Other Operations","","General Insurance","","Other Operations","","General Insurance","","Other Operations"],["(in millions)","Net Investment Income and Other","","Pre-tax Income (Loss)","","Net Investment Income and Other","","Pre-tax Income (Loss)","","Net Investment Income and Other","","Pre-tax Income (Loss)","","Net Investment Income and Other","","Pre-tax Income (Loss)","","Net Investment Income and Other","","Pre-tax Income (Loss)","","Net Investment Income and Other","","Pre-tax Income (Loss)"],["Net investment income and other/Pre-tax income (loss)","$","3,215","","","$","4,474","","","$","1,047","","","$","(604)","","","$","3,150","","","$","4,308","","","$","302","","","$","(1,441)","","","$","2,474","","","$","5,175","","","$","(70)","","","$","(1,403)"],["Consolidation and Eliminations","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","13","","","\u2014","","","\u2014","","","\u2014","","","(14)","","","\u2014"],["Other income (expense) - net","(31)","","","\u2014","","","18","","","\u2014","","","(49)","","","\u2014","","","39","","","\u2014","","","(51)","","","\u2014","","","1","","","\u2014"],["Changes in the fair values of equity securities, AIG's investment in Corebridge and gain on sale of shares","(73)","","","(73)","","","(513)","","","(513)","","","(84)","","","(84)","","","31","","","31","","","(9)","","","(9)","","","(20)","","","(20)"],["(Gain) loss on extinguishment of debt","\u2014","","","\u2014","","","\u2014","","","14","","","\u2014","","","\u2014","","","\u2014","","","(37)","","","\u2014","","","\u2014","","","\u2014","","","303"],["Net investment income on Fortitude Re funds withheld assets","(44)","","","(44)","","","(100)","","","(100)","","","(4)","","","(4)","","","(176)","","","(176)","","","(6)","","","(6)","","","(47)","","","(47)"],["Net realized losses on Fortitude Re funds withheld assets","\u2014","","","8","","","\u2014","","","31","","","\u2014","","","1","","","\u2014","","","70","","","\u2014","","","\u2014","","","\u2014","","","99"],["Net realized (gains) losses on Fortitude Re funds withheld embedded derivative","\u2014","","","\u2014","","","\u2014","","","75","","","\u2014","","","(18)","","","\u2014","","","291","","","\u2014","","","(70)","","","\u2014","","","(1,063)"],["Net realized (gains) losses","(7)","","","330","","","(1)","","","98","","","10","","","731","","","2","","","12","","","15","","","136","","","46","","","132"],["Net loss (gain) on divestitures and other","\u2014","","","(522)","","","\u2014","","","(94)","","","\u2014","","","18","","","\u2014","","","11","","","\u2014","","","15","","","\u2014","","","138"],["Non-operating litigation reserves and settlements","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","1","","","\u2014","","","(14)","","","\u2014","","","(2)"],["Unfavorable (favorable) prior year development and related amortization changes ceded under retroactive reinsurance agreements","\u2014","","","101","","","\u2014","","","4","","","\u2014","","","(42)","","","\u2014","","","(20)","","","\u2014","","","(197)","","","\u2014","","","37"],["Net loss reserve discount (benefit) charge","\u2014","","","226","","","\u2014","","","\u2014","","","\u2014","","","195","","","\u2014","","","\u2014","","","\u2014","","","(703)","","","\u2014","","","\u2014"],["Net results of businesses in run-off","\u2014","","","\u2014","","","(17)","","","111","","","\u2014","","","\u2014","","","(21)","","","31","","","\u2014","","","\u2014","","","(6)","","","(25)"],["Pension expense related to lump sum payments to former employees","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","60","","","\u2014","","","11","","","\u2014","","","31","","","\u2014","","","28"],["Integration and transaction costs associated with acquiring or divesting businesses","\u2014","","","\u2014","","","\u2014","","","39","","","\u2014","","","1","","","\u2014","","","5","","","\u2014","","","1","","","\u2014","","","11"],["Restructuring and other costs","\u2014","","","459","","","\u2014","","","286","","","\u2014","","","195","","","\u2014","","","161","","","\u2014","","","172","","","\u2014","","","251"],["Non-recurring costs related to regulatory or accounting changes","\u2014","","","18","","","\u2014","","","\u2014","","","\u2014","","","22","","","\u2014","","","\u2014","","","\u2014","","","26","","","\u2014","","","\u2014"],["Net impact from elimination of international reporting lag","\u2014","","","\u2014","","","\u2014","","","\u2014","","","(1)","","","(12)","","","\u2014","","","\u2014","","","(41)","","","(127)","","","\u2014","","","\u2014"],["Net investment income and other, APTI basis/Adjusted pre-tax income (loss)","$","3,060","","","$","4,977","","","$","434","","","$","(653)","","","$","3,022","","","$","5,371","","","$","190","","","$","(1,050)","","","$","2,382","","","$","4,430","","","$","(110)","","","$","(1,561)"]] [[/GREPCENT_TABLE]] Business Segment Operations In the fourth quarter of 2024, the Company realigned its organizational structure and the composition of its reportable segments to reflect changes in how the Company manages its operations, specifically the level at which its chief operating decision makers (CODMs) regularly review operating results and allocate resources. Our CODMs are the chief executive officer (CEO) and chief financial officer (CFO). The CODMs evaluate performance of the segments based on underwriting income (loss). The CODMs use this measure to benchmark AIG’s performance, assessing performance of the segments and in establishing management’s compensation. As of December 31, 2024, AIG reports the results of its businesses through three segments and Other Operations. The three segments are North America Commercial, International Commercial and Global Personal. Other Operations predominantly consists of Net Investment Income from our AIG Parent liquidity portfolio, Corebridge dividend income, corporate General operating expenses, and Interest expense. Prior years’ presentations have been recast to conform to the new reportable segments. Our General Insurance business (General Insurance) consists of our three segments and the Net investment income related to our insurance operations. [[GREPCENT_TABLE]] [["AIG | 2024 Form 10-K","53"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Business Segment Operations | General Insurance [[GREPCENT_TABLE]] [["General Insurance"],["Commercial Lines is managed by our geographic markets of North America and International, while Personal Insurance is managed globally. Our global presence is underpinned by our multinational capabilities to provide Commercial Lines and Personal Insurance products within these geographic markets."],["PRODUCTS AND DISTRIBUTION"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["North America Commercial consists of insurance businesses in the United States, Canada and Bermuda.","International Commercial consists of insurance businesses in Japan, the United Kingdom, Europe, Middle East and Africa (EMEA region), Asia Pacific, Latin America and Caribbean, and China. International Commercial also includes the results of Talbot Holdings Ltd. (Talbot) as well as AIG\u2019s Global Specialty business.","Global Personal consists primarily of insurance businesses in the United States as well as Japan, the United Kingdom, Europe, Middle East and Africa (EMEA region), Asia Pacific, Latin America and Caribbean, and China."]] [[/GREPCENT_TABLE]] Commercial Lines Property & Short Tail: Products include commercial and industrial property, including business interruption, as well as package insurance products and services that cover exposures to man-made and natural disasters. Casualty: Products include general liability, environmental, commercial automobile liability, workers’ compensation, excess casualty and crisis management insurance products. Casualty also includes risk-sharing and other customized structured programs for large corporate and multinational customers. Financial Lines: Products include professional liability insurance for a range of businesses and risks, including directors and officers, mergers and acquisitions, fidelity, employment practices, fiduciary liability, cyber risk, kidnap and ransom, and errors and omissions insurance. Global Specialty: Products include marine, energy-related property insurance products, aviation, political risk, trade credit, trade finance and portfolio solutions. On July 3, 2023, AIG completed the sale of CRS to American Financial Group, Inc. and in substance, AIG exited the crop business. For periods prior to the sale of CRS, the underwriting results are included in adjusted pre-tax income of General Insurance – North America Commercial. On November 1, 2023, AIG completed the sale of Validus Reinsurance, Ltd. (Validus Re), including AlphaCat Managers Ltd. and Talbot Treaty reinsurance business to RenaissanceRe Holdings Ltd. (RenaissanceRe). For periods prior to the sale of Validus Re, the underwriting results are included in adjusted pre-tax income of General Insurance – North America Commercial. For additional information, see Note 1 to the Consolidated Financial Statements. Personal Insurance Global Accident & Health: Products include group personal accident and business travel products for employees, associations and other organizations, and voluntary and sponsor-paid personal accident and supplemental health products for individuals. On December 2, 2024, AIG completed the sale of its global individual personal travel insurance and assistance business to Zurich Insurance Group. The agreement includes the Travel Guard business and its servicing capabilities, excluding our travel insurance businesses in Japan and our AIG joint venture arrangement in India. Travel coverages offered through AIG’s Global Accident & Health business are also excluded from this agreement. For additional information, see Note 4 to the Consolidated Financial Statements. [[GREPCENT_TABLE]] [["54","AIG | 2024 Form 10-K"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Business Segment Operations | General Insurance Personal Lines: Products include personal auto and homeowners in selected markets, comprehensive extended warranty, device protection insurance, home warranty and related services, and insurance for high net-worth individuals offered through Private Client Select (PCS) in the U.S. that covers auto, homeowners, umbrella, yacht, fine art and collections. General Insurance products in North America and International markets are distributed through various channels, including captive and independent agents, brokers, affinity partners, airlines and travel agents, and retailers. Our global platform enables writing multinational and cross-border risks in both Commercial Lines and Personal Insurance. BUSINESS STRATEGY Profitable Growth: Build on our high-quality portfolio by focusing on targeted growth through continued underwriting discipline, improved retentions and new business development. Deploy capital efficiently to act opportunistically and achieve growth in profitable lines, geographies and customer segments, while taking a disciplined underwriting approach to exposure management, terms and conditions and rate change to achieve our risk/return hurdles. Continue to be open to inorganic growth opportunities in profitable markets and segments to expand our capabilities and footprint. Underwriting Excellence: Continue to enhance portfolio optimization through strength of underwriting framework and guidelines as well as clear communication of risk appetite and rate adequacy. Empower and increase accountability of the underwriter and continue to integrate underwriting, claims and actuarial to enable better decision making. Focus on enhancing risk selection, driving consistent underwriting best practices and building robust monitoring standards to improve underwriting results. Reinsurance Optimization: Strategically partner with reinsurers to effectively manage exposure to losses arising from frequency of large catastrophic events and severity from individual risk losses. We strive to optimize our reinsurance program to manage volatility and protect the balance sheet from tail events and unpredictable net losses in support of our profitable growth objectives. COMPETITION AND CHALLENGES General Insurance operates in a highly competitive industry against global, national and local insurers and reinsurers and underwriting syndicates in specific market areas and product types. Insurance companies compete through a combination of risk acceptance criteria, product pricing, service levels and terms and conditions. We serve our business and individual customers on a global basis – from the largest multinational corporations to local businesses and individuals. General Insurance seeks to differentiate itself in the markets where we participate by providing leading expertise and insight to clients, distribution partners and other stakeholders, delivering underwriting excellence and value-driven insurance solutions and providing high quality, tailored end-to-end support to stakeholders. In doing so, we leverage our world-class global franchise, multinational capabilities, balance sheet strength and financial flexibility. Our challenges include: •ensuring adequate business pricing given passage of time to reporting and settlement for insurance business, particularly with respect to long-tail Commercial Lines exposures; •impact of social and economic inflation on claim frequency and severity; and •volatility in claims arising from natural and man-made catastrophes and other aggregations of risk exposure. INDUSTRY AND ECONOMIC FACTORS The results of General Insurance for the year ended December 31, 2024 reflect continued strong performance from our Commercial Lines portfolio and focused execution on our portfolio management strategies within Personal Insurance. Across North America Commercial and International Commercial we have seen increased demand for our insurance products and strong growth in new business. We continue to monitor the impact of inflation and other economic factors on rate adequacy and loss cost trends. Similarly, we are monitoring monetary policy actions taken or anticipated to be taken by central banks and the corresponding impact on market interest rates. [[GREPCENT_TABLE]] [["AIG | 2024 Form 10-K","55"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Business Segment Operations | General Insurance General Insurance – North America Commercial North America Commercial continues to pursue profitable growth. While market discipline continues to support price increases across most lines, we are seeing capacity move back into the market in certain segments given pricing levels which is putting pressure on rates. We have focused on retaining our best accounts which has led to strong retention across the portfolio. These retention rates are often coupled with an exposure limit management strategy to reduce volatility within the portfolio. We continue to proactively identify segment growth areas as market conditions warrant through effective portfolio management, while non-renewing unprofitable business. General Insurance – International Commercial We are continuing to pursue growth in our most profitable lines of business and diversify our portfolio across all regions by expanding key business lines while remaining a market leader in key developed and developing markets. We are maintaining our underwriting discipline, reducing gross and net limits where appropriate, utilizing reinsurance to reduce volatility, as well as continuing our risk selection strategy to improve profitability. General Insurance – Global Personal Global Personal serves individuals as well as group and corporate clients across a broad range of products, markets, and client profiles. Amid competitive market conditions, we continue to benefit from improved underwriting quality and portfolio diversity, as well as investment in expanded capabilities and strategic distribution partnerships. GENERAL INSURANCE RESULTS [[GREPCENT_TABLE]] [["Years Ended December 31,","","","","","","","","","","","","","","","Change"],["(in millions)","","","","","","","","","2024","","2023","","2022","","2024 vs 2023","","2023 vs 2022"],["Underwriting results:"],["Net premiums written","","","","","","","","$","23,902","","$","26,719","","$","25,512","","","(11)","","%","5","","%"],["Increase in unearned premiums","","","","","","","","","(445)","","","(1,628)","","","(172)","","","73","","","NM"],["Net premiums earned","","","","","","","","","23,457","","","25,091","","","25,340","","","(7)","","","(1)"],["Losses and loss adjustment expenses incurred(a)","","","","","","","","","14,038","","","14,775","","","15,407","","","(5)","","","(4)"],["Acquisition expenses:"],["Amortization of deferred policy acquisition costs","","","","","","","","","3,413","","","3,623","","","3,533","","","(6)","","","3"],["Other acquisition expenses","","","","","","","","","1,137","","","1,279","","","1,365","","","(11)","","","(6)"],["Total acquisition expenses","","","","","","","","","4,550","","","4,902","","","4,898","","","(7)","","","\u2014"],["General operating expenses","","","","","","","","","2,952","","","3,065","","","2,987","","","(4)","","","3"],["Underwriting income","","","","","","","","","1,917","","","2,349","","","2,048","","","(18)","","","15"],["Net investment income","","","","","","","","","3,060","","","3,022","","","2,382","","","1","","","27"],["Adjusted pre-tax income","","","","","","","","$","4,977","","$","5,371","","$","4,430","","","(7)","","%","21","","%"],["Loss ratio(a)","","","","","","","","","59.8","","","58.9","","","60.8","","","0.9","","","(1.9)"],["Acquisition ratio","","","","","","","","","19.4","","","19.5","","","19.3","","","(0.1)","","","0.2"],["General operating expense ratio","","","","","","","","","12.6","","","12.2","","","11.8","","","0.4","","","0.4"],["Expense ratio","","","","","","","","","32.0","","","31.7","","","31.1","","","0.3","","","0.6"],["Combined ratio(a)","","","","","","","","","91.8","","","90.6","","","91.9","","","1.2","","","(1.3)"],["Adjustments for accident year loss ratio, as adjusted and accident year combined ratio, as adjusted:"],["Catastrophe losses and reinstatement premiums","","","","","","","","","(5.0)","","","(4.3)","","","(5.0)","","","(0.7)","","","0.7"],["Prior year development, net of reinsurance and prior year premiums","","","","","","","","","1.4","","","1.4","","","1.8","","","\u2014","","","(0.4)"],["Accident year loss ratio, as adjusted","","","","","","","","","56.2","","","56.0","","","57.6","","","0.2","","","(1.6)"],["Accident year combined ratio, as adjusted","","","","","","","","","88.2","","","87.7","","","88.7","","","0.5","","","(1.0)"]] [[/GREPCENT_TABLE]] (a)Consistent with our definition of APTI, excludes net loss reserve discount and the portion of favorable or unfavorable prior year reserve development for which we have ceded the risk under retroactive reinsurance agreements and related changes in amortization of the deferred gain. [[GREPCENT_TABLE]] [["56","AIG | 2024 Form 10-K"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Business Segment Operations | General Insurance The following table presents General Insurance net premiums written by segment, showing change on both reported and constant dollar basis: [[GREPCENT_TABLE]] [["Years Ended December 31,","","","","","","","","","","","","","","","","Percentage Change in U.S. dollars","","Percentage Change in Original Currency"],["(in millions)","","","","","","","","","","","","2024","","2023","","2022","","2024 vs 2023","","2023 vs 2022","","","2024 vs 2023","","2023 vs 2022"],["North America Commercial","","","","","","","","","","","$","8,452","","$","11,432","","$","10,899","","","(26)","","%","5","","%","","(26)","","%","5","","%"],["International Commercial","","","","","","","","","","","","8,364","","","8,168","","","7,877","","","2","","","4","","","","3","","","5"],["Global Personal","","","","","","","","","","","","7,086","","","7,119","","","6,736","","","\u2014","","","6","","","","2","","","10"],["Total net premiums written","","","","","","","","","","","$","23,902","","$","26,719","","$","25,512","","","(11)","","%","5","","%","","(10)","","%","6","","%"]] [[/GREPCENT_TABLE]] The following tables present General Insurance accident year catastrophes(a) by segment and number of events: [[GREPCENT_TABLE]] [["(dollars in millions)","# of Events","","North America Commercial","","InternationalCommercial","","Global Personal","","Total"],["Years Ended December 31, 2024"],["Flooding, rainstorms and other","3","","","$","2","","","$","98","","","$","\u2014","","","$","100"],["Windstorms and hailstorms","17","","","700","","","133","","","135","","","968"],["Winter storms","2","","","44","","","1","","","7","","","52"],["Wildfires","1","","","41","","","\u2014","","","\u2014","","","41"],["Earthquakes","1","","","\u2014","","","7","","","\u2014","","","7"],["Reinstatement premiums","","","12","","","(2)","","","\u2014","","","10"],["Total catastrophe-related charges","24","","","$","799","","","$","237","","","$","142","","","$","1,178"],["Years Ended December 31, 2023"],["Flooding, rainstorms and other","3","","","$","10","","","$","72","","","$","20","","","$","102"],["Windstorms and hailstorms","26","","","396","","","186","","","126","","","708"],["Winter storms","2","","","24","","","4","","","17","","","45"],["Wildfires","2","","","131","","","19","","","13","","","163"],["Earthquakes","1","","","20","","","29","","","\u2014","","","49"],["Reinstatement premiums","","","31","","","(1)","","","1","","","31"],["Total catastrophe-related charges","34","","","$","612","","","$","309","","","$","177","","","$","1,098"],["Years Ended December 31, 2022"],["Flooding, rainstorms and other","3","","","$","53","","","$","103","","","$","2","","","$","158"],["Windstorms and hailstorms","18","","","484","","","137","","","116","","","737"],["Winter