American International Group, Inc. New · NYSE:AIG
American International Group, Inc. New — American International Group — Q1 2019 Earnings Presentation
30 slides from American International Group, Inc. New's earnings presentation, May 7, 2019
Slide 1: Conference Call Presentation First Quarter 2019
Conference Call Presentation First Quarter 2019 May 7, 2019
Slide 2: Cautionary Statement Regarding Forward Looking Information
Cautionary Statement Regarding Forward Looking 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, projections, goals, assumptions and statements that
Slide 3: First Quarter 2019 Key Outcomes
First Quarter 2019 Key Outcomes 1Q19 Adjusted After-Tax Income (AATI) of $1.4B ($1.58/share) Adjusted Book Value Per Share of $55.47, up approximately 1% from $54.95 at year-end Consolidated 1Q19 net investment income (NII) increased due largely to improved market performance and alternative inv
Slide 4: Consolidated Operating Financial Highlights
Consolidated Operating Financial Highlights ($ in millions, except per share amounts) 1Q18 1Q19 Adjusted Pre-tax Income (Loss): General Insurance North America $320 $934 International 190 334 Total General Insurance 510 1,268 Life and Retirement Individual Retirement 499 508 Group Retirement 282 232
Slide 5: Net Investment Income
Investments ($ in millions, unless otherwise indicated) Three Months Ended Three Months Ended March December 31, 31, 2018 2018 2019 General Insurance $349 $761 $1,089 Net Investment Income Life and Retirement 1,921 2,046 2,042 Legacy 527 565 575 Other Operations 43 (1) 91 Consolidations and Eliminat
Slide 6: Parent Liquidity
Parent Liquidity Changes in Parent Liquidity ($B) Cash & S/T Investments Unencumbered Securities $0.5 $0.6 ($0.3) $5.2 $1.2 ($0.2) ($0.4) $3.8 Includes: $3.5 Life Dividends: $0.5B GI Dividends: $3.2 $0.5B Tax Payments from Subsidiaries: $0.2B $1.6 $0.6 Balance at Insurance Debt Preferred Stock Divid
Slide 7: General Insurance – Select Metrics
General Insurance – Select Metrics ($ in millions) 1Q18 1Q19 Catastrophe Losses, Net of Reinsurance ($M) Net premiums written $6,171 $6,033 Net premiums earned $6,683 $6,713 $376 $77 Loss and loss adjustment expense 4,488 4,233 Acquisition expenses 1,451 1,462 $175 General operating expenses 995 839
Slide 8: General Insurance – North America
General Insurance – North America ($ in millions) 1Q18 1Q19 Net premiums written $2,039 $2,578 Key Takeaways: Commercial Lines 1,314 1,998 NPW growth driven by strategic acquisitions partially Personal Insurance 725 580 offset by underwriting and reinsurance actions Net premiums earned $2,692 $3,1
Slide 9: General Insurance – International
General Insurance – International ($ in millions) 1Q18 1Q19 Net premiums written $4,132 $3,455 Commercial Lines 1,955 1,780 Key Takeaways: Personal Insurance 2,177 1,675 NPW, excluding the impact of foreign exchange, Net premiums earned $3,991 $3,560 decreased due to the 1Q18 Japan merger impact,
Slide 10: Reserves
Reserves ($ in millions) Unfavorable (Favorable) 1Q18 4Q18 1Q19 General Insurance North America Commercial Lines ($136) $326 ($69) Personal Insurance 58 - 9 Total North America (78) 326 (60) International Commercial Lines (1) 74 41 Personal Insurance (29) (37) (53) Total International ($30) 37 (12)
Slide 11: Life and Retirement – Select Metrics
Life and Retirement – Select Metrics Adjusted ROCE Premiums and Deposits ($B)1 $8.4 $7.5 $1.1 $1.5 $1.0 $1.0 $2.1 14.3% 15.0% $1.9 $4.2 $3.2 1Q18 1Q19 1Q18 1Q19 Individual Retirement Group Retirement Life Insurance Institutional Markets Adjusted Pre-Tax Income ($M) General Operating Expenses ($M) $8
Slide 12: Life and Retirement – Individual Retirement
Life and Retirement – Individual Retirement ($ in millions) 1Q18 1Q19 Premiums and deposits 1 $ 3,210 $ 4,186 Key Takeaways Premiums 12 11 Adjusted pre-tax income increased due to the positive impact of tightening credit spreads and equity market performance, which resulted Policy fees 204 193 in
Slide 13: Life and Retirement – Group Retirement
Life and Retirement – Group Retirement ($ in millions) 1Q18 1Q19 Premiums and deposits 1 $ 1,863 $ 2,063 Key Takeaways Adjusted pre-tax income decreased mainly due to lower Premiums 6 4 investment income, driven by a one-time bond claim payment Policy fees 112 100 recovery in 1Q18 and lower altern
Slide 14: Life and Retirement – Life Insurance
