INVESTMENTS (Tables)

9 Months Ended

Sep. 30, 2019

Investments [Line Items]

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)
September 30, 2019
Bonds available for sale:
U.S. government and government sponsored entities	$	4,727	$	501	$	(1)	$	5,227	$	-
Obligations of states, municipalities and political subdivisions		14,122		1,640		(17)		15,745		-
Non-U.S. governments		14,456		999		(79)		15,376		-
Corporate debt		138,950		12,956		(534)		151,372		9
Mortgage-backed, asset-backed and collateralized:
RMBS		29,513		3,344		(62)		32,795		1,222
CMBS		13,577		771		(12)		14,336		34
CDO/ABS		18,000		449		(79)		18,370		17
Total mortgage-backed, asset-backed and collateralized		61,090		4,564		(153)		65,501		1,273
Total bonds available for sale(b)	$	233,345	$	20,660	$	(784)	$	253,221	$	1,282
December 31, 2018
Bonds available for sale:
U.S. government and government sponsored entities	$	3,170	$	132	$	(42)	$	3,260	$	-
Obligations of states, municipalities and political subdivisions		15,421		701		(121)		16,001		4
Non-U.S. governments		14,376		451		(302)		14,525		-
Corporate debt		130,436		3,911		(3,647)		130,700		4
Mortgage-backed, asset-backed and collateralized:
RMBS		31,940		2,754		(317)		34,377		1,155
CMBS		12,673		242		(214)		12,701		31
CDO/ABS		17,764		228		(165)		17,827		17
Total mortgage-backed, asset-backed and collateralized		62,377		3,224		(696)		64,905		1,203
Total bonds available for sale(b)	$	225,780	$	8,419	$	(4,808)	$	229,391	$	1,211

(a)Represents the amount of other-than-temporary impairments recognized in Accumulated other comprehensive income (loss). 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 September 30, 2019 and December 31, 2018, bonds available for sale held by us that were below investment grade or not rated totaled $28.0 billion and $28.8 billion, 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
September 30, 2019
Bonds available for sale:
U.S. government and government sponsored entities	$	136	$	1	$	43	$	-	$	179	$	1
Obligations of states, municipalities and political
subdivisions		383		6		256		11		639		17
Non-U.S. governments		919		27		443		52		1,362		79
Corporate debt		8,794		294		3,244		240		12,038		534
RMBS		2,671		23		1,778		39		4,449		62
CMBS		640		4		343		8		983		12
CDO/ABS		3,979		51		1,892		28		5,871		79
Total bonds available for sale	$	17,522	$	406	$	7,999	$	378	$	25,521	$	784
December 31, 2018
Bonds available for sale:
U.S. government and government sponsored entities	$	574	$	13	$	873	$	29	$	1,447	$	42
Obligations of states, municipalities and political
subdivisions		1,965		51		1,530		70		3,495		121
Non-U.S. governments		3,851		149		2,422		153		6,273		302
Corporate debt		47,364		2,181		20,056		1,466		67,420		3,647
RMBS		5,231		94		5,641		223		10,872		317
CMBS		2,646		47		4,264		167		6,910		214
CDO/ABS		9,169		144		1,324		21		10,493		165
Total bonds available for sale	$	70,800	$	2,679	$	36,110	$	2,129	$	106,910	$	4,808

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

	Total Fixed Maturity Securities				Fixed Maturity Securities in a Loss
	Available for Sale				Position Available for Sale
(in millions)		Amortized Cost		Fair Value		Amortized Cost		Fair Value
September 30, 2019
Due in one year or less	$	10,910	$	11,107	$	1,373	$	1,339
Due after one year through five years		45,243		46,583		5,878		5,631
Due after five years through ten years		43,042		45,877		3,947		3,756
Due after ten years		73,060		84,153		3,651		3,492
Mortgage-backed, asset-backed and collateralized		61,090		65,501		11,456		11,303
Total	$	233,345	$	253,221	$	26,305	$	25,521
December 31, 2018
Due in one year or less	$	9,539	$	9,674	$	2,322	$	2,294
Due after one year through five years		47,400		47,905		17,382		16,844
Due after five years through ten years		42,363		42,045		27,724		26,517
Due after ten years		64,101		64,862		35,319		32,980
Mortgage-backed, asset-backed and collateralized		62,377		64,905		28,971		28,275
Total	$	225,780	$	229,391	$	111,718	$	106,910

