American International Group, Inc. New · NYSE:AIG

American International Group, Inc. New — American International Group — Q4 2018 Earnings Presentation

33 slides from American International Group, Inc. New's earnings presentation, Feb 14, 2019

  1. Slide 1: Conference Call Presentation Fourth Quarter 2018

    Conference Call Presentation Fourth Quarter 2018 February 14, 2019

  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: Fourth Quarter and Full Year 2018 Key Outcomes

    Fourth Quarter and Full Year 2018 Key Outcomes 4Q18 Adjusted After-Tax Loss (AATL) of $559M (-$0.63/share); FY’18 Adjusted After-tax Income (AATI) of $1.1B ($1.17/share) Consolidated  Adjusted Book Value Per Share of $54.95, flat from $54.74 a year ago  4Q18 and FY’18 net investment income (NII) d

  4. Slide 4: 4Q Actual vs. Consensus Estimate

    4Q Actual vs. Consensus Estimate Adjusted After-tax Income / (Loss) per Diluted Share ($1.05) $0.42 ($0.38) ($0.26) ($0.17) ($0.08) ($0.05) ($0.11) ($0.63) (2) (3) (4) (5) (6) (7) 4Q (1) Capital Markets (2) Prior Year Other Legacy (3) General (4) Effective Tax (5) Other (6) 4Q Consensus Volatility D

  5. Slide 5: Net Investment Income

    Insurance Company Investments ($ in millions, unless otherwise indicated) Twelve Months Ended Quarterly December 31, Net Investment Income(1) 4Q17 4Q18 2017 2018 General Insurance $859 $349 $3,668 $2,668 Life and Retirement 2,003 1,921 7,816 7,922 Legacy 634 527 2,776 2,325 Other Operations – 43 53

  6. Slide 6: Legacy

    Legacy ($ in millions) 4Q17 4Q18 FY’17 FY’18 General Insurance run-off lines 14 7 221 76 Life and Retirement run-off lines 98 (137) 406 17 Legacy Investments 299 (20) 843 120 Adjusted pre-tax income (loss) $411 ($150) $1,470 $213 Key Takeaways  Legacy investments declined in FY’18 due to the sale o

  7. Slide 7: General Insurance

    General Insurance Net Premiums Written ($B) Combined Ratios $25.4