American International Group, Inc. New · NYSE:AIG
American International Group, Inc. New — American International Group — Q4 2023 Earnings Presentation
45 slides from American International Group, Inc. New's earnings presentation, Feb 14, 2024
Slide 1: Fourth Quarter and Full Year 2023 Financial Results Presentation
Fourth Quarter and Full Year 2023 Financial Results Presentation February 14, 2024 Copyright ® 2024 by American International Group, Inc. All rights reserved. No part of this document may be reproduced, republished or reposted without the permission of AIG.
Slide 2: Fourth Quarter Operating EPS Increased 29%; Full Year Operating EPS of $6.79
Group Performance Strategy Capital 4Q’23 Results FY’23 Results Investments Fourth Quarter Operating EPS* Increased 29% from Prior Year Quarter; Full Year Operating EPS* of $6.79 is the Highest AIG has Achieved in More Than 15 Years General Insurance After-Tax Income Book Value per Return on Combined
Slide 3: Sustained Underwriting Improvement Benefiting From Gross Limit Reduction and Underwriting Discipline
Group Performance Strategy Capital 4Q’23 Results FY’23 Results Investments Sustained Underwriting Improvement Benefiting From Gross Limit Reduction and Underwriting Discipline General Insurance Underwriting Income ($B) Commercial Lines Gross Limit(1) ($T) $3.0 $3.0 $2.3 ~$1.4T Reduction $(5.6) ~$8B
Slide 4: Execution of Several Strategic Transactions in 2023 Helped to Unlock Significant Value
Group Performance Strategy Capital 4Q’23 Results FY’23 Results Investments Execution of Several Strategic Transactions in 2023 Helped to Unlock Significant Value for AIG and Corebridge Shareholders Transitioning to a Pure-Play Primary P&C Specialty Insurer • Streamlining operations and Simplifying t
Slide 5: Continued Execution of Balanced Capital Management Actions
Group Performance Strategy Capital 4Q’23 Results FY’23 Results Investments Continued Execution of Balanced Capital Management Actions Share Repurchase Highlights ($ millions, except for per share data) FY21 FY22 FY23 • Aggregate share repurchases of $10.8B over the last three years, Aggregate Share
Slide 6: Balance Sheet Strength: Strong Insurance Company Capitalization and Reduced Debt Leverage
Group Performance Strategy Capital 4Q’23 Results FY’23 Results Investments Balance Sheet Strength: Strong Insurance Company Capitalization and Reduced Debt Leverage Capital Structure ($B) Capital Ratios $64.6 Dec. 31, Dec. 31, • Total debt and preferred stock to $71.0 Change $0.3 Validus Re Debt(1)
Slide 7: Focused on Achieving 10%-Plus Adjusted ROCE
Group Performance Strategy Capital 4Q’23 Results FY’23 Results Investments Focused on Achieving 10%-Plus Adjusted ROCE* Key Drivers for Delivering 10%-Plus Adjusted ROCE* Path to 10%-Plus Adjusted ROCE* ~100 - 200 bps Sustained and Improved Underwriting Profitability ~300 - 400 bps Continue the cult
Slide 8: Fourth Quarter 2023 Financial Detail
Fourth Quarter 2023 Financial Detail Copyright ® 2024 by American International Group, Inc. All rights reserved. No part of this document may be reproduced, republished or reposted without the permission of AIG.
Slide 9: Strong Growth in Adjusted Pre-Tax Income and Adjusted ROE in Both Businesses
Group Performance Strategy Capital 4Q’23 Results FY’23 Results Investments Strong Growth in Adjusted Pre-Tax Income and Adjusted Return on Common Equity in Both Businesses General Insurance Life and Retirement Net Premiums Written (NPW) ($M) Premiums and Deposits* ($M) +3% / +7% Adj.*(1) $5,755 $10,
Slide 10: General Insurance: Strong Growth in Net Investment Income and Continued Margin Improvement
Group Performance Strategy Capital 4Q’23 Results GI FY’23 Results Investments General Insurance: Strong Growth in Net Investment Income and Continued Margin Improvement Led to 19% Growth in APTI Key Financials Net Premiums Written ($M) ($M) 4Q22 4Q23 Change Total NPW $5,610 $5,755 Net premiums writt
Slide 11: General Insurance: 5th Consecutive Year of Quarterly AYCR Improvement
Group Performance Strategy Capital 4Q’23 Results GI FY’23 Results Investments General Insurance: 5th Consecutive Year of Quarterly AYCR* Improvement, Driven by Commercial Lines Calendar Year Combined Ratio Accident Year Combined Ratio, As Adjusted* 115.0% (25.9) pts (10.9) pts 11.3% 99.8% 102.8% 92.
