American International Group, Inc. New · NYSE:AIG

American International Group, Inc. New — American International Group — Q2 2018 Earnings Presentation

30 slides from American International Group, Inc. New's earnings presentation, Aug 3, 2018

1. Slide 1: Conference Call Presentation Second Quarter 2018

   © Conference Call Presentation Second Quarter 2018 AUGUST 3, 2018

2. 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

3. Slide 3: Second Quarter 2018 Key Themes

   Second Quarter 2018 Key Themes Progress towards delivering sustainable, profitable growth  2Q18 Adjusted After-Tax Income (AATI) of $961M ($1.05/share)  Adjusted Book Value Per Share growth of 2.2% during 2Q18, to $57.34 Consolidated  Lower than expected returns on alternative investments and fai

4. Slide 4: Consolidated Operating Financial Highlights

   Consolidated Operating Financial Highlights ($ in millions, except per share amounts) 2Q17 2Q18 Adjusted Pre-tax Income (Loss): General Insurance North America $721 $407 International 325 161 Total General Insurance 1,046 568 Life and Retirement Individual Retirement 558 462 Group Retirement 266 250

5. Slide 5: 2Q18 Noteworthy Items

   2Q18 Noteworthy Items ($ in millions) 2Q18 – Income / (Loss) Recurring items: Pre-tax After-tax Catastrophe losses, net of reinsurance ($150) ($119) Favorable prior year loss reserve development, net of reinsurance 63 50 Severe losses, net of reinsurance1 (293) (231) Investment Performance: Lower th

6. Slide 6: Parent Liquidity

   Parent Liquidity Changes in Parent Liquidity ($B) Cash & S/T Investments Unencumbered Securities $1.8 ($0.2) $9.3 $8.5 ($0.6) ($0.2) Includes: $3.1 GI Dividends - $0.5B Life Dividends – $0.9B $3.8 Net Tax Pmts – $0.4B $3.8 $6.2 ($5.5) $4.6 $3.1 $0.7 Balance at Insurance Debt Interest Share & Warrant

7. Slide 7: Strong Capital Position

   Strong Capital Position Capital Structure ($B) Capital Return ($M) $87.9 1H’18 2Q18 $85.2 $0.8 Share & warrant repurchases* $650 $350 $1.6 $21.3 $21.9 Dividends declared 575 286 Hybrids $5.5 $0.5 Total $1,225 $636 $0.6 $0.2 Financial Debt1 $10.5 $9.9 * Additional $150M of share and warrant repurchas

8. Slide 8: Legacy

   Legacy Key Takeaways Legacy Monetization – Progress to date ($B)  We have monetized $10.8 billion of Legacy assets since 4Q15. YE'15 $2.1  DSA Re is a stand-alone run-off composite reinsurer with $42 billion of assets and $39 billion of insurance liabilities at June 30, 2018. FY'16 Legacy  On Aug

9. Slide 9: General Insurance

   © General Insurance Peter Zaffino Chief Executive Officer of General Insurance

10. Slide 10: General Insurance

    General Insurance Adjusted Pre-Tax Income ($M) Catastrophe & Severe Losses ($M) $1,046 $293 $325 $17 $180 $568 $150 $2 $125 $161 $28 $276 $721 $178 $122 $407 2Q17 2Q18 2Q17 2Q18 2Q17 2Q18 Catastrophe Losses Severe Losses North America International Commercial Lines Personal Insurance Net Premiums Wr

11. Slide 11: General Insurance – North America

    General Insurance – North America ($ in millions) 2Q17 2Q18 Net premiums written $3,125 $3,236 Key Takeaways:  Net premiums written increased by 4%, largely driven by lower Commercial Lines 2,312 2,321 ceded premiums and growth in Travel business. Personal Insurance 813 915  Increase in AYLR, as a

12. Slide 12: General Insurance – International

    General Insurance – International ($ in millions) 2Q17 2Q18 Net premiums written $3,547 $3,741 Commercial Lines 1,514 1,590 Personal Insurance 2,033 2,151 Key Takeaways: Net premiums earned $3,632 $3,678  NPW increased slightly YoY, excluding FX, primarily due to Commercial Lines 1,631 1,668 growth

