American International Group, Inc. New · NYSE:AIG

American International Group, Inc. New — American International Group — Q4 2017 Earnings Presentation

36 slides from American International Group, Inc. New's earnings presentation, Feb 9, 2018

1. Slide 1: Conference Call Presentation Fourth Quarter 2017

   © Conference Call Presentation Fourth Quarter 2017 FEBRUARY 9, 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, projections, goals, assumptions and statements that may constit

3. Slide 3: Fourth Quarter and Full Year 2017 Key Themes

   Fourth Quarter and Full Year 2017 Key Themes 4Q17 Adjusted After-Tax Income (AATI) of $526M ($0.57/share); FY’17 AATI of $2.2B ($2.34/share)  AATI excludes $6.7B charge ($7.36/share) to re-measure DTA for Tax Act Consolidated  Book Value Per Share of $72.49, including DTA re-measurement  Continue

4. Slide 4: Consolidated Operating Financial Highlights

   Consolidated Operating Financial Highlights ($ in millions, except per share amounts) 4Q16 4Q17 FY'16 FY'17 Adjusted Pre-tax Income (Loss): General Insurance North America ($4,406) $412 ($2,399) ($232) International (441) (399) 348 (581) Total General Insurance (4,847) 13 (2,051) (813) Life and Reti

5. Slide 5: Noteworthy Items

   Noteworthy Items ($ in millions) 4Q16 4Q17 FY’16 FY'17 Revenue Items: Better (worse) than expected alternative returns1 $104 $62 ($548) $465 Better (worse) than expected DIB and GCM returns 74 234 (174) 463 Fair value gain/(loss) on other securities accounted under fair value option2 (50) 524 295 1,

6. Slide 6: Prior Year Reserve Development

   Prior Year Reserve Development ($ in millions) - Unfavorable (favorable) 4Q16 4Q17 FY’16 FY'17 General Insurance North America Commercial Lines $4,881 ($105) $5,325 $357 Personal Insurance - 8 (39) 14 Total North America $4,881 ($97) $5,286 $371 International Key Takeaways Commercial Lines 359 193 2

7. Slide 7: General Insurance Ultimate AYLR, As Adjusted, Trend

   General Insurance Ultimate AYLR, As Adjusted, Trend Ultimate Accident Year Loss Ratio, As Adjusted Trend1 69.8% 66.0% 64.7% 64.4% 64.0% 64.1% 63.0% 2011 2012 2013 2014 2015 2016 2017 1) Amounts presented reflect the impact of prior year development for 2017 and prior years in each accident year. 7

8. Slide 8: Diversified Operating Platform Allows for Utilization of Tax Attributes

   Diversified Operating Platform Allows for Utilization of Tax Attributes As of 12/31/16 As of 12/31/17 Gross Deferred Gross Deferred ($ in billions) Type Utilization/Expiration Attributes Tax Asset Attributes Tax Asset  Utilize against non-life companies and up to Net Operating Loss 35% of life insu

9. Slide 9: Parent Liquidity

   Parent Liquidity Changes in Parent Liquidity ($B) $0.4 $2.0 ($0.9) ($0.3) $7.3 $6.7 ($0.3) ($0.3) Includes: Life Dividends – $0.3B Tax Pmts – ($1.2B) Unencumbered Unencumbered Securities Securities $5.2 $4.5 Cash & Cash & S/T Inv. S/T Inv. $2.2 $2.1 Balance at Legacy Debt Issuances Insurance Debt Ma

10. Slide 10: General Insurance

    © General Insurance Peter Zaffino Chief Executive Officer of General Insurance

11. Slide 11: General Insurance

    General Insurance Adjusted Pre-Tax Income (Loss) ($M) Catastrophe Losses ($M) $13 4Q17 California Wildfire Losses of $572M $412 $348 ($399) ($232) $4,186 $762 ($581) $788 ($4,406) ($2,399) ($813) $462 $383 $45 $3,398 $1,325 ($441) $160 $338 $300 ($4,847) ($2,051) $1,165 4Q16 4Q17 FY'16 FY'17 4Q16 4Q