Slide 12: General Insurance North America: Continued Underlying Margin Improvement within Commercial Lines
Group Performance Strategy Capital 4Q’23 Results GI FY’23 Results Investments General Insurance North America: Continued Underlying Margin Improvement within Commercial Lines Key Financials North America Net Premiums Written ($M) • NA Commercial Lines NPW increased ($M) 4Q22 4Q23 Change Total NPW 5%
Slide 13: General Insurance International: AYCR Improved 1.2 Points
Group Performance Strategy Capital 4Q’23 Results GI FY’23 Results Investments General Insurance International: AYCR Improved 1.2 Points with 6%(1) Net Premiums Written Growth within Commercial Lines Key Financials International Net Premiums Written ($M) • International Commercial Lines NPW ($M) 4Q22
Slide 14: Life & Retirement: Fixed Index and Fixed Annuities Sales Increased 55%
Group Performance Strategy Capital 4Q’23 Results L&R FY’23 Results Investments Life & Retirement: Fixed Index and Fixed Annuities Sales Increased 55% Year-Over- Year Along with Continued Spread Expansion Adjusted Pre-tax Income (APTI) Return on Adjusted Segment Common Equity*(1) 4Q22 4Q23 • In 4Q23,
Slide 15: Individual Retirement & Group Retirement: Base Net Investment Spread Expansion
Group Performance Strategy Capital 4Q’23 Results L&R FY’23 Results Investments Individual Retirement & Group Retirement: Combined Base Net Investment Spread Expansion of 23 Basis Points Individual Retirement • Individual Retirement grew base Key Figures Investment Spreads spread income due to higher
Slide 16: Life Insurance and Institutional Markets
Group Performance Strategy Capital 4Q’23 Results L&R FY’23 Results Investments Life Insurance: Continued Premiums and Deposits* Growth Institutional Markets: Strong New Production Life Insurance • Life Insurance APTI decreased from Key Figures New Business Sales Mix 4Q22 primarily due to lower under
Slide 17: Other Operations: Improved Corporate and Other Excluding Corebridge Results
Group Performance Strategy Capital 4Q’23 Results Other FY’23 Results Investments Other Operations: Improved Corporate and Other Excluding Corebridge Results Driven by GOE Reduction • Corporate and Other APTL excluding Adjusted pre-tax income consists of amounts attributed by ($M) 4Q22 4Q23 Change Co
Slide 18: Other Noteworthy Items
Group Performance Strategy Capital 4Q’23 Results Other FY’23 Results Investments Other Noteworthy Items 4Q22 4Q23 EPS – EPS – ($M, except per share amounts) APTI AATI(1) APTI AATI(1) Diluted(2) Diluted(2) Expense Items: Catastrophe-related losses, net of reinsurance $239 $189 $0.25 $125 $99 $0.14 Re
Slide 19: Full Year 2023 Financial Detail
Full Year 2023 Financial Detail Copyright ® 2024 by American International Group, Inc. All rights reserved. No part of this document may be reproduced, republished or reposted without the permission of AIG.
Slide 20: Strong Adjusted Pre-Tax Income Growth and Adjusted ROE in Both Businesses
Group Performance Strategy Capital 4Q’23 Results FY’23 Results Investments Strong Adjusted Pre-Tax Income Growth and Adjusted Return on Common Equity in Both Businesses General Insurance Life and Retirement Net Premiums Written (NPW) ($M) Premiums and Deposits* ($M) +5% / +7% Adj.*(1) $26,719 +26% $
Slide 21: General Insurance: Record Underwriting Income of Over $2.3B
Group Performance Strategy Capital 4Q’23 Results FY’23 Results GI Investments General Insurance: Delivered Record Underwriting Income of Over $2.3B, Driven by Commercial Lines Key Financials Net Premiums Written ($M) ($M) FY22 FY23 Change Total NPW $25,512 $26,719 Net premiums written $25,512 $26,71
Slide 22: General Insurance: 5th Consecutive Year of Full-Year AYCR Improvement
Group Performance Strategy Capital 4Q’23 Results FY’23 Results GI Investments General Insurance: 5th Consecutive Year of Full-Year AYCR* Improvement, Driven by Commercial Lines Calendar Year Combined Ratio Accident Year Combined Ratio, As Adjusted* 111.4% (20.8) pts (12.0) pts 99.6% 104.3% 10.5% 95.
