INVESTMENTS (Tables)

12 Months Ended

Dec. 31, 2014

INVESTMENTS

The amortized cost or cost and fair value of AIG's available for sale securities and other invested assets carried at fair value

										Other-Than-
		Amortized		Gross		Gross				Temporary
		Cost or		Unrealized		Unrealized		Fair		Impairments
(in millions)		Cost		Gains		Losses		Value		in AOCI(a)
December 31, 2014
Bonds available for sale:
U.S. government and government sponsored entities	$	2,806	$	204	$	(18)	$	2,992	$	-
Obligations of states, municipalities and political subdivisions		25,979		1,729		(49)		27,659		(13)
Non-U.S. governments		20,280		966		(151)		21,095		-
Corporate debt		134,961		10,594		(1,122)		144,433		64
Mortgage-backed, asset-backed and collateralized:
RMBS		34,377		3,435		(292)		37,520		1,767
CMBS		12,129		815		(59)		12,885		215
CDO/ABS		12,775		628		(128)		13,275		47
Total mortgage-backed, asset-backed and collateralized		59,281		4,878		(479)		63,680		2,029
Total bonds available for sale(b)		243,307		18,371		(1,819)		259,859		2,080
Equity securities available for sale:
Common stock		1,185		2,461		(17)		3,629		-
Preferred stock		21		4		-		25		-
Mutual funds		724		54		(37)		741		-
Total equity securities available for sale		1,930		2,519		(54)		4,395		-
Total	$	245,237	$	20,890	$	(1,873)	$	264,254	$	2,080
December 31, 2013
Bonds available for sale:
U.S. government and government sponsored entities	$	3,084	$	150	$	(39)	$	3,195	$	-
Obligations of states, municipalities and political subdivisions		28,704		1,122		(446)		29,380		(15)
Non-U.S. governments		22,045		822		(358)		22,509		-
Corporate debt		139,461		7,989		(2,898)		144,552		74
Mortgage-backed, asset-backed and collateralized:
RMBS		33,520		3,101		(473)		36,148		1,670
CMBS		11,216		558		(292)		11,482		125
CDO/ABS		10,501		649		(142)		11,008		62
Total mortgage-backed, asset-backed and collateralized		55,237		4,308		(907)		58,638		1,857
Total bonds available for sale(b)		248,531		14,391		(4,648)		258,274		1,916
Equity securities available for sale:
Common stock		1,280		1,953		(14)		3,219		-
Preferred stock		24		4		(1)		27		-
Mutual funds		422		12		(24)		410		-
Total equity securities available for sale		1,726		1,969		(39)		3,656		-
Total	$	250,257	$	16,360	$	(4,687)	$	261,930	$	1,916

(a) Represents the amount of other-than-temporary impairment losses recognized in Accumulated other comprehensive income. Amount includes unrealized gains and losses on impaired securities relating to changes in the value of such securities subsequent to the impairment measurement date.

(b)At December 31,2014 and 2013, bonds available for sale held by us that were below investment grade or not rated totaled $35.1billion and $32.6billion, respectively.

The fair value and gross unrealized losses on AIG's available for sale securities, aggregated by major investment category and length of time that individual securities have been in a continuous unrealized loss position

	Less than 12 Months				12 Months or More				Total
				Gross				Gross				Gross
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(in millions)		Value		Losses		Value		Losses		Value		Losses
December 31, 2014
Bonds available for sale:
U.S. government and government sponsored entities	$	526	$	5	$	281	$	13	$	807	$	18
Obligations of states, municipalities and political
subdivisions		495		9		794		40		1,289		49
Non-U.S. governments		1,606		42		1,690		109		3,296		151
Corporate debt		12,132		450		11,570		672		23,702		1,122
RMBS		4,621		109		3,996		183		8,617		292
CMBS		220		1		2,087		58		2,307		59
CDO/ABS		3,857		50		1,860		78		5,717		128
Total bonds available for sale		23,457		666		22,278		1,153		45,735		1,819
Equity securities available for sale:
Common stock		88		16		2		1		90		17
Mutual funds		280		37		64		-		344		37
Total equity securities available for sale		368		53		66		1		434		54
Total	$	23,825	$	719	$	22,344	$	1,154	$	46,169	$	1,873
December 31, 2013
Bonds available for sale:
U.S. government and government sponsored entities	$	1,101	$	34	$	42	$	5	$	1,143	$	39
Obligations of states, municipalities and political
subdivisions		6,134		379		376		67		6,510		446
Non-U.S. governments		4,102		217		710		141		4,812		358
Corporate debt		38,495		2,251		4,926		647		43,421		2,898
RMBS		8,543		349		1,217		124		9,760		473
CMBS		3,191		176		1,215		116		4,406		292
CDO/ABS		2,845		62		915		80		3,760		142
Total bonds available for sale		64,411		3,468		9,401		1,180		73,812		4,648
Equity securities available for sale:
Common stock		96		14		-		-		96		14
Preferred stock		5		1		-		-		5		1
Mutual funds		369		24		-		-		369		24
Total equity securities available for sale		470		39		-		-		470		39
Total	$	64,881	$	3,507	$	9,401	$	1,180	$	74,282	$	4,687