12. Slide 12: General Insurance – North America

    General Insurance – North America ($ in millions) 4Q16 4Q17 FY’16 FY’17 Net premiums written $3,008 $2,583 $13,026 $10,973 Key Takeaways: Commercial Lines 2,236 1,808 9,765 7,849  NPW decline driven by strategic reductions in targeted Personal Insurance 772 775 3,261 3,124 remediation areas, includ

13. Slide 13: General Insurance – International

    General Insurance – International ($ in millions) 4Q16 4Q17 FY’16 FY’17 Net premiums written $3,504 $3,309 $15,367 $14,465 Commercial Lines 1,466 1,422 7,163 6,606 Personal Insurance 2,038 1,887 8,204 7,859 Key Takeaways Net premiums earned $3,888 $3,648 $15,622 $14,571  NPW decline driven primaril

14. Slide 14: Strategic Uses of Reinsurance

    Strategic Uses of Reinsurance North American Catastrophe program (“NA Cat”) enhanced to provide protection against single and aggregate events 2017 Program 2018 Program • Aggregate Occurrence • Occurrence (1 reinstatement Coverage Type (no reinstatement) @100%) NA Cat • Top and Aggregate • Aggregate

15. Slide 15: Life and Retirement

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

16. Slide 16: Life and Retirement – Select Metrics

    Life and Retirement – Select Metrics Adjusted ROE Premiums and Deposits (P&D) ($B) $29.3 $8.0 $27.5 $2.2 $7.2 $2.0 $3.5 $4.2 $1.2 $3.8 $0.9 $1.0 $7.6 12.4% $7.6 11.2% 10.8% $2.1 $1.8 10.2% $16.1 $3.1 $3.1 $11.9 4Q16 4Q17 FY'16 FY'17 4Q16 4Q17 FY'16 FY'17 Individual Retirement Group Retirement Life I

17. Slide 17: Life and Retirement – Individual Retirement

    Life and Retirement – Individual Retirement ($ in millions) 4Q16 4Q17 FY’16 FY’17 Key Takeaways  AUA at historical highs driven by equity market performance and Premiums and deposits $3,078 $3,106 $16,062 $11,906 positive Index Annuity net flows for 4Q and FY 2017 Premiums 34 10 163 91  Net Flows

18. Slide 18: Life and Retirement – Group Retirement

    Life and Retirement – Group Retirement ($ in millions) 4Q16 4Q17 FY’16 FY’17 Key Takeaways Premiums and deposits $2,056 $1,848 $7,570 $7,550  New group acquisition deposits for FY 2017 exceeded prior year by Premiums 6 6 27 27 45%  AUA at historical highs driven by equity market performance Policy

19. Slide 19: Life and Retirement – Life Insurance

    Life and Retirement – Life Insurance ($ in millions) 4Q16 4Q17 FY’16 FY’17 Key Takeaways Premiums and deposits $911 $963 $3,519 $3,755  Strong growth in sales in Term and Universal life insurance for Premiums 339 362 1,407 1,530 4Q and FY 2017  Platform modernization, distribution simplification,

20. Slide 20: Life and Retirement – Institutional Markets

    Life and Retirement – Institutional Markets ($ in millions) 4Q16 4Q17 FY’16 FY’17 Premiums and deposits $1,168 $2,048 $2,153 $4,247 Key Takeaways Premiums 142 1,019 691 2,398  Opportunistic strategy has led to strong growth in a number of Policy fees 46 42 179 174 product lines, including pension r

21. Slide 21: Q&A and Closing Remarks

    AIG]. Q&A and Closing Remarks

22. Slide 22: Appendix

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23. Slide 23: Strong Capital Position

    Strong Capital Position Capital Structure ($B) Capital Return ($M) FY’16 FY’17 $98.1 Share repurchases $11,460 $6,275 $0.8 $87.9 $20.4 Warrant repurchases 309 3 $0.8 Hybrids $21.3 Dividends declared 1,372 1,172 $3.2 $0.6 Financial Debt1 Total $13,141 $7,450 $14.8 $0.5 $5.5 NCI $10.5 AOCI Risk Based