13. Slide 13: Life and Retirement

    © Life and Retirement Kevin Hogan Chief Executive Officer of Life and Retirement

14. Slide 14: Life and Retirement – Select Metrics

    Life and Retirement – Select Metrics Adjusted ROE Premiums and Deposits ($B) $7.4 $5.8 $0.7 $0.2 $1.0 $0.9 15.0% $2.3 12.7% $1.8 $2.9 $3.4 2Q17 2Q18 2Q17 2Q18 Individual Retirement Group Retirement Life Insurance Institutional Markets Adjusted Pre-Tax Income ($M) General Operating Expenses ($M) $378

15. Slide 15: Life and Retirement – Individual Retirement

    Life and Retirement – Individual Retirement ($ in millions) 2Q17 2Q18 Key Takeaways Premiums and deposits $2,892 $3,422  Higher AUA driven by equity market performance and positive Index Annuity net flows. Premiums 31 16  Total net flows improved other than for Retail Mutual Funds; Policy fees 192

16. Slide 16: Life and Retirement – Group Retirement

    Life and Retirement – Group Retirement ($ in millions) 2Q17 2Q18 Premiums and deposits $1,802 $2,345 Key Takeaways Premiums 4 15  Higher premiums and deposits, with growth in periodic deposits Policy fees 101 112 and strong new group acquisitions. Net investment income 535 542  Net outflows contin

17. Slide 17: Life and Retirement – Life Insurance

    Life and Retirement – Life Insurance ($ in millions) 2Q17 2Q18 Premiums and deposits $947 $980 Premiums 400 418 Key Takeaways  Premiums and deposits reflect growth across product Policy fees 357 377 offerings and geography, particularly in the U.K. Net investment income 261 282  Adjusted pre-tax i

18. Slide 18: Life and Retirement – Institutional Markets

    Life and Retirement – Institutional Markets ($ in millions) 2Q17 2Q18 Premiums and deposits $150 $652 Key Takeaways Premiums 67 41  Increase in premiums and deposits driven by GICs. Policy fees 44 40  Growth of in force business reflects execution of opportunistic transactions over the last 12 mon

19. Slide 19: Q&A and Closing Remarks

    AIG]. Q&A and Closing Remarks

20. Slide 20: Appendix

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21. Slide 21: Glossary of Non-GAAP Financial Measures and Non-GAAP Reconciliations

    © Glossary of Non-GAAP Financial Measures and Non-GAAP Reconciliations

22. Slide 22: 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

23. Slide 23: 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

24. Slide 24: 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

25. Slide 25: Non-GAAP Reconciliations

    Non-GAAP Reconciliations Adjusted Pre-tax and After-tax Income - Consolidated (in millions) Quarterly 2Q17 2Q18 Pre-tax income from continuing operations $ 1,667 $ 1,252 Adjustments to arrive at Adjusted pre-tax income Changes in fair value of securities used to hedge guaranteed living benefits (80)

26. Slide 26: Non-GAAP Reconciliations

    Non-GAAP Reconciliations Book Value Per Share and Return on Equity (in millions, except per share data) Book Value Per Share 4Q17 1Q18 2Q18 Total AIG shareholders' equity (a) $ 65,171 $ 62,792 $ 61,186 Less: Accumulated other comprehensive income (AOCI) 5,465 2,220 230 Total AIG shareholders' equity

27. Slide 27: Non-GAAP Reconciliations

    Non-GAAP Reconciliations Return on Equity General Insurance Life and Retirement (in millions) Quarterly (in millions) Quarterly 2Q17 2Q18 2Q17 2Q18 Adjusted pre-tax income $ 1,046 $ 568 Adjusted pre-tax income $ 993 $ 962 Interest expense on attributed financial debt 132 137 Interest expense on attr

28. Slide 28: 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 2Q17 2Q18 FY'17 2Q17 2Q18 FY'17 Loss ratio 64.0 65.7 83.2 Loss ratio 74.9 73.1 101.7 Catastrophe losses and reinstatem

29. Slide 29: 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 2Q17 2Q18 FY'17 2Q17 2Q18 FY'17 Loss ratio 55.3 59.9 68.6 Loss ratio 61.1 68.2 87.5

30. Slide 30: Non-GAAP Reconciliations

    Non-GAAP Reconciliations Premiums (in millions) Quarterly Individual Retirement: 2Q17 2Q18 Premiums $ 31 $ 16 Deposits 2,862 3,408 Other (1) (2) Premiums and deposits $ 2,892 $ 3,422 Individual Retirement (Fixed Annuities): Premiums $ 33 $ 17 Deposits 604 1,112 Other (4) (4) Premiums and deposits $

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