The amortized cost and fair value of fixed maturity securities available for sale by contractual maturity

	Total Fixed Maturity Securities				Fixed Maturity Securities Available
December 31, 2014	Available for Sale				for Sale in a Loss Position
(in millions)		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	9,821	$	9,975	$	637	$	620
Due after one year through five years		48,352		50,873		6,669		6,529
Due after five years through ten years		62,685		65,889		12,873		12,338
Due after ten years		63,168		69,442		10,255		9,607
Mortgage-backed, asset-backed and collateralized		59,281		63,680		17,120		16,641
Total	$	243,307	$	259,859	$	47,554	$	45,735

The gross realized gains and gross realized losses from sales of AIG's available for sale securities

	Years Ended December 31,
		2014				2013				2012
		Gross		Gross		Gross		Gross	Gross		Gross
	Realized		Realized		Realized		Realized		Realized		Realized
(in millions)		Gains		Losses		Gains		Losses	Gains		Losses
Fixed maturity securities	$	703	$	118	$	2,634	$	202	$	2,778	$	171
Equity securities		135		24		130		19		515		31
Total	$	838	$	142	$	2,764	$	221	$	3,293	$	202

The fair value of AIG's other securities

		December 31, 2014				December 31, 2013
		Fair	Percent			Fair	Percent
(in millions)		Value	of Total			Value	of Total
Fixed maturity securities:
U.S. government and government sponsored entities	$	5,498	27	%	$	5,723	24	%
Obligations of states, territories and political subdivisions		122	1			121	1
Non-U.S. governments		2	-			2	-
Corporate debt		719	3			1,169	5
Mortgage-backed, asset-backed and collateralized:
RMBS		2,094	10			2,263	10
CMBS		1,077	5			1,353	6
CDO/ABS and other collateralized(a)		10,200	49			11,985	51
Total mortgage-backed, asset-backed and collateralized		13,371	64			15,601	67
Other		-	-			7	-
Total fixed maturity securities		19,712	95			22,623	97
Equity securities		1,049	5			834	3
Total	$	20,761	100	%	$	23,457	100	%

(a)Includes $0.9 billion and $1.0 billion of U.S. Government agency backed ABS at December 31, 2014 and 2013, respectively.

Components of other invested assets

December 31,
(in millions)		2014		2013
Alternative investments(a)	$	19,656	$	19,709
Mutual funds		-		85
Investment real estate(b)		3,612		3,113
Aircraft asset investments(c)		651		763
Investments in life settlements		3,753		3,601
Investment in AerCap		4,972		-
All other investments		1,874		1,388
Total	$	34,518	$	28,659

(a) Includes hedge funds, private equity funds, affordable housing partnerships, and other investment partnerships.

(b) Net of accumulated depreciation of $315 million and $513 million in 2014 and 2013, respectively.

(c) Consists primarily of investments in aircraft equipment held in consolidated trusts.

The carrying value and ownership percentage of AIA and equity method investments

		2014			2013
		Carrying	Ownership		Carrying	Ownership
(in millions, except percentages)		Value	Percentage		Value	Percentage
Equity method investments	$	18,951	Various	$	12,921	Various

Schedule of information regarding investments in life settlements

	December 31, 2014
	Number of		Carrying	Face Value
(dollars in millions)	Contracts		Value	(Death Benefits)
Remaining Life Expectancy of Insureds:
0 – 1 year	1	$	-	$	-
1 – 2 years	12		9		19
2 – 3 years	18		11		19
3 – 4 years	77		42		93
4 – 5 years	152		205		436
Thereafter	4,687		3,486		15,370
Total	4,947	$	3,753	$	15,937

Components of net investment income

Years Ended December 31,
(in millions)		2014		2013		2012
Fixed maturity securities, including short-term investments	$	12,322	$	12,044	$	12,592
Change in fair value of ML II		-		-		246
Change in fair value of ML III		-		-		2,888
Change in fair value of AIA securities including realized gain		-		-		2,069
Equity securities		221		178		162
Interest on mortgage and other loans		1,272		1,144		1,083
Alternative investments*		2,624		2,803		1,769
Real estate		110		128		127
Other investments		47		61		11
Total investment income		16,596		16,358		20,947
Investment expenses		517		548		604
Net investment income	$	16,079	$	15,810	$	20,343

* Includes hedge funds, private equity funds, affordable housing partnerships, investments in life settlements and other investment partnerships.

