How Big is AIG's Life Insurance Arm?

I must have been half asleep yesterday when I blogged my AIG datapoint of the day, since I utterly failed to notice that it failed to pass a simple smell test. (Proof of being half asleep: I also confused Hank Greenberg with Ace Greenberg.) Andrew Ross Sorkin wrote that "in the United States, A.I.G. has more than 375 million policies with a face value of $19 trillion" -- but that simply can't be true, since the entire population of the United States is only about 306 million, and AIG can't have written more than one life insurance policy per person.

In fact, as an anonymous commenter helpfully pointed out, the $19 trillion number is the total face value of all life insurance written in the US. AIG's numbers are far smaller, as we can see from its most recent annual report:

The value of AIG's US life insurance and retirement services policies combined is about $1 trillion; the components aren't split out, but AIG does say that it made a profit of $226 million on domestic life insurance, compared to a total profit of $1.99 billion on US life insurance and retirement services combined. My commenter says that AIG has about 3% of the US life insurance market, which would imply that AIG's life insurance policies total about $570 billion -- a large number, but nothing close to $19 trillion. And of course remember that the cash-out value of those policies is a tiny fraction of their face value.

AIG actually has bigger life insurance operations outside the US than it does inside, but either way I don't think that they pose the kind of systemic risk that Sorkin implies. There's no correction on his column yet, but I think there should be.