Reinsurance (Tables)

9 Months Ended

Sep. 30, 2024

Summary of Assets Supporting Funds Withheld Arrangements

There is a diverse pool of assets supporting the funds withheld arrangements with Fortitude Re. The following summarizes the composition of the pool of assets:


	September 30, 2024				December 31, 2023
(in millions)	Carrying Value			Fair Value	Carrying Value			Fair Value	Corresponding Accounting Policy
Fixed maturity securities - available for sale(a)	$	2,148	$	2,148	$	2,180	$	2,180	Fair value through other comprehensive income (loss)
Fixed maturity securities - fair value option		749		749		655		655	Fair value through net investment income
Commercial mortgage loans		475		456		543		528	Amortized cost



Short-term investments		21		21		46		46	Fair value through net investment income
Funds withheld investment assets		3,393		3,374		3,424		3,409
Derivative assets, net(b)		—		—		—		—	Fair value through net realized gains (losses)
Other(c)		103		103		118		118	Amortized cost
Total	$	3,496	$	3,477	$	3,542	$	3,527

(a)The change in the net unrealized gains (losses) on available for sale securities related to the Fortitude Re funds withheld assets was $31 million ($25 million after-tax) and $(60) million ($(47) million after-tax), respectively for the nine months ended September 30, 2024 and 2023.

(b)The derivative assets and liabilities have been presented net of cash collateral. The derivative assets and liabilities supporting the Fortitude Re funds withheld arrangements had a fair market value of $3 million and $27 million, respectively, as of September 30, 2024. The derivative assets and liabilities supporting the Fortitude Re funds withheld arrangements had a fair market value of $1 million and $28 million, respectively, as of December 31, 2023. These derivative assets and liabilities are fully collateralized either by cash or securities.

(c)Primarily comprised of Cash and Accrued investment income.

Summary of the Impact of Funds Withheld Arrangements

The impact of the funds withheld arrangements with Fortitude Re was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)		2024		2023		2024		2023

Net investment income - Fortitude Re funds withheld assets	$	51	$	29	$	123	$	106
Net realized gains (losses) on Fortitude Re funds withheld assets:
Net realized losses - Fortitude Re funds withheld assets		(18)		(3)		(38)		(64)
Net realized gains (losses) - Fortitude Re funds withheld embedded derivative		(157)		57		(158)		(25)
Net realized gains (losses) on Fortitude Re funds withheld assets		(175)		54		(196)		(89)
Income (loss) from continuing operations before income tax expense (benefit)		(124)		83		(73)		17
Income tax expense (benefit)(a)		(26)		18		(15)		4
Net income (loss)		(98)		65		(58)		13
Change in unrealized appreciation (depreciation) of all other investments(a)		67		(63)		25		(47)
Comprehensive income (loss)	$	(31)	$	2	$	(33)	$	(34)

(a)The income tax expense (benefit) and the tax impact in Accumulated other comprehensive income (loss) (AOCI) was computed using AIG’s U.S. statutory tax rate of 21 percent.

Rollforward of the Reinsurance Recoverable Allowance

The following table presents a rollforward of the reinsurance recoverable allowance:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)		2024		2023		2024		2023
Balance, beginning of period	$	260	$	254	$	255	$	260
Addition to (release of) allowance for expected credit losses and disputes, net		9		1		9		(3)
Write-offs charged against the allowance for credit losses and disputes		—		—		(1)		(1)

Other changes		3		(1)		9		(2)


Balance, end of period	$	272	$	254	$	272	$	254