American International Group, Inc. New · NYSE:AIG

American International Group, Inc. New — American International Group — Q3 2018 Earnings Presentation

33 slides from American International Group, Inc. New's earnings presentation, Nov 1, 2018

1. Slide 1: Conference Call Presentation Third Quarter 2018

   © Conference Call Presentation Third Quarter 2018 NOVEMBER 1, 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: Third Quarter 2018 Key Themes

   Third Quarter 2018 Key Themes Despite an active CAT quarter, progress towards improved profitability  3Q18 Adjusted After-Tax Loss (AATL) of $301M ($0.34/share) Consolidated  Adjusted Book Value Per Share of $55.58, down 3.1% during 3Q18 (0.8% due to increase in ADC deferred gain)  Net investment

4. Slide 4: Consolidated Operating Financial Highlights

   Consolidated Operating Financial Highlights ($ in millions, except per share amounts) 3Q17 3Q18 Adjusted Pre-tax Income (Loss): General Insurance North America ($2,193) ($160) International (740) (665) Total General Insurance (2,933) (825) Life and Retirement Individual Retirement 718 393 Group Reti

5. Slide 5: 3Q18 Noteworthy Items

   3Q18 Noteworthy Items ($ in millions) 3Q18 – Income / (Loss) Recurring items: Pre-tax After-tax Catastrophe losses, net of reinsurance ($1,624) ($1,283) Unfavorable prior year loss reserve development, net of reinsurance (170) (134) Severe losses, net of reinsurance (153) (121) Investment Performanc

6. Slide 6: Parent Liquidity

   Parent Liquidity Changes in Parent Liquidity ($B) Cash & S/T Investments Unencumbered Securities $1.8 $9.3 Includes: GI Dividends - $0.8B $3.1 Life Dividends – $0.8B Net Tax Pmts – $0.2B ($5.5) $4.5 ($0.6) ($0.2) ($0.3) $6.2 $3.7 $0.9 Balance at Insurance Cash Paid Share & Warrant Interest Paid on O

7. Slide 7: Strong Capital Position

   Strong Capital Position Capital Structure ($B) Capital Return ($M) $87.9 9M'18 3Q18 $83.5 $0.8 $1.6 $21.3 Share & warrant repurchases $1,000 $350 $22.8 $0.5 Hybrids Dividends declared 858 283 $5.5 $0.6 1 $10.5 $10.0 Financial Debt Total $1,858 $633 NCI Total Equity: Total Equity: AOCI Risk Based Cap

8. Slide 8: General Insurance

   © General Insurance Peter Zaffino Chief Executive Officer of General Insurance

9. Slide 9: General Insurance

   General Insurance Adjusted Pre-Tax Loss ($M) Catastrophe Losses, Net of Reinsurance ($M) ($160) $3,016 ($665) $297 ($2,193) ($825) $1,567 $2,719 $192 ($740) $660 ($2,933) $715 3Q17 3Q18 3Q17 3Q18 North America International Commercial (ex. Validus) Personal Validus Net Premiums Written ($B) Combined

10. Slide 10: Catastrophe Losses & Reinsurance

    Catastrophe Losses & Reinsurance Pre-tax Catastrophe Losses, Net of Reinsurance 3Q'18 Events Prior-Quarter ($ in millions) Total Japan United States Other Development North America: Commercial (excl. Validus) $23 $358 $4 ($20) $365 Commercial (Validus) 116 51 - (1) 166 Total North America Commercial

11. Slide 11: General Insurance – North America

    General Insurance – North America ($ in millions) 3Q17 3Q18 Key Takeaways: Net premiums written $2,942 $3,164  NPW growth of 7.5% reflects inclusion of Validus and Commercial Lines 2,118 2,229 growth in Travel business. Personal Insurance 824 935  AYLR, as adjusted, benefited from more moderate se

12. Slide 12: General Insurance – International

    General Insurance – International ($ in millions) 3Q17 3Q18 Key Takeaways: Net premiums written $3,635 $3,671  NPW increased slightly YoY, excluding FX, primarily due to the Commercial Lines 1,652 1,810 inclusion of Validus, growth in the Financial Lines business in Europe, and higher premiums in P

13. Slide 13: Reserves

    Reserves ($ in millions) Unfavorable (Favorable) 9M'18 3Q18 General Insurance North America Commercial Lines ($245) ($14) Personal Insurance 247 148 Total North America $2 $134 International Commercial Lines 59 68 Personal Insurance (58) (30) Total International 1 38 Total General Insurance 3 172 Le

