American International Group, Inc. New · NYSE:AIG
American International Group, Inc. New — American International Group — Q3 2023 Earnings Presentation
32 slides from American International Group, Inc. New's earnings presentation, Nov 2, 2023
Slide 1: Third Quarter 2023 Financial Results Presentation
Third Quarter 2023 Financial Results Presentation November 2, 2023 Copyright ® 2023 by American International Group, Inc. All rights reserved. No part of this document may be reproduced, republished or reposted without the permission of AIG.
Slide 2: Operating EPS Increased 92% from the Prior Year Quarter
Group Performance Strategy Segment Performance GI L&R Other Investments Capital Operating EPS* Increased 92% from the Prior Year Quarter with Continued Improvement in Underwriting Profitability General Insurance After-Tax Income Book Value per Return on Combined Ratio per Diluted Share Common Share
Slide 3: Focused on Achieving 10%-Plus Adjusted ROCE
Group Performance Strategy Segment Performance GI L&R Other Investments Capital Focused on Achieving 10%-Plus Adjusted ROCE* Key Drivers for Delivering 10%-Plus Adjusted ROCE* Path to 10%-Plus Adjusted ROCE* ~100 - 200 bps Sustained and Improved Underwriting Profitability ~300 - 400 bps Continue the
Slide 4: Strong Adjusted Pre-Tax Income Growth and Adjusted Return on Common Equity in Both Businesses
Group Performance Strategy Segment Performance GI L&R Other Investments Capital Strong Adjusted Pre-Tax Income Growth and Adjusted Return on Common Equity in Both Businesses General Insurance Life and Retirement Net Premiums Written (NPW) ($M) Premiums and Deposits* ($M) +4% $9,248 $6,403 +1% / +9%
Slide 5: General Insurance: Strong Combined Ratio Improvement of 6.8 Points
Group Performance Strategy Segment Performance GI L&R Other Investments Capital General Insurance: Strong Combined Ratio Improvement of 6.8 Points from the Prior Year Quarter Key Financials Net Premiums Written ($M) ($M) 3Q22 3Q23 Change Total NPW Net premiums written $6,403 $6,462 1% $6,403 +1% / +
Slide 6: 5th Consecutive Year of AYCR Improvement
Group Performance Strategy Segment Performance GI L&R Other Investments Capital 5th Consecutive Year of AYCR* Improvement Delivering the Best Quarterly AYCR* in Over 15 Years, Driven by Commercial Lines Calendar Year Combined Ratio Accident Year Combined Ratio, As Adjusted* (33.9) pts (13.1) pts 124
Slide 7: General Insurance North America: Continued Underlying Margin Expansion
Group Performance Strategy Segment Performance GI L&R Other Investments Capital General Insurance North America: Continued Underlying Margin Expansion Key Financials North America Net Premiums Written ($M) • NA Commercial Lines NPW increased ($M) 3Q22 3Q23 Change Total NPW 5%(1) from 3Q22 driven by
Slide 8: General Insurance International: Strong Accident Year Loss Ratio
Group Performance Strategy Segment Performance GI L&R Other Investments Capital General Insurance International: Strong Accident Year Loss Ratio with Solid Net Premiums Written Growth in Commercial Lines Key Financials International Net Premiums Written ($M) • International Commercial Lines NPW ($M)
Slide 9: Life & Retirement: Higher Adjusted Pre-Tax Income
Group Performance Strategy Segment Performance GI L&R Other Investments Capital Life & Retirement: Higher Adjusted Pre-Tax Income from Strong Base Spread Income Growth Adjusted Pre-tax Income (APTI) Return on Adjusted Segment Common Equity*(1) 3Q22 3Q23 • The 24% growth in 3Q23 APTI from 3Q22 reflec
Slide 10: Individual Retirement & Group Retirement: Base Net Investment Spread Expansion