storms","5","","","141","","","21","","","45","","","207"],["Earthquakes","1","","","\u2014","","","16","","","3","","","19"],["Russia / Ukraine","N/A","(b)","10","","","97","","","\u2014","","","107"],["Reinstatement premiums","","","51","","","31","","","2","","","84"],["Total catastrophe-related charges","27","","","$","739","","","$","405","","","$","168","","","$","1,312"]] [[/GREPCENT_TABLE]] (a)Natural catastrophe losses are generally weather or seismic events, in each case, having a net impact on AIG in excess of $10 million and man-made catastrophe losses, such as terrorism and civil unrest that exceed the $10 million threshold. (b)As the Russia/Ukraine conflict continues to evolve the number of events is yet to be determined. NORTH AMERICA COMMERCIAL RESULTS [[GREPCENT_TABLE]] [["Years Ended December 31,","","","","","","","","","","","","","","","","","Change"],["(in millions)","","","","","","","","","2024","","2023","","2022","","","","2024 vs 2023","","2023 vs 2022"],["Underwriting results:"],["Net premiums written","","","","","","","","","$","8,452","","","$","11,432","","","$","10,899","","","","","(26)","","%","5","%"],["Increase in unearned premiums","","","","","","","","","(280)","","","(1,199)","","","(455)","","","","","77","","","(164)"],["Net premiums earned","","","","","","","","","8,172","","","10,233","","","10,444","","","","","(20)","","","(2)"],["Losses and loss adjustment expenses incurred(a)","","","","","","","","","5,713","","","6,323","","","7,218","","","","","(10)","","","(12)"],["Acquisition expenses:"],["Amortization of deferred policy acquisition costs","","","","","","","","","824","","","1,371","","","1,381","","","","","(40)","","","(1)"],["Other acquisition expenses","","","","","","","","","222","","","231","","","174","","","","","(4)","","","33"],["Total acquisition expenses","","","","","","","","","1,046","","","1,602","","","1,555","","","","","(35)","","","3"],["General operating expenses","","","","","","","","","865","","","953","","","927","","","","","(9)","","","3"],["Underwriting income","","","","","","","","","$","548","","","$","1,355","","","$","744","","","","","(60)","","%","82","%"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["AIG | 2024 Form 10-K","57"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Business Segment Operations | General Insurance [[GREPCENT_TABLE]] [["Years Ended December 31,","","","","","","","","","","","","","","","","","Change"],["(in millions)","","","","","","","","","2024","","2023","","2022","","","","2024 vs 2023","","2023 vs 2022"],["Loss ratio(a)","","","","","","","","","69.9","","","61.8","","","69.1","","","","","8.1","","","(7.3)"],["Acquisition ratio","","","","","","","","","12.8","","","15.7","","","14.9","","","","","(2.9)","","","0.8"],["General operating expense ratio","","","","","","","","","10.6","","","9.3","","","8.9","","","","","1.3","","","0.4"],["Expense ratio","","","","","","","","","23.4","","","25.0","","","23.8","","","","","(1.6)","","","1.2"],["Combined ratio(a)","","","","","","","","","93.3","","","86.8","","","92.9","","","","","6.5","","","(6.1)"],["Adjustments for accident year loss ratio, as adjusted and accident year combined ratio, as adjusted:"],["Catastrophe losses and reinstatement premiums","","","","","","","","","(9.7)","","","(5.9)","","","(6.9)","","","","","(3.8)","","","1.0"],["Prior year development, net of reinsurance and prior year premiums","","","","","","","","","1.5","","","3.7","","","0.7","","","","","(2.2)","","","3.0"],["Accident year loss ratio, as adjusted","","","","","","","","","61.7","","","59.6","","","62.9","","","","","2.1","","","(3.3)"],["Accident year combined ratio, as adjusted","","","","","","","","","85.1","","","84.6","","","86.7","","","","","0.5","","","(2.1)"]] [[/GREPCENT_TABLE]] (a)Consistent with our definition of APTI, excludes net loss reserve discount and the portion of favorable or unfavorable prior year reserve development for which we have ceded the risk under retroactive reinsurance agreements and related changes in amortization of the deferred gain. Business and Financial Highlights Net Premiums Written Comparison for the Years Ended December 31, 2024 and 2023 Net premiums written decreased by $3.0 billion driven by the sales of AIG Re and CRS, partially offset by growth in Casualty. Net Premiums Written Comparison for the Years Ended December 31, 2023 and 2022 Net premiums written increased by $533 million, particularly in AIG Re and Property driven by continued positive rate change, higher renewal retentions and strong new business production, partially offset by decreases in Crop as a consequence of the CRS sale and Financial Lines. Underwriting Income (Loss) Comparison for the Years Ended December 31, 2024 and 2023 Underwriting income decreased by $807 million primarily due to: •lower net favorable prior year development (2.2 points or $252 million), primarily from Casualty which turned unfavorable driven by a large settlement of a legacy mass tort claim with most of the gross loss in accident years covered under the adverse development cover, partially offset by Financial Lines which turned favorable and higher favorable development in Property; •higher Catastrophe losses (3.8 points or $187 million); and •the sales of AIG Re and CRS. This decrease was partially offset by a lower expense ratio (1.6 points) reflecting a lower acquisition ratio (2.9 points), partially offset by an increase in general operating expense ratio (1.3 points), primarily driven by changes in business mix including the impact from the sales of AIG Re and CRS. Underwriting Income (Loss) Comparison for the Years Ended December 31, 2023 and 2022 Underwriting income increased by $611 million primarily due to: •improvement in the accident year loss ratio, as adjusted (3.3 points) primarily driven by changes in business mix along with continued positive rate change, focused risk selection and improved terms and conditions; •higher net favorable prior year reserve development (3.0 points or $327 million), primarily due to lower unfavorable development in Financial Lines, partially offset by lower favorable development in Casualty; and •lower catastrophe losses (1.0 points or $127 million). This increase was partially offset by: •a higher expense ratio (1.2 points) reflecting a higher acquisition ratio (0.8 points) primarily driven by changes in business mix as well as an increase in general operating expense ratio (0.4 points). [[GREPCENT_TABLE]] [["58","AIG | 2024 Form 10-K"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Business Segment Operations | General Insurance INTERNATIONAL COMMERCIAL RESULTS [[GREPCENT_TABLE]] [["Years Ended December 31,","","","","","","","","","","","","","","","","","Change"],["(in millions)","","","","","","","","","2024","","2023","","2022","","","","2024 vs 2023","","2023 vs 2022"],["Underwriting results:"],["Net premiums written","","","","","","","","$","8,364","","$","8,168","","$","7,877","","","","","2","","%","4","","%"],["Increase in unearned premiums","","","","","","","","","(219)","","","(204)","","","(176)","","","","","(7)","","","(16)"],["Net premiums earned","","","","","","","","","8,145","","","7,964","","","7,701","","","","","2","","","3"],["Losses and loss adjustment expenses incurred","","","","","","","","","4,463","","","4,641","","","4,301","","","","","(4)","","","8"],["Acquisition expenses:"],["Amortization of deferred policy acquisition costs","","","","","","","","","1,018","","","943","","","938","","","","","8","","","1"],["Other acquisition expenses","","","","","","","","","342","","","350","","","378","","","","","(2)","","","(7)"],["Total acquisition expenses","","","","","","","","","1,360","","","1,293","","","1,316","","","","","5","","","(2)"],["General operating expenses","","","","","","","","","1,095","","","1,028","","","945","","","","","7","","","9"],["Underwriting income","","","","","","","","$","1,227","","$","1,002","","$","1,139","","","","","22","","%","(12)","","%"],["Loss ratio","","","","","","","","","54.8","","","58.3","","","55.8","","","","","(3.5)","","","2.5"],["Acquisition ratio","","","","","","","","","16.7","","","16.2","","","17.1","","","","","0.5","","","(0.9)"],["General operating expense ratio","","","","","","","","","13.4","","","12.9","","","12.3","","","","","0.5","","","0.6"],["Expense ratio","","","","","","","","","30.1","","","29.1","","","29.4","","","","","1.0","","","(0.3)"],["Combined ratio","","","","","","","","","84.9","","","87.4","","","85.2","","","","","(2.5)","","","2.2"],["Adjustments for accident year loss ratio, as adjusted and accident year combined ratio, as adjusted:"],["Catastrophe losses and reinstatement premiums","","","","","","","","","(2.9)","","","(3.9)","","","(5.0)","","","","","1.0","","","1.1"],["Prior year development, net of reinsurance and prior year premiums","","","","","","","","","1.0","","","(1.8)","","","1.6","","","","","2.8","","","(3.4)"],["Accident year loss ratio, as adjusted","","","","","","","","","52.9","","","52.6","","","52.4","","","","","0.3","","","0.2"],["Accident year combined ratio, as adjusted","","","","","","","","","83.0","","","81.7","","","81.8","","","","","1.3","","","(0.1)"]] [[/GREPCENT_TABLE]] Business and Financial Highlights Net Premiums Written Comparison for the Years Ended December 31, 2024 and 2023 Net premiums written, excluding the unfavorable impact of foreign exchange ($16 million), increased by $212 million primarily due to growth in Property, Specialty and Casualty driven by strength of renewal retentions and new business production, partially offset by the sale of AIG Re and lower production in Financial Lines. Net Premiums Written Comparison for the Years Ended December 31, 2023 and 2022 Net premiums written, excluding the unfavorable impact of foreign exchange ($79 million), increased by $370 million primarily due to growth in Property and Specialty driven by continued positive rate change and strong new business production, partially offset by a decrease in Financial Lines. Underwriting Income (Loss) Comparison for the Years Ended December 31, 2024 and 2023 Underwriting income increased by $225 million primarily due to: •net favorable prior year reserve development of $73 million in 2024 compared to net unfavorable prior year reserve development of $140 million in 2023 (2.8 points or $213 million), primarily as a result of Specialty and Property which turned favorable and lower unfavorable development within Casualty, partially offset by Financial Lines development which turned unfavorable; and •lower catastrophe losses (1.0 points or $72 million). This increase was partially offset by: •a higher expense ratio (1.0 points) reflecting an acquisition ratio (0.5 points) and general operating expense ratio (0.5 points) primarily driven by changes in business mix; and •a higher accident year loss ratio, as adjusted (0.3 points) due to changes in business mix. Underwriting Income (Loss) Comparison for the Years Ended December 31, 2023 and 2022 Underwriting income decreased by $137 million primarily due to: •net unfavorable prior year reserve development of $140 million in 2023 compared to net favorable development in 2022 of $135 million (3.4 points or $275 million), primarily as a result of lower favorable development in Specialty, unfavorable development in Property and higher unfavorable development in Casualty, partially offset by favorable development in Financial Lines; and •a higher accident year loss ratio, as adjusted (0.2 points) due to changes in business mix. [[GREPCENT_TABLE]] [["AIG | 2024 Form 10-K","59"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Business Segment Operations | General Insurance This decrease was partially offset by: •lower catastrophe losses (1.1 points or $96 million); and •a lower expense ratio (0.3 points) reflecting a lower acquisition ratio (0.9 points) primarily driven by changes in business mix and improved commission terms, partially offset by an increase in the general operating expense ratio (0.6 points). GLOBAL PERSONAL RESULTS [[GREPCENT_TABLE]] [["Years Ended December 31,","","","","","","","","","","","","","","","","","Change"],["(in millions)","","","","","","","","","2024","","2023","","2022","","","","2024 vs 2023","","2023 vs 2022"],["Underwriting results:"],["Net premiums written","","","","","","","","$","7,086","","$","7,119","","$","6,736","","","","","\u2014","","%","6","","%"],["(Increase) decrease in unearned premiums","","","","","","","","","54","","","(225)","","","459","","","","","NM","","NM"],["Net premiums earned","","","","","","","","","7,140","","","6,894","","","7,195","","","","","4","","","(4)"],["Losses and loss adjustment expenses incurred","","","","","","","","","3,862","","","3,811","","","3,888","","","","","1","","","(2)"],["Acquisition expenses:"],["Amortization of deferred policy acquisition costs","","","","","","","","","1,571","","","1,309","","","1,214","","","","","20","","","8"],["Other acquisition expenses","","","","","","","","","573","","","698","","","813","","","","","(18)","","","(14)"],["Total acquisition expenses","","","","","","","","","2,144","","","2,007","","","2,027","","","","","7","","","(1)"],["General operating expenses","","","","","","","","","992","","","1,084","","","1,115","","","","","(8)","","","(3)"],["Underwriting income (loss)","","","","","","","","$","142","","$","(8)","","$","165","","","","","NM","%","NM","%"],["Loss ratio","","","","","","","","","54.1","","","55.3","","","54.0","","","","","(1.2)","","","1.3"],["Acquisition ratio","","","","","","","","","30.0","","","29.1","","","28.2","","","","","0.9","","","0.9"],["General operating expense ratio","","","","","","","","","13.9","","","15.7","","","15.5","","","","","(1.8)","","","0.2"],["Expense ratio","","","","","","","","","43.9","","","44.8","","","43.7","","","","","(0.9)","","","1.1"],["Combined ratio","","","","","","","","","98.0","","","100.1","","","97.7","","","","","(2.1)","","","2.4"],["Adjustments for accident year loss ratio, as adjusted and accident year combined ratio, as adjusted:"],["Catastrophe losses and reinstatement premiums","","","","","","","","","(2.0)","","","(2.6)","","","(2.3)","","","","","0.6","","","(0.3)"],["Prior year development, net of reinsurance and prior year premiums","","","","","","","","","1.6","","","1.8","","","3.8","","","","","(0.2)","","","(2.0)"],["Accident year loss ratio, as adjusted","","","","","","","","","53.7","","","54.5","","","55.5","","","","","(0.8)","","","(1.0)"],["Accident year combined ratio, as adjusted","","","","","","","","","97.6","","","99.3","","","99.2","","","","","(1.7)","","","0.1"]] [[/GREPCENT_TABLE]] Business and Financial Highlights Net Premiums Written Comparison for the Years Ended December 31, 2024 and 2023 Net premiums written, excluding the unfavorable impact of foreign exchange ($199 million), increased by $166 million primarily due to Personal Auto and PCS, partially offset by lower production in Warranty. Net Premiums Written Comparison for the Years Ended December 31, 2023 and 2022 Net premiums written, excluding the unfavorable impact of foreign exchange ($240 million), increased by $623 million primarily due to PCS resulting from changes in our reinsurance program. Underwriting Income (Loss) Comparison for the Years Ended December 31, 2024 and 2023 Underwriting income increased by $150 million primarily due to: •improvement in the accident year loss ratio, as adjusted (0.8 points) primarily driven by changes in business mix along with continued positive rate change; •a lower expense ratio (0.9 points) reflecting a lower general operating expense ratio (1.8 points), partially offset by higher acquisition ratio (0.9 points) primarily driven by change in business mix; and •lower catastrophe losses (0.6 points or $35 million). Underwriting Income (Loss) Comparison for the Years Ended December 31, 2023 and 2022 Underwriting income decreased by $173 million primarily due to: •lower net favorable prior year reserve development (2.0 points or $156 million), primarily in Personal Auto; •a higher expense ratio of (1.1 points) reflecting a higher acquisition ratio (0.9 points) as well as increase in general operating expense ratio (0.2 points) primarily driven by changes in business mix; and •higher catastrophe losses (0.3 points or $9 million). [[GREPCENT_TABLE]] [["60","AIG | 2024 Form 10-K"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Business Segment Operations | General Insurance This decrease was partially offset by: •improvement in the accident year loss ratio, as adjusted (1.0 points) primarily driven by changes in business mix along with continued positive rate change, focused risk selection and improved terms and conditions. Other Operations Other Operations predominantly consists of Net Investment Income from our AIG Parent liquidity portfolio, Corebridge dividend income, corporate General operating expenses, and Interest expense. OTHER OPERATIONS RESULTS [[GREPCENT_TABLE]] [["Years Ended December 31,","","","","","","","","","","","","","","","","Change"],["(in millions)","","","","","","","","2024","","2023","","2022","","","","2024 vs 2023","","2023 vs 2022"],["Net investment income and other","","","","","","","$","434","","$","190","","$","(110)","","","","","128","","%","NM","%"],["Benefits, losses and expenses:"],["Corporate and other general operating expenses","","","","","","","","623","","","698","","","850","","","","","(11)","","","(18)"],["Amortization of intangible assets","","","","","","","","18","","","27","","","40","","","","","(33)","","","(33)"],["Interest expense","","","","","","","","445","","","498","","","624","","","","","(11)","","","(20)"],["Total benefits, losses and expenses","","","","","","","","1,086","","","1,223","","","1,514","","","","","(11)","","","(19)"],["Adjusted pre-tax loss before consolidation and eliminations","","","","","","","","(652)","","","(1,033)","","","(1,624)","","","","","37","","","36"],["Consolidation and eliminations","","","","","","","","(1)","","","(17)","","","63","","","","","94","","","NM"],["Adjusted pre-tax loss*","","","","","","","$","(653)","","$","(1,050)","","$","(1,561)","","","","","38","","%","33","","%"]] [[/GREPCENT_TABLE]] *In the fourth quarter of 2024, AIG realigned and began excluding the net results of run-off businesses previously reported in Other Operations from Adjusted pre-tax income. Historical results have been recast to reflect these changes. YEARS ENDED DECEMBER 31, 2024 AND 2023 COMPARISON Adjusted pre-tax loss before consolidation and eliminations was $652 million in 2024 compared to $1.0 billion in 2023, a decrease of $381 million, primarily due to: •higher net investment income and other of $244 million due to dividend income from Corebridge in 2024 compared to $0 in 2023 and on AIG Parent portfolio due to higher yields and higher average balance; •lower corporate general operating expenses of $75 million primarily driven by employee related costs and other operating expenses; and •lower interest expense of $53 million primarily driven by interest savings from $3.5 billion debt repurchases, through cash tender offers and debt redemption and maturity in 2023 and 2024, offset by interest expense of $10 million on $750 million Senior unsecured debt issued in the first quarter of 2023. YEARS ENDED DECEMBER 31, 2023 AND 2022 COMPARISON Adjusted pre-tax loss before consolidation and eliminations of $1.0 billion in 2023 compared to $1.6 billion in 2022, a decrease of $591 million, was primarily due to: •higher net investment income and other of $300 million primarily driven by AIG Parent portfolio due to higher yields and higher average balance; •lower corporate general operating expenses of $152 million primarily driven by a reduction in employee related costs and other operating expenses; and •lower interest expense of $126 million primarily driven by interest savings from $11.0 billion debt repurchases, through cash tender offers and debt redemption and maturity in 2022 and 2023. [[GREPCENT_TABLE]] [["AIG | 2024 Form 10-K","61"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Investments Investments OVERVIEW Our investment strategies are tailored to the specific business needs of each segment by targeting an asset allocation mix that supports estimated cash flow needs of our outstanding liabilities and provides diversification from an asset class, sector, issuer, and geographic perspective. The primary objectives are generation of investment income, preservation of capital, liquidity management and growth of surplus. The majority of assets backing our insurance liabilities consist of fixed maturity securities. Our Investment Management Agreements with BlackRock, Inc. Since April 2022, AIG insurance company subsidiaries have entered into separate investment management agreements with BlackRock, Inc. and its investment advisory affiliates (BlackRock). As of December 31, 2024, BlackRock manages $62 billion of our investment portfolio, consisting of liquid fixed income, certain private placements and private equity assets. In addition, liquid fixed income assets associated with the Fortitude Re funds withheld asset portfolio were separately transferred to BlackRock for management in 2022. [[GREPCENT_TABLE]] [["INVESTMENT HIGHLIGHTS IN 2024"],["\u2022Blended investment yields on new investments are higher than blended rates on investments that were sold, matured or called during this period. We continued to make investments in structured securities and other fixed maturity securities with attractive risk-adjusted return characteristics to improve yields and increase net investment income.