Slide 23: General Insurance North America: Full Year Underwriting Income Increased 86%
Group Performance Strategy Capital 4Q’23 Results FY’23 Results GI Investments General Insurance North America: Full Year Underwriting Income Increased 86% to $1.2B Key Financials North America Net Premiums Written ($M) • NA Commercial Lines NPW increased ($M) FY22 FY23 Change Total NPW 5%(1) from FY
Slide 24: General Insurance International: Underlying Margin Improvement
Group Performance Strategy Capital 4Q’23 Results FY’23 Results GI Investments General Insurance International: Underlying Margin Improvement with Continued Net Premium Growth in Commercial Lines Key Financials International Net Premiums Written ($M) • International Commercial Lines NPW ($M) FY22 FY2
Slide 25: Life & Retirement: Adjusted Pre-Tax Income Growth from Base Spread Income
Group Performance Strategy Capital 4Q’23 Results FY’23 Results L&R Investments Life & Retirement: Adjusted Pre-Tax Income Growth from Strong Base Spread Income Growth Adjusted Pre-tax Income (APTI) Return on Adjusted Segment Common Equity*(1) FY22 FY23 • The 15% growth in 2023 APTI from +1.1 pts 202
Slide 26: Individual Retirement & Group Retirement: Base Spread Expansion of 46 Basis Points
Group Performance Strategy Capital 4Q’23 Results FY’23 Results L&R Investments Individual Retirement & Group Retirement: Combined Base Net Investment Spread Expansion of 46 Basis Points Individual Retirement • Individual Retirement had base Key Figures Investment Spreads spread income growth due to
Slide 27: Life Insurance and Institutional Markets: Strong New Production
Group Performance Strategy Capital 4Q’23 Results FY’23 Results L&R Investments Life Insurance: New Business Sales Increased by 9% in 2023 Institutional Markets: Strong New Production Life Insurance • Life Insurance APTI decreased from Key Figures New Business Sales Mix 2022 primarily due to lower un
Slide 28: Other Operations: Improved Corporate and Other Excluding Corebridge Results
Group Performance Strategy Capital 4Q’23 Results FY’23 Results Other Investments Other Operations: Improved Corporate and Other Excluding Corebridge Results Driven by GOE Reduction • Corporate and Other excluding Adjusted pre-tax income consists of amounts attributed by ($M) FY22 FY23 Change Corebri
Slide 29: Other Noteworthy Items
Group Performance Strategy Capital 4Q’23 Results FY’23 Results Other Investments Other Noteworthy Items FY22 FY23 EPS – EPS – ($M, except per share amounts) APTI AATI(1) APTI AATI(1) Diluted(2) Diluted(2) Expense Items: Catastrophe-related losses, net of reinsurance $1,234 $975 $1.24 $1,069 $845 $1.
Slide 30: Well Diversified Investment Portfolio with Solid Credit Characteristics
Group Performance Strategy Capital 4Q’23 Results FY’23 Results Investments Well Diversified Investment Portfolio with Solid Credit Characteristics Investment Portfolio ($B) Investment Portfolio Composition by Segment(1) ($B) AIG General Insurance Life and Retirement Other Ops • $294B high quality in
Slide 31: Continued Yield Improvement in AFS Bonds and Loans Portfolios
Group Performance Strategy Capital 4Q’23 Results FY’23 Results Investments Continued Yield Improvement in AFS Bonds and Loans Portfolios from Higher New Money Rates Yields and Investment Income on FMS – AFS Bonds and Mortgage and Other Loans Receivable(1) ($M) $3,254 • Yield(2) on FMS – AFS Bonds an
Slide 32: Cautionary Statement
Cautionary Statement On January 1, 2023, AIG adopted the new accounting standard for Targeted Improvements to the Accounting for Long-Duration Contracts (the standard or LDTI), with a transition date of January 1, 2021; AIG adopted the standard using the modified retrospective transition method rela
Slide 33: Appendix: Glossary of Non-GAAP Financial Measures and Reconciliations
Appendix: Glossary of Non- GAAP Financial Measurers and Non-GAAP Reconciliations Copyright ® 2023 by American International Group, Inc. All rights reserved. No part of this document may be reproduced, republished or reposted without the permission of AIG.
