Reinsurance (Tables)

12 Months Ended

Dec. 31, 2023

The following tables present the transition rollforward for Reinsurance assets:


(in millions)	Individual Retirement		Life Insurance		Institutional Markets		Total
Reinsurance assets - other, net of allowance for credit losses and disputes(a)
Pre-adoption, December 31, 2020	$	309	$	2,370	$	28	$	2,707
Reclassification of Cost of Reinsurance(b)	—		416		—		416
Reclassification to Market risk benefits	(35)		—		—		(35)
Change in cash flow assumptions and effect of net premiums exceeding gross premiums	—		9		—		9
Change due to the current upper-medium grade discount rate	—		74		5		79
Post-adoption January 1, 2021	$	274	$	2,869	$	33	$	3,176


(in millions)	Total
Reinsurance assets - Fortitude Re, net of allowance for credit losses and disputes(c)
Pre-adoption, December 31, 2020	$	29,135
Change in cash flow assumptions and effect of net premiums exceeding gross premiums	55
Change due to the current upper-medium grade discount rate	7,611
Post-adoption January 1, 2021	$	36,801

(a)Excludes $36.3 billion of Reinsurance assets - other, net of allowance for credit losses and disputes in General Insurance and Other Operations.

(b)Cost of reinsurance is reported in Other liabilities in the Consolidated Balance sheets.

(c)Represents Life and Retirement legacy insurance lines ceded to Fortitude Re. Excludes $5.4 billion of Reinsurance assets - Fortitude Re, net of allowance for credit losses and disputes in General Insurance and Other Operations.

The following table presents short-duration insurance premiums written and earned:


	Years Ended December 31,
(in millions)		2023		2022		2021
Premiums written:
Direct	$	31,445	$	32,025	$	30,910
Assumed		7,951		7,385		7,209
Ceded		(12,190)		(12,650)		(11,702)
Net	$	27,206	$	26,760	$	26,417
Premiums earned:
Direct	$	30,781	$	32,053	$	30,279
Assumed		7,050		7,137		6,640
Ceded		(12,268)		(12,425)		(11,301)
Net	$	25,563	$	26,765	$	25,618

The following table presents premiums earned and policy fees for our long-duration life insurance and annuity operations:


Years Ended December 31,
(in millions)		2023		2022		2021
Premiums earned:
Direct	$	4,706	$	4,739	$	4,604
Assumed		4,111		1,318		2,265
Ceded		(1,126)		(966)		(1,202)
Net	$	7,691	$	5,091	$	5,667
Policy Fees:
Direct	$	2,873	$	2,991	$	3,090
Assumed		—		—		—
Ceded		(76)		(78)		(85)
Net	$	2,797	$	2,913	$	3,005

Summary of The Composition of Pool of Assets

The following table provides supplemental information for loss and benefit reserves, gross and net of ceded reinsurance:


At December 31,	2023				2022
(in millions)		As Reported		Net of Reinsurance		As Reported		Net of Reinsurance
Liability for unpaid losses and loss adjustment expenses	$	(70,393)	$	(39,994)	$	(75,167)	$	(42,955)
Future policy benefits for life and accident and health insurance contracts		(58,576)		(35,005)		(51,914)		(27,836)
Policyholder contract deposits		(161,979)		(158,171)		(155,984)		(152,375)
Reserve for unearned premiums		(17,387)		(13,117)		(18,338)		(13,992)
Other policyholder funds		(3,356)		(2,817)		(3,463)		(2,898)
Reinsurance assets*		62,587				64,810

*Reinsurance assets excludes (i) allowance for credit losses and disputes of $236 million and $295 million (of which $110 million and $110 million pertains to CECL reserve for Liability for unpaid losses and loss adjustment expenses) for the years ended December 31, 2023 and 2022, respectively, (ii) paid loss recoveries of $4,879 million and $4,662 million for the years ended December 31, 2023 and 2022, respectively, and (iii) policy and contract claims recoverable of $296 million and $545 million for the years ended December 31, 2023 and 2022, respectively.