\u2022Total Net investment income increased for the year ended December 31, 2024 compared to the same period in the prior year, primarily due to dividend income from AIG's equity in Corebridge, higher income on available for sale fixed maturity securities and short term instruments, partially offset by mortgage loans."]] [[/GREPCENT_TABLE]] INVESTMENT STRATEGIES Investment strategies are assessed at the segment level and involve considerations that include local and general market and economic conditions, duration and cash flow management, risk appetite and volatility constraints, rating agency and regulatory capital considerations, tax, regulatory and legal investment limitations, and, as applicable, environmental, social and governance considerations. Some of our key investment strategies are as follows: •Our fundamental strategy across the portfolios is to seek investments with similar duration and cash flow characteristics to the associated insurance liabilities to the extent practicable. •We seek to purchase investments that offer enhanced yield through illiquidity premiums, such as private placements and commercial mortgage loans, which also add portfolio diversification. These assets typically afford credit protections through covenants, ability to customize structures that meet our insurance liability needs, and deeper due diligence given information access. •Given our global presence, we seek investments that provide diversification from investments available in local markets. To the extent we purchase these investments, we generally hedge any currency risk using derivatives, which could provide opportunities to earn higher risk adjusted returns compared to investments in the functional currency. •AIG Parent, included in Other Operations, actively manages its assets and liabilities, counterparties and duration. AIG Parent’s liquidity sources are held primarily in the form of cash and short-term investments. This strategy allows us to both diversify our sources of liquidity and reduce the cost of maintaining sufficient liquidity. •Within the U.S., General Insurance investments are generally split between reserve backing and surplus portfolios. –Insurance reserves are backed mainly by investment grade fixed maturity securities that meet our duration, risk-return, capital, tax, liquidity, credit quality and diversification objectives. We assess asset classes based on their fundamental underlying risk factors, including credit (public and private), commercial real estate and residential real estate, regardless of whether such investments are bonds, loans, or structured products. –Surplus investments seek to enhance portfolio returns and are generally comprised of a mix of fixed maturity investment grade and below investment grade securities and various alternative asset classes, including private equity, real estate equity, and hedge funds. Over the past few years, hedge fund investments have been reduced. [[GREPCENT_TABLE]] [["62","AIG | 2024 Form 10-K"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Investments •Outside of the U.S., fixed maturity securities held by our insurance companies consist primarily of investment-grade securities generally denominated in the currencies of the countries in which we operate. •We also utilize derivatives to manage our asset and liability duration as well as currency exposures. Asset-Liability Management The investment strategy within the General Insurance companies focuses on growth of surplus, maintenance of sufficient liquidity for unanticipated insurance claims, and preservation of capital. General Insurance invests primarily in fixed maturity securities issued by corporations, municipalities and other governmental agencies; structured securities collateralized by, among other assets, residential and commercial real estate; and commercial mortgage loans. Fixed maturity securities of the General Insurance companies have an average duration of 3.8 years, with an average of 4.2 years for North America and 3.0 years for International. While invested assets backing reserves of the General Insurance companies are primarily invested in conventional liquid fixed maturity securities, we have continued to allocate to asset classes that offer higher yields through structural and illiquidity premiums, particularly in our North America operations. In addition, we continue to invest in both fixed rate and floating rate asset-backed investments to manage our exposure to potential changes in interest rates and inflation. We seek to diversify the portfolio across asset classes, sectors and issuers to mitigate idiosyncratic portfolio risks. In addition, a portion of the surplus of General Insurance companies is invested in a diversified portfolio of alternative investments that seek to balance liquidity, volatility and growth of surplus. Although these alternative investments are subject to periodic earnings fluctuations, they have historically achieved yields in excess of the fixed maturity portfolio yields and have provided added diversification to the broader portfolio. Available-for-Sale Investments The following table presents the fair value of our available-for-sale securities: [[GREPCENT_TABLE]] [["(in millions)","","December 31, 2024","","","December 31, 2023"],["Bonds available for sale:"],["U.S. government and government sponsored entities","$","3,267","","","$","4,395"],["Obligations of states, municipalities and political subdivisions","","3,143","","","","4,833"],["Non-U.S. governments","","8,107","","","","8,396"],["Corporate debt","","31,826","","","","32,346"],["Mortgage-backed, asset-backed and collateralized:"],["RMBS","","8,604","","","","6,207"],["CMBS","","3,926","","","","4,147"],["CLO/ABS","","5,133","","","","4,918"],["Total mortgage-backed, asset-backed and collateralized","","17,663","","","","15,272"],["Total bonds available for sale*","$","64,006","","","$","65,242"]] [[/GREPCENT_TABLE]] *At December 31, 2024 and 2023, the fair value of bonds available for sale held by us that were below investment grade or not rated totaled $3.6 billion and $5.2 billion, respectively. The following table presents the fair value of our aggregate credit exposures to non-U.S. governments for our fixed maturity securities: [[GREPCENT_TABLE]] [["(in millions)","","December 31, 2024","","","December 31, 2023"],["Canada","$","1,384","","","$","1,340"],["Germany","","834","","","","929"],["Japan","","555","","","","699"],["United Kingdom","","416","","","","478"],["France","","360","","","","430"],["Australia","","335","","","","314"],["Israel","","312","","","","201"],["Korea, Republic of","","268","","","","293"],["Malaysia","","220","","","","183"],["Denmark","","205","","","","227"],["Other","","3,242","","","","3,326"],["Total","$","8,131","","","$","8,420"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["AIG | 2024 Form 10-K","63"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Investments The following table presents the fair value of our aggregate European credit exposures by major sector for our fixed maturity securities: [[GREPCENT_TABLE]] [["","","December 31, 2024","","December 31, 2023 Total"],["(in millions)","","Sovereign","","Financial Institution","","Non-Financial Corporates","","Structured Products","","Total"],["Euro-Zone countries:"],["France","$","360","","$","1,136","","$","481","","$","12","","$","1,989","","$","2,068"],["Germany","","834","","","223","","","750","","","56","","","1,863","","","2,042"],["Netherlands","","164","","","448","","","297","","","26","","","935","","","940"],["Ireland","","9","","","57","","","112","","","406","","","584","","","231"],["Italy","","21","","","88","","","260","","","\u2014","","","369","","","420"],["Spain","","9","","","149","","","110","","","53","","","321","","","353"],["Denmark","","205","","","45","","","7","","","\u2014","","","257","","","297"],["Belgium","","33","","","123","","","73","","","13","","","242","","","276"],["Luxembourg","","17","","","60","","","80","","","\u2014","","","157","","","227"],["Finland","","9","","","63","","","6","","","1","","","79","","","95"],["Other Euro-Zone","","226","","","24","","","35","","","14","","","299","","","194"],["Total Euro-Zone","$","1,887","","$","2,416","","$","2,211","","$","581","","$","7,095","","$","7,143"],["Remainder of Europe:"],["United Kingdom","$","416","","$","1,228","","$","1,379","","$","239","","$","3,262","","$","3,696"],["Switzerland","","15","","","186","","","283","","","\u2014","","","484","","","589"],["Sweden","","117","","","144","","","30","","","\u2014","","","291","","","342"],["Norway","","64","","","37","","","9","","","\u2014","","","110","","","150"],["Jersey (Channel Islands)","","3","","","11","","","9","","","71","","","94","","","5"],["Other - Remainder of Europe","","37","","","3","","","8","","","2","","","50","","","31"],["Total - Remainder of Europe","$","652","","$","1,609","","$","1,718","","$","312","","$","4,291","","$","4,813"],["Total","$","2,539","","$","4,025","","$","3,929","","$","893","","$","11,386","","$","11,956"]] [[/GREPCENT_TABLE]] Investments in Municipal Bonds At December 31, 2024, the U.S. municipal bond portfolio was composed primarily of essential service revenue bonds and high-quality tax-exempt bonds with 98 percent of the portfolio rated A or higher. The following table presents the fair values of our available for sale U.S. municipal bond portfolio by state and municipal bond type: [[GREPCENT_TABLE]] [["","December 31, 2024"],["(in millions)","","State General Obligation","","Local General Obligation","","Revenue","","Total Fair Value","","December 31, 2023 Total Fair Value"],["California","$","196","","$","135","","$","385","","$","716","","$","903"],["New York","","37","","","72","","","313","","","422","","","746"],["Texas","","1","","","138","","","126","","","265","","","490"],["Massachusetts","","50","","","13","","","136","","","199","","","209"],["Florida","","1","","","\u2014","","","142","","","143","","","227"],["Pennsylvania","","51","","","\u2014","","","82","","","133","","","203"],["Connecticut","","42","","","3","","","80","","","125","","","109"],["Illinois","","5","","","33","","","72","","","110","","","301"],["Georgia","","50","","","4","","","25","","","79","","","159"],["Hawaii","","68","","","\u2014","","","6","","","74","","","89"],["Oregon","","13","","","41","","","17","","","71","","","83"],["Washington","","5","","","11","","","45","","","61","","","140"],["New Jersey","","1","","","2","","","55","","","58","","","200"],["All other states","","54","","","20","","","613","","","687","","","974"],["Total","$","574","","$","472","","$","2,097","","$","3,143","","$","4,833"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["64","AIG | 2024 Form 10-K"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Investments Investments in Corporate Debt Securities The following table presents the fair value of our available for sale corporate debt securities by industry categories: [[GREPCENT_TABLE]] [["Industry Category"],["(in millions)","","December 31, 2024","","","December 31, 2023"],["Financial institutions:"],["Money center/Global bank groups","$","3,642","","","$","5,153"],["Regional banks \u2013 other","","2,129","","","","222"],["Life insurance","","728","","","","617"],["Securities firms and other finance companies","","669","","","","296"],["Insurance non-life","","494","","","","938"],["Regional banks \u2013 North America","","1,314","","","","2,029"],["Other financial institutions","","4,116","","","","3,152"],["Utilities","","2,659","","","","2,989"],["Communications","","1,844","","","","2,111"],["Consumer noncyclical","","2,715","","","","3,436"],["Capital goods","","1,715","","","","1,552"],["Energy","","1,702","","","","1,672"],["Consumer cyclical","","3,284","","","","3,049"],["Basic materials","","1,838","","","","1,141"],["Other","","2,977","","","","3,989"],["Total*","$","31,826","","","$","32,346"]] [[/GREPCENT_TABLE]] *At December 31, 2024 and 2023, approximately 88 percent and 90 percent, respectively, of these investments were rated investment grade. Investments in RMBS The following table presents the fair value of AIG’s RMBS available for sale securities: [[GREPCENT_TABLE]] [["(in millions)","","December 31, 2024","","","December 31, 2023"],["Agency RMBS","$","4,978","","","$","2,827"],["Alt-A RMBS","","1,620","","","","1,338"],["Subprime RMBS","","291","","","","323"],["Prime non-agency","","850","","","","580"],["Other housing related","","865","","","","1,139"],["Total RMBS(a)(b)","$","8,604","","","$","6,207"]] [[/GREPCENT_TABLE]] (a)Includes approximately $1.3 billion at both December 31, 2024 and 2023, of certain RMBS that had experienced deterioration in credit quality since their origination. This excludes impact of U.S. debt downgrade of Fannie Mae and Freddie Mac. For additional information on purchased credit deteriorated securities, see Note 6 to the Consolidated Financial Statements. (b)The weighted average expected life was six years and seven years at December 31, 2024 and December 31, 2023, respectively. Our investments guidelines for investing in RMBS, collateralized loan obligations (CLO) and other asset-backed securities (ABS) take into consideration the quality of the originator, the manager, the servicer, security credit ratings, underlying characteristics of the mortgages, borrower characteristics, and the level of credit enhancement in the transaction. Investments in CMBS The following table presents the fair value of our CMBS available for sale securities: [[GREPCENT_TABLE]] [["(in millions)","","December 31, 2024","","","December 31, 2023"],["CMBS (traditional)","$","3,102","","$","3,604"],["Agency","","574","","","488"],["Other","","250","","","55"],["Total","$","3,926","","$","4,147"]] [[/GREPCENT_TABLE]] The fair value of CMBS holdings remained stable during the year ended December 31, 2024. The majority of our investments in CMBS are in tranches that contain substantial credit protection features through collateral subordination. The majority of CMBS holdings are traditional conduit transactions, broadly diversified across property types and geographical areas. [[GREPCENT_TABLE]] [["AIG | 2024 Form 10-K","65"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Investments Investments in CLO/ABS The following table presents the fair value of our CLO/ABS available for sale securities by collateral type: [[GREPCENT_TABLE]] [["(in millions)","","December 31, 2024","","","December 31, 2023"],["Collateral Type:"],["ABS","$","2,445","","","$","1,827"],["Bank loans","","2,688","","","","3,090"],["Other","","\u2014","","","","1"],["Total","$","5,133","","","$","4,918"]] [[/GREPCENT_TABLE]] Unrealized Losses of Fixed Maturity Securities The following table shows the aging of the unrealized losses of fixed maturity securities, the extent to which the fair value is less than amortized cost or cost, and the number of respective items in each category: [[GREPCENT_TABLE]] [["December 31, 2024","","Less Than or Equal","","Greater Than 20%","","Greater Than 50%"],["","","to 20% of Cost(b)","","to 50% of Cost(b)","","of Cost(b)","","Total"],["Aging(a)","","","Unrealized","","","","Unrealized","","","","Unrealized","","","","Unrealized"],["(dollars in millions)","","Cost(c)","","Loss","Items(d)","","Cost(c)","","Loss","Items(d)","","Cost(c)","","Loss","Items(d)","","Cost(c)","","Loss","Items(d)"],["Investment grade bonds"],["0-6 months","$","19,725","","$","343","","5,027","","$","100","","$","26","","5","","$","\u2014","","$","\u2014","","1","","$","19,825","","$","369","","5,033"],["7-11 months","","399","","","13","","159","","","29","","","7","","4","","","\u2014","","","\u2014","","\u2014","","","428","","","20","","163"],["12 months or more","","17,254","","","1,537","","4,879","","","2,970","","","854","","537","","","294","","","171","","24","","","20,518","","","2,562","","5,440"],["Total","$","37,378","","$","1,893","","10,065","","$","3,099","","$","887","","546","","$","294","","$","171","","25","","$","40,771","","$","2,951","","10,636"],["Below investment grade bonds"],["0-6 months","$","2,078","","$","36","","1,179","","$","3","","$","1","","7","","$","2","","$","2","","11","","$","2,083","","$","39","","1,197"],["7-11 months","","57","","","3","","34","","","2","","","1","","5","","","1","","","1","","2","","","60","","","5","","41"],["12 months or more","","998","","","79","","572","","","121","","","32","","38","","","8","","","7","","6","","","1,127","","","118","","616"],["Total","$","3,133","","$","118","","1,785","","$","126","","$","34","","50","","$","11","","$","10","","19","","$","3,270","","$","162","","1,854"],["Total bonds"],["0-6 months","$","21,803","","$","379","","6,206","","$","103","","$","27","","12","","$","2","","$","2","","12","","$","21,908","","$","408","","6,230"],["7-11 months","","456","","","16","","193","","","31","","","8","","9","","","1","","","1","","2","","","488","","","25","","204"],["12 months or more","","18,252","","","1,616","","5,451","","","3,091","","","886","","575","","","302","","","178","","30","","","21,645","","","2,680","","6,056"],["Total","$","40,511","","$","2,011","","11,850","","$","3,225","","$","921","","596","","$","305","","$","181","","44","","$","44,041","","$","3,113","","12,490"]] [[/GREPCENT_TABLE]] (a)Represents the number of consecutive months that fair value has been less than cost by any amount. (b)Represents the percentage by which fair value is less than cost. (c)For bonds, represents amortized cost net of allowance. (d)Item count is by CUSIP by subsidiary. The allowance for credit losses was $4 million for investment grade bonds and $34 million for below investment grade bonds as of December 31, 2024. Commercial Mortgage Loans At December 31, 2024, we had direct commercial mortgage loan exposure of $3.3 billion. The following table presents the commercial mortgage loan exposure by location and class of loan based on amortized cost: [[GREPCENT_TABLE]] [["","Number of Loans","","Class","","","Percent of Total"],["(dollars in millions)","","Apartments","","Offices","","Retail","","Industrial","","Hotel","","Others","","Total"],["December 31, 2024"],["State:"],["California","21","","$","97","","$","247","","$","30","","$","56","","$","32","","$","\u2014","","$","462","","14","","%"],["New York","19","","","43","","","217","","","70","","","20","","","32","","","\u2014","","","382","","12"],["Texas","19","","","78","","","201","","","2","","","31","","","22","","","\u2014","","","334","","10"],["Massachusetts","9","","","94","","","156","","","49","","","7","","","\u2014","","","\u2014","","","306","","9"],["Florida","11","","","68","","","\u2014","","","62","","","8","","","38","","","\u2014","","","176","","5"],["New Jersey","18","","","78","","","","","\u2014","","","43","","","\u2014","","","10","","","131","","4"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["66","AIG | 2024 Form 10-K"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Investments [[GREPCENT_TABLE]] [["","Number of Loans","","Class","","","Percent of Total"],["(dollars in millions)","","Apartments","","Offices","","Retail","","Industrial","","Hotel","","Others","","Total"],["Pennsylvania","10","","","18","","","52","","","29","","","18","","","\u2014","","","","","117","","4"],["Illinois","6","","","88","","","20","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","108","","3"],["Ohio","5","","","62","","","\u2014","","","29","","","\u2014","","","\u2014","","","\u2014","","","91","","3"],["Washington","5","","","49","","","\u2014","","","\u2014","","","\u2014","","","11","","","\u2014","","","60","","2"],["Other states","31","","","134","","","33","","","63","","","49","","","6","","","\u2014","","","285","","8"],["Foreign","36","","","278","","","182","","","98","","","69","","","117","","","109","","","853","","26"],["Total*","190","","$","1,087","","$","1,108","","$","432","","$","301","","$","258","","$","119","","$","3,305","","100","","%"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["December 31, 2023"],["State:"],["California","21","","$","89","","$","277","","$","32","","$","58","","$","33","","$","\u2014","","$","489","","13","","%"],["New York","19","","","43","","","208","","","77","","","20","","","32","","","\u2014","","","380","","10"],["Texas","21","","","77","","","255","","","2","","","44","","","\u2014","","","\u2014","","","378","","10"],["Massachusetts","9","","","96","","","128","","","50","","","7","","","\u2014","","","\u2014","","","281","","7"],["New Jersey","21","","","111","","","8","","","20","","","55","","","\u2014","","","10","","","204","","5"],["Florida","11","","","60","","","\u2014","","","64","","","9","","","38","","","\u2014","","","171","","4"],["Illinois","6","","","88","","","26","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","114","","3"],["Ohio","6","","","63","","","3","","","30","","","\u2014","","","\u2014","","","\u2014","","","96","","4"],["Pennsylvania","8","","","14","","","39","","","36","","","5","","","\u2014","","","\u2014","","","94","","2"],["Colorado","7","","","17","","","32","","","32","","","\u2014","","","6","","","\u2014","","","87","","2"],["Other states","37","","","206","","","20","","","64","","","40","","","16","","","\u2014","","","346","","9"],["Foreign","47","","","403","","","227","","","111","","","222","","","122","","","111","","","1,196","","31"],["Total*","213","","$","1,267","","$","1,223","","$","518","","$","460","","$","247","","$","121","","$","3,836","","100","","%"]] [[/GREPCENT_TABLE]] *Does not reflect allowance for credit losses. For additional information on commercial mortgage loans, see Note 7 to the Consolidated Financial Statements. Net Realized Gains and Losses The following table presents the components of Net realized gains (losses): [[GREPCENT_TABLE]] [["Years Ended December 31,","2024","","2023","","2022"],["(in millions)","Excluding Fortitude Re Funds Withheld Assets","Fortitude Re Funds Withheld Assets","","Total","","Excluding Fortitude Re Funds Withheld Assets","Fortitude Re Funds Withheld Assets","","Total","","Excluding Fortitude Re Funds Withheld Assets","Fortitude Re Funds Withheld Assets","","Total"],["Sales