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

	Three Months Ended September 30,								Nine Months Ended September 30,
		2019				2018			2019					2018
		Gross		Gross		Gross		Gross		Gross		Gross		Gross		Gross
	Realized		Realized		Realized		Realized		Realized		Realized		Realized		Realized
(in millions)		Gains		Losses		Gains		Losses		Gains		Losses		Gains		Losses
Fixed maturity securities	$	198	$	70	$	82	$	71	$	464	$	280	$	252	$	244
Equity securities		-		-		-		-		-		-		16		-
Total	$	198	$	70	$	82	$	71	$	464	$	280	$	268	$	244

The fair value of AIG's other securities

		September 30, 2019				December 31, 2018
		Fair	Percent			Fair	Percent
(in millions)		Value	of Total			Value	of Total
Fixed maturity securities:
U.S. government and government sponsored entities	$	2,296	25	%	$	2,665	21	%
Non-U.S. governments		-	-			45	-
Corporate debt		18	-			1,671	13
Mortgage-backed, asset-backed and collateralized:
RMBS		1,297	14			1,714	14
CMBS		403	5			388	3
CDO/ABS and other collateralized*		4,313	47			4,932	39
Total mortgage-backed, asset-backed and collateralized		6,013	66			7,034	56
Total fixed maturity securities		8,327	91			11,415	90
Equity securities		771	9			1,253	10
Total	$	9,098	100	%	$	12,668	100	%

*There were no U.S. government agency-backed ABS at September 30, 2019. Includes $178 million of U.S. government agency-backed ABS at December 31, 2018.

Components of other invested assets

		September 30,		December 31,
(in millions)		2019		2018
Alternative investments(a) (b)	$	8,532	$	8,966
Investment real estate(c)		9,491		8,935
All other investments		1,463		1,440
Total	$	19,486	$	19,341

(a)At September 30, 2019, included hedge funds of $3.5 billion, private equity funds of $4.7 billion and affordable housing partnerships of $336 million. At December 31, 2018, included hedge funds of $4.2 billion, private equity funds of $4.3 billion and affordable housing partnerships of $438 million.

(b)At September 30, 2019, approximately 70 percent of our hedge fund portfolio is available for redemption in 2019. The remaining 30 percent will be available for redemption between 2020 and 2027.

(c)Net of accumulated depreciation of $710 million and $598 million at September 30, 2019 and December 31, 2018, respectively.

Components of net investment income

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)		2019		2018		2019		2018
Available for sale fixed maturity securities, including short-term investments	$	2,698	$	2,629	$	8,052	$	7,775
Other fixed maturity securities(a)		333		60		941		29
Equity securities		(51)		(21)		6		(50)
Interest on mortgage and other loans		495		455		1,511		1,352
Alternative investments(b)		115		329		879		837
Real estate		96		72		227		133
Other investments(a)		(143)		(13)		(203)		11
Total investment income		3,543		3,511		11,413		10,087
Investment expenses		135		115		381		365
Net investment income	$	3,408	$	3,396	$	11,032	$	9,722

(a)In the third quarter of 2019, we reclassified $96 million in net investment income of bonds recorded at fair value from Other investments to Other fixed maturity securities.

(b)Includes income from hedge funds, private equity funds and affordable housing partnerships. Hedge funds are recorded as of the balance sheet date. Private equity funds are generally reported on a one-quarter lag.

Net Realized Capital Gains and Losses

Components of net realized capital gains (losses)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)		2019		2018		2019		2018
Sales of fixed maturity securities	$	128	$	11	$	184	$	8
Sales of equity securities		-		-		-		16
Other-than-temporary impairments:
Change in intent		-		(3)		(3)		(52)
Foreign currency declines		(6)		(1)		(15)		(13)
Issuer-specific credit events		(17)		(30)		(113)		(92)
Adverse projected cash flows		(1)		(1)		(6)		(1)
Provision for loan losses		(25)		(23)		(35)		(73)
Foreign exchange transactions		(203)		(21)		(242)		(155)
Variable annuity embedded derivatives, net of related hedges		311		(185)		10		(2)
All other derivatives and hedge accounting		466		(1)		601		149
Loss on sale of private equity funds		-		(311)		-		(311)
Other		276		54		506		161
Net realized capital gains (losses)	$	929	$	(511)	$	887	$	(365)

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

The following table presents the increase (decrease) in unrealized appreciation (depreciation) of our available for sale securities and other investments:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)		2019		2018		2019		2018
Increase (decrease) in unrealized appreciation (depreciation) of investments:
Fixed maturity securities	$	4,377	$	(920)	$	16,265	$	(8,858)
Other investments		-		(31)		(68)		(59)
Total increase (decrease) in unrealized appreciation (depreciation) of investments	$	4,377	$	(951)	$	16,197	$	(8,917)

