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SEGMENT INFORMATION
 12 Months Ended
Dec. 31, 2014
SEGMENT INFORMATION  
SEGMENT INFORMATION

3. SEGMENT INFORMATION

In the fourth quarter of 2014, we completed our previously announced reorganization and modified the presentation of our financial results to reflect our new operating structure. The new operating structure includes two reportable segments – Commercial Insurance and Consumer Insurance - and a Corporate and Other category. The Corporate and Other category consists of businesses and items not allocated to our reportable segments.

Prior to the fourth quarter of 2014, AIG reported its results through two reportable segments – AIG Property Casualty and AIG Life and Retirement. The AIG Property Casualty reportable segment had two operating segments – Commercial Insurance and Consumer Insurance in addition to an AIG Property Casualty Other category. The AIG Life and Retirement reportable segment had two operating segments – Retail and Institutional.

We evaluate performance based on revenues and pre-tax operating income (loss). Pre-tax operating income (loss) is derived by excluding certain items from net income (loss) attributable to AIG. See the table below for the items excluded from pre-tax operating income.

To align our financial reporting with the manner in which AIG’s chief operating decision makers review the businesses to assess performance and make decisions about resources to be allocated, the Commercial and Consumer reportable segments are presented as three operating segments for each reportable segment as follows:

Commercial Insurance

The Commercial Insurance segment is presented as three operating segments:

  • Property Casualty – previously included as part of AIG Property Casualty’s Commercial operating segment
  • Mortgage Guaranty – previously reported within the Corporate and Other Category
  • Institutional Markets – previously reported in AIG Life and Retirement’s Institutional operating segment

Property Casualty products are primarily distributed through a network of independent retail and wholesale brokers, and through an independent agency network. Mortgage Guaranty products and services are provided to mortgage lenders including mortgage banks, credit unions and finance agencies. Institutional Markets products are marketed primarily through specialized marketing and consulting firms and structured settlement brokers.

Consumer Insurance

The Consumer Insurance segment is presented as three operating segments:

  • Retirement – consists of the product lines Fixed Annuities, Retirement Income Solutions, Group Retirement, and Retail Mutual Funds and Advisory Services, previously included in AIG Life and Retirement’s Retail and Institutional operating segments.
  • Life – consists of businesses previously included in AIG Life and Retirement’s Retail operating segment as well as the international life business previously included in AIG Property Casualty’s Consumer operating segment.
  • Personal Insurance – consists of Personal Lines and Accident & Health product lines previously reported as a component of AIG Property Casualty’s Consumer operating segment.

Retirement and Life products are distributed through a unified multi-channel distribution network that includes banks, broker-dealers, independent marking organizations, financial advisors, independent insurance agents and career agents. Personal insurance products are distributed primarily through agents and brokers, as well as through direct marketing and partner organizations.

Investment income is allocated between the Property Casualty and Personal Insurance operating segments based on an internal investment income allocation model. The model estimates investable funds based primarily on loss reserves and allocated capital.

The run-off insurance businesses previously reported in AIG Property Casualty’s Other category are now presented in Corporate and Other.

Corporate and Other

Our Corporate and Other includes results from:

  • Direct Investment book
  • Global Capital Markets
  • Retained Interests, which represent the fair value gains or losses, prior to their sale in 2012, of the AIA Group Limited (AIA) ordinary shares retained following the AIA initial public offering; the MetLife, Inc. (MetLife) securities that were received as consideration from the sale of American Life Insurance Company (ALICO); and the fair value gains or losses, prior to the FRBNY liquidation of Maiden Lane III LLC (ML III) assets, on the retained interest in ML III
  • AIG Parent, Run-off Insurance Lines, and Other, and
  • Aircraft Leasing through May 14, 2014, the date of our sale of ILFC.

Certain of our management activities, such as investment management, enterprise risk management, liquidity management and capital management, and our balance sheet reporting, are conducted on a legal entity basis. We group our insurance-related legal entities into two categories: Non-Life Insurance Companies, and Life Insurance Companies.

Non-Life Insurance Companies include the following major property casualty and mortgage guaranty companies: National Union Fire Insurance Company of Pittsburgh, Pa.(National Union); American Home Assurance Company (American Home); Lexington Insurance Company (Lexington); Fuji Fire and Marine Insurance Company Limited (Fuji Fire); American Home Assurance Company, Ltd. (American Home Japan); AIG Asia Pacific Insurance, Pte, Ltd.; AIG Europe Limited and United Guaranty Residential Insurance Company (UGRIC).

Life Insurance Companies include the following major operating companies: American General Life Insurance Company (American General Life); The Variable Annuity Life Insurance Company (VALIC); The United States Life Insurance Company in the City of New York (U.S. Life) and AIG Fuji Life Insurance Company Limited (Fuji Life).

Prior periods have been revised to conform to the current period presentation for the above segment changes.