of fixed maturity securities","$","(583)","","$","(36)","","$","(619)","","","$","(668)","","$","(67)","","$","(735)","","","$","(565)","","$","(83)","","$","(648)"],["Intent to sell","","\u2014","","","\u2014","","","\u2014","","","","\u2014","","","\u2014","","","\u2014","","","","(66)","","","\u2014","","","(66)"],["Change in allowance for credit losses on fixed maturity securities","","(25)","","","\u2014","","","(25)","","","","(44)","","","\u2014","","","(44)","","","","(72)","","","\u2014","","","(72)"],["Change in allowance for credit losses on loans","","(23)","","","\u2014","","","(23)","","","","(28)","","","3","","","(25)","","","","19","","","(3)","","","16"],["Foreign exchange transactions","","256","","","(9)","","","247","","","","124","","","5","","","129","","","","266","","","(10)","","","256"],["All other derivatives and hedge accounting","","(62)","","","7","","","(55)","","","","(165)","","","(8)","","","(173)","","","","159","","","(3)","","","156"],["Sales of alternative investments","","(16)","","","\u2014","","","(16)","","","","29","","","\u2014","","","29","","","","15","","","\u2014","","","15"],["Other","","19","","","(1)","","","18","","","","18","","","(4)","","","14","","","","37","","","\u2014","","","37"],["Net realized losses \u2013 excluding Fortitude Re funds withheld embedded derivative","","(434)","","","(39)","","","(473)","","","","(734)","","","(71)","","","(805)","","","","(207)","","","(99)","","","(306)"],["Net realized gains (losses) on Fortitude Re funds withheld embedded derivative","","\u2014","","","(75)","","","(75)","","","","\u2014","","","(273)","","","(273)","","","","\u2014","","","1,133","","","1,133"],["Net realized gains (losses)","$","(434)","","$","(114)","","$","(548)","","","$","(734)","","$","(344)","","$","(1,078)","","","$","(207)","","$","1,034","","$","827"]] [[/GREPCENT_TABLE]] Lower Net realized losses excluding Fortitude Re funds withheld assets in the year ended December 31, 2024 compared to 2023 were primarily due to lower losses on sales of fixed maturity securities and lower derivatives losses compared to the prior year period. Higher Net realized losses excluding Fortitude Re funds withheld assets in the year ended December 31, 2023 compared to 2022 were primarily due to lower derivative gains in 2023 compared to 2022. [[GREPCENT_TABLE]] [["AIG | 2024 Form 10-K","67"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Investments Net realized gains (losses) on Fortitude Re funds withheld assets primarily reflect changes in the valuation of the modified coinsurance and funds withheld assets. Increases in the valuation of these assets result in losses to AIG as the appreciation on the assets under those reinsurance arrangements must be transferred to Fortitude Re. Decreases in valuation of the assets result in gains to AIG as the depreciation on the assets under those reinsurance arrangements must be transferred to Fortitude Re. For additional information on the impact of the funds withheld arrangements with Fortitude Re, see Note 8 to the Consolidated Financial Statements. For additional information on our investment portfolio, see Note 6 to the Consolidated Financial Statements. Change in Unrealized Gains and Losses on Investments The change in net unrealized gains and losses on investments in the year ended December 31, 2024 was primarily attributable to a change in the fair value of fixed maturity securities. For the year ended December 31, 2024, net unrealized gains were $692 million due to lower interest rates and narrowing of credit spreads. The change in net unrealized gains and losses on investments in the year ended December 31, 2023 was primarily attributable to a change in the fair value of fixed maturity securities. For the year ended December 31, 2023, net unrealized gains were $2.5 billion primarily due to widening of credit spreads. For additional information on our investment portfolio, see Note 6 to the Consolidated Financial Statements. CREDIT RATINGS At December 31, 2024, approximately 61 percent of our fixed maturity securities were held by our U.S. entities. Approximately 90 percent of these securities were rated investment grade by one or more of the principal rating agencies. Moody’s Investors Service Inc. (Moody’s), Standard & Poor’s Financial Services LLC, a subsidiary of S&P Global Inc. (S&P), or similar foreign rating services rate a significant portion of our foreign entities’ fixed maturity securities portfolio. Rating services are not available for some foreign-issued securities. We closely monitor the credit quality of the foreign portfolio’s non-rated fixed maturity securities. At December 31, 2024, approximately 94 percent of such investments were either rated investment grade or, on the basis of analysis of our investment managers, were equivalent from a credit standpoint to securities rated investment grade. Approximately 24 percent of the foreign entities’ fixed maturity securities portfolio is comprised of sovereign fixed maturity securities supporting policy liabilities in the country of issuance. Composite AIG Credit Ratings With respect to our fixed maturity securities, the credit ratings in the table below and in subsequent tables reflect: (i) a composite of the ratings of the three major rating agencies, or when agency ratings are not available, the NAIC Designation assigned by the NAIC SVO (96 percent of total fixed maturity securities), or (ii) our internal ratings when these investments have not been rated by any of the major rating agencies or the NAIC. The “Non-rated” category in those tables consists of fixed maturity securities that have not been rated by any of the major rating agencies, the NAIC or us. For information regarding credit risks associated with Investments, see Enterprise Risk Management – Credit Risk Management. The following table presents the composite AIG credit ratings of our fixed maturity securities calculated on the basis of their fair value: [[GREPCENT_TABLE]] [["","","Available for Sale","","Other","","Total"],["(in millions)","","December 31, 2024","","December 31, 2023","","December 31, 2024","","December 31, 2023","","December 31, 2024","","December 31, 2023"],["Rating:"],["Other fixed maturity securities"],["AAA","$","5,254","","$","5,625","","$","13","","$","16","","$","5,267","","$","5,641"],["AA","","9,599","","","12,775","","","80","","","145","","","9,679","","","12,920"],["A","","14,420","","","14,758","","","114","","","73","","","14,534","","","14,831"],["BBB","","12,839","","","12,992","","","145","","","96","","","12,984","","","13,088"],["Below investment grade","","4,171","","","3,653","","","4","","","\u2014","","","4,175","","","3,653"],["Non-rated","","60","","","167","","","\u2014","","","\u2014","","","60","","","167"],["Total","$","46,343","","$","49,970","","$","356","","$","330","","$","46,699","","$","50,300"],["Mortgage-backed, asset-backed and collateralized"],["AAA","$","8,757","","$","6,650","","$","134","","$","77","","$","8,891","","$","6,727"],["AA","","6,765","","","6,065","","","89","","","108","","","6,854","","","6,173"],["A","","482","","","614","","","49","","","29","","","531","","","643"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["68","AIG | 2024 Form 10-K"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Investments [[GREPCENT_TABLE]] [["","","Available for Sale","","Other","","Total"],["(in millions)","","December 31, 2024","","December 31, 2023","","December 31, 2024","","December 31, 2023","","December 31, 2024","","December 31, 2023"],["BBB","","470","","","517","","","88","","","81","","","558","","","598"],["Below investment grade","","1,189","","","1,426","","","29","","","30","","","1,218","","","1,456"],["Non-rated","","\u2014","","","\u2014","","","\u2014","","","8","","","\u2014","","","8"],["Total","$","17,663","","$","15,272","","$","389","","$","333","","$","18,052","","$","15,605"],["Total"],["AAA","$","14,011","","$","12,275","","$","147","","$","93","","$","14,158","","$","12,368"],["AA","","16,364","","","18,840","","","169","","","253","","","16,533","","","19,093"],["A","","14,902","","","15,372","","","163","","","102","","","15,065","","","15,474"],["BBB","","13,309","","","13,509","","","233","","","177","","","13,542","","","13,686"],["Below investment grade","","5,360","","","5,079","","","33","","","30","","","5,393","","","5,109"],["Non-rated","","60","","","167","","","\u2014","","","8","","","60","","","175"],["Total","$","64,006","","$","65,242","","$","745","","$","663","","$","64,751","","$","65,905"]] [[/GREPCENT_TABLE]] National Association of Insurance Commissioners (NAIC) Designations of Fixed Maturity Securities The Securities Valuation Office (SVO) of the NAIC evaluates the investments of U.S. insurers for statutory reporting purposes and assigns fixed maturity securities to one of six categories called NAIC Designations. In general, NAIC Designations of ‘1’ highest quality, or ‘2’ high quality, include fixed maturity securities considered investment grade, while NAIC Designations of ‘3’ through ‘6’ generally include fixed maturity securities referred to as below investment grade. NAIC Designations for non-agency Residential Mortgage Backed Securities (RMBS) and Commercial Mortgage Backed Securities (CMBS) are calculated using third party modeling results provided through the NAIC. These methodologies result in an improved NAIC Designation for such securities compared to the rating typically assigned by the three major rating agencies. The following tables summarize the ratings distribution of AIG subsidiaries’ fixed maturity security portfolio by NAIC Designation, and the distribution by composite AIG credit rating, which is generally based on ratings of the three major rating agencies. For fixed maturity securities where no NAIC Designation is assigned or able to be calculated using third-party data, the NAIC Designation category used in the first table below reflects an internal rating. The NAIC Designations presented below do not reflect the added granularity to the designation categories adopted by the NAIC in 2020, which further subdivide each category of fixed maturity securities by appending letter modifiers to the numerical designations. The following table presents the fixed maturity security portfolio categorized by NAIC Designation, at fair value: [[GREPCENT_TABLE]] [["December 31, 2024"],["(in millions)"],["NAIC Designation","","1","","2","","Total Investment Grade","","3","","4","","5","","6","","Total Below Investment Grade","","Total"],["Other fixed maturity securities","$","29,357","","$","13,063","","$","42,420","","$","2,430","","$","1,552","","$","171","","$","65","","$","4,218","","$","46,638"],["Mortgage-backed, asset-backed and collateralized","","17,249","","","535","","","17,784","","","102","","","128","","","\u2014","","","38","","","268","","","18,052"],["Total*","$","46,606","","$","13,598","","$","60,204","","$","2,532","","$","1,680","","$","171","","$","103","","$","4,486","","$","64,690"]] [[/GREPCENT_TABLE]] *Excludes $61 million of fixed maturity securities for which no NAIC Designation is available. The following table presents the fixed maturity security portfolio categorized by composite AIG credit rating, at fair value: [[GREPCENT_TABLE]] [["December 31, 2024"],["(in millions)"],["Composite AIG Credit Rating","","AAA/AA/A","","BBB","","Total Investment Grade","","BB","","B","","CCC and Lower","","Total Below Investment Grade","","Total"],["Other fixed maturity securities","$","29,481","","$","12,983","","$","42,464","","$","2,208","","$","1,765","","$","201","","$","4,174","","$","46,638"],["Mortgage-backed, asset-backed and collateralized","","16,275","","","558","","","16,833","","","48","","","103","","","1,068","","","1,219","","","18,052"],["Total*","$","45,756","","$","13,541","","$","59,297","","$","2,256","","$","1,868","","$","1,269","","$","5,393","","$","64,690"]] [[/GREPCENT_TABLE]] *Excludes $61 million of fixed maturity securities for which no NAIC Designation is available. [[GREPCENT_TABLE]] [["AIG | 2024 Form 10-K","69"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Insurance Reserves Insurance Reserves LIABILITY FOR UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES (LOSS RESERVES) The following table presents the components of our gross and net loss reserves by segment and major lines of business(a): [[GREPCENT_TABLE]] [["","December 31, 2024","","December 31, 2023"],["(in millions)","Net Loss Reserves","Reinsurance Recoverable","Gross Loss Reserves","","Net Loss Reserves","Reinsurance Recoverable","Gross Loss Reserves"],["General Insurance:"],["North America Commercial:"],["U.S. Workers' Compensation (net of discount)","","$","2,293","","","$","3,916","","","$","6,209","","","$","2,655","","","$","4,099","","","$","6,754"],["U.S. Excess Casualty","","3,208","","","3,139","","","6,347","","","3,321","","","3,272","","","6,593"],["U.S. Other Casualty","","4,387","","","3,416","","","7,803","","","4,112","","","3,676","","","7,788"],["U.S. Financial Lines","","5,422","","","1,614","","","7,036","","","5,672","","","1,622","","","7,294"],["U.S. Property and Special Risks","","4,297","","","1,233","","","5,530","","","4,403","","","1,494","","","5,897"],["Other product lines(b)","","3,747","","","2,947","","","6,694","","","2,776","","","2,656","","","5,432"],["Total North America Commercial","","23,354","","","16,265","","","39,619","","","22,939","","","16,819","","","39,758"],["International Commercial:"],["UK/Europe Casualty and Financial Lines","","7,280","","","1,952","","","9,232","","","7,447","","","1,951","","","9,398"],["UK/Europe Property and Special Risks","","2,355","","","1,761","","","4,116","","","2,913","","","1,665","","","4,578"],["Other product lines(b)","","1,630","","","1,230","","","2,860","","","1,726","","","1,652","","","3,378"],["Total International Commercial","","11,265","","","4,943","","","16,208","","","12,086","","","5,268","","","17,354"],["Global Personal:"],["U.S. Personal Insurance","","836","","","2,048","","","2,884","","","767","","","2,163","","","2,930"],["UK/Europe and Japan Personal Insurance","","1,269","","","670","","","1,939","","","1,483","","","671","","","2,154"],["Other product lines(b)","","983","","","776","","","1,759","","","914","","","874","","","1,788"],["Total Global Personal","","3,088","","","3,494","","","6,582","","","3,164","","","3,708","","","6,872"],["Unallocated loss adjustment expenses(b)","","1,804","","","744","","","2,548","","","1,298","","","841","","","2,139"],["Total General Insurance","","39,511","","","25,446","","","64,957","","","39,487","","","26,636","","","66,123"],["Other Operations","","631","","","3,580","","","4,211","","","617","","","3,653","","","4,270"],["Total","","$","40,142","","","$","29,026","","","$","69,168","","","$","40,104","","","$","30,289","","","$","70,393"]] [[/GREPCENT_TABLE]] (a)Includes net loss reserve discount of $1.2 billion and $1.2 billion at December 31, 2024 and 2023, respectively. For information regarding loss reserve discount, see Note 13 to the Consolidated Financial Statements. (b)Other product lines and Unallocated loss adjustment expenses includes Gross liability for unpaid losses and loss adjustment expense and Reinsurance recoverable on unpaid losses and loss adjustment expense for the Fortitude Re reinsurance of $2.7 billion and $2.9 billion at December 31, 2024 and 2023, respectively. Prior Year Development The following table summarizes incurred (favorable) unfavorable prior year development net of reinsurance by segment and major lines of business: [[GREPCENT_TABLE]] [["Years Ended December 31,"],["(in millions)","","","","","","","2024","","2023","","2022"],["General Insurance:"],["North America Commercial:"],["U.S. Workers' Compensation","","","","","","$","(261)","","$","(190)","","$","(419)"],["U.S. Excess Casualty","","","","","","","228","","","(48)","","","(8)"],["U.S. Other Casualty","","","","","","","(25)","","","(134)","","","(167)"],["U.S. Financial Lines","","","","","","","(43)","","","37","","","658"],["U.S. Property and Special Risks","","","","","","","8","","","(7)","","","(106)"],["Other Product Lines","","","","","","","(63)","","","(65)","","","(94)"],["Total North America Commercial","","","","","","$","(156)","","$","(407)","","$","(136)"],["International Commercial:"],["UK/Europe Casualty and Financial Lines","","","","","","$","170","","$","165","","$","82"],["UK/Europe Property and Special Risks","","","","","","","(35)","","","81","","","(153)"],["Other Product Lines","","","","","","","(234)","","","(98)","","","(38)"],["Total International Commercial","","","","","","$","(99)","","$","148","","$","(109)"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["70","AIG | 2024 Form 10-K"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Insurance Reserves [[GREPCENT_TABLE]] [["Years Ended December 31,"],["(in millions)","","","","","","","2024","","2023","","2022"],["Global Personal:"],["U.S. Personal Insurance","","","","","","$","(27)","","$","(66)","","$","(33)"],["UK/Europe and Japan Personal Insurance","","","","","","","(47)","","","(57)","","","(111)"],["Other Product Lines","","","","","","","(39)","","","(9)","","","(129)"],["Total Global Personal","","","","","","$","(113)","","$","(132)","","$","(273)"],["Total General Insurance*","","","","","","$","(368)","","$","(391)","","$","(518)"],["Other Operations Run-Off","","","","","","","1","","","(7)","","","(5)"],["Total prior year favorable development","","","","","","$","(367)","","$","(398)","","$","(523)"]] [[/GREPCENT_TABLE]] *Includes the amortization attributed to the deferred gain at inception from the National Indemnity Company (NICO) adverse development reinsurance agreement of $136 million, $164 million and $167 million for the years ended December 31, 2024, 2023 and 2022, respectively. Consistent with our definition of APTI, the amount excludes the portion of (favorable)/unfavorable prior year reserve development for which we have ceded the risk under the NICO reinsurance agreements of $289 million, $(158) million and $(174) million for the years ended December 31, 2024, 2023 and 2022, respectively. Also excludes the related changes in amortization of the deferred gain, which were $268 million, $(83) million and $85 million over those same periods. Net Loss Development – 2024 In the year ended December 31, 2024, we recognized favorable prior year loss reserve development of $367 million. The key components of this development were: North America Commercial •Favorable development on our U.S. Workers' Compensation reflecting continued favorable loss experience. •Adverse development on U.S. Excess Casualty driven by a large settlement of a legacy mass tort claim with the gross loss in accident years covered under the Adverse Development Cover and increased reserves related to claims emergence. •Adverse development on U.S. Property and Special Risks reflecting development on prior year catastrophes offset by favorable loss experience in Retail and Wholesale Property. •Favorable development on U.S. Financial Lines, reflecting favorable experience across most reserving classes, offset by unfavorable development in M&A and High Excess classes. •Favorable development on U.S. Other Casualty, reflecting favorability across numerous Casualty reserving classes, partially offset by unfavorable development on Commercial Auto and Wholesale Primary General Liability. •Amortization benefit related to the deferred gain on the adverse development cover. International Commercial •Favorable development on Other Product Lines, primarily driven by Global Specialty which saw favorable development across multiple lines. •Adverse development on UK/Europe Casualty and Financial Lines driven by unfavorable development in UK Financial Lines partially offset by favorable development in EMEA Financial Lines, and unfavorable development in European Excess Casualty driven by claim-specific emergence on accident year 2016. •Favorable development on UK/Europe Property and Special Risks reflecting favorable development across most segments and geographies. Global Personal •Favorable development on UK/Europe and Japan Personal Insurance primarily driven by Japan A&H and Auto, partially offset by unfavorable development in Personal Auto in EMEA. •Favorable development in U.S. Personal Insurance and Other Product Lines due to favorable development on prior year catastrophes across several events, primarily in the 2019-2023 accident years. Our analyses and conclusions about prior year reserves also help inform our judgments about the current accident year loss and loss adjustment expense ratios we selected. For additional information on prior year development by line of business, see Note 13 to the Consolidated Financial Statements. For information regarding actuarial methods employed for major classes of business, see Critical Accounting Estimates. Net Loss Development – 2023 In the year ended December 31, 2023, we recognized favorable prior year loss reserve development of $398 million. The key components of this development were: [[GREPCENT_TABLE]] [["AIG | 2024 Form 10-K","71"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Insurance Reserves North America Commercial •Favorable development on U.S. Workers' Compensation business reflecting a continuation of favorable loss cost trends in guaranteed cost and excess segments across most accident years. •Favorable development in U.S. Excess Casualty driven by favorable development on the Excess Construction Runoff Portfolio. •Favorable development in U.S. Other Casualty reflecting favorable experience in construction defect and construction wraps as well as guaranteed cost auto and general liability. •Favorable development in U.S. Property and Special risks reflecting favorable development on prior year catastrophes in the 2017-2021 accident years, offset by adverse development on prior year