American International Group, Inc. New · NYSE:AIG
American International Group, Inc. New — American International Group — Q1 2021 Earnings Presentation
28 slides from American International Group, Inc. New's earnings presentation, May 7, 2021
Slide 1: First Quarter 2021 Financial Results Presentation
First Quarter 2021 Financial Results Presentation May 7, 2021
Slide 2: Cautionary Statement Regarding Forward-Looking Information, Comment on Regulation G
Cautionary Statement Regarding Forward-Looking Information, Comment on Regulation G and Other Information This document and the remarks made within this presentation may include, and officers and representatives of American International Group, Inc. (AIG) may from time to time make and discuss, proj
Slide 3: 1Q21 APTI reflects continued improvement in General Insurance and strong Life and Retirement APTI
1Q21 APTI reflects continued improvement in General Insurance accident year, as adjusted*, underwriting profitability and strong Life and Retirement APTI Adjusted after-tax income attributable to AIG common shareholders (AATI)* of $923M ($1.05/diluted share) and adjusted pre-tax income (APTI)* of
Slide 4: APTI of $1.3B reflects higher NII and improved Commercial Lines AYCR
APTI of $1.3B reflects higher NII, APTI basis, continued improvement in Commercial Lines AYCR, as adjusted, and strong Life and Retirement results ($M, except per common share amounts) 1Q20 1Q21 Variances Key Takeaways Adjusted Pre-tax Income (Loss): General Insurance APTI increased by $344M prima
Slide 5: 1Q20 and 1Q21 noteworthy items
1Q20 and 1Q21 noteworthy items 1Q20 – Income / (Loss) 1Q21 – Income / (Loss) EPS – EPS – ($M, except per share amounts) Pre-tax After-tax1 Pre-tax After-tax1 diluted2 diluted2 CATs excluding General Insurance COVID-193 ($147) ($116) ($0.13) ($441) ($348) ($0.40) General Insurance COVID-19 CATs (272)
Slide 6: Gross investment income, APTI basis, increased $408M
Gross investment income (GII), APTI basis1*, increased $408M reflecting improved private equity and hedge fund investment returns Invested Assets & Gross Investment Income, APTI Basis1 1Q21 Invested Assets Gross Investment Income, APTI basis ($M) $B Fixed Maturities Alternatives All Other 1Q20 1Q20
Slide 7: General Insurance: 3.1 pts better AYCR; Global Commercial Lines NPW grew 25%
General Insurance: 3.1 pts better AYCR, as adjusted; Global Commercial Lines NPW grew 25% (22% on a constant dollar basis) ($M) 1Q20 1Q21 Net Premiums Written (NPW) ($M) Net premiums written $5,921 $6,479 Global Commercial Lines Global Personal Insurance Net premiums earned $6,079 $5,866 $4,769 $2,1
Slide 8: General Insurance: North America Commercial Lines AYCR improvement
General Insurance: 3.7 pt improvement in North America Commercial Lines AYCR, as adjusted; Personal Insurance impacted by Travel and Syndicate 2019 ($M) 1Q20 1Q21 Key Takeaways: Net premiums written $2,699 $2,930 NA Commercial Lines NPW grew 29% over 1Q20 reflecting continued strong rate increases
Slide 9: General Insurance: International AYCR improvement
General Insurance: Strong 3.4 pt improvement in International AYCR, as adjusted, due to improved business mix along with rate increases ($M) 1Q20 1Q21 Key Takeaways: Net premiums written $3,222 $3,549 International Commercial Lines NPW grew 20% (13% on a constant dollar basis) Commercial Lines 1,6
Slide 10: Life and Retirement: 57% increase in APTI
Life and Retirement**: 57% increase in APTI driven by favorable capital markets conditions resulting in higher NII and lower DAC/SIA amortization, partially offset by base net investment spread compression and elevated mortality Key Takeaways Adjusted Pre-Tax Income ($M) 1Q21 APTI growth reflects
Slide 11: Life and Retirement: Individual and Group Retirement APTI up
Life and Retirement: Individual and Group Retirement APTI up 74% and 115%, respectively, driven by favorable capital markets conditions, partially offset by base net investment spread compression Individual Retirement1 Assets Under 1Q21 vs 1Q20 APTI reflects Premiums and Net Administration APTI ($M)
Slide 12: Life and Retirement: Life Insurance and Institutional Markets APTI
Life and Retirement: Life Insurance and Institutional Markets APTI reflects higher NII from favorable capital markets conditions; Life Insurance impacted by elevated mortality Life Insurance New Business Premiums and APTI ($M) Sales ($M) Deposits ($M) 1Q21 vs 1Q20 APTI reflects $109 $1,131 ($40) Fav
Slide 13: Other Operations: APTL decreased principally due to Fortitude in 1Q20
Other Operations: APTL decreased principally due to the impact of Fortitude in 1Q20 which was deconsolidated in 2Q20 ($M) 1Q20 1Q21 Corporate and Other ($879) ($552) Asset Management 44 198 Adjusted pre-tax loss before consolidation and eliminations ($835) ($354) Consolidation and eliminations: Cons
Slide 14: Financial flexibility remains robust with strong balance sheet
