SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2016

SEGMENT INFORMATION

SEGMENT INFORMATION

3. SEGMENT INFORMATION

We report our results of operations consistent with the manner in which our chief operating decision makers review the business to assess performance and allocate resources through two reportable segments: Commercial Insurance and Consumer Insurance as well as a Corporate and Other category. The Corporate and Other category consists of businesses and items not allocated to our reportable segments.

Prior to the third quarter of 2016, we presented United Guaranty and Institutional Markets as operating segments of Commercial Insurance. Beginning in the third quarter of 2016, in order to align our financial reporting with the manner in which our chief operating decision makers review the businesses to assess performance and make decisions about resources to be allocated, United Guaranty and Institutional Markets are presented in the Corporate and Other category for all periods presented. As a result, Commercial Insurance operations now consist of our commercial property and casualty business.

As a result of the transaction agreement discussed in Note 4 to the Condensed Consolidated Financial Statements, the associated assets and liabilities of UGChave been classified as held-for-sale at September 30, 2016.

In the second quarter of 2015, a United Guaranty subsidiary and certain of our property casualty companies entered into a 50 percent quota share arrangement whereby the United Guaranty subsidiary (1) ceded 50 percent of the risk relating to policies written in 2014 that were current as of January 1, 2015 and (2) ceded 50 percent of the risk relating to all policies written in 2015 and 2016, each in exchange for a 30 percent ceding commission and reimbursements of 50 percent of the losses and loss adjustment expenses incurred on covered policies. Beginning in the third quarter of 2016, the effects of these intercompany reinsurance arrangements are included in the results of Commercial Insurance and Corporate and Other for all periods presented. Previously, these arrangements were eliminated for purposes of segment reporting.

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

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 (loss).

The following tables present our operations by reportable segment:

	2016				2015
				Pre-Tax				Pre-Tax
Three Months Ended September 30,		Total		Operating		Total		Operating
(in millions)		Revenues		Income (Loss)		Revenues	Income (Loss)
Commercial Insurance	$	5,460	$	729	$	5,750	$	592
Consumer Insurance
Retirement		2,084		1,108		2,203		635
Life		1,662		98		1,578		(40)
Personal Insurance		2,982		178		2,871		62
Total Consumer Insurance		6,728		1,384		6,652		657
Corporate and Other*		1,557		(522)		911		(396)
AIG consolidation and elimination		(149)		21		(134)		(5)
Total AIG consolidated operating revenues and pre-tax operating income		13,596		1,612		13,179		848
Reconciling items from Total revenues and Pre-tax operating income
(loss) to revenues and pre-tax income (loss):
Changes in fair values of securities used to hedge guaranteed
living benefits		17		17		4		4
Changes in benefit reserves and DAC, VOBA and SIA related to
net realized capital gains		-		(67)		-		(2)
Other income - net		-		3		-		-
Loss on extinguishment of debt		-		14		-		(346)
Net realized capital gains		(765)		(765)		(342)		(342)
Income (loss) from divested businesses		-		128		-		(3)
Non-operating litigation reserves and settlements		1		5		-		30
Reserve development related to non-operating run-off insurance business		-		-		-		(30)
Restructuring and other costs		-		(210)		-		(274)
Other		5		-		(19)		-
Revenues and pre-tax income (loss)	$	12,854	$	737	$	12,822	$	(115)

	2016				2015
				Pre-Tax				Pre-Tax
Nine Months Ended September 30,		Total		Operating		Total		Operating
(in millions)		Revenues		Income (Loss)		Revenues	Income (Loss)
Commercial Insurance	$	16,376	$	2,306	$	17,993	$	2,990
Consumer Insurance
Retirement		6,407		2,310		7,056		2,239
Life		4,949		387		4,823		280
Personal Insurance		8,718		579		8,602		106
Total Consumer Insurance		20,074		3,276		20,481		2,625
Corporate and Other*		3,959		(1,411)		5,338		697
AIG consolidation and elimination		(507)		15		(408)		(69)
Total AIG consolidated operating revenues and pre-tax operating income		39,902		4,186		43,404		6,243
Reconciling items from Total revenues and Pre-tax operating income
(loss) to revenues and pre-tax income (loss):
Changes in fair values of securities used to hedge guaranteed
living benefits		270		270		(39)		(39)
Changes in benefit reserves and DAC, VOBA and SIA related to
net realized capital gains		-		(91)		-		(84)
Other income - net		-		15		-		-
Loss on extinguishment of debt		-		(76)		-		(756)
Net realized capital gains (losses)		(829)		(829)		1,125		1,125
Income (loss) from divested businesses		-		351		(48)		(58)
Non-operating litigation reserves and settlements		42		43		91		86
Reserve development related to non-operating run-off insurance business		-		-		-		(30)
Restructuring and other costs		-		(488)		-		(274)
Other		(28)		-		(37)		-
Revenues and pre-tax income	$	39,357	$	3,381	$	44,496	$	6,213

* Corporate and Other includes income from assets held by AIG Parent and other corporate subsidiaries and results from United Guaranty and Institutional Markets.