catastrophes in the 2022 accident year. •Unfavorable development in U.S. Financial Lines due to unfavorable development on High Attaching Excess D&O, M&A, Primary National D&O, Cyber data privacy claims, and Architects & Engineers, partially offset by favorable development on Primary Private Not for Profit D&O and Financial Institutions D&O. •Amortization benefit related to the deferred gain on the adverse development cover. International Commercial •Unfavorable development in UK/Europe Casualty and Financial Lines reflecting unfavorable development in auto liability in Europe and UK and in UK D&O and Commercial Professional Indemnity business, partially offset by favorable development in Financial Institutions Professional Indemnity and D&O in Europe and UK and Cyber and Commercial Personal Indemnity in Europe. •Unfavorable development in UK/Europe Property and Special Risks driven by unfavorable development on prior year catastrophes. •Favorable development in Other product lines driven primarily by Global Specialty. Global Personal •Favorable development, primarily in U.S. Personal Insurance, due to favorable development on prior year catastrophes across several events, primarily in the 2017-2020 accident years. •Favorable development on Japan Personal Insurance driven by personal auto and A&H business. Net Loss Development – 2022 In the year ended December 31, 2022, we recognized favorable prior year loss reserve development of $523 million. The key components of this development were: North America Commercial •Favorable development in U.S Workers' Compensation reflecting continued favorable loss experience across most accident years particularly for excess and guaranteed cost segments. •Favorable development in U.S. Excess Casualty particularly in lead and mid-excess retail segments. •Favorable development in U.S. Other Casualty in the Commercial Auto, General Liability and Construction Wraps business. •Amortization benefit related to the deferred gain on the adverse development cover. •Unfavorable development driven by U.S. Financial Lines driven by unfavorable severity trends in Excess and Primary D&O and Excess and Financial Institutions Errors and Omissions (E&O), partially offset by favorable results in Employment Practices Liability Insurance (EPLI). International Commercial •Favorable development on Global Specialty across all products in all regions. •Unfavorable development in Casualty in Europe Excess Casualty and French Auto as well as large loss experience in the UK, partially offset by favorable experience in Asia Pacific Casualty. •Unfavorable development in Financial Lines primarily in the UK for M&A, Commercial PI and Commercial D&O. Global Personal •Favorable development in International Personal Lines, particularly with Auto and A&H coverages in Japan, as well as favorable experience recognized in Europe and the UK. •Favorable development, primarily in U.S. Personal Insurance, due to favorable development on prior year catastrophes across several events, primarily in the 2017-2019 accident years. We note that for certain categories of claims (e.g., construction defect claims and environmental claims) and for reinsurance recoverable, losses may sometimes be reclassified to an earlier or later accident year as more information about the date of occurrence becomes available to us. [[GREPCENT_TABLE]] [["72","AIG | 2024 Form 10-K"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Insurance Reserves Significant Reinsurance Agreements In the first quarter of 2017, we entered into an adverse development reinsurance agreement with NICO, under which we transferred to NICO 80 percent of the reserve risk on substantially all of our U.S. Commercial long-tail exposures for accident years 2015 and prior. Under this agreement, we ceded to NICO 80 percent of the losses on subject business paid on or after January 1, 2016 in excess of $25 billion of net paid losses, up to an aggregate limit of $25 billion. We account for this transaction as retroactive reinsurance. This transaction resulted in a gain, which under GAAP retroactive reinsurance accounting is deferred and amortized into income over the settlement period. NICO created a collateral trust account as security for their claim payment obligations to us, into which they deposited the consideration paid under the agreement, and Berkshire Hathaway Inc. has provided a parental guarantee to secure NICO’s obligations under the agreement. For a description of AIG’s catastrophe reinsurance protection for 2024, see Part II, Item 7. MD&A – Enterprise Risk Management – Insurance Risks – Natural Catastrophe Risk. The table below shows the calculation of the deferred gain on the adverse development reinsurance agreement, the effect of discounting of loss reserves and amortization of the deferred gain. [[GREPCENT_TABLE]] [["(in millions)","December 31, 2024","","December 31, 2023","","December 31, 2022"],["Gross Covered Losses"],["Covered reserves before discount","$","9,823","","","$","10,849","","","$","12,537"],["Inception to date losses paid","31,545","","","30,157","","","28,667"],["Attachment point","(25,000)","","","(25,000)","","","(25,000)"],["Covered losses above attachment point","$","16,368","","","$","16,006","","","$","16,204"],["Deferred Gain Development"],["Covered losses above attachment ceded to NICO (80%)","$","13,094","","","$","12,805","","","$","12,963"],["Consideration paid including interest","(10,188)","","","(10,188)","","","(10,188)"],["Pre-tax deferred gain before discount and amortization","2,906","","","2,617","","","2,775"],["Discount on ceded losses(a)","(936)","","","(1,104)","","","(1,254)"],["Pre-tax deferred gain before amortization","1,970","","","1,513","","","1,521"],["Inception to date amortization of deferred gain at inception","(1,564)","","","(1,428)","","","(1,264)"],["Inception to date amortization attributed to changes in deferred gain(b)","(122)","","","64","","","(52)"],["Deferred gain liability reflected in AIG's balance sheet","$","284","","","$","149","","","$","205"]] [[/GREPCENT_TABLE]] (a)The accretion of discount and a reduction in effective interest rates is offset by changes in estimates of the amount and timing of future recoveries. (b)Excluded from APTI. The following table presents the rollforward of activity in the deferred gain from the adverse development reinsurance agreement: [[GREPCENT_TABLE]] [["Years Ended December 31,"],["(in millions)","","","","","","","2024","","2023","","2022"],["Balance at beginning of year, net of discount","","","","","","$","149","","$","205","","$","869"],["(Favorable) unfavorable prior year reserve development ceded to NICO(a)","","","","","","","289","","","(158)","","","(174)"],["Amortization attributed to deferred gain at inception(b)","","","","","","","(136)","","","(164)","","","(167)"],["Amortization attributed to changes in deferred gain(c)","","","","","","","(186)","","","116","","","(22)"],["Changes in discount on ceded loss reserves","","","","","","","168","","","150","","","(301)"],["Balance at end of year, net of discount","","","","","","$","284","","$","149","","$","205"]] [[/GREPCENT_TABLE]] (a)Prior year reserve development ceded to NICO under the retroactive reinsurance agreement is deferred under GAAP. (b)Represents amortization of the deferred gain recognized in APTI. (c)Excluded from APTI. The lines of business subject to this agreement include those with longer tails, which carry a higher degree of uncertainty. Since inception, there have been periods of both favorable and unfavorable prior year development. This agreement will continue to reduce the impact of volatility in the development on our ultimate loss estimates over time. Fortitude Re was established during the first quarter of 2018 in a series of reinsurance transactions related to our run-off operations. Those reinsurance transactions were designed to consolidate most of our insurance run-off lines into a single legal entity. As of December 31, 2024, $3.4 billion of reserves related to business written by multiple wholly-owned AIG subsidiaries, had been ceded to Fortitude Re under these reinsurance transactions. [[GREPCENT_TABLE]] [["AIG | 2024 Form 10-K","73"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Liquidity and Capital Resources Liquidity and Capital Resources OVERVIEW Liquidity refers to the ability to generate sufficient cash resources to meet the cash requirements of our business operations and payment obligations. Capital refers to the long-term financial resources available to support the operation of our businesses, fund business growth and cover financial and operational needs that arise from adverse circumstances. Our primary source of ongoing capital generation is derived from the profitability of our insurance subsidiaries. We must comply with numerous constraints on our capital positions. These constraints drive the requirements for capital adequacy at AIG and the individual businesses and are based on internally defined risk tolerances, regulatory requirements, rating agency and creditor expectations and business needs. For information regarding our liquidity risk framework, see Enterprise Risk Management – Liquidity Risk Management. We believe that we have sufficient liquidity and capital resources to satisfy future requirements and meet our obligations to policyholders, customers, creditors and debt-holders, including those arising from reasonably foreseeable contingencies or events. Nevertheless, some circumstances may cause our cash or capital needs to exceed projected liquidity or readily deployable capital resources. For information regarding risks associated with our liquidity and capital resources, see Part I, Item 1A. – Risk Factors – Liquidity, Capital and Credit. Depending on market conditions, regulatory and rating agency considerations and other factors, we may take various liability and capital management actions. Liability management actions may include, but are not limited to, repurchasing or redeeming outstanding debt, issuing new debt or engaging in debt exchange offers. Capital management actions may include, but are not limited to, issuing preferred stock, paying dividends to our shareholders on AIG Common Stock, par value $2.50 per share (AIG Common Stock) and repurchases of AIG Common Stock. LIQUIDITY AND CAPITAL RESOURCES HIGHLIGHTS SOURCES Liquidity to AIG Parent from Subsidiaries During the year ended December 31, 2024, our General Insurance companies distributed dividends of $4.1 billion to AIG Parent or applicable intermediate holding companies. Sales of Corebridge Shares by AIG In June and July 2024, we sold an aggregate of approximately 31.9 million shares of Corebridge common stock in a secondary offering at a public offering price of $29.20 per share, which included 30 million shares initially offered and the partial exercise by the underwriters of their option to purchase additional shares. The aggregate gross proceeds to AIG Parent were approximately $932 million. In August 2024, we sold approximately 8 million shares of Corebridge common stock to Corebridge at the per share purchase price of $24.90. The aggregate proceeds to AIG Parent were $200 million. In September 2024, we sold 5 million shares of Corebridge common stock in a Rule 144 transaction at the per share purchase price of $26.86. The aggregate proceeds to AIG Parent were approximately $134 million. In November 2024, we sold 30 million shares of Corebridge common stock in a secondary offering at a public offering price of $31.20 per share. The aggregate gross proceeds to AIG Parent were approximately $936 million. In December 2024, we sold approximately 120 million shares of Corebridge common stock to Nippon Life Insurance Company at the per share purchase price of $31.47 per share. The aggregate proceeds to AIG Parent were approximately $3.8 billion. Senior Notes Offering In November 2024, AIG issued ¥77.1 billion aggregate principal amount of 1.580% Notes Due 2028, ¥10.3 billion aggregate principal amount of 1.757% Notes Due 2029 and ¥12.6 billion aggregate principal amount of 2.137% Notes Due 2034, which was equivalent to approximately $660 million at the time of the offering. Sale of AIG's Travel Business On December 2, 2024, AIG completed the sale of its global individual personal travel insurance and assistance business to Zurich Insurance Group and received $600 million cash, plus additional earn-out consideration. [[GREPCENT_TABLE]] [["74","AIG | 2024 Form 10-K"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Liquidity and Capital Resources USES General Borrowings During the year ended December 31, 2024, $2.0 billion of debt categorized as general borrowings matured, was repaid or redeemed, including: •Repayment of $459 million aggregate principal amount of our 4.125% Notes due February 15, 2024. •Redemption of €41.55 million aggregate principal amount of our Series A-3 Junior Subordinated Debentures, equivalent to approximately $46 million at the time of repayment. •Redemption of $400 million face amount of our Zero Coupon Callable Notes Due 2047, for a redemption price of 135.631 percent of the face amount, which totaled approximately $543 million. •Repurchased, through cash tender offers, approximately $1.13 billion aggregate principal amount of certain notes and debentures issued by AIG for an aggregate purchase price of approximately $1.14 billion. We made interest payments on our general borrowings totaling $611 million during the year ended December 31, 2024. Dividends During the year ended December 31, 2024: •We made a cash dividend payment of $365.625 per share on our Series A 5.85% Non-Cumulative Perpetual Preferred Stock (Series A Preferred Stock) for the three months ended March 31, 2024 totaling $7 million. •We made cash dividend payments in the amount of $0.40 per share on AIG Common Stock for each of the three month periods ended December 31, 2024, September 30, 2024 and June 30, 2024 (an increase of 11 percent from prior dividend payments), and $0.36 per share for the three months ended March 31, 2024, totaling $1.0 billion. Repurchases of Common Stock(a) and Redemption of Preferred Stock During the year ended December 31, 2024, AIG Parent repurchased approximately 89 million shares of AIG Common Stock, for an aggregate purchase price of approximately $6.6 billion. On March 15, 2024, we redeemed all 20,000 outstanding shares of our Series A Preferred Stock and all 20,000,000 of the corresponding Depositary Shares, each representing a 1/1,000th interest in a share of Series A Preferred Stock for an aggregate redemption price of $500 million, paid in cash. (a)Pursuant to a Securities Exchange Act of 1934 (the Exchange Act) Rule 10b5-1 repurchase plan, from January 1, 2025 to February 7, 2025, AIG Parent repurchased approximately 13 million shares of AIG Common Stock for an aggregate purchase price of approximately $952 million. ANALYSIS OF SOURCES AND USES OF CASH Operating Cash Flow Activities Insurance companies generally receive most premiums in advance of the payment of claims or policy benefits. The ability of insurance companies to generate positive cash flow is affected by the frequency and severity of losses under their insurance policies, policy retention rates, effective management of their investment portfolio and operating expense discipline. Interest payments totaled $858 million, $1.1 billion and $1.1 billion in the years ended December 31, 2024, 2023 and 2022, respectively. Excluding interest payments, AIG had operating cash inflows of $4.1 billion, $7.3 billion and $5.3 billion in the years ended December 31, 2024, 2023 and 2022, respectively, including outflows of $104 million, $710 million and $488 million from discontinued operations in the years ended December 31, 2024, 2023 and 2022, respectively. Investing Cash Flow Activities Net cash provided by investing activities in the year ended December 31, 2024 was $1.7 billion, including $4.2 billion used in discontinued operations, compared to net cash used in investing activities of $7.0 billion, including $4.5 billion from discontinued operations, in 2023 and $3.6 billion, including $6.5 billion from discontinued operations, in 2022. Financing Cash Flow Activities Net cash used in financing activities in the year ended December 31, 2024 totaled $5.1 billion, reflecting: •$1.0 billion to pay dividends of $0.40 per share in each of the three month periods ended December 31, 2024, September 30, 2024 and June 30, 2024, and $0.36 per share for the three months ended March 31, 2024 on AIG Common Stock; •$22 million to pay a first quarter dividend of $365.625 per share on AIG’s Series A Preferred Stock and redemption premiums; •$6.7 billion to repurchase approximately 90 million shares of AIG Common Stock; •$1.4 billion in net outflows from the issuance and repayment of long-term debt; and [[GREPCENT_TABLE]] [["AIG | 2024 Form 10-K","75"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Liquidity and Capital Resources •$3.9 billion in net inflows from discontinued operations. Net cash provided by financing activities in the year ended December 31, 2023 totaled $782 million reflecting: •$997 million to pay dividends of $0.36 per share in the three months ended December 31, 2023, September 30, 2023 and June 30, 2023, and $0.32 per share for the three months ended March 31, 2023 on AIG Common Stock; •$29 million to pay quarterly dividends of $365.625 per share on AIG’s Series A Preferred Stock; •$3.0 billion to repurchase approximately 51 million shares of AIG Common Stock; •$1.6 billion in net outflows from the issuance and repayment of long-term debt; •$45 million in net outflows from the issuance and repayment of debt of consolidated investment entities; and •$3.5 billion in net inflows from discontinued operations. Net cash used in financing activities in the year ended December 31, 2022 totaled $602 million reflecting: •$982 million to pay quarterly dividends of $0.32 per share on AIG Common Stock; •$29 million to pay quarterly dividends of $365.625 per share on AIG’s Series A Preferred Stock; •$5.2 billion to repurchase approximately 90 million shares of AIG Common Stock; •$9.4 billion in net outflows from the issuance, repayment and cash tender of long-term debt; •$234 million in net outflows from the issuance and repayment of debt of consolidated investment entities; and •$13.9 billion in net inflows from discontinued operations. LIQUIDITY AND CAPITAL RESOURCES OF AIG PARENT AND SUBSIDIARIES AIG Parent As of December 31, 2024 and 2023, respectively, AIG Parent and applicable intermediate holding companies had approximately $10.7 billion and $12.1 billion in liquidity sources held in the form of cash, short-term investments and AIG Parent's committed, revolving syndicated credit facility of $3.0 billion as of December 31, 2024 and $4.5 billion as of December 31, 2023. AIG Parent’s primary sources of liquidity are dividends, distributions, loans and other payments from subsidiaries and credit facilities. AIG Parent’s primary uses of liquidity are for debt service, capital and liability management, operating expenses and dividends on AIG Common Stock. We expect to access the debt and preferred equity markets from time to time to meet funding requirements as needed. We utilize our capital resources to support our businesses, with the majority of capital allocated to our insurance operations. Should we have or generate more capital than is needed to support our business strategies (including organic or inorganic growth opportunities) or mitigate risks inherent to our business, we may develop plans to distribute such capital to shareholders via dividends or AIG Common Stock repurchase authorizations or deploy such capital towards liability management. Insurance Companies We expect that our insurance companies will be able to continue to satisfy reasonably foreseeable future liquidity requirements and meet their obligations, including those arising from reasonably foreseeable contingencies or events, through cash from operations and, to the extent necessary, monetization of invested assets. Our insurance companies’ liquidity resources are primarily held in the form of cash, short-term investments and publicly traded, investment grade rated fixed maturity securities. Each of our material insurance companies’ liquidity is monitored through various internal liquidity risk measures. The primary sources of liquidity are premiums, fees, reinsurance recoverables and investment income and maturities. Certain of our insurance companies have access to Federal Home Loan Bank (FHLB) borrowings as an additional source of funding. The primary uses of liquidity are paid losses, reinsurance payments, interest payments, dividends, expenses, investment purchases and collateral requirements. Our insurance companies may require additional funding to meet capital or liquidity needs under certain circumstances. For example, large catastrophes may require us to provide additional support to the affected operations of our insurance companies. We are party to several letter of credit agreements with various financial institutions, which issue letters of credit from time to time in support of our insurance companies. These letters of credit are subject to reimbursement by us in the event of a drawdown of these letters of credit. Letters of credit issued in support of our insurance companies totaled approximately $2.3 billion at December 31, 2024. [[GREPCENT_TABLE]] [["76","AIG | 2024 Form 10-K"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Liquidity and Capital Resources CREDIT FACILITIES We maintain a syndicated, multicurrency revolving credit facility as a potential source of liquidity for general corporate purposes. On September 27, 2024, we amended and restated the five-year syndicated credit facility that was entered into on November 19, 2021 (the Previous Facility). The amended and restated five-year syndicated credit facility (the Facility) provides for aggregate commitments by the bank syndicate to provide AIG Parent with unsecured revolving loans and/or standby letters of credit of up to $3.0 billion (the Previous Facility was up to $4.5 billion). The Facility is scheduled to expire in September 2029 (the Previous Facility was scheduled to expire in November 2026). Our ability to utilize the Facility is conditioned on the satisfaction of certain legal, operating, administrative and financial covenants and other requirements contained in the Facility. These include covenants relating to our maintenance of a specified total consolidated net worth and total consolidated debt to total consolidated capitalization. Failure to satisfy these and other requirements contained in the Facility would restrict our access to the Facility and could have a material adverse effect on our financial condition, results of operations and liquidity. As of December 31, 2024, a total of $3.0 billion remained available under the Facility. CONTRACTUAL OBLIGATIONS The following table summarizes material contractual obligations in total, and by remaining maturity: [[GREPCENT_TABLE]] [["December 31, 2024","","","Payments due by Period"],["(in millions)","","Total Payments","","2025","","2026 - 2027","","Thereafter"],["Loss reserves(a)","$","71,279","","$","19,667","","$","20,308","","$","31,304"],["Long-term debt(b)","","8,764","","","398","","","1,120","","","7,246"],["Interest payments on long-term debt","","4,924","","","369","","","697","","","3,858"],["Total","$","84,967","","$","20,434","","$","22,125","","$","42,408"]] [[/GREPCENT_TABLE]] (a)Represents loss reserves, undiscounted and gross of reinsurance. (b)Does not reflect $158 million of debt of consolidated investment entities, for which recourse is limited to the assets of the respective investment entities and for which there is no recourse to the general credit of AIG. Loss Reserves Loss reserves relate to our General Insurance companies and represent estimates of future loss and loss adjustment expense payments based on historical loss development payment patterns. The amounts presented in the above table are undiscounted and therefore exceed the liability for unpaid losses and loss adjustment expenses, including allowance for credit losses, as presented on the Consolidated Balance Sheets. Due to the significance of the assumptions used, the payments by period presented above could be materially different from actual required payments. We believe that our General Insurance companies maintain adequate financial resources to meet the actual required payments under these obligations. For additional information on loss reserves, see Critical Accounting Estimates – Loss Reserves and Note 13 to the Consolidated Financial Statements. Long-Term Debt and Interest Payments on Long-Term Debt The amounts presented in the above table represent AIG's total long-term debt outstanding and associated future interest payments due on such debt. For additional information on outstanding debt, see – Debt. [[GREPCENT_TABLE]] [["AIG | 2024 Form 10-K","77"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Liquidity and Capital Resources OFF-BALANCE SHEET ARRANGEMENTS AND COMMERCIAL COMMITMENTS In the normal course of business, AIG and our subsidiaries enter into commitments under which we may be required to make payments in the future on a contingent basis. The following table summarizes Off-Balance Sheet Arrangements and Commercial Commitments in total, and by remaining maturity: [[GREPCENT_TABLE]] [["December 31, 2024","","Total AmountsCommitted"],["(in millions)","","","","2025","","2026 - 2027","","Thereafter"],["Commitments:"],["Investment commitments","$","1,773","","","$","1,084","","$","592","","$","97"],["Commitments to extend credit","","258","","","","125","","","102","","","31"],["Letters of credit","","295","","","","91","","","\u2014","","","204"],["Total(a)(b)","$","2,326","","","$","1,300","","$","694","","$","332"]] [[/GREPCENT_TABLE]] (a)Excludes guarantees, CMAs or other support arrangements between AIG consolidated entities. (b)Excludes commitments with respect to pension plans. The annual pension contribution for 2025 is expected to be approximately $53 million. Investment commitments We enter into investment commitments in the normal course of business that are aligned with and support our investment strategies. These represent commitments to investment in private equity funds as well as commitments to purchase and develop real estate in the United States and abroad. The commitments to invest are called at the discretion of each fund, as needed for funding new investments or expenses of the fund, the timing of which is estimated based on the expected life cycle of the related funds, consistent with past trends of requirements for funding. These commitments are primarily made by insurance subsidiaries of the Company. We also enter into arrangements with variable interest entities (VIEs) and consolidate a VIE when we are the primary beneficiary of the entity. For additional information on investment commitments and VIEs, see Note 10 to the Consolidated Financial Statements. Commitments to extend credit As part of our normal course of business lending operations, we enter into commitments to fund mortgage loans at certain interest rates and various other terms, within a stated period of time. Such commitments are legally binding and generally made by insurance subsidiaries of the Company. Letters of credit AIG is party to several letter of credit agreements with various financial institutions, which issue letters of credit from time to time for the benefit of third parties in support of our businesses. These letters of credit are subject to reimbursement by AIG in the event of a drawdown. Indemnification agreements For information regarding our indemnification agreements, see Note 15 to the Consolidated Financial Statements. [[GREPCENT_TABLE]] [["78","AIG | 2024 Form 10-K"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Liquidity and Capital Resources DEBT We expect to service and repay general borrowings through maturing investments and dispositions of invested assets, future cash flows from operations, cash flows generated from invested assets, future debt or preferred stock issuances and other financing arrangements. The following table provides the rollforward of our total debt outstanding: [[GREPCENT_TABLE]] [["Year Ended December 31, 2024","Balance, Beginning of Year","","Issuances","","Maturities and Repayments","","","Effect of Foreign Exchange","","Other Changes","","","Balance, End of Year"],["(in millions)"],["General borrowings:"],["Notes and bonds payable","$","9,079","","$","660","","$","(1,653)","","","$","(85)","","$","(116)","","","$","7,885"],["Junior subordinated debt","","992","","","\u2014","","","(393)","","","","\u2014","","","3","","","","602"],["AIG Japan Holdings Kabushiki Kaisha","","267","","","\u2014","","","\u2014","","","","(28)","","","\u2014","","","","239"],["Total general borrowings","","10,338","","","660","","","(2,046)","","","","(113)","","","(113)","","","","8,726"],["Borrowings supported by assets","","37","","","\u2014","","","(1)","","","","\u2014","","","1","","","","37"],["Other subsidiaries' notes, bonds, loans and mortgages payable - not guaranteed by AIG","","\u2014","","","1","","","\u2014","","","","\u2014","","","\u2014","","","","1"],["Total long-term debt","$","10,375","","$","661","","$","(2,047)","","","$","(113)","","$","(112)","","","$","8,764"],["Debt of consolidated investment entities - not guaranteed by AIG(a)","$","231","","$","\u2014","","","(1)","","","","\u2014","","","(72)","","(b)","$","158"]] [[/GREPCENT_TABLE]] (a)At December 31, 2024, includes debt of consolidated investment entities primarily related to real estate investments of $158 million. At December 31, 2023, includes debt of consolidated investment entities related to real estate investments of $79 million and other securitization vehicles of $152 million. (b)Includes the effect of consolidating previously unconsolidated partnerships. Debt Maturities The following table summarizes maturing long-term debt at December 31, 2024 of AIG for the next four quarters: [[GREPCENT_TABLE]] [["","","First Quarter","","Second Quarter","","Third Quarter","","Fourth Quarter"],["(in millions)","","2025","","2025","","2025","","2025","","Total"],["General borrowings","$","239","","$","146","","$","\u2014","","$","\u2014","","$","385"],["Borrowings supported by assets","","\u2014","","","\u2014","","","\u2014","","","12","","","12"],["Other subsidiaries' notes, bonds, loans and mortgages payable","","\u2014","","","\u2014","","","\u2014","","","1","","","1"],["Total","$","239","","$","146","","$","\u2014","","$","13","","$","398"]] [[/GREPCENT_TABLE]] CREDIT RATINGS Credit ratings estimate a company’s ability to meet its obligations and may directly affect the cost and availability of financing to that company. The following table presents the credit ratings of AIG Parent as of the date of this filing. Figures in parentheses indicate the relative ranking of the ratings within the agency’s rating categories; that ranking refers only to the major rating category and not to the modifiers assigned by the rating agencies. [[GREPCENT_TABLE]] [["","Short-Term Debt","","Senior Long-Term Debt"],["","Moody's","S&P","","Moody's(a)","S&P(b)","Fitch(c)"],["American International Group, Inc.","P-2 (2nd of 4)","A-2 (2nd of 5)","","Baa 2 (4th of 9) / Positive","BBB+ (4th of 9) /Positive","BBB+ (4th of 9) /Stable"]] [[/GREPCENT_TABLE]] (a)Moody’s appends numerical modifiers 1, 2 and 3 to the generic rating categories to show relative position within the rating categories. (b)S&P ratings may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories. (c)Fitch Ratings Inc. (Fitch) ratings may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories. These credit ratings are current opinions of the rating agencies. They may be changed, suspended or withdrawn at any time by the rating agencies as a result of changes in, or unavailability of, information or based on other circumstances. Ratings may also be withdrawn at our request. We are party to some agreements that contain “ratings triggers.” Depending on the ratings maintained by one or more rating agencies, these triggers could result in (i) the termination or limitation of credit availability or a requirement for accelerated repayment, (ii) the termination of business contracts or (iii) a requirement to post collateral for the benefit of counterparties. [[GREPCENT_TABLE]] [["AIG | 2024 Form 10-K","79"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Liquidity and Capital Resources In the event of a downgrade of our long-term senior debt ratings, certain AIG entities would be required to post additional collateral under some derivative and other transactions, or certain of the counterparties of such entities would be permitted to terminate such transactions early. The actual amount of collateral that we would be required to post to counterparties in the event of such downgrades, or the aggregate amount of payments that we could be required to make, depends on market conditions, the fair value of outstanding affected transactions and other factors prevailing at the time of the downgrade. FINANCIAL STRENGTH RATINGS Financial Strength ratings estimate an insurance company’s ability to pay its obligations under an insurance policy. The following table presents the ratings of our significant insurance subsidiaries as of the date of this filing. [[GREPCENT_TABLE]] [["","A.M. Best","S&P","Fitch","Moody\u2019s"],["National Union Fire Insurance Company of Pittsburgh, Pa.","A","A+","A+","A2"],["Lexington Insurance Company","A","A+","A+","A2"],["American Home Assurance Company","A","A+","A+","A2"],["AIG Europe S.A.","NR","A+","NR","A2"],["American International Group UK Ltd.","A","A+","NR","A2"],["AIG General Insurance Co. Ltd.","NR","A+","NR","NR"]] [[/GREPCENT_TABLE]] In February 2024, S&P revised its outlook on AIG Parent and its core General Insurance subsidiaries to positive from stable and affirmed the ‘BBB+/A-2’ issuer credit ratings on AIG Parent and ‘A+’ financial strength ratings on the core General Insurance entities. On January 26, 2024, A.M. Best upgraded the Long-Term Issuer Credit Ratings (Long-Term ICR) of AIG General Insurance subsidiaries to ‘a+’ from ‘a’, the Long-Term ICR of AIG Parent to ‘bbb+’ from ‘bbb’, and revised the outlook of the Long-Term ICRs to stable from positive. A.M. Best also affirmed the 'A' Financial Strength Rating of the AIG General Insurance subsidiaries with stable outlook. These financial strength ratings are current opinions of the rating agencies. They may be changed, suspended or withdrawn at any time by the rating agencies as a result of changes in, or unavailability of, information or based on other circumstances. For information regarding the effects of downgrades in our credit ratings and financial strength ratings, see Part I, Item 1A. Risk Factors – Liquidity, Capital and Credit – “A downgrade by one or more of the rating agencies in the Insurer Financial Strength ratings of our insurance or reinsurance companies could limit their ability to write or prevent them from writing new business and impair their retention of customers and in-force business, and a downgrade in our credit ratings could adversely affect our business, results of operations, financial condition and liquidity” and Note 11 to the Consolidated Financial Statements. REGULATION AND SUPERVISION For a discussion of our regulation and supervision by different regulatory authorities in the United States and abroad, including with respect to our liquidity and capital resources, see Part I, Item 1. Business – Regulation and Part I, Item 1A. Risk Factors – Regulation. DIVIDENDS On February 11, 2025, our Board of Directors declared a cash dividend on AIG Common Stock of $0.40 per share, payable on March 31, 2025 to shareholders of record on March 17, 2025. The payment of any future dividends will be at the discretion of our Board of Directors and will depend on various factors. For further detail on our dividends, see Note 16 to the Consolidated Financial Statements. REPURCHASES OF AIG COMMON STOCK Our Board of Directors has authorized the repurchase of shares of AIG Common Stock through a series of actions. On April 30, 2024, the Board of Directors authorized the repurchase of $10.0 billion of AIG Common Stock (inclusive of the approximately $3.9 billion remaining under the Board's prior share repurchase authorization). During the year ended December 31, 2024, AIG Parent repurchased approximately 89 million shares of AIG Common Stock for an aggregate purchase price of $6.6 billion. Pursuant to an Exchange Act Rule 10b5-1 repurchase plan, from January 1, 2025 to February 7, 2025, we repurchased approximately 13 million shares of AIG Common Stock for an aggregate purchase price of approximately $952 million. As of February 7, 2025, $4.7 billion remained under the Board's authorization. The timing of any future share repurchases will depend on market conditions, our business and strategic plans, financial condition, results of operations, liquidity and other factors, as discussed further in Note 16 to the Consolidated Financial Statements. [[GREPCENT_TABLE]] [["80","AIG | 2024 Form 10-K"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Liquidity and Capital Resources DIVIDEND RESTRICTIONS Payments of dividends to AIG Parent or intermediate holding companies by insurance subsidiaries are subject to certain restrictions imposed by regulatory authorities. For information regarding restrictions on payments of dividends by our subsidiaries, see Note 16 to the Consolidated Financial Statements. Enterprise Risk Management OVERVIEW Risk management is an integral part of our business strategy and a key element of our approach to corporate governance. We have an integrated process for managing risks throughout our organization in accordance with our firm-wide risk appetite. Our Board of Directors has oversight responsibility for the management of risk. Our ERM Department oversees and integrates the risk management functions in our business entities and embeds risk management in our day-to-day business processes, providing senior management with a consolidated view of AIG’s major risk positions. Nevertheless, our risk management efforts may not always be successful and material adverse effects on our business, results of operations, cash flows, liquidity or financial condition may occur. For further information regarding the risks associated with our business and operations, see Part I, Item 1A. Risk Factors. AIG employs a Three Lines model. AIG’s business leaders assume full accountability for the risks and controls in their segments, and ERM performs a review, challenge and oversight function. The third line consists of our Internal Audit Group that provides independent assurance to AIG’s Board of Directors. RISK GOVERNANCE STRUCTURE Our risk governance structure is designed to foster the development and maintenance of a risk and control culture that encompasses all significant risk categories impacting our lines of business and functions. Accountability for the implementation and oversight of risk policies is aligned with individual business leaders, with the risk committees' oversight. Our Board of Directors oversees the management of risk through its Risk Committee and Audit Committee. Our Chief Risk Officer (CRO), a member of the Executive Leadership team, reports to both the Risk Committee and our Chairman and Chief Executive Officer. The AIG CRO chairs the Group Risk Committee (GRC), the senior management group responsible for assessing all significant risks on a global basis. The GRC is supported by management committees and Legal Entity Risk Committees. RISK APPETITE, LIMITS, IDENTIFICATION AND MEASUREMENT Risk Appetite Framework Approved by our Board of Directors, AIG’s Risk Appetite Framework integrates stakeholder interests, strategic business goals and available financial resources. We balance these by seeking to take measured risks that are expected to generate repeatable, sustainable earnings and create long-term value for our shareholders. Our risk tolerances take into consideration regulatory requirements, rating agency expectations, and business needs. Risk Limits A key component of our Risk Appetite Framework is the establishment and maintenance of tolerances and limits on material risks to meet AIG’s objectives. As part of AIG's Risk Appetite Framework, AIG has defined, where relevant, a set of risk tolerances to ensure appropriate support of aggregate risk-taking. This includes identifying the appropriate set of metrics, and calibrating a specific tolerance level for each metric, as appropriate. Risk Identification and Measurement We conduct risk identification through multiple processes at the business entity and corporate level focused on capturing our material risks. A key initiative is our integrated bottom-up risk identification and assessment process which is conducted down to the product-line level. In addition, we perform an annual top-down risk assessment to identify top risks and assign owners to ensure these risks are appropriately addressed and managed. These processes are used as critical input to enhance and develop our analytics for measuring and assessing risks across the organization. [[GREPCENT_TABLE]] [["AIG | 2024 Form 10-K","81"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Enterprise Risk Management The internal capital framework quantifies our aggregate economic risk at a given confidence interval, after considering diversification benefits between risk factors and business lines. The stress testing framework assesses our aggregate exposure to our most significant financial and insurance risks. We use this information to support the assessment of resources needed by us to support our subsidiaries and capital resources required to maintain consolidated company target capitalization levels. [[GREPCENT_TABLE]] [["We evaluate and manage risk in material topics as discussed below."],["\u2022Credit Risk Management","\u2022Liquidity Risk Management","\u2022Business and Strategy Risks"],["\u2022Market Risk Management","\u2022Operational Risk Management","\u2022Insurance Risks"]] [[/GREPCENT_TABLE]] CREDIT RISK MANAGEMENT Credit risk is defined as the risk that our customers or counterparties are unable or unwilling to repay their contractual obligations when they become due. Credit risk may also result from a downgrade of a counterparty’s credit ratings or a widening of its credit spreads. Direct and indirect credit exposures may arise from, but are not limited to, fixed income investments, equity securities, deposits, commercial paper investments, securities purchased under agreements to resell and repurchase agreements, corporate and consumer loans, leases, reinsurance and retrocessional insurance recoverables, counterparty risk arising from derivatives activities, collateral extended to counterparties, insurance risk cessions to third parties, financial guarantees, letters of credit, and certain General Insurance businesses. AIG's credit risk management framework defines credit risk processes to identify, evaluate, risk rate, measure, manage and govern credit risk across the enterprise and to ensure the consistency of those processes. We monitor and control our company-wide credit risk concentrations and attempt to avoid unwanted or excessive risk accumulations, whether funded or unfunded. To minimize the level of credit risk in some circumstances, we may require mitigants, such as parental or third-party guarantees, simultaneous payment provisions or collateral, including commercial bank-issued letters of credit, funds withheld accounts and cash or securities held in trust collateral accounts. For additional information on our credit concentrations