Financial flexibility remains robust with strong balance sheet; Total debt & preferred stock leverage of 28.4%; $1.5B senior notes redeemed in February 2021 Capital Structure ($B) Risk Based Capital (RBC) Ratios4 $93.2 $1.6 $88.0 Hybrids 1 Life and Retirement General Insurance $1.6 Year 1,2 Companie
Slide 15: AIG 200: Continued execution of global multi-year initiative
AIG 200: Continued execution of global, multi-year initiative to achieve transformational change and $1B of GOE savings; Achieved run rate savings of ~$500M to date The Standard Commercial Underwriting Platform will modernize global underwriting capabilities by 1 simplifying processes and tools to c
Slide 16: Corporate debt investment portfolio is well diversified by industry sector
AIG’s corporate debt investment portfolio is well diversified by industry sector; credit quality remains strong Fixed Maturity Securities by NAIC Designation Corporate Debt by Industry Sector March 31, 2021 – $234.5B1 March 31, 2021 – $139.3B1 NAIC 3-6 Other 8% $107.5 Basic materials $16.4 Energy $3
Slide 17: Glossary of Non-GAAP Financial Measures and Non-GAAP Reconciliations
Glossary of Non-GAAP Financial Measures and Non-GAAP Reconciliations 17
Slide 18: Glossary of Non-GAAP Financial Measures
Glossary of Non-GAAP Financial Measures Glossary of Non-GAAP Throughout this presentation, we present our financial condition and results of operations in the way we believe will be most meaningful and representative of our business results. Some of the measurements we use are “Non-GAAP financial me
Slide 19: Glossary of Non-GAAP Financial Measures
Glossary of Non-GAAP Financial Measures Glossary of Non-GAAP Book Value per Common Share, Excluding Accumulated Other Comprehensive Income (AOCI) adjusted for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets and Deferred Tax Assets (DTA) (Adjusted Book Value
Slide 20: Glossary of Non-GAAP Financial Measures
Glossary of Non-GAAP Financial Measures Glossary of Non-GAAP Adjusted Revenues exclude Net realized capital gains (losses), income from non-operating litigation settlements (included in Other income for GAAP purposes) and changes in fair value of securities used to hedge guaranteed living benefits
Slide 21: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted Pre-tax and After-tax Income - Consolidated (in millions) Quarterly 1Q20 1Q21 Pre-tax income from continuing operations $ 2,558 $ 4,728 Adjustments to arrive at Adjusted pre-tax income (loss) Changes in fair value of securities used to hedge guaranteed living benefi
Slide 22: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted Pre-tax and After-tax Income - Consolidated (in millions) Quarterly 1Q20 1Q21 After-tax net income, including noncontrolling interests $ 1,654 $ 3,930 Noncontrolling interests (income) loss 95 (54) Net income attributable to AIG $ 1,749 $ 3,876 Dividends on preferre
Slide 23: Non-GAAP Reconciliations
Non-GAAP Reconciliations Book Value Per Common Share (in millions, except per common share data) March 31, December 31, Book Value Per Common Share 2020 2021 2020 Total AIG shareholders' equity $ 60,173 $ 62,679 $ 66,362 Less: Preferred equity 485 485 485 Total AIG common shareholders' equity (a) 59
Slide 24: Non-GAAP Reconciliations
Non-GAAP Reconciliations Return on Common Equity (in millions) Quarterly Return On Common Equity Computations 1Q20 1Q21 Actual or Annualized net income attributable to AIG common shareholders (a) $ 6,968 $ 15,476 Actual or Annualized adjusted after-tax income attributable to AIG common shareholders
Slide 25: Non-GAAP Reconciliations
Non-GAAP Reconciliations Accident Year Loss Ratio, as adjusted, and Accident Year Combined Ratio, as adjusted General Insurance General Insurance - North America Quarterly Quarterly 1Q20 1Q21 1Q20 1Q21 Loss ratio 66.8 65.6 Loss ratio 72.7 79.6 Catastrophe losses and reinstatement premiums (6.9) (7.3
Slide 26: Non-GAAP Reconciliations
Non-GAAP Reconciliations Accident Year Loss Ratio, as adjusted, and Accident Year Combined Ratio, as adjusted General Insurance - International General Insurance - International - Quarterly Commercial Lines Quarterly 1Q20 1Q21 1Q20 1Q21 Loss ratio 61.9 56.0 Loss ratio 66.8 57.1 Catastrophe losses an
Slide 27: Non-GAAP Reconciliations
Non-GAAP Reconciliations Net Premiums Written – Change in Constant Dollar Global - Global - International - International - General Insurance Commercial Lines Personal Insurance Commercial Lines Personal Insurance Foreign exchange effect on worldwide premiums: 1Q21 1Q21 1Q21 1Q21 Change in net premi
Slide 28: Non-GAAP Reconciliations
Non-GAAP Reconciliations Premiums (in millions) Quarterly Individual Retirement: 1Q20 1Q21 Premiums $ 41 $ 25 Deposits 3,079 3,349 Other (4) (1) Premiums and deposits $ 3,116 $ 3,373 Individual Retirement (Fixed Annuities): Premiums $ 41 $ 25 Deposits 616 615 Other (10) (2) Premiums and deposits $ 6
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