American International Group, Inc. New · NYSE:AIG

American International Group, Inc. New — American International Group — Q3 2013 Earnings Presentation

42 slides from American International Group, Inc. New's earnings presentation, Nov 13, 2013

  1. Slide 1: American International Group, Inc. Investor Presentation

    American International Group, Inc. Investor Presentation November 13, 2013

  2. Slide 2: Cautionary Statement Regarding Projections and Other Information About Future Events

    Cautionary Statement Regarding Projections and Other Information About Future Events 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, projections, goals, assumptions and s

  3. Slide 3: AIG – An Established Global Insurance Franchise

    AIG – An Established Global Insurance Franchise A platform for delivering sustainable profitable growth. Core Insurance Strategies Key Accomplishments Businesses Nine months 2013 NPW growth of 6.6% in all major lines excluding FX, Reinsurance, and Casualty (9.3% for Commercial excluding  Grow high

  4. Slide 4: AIG – Building on Capital Strength

    AIG – Building on Capital Strength  Paid $0.10/sh. quarterly cash dividend in September 2013; $1 billion share repurchase authorization  Nine months 2013 debt calls and tenders of AIG Shareholders’ Equity - Active Capital Management $3.4 billion (face amount) and approximately $98.8 bn at Septembe

  5. Slide 5: AIG Property Casualty

    AIG Property Casualty ~t AIG

  6. Slide 6: AIG Property Casualty – A Truly Global Franchise

    AIG Property Casualty – A Truly Global Franchise AIG Property Casualty is a diversified global P&C market leader with 2012 NPW of over $34 billion.  #1 U.S.-based property casualty EMEA(1) insurance organization in Europe, with 2012 NPW: $6.4 bn established and growing positions in 19% of total NPW

  7. Slide 7: AIG Property Casualty – Financial Highlights

    AIG Property Casualty – Financial Highlights Full Year Nine Months ($ in billions) 2010 2011 2012 2013 Net premiums written $31.6 $34.8 $34.4 $26.4 Net investment income 4.4 4.3 4.8 3.8 Pre-tax operating income (loss) (1) $(1.1) $1.2 $1.8 $3.7 Accident year loss ratio, as adjusted (2) 69.2 68.7 65.2

  8. Slide 8: AIG Property Casualty – Business Overview

    AIG Property Casualty – Business Overview AIG Property Casualty offers a broad product platform. Commercial Insurance Consumer Insurance Nine Months 2013 NPW – $16.0 bn Nine Months 2013 NPW – $10.4 bn Property 24% Financial Lines 20% Accident Personal & Health Lines 49% 51% Specialty Casualty 17% 39

  9. Slide 9: AIG Property Casualty – Strategic Focus

    AIG Property Casualty – Strategic Focus Strategic levers driving shareholder value creation. Business Underwriting Claims Operational Capital Mix Excellence Service Effectiveness Management  Balance growth with  Globalize  Global Claims  Simplify and  Use RAP as a key profitability and risk sta

  10. Slide 10: AIG Property Casualty – Strong Brands and Customer Loyalty

    AIG Property Casualty – Strong Brands and Customer Loyalty AIG Property Casualty continues to be recognized for excellence. PropertyCasualty360 British Insurance Award World Travel Fair 2013 Best Overall Commercial 2013 Underwriter of the Year 2013 Best Quality Service, Travel Insurance Insurance Pr

  11. Slide 11: AIG Property Casualty – Product Diversification

    AIG Property Casualty – Product Diversification Commercial Insurance Consumer Insurance  General Liability  Commercial Auto Casualty  Workers’ Compensation  Excess Casualty  Personal Accident  Crisis Management Accident and  Supplemental Medical Health  Travel  Industrial, Energy and Commer

  12. Slide 12: AIG Property Casualty – Growth Economies

    AIG Property Casualty – Growth Economies Growth economies accounted for 12.8% of NPW for nine months 2013, up 13.4% from nine months 2012  Growth economies are those within Central Europe, Middle East, Africa, Latin America and Asia Pacific, excluding Japan  #1 foreign property casualty insurance

  13. Slide 13: AIG Property Casualty – Investment Composition & Ratings

    AIG Property Casualty – Investment Composition & Ratings (As of September 30, 2013) Total Cash & Invested Assets - $124.9 billion(1) Bond Portfolio - $101.0 billion(1) - by Agency Credit Rating CMBS CDO/ABS Equities 2% 5% 3% BB BBB Other A 2% RMBS 13% 10% invested Loans 26% B assets 1% 2% 11% Cash a

  14. Slide 14: AIG Life and Retirement

    AlG Life and Retirement | AIG

  15. Slide 15: AIG Life and Retirement – Operating from a Position of Strength

    AIG Life and Retirement – Operating from a Position of Strength  Long standing leading market positions Market Leader  Scale advantage in key product lines Product Diversity  Comprehensive portfolio of life insurance, A&H, annuity, group retirement, & Capacity for group benefits, institutional pr