and credit exposures, see Investments – Investment Strategies – Available-for-Sale Investments. Derivative Transactions We utilize derivatives principally to enable us to hedge exposure associated with changes in levels of interest rates, currencies, credit, commodities, equity prices and other risks. Credit risk associated with derivative counterparties exists for a derivative contract when that contract has a positive fair value to us. All derivative transactions must be transacted within counterparty limits that have been approved by ERM. We evaluate counterparty credit quality via an internal analysis that is consistent with the AIG Credit Policy and, where necessary, we require credit enhancements for certain transactions and enter into offsetting and netting arrangements. For additional information related to derivative transactions, see Note 11 to the Consolidated Financial Statements. MARKET RISK MANAGEMENT Market risk is defined as the risk of adverse impact due to systemic movements in one or more of the following market risk drivers: interest rates, credit spreads, foreign exchange, equity and commodity prices, residential and commercial real estate values, inflation, and their respective levels of uncertainty. It can also be brought on by political turmoil, natural disasters, and terrorist attacks. We are exposed to market risks primarily within our insurance and capital markets activities, on both the asset and the liability sides of our balance sheet through on- and off-balance sheet exposures. Market risk is overseen at the corporate level within ERM through the CRO. Market risk is managed by our finance, treasury and investment management corporate functions, collectively, and in partnership with ERM. The scope and magnitude of our market risk exposures is monitored through multiple lenses that include economic, GAAP and statutory reporting frameworks at various levels of business consolidation, in a manner consistent with our risk appetite statement. This process aims to establish a comprehensive coverage of potential implications from adverse market risk developments. We use a number of approaches to measure market risk exposure including sensitivity analysis, scenario analysis and stress testing. [[GREPCENT_TABLE]] [["82","AIG | 2024 Form 10-K"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Enterprise Risk Management Market Risk Sensitivities Most of our fixed income portfolio is reported as available-for-sale. Therefore, fair value changes will have a direct impact on Accumulated Other Comprehensive Income (Loss) (AOCI), but do not impact our net investment income revenue unless the assets are sold. Our short-term and long-term debt is reported at amortized cost and thus changes in interest rates do not impact the debt values reported on our financial statements. Their fair value, however, is sensitive to interest rates. The following table provides estimates of sensitivity to changes in yield curves, equity prices and foreign exchange (FX) rates on our financial instruments. We aim to manage interest rate exposure of the investment portfolio such that valuation changes from interest rates are partially offset by changes in the economic value of insurance reserves. These exposures are regularly reviewed as part of AIG’s governance structure and limits are set accordingly. The table excludes $3.1 billion of interest rate sensitive assets supporting the Fortitude Re funds withheld arrangements as the contractual returns related to the assets are transferred to Fortitude Re, as well as $3.2 billion of related funds withheld payables. [[GREPCENT_TABLE]] [["","Balance Sheet Exposure","","Economic Effect"],["(dollars in millions)","December 31, 2024","December 31, 2023","","","December 31, 2024","December 31, 2023"],["Sensitivity factor","","","","100 bps parallel increase in all yield curves"],["Interest rate sensitive assets:"],["Fixed maturity securities","$","61,408","","$","62,522","","","","$","(2,248)","","$","(2,246)"],["Mortgage and other loans receivable(a)","3,057","","3,670","","","","(61)","","(87)"],["Total interest rate sensitive assets(b)","$","64,465","","$","66,192","","","","$","(2,309)","","$","(2,333)"],["Interest rate sensitive liabilities:"],["Long-term debt(a)(c)","(8,525)","","(10,108)","","","","628","","840"],["Total interest rate sensitive liabilities","$","(8,525)","","$","(10,108)","","","","$","628","","$","840"],["Sensitivity factor","","","","20% decline in equity prices and alternative investments"],["Equity and alternative investments:"],["Real estate investments","$","259","","$","211","","","","$","(52)","","$","(42)"],["Private equity","3,586","","3,723","","","","(717)","","(745)"],["Hedge funds","187","","411","","","","(37)","","(82)"],["Common equity","704","","665","","","","(141)","","(133)"],["Other investments","5,796","","2,022","","","","(1,159)","","(404)"],["Total equity and alternative investments","$","10,532","","$","7,032","","","","$","(2,106)","","$","(1,406)"],["Sensitivity factor","","","","10% depreciation of all FX rates against the U.S. dollar"],["Foreign currency-denominated net asset position:"],["British pound","$","1,233","","$","1,350","","","","$","(123)","","$","(135)"],["Japan Yen","627","","1,105","","","","(63)","","(110)"],["Euro","1,165","","1,101","","","","(116)","","(110)"],["All other foreign currencies","2,941","","2,328","","","","(294)","","(233)"],["Total foreign currency-denominated net asset position(d)","$","5,966","","$","5,884","","","","$","(596)","","$","(588)"]] [[/GREPCENT_TABLE]] (a)The economic effect is the difference between the estimated fair value with and without a 100 bps parallel increase in all yield curves. The estimated fair values for Mortgage and other loans receivable and Long-term debt, excluding assets supporting Fortitude Re funds withheld assets, were $2.8 billion and $8.2 billion at December 31, 2024, respectively. The estimated fair values for Mortgage and other loans receivable and Long-term debt, excluding assets supporting Fortitude Re funds withheld assets, were $4.1 billion and $9.6 billion at December 31, 2023, respectively. (b)At December 31, 2024, $568 million of Fixed maturity securities and $492 million of Mortgage and other loans receivable were excluded due to modeling limitations. At December 31, 2023, this amount was $566 million for Fixed maturity securities and $459 million for Mortgage and other loans receivable. (c)At December 31, 2024 and 2023 the analysis excluded $239 million and $267 million, respectively, of AIG Japan Holdings Kabushiki Kaisha loans. (d)Most of the foreign currency exposure is reported on a one quarter lag. Foreign currency-denominated net asset position reflects our aggregated non-U.S. dollar assets less our aggregated non-U.S. dollar liabilities on a GAAP basis. Interest rate sensitivity is defined as the change in value with respect to a 100 basis point parallel shift up in the interest rate environment, calculated as: scenario value minus base value, where base value is the value under the yield curves as of the period end and scenario value is the value reflecting a 100 basis point parallel increase in all yield curves. The hypothetical change is assumed to be instantaneous. This therefore also assumes that the interest rate risk profile of the company remains constant and doesn't reflect the impact of any potential portfolio duration repositioning while interest rates rise. As a global company, AIG conducts business in multiple currencies. In general, we aim to match liabilities with assets of the same currency. For regulated insurance subsidiaries, we also try to mitigate statutory surplus or capital injection risk and capital surplus volatility in accordance with the entity’s statutory accounting framework. This often requires us to allocate capital in the liability’s currency mix or the functional currency of the entity. Derivatives may also be used. [[GREPCENT_TABLE]] [["AIG | 2024 Form 10-K","83"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Enterprise Risk Management For additional information on our three-tiered hierarchy of limits, see – Risk Appetite, Limits, Identification and Measurement – Risk Limits. LIQUIDITY RISK MANAGEMENT Liquidity risk is defined as the risk that our financial condition will be adversely affected by the inability or perceived inability to meet our short-term cash, collateral or other financial obligations as they come due. AIG and its legal entities seek to maintain sufficient liquidity both during the normal course of business and under defined liquidity stress scenarios to ensure that sufficient cash will be available to meet the obligations as they come due. Liquidity risk drivers include market/monetization risk, cash flow mismatch risk, event funding risk, and financing risk. Liquidity risk is monitored through comprehensive cash flow projections over varying time horizons that incorporate all relevant liquidity sources and uses and include known and likely cash inflows and outflows. We use several approaches to measure liquidity risk exposure including coverage flow forecasts and stress testing. OPERATIONAL RISK MANAGEMENT Operational risk is defined as the risk of loss, or other adverse consequences, resulting from inadequate or failed internal processes, people, systems, or from external events. Operational risk includes legal, regulatory, technology, compliance, third-party and business continuity risks, but excludes business and strategy risks. Operational risk is inherent in our business entities and can have many impacts, including but not limited to, unexpected economic losses or gains, reputational harm due to negative publicity, regulatory action from supervisory agencies and operational and business disruptions, and/or damage to customer relationships. ERM, working together with other control and assurance functions and first line Risk Control Owners through the risk and control framework, provides an independent view of operational risks for each of the business areas. Cybersecurity Risk AIG, like other global companies, continues to witness the increased sophistication and activities of unauthorized parties attempting cyber and other computer-related penetrations such as “denial of service” attacks, phishing, untargeted but sophisticated and automated attacks, and other disruptive software in an effort to compromise systems, networks and obtain sensitive information. ERM works closely with and supports the risk management practices of Information Technology, the Information Security Office and the business units and functions that form the lines of defense against the cybersecurity risks that we face. For additional information regarding the privacy data protection and cybersecurity regulations to which we are subject, see Part I, Item 1. Business – Regulation – Privacy, Data Protection, Cybersecurity and Artificial Intelligence Requirements. For additional discussion of cybersecurity risks, see Part I, Item 1A. Risk Factors – Business and Operations. For additional information regarding our cybersecurity risk management as well as strategy and governance, please see Part 1, Item 1C. Cybersecurity. BUSINESS AND STRATEGY RISKS Business and strategy risk encompasses those risks that stem from strategy risk, risk of legal and regulatory actions, risk of rating agency actions, reputational risk and intercompany dependencies. The major AIG strategy risks capture risk of losses due to the inability to implement appropriate business plans and strategies, make decisions, allocate resources or adapt to changes in the business environment. These risks include, but are not limited to pricing, distribution channels, acquisitions, and dispositions. The risk of legal and regulatory actions is defined as the risk that legal action or a change in regulation in the regions in which AIG does business will materially impact business operations, financial performance, and/or capital requirements. Risk drivers include, but are not limited to, adverse actions in legal or regulatory environment, and adverse actions or added complexity of accounting/tax standards. A downgrade by one or more of the rating agencies in the Insurer Financial Strength ratings of AIG’s insurance companies could limit their ability to write or prevent them from writing new business and impair their retention of customers and in-force business, and a downgrade in our credit ratings could adversely affect our business, results of operations, financial condition, and liquidity. Reputational risk events are typically linked to risk incidents, whether internal (e.g., data privacy breaches, fraud, etc.) or external (e.g., non-AIG insurance losses). The reputational impact may magnify the financial consequences of the original risk event (e.g., reduced sales in addition to fines). [[GREPCENT_TABLE]] [["84","AIG | 2024 Form 10-K"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Enterprise Risk Management AIG generates multiple connections and dependencies among its affiliates and legal entities. Financial interconnections are utilized by AIG to support the funding requirements of the business units, optimize group capital deployment within the organization, offer comfort to policyholders, regulators, and rating agencies, provide credit support for higher financial strength ratings, manage exposures, distribute risk appropriately, and meet client or regulatory requirements. To conduct its businesses, AIG relies on operational capabilities of several AIG affiliates and corporate functions. The operational interconnections can be categorized as employees, management information systems, real estate, shared services, and intellectual property. AIG monitors and reports on the above-mentioned risks through ongoing risk reporting to various committees, monitoring of capital positions, regular interaction with AIG businesses and functions, regulators, and rating agencies. AIG reputational risk protocols are incorporated into the overall risk management framework. On a regular basis, ERM performs Second Line Review and Challenge on many of these processes and approaches, including, but not limited to, budget and expense assumptions, pricing and reserving models, assumptions, and results. The Internal Audit Group performs audits on key processes and provides continuous monitoring on remediation of audit findings. Processes and controls are designed to respond proactively and in some cases, reactively, in an effective and consistent way. INSURANCE RISKS Insurance risk is defined as the risk of actual claims experience and/or policyholder behavior being materially different than initially expected at the inception of an insurance contract. Uncertainties related to insurance risk can lead to deviations in magnitude and/or timing of prospective cash flows associated with our liabilities compared to what we expected. We manage our business risk oversight activities through our insurance operations. A primary goal in managing our insurance operations is to achieve an acceptable risk-adjusted return on equity. To achieve this goal, we must be disciplined in risk selection, premium adequacy, and appropriate terms and conditions to cover the risk accepted. We operate our insurance businesses on a global basis, and we are exposed to a wide variety of risks with different time horizons. We manage these risks throughout the organization, both centrally and locally, through a number of processes and procedures, including but not limited to, pricing and risk selection models, pricing approval processes, pre-launch approval of product design, development, and distribution, underwriting approval processes and authorities, modeling and reporting of aggregations and limit concentrations at multiple levels, model risk management framework and validation processes, risk transfer tools, review and challenge of reserves, actuarial profitability and reserve reviews, management of the relationship between assets and liabilities, and experience monitoring and assumption updates. Risks primarily include loss reserves, underwriting, catastrophe exposure, single risk loss exposure, and reinsurance. The potential inadequacy of the liabilities we establish for unpaid losses and loss adjustment expenses is a key risk faced by the General Insurance companies, which we manage through internal controls and oversight of the loss reserve setting process, as well as reviews by external experts. For further information, see Critical Accounting Estimates – Loss Reserves. The potential inadequacy of premiums charged for future risk periods on risks underwritten in our portfolios can impact the General Insurance companies’ ability to achieve an underwriting profit. We develop pricing based on our estimates of losses and expenses, but factors such as market pressures and the inherent uncertainty and complexity in estimating losses may result in premiums that are inadequate to generate underwriting profit. Our business is exposed to various catastrophic events, including natural disasters, man-made catastrophes, or pandemic disease, in which multiple losses can occur and affect multiple lines of business in any calendar year, adversely affecting our business and operating results. Concentration of exposure in certain industries or geographies may cause us to suffer disproportionate losses. Our business is exposed to loss events, such as fires or explosions, that have the potential to generate losses from a single insured client. The net risk to us is managed to acceptable limits established by the Chief Underwriting Officer through a combination of internal underwriting standards and external reinsurance. Since we use reinsurance to limit our losses, we are exposed to risks associated with reinsurance including the recoverability of expected payments from reinsurers due to either an inability or unwillingness to pay, contracts that do not respond properly to the event or actual reinsurance coverage that is different than anticipated, which is monitored through our credit risk management framework. We closely manage insurance risk by monitoring and controlling the nature and geographic location of the risks in each underwritten line of business, concentrations in industries, the terms and conditions of the underwriting and the premiums we charge for taking on the risk. We analyze concentrations of risks using various modeling techniques, including both probability distributions (stochastic) and/or single-point estimates (deterministic) approaches. [[GREPCENT_TABLE]] [["AIG | 2024 Form 10-K","85"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Enterprise Risk Management Risk Measurement, Monitoring and Limits We use several approaches to measure our insurance risk exposure including sensitivity and scenario analyses, stochastic methods, and experience studies. Additionally, there are risk-specific assessment tools in place to appropriately manage the variety of insurance risks to which we are exposed. For additional information on our three-tiered hierarchy of limits, see – Risk Appetite, Limits, Identification and Measurement – Risk Limits. Natural Catastrophe Risk We manage catastrophe exposure with multiple approaches such as setting risk limits based on aggregate Probable Maximum Loss (PML) modeling, monitoring overall exposures and risk accumulations, modifying our gross underwriting standards, and purchasing catastrophe reinsurance through both the traditional reinsurance and capital markets in addition to other reinsurance protections. We use third-party catastrophe risk models and other tools to evaluate and simulate frequency and severity of catastrophic events and associated losses to our portfolios of exposures with adjustments applied to modeled losses to account for loss adjustment expenses, model biases, data quality and non-modeled risks. We recognize that climate change has implications for insurance industry exposure to natural catastrophe risk. With multiple levels of risk management processes in place, we actively analyze the latest climate science and policies to anticipate potential changes to our risk profile, pricing models and strategic planning and will continue to adapt to and evolve with the developing risk exposures attributed to climate change. In addition, we provide insurance products and services to help our clients be proactive against the threat of climate change. The table below details our modeled estimates of PML, net of reinsurance, on an annual aggregate basis. The 1-in-100 and 1-in-250 PMLs are the annual aggregate probable maximum losses with probability of 1 percent and 0.4 percent in a year, respectively. Estimates as of December 31, 2024 reflect our in-force portfolio for exposures as of July 1, 2024, and all inuring reinsurance covers as of December 31, 2024, except for the catastrophe reinsurance programs, which are as of January 1, 2025 and reflected as of such date. The following table presents an overview of annual aggregate modeled losses for world-wide all perils and exposures arising from our largest primarily modeled perils: [[GREPCENT_TABLE]] [["At December 31, 2024","Net of Reinsurance","","Net of Reinsurance,After Tax(f)","","Percent of Total Shareholders' Equity","","Percent of Total Shareholders' Equity Excluding AOCI"],["(in millions)"],["Exposures:"],["World-wide all peril (1-in-250)(a)","$","2,535","","","$","2,002","","","4.7","%","","4.0","%"],["U.S. Hurricane (1-in-100)(b)","932","","","736","","","1.7","","","1.5"],["U.S. Earthquake (1-in-250)(c)","830","","","655","","","1.5","","","1.3"],["Japanese Typhoon (1-in-100)(d)","278","","","220","","","0.5","","","0.4"],["Japanese Earthquake (1-in-250)(e)","242","","","191","","","0.4","","","0.4"]] [[/GREPCENT_TABLE]] (a)The world-wide all peril loss estimate includes wildfire exposure. (b)The U.S. hurricane loss estimate includes losses to Commercial and Personal Property from hurricane hazards of