14. Slide 14: Life and Retirement

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

15. Slide 15: Life and Retirement – Select Metrics

    Life and Retirement – Select Metrics Adjusted ROE Premiums and Deposits ($B) $6.8 $6.8 $0.1 $1.5 $1.0 $0.9 $2.1 14.9% 11.2% $1.9 $3.6 $2.5 3Q17 3Q18 3Q17 3Q18 Individual Retirement Group Retirement Life Insurance Institutional Markets Adjusted Pre-Tax Income ($M) General Operating Expenses ($M) Incl

16. Slide 16: Life and Retirement – Individual Retirement

    Life and Retirement – Individual Retirement ($ in millions) 3Q17 3Q18 Key Takeaways Premiums and deposits $2,526 $3,616  Strong assets under administration during the quarter driven by equity Premiums 22 9 market performance and higher Index Annuity deposits. Policy fees 190 204  Premiums and Depo

17. Slide 17: Life and Retirement – Group Retirement

    Life and Retirement – Group Retirement ($ in millions) 3Q17 3Q18 Key Takeaways Premiums and deposits $1,860 $2,116  Premiums and deposits are higher than prior year period. Premiums 8 9  Higher surrenders and other withdrawals principally driven by two large plan losses due to competitive pressure

18. Slide 18: Life and Retirement – Life Insurance

    Life and Retirement – Life Insurance ($ in millions) 3Q17 3Q18 Premiums and deposits $935 $978 Key Takeaways Premiums 384 379  Premiums and deposits reflect strong new business sales Policy fees 343 141 growth. Net investment income 260 275  Impact to adjusted pre-tax income of negative $63 millio

19. Slide 19: Life and Retirement – Institutional Markets

    Life and Retirement – Institutional Markets ($ in millions) 3Q17 3Q18 Premiums and deposits $1,476 $69 Key Takeaways Premiums 897 46  Premiums and deposits are lower driven by large GIC and Pension Risk Transfer transactions that occurred in 3Q17. Policy fees 44 40  Growth of in-force business pos

20. Slide 20: Q&A and Closing Remarks

    AIG]. Q&A and Closing Remarks

21. Slide 21: Appendix

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22. Slide 22: Legacy

    Legacy Key Takeaways ($ in millions) 3Q17 3Q18  General insurance run-off lines include $57 million of pre-tax catastrophe losses, net of reinsurance, related to Japan. General Insurance run-off lines $63 ($37)  Legacy investments impacted by the continued sale of non- insurance assets primarily d

23. Slide 23: Summary of Validus Purchase Accounting

    Summary of Validus Purchase Accounting Estimated At Fair Reporting ($ in millions) Identifiable assets acquired Weighted Avg. July 18, 2018 Value Segment Useful Life Definite Lived intangibles Cash Consideration $5,475 Other paid Value of distribution network acquired (VODA) $444 15 years Operations

24. Slide 24: Glossary of Non-GAAP Financial Measures and Non-GAAP Reconciliations

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

25. Slide 25: 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

26. Slide 26: 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

27. Slide 27: 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

28. Slide 28: Non-GAAP Reconciliations

    Non-GAAP Reconciliations Adjusted Pre-tax and After-tax Income - Consolidated (in millions) Quarterly 3Q17 3Q18 Pre-tax income (loss) from continuing operations $ (2,803) $ (1,527) Adjustments to arrive at Adjusted pre-tax income (loss) Changes in fair value of securities used to hedge guaranteed li

29. Slide 29: 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 2Q18 3Q18 Total AIG shareholders' equity (a) $ 65,171 $ 61,186 $ 58,586 Less: Accumulated other comprehensive income (AOCI) 5,465 230 (536) Total AIG shareholders' equity

30. Slide 30: Non-GAAP Reconciliations

    Non-GAAP Reconciliations Return on Equity General Insurance Life and Retirement (in millions) Quarterly (in millions) Quarterly 3Q17 3Q18 3Q17 3Q18 Adjusted pre-tax loss $ (2,933) $ (825) Adjusted pre-tax income $ 1,158 $ 713 Interest expense on attributed financial debt 124 141 Interest expense on

31. Slide 31: 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 3Q17 3Q18 FY'17 3Q17 3Q18 FY'17 Loss ratio 175.0 98.8 101.7 Loss ratio 124.1 88.6 83.2 Catastrophe losses and reinstat

32. Slide 32: 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 3Q17 3Q18 FY'17 3Q17 3Q18 FY'17 Loss ratio 85.0 79.7 68.6 Loss ratio 124.1 87.6 87.

33. Slide 33: Non-GAAP Reconciliations

    Non-GAAP Reconciliations Premiums (in millions) Quarterly Individual Retirement: 3Q17 3Q18 Premiums $ 22 $ 9 Deposits 2,504 3,609 Other - (2) Premiums and deposits $ 2,526 $ 3,616 Individual Retirement (Fixed Annuities): Premiums $ 20 $ 10 Deposits 573 1,158 Other (1) (3) Premiums and deposits $ 592

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