  16. Slide 16: AIG Life and Retirement – Financial Highlights

    AIG Life and Retirement – Financial Highlights Full Year Nine Months 2013 ($ in billions) 2010 2011 2012 Premiums and deposits (1) $19.5 $24.4 $21.0 $20.8 Net investment income 10.8 9.9 10.7 8.0 Pre-tax operating income (2) 4.1 3.3 4.2 3.7 Cash & invested assets (3) 183.8 194.2 205.3 196.3 Assets un

  17. Slide 17: AIG Life and Retirement – Diversified Business Mix

    AIG Life and Retirement – Diversified Business Mix Nine Months 2013 Nine Months 2013 Premiums and Deposits - $20.8 billion(1) Pre-tax Operating Income - $3.7 billion(2) Retail: 69% Institutional: 31% Retail: 63% Institutional: 37% Life Insurance Life Insurance and A&H Group and A&H Group 12% Retirem

  18. Slide 18: AIG Life and Retirement – Assets Under Management

    AIG Life and Retirement – Assets Under Management Year-over-year growth in AUM reflects strong sales generated by robust demand for our retail products, equity market performance and continued execution of our Institutional growth strategies. Assets Under Management - $304.4 billion at September 30,

  19. Slide 19: AIG Life and Retirement – Leading Market Positions

    AIG Life and Retirement – Leading Market Positions Market Positions Excellence in Service, Marketing and Technology #3 in Total Annuity Sales Market Tools International MarCom Awards 2013 Achievement in Customer 2012 and 2013 Platinum and Gold Excellence (ACE award for 7th Awards (42 in total) #1 in

  20. Slide 20: AIG Life and Retirement – Broad Multichannel Distribution Network

    AIG Life and Retirement – Broad Multichannel Distribution Network 2012 Sales by Channel Diversified Distribution Network Affiliated: 43% Non-affiliated: 57% VALIC financial advisors Affiliated AGLA agents B-Ds 29% VALIC FAs 33% Advisor Group AIG Direct Direct & Other Broker-dealers 3% Non-affiliated

  21. Slide 21: AIG Life and Retirement – Variable Annuities

    AIG Life and Retirement – Variable Annuities Changing competitive environment offers a unique opportunity. Variable Annuity “Non-Captive” Industry Sales(1) ($ millions) Six Months 2013 FY 2012 FY 2011 FY 2010 FY 2009 Rank Sales Share Rank Sales Share Rank Sales Share Rank Sales Share Rank Sales Shar

  22. Slide 22: AIG Life and Retirement – Investment Composition & Ratings

    AIG Life and Retirement – Investment Composition & Ratings (As of September 30, 2013) Total Cash & Invested Assets - $196.3 billion(1) Bond Portfolio - $156.6 billion(1) - by Agency Credit Rating CMBS RMBS 5% BB 12% CDO/ABS 4% 5% BBB 42% B Other invested 2% assets 6% <B 7% Loans Corporate debt 9% AA

  23. Slide 23: AIG Life and Retirement – Net Investment Spread Management

    AIG Life and Retirement – Net Investment Spread Management Base Yields(1) 5.50% 5.50% 5.38% 5.33% 5.35% 5.26% 5.30% 5.26% 5.31% 5.25% 5.12% 5.12% 5.10% 5.17% 5.19% 5.23% 5.14% 5.08% 5.01% 4.95% 4.85% 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 Cost of Funds(2) 3.28% 3.27% 3.26% 3.26% 3.10% 3.08% 3.06% 3.13%

  24. Slide 24: Mortgage Guaranty (United Guaranty Corporation)

    Mortgage Guaranty (United Guaranty Corporation) 24

  25. Slide 25: United Guaranty – Financial Highlights

    United Guaranty – Financial Highlights Full Year Nine Months ($ in millions) 2010 2011 2012 2013 Net premiums written $756 $801 $858 $793 Net investment income 149 132 146 99 Pre-tax operating income (loss) (1) $353 $(97) $9 $157 Combined ratio 79.1 128.9 119.2 90.4 Cash & invested assets (2) $4,486

  26. Slide 26: United Guaranty – A Market Leader

    United Guaranty – A Market Leader Risk based pricing driving profitable new business. New Insurance Written Average ($ in billions) Vintage $16.0 Year(1) $14.4 FICO Score LTV Ratio $12.0 2010 760 90 New Insurance Written $10.7 2011 757 91 $8.0 $5.7 2012 758 91 $4.0 Nine Months 754 92 2013 $0.0 3Q11

  27. Slide 27: United Guaranty – Shrinking Legacy In-Force

    United Guaranty – Shrinking Legacy In-Force Primary Delinquency Rate Primary Risk-in-force (RIF) – $35.5 billion As of September 30, 2013 (by vintage year) 20% 2004 & Prior 8% 18% 2005 2013 24% 6% 16% 14% 2006 6% 12% 10% 8% 2007 12% 6% 4% 2% 2012 2008 0% 23% 6% 12/31/08 12/31/09 12/31/10 12/31/11 12

  28. Slide 28: United Guaranty – Financial Strength

    United Guaranty – Financial Strength Capitalization and Risk Asset Composition At June 30, 2013 Default Post 2008 Risk-to- At Sept. 30, 2013 Rate (%) RIF (%) Capital(1) United Guaranty 6.4 62 18.6 Genworth 8.7 41 23.2 MGIC 11.5 39 20.0 Radian 7.8 57 19.8 Essent 0.1 100 18.0  UGC has the lowest defa