wind and storm surge. (c)The U.S. earthquake loss estimates represent exposure to Commercial and Personal Property, U.S. Workers’ Compensation and A&H lines of business. (d)Japan Typhoon loss estimate represents exposure to Commercial and Personal Property. (e)Japan Earthquake loss estimate represents exposure to Commercial and Personal Property and A&H lines of business. (f)Taxed at the statutory tax rate of 21 percent for both the U.S. and Japanese modeled losses. The majority of Japan exposures are ceded to our U.S. Pool. AIG, along with other property casualty insurance and reinsurance companies, uses industry-recognized catastrophe models and applies proprietary modeling processes and assumptions to arrive at loss estimates. The use of different methodologies and assumptions could materially change the projected losses, and our modeled losses may not be comparable to estimates made by other companies. Also, the modeled results are based on the assumption that all reinsurers fulfill their obligations to us under the terms of the reinsurance arrangements. These estimates are inherently uncertain and may not accurately reflect our net exposure, inclusive of credit risk, to these events. Our 2025 property catastrophe reinsurance program is a worldwide program providing both aggregate and per occurrence protection, with differing per occurrence and aggregate retentions for North America, Japan, and rest of world. In 2025, for North America Commercial portfolio, we maintained the $500 million retention and increased the vertical limit purchased by $500 million. For the North America Personal Lines portfolio, as a consequence of increasing the US personal lines portfolio’s contribution to the aggregate cover, we increased the retention to $200 million. We also increased vertical limit purchased and achieved several coverage [[GREPCENT_TABLE]] [["86","AIG | 2024 Form 10-K"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS ITEM 7 | Enterprise Risk Management enhancements. For the International portfolio, we retained our core attachment points for Japan of $200 million and $125 million for rest of world. We have also purchased property per risk covers that provide protection against large losses globally, which include those emanating from non-critical catastrophe events (all events except for named windstorm and earthquake) globally as well as critical catastrophe events (named windstorm and earthquake) outside North America. Actual results in any period are likely to vary, perhaps materially, from the modeled scenarios. The occurrence of one or more severe events could have a material adverse effect on our financial condition, results of operations and liquidity. For additional information, see also Part 1, Item 1A. Risk Factors – Reserves and Exposures. Terrorism Risk We actively monitor terrorism risk and manage exposures to losses from terrorist attacks. Terrorism risks are modeled using a third-party vendor model for various terrorism attack modes and scenarios. Adjustments are made to account for vendor model gaps and the nature of the General Insurance companies’ exposures. Our largest terrorism concentrations are in New York City, and estimated losses are largely driven by the Property and Workers’ Compensation lines of business. Our exposure to terrorism risk in the U.S. is mitigated by the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) in addition to limited private reinsurance protections. TRIPRA covers certified terrorist attacks within the U.S. or U.S. missions and against certain U.S. carriers or vessels and excludes certain lines of business as specified by applicable law. We offer terrorism coverage in many other countries through various insurance products and participate in country terrorism pools when applicable. International terrorism exposure is estimated using scenario-based modeling and exposure concentration is monitored routinely. Targeted reinsurance purchases are made for some lines of business to cover potential losses due to terrorist attacks. We also rely on the government-sponsored and government-arranged terrorism reinsurance programs, including pools, in force in applicable non-U.S. jurisdictions. Reinsurance Activities We purchase reinsurance for our insurance and reinsurance operations. Reinsurance facilitates insurance risk management (retention, volatility, concentrations) and capital planning. We may purchase reinsurance on a pooled basis. Reinsurance is used primarily to manage overall capital adequacy and mitigate the insurance loss exposure related to certain events, such as natural and man-made catastrophes, death events, or single policy level events. Our subsidiaries operate worldwide primarily by underwriting and accepting risks for their direct account on a gross basis and reinsuring a portion of the exposure on either an individual risk or an aggregate basis to the extent those risks exceed the desired retention level. In addition, as a condition of certain direct underwriting transactions, we may be required by clients, agents or regulation to cede all or a portion of risks to specified reinsurance entities, such as captives, other insurers, local reinsurers and compulsory pools. Reinsurance contracts do not relieve our subsidiaries from their direct obligations to insureds. However, an effective reinsurance program substantially mitigates our exposure to potentially significant losses. Reinsurance Recoverable AIG’s reinsurance recoverable assets are comprised of paid losses recoverable, ceded loss reserves, ceded reserves for unearned premiums, and Life and Annuity reinsurance recoverables (ceded policy and claim reserves and policyholder contract deposits). At December 31, 2024, total reinsurance recoverable assets were $38.0 billion. These assets include general reinsurance paid losses recoverable of $3.8 billion, ceded loss reserves of $29.1 billion including reserves for IBNR claims, and ceded reserves for unearned premiums of $4.3 billion, as well as life reinsurance recoverable of $0.8 billion. The methods used to estimate IBNR and to establish the resulting ultimate losses involve projecting the frequency and severity of losses over multiple years. These methods are continually reviewed and updated by management. Any adjustments are reflected in income. We believe that the amount recorded for ceded loss reserves at December 31, 2024 reflects a reasonable estimate of the ultimate losses recoverable. Actual losses may, however, differ from the reserves currently ceded. At December 31, 2024, we held $20.1 billion of collateral, in the form of funds withheld, securities in reinsurance trust accounts and/or irrevocable letters of credit, in support of reinsurance recoverable assets from unaffiliated reinsurers. At December 31, 2024, we had no significant reinsurance recoverable due from any individual reinsurer that was financially troubled. Reduced profitability associated with lower interest rates, market volatility and catastrophe losses (including COVID-19), could potentially result in reduced capacity or rating downgrades for some reinsurers. The Reinsurance Credit Department, in conjunction with the credit executives within ERM, reviews these developments, monitors compliance with credit triggers that may require AIG's reinsurer to post collateral, and seeks to use other appropriate means to mitigate any material risks arising from these developments. For additional information on reinsurance recoverable, see Critical Accounting Estimates – Reinsurance Assets. [[GREPCENT_TABLE]] [["AIG | 2024 Form 10-K","87"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS Glossary Glossary Accident year The annual calendar accounting period in which loss events occurred, regardless of when the losses are actually reported, booked or paid. Accident year combined ratio, as adjusted (Accident year combined ratio, ex-CAT) The combined ratio excluding catastrophe losses and related reinstatement premiums, prior year development, net of premium adjustments, and the impact of reserve discounting. Accident year loss ratio, as adjusted (Accident year loss ratio, ex-CAT) The loss ratio excluding catastrophe losses and related reinstatement premiums, prior year development, net of premium adjustments, and the impact of reserve discounting. Acquisition ratio Acquisition costs divided by net premiums earned. Acquisition costs are those costs incurred to acquire new and renewal insurance contracts and also include the amortization of VOBA and DAC. Acquisition costs vary with sales and include, but are not limited to, commissions, premium taxes, direct marketing costs and certain costs of personnel engaged in sales support activities such as underwriting. Attritional losses are losses recorded in the current accident year, which are not catastrophe losses. Book Value per share, excluding Goodwill, Value of business acquired (VOBA), Value of distribution channel acquired (VODA) and Other intangible assets (Tangible book value per share) is used to provide a useful measure of the realizable shareholder value on a per share basis. Tangible book value per share is derived by dividing Total AIG common shareholders’ equity, excluding intangible assets (AIG tangible common shareholders’ equity) by total common shares outstanding. Book value per share, excluding Investments AOCI, deferred tax assets (DTA) and AIG’s ownership interest in Corebridge (Core operating book value per share) is used to show the amount of our net worth on a per share basis after eliminating Investments AOCI, DTA and AIG’s ownership interest in Corebridge. We believe this measure is useful to investors because it eliminates the fair value of investments that can fluctuate significantly from period to period due to changes in market conditions. We also exclude the portion of DTA representing U.S. tax attributes related to net operating loss carryforwards (NOLs), corporate alternative minimum tax credits (CAMTCs) and foreign tax credits (FTCs) that have not yet been utilized. Amounts for interim periods are estimates based on projections of full-year attribute utilization. As NOLs, CAMTCs and FTCs are utilized, the corresponding portion of the DTA utilized is included. We exclude AIG’s ownership interest in Corebridge since it is not a core long-term investment for AIG. Core operating book value per share is derived by dividing total AIG common shareholders’ equity, excluding Investments AOCI, DTA and AIG’s ownership interest in Corebridge (AIG core operating shareholders’ equity) by total common shares outstanding. Book Value per share, excluding Investments AOCI, Goodwill, VOBA, VODA and Other intangible assets (Adjusted tangible book value per share) is used to provide a useful measure of the realizable shareholder value on a per share basis after eliminating the fair value of investments that can fluctuate significantly from period to period due to changes in market conditions and Fortitude Re funds withheld assets since these fair value movements are economically transferred to Fortitude Re. Adjusted tangible book value per share is derived by dividing AIG adjusted common equity, excluding intangible assets, (AIG adjusted tangible common shareholders’ equity) by total common shares outstanding. Book value per share, excluding investments related cumulative unrealized gains and losses recorded in Accumulated other comprehensive income (loss) (AOCI) adjusted for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets (collectively, Investments AOCI) (Adjusted book value per share) is used to show the amount of our net worth on a per share basis after eliminating the fair value of investments that can fluctuate significantly from period to period due to changes in market conditions. In addition, we adjust for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets held by AIG in support of Fortitude Re’s reinsurance obligations to AIG (Fortitude Re funds withheld assets) since these fair value movements are economically transferred to Fortitude Re. Adjusted book value per share is derived by dividing total AIG common shareholders’ equity, excluding Investments AOCI (AIG adjusted common shareholders' equity) by total common shares outstanding. Casualty insurance Insurance that is primarily associated with the losses caused by injuries to third persons, i.e., not the insured, and the legal liability imposed on the insured as a result. Combined ratio Sum of the loss ratio and the acquisition and general operating expense ratios. Credit Support Annex A legal document generally associated with an ISDA Master Agreement that provides for collateral postings which could vary depending on ratings and threshold levels. DAC Deferred Policy Acquisition Costs Deferred costs that are incremental and directly related to the successful acquisition of new business or renewal of existing business. [[GREPCENT_TABLE]] [["88","AIG | 2024 Form 10-K"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS Glossary Deferred gain on retroactive reinsurance Retroactive reinsurance is a reinsurance contract in which an assuming entity agrees to reimburse a ceding entity for liabilities incurred as a result of past insurable events. If the amount of premium paid by the ceding reinsurer is less than the related ceded loss reserves, the resulting gain is deferred and amortized over the settlement period of the reserves. Any related development on the ceded loss reserves recoverable under the contract would increase the deferred gain if unfavorable, or decrease the deferred gain if favorable. Expense ratio Sum of acquisition expenses and general operating expenses, divided by net premiums earned. General operating expense ratio General operating expenses divided by net premiums earned. General operating expenses are those costs that are generally attributed to the support infrastructure of the organization and include but are not limited to personnel costs, projects and bad debt expenses. General operating expenses exclude losses and loss adjustment expenses incurred, acquisition expenses, and investment expenses. IBNR Incurred But Not Reported Estimates of claims that have been incurred but not reported to us. ISDA Master Agreement An agreement between two counterparties, which may have multiple derivative transactions with each other governed by such agreement, that generally provides for the net settlement of all or a specified group of these derivative transactions, as well as pledged collateral, through a single payment, in a single currency, in the event of a default on, or affecting any, one derivative transaction or a termination event affecting all, or a specified group of, derivative transactions. Loan-to-value ratio Principal amount of loan amount divided by appraised value of collateral securing the loan. Loss Adjustment Expenses The expenses directly attributed to settling and paying claims of insureds and include, but are not limited to, legal fees, adjuster’s fees and the portion of general expenses allocated to claim settlement costs. Loss ratio Losses and loss adjustment expenses incurred divided by net premiums earned. Loss reserve development The increase or decrease in incurred losses and loss adjustment expenses related to prior years as a result of the re-estimation of loss reserves at successive valuation dates for a given group of claims. Loss reserves Liability for unpaid losses and loss adjustment expenses. The estimated ultimate cost of settling claims relating to insured events that have occurred on or before the balance sheet date, whether or not reported to the insurer at that date. Master netting agreement An agreement between two counterparties who have multiple derivative contracts with each other that provides for the net settlement of all contracts covered by such agreement, as well as pledged collateral, through a single payment, in a single currency, in the event of default on or upon termination of any one such contract. Natural catastrophe losses are generally weather or seismic events having a net impact on AIG in excess of $10 million each and man-made catastrophe losses, such as terrorism and civil disorders that exceed the $10 million threshold. Net premiums written represent the sales of an insurer, adjusted for reinsurance premiums assumed and ceded, during a given period. Net premiums earned are the revenue of an insurer for covering risk during a given period. Net premiums written are a measure of performance for a sales period, while net premiums earned are a measure of performance for a coverage period. Noncontrolling interests The portion of equity ownership in a consolidated subsidiary not attributable to the controlling parent company. Pool A reinsurance arrangement whereby all of the underwriting results of the pool members are combined and then shared by each member in accordance with its pool participation percentage. Prior year development See Loss reserve development. RBC Risk-Based Capital A formula designed to measure the adequacy of an insurer’s statutory surplus compared to the risks inherent in its business. Reinstatement premiums Premiums on an insurance policy over and above the initial premium imposed at the beginning of the policy payable to reinsurers or receivable from insurers to restore coverage limits that have been reduced or exhausted as a result of reinsured losses under certain excess of loss reinsurance contracts. Reinsurance The practice whereby one insurer, the reinsurer, in consideration of a premium paid to that insurer, agrees to indemnify another insurer, the ceding company, for part or all of the liability of the ceding company under one or more policies or contracts of insurance which it has issued. Reinsurance recoverables are comprised of paid losses recoverable, ceded loss reserves, ceded reserves for unearned premiums. Retroactive reinsurance See Deferred gain on retroactive reinsurance. Return on Equity – Adjusted After-tax Income, Excluding Goodwill, VOBA, VODA and Other Intangible assets (Return on tangible equity) is used to show the return on AIG tangible common shareholder’s equity, which we believe is a useful measure of realizable shareholder value. We exclude Goodwill, VOBA, VODA and Other intangible assets from AIG common shareholders’ equity to derive AIG tangible common shareholders’ equity. Return on AIG tangible common equity is derived by dividing actual or, for interim periods, annualized adjusted after-tax income attributable to AIG common shareholders by average AIG tangible common shareholders' equity. [[GREPCENT_TABLE]] [["AIG | 2024 Form 10-K","89"]] [[/GREPCENT_TABLE]] TABLE OF CONTENTS Glossary Return on equity – Adjusted after-tax income excluding Investments AOCI (Adjusted return on equity) is used to show the rate of return on common shareholders’ equity excluding Investments AOCI. We believe this measure is useful to investors because it eliminates the fair value of investments which can fluctuate significantly from period to period due to changes in market conditions. Adjusted return on equity is derived by dividing actual or, for interim periods, annualized adjusted after-tax income attributable to AIG common shareholders by average AIG adjusted common shareholders’ equity. Return on equity – Adjusted after-tax income excluding Investments AOCI, DTA and AIG’s ownership interest in Corebridge (Core operating return on equity) is used to show the rate of return on common shareholders’ equity excluding Investments AOCI, DTA and AIG’s ownership interest in Corebridge. We believe this measure is useful to investors because it eliminates the fair value of investments that can fluctuate significantly from period to period due to changes in market conditions. We also exclude the portion of DTA representing U.S. tax attributes related to NOLs, CAMTCs and FTCs that have not yet been utilized. Amounts for interim periods are estimates based on projections of full-year attribute utilization. As NOLs, CAMTCs and FTCs are utilized, the corresponding portion of the DTA utilized is included. We exclude AIG’s ownership interest in Corebridge since it is not a core long-term investment for AIG. We believe this metric will provide investors with greater insight as to the underlying profitability of our property and casualty business. Core operating return on equity is derived by dividing actual or, for interim periods, annualized adjusted after-tax income attributable to AIG common shareholders by average AIG core operating shareholders’ equity. Subrogation The amount of recovery for claims we have paid our policyholders, generally from a negligent third party or such party’s insurer. Unearned premium reserve Liabilities established by insurers and reinsurers to reflect unearned premiums, which are usually refundable to policyholders if an insurance or reinsurance contract is canceled prior to expiration of the contract term. VOBA Value of Business Acquired Present value of future pre-tax profits from in-force policies of acquired businesses discounted at yields applicable at the time of purchase. VOBA is reported in DAC in the Consolidated Balance Sheets. Acronyms [[GREPCENT_TABLE]] [["A&H","Accident and Health Insurance","ISDA","International Swaps and Derivatives Association, Inc."],["ABS","Asset-Backed Securities","Moody's","Moody's Investors' Service Inc."],["APTI","Adjusted pre-tax income","NAIC","National Association of Insurance Commissioners"],["CDS","Credit Default Swap","NM","Not Meaningful"],["CLO","Collateralized Loan Obligations","ORR","Obligor Risk Ratings"],["CMBS","Commercial Mortgage-Backed Securities","RMBS","Residential Mortgage-Backed Securities"],["ERM","Enterprise Risk Management","S&P","Standard & Poor's Financial Services LLC"],["FASB","Financial Accounting Standards Board","SEC","Securities and Exchange Commission"],["GAAP","Accounting Principles Generally Accepted in the United States of America","VIE","Variable Interest Entity"]] [[/GREPCENT_TABLE]]