The following table summarizes the unrealized gains and losses recognized in Net Investment Income during the reporting period on equity securities still held at the reporting date:

Three Months Ended September 30,	2019						2018
				Other						Other
			Invested						Invested
(in millions)		Equities		Assets		Total		Equities		Assets		Total
Net gains and losses recognized during the period on equity securities	$	(51)	$	105	$	54	$	(13)	$	183	$	170
Less: Net gains and losses recognized during the period on equity
securities sold during the period		18		13		31		28		18		46
Unrealized gains and losses recognized during the reporting
period on equity securities still held at the reporting date	$	(69)	$	92	$	23	$	(41)	$	165	$	124
Nine Months Ended September 30,	2019						2018
				Other						Other
			Invested						Invested
(in millions)		Equities		Assets		Total		Equities		Assets		Total
Net gains and losses recognized during the period on equity securities	$	6	$	615	$	621	$	(41)	$	497	$	456
Less: Net gains and losses recognized during the period on equity
securities sold during the period		30		169		199		34		45		79
Unrealized gains and losses recognized during the reporting
period on equity securities still held at the reporting date	$	(24)	$	446	$	422	$	(75)	$	452	$	377

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)		2019		2018		2019		2018
Balance, beginning of period	$	34	$	188	$	-	$	526
Increases due to:
Credit impairments on new securities subject to impairment losses		10		15		105		32
Additional credit impairments on previously impaired securities		8		16		14		61
Reductions due to:
Credit impaired securities fully disposed for which there was no
prior intent or requirement to sell		(3)		(12)		(62)		(143)
Accretion on securities previously impaired due to credit*		(7)		(164)		(15)		(433)
Balance, end of period	$	42	$	43	$	42	$	43

*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)	$	35,522
Cash flows expected to be collected*		29,095
Recorded investment in acquired securities		19,648

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

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

(in millions)	September 30, 2019		December 31, 2018
Outstanding principal balance	$	11,016	$	12,495
Amortized cost		7,434		8,646
Fair value		9,171		10,280

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

The following table presents activity for the accretable yield on PCI securities:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)		2019		2018		2019		2018
Balance, beginning of period	$	6,402	$	7,461	$	7,210	$	7,501
Newly purchased PCI securities		4		5		17		32
Accretion		(172)		(176)		(495)		(553)
Effect of changes in interest rate indices		(278)		15		(678)		189
Net reclassification from (to) non-accretable difference,
including effects of prepayments		(162)		93		(260)		229
Balance, end of period	$	5,794	$	7,398	$	5,794	$	7,398

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

(in millions)		September 30, 2019		December 31, 2018
Fixed maturity securities available for sale	$	2,781	$	1,050
Other bond securities, at fair value	$	-	$	122

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
September 30, 2019
Bonds available for sale:
Non-U.S. governments	$	64	$	61	$	-	$	-	$	-	$	125
Corporate debt		28		104		-		-		-		132
Other bond securities:
U.S. government and government sponsored entities		-		-		-		-		-		-
Non-U.S. governments		-		-		-		-		-		-
Corporate debt		-		-		-		-		-		-
Total	$	92	$	165	$	-	$	-	$	-	$	257
December 31, 2018
Bonds available for sale:
Non-U.S. governments	$	25	$	35	$	-	$	-	$	-	$	60
Corporate debt		51		55		-		-		-		106
Other bond securities:
U.S. government and government sponsored entities		11		-		-		-		-		11
Non-U.S. governments		-		3		-		-		-		3
Corporate debt		17		38		53		-		-		108
Total	$	104	$	131	$	53	$	-	$	-	$	288

	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
September 30, 2019
Bonds available for sale:
Obligations of states, municipalities and political
subdivisions	$	-	$	-	$	262	$	128	$	-	$	390
Non-U.S. governments		-		-		-		-		-		-
Corporate debt		-		1,062		635		437		-		2,134
Total	$	-	$	1,062	$	897	$	565	$	-	$	2,524
December 31, 2018
Bonds available for sale:
Obligations of states, municipalities and political
subdivisions	$	-	$	50	$	130	$	-	$	-	$	180
Non-U.S. governments		-		21		8		-		-		29
Corporate debt		-		330		345		-		-		675
Total	$	-	$	401	$	483	$	-	$	-	$	884

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

(in millions)		September 30, 2019		December 31, 2018
Securities collateral pledged to us	$	2,075	$	426
Amount sold or repledged by us		35		106