  29. Slide 29: Capital Strength

    Capital Strength AIG

  30. Slide 30: Capital Position and Ratings

    Capital Position and Ratings Capital Structure Credit Ratings(2) ($ in billions, except per share data) S&P Moody’s Fitch AM Best $124.1 $120.7 $0.7 $0.7 Non-redeemable $16.1 $15.3 AIG – Senior noncontrolling A- Baa1 BBB NR interests $9.4 $6.0 Debt (1) Financial Debt AIG PC(3) – A+ A1 A A FSR Hybrid

  31. Slide 31: Financial Flexibility – A Source of Strength

    Financial Flexibility – A Source of Strength AIG Parent Cash, Short-Term Investments & Insurance Company Distributions Unencumbered Securities ($ in millions) ($ in billions) AIG Property Casualty AIG Life and Retirement $5,349 $12.6 $12.7 $4,619 $3.0 $2,853 $2,978 Unencumbered $3,111 Fixed Maturity

  32. Slide 32: Other Sources of Value

    Other Sources of Value | AIG

  33. Slide 33: Direct Investment Book and Global Capital Markets

    Direct Investment Book and Global Capital Markets Direct Investment Book (1) Global Capital Markets (1) ($ in billions) Assets $23.7 $8.0 Liabilities $20.8 $3.4 Net Asset Value $2.9 $4.6 Legacy Matched AIG Hedging & Legacy AIGFP Stable Value Go Forward Assets & Liabilities Market Derivatives(2) CDS

  34. Slide 34: Direct Investment Book Long-Term Debt

    Direct Investment Book Long-Term Debt ($ in billions) $25 90% 80% 80% $20 $18.7 $18.5 70% $1.2 $1.1 $16.3 60% $1.1 $14.5 55% $15 $5.8 $5.7 $0.8 $12.7 50% $5.1 $0.6 $4.5 40% $10 $3.5 $3.5 $8.3 $4.2 32% $3.5 $0.5 30% $3.5 $8.2 $8.2 23% $3.5 $3.9 20% $5 $6.7 $3.8 13% $0.3 $5.6 10% 0% $4.4 $3.5 $3.3 $0.

  35. Slide 35: Deferred Tax Asset Overview

    Deferred Tax Asset Overview AIG has substantial tax attribute carryforwards that are available under U.S. tax law to offset future U.S. federal income tax obligations. Amounts are presented on a U.S. GAAP basis. As of 12/31/11 As of 12/31/12 Gross Deferred Gross Deferred ($ in billions) Type Attribu

  36. Slide 36: Appendix

    Appendix AIG

  37. Slide 37: AIG Consolidated Financial Highlights

    AIG Consolidated Financial Highlights Nine Months Inc. ($ in millions, except per share amounts) 2012 2013 (Dec.) Revenues $50,440 $48,029 (5%) Net income attributable to AIG 7,396 7,107 (4%) After-tax operating income attributable to AIG $6,345 $5,058 (20%) Diluted earnings per common share: Income

  38. Slide 38: Non-GAAP Reconciliation – Pre-tax Operating Income

    Non-GAAP Reconciliation – Pre-tax Operating Income Nine Months 2013 AIG AIG Mortgage Other ($ in millions) Property Casualty Life and Retirement Guaranty Operations Total Income from continuing operations, before tax $ 3,801 $ 4,530 $ 162 $ (1,335) $ 7,158 Adjustments to arrive at pre-tax operating

  39. Slide 39: Non-GAAP Reconciliation – Full Year & Nine Months Pre-tax Operating Income

    Non-GAAP Reconciliation – Full Year & Nine Months Pre-tax Operating Income AIG Property Casualty Full Year Nine Months ($ in millions) 2010 2011 2012 2013 Income from continuing operations, before tax $ (93) $ 1,820 $ 1,837 $ 3,801 Adjustments to arrive at pre-tax operating income: Net realized capi

  40. Slide 40: Non-GAAP Reconciliation – After-tax operating income

    Non-GAAP Reconciliation – After-tax operating income Nine Months ($ in millions) 2012 2013 Net income attributable to AIG $7,396 $7,107 Income from discontinued operations, net of income tax expense (280) (84) Net losses on sale of divested businesses 2 31 Uncertain tax positions and other tax adjus

  41. Slide 41: Non-GAAP Reconciliation – BVPS ex. AOCI, Premiums & Deposits, Accident Year Combined Ratio

    Non-GAAP Reconciliation – BVPS ex. AOCI, Premiums & Deposits, Accident Year Combined Ratio, As Adjusted Book Value Per Common Share - Ex. AOCI December 31, September 30, ($ in millions, except per share data) 2011 2012 2012 2013 Total AIG shareholders’ equity $ 101,538 $ 98,002 $ 101,666 $ 98,793 Le

  42. Slide 42: AIG – Bring on tomorrow

    AIG Bring on tomorrow

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