INVESTMENTS (Tables)

12 Months Ended

Dec. 31, 2016

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, 2016
Bonds available for sale:
U.S. government and government sponsored entities	$	1,870	$	148	$	(26)	$	1,992	$	-
Obligations of states, municipalities and political subdivisions		24,025		1,001		(254)		24,772		-
Non-U.S. governments		14,018		773		(256)		14,535		-
Corporate debt		126,648		7,271		(1,739)		132,180		(31)
Mortgage-backed, asset-backed and collateralized:
RMBS		35,311		2,541		(478)		37,374		1,212
CMBS		14,054		409		(192)		14,271		45
CDO/ABS		16,315		278		(180)		16,413		39
Total mortgage-backed, asset-backed and collateralized		65,680		3,228		(850)		68,058		1,296
Total bonds available for sale(b)		232,241		12,421		(3,125)		241,537		1,265
Equity securities available for sale:
Common stock		708		369		(12)		1,065		-
Preferred stock		748		4		-		752		-
Mutual funds		241		23		(3)		261		-
Total equity securities available for sale		1,697		396		(15)		2,078		-
Total	$	233,938	$	12,817	$	(3,140)	$	243,615	$	1,265
December 31, 2015
Bonds available for sale:
U.S. government and government sponsored entities	$	1,698	$	155	$	(9)	$	1,844	$	-
Obligations of states, municipalities and political subdivisions		26,003		1,424		(104)		27,323		19
Non-U.S. governments		17,752		805		(362)		18,195		-
Corporate debt		133,513		6,462		(3,987)		135,988		(87)
Mortgage-backed, asset-backed and collateralized:
RMBS		33,878		2,760		(411)		36,227		1,326
CMBS		13,139		561		(129)		13,571		185
CDO/ABS		14,985		360		(248)		15,097		39
Total mortgage-backed, asset-backed and collateralized		62,002		3,681		(788)		64,895		1,550
Total bonds available for sale(b)		240,968		12,527		(5,250)		248,245		1,482
Equity securities available for sale:
Common stock		913		1,504		(16)		2,401		-
Preferred stock		19		3		-		22		-
Mutual funds		447		53		(8)		492		-
Total equity securities available for sale		1,379		1,560		(24)		2,915		-
Total	$	242,347	$	14,087	$	(5,274)	$	251,160	$	1,482

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

(b)At December 31,2016 and 2015, bonds available for sale held by us that were below investment grade or not rated totaled $33.6billion and $34.9billion, 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, 2016
Bonds available for sale:
U.S. government and government sponsored entities	$	720	$	26	$	-	$	-	$	720	$	26
Obligations of states, municipalities and political
subdivisions		5,814		221		231		33		6,045		254
Non-U.S. governments		3,865		162		489		94		4,354		256
Corporate debt		28,184		1,013		6,080		726		34,264		1,739
RMBS		8,794		252		4,045		226		12,839		478
CMBS		4,469		152		479		40		4,948		192
CDO/ABS		5,362		102		1,961		78		7,323		180
Total bonds available for sale		57,208		1,928		13,285		1,197		70,493		3,125
Equity securities available for sale:
Common stock		125		12		-		-		125		12
Mutual funds		64		3		-		-		64		3
Total equity securities available for sale		189		15		-		-		189		15
Total	$	57,397	$	1,943	$	13,285	$	1,197	$	70,682	$	3,140
December 31, 2015
Bonds available for sale:
U.S. government and government sponsored entities	$	483	$	9	$	1	$	-	$	484	$	9
Obligations of states, municipalities and political
subdivisions		2,382		87		268		17		2,650		104
Non-U.S. governments		4,327		203		832		159		5,159		362
Corporate debt		41,317		2,514		5,428		1,473		46,745		3,987
RMBS		7,215		133		4,318		278		11,533		411
CMBS		4,138		108		573		21		4,711		129
CDO/ABS		7,064		104		2,175		144		9,239		248
Total bonds available for sale		66,926		3,158		13,595		2,092		80,521		5,250
Equity securities available for sale:
Common stock		91		16		-		-		91		16
Mutual funds		200		8		-		-		200		8
Total equity securities available for sale		291		24		-		-		291		24
Total	$	67,217	$	3,182	$	13,595	$	2,092	$	80,812	$	5,274

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, 2016	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	$	7,796	$	7,994	$	604	$	581
Due after one year through five years		49,200		51,958		6,002		5,841
Due after five years through ten years		43,308		44,226		16,045		15,332
Due after ten years		66,257		69,301		25,007		23,629
Mortgage-backed, asset-backed and collateralized		65,680		68,058		25,960		25,110
Total	$	232,241	$	241,537	$	73,618	$	70,493
December 31, 2015
Due in one year or less	$	9,176	$	9,277	$	1,122	$	1,103
Due after one year through five years		47,230		49,196		9,847		9,494
Due after five years through ten years		54,120		54,459		22,296		20,686
Due after ten years		68,440		70,418		26,235		23,755
Mortgage-backed, asset-backed and collateralized		62,002		64,895		26,271		25,483
Total	$	240,968	$	248,245	$	85,771	$	80,521