Life and Retirement – Life Insurance ($ in millions) 1Q18 1Q19 Premiums and deposits $ 969 $ 995 Key Takeaways Premiums 379 395 Adjusted pre-tax income increased due to favorable mortality, Policy fees 377 373 positive reserve and reinsurance refinements and lower general Net investment income 293
Slide 15: Life and Retirement – Institutional Markets
Life and Retirement – Institutional Markets ($ in millions) 1Q18 1Q19 Premiums and deposits $ 1,463 $ 1,112 Key Takeaways Premiums 49 819 Adjusted pre-tax income increased with higher net investment income on growing asset base Policy fees 41 41 Shift in premium and deposit mix is consistent wit
Slide 16: Legacy
Legacy ($ in millions) 1Q18 4Q18 1Q19 General Insurance run-off lines 62 7 15 Life and Retirement run-off lines 28 (137) 87 Legacy Investments 55 (20) 10 Adjusted pre-tax income (loss) $145 ($150) $112 Key Takeaways Life and Retirement run-off lines adjusted pre-tax income increased primarily due
Slide 17: Q&A and Closing Remarks
Q&A and Closing Remarks AIG
Slide 18: Appendix
Appendix AIG
Slide 19: Strong Capital Position
Strong Capital Position Capital Structure ($B) Capital Return ($M) $86.4 FY'18 1Q19 $81.0 $1.5 $1.5 Share & warrant repurchases $1,750 $- $22.8 $22.2 Hybrids $1.3 Dividends declared 1,138 278 Financial Debt 1 $0.9 $2.1 $10.2 $9.9 Total $2,888 $278 $0.5 NCI AOCI Total Equity: Risk Based Capital (RBC)
Slide 20: Glossary of Non-GAAP Financial Measures and Non-GAAP Reconciliations
Glossary of Non-GAAP Financial Measures and Non-GAAP Reconciliations 20
Slide 21: 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 22: Glossary of Non-GAAP Financial Measures
Glossary of Non-GAAP Financial Measures Glossary of Non-GAAP We use the following operating performance measures because we believe they enhance the understanding of the underlying profitability of continuing operations and trends of our business segments. We believe they also allow for more meaning
Slide 23: Glossary of Non-GAAP Financial Measures
Glossary of Non-GAAP Financial Measures Glossary of Non-GAAP Accident year loss and combined ratios, as adjusted: both the accident year loss and combined ratios, as adjusted, exclude catastrophe losses and related reinstatement premiums, prior year development, net of premium adjustments, and the
Slide 24: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted Pre-tax and After-tax Income - Consolidated (in millions) Quarterly 1Q18 1Q19 Pre-tax income from continuing operations $ 1,227 $ 1,154 Adjustments to arrive at Adjusted pre-tax income Changes in fair value of securities used to hedge guaranteed living benefits 77 (
Slide 25: Non-GAAP Reconciliations
Non-GAAP Reconciliations Book Value Per Share and Return on Common Equity (in millions, except per share data) Book Value Per Common Share 4Q18 1Q19 Total AIG shareholders' equity $ 56,361 $ 60,787 Less: Preferred equity - 485 Total AIG common shareholders' equity (a) 56,361 60,302 Less: Accumulated
Slide 26: Non-GAAP Reconciliations
Non-GAAP Reconciliations Return on Common Equity General Insurance Life and Retirement (in millions) Quarterly (in millions) Quarterly 1Q18 1Q19 1Q18 1Q19 Adjusted pre-tax income $ 510 $ 1,268 Adjusted pre-tax income $ 892 $ 924 Interest expense on attributed financial debt 124 144 Interest expense
Slide 27: 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 1Q18 1Q19 1Q18 1Q19 Loss ratio 67.2 63.1 Loss ratio 80.0 69.4 Catastrophe losses and reinstatement premiums (5.7) (2.7
Slide 28: 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 1Q18 1Q19 1Q18 1Q19 Loss ratio 58.5 57.4 Loss ratio 64.5 63.0 Catastrophe losses an
Slide 29: Non-GAAP Reconciliations
Non-GAAP Reconciliations Net Premiums Written – Change in Constant Dollar General Insurance International Foreign exchange effect on worldwide premiums: 1Q19 1Q19 Change in net premiums written Increase (decrease) in original currency 0.1 % (13.2) % Foreign exchange effect (2.4) (3.2) Increase (decr
Slide 30: Non-GAAP Reconciliations
Non-GAAP Reconciliations Premiums* (in millions) Quarterly Individual Retirement: 1Q18 1Q19 Premiums $ 12 $ 11 Deposits 4,347 4,175 Other (1) - Premiums and deposits $ 4,358 $ 4,186 Individual Retirement (Fixed Annuities): Premiums $ 13 $ 12 Deposits 786 1,811 Other (2) (2) Premiums and deposits $ 7
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