Variable Interest Entities

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Variable Interest Entities

10. Variable Interest Entities

We enter into various arrangements with Variable Interest Entities (VIEs) in the normal course of business and consolidate the VIEs when we determine we are the primary beneficiary. This analysis includes a review of the VIE’s capital structure, related contractual relationships and terms, nature of the VIE’s operations and purpose, nature of the VIE’s interests issued and our involvement with the entity. When assessing the need to consolidate a VIE, we evaluate the design of the VIE as well as the related risks to which the entity was designed to expose the variable interest holders.

The primary beneficiary is the entity that has both (i) the power to direct the activities of the VIE that most significantly affect the entity’s economic performance and (ii) the obligation to absorb losses or the right to receive benefits that could be potentially significant to the VIE. While also considering these factors, the consolidation conclusion depends on the breadth of our decision-making ability and our ability to influence activities that significantly affect the economic performance of the VIE.

BALANCE SHEET CLASSIFICATION AND EXPOSURE TO LOSS

Creditors or beneficial interest holders of VIEs for which AIG is the primary beneficiary generally have recourse only to the assets and cash flows of the VIEs and do not have recourse to AIG, except in limited circumstances when AIG has provided a guarantee to the VIE’s interest holders. The following table presents the total assets and total liabilities associated with our variable interests in consolidated VIEs, as classified in the Condensed Consolidated Balance Sheets:

(in millions)		September 30, 2024		December 31, 2023
Assets:
Bonds available for sale	$	29	$	72
Mortgage and other loans receivable		—		122
Short-term investments		—		5
Accrued investment income		1		2
Other assets		1		1
Total*	$	31	$	202
Liabilities:
Debt of consolidated investment entities	$	—	$	38
Total	$	—	$	38

*The assets of each VIE can be used only to settle specific obligations of that VIE.

We calculate our maximum exposure to loss to be (i) the amount invested in the debt or equity of the VIE, (ii) the notional amount of VIE assets or liabilities where we have also provided credit protection to the VIE with the VIE as the referenced obligation, and (iii) other commitments and guarantees to the VIE.

The following table presents total assets of unconsolidated VIEs in which we hold a variable interest, as well as our maximum exposure to loss associated with these VIEs:

			Maximum Exposure to Loss
(in millions)		Total VIE Assets		On-Balance Sheet(c)		Off-Balance Sheet			Total
September 30, 2024
Real estate and investment entities(a)	$	361,397	$	3,677	$	1,175	(d)	$	4,852
Other(b)		1,027		—		748	(e)		748
Total	$	362,424	$	3,677	$	1,923		$	5,600
December 31, 2023
Real estate and investment entities(a)	$	355,003	$	4,107	$	1,492	(d)	$	5,599
Other(b)		1,027		—		748	(e)		748
Total	$	356,030	$	4,107	$	2,240		$	6,347

(a)Comprised primarily of hedge funds and private equity funds.

(b)At September 30, 2024 and December 31, 2023, excludes approximately $1,925 million and $1,971 million, respectively, of VIE assets related to AIGFP and its consolidated subsidiaries, with maximum off-balance sheet exposure to loss of $1,894 million and $1,941 million, respectively. For additional information, see Note 1 to the Consolidated Financial Statements in the 2023 Annual Report.

(c)At September 30, 2024 and December 31, 2023, $3.7 billion and $4.1 billion, respectively, of our total unconsolidated VIE assets were recorded as Other invested assets.

(d)These amounts represent our unfunded commitments to invest in private equity funds and hedge funds.

(e)These amounts represent our estimate of the maximum exposure to loss under certain insurance policies issued to VIEs if a hypothetical loss occurred to the extent of the full amount of the insured value. Our insurance policies cover defined risks and our estimate of liability is included in our insurance reserves on the balance sheet.

For additional information on VIEs, see Note 10 to the Consolidated Financial Statements in the 2023 Annual Report.