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

	Years Ended December 31,
		2016				2015				2014
		Gross		Gross		Gross		Gross	Gross		Gross
	Realized		Realized		Realized		Realized		Realized		Realized
(in millions)		Gains		Losses		Gains		Losses	Gains		Losses
Fixed maturity securities	$	801	$	800	$	517	$	423	$	703	$	118
Equity securities		1,072		15		1,060		28		135		24
Total	$	1,873	$	815	$	1,577	$	451	$	838	$	142

The fair value of AIG's other securities

		December 31, 2016				December 31, 2015
		Fair	Percent			Fair	Percent
(in millions)		Value	of Total			Value	of Total
Fixed maturity securities:
U.S. government and government sponsored entities	$	2,939	20	%	$	3,369	19	%
Obligations of states, municipalities and political subdivisions		-	-			75	-
Non-U.S. governments		51	-			50	-
Corporate debt		1,772	12			2,035	12
Mortgage-backed, asset-backed and collateralized:
RMBS		2,025	14			2,230	13
CMBS		603	4			750	4
CDO/ABS and other collateralized*		6,608	47			8,273	47
Total mortgage-backed, asset-backed and collateralized		9,236	65			11,253	64
Total fixed maturity securities		13,998	97			16,782	95
Equity securities		482	3			921	5
Total	$	14,480	100	%	$	17,703	100	%

*Includes $421 million and $712 million of U.S. Government agency backed ABS at December 31, 2016 and 2015, respectively.

Components of other invested assets

December 31,
(in millions)		2016		2015
Alternative investments(a) (b)	$	13,379	$	18,150
Investment real estate(c)		6,900		6,579
Aircraft asset investments(d)		321		477
Investments in life settlements		2,516		3,606
All other investments		1,422		982
Total	$	24,538	$	29,794

(a) At December 31,2016, includes hedge funds of $7.2 billion, private equity funds of $5.5 billion, and affordable housing partnerships of $625 million. At December 31, 2015, includes hedge funds of $10.9 billion, private equity funds of $6.5 billion, and affordable housing partnerships of $701 million.

(b) Approximately 72 percent and 15 percent of our hedge fund portfolio is available for redemption in 2017 and 2018, respectively, an additional 7 percent will be available between 2019 and 2024.

(c) Net of accumulated depreciation of $451 million and $668 million in 2016 and 2015, respectively.

(d) Consists of investments in aircraft equipment held in a consolidated trust.

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

		2016			2015
		Carrying	Ownership		Carrying	Ownership
(in millions, except percentages)		Value	Percentage		Value	Percentage
Equity method investments	$	10,756	Various	$	14,259	Various

Schedule of information regarding investments in life settlements

	December 31, 2016
	Number of		Carrying	Face Value
(dollars in millions)	Contracts		Value	(Death Benefits)
Remaining Life Expectancy of Insureds:
0 – 1 year	1	$	-	$	-
1 – 2 years	5		5		10
2 – 3 years	16		6		14
3 – 4 years	43		43		93
4 – 5 years	148		171		404
Thereafter	3,235		2,291		9,266
Total	3,448	$	2,516	$	9,787

Components of net investment income

Years Ended December 31,
(in millions)		2016		2015		2014
Fixed maturity securities, including short-term investments	$	11,645	$	11,332	$	12,322
Equity securities		(5)		99		221
Interest on mortgage and other loans		1,526		1,417		1,272
Alternative investments*		693		1,120		2,070
Real estate		150		181		110
Other investments		509		432		601
Total investment income		14,518		14,581		16,596
Investment expenses		453		528		517
Net investment income	$	14,065	$	14,053	$	16,079

*Beginning in the first quarter of 2016, the presentation of income on alternative investments has been refined to include only income from hedge funds, private equity funds and affordable housing partnerships. Prior period disclosures have been reclassified to conform to this presentation. Hedge funds for which we elected the fair value option are recorded as of the balance sheet date. Other hedge funds are generally reported on a one-month lag, while private equity funds are generally reported on a one-quarter lag.

Components of net realized capital gains (losses)

Years Ended December 31,
(in millions)		2016		2015		2014
Sales of fixed maturity securities	$	1	$	94	$	585
Sales of equity securities(a)		1,057		1,032		111
Other-than-temporary impairments:
Severity		(15)		(13)		(3)
Change in intent		(46)		(233)		(40)
Foreign currency declines		(18)		(57)		(19)
Issuer-specific credit events		(433)		(348)		(169)
Adverse projected cash flows		(47)		(20)		(16)
Provision for loan losses		10		(58)		(1)
Foreign exchange transactions		(1,226)		416		598
Derivatives and hedge accounting		(944)		341		(177)
Impairments on investments in life settlements		(397)		(540)		(201)
Other(b)		114		162		71
Net realized capital gains (losses)	$	(1,944)	$	776	$	739

(a) In 2016 and 2015 includes realized gains on the sale of a portion of our holdings in People’s Insurance Company (Group) of China Limited and PICC Property & Casualty Company Limited (collectively, our PICC Investment).