The following table presents AIG’s continuing operations by reportable segment:

NetDepreciationPre-Tax
TotalInvestmentInterestandOperating
(in millions) RevenuesIncomeExpenseAmortizationIncome (Loss)
2014
Commercial Insurance
Property Casualty$25,183$4,298$-$2,445$4,248
Mortgage Guaranty1,042138-56592
Institutional Markets2,5761,9577(215)670
Total Commercial Insurance28,8016,39372,2865,510
Consumer Insurance
Retirement9,7846,48923(231)3,495
Life6,3212,1997130580
Personal Insurance12,36439422,067399
Total Consumer Insurance28,4699,082321,9664,474
Corporate and Other
Direct Investment book1,479-218(40)1,241
Global Capital Markets474---359
AIG Parent and Other*2,9607001,598386(1,989)
Aircraft Leasing-----
Consolidation and elimination(716)-(11)-1
Total Corporate and Other4,1977001,805346(388)
AIG Consolidation and elimination(466)(356)(126)(181)(22)
Total AIG Consolidated pre-tax operating income$61,001$15,819$1,718$4,417$9,574
Reconciling Items from pre-tax operating income to pre-tax income:
Changes in fair values of fixed maturity securities designated to hedge
living benefit liabilities, net of interest expense260260--260
Changes in benefit reserves and DAC, VOBA and SIA related to
net realized capital gains----(217)
Loss on extinguishment of debt----(2,282)
Net realized capital gains739---739
Income from divested businesses1,602--312,169
Legal settlements related to legacy crisis matters804---804
Legal reserves related to legacy crisis matters----(546)
Pre-tax income$64,406$16,079$1,718$4,448$10,501
2013
Commercial Insurance
Property Casualty$25,108$4,431$8$2,393$4,095
Mortgage Guaranty941132-50205
Institutional Markets2,8132,0901(160)680
Total Commercial Insurance28,8626,65392,2834,980
Consumer Insurance
Retirement9,4316,6283(165)3,490
Life6,3972,2694214806
Personal Insurance12,83245532,110268
Total Consumer Insurance28,6609,352102,1594,564
Corporate and Other
Direct Investment book1,825-353(80)1,448
Global Capital Markets833---625
AIG Parent and Other*1,9083092,112301(2,396)
Aircraft Leasing-----
Consolidation and elimination(547)-(14)-4
Total Corporate and Other4,0193092,451221(319)
AIG Consolidation and elimination(17)(343)(328)(26)165
Total AIG Consolidated pre-tax operating income$61,524$15,971$2,142$4,637$9,390
Reconciling Items from pre-tax operating income to pre-tax income:
Changes in fair values of fixed maturity securities designated to hedge
living benefit liabilities, net of interest expense(161)(161)--(161)
Changes in benefit reserves and DAC, VOBA and SIA related to
net realized capital gains----(1,608)
Other income (expense) - net----(72)
Loss on extinguishment of debt----(651)
Net realized capital gains1,939---1,939
Loss from divested businesses4,420--76(177)
Legal settlements related to legacy crisis matters1,152---1,152
Legal reserves related to legacy crisis matters----(444)
Pre-tax income$68,874$15,810$2,142$4,713$9,368
2012
Commercial Insurance
Property Casualty$24,799$3,951$6$2,736$1,681
Mortgage Guaranty861146-449
Institutional Markets2,6262,066-(40)525
Total Commercial Insurance28,2866,16362,7402,215
Consumer Insurance
Retirement8,7096,502-12,801
Life6,4572,2834267736
Personal Insurance13,580477-2,106199
Total Consumer Insurance28,7469,26242,3743,736
Corporate and Other
Direct Investment book1,607-369(121)1,215
Global Capital Markets749---557
Retained Interest4,9574,957--4,957
AIG Parent and Other*2,0284592,264316(2,724)
Aircraft Leasing-----
Consolidation and elimination(405)-(27)--
Total Corporate and Other8,9365,4162,6061954,005
AIG Consolidation and elimination(589)(535)(297)(2)(18)
Total AIG Consolidated pre-tax operating income$65,379$20,306$2,319$5,307$9,938
Reconciling Items from pre-tax operating income to pre-tax income:
Changes in fair values of fixed maturity securities designated to hedge
living benefit liabilities, net of interest expense3737--37
Changes in benefit reserves and DAC, VOBA and SIA related to
net realized capital gains----(1,213)
Loss on extinguishment of debt----(32)
Net realized capital gains1,086---1,086
Loss from divested businesses4,502--2,042(6,411)
Legal settlements related to legacy crisis matters210---210
Legal reserves related to legacy crisis matters----(754)
Non-qualifying derivative hedging gains, excluding net RCG----30
Pre-tax income$71,214$20,343$2,319$7,349$2,891

* Includes Run-off Insurance Lines and Other Businesses. The following table presents AIG’s year-end identifiable assets and capital expenditures by reportable segment:

Year-End Identifiable AssetsCapital Expenditures
(in millions)2014201320142013
Total Non-Life Insurance Companies$164,299$168,738$697$370
Total Life Insurance Companies301,295287,46411466
Corporate and Other
Direct Investment book15,26323,541--
Global Capital Markets3,2706,406--
AIG Parent and Other91,27788,270523413
Aircraft Leasing*-39,3134981,883
Consolidation and Elimination49,58434,031--
Total Corporate and Other159,394191,5611,0212,296
AIG Consolidation and Elimination(109,407)(106,434)--
Total Assets$515,581$541,329$1,832$2,732

* 2013 includes Aircraft Leasing assets classified as assets held-for-sale on the Consolidated Balance Sheets.

The following table presents AIG’s consolidated total revenues and real estate and other fixed assets, net of accumulated depreciation, by major geographic area:

Real Estate and Other Fixed Assets,
Total Revenues*Net of Accumulated Depreciation
(in millions)201420132012201420132012
U.S.$44,274$46,078$47,406$1,886$1,606$1,391
Asia Pacific7,5238,8049,498521448516
Other Foreign12,60913,99214,310293261306
Consolidated$64,406$68,874$71,214$2,700$2,315$2,213

* Revenues are generally reported according to the geographic location of the reporting unit.