24. Slide 24: Legacy

    Legacy ($ in billions) Key Takeaways Legacy Monetization – Progress to date  Legacy is managed in three sub-segments: Legacy Investments, Legacy Life and Retirement run-off Lines, and Legacy GI run-off lines. YE'15 $2.1B  Legacy Investments decreased as a result of significant dispositions in 2016

25. Slide 25: Glossary of Non-GAAP Financial Measures and Non-GAAP Reconciliations

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

26. Slide 26: 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

27. Slide 27: 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

28. Slide 28: Glossary of Non-GAAP Financial Measures

    Glossary of Non-GAAP Financial Measures Glossary of Non-GAAP  Accident year loss and combined ratios, as adjusted and Accident year loss and combined ratios, as adjusted, including Average Annual Loss (AAL): both the accident year loss and combined ratios, as adjusted, exclude catastrophe losses an

29. Slide 29: Non-GAAP Reconciliations

    Non-GAAP Reconciliations Adjusted Pre-tax and After-tax Income - Consolidated (in millions) Twelve Months Ended Quarterly December 31, 4Q16 4Q17 2016 2017 Pre-tax income (loss) from continuing operations $ (3,455) $ 875 $ (74) $ 1,466 Adjustments to arrive at Adjusted pre-tax income (loss) Changes i

30. Slide 30: Non-GAAP Reconciliations

    Non-GAAP Reconciliations Book Value Per Share and Return on Equity (in millions, except per share data) Twelve Months Ended December 31, Book Value Per Share 2016 2017 Total AIG shareholders' equity (a) $ 76,300 $ 65,171 Less: Accumulated other comprehensive income (AOCI) 3,230 5,465 Total AIG share

31. Slide 31: Non-GAAP Reconciliations

    Non-GAAP Reconciliations Return on Equity General Insurance Twelve Months Ended (in millions) Quarterly December 31, 4Q16 4Q17 2016 2017 Adjusted pre-tax income (loss) $ (4,847) $ 13 $ (2,051) $ (813) Interest expense on attributed financial debt 124 115 457 499 Adjusted pre-tax income (loss) includ

32. Slide 32: Non-GAAP Reconciliations

    Non-GAAP Reconciliations Return on Equity Core Twelve Months Ended (in millions) Quarterly December 31, 4Q16 4Q17 2016 2017 Adjusted pre-tax income (loss) $ (4,195) $ 429 $ 408 $ 1,688 Interest expense (benefit) on attributed financial debt (45) (31) (122) (159) Adjusted pre-tax income (loss) includ

33. Slide 33: Non-GAAP Reconciliations

    Non-GAAP Reconciliations Accident Year Loss Ratio, as adjusted, and Accident Year Combined Ratio, as adjusted Twelve Months Twelve Months General Insurance Ended General Insurance - North America Ended Quarterly December 31, Quarterly December 31, 4Q16 4Q17 2016 2017 4Q16 4Q17 2016 2017 Loss ratio 1

34. Slide 34: Non-GAAP Reconciliations

    Non-GAAP Reconciliations Accident Year Loss Ratio, as adjusted, and Accident Year Combined Ratio, as adjusted Twelve Months Twelve Months General Insurance - International Ended General Insurance - International - Ended Quarterly December 31, Commercial Lines Quarterly December 31, 4Q16 4Q17 2016 20

35. Slide 35: Non-GAAP Reconciliations

    Non-GAAP Reconciliations Accident Year Loss Ratio, as adjusted (incl. PYD) Total General Insurance Full Year 2011 2012 2013 2014 2015 2016 2017 Loss ratio 76.7 72.6 65.3 64.0 74.0 84.8 83.2 Catastrophe losses and reinstatement premiums (9.3) (7.8) (2.5) (2.2) (2.4) (4.4) (16.1) Prior year developmen

36. Slide 36: Non-GAAP Reconciliations

    Non-GAAP Reconciliations Premiums (in millions) Twelve Months Ended Quarterly December 31, Individual Retirement: 4Q16 4Q17 2016 2017 Premiums $ 34 $ 10 $ 163 $ 91 Deposits 3,044 3,096 15,898 11,819 Other - - 1 (4) Premiums and deposits $ 3,078 $ 3,106 $ 16,062 $ 11,906 Individual Retirement (Fixed

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