Summary of Assets Supporting Funds Withheld Arrangements

There is a diverse pool of assets supporting the funds withheld arrangements with Fortitude Re. The following summarizes the composition of the pool of assets:


	December 31, 2023				December 31, 2022
(in millions)	Carrying Value			Fair Value	Carrying Value			Fair Value	Corresponding Accounting Policy
Fixed maturity securities - available for sale(a)	$	17,384	$	17,384	$	18,821	$	18,821	Fair value through other comprehensive income (loss)
Fixed maturity securities - fair value option		4,867		4,867		4,182		4,182	Fair value through net investment income
Commercial mortgage loans		3,921		3,685		4,107		3,837	Amortized cost
Real estate investments		184		329		133		348	Amortized cost
Private equity funds / hedge funds		1,910		1,910		1,893		1,893	Fair value through net investment income
Policy loans		330		330		355		355	Amortized cost
Short-term investments		176		176		75		75	Fair value through net investment income
Funds withheld investment assets		28,772		28,681		29,566		29,511
Derivative assets, net(b)		45		45		90		90	Fair value through net realized gains (losses)
Other(c)		758		758		782		782	Amortized cost
Total	$	29,575	$	29,484	$	30,438	$	30,383

(a)The change in the net unrealized gains (losses) on available for sale securities related to the Fortitude Re funds withheld assets was $734 million ($580 million after-tax) and $(7.5) billion ($(5.9) billion after-tax), respectively for the years ended December 31, 2023 and 2022.

(b)The derivative assets and liabilities have been presented net of cash collateral. The derivative assets and liabilities supporting the Fortitude Re funds withheld arrangements had a fair market value of $63 million and $34 million, respectively, as of December 31, 2023. The derivative assets and liabilities supporting the Fortitude Re funds withheld arrangements had a fair market value of $192 million and $28 million, respectively, as of December 31, 2022. These derivative assets and liabilities are fully collateralized either by cash or securities.

(c)Primarily comprised of Cash and Accrued investment income.

Summary of The Impact of Funds Withheld Arrangements

The impact of the funds withheld arrangements with Fortitude Re was as follows:


Years Ended December 31,
(in millions)		2023		2022		2021

Net investment income - Fortitude Re funds withheld assets	$	1,544	$	943	$	1,971
Net realized gains (losses) on Fortitude Re funds withheld assets:
Net realized gains (losses) - Fortitude Re funds withheld assets		(295)		(486)		1,003
Net realized gains (losses) - Fortitude Re funds withheld embedded derivative		(2,007)		7,481		(603)
Net realized gains (losses) on Fortitude Re funds withheld assets		(2,302)		6,995		400
Income (loss) from continuing operations before income tax expense (benefit)		(758)		7,938		2,371
Income tax expense (benefit)(a)		(159)		1,667		499
Net income (loss)		(599)		6,271		1,872
Change in unrealized appreciation (depreciation) of all other investments(a)		580		(5,900)		(1,760)
Comprehensive income (loss)	$	(19)	$	371	$	112

(a)The income tax expense (benefit) and the tax impact in AOCI was computed using AIG’s U.S. statutory tax rate of 21 percent.

Reinsurance Recoverable, Allowance for Credit Loss

The following table presents a rollforward of the reinsurance recoverable allowance:


Years Ended December 31,		2023						2022						2021
(in millions)	General Insurance		Life and Retirement			Total	General Insurance		Life and Retirement			Total	General Insurance		Life and Retirement			Total
Balance, beginning of year	$	260	$	84	$	344	$	281	$	101	$	382	$	292	$	83	$	375

Addition to (release of) allowance for expected credit losses and disputes, net		(5)		(5)		(10)		(22)		(17)		(39)		6		18		24
Write-offs charged against the allowance for credit losses and disputes		—		(49)		(49)		(5)		—		(5)		(17)		—		(17)
Recoveries of amounts previously written off		—		—		—		2		—		2		—		—		—
Other changes		—		—		—		4		—		4		—		—		—
Balance, end of year	$	255	$	30	$	285	$	260	$	84	$	344	$	281	$	101	$	382

Schedule of Life Insurance in Force Ceded to Other Insurance Companies

The following table presents long-duration insurance in-force ceded to other insurance companies:


At December 31,
(in millions)	2023		2022		2021
Long-duration insurance in force ceded	$	363,471	$	346,879	$	363,008