Group Performance Strategy Segment Performance GI L&R Other Investments Capital Individual Retirement & Group Retirement: Combined Base Net Investment Spread Expansion of 41 Basis Points Individual Retirement Key Figures Investment Spreads • Individual Retirement had base spread income growth due to
Slide 11: Life Insurance and Institutional Markets
Group Performance Strategy Segment Performance GI L&R Other Investments Capital Life Insurance: Improved Mortality Experience Institutional Markets: Strong New Production Life Insurance Key Figures New Business Sales Mix • Life Insurance APTI increased from 3Q22 primarily due to higher base investme
Slide 12: Other Operations: Reduced GOE and Improved Corporate and Other Results
Group Performance Strategy Segment Performance GI L&R Other Investments Capital Other Operations: Reduced GOE and Improved Corporate and Other Results ($M) 3Q22 3Q23 Change • Other Operations APTL improved $149M year-over-year primarily due to the lower impact of Variable Interest Corporate and Othe
Slide 13: Other Noteworthy Items
Group Performance Strategy Segment Performance GI L&R Other Investments Capital Other Noteworthy Items 3Q22 3Q23 EPS – EPS – ($M, except per share amounts) APTI AATI(1) APTI AATI(1) Diluted(2) Diluted(2) Expense Items: Catastrophe-related losses, net of reinsurance $600 $474 $0.61 $427 $337 $0.47 Re
Slide 14: Well Diversified Investment Portfolio with Solid Credit Characteristics
Group Performance Strategy Segment Performance GI L&R Other Investments Capital Well Diversified Investment Portfolio with Solid Credit Characteristics Investment Portfolio ($B) Investment Portfolio Composition by Segment(1) ($B) AIG General Insurance Life and Retirement Other Ops • $273B high quali
Slide 15: Continued Yield Improvement in AFS Bonds and Loans Portfolios
Group Performance Strategy Segment Performance GI L&R Other Investments Capital Continued Yield Improvement in AFS Bonds and Loans Portfolios from Higher New Money Rates and Floating Rate Security Resets Yields and Investment Income on FMS – AFS Bonds and Mortgage and Other Loans Receivable(1) ($M)
Slide 16: Commercial Mortgage Loan (CML) Portfolio
Group Performance Strategy Segment Performance GI L&R Other Investments Capital Commercial Mortgage Loan (CML) Portfolio Commercial Mortgage Loans By Segment (in $B) Commercial Mortgage Loans Breakdown By Category CECL Allowance: • AIG’s CMLs are originated and managed L&R by a highly experienced te
Slide 17: Office CML Portfolio
Group Performance Strategy Segment Performance GI L&R Other Investments Capital Office CML Portfolio Office CMLs By Segment (in $B) Breakdown by Office Type Office CML Allowance: • The office CML portfolio represents L&R $8.8B or 3% of total invested assets 4.2% 13% (excluding Fortitude Re), with CE
Slide 18: Balance Sheet Strength: Continued Strong Insurance Company Capitalization
Group Performance Strategy Segment Performance GI L&R Other Investments Capital Balance Sheet Strength: Continued Strong Insurance Company Capitalization Capital Structure ($B) Capital Ratios $64.6 $64.4 Dec. 31, Sept. 30, • Total debt & preferred stock to total Change $0.3 Validus Re Debt(1) 2022 2
Slide 19: Cautionary Statement
Cautionary Statement On January 1, 2023, AIG adopted the new accounting standard for Targeted Improvements to the Accounting for Long-Duration Contracts (the standard or LDTI), with a transition date of January 1, 2021; AIG adopted the standard using the modified retrospective transition method rela
Slide 20: Appendix: Glossary of Non-GAAP Financial Measures and Reconciliations
Appendix: Glossary of Non- GAAP Financial Measurers and Non-GAAP Reconciliations Copyright ® 2023 by American International Group, Inc. All rights reserved. No part of this document may be reproduced, republished or reposted without the permission of AIG.