Components of net realized capital gains (losses)

Years Ended December 31,
(in millions)		2014		2013		2012
Sales of fixed maturity securities	$	585	$	2,432	$	2,607
Sales of equity securities		111		111		484
Other-than-temporary impairments:
Severity		(3)		(6)		(44)
Change in intent		(40)		(48)		(62)
Foreign currency declines		(19)		(1)		(8)
Issuer-specific credit events		(169)		(170)		(931)
Adverse projected cash flows		(16)		(7)		(5)
Provision for loan losses		(1)		(26)		104
Foreign exchange transactions		598		151		(233)
Derivative instruments		(177)		287		(529)
Impairments of investments in life settlements		(201)		(971)		(309)
Other		71		187		13
Net realized capital gains	$	739	$	1,939	$	1,087

Schedule of increase (decrease) in unrealized appreciation (depreciation) of available for sale securities and other investments

	Years Ended
	December 31,
(in millions)		2014		2013
Increase (decrease) in unrealized appreciation (depreciation) of investments:
Fixed maturities	$	6,809	$	(14,066)
Equity securities		535		360
Other investments		376		101
Total increase (decrease) in unrealized appreciation (depreciation) of investments*	$	7,720	$	(13,605)

* Excludes net unrealized gains attributable to businesses held for sale.

Credit impairments recognized in earnings for available for sale fixed maturity securities

Years Ended December 31,
(in millions)		2014		2013		2012
Balance, beginning of year	$	3,872	$	5,164	$	6,504
Increases due to:
Credit impairments on new securities subject to impairment losses		49		47		194
Additional credit impairments on previously impaired securities		85		78		483
Reductions due to:
Credit impaired securities fully disposed for which there was no
prior intent or requirement to sell		(613)		(643)		(1,105)
Credit impaired securities for which there is a current intent or
anticipated requirement to sell		-		-		(5)
Accretion on securities previously impaired due to credit*		(725)		(774)		(915)
Other		(9)		-		8
Balance, end of year	$	2,659	$	3,872	$	5,164

* Represents both accretion recognized due to changes in cash flows expected to be collected over the remaining expected term of the credit impaired securities and the accretion due to the passage of time.

Schedule of Purchased Credit Impaired (PCI) Securities, at acquisition date

(in millions)	At Date of Acquisition
Contractually required payments (principal and interest)	$	30,520
Cash flows expected to be collected*		24,561
Recorded investment in acquired securities		16,311

* Represents undiscounted expected cash flows, including both principal and interest.

Schedule of Purchased Credit Impaired (PCI) Securities, at reporting date

		December 31,		December 31,
(in millions)		2014		2013
Outstanding principal balance	$	16,962	$	14,741
Amortized cost		12,216		10,110
Fair value		13,462		11,338

Activity for accretable yield on Purchased Credit Impaired (PCI) Securities

Years Ended December 31,
(in millions)		2014		2013
Balance, beginning of year	$	6,940	$	4,766
Newly purchased PCI securities		1,289		1,773
Disposals		-		(60)
Accretion		(880)		(719)
Effect of changes in interest rate indices		(542)		302
Net reclassification from non-accretable difference,
including effects of prepayments		58		878
Balance, end of year	$	6,865	$	6,940

Schedule of fair value of securities pledged to counterparties under secured financing transactions

(in millions)		December 31, 2014		December 31, 2013
Securities available for sale	$	-	$	3,837
Other securities		2,122		2,766

Schedule of fair value of securities pledged to the entity under reverse repurchase agreements

(in millions)		December 31, 2014		December 31, 2013
Securities collateral pledged to us	$	2,506	$	8,878
Amount repledged by us		131		71

Investment [Line Items]

Summarized financial information of AIG's equity method investees

Years Ended December 31,
(in millions)		2014		2013		2012
Operating results:
Total revenues	$	29,579	$	19,181	$	9,438
Total expenses		(7,828)		(5,515)		(5,183)
Net income	$	21,751	$	13,666	$	4,255
At December 31,
(in millions)				2014		2013
Balance sheet:
Total assets			$	207,994	$	150,586
Total liabilities			$	(67,346)	$	(25,134)