Slide 34: Glossary of Non-GAAP Financial Measures
Glossary of Non-GAAP Financial Measures 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 measures” under Securit
Slide 35: Glossary of Non-GAAP Financial Measures
Glossary of Non-GAAP Financial Measures • Adjusted After-tax Income attributable to AIG common shareholders (AATI) is derived by excluding the tax effected APTI adjustments described above, dividends on preferred stock, noncontrolling interest on net realized gains (losses), other non-operating expe
Slide 36: Glossary of Non-GAAP Financial Measures
Glossary of Non-GAAP Financial Measures • Adjusted Revenues exclude Net realized gains (losses), income from non-operating litigation settlements (included in Other income for GAAP purposes), changes in fair value of securities used to hedge guaranteed living benefits (included in Net investment inc
Slide 37: Non-GAAP Reconciliations – Adjusted Pre-tax Income
Non-GAAP Reconciliations – Adjusted Pre-tax Income (in millions) Quarterly Full Year 4Q22 4Q23 FY22 FY23 Pre-tax income (loss) from continuing operations $756 $(1,346) $14,299 $3,858 Adjustments to arrive at Adjusted pre-tax income Changes in fair value of securities used to hedge guaranteed living
Slide 38: Non-GAAP Reconciliations – Adjusted After-tax Income
Non-GAAP Reconciliations – Adjusted After-tax Income (in millions) Quarterly Full Year 4Q22 4Q23 FY22 FY23 After-tax net income (loss), including noncontrolling interests $547 $(473) $11,273 $3,878 Noncontrolling interests (income) loss 5 566 (1,046) (235) Net income attributable to AIG $552 $93 $10
Slide 39: Non-GAAP Reconciliations – Book Value Per Common Share and Leverage
Non-GAAP Reconciliations – Book Value Per Common Share and Leverage Book Value per Common Share (in millions, except per common share data) Book Value Per Common Share 4Q21 4Q22 3Q23 4Q23 Total AIG shareholders' equity $66,068 $40,970 $39,984 $45,351 Less: Preferred equity 485 485 485 485 Total AIG
Slide 40: Non-GAAP Reconciliations – Return on Common Equity
Non-GAAP Reconciliations – Return on Common Equity Return on Common Equity (in millions) Quarterly Full Year Return On Common Equity Computations 4Q22 4Q23 FY22 FY23 Actual or Annualized net income attributable to AIG common shareholders (a) $2,180 $344 $10,198 $3,614 Actual or Annualized adjusted a
Slide 41: Non-GAAP Reconciliations – RoCE and Accident Year Loss and Combined Ratios
Non-GAAP Reconciliations – RoCE (Cont’d) and Accident Year Loss and Combined Ratios Return on Common Equity (continued) Life and Retirement (in millions) Quarterly Full Year 4Q22 4Q23 FY22 FY23 Adjusted pre-tax income $852 $957 $3,317 $3,805 Interest expense on attributed financial debt 110 114 345
Slide 42: Non-GAAP Reconciliations – Accident Year Loss and Combined Ratios
Non-GAAP Reconciliations – Accident Year Loss and Combined Ratios (cont’d) General Insurance – North America General Insurance – North America – Commercial Lines Quarterly Full Year Quarterly Full Year 4Q22 4Q23 FY22 FY23 4Q22 4Q23 FY22 FY23 Loss ratio 59.4 58.3 67.1 61.1 Loss ratio 61.5 61.1 69.1 6
Slide 43: Non-GAAP Reconciliations – Accident Year Loss and Combined Ratios
Non-GAAP Reconciliations – Accident Year Loss and Combined Ratios (cont’d) General Insurance – International – Commercial Lines General Insurance – International – Personal Insurance Quarterly Full Year Quarterly Full Year 4Q22 4Q23 FY22 FY23 4Q22 4Q23 FY22 FY23 Loss ratio 59.6 57.6 55.8 58.3 Loss r
Slide 44: Non-GAAP Reconciliations – Gross and Net Premiums Written – Comparable Basis
Non-GAAP Reconciliations – Gross and Net Premiums Written – Comparable Basis Gross Premiums Written – Comparable Basis General Insurance 4Q23 Increase (decrease) as reported in U.S. dollars 0.5% Foreign exchange effect (0.9) Lag elimination impact 0.5 Validus Re 2.2 Crop Risk Services 1.8 Increase (
Slide 45: Non-GAAP Reconciliations – Premiums
Non-GAAP Reconciliations – Premiums (in millions) Quarterly Twelve Months Ended December 31, 4Q22 4Q23 2022 2023 Individual Retirement: Premiums $63 $40 $235 $213 Deposits 3,764 5,245 14,900 17,971 Other — (3) (15) (13) Premiums and deposits $3,827 $5,282 $15,120 $18,171 Individual Retirement (Fixed
American International Group — Q4 2023 Earnings Presentation on 6ix