Slide 21: Glossary of Non-GAAP Financial Measures
Glossary of Non-GAAP Financial Measures 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 measures” under Securit
Slide 22: Glossary of Non-GAAP Financial Measures
Glossary of Non-GAAP Financial Measures • Adjusted After-tax Income attributable to AIG common shareholders (AATI) is derived by excluding the tax effected APTI adjustments described above, dividends on preferred stock, noncontrolling interest on net realized gains (losses), other non-operating expe
Slide 23: Glossary of Non-GAAP Financial Measures
Glossary of Non-GAAP Financial Measures • Adjusted Revenues exclude Net realized gains (losses), income from non-operating litigation settlements (included in Other income for GAAP purposes), changes in fair value of securities used to hedge guaranteed living benefits (included in Net investment inc
Slide 24: Non-GAAP Reconciliations – Adjusted Pre-tax Income
Non-GAAP Reconciliations – Adjusted Pre-tax Income (in millions) Quarterly 3Q22 3Q23 Pre-tax income (loss) from continuing operations $3,904 $3,568 Adjustments to arrive at Adjusted pre-tax income Changes in fair value of securities used to hedge guaranteed living benefits (6) 6 Change in the fair v
Slide 25: Non-GAAP Reconciliations – Adjusted After-tax Income
Non-GAAP Reconciliations – Adjusted After-tax Income (in millions) Quarterly 3Q22 3Q23 After-tax net income (loss), including noncontrolling interests $3,087 $2,747 Noncontrolling interests (income) loss (339) (720) Net income attributable to AIG $2,748 $2,027 Dividends on preferred stock 7 7 Net in
Slide 26: Non-GAAP Reconciliations – Book Value Per Common Share
Non-GAAP Reconciliations – Book Value Per Common Share Book Value per Common Share (in millions, except per common share data) Quarterly Book Value Per Common Share 4Q22 3Q23 Total AIG shareholders' equity $40,970 $39,984 Less: Preferred equity 485 485 Total AIG common shareholders' equity (a) 40,48
Slide 27: Non-GAAP Reconciliations – Return on Common Equity
Non-GAAP Reconciliations – Return on Common Equity Return on Common Equity (in millions) Quarterly Return On Common Equity Computations 3Q22 3Q23 Actual or Annualized net income attributable to AIG common shareholders (a) $10,964 $8,080 Actual or Annualized adjusted after-tax income attributable to
Slide 28: Non-GAAP Reconciliations – RoCE (Cont'd) and Accident Year Loss and Combined Ratios
Non-GAAP Reconciliations – RoCE (Cont’d) and Accident Year Loss and Combined Ratios Return on Common Equity (continued) Life and Retirement (in millions) Quarterly 3Q22 3Q23 Adjusted pre-tax income $784 $971 Interest expense on attributed financial debt 93 117 Adjusted pre-tax income including attri
Slide 29: Non-GAAP Reconciliations – Accident Year Loss and Combined Ratios (cont'd)
Non-GAAP Reconciliations – Accident Year Loss and Combined Ratios (cont’d) General Insurance – North America General Insurance – North America – Commercial Lines Quarterly Quarterly 3Q22 3Q23 3Q22 3Q23 Loss ratio 87.8 64.1 Loss ratio 91.5 63.7 Catastrophe losses and reinstatement premiums (17.2) (11
Slide 30: Non-GAAP Reconciliations – Accident Year Loss and Combined Ratios (cont'd)
Non-GAAP Reconciliations – Accident Year Loss and Combined Ratios (cont’d) General Insurance – International – Commercial Lines General Insurance – International – Personal Insurance Quarterly Quarterly 3Q22 3Q23 3Q22 3Q23 Loss ratio 46.6 55.2 Loss ratio 50.0 55.8 Catastrophe losses and reinstatemen
Slide 31: Non-GAAP Reconciliations – Gross & Net Premiums Written – Comparable Basis
Non-GAAP Reconciliations – Gross & Net Premiums Written – Comparable Basis Gross Premiums Written – Comparable Basis General Insurance Total Commerical Lines Personal 3Q23 3Q23 3Q23 Change in gross premiums written Increase (decrease) as reported in U.S. dollars (4.0)% (5.5)% 1.0% Foreign exchange e
Slide 32: Non-GAAP Reconciliations – Premiums
Non-GAAP Reconciliations – Premiums (in millions) Quarterly 3Q22 3Q23 Individual Retirement: Premiums $56 $29 Deposits 3,740 3,935 Other (4) (3) Premiums and deposits $3,792 $3,961 Individual Retirement (Fixed Annuities): Premiums $56 $29 Deposits 1,264 1,313 Other (4) (3) Premiums and deposits $1,3
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