(b)In 2016, primarily includes $107 million of realized gains due to a purchase price adjustment on the sale of Class B shares of Prudential Financial, Inc. and losses of $253 million from the sale of a portion of our Life Settlements portfolio. In 2015, primarily includes $357 million of realized gains due to the sale of common shares of SpringLeaf Holdings (now known as OneMain Holdings, Inc.), $428 million of realized gains due to the sale of Class B shares of Prudential Financial, Inc. and $463 million of realized losses due to the sale of ordinary shares of AerCap.

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

	Years Ended
	December 31,
(in millions)		2016		2015
Increase (decrease) in unrealized appreciation (depreciation) of investments:
Fixed maturity securities	$	2,019	$	(9,275)
Equity securities		(1,155)		(929)
Other investments		(259)		(803)
Total increase (decrease) in unrealized appreciation (depreciation) of investments*	$	605	$	(11,007)

* 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)		2016		2015		2014
Balance, beginning of year	$	1,747	$	2,659	$	3,872
Increases due to:
Credit impairments on new securities subject to impairment losses		204		111		49
Additional credit impairments on previously impaired securities		212		109		85
Reductions due to:
Credit impaired securities fully disposed of for which there was no
prior intent or requirement to sell		(296)		(399)		(613)
Credit impaired securities for which there is a current intent or
anticipated requirement to sell		-		2		-
Accretion on securities previously impaired due to credit*		(767)		(735)		(725)
Divested businesses		(2)		-		-
Other		-		-		(9)
Balance, end of year	$	1,098	$	1,747	$	2,659

* 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)	$	35,885
Cash flows expected to be collected*		29,314
Recorded investment in acquired securities		19,689

*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)		2016		2015
Outstanding principal balance	$	16,728	$	16,871
Amortized cost		11,987		12,303
Fair value		12,922		13,164

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

Years Ended December 31,
(in millions)		2016		2015
Balance, beginning of year	$	6,846	$	6,865
Newly purchased PCI securities		707		696
Disposals		-		(13)
Accretion		(842)		(879)
Effect of changes in interest rate indices		39		(251)
Net reclassification from (to) non-accretable difference		748		428
Balance, end of year	$	7,498	$	6,846

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

(in millions)		December 31, 2016		December 31, 2015
Fixed maturity securities available for sale	$	2,389	$	1,145
Other bond securities, at fair value		1,799		1,740

Transfer of Certain Financial Assets Accounted for as Secured Borrowings

	Remaining Contractual Maturity of the Agreements
(in millions)	Overnight and Continuous			up to 30 days		31 - 90 days		91 - 364 days		365 days or greater		Total
December 31, 2016
Other bond securities:
Non-U.S. governments	$	-	$	-	$	-	$	51	$	-	$	51
Corporate debt		-		163		860		725		-		1,748
Total	$	-	$	163	$	860	$	776	$	-	$	1,799
December 31, 2015
Bonds available for sale:
Non-U.S. governments	$	-	$	50	$	-	$	-	$	-	$	50
Other bond securities:
Non-U.S. governments		-		-		-		49		-		49
Corporate debt		-		33		332		1,326		-		1,691
Total	$	-	$	83	$	332	$	1,375	$	-	$	1,790

	Remaining Contractual Maturity of the Agreements
(in millions)		Overnight and Continuous		up to 30 days		31 - 90 days		91 - 364 days		365 days or greater		Total
December 31, 2016
Bonds available for sale:
Obligations of states, municipalities and political
subdivisions	$	-	$	21	$	-	$	-	$	-	$	21
Non-U.S. governments		-		-		50		-		-		50
Corporate debt		-		791		1,466		-		-		2,257
CMBS		-		-		61		-		-		61
Total	$	-	$	812	$	1,577	$	-	$	-	$	2,389
December 31, 2015
Bonds available for sale:
Non-U.S. governments	$	-	$	-	$	57	$	-	$	-	$	57
Corporate debt		-		-		914		-		-		914
RMBS		-		-		-		124		-		124
Total	$	-	$	-	$	971	$	124	$	-	$	1,095

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

(in millions)		December 31, 2016		December 31, 2015
Securities collateral pledged to us	$	1,434	$	1,742
Amount sold or repledged by us		11		-

Investment [Line Items]

Summarized financial information of AIG's equity method investees

Years Ended December 31,
(in millions)		2016		2015		2014
Operating results:
Total revenues	$	9,512	$	22,055	$	29,579
Total expenses		(7,361)		(3,898)		(7,828)
Net income	$	2,151	$	18,157	$	21,751
At December 31,
(in millions)				2016		2015
Balance sheet:
Total assets			$	158,306	$	201,007
Total liabilities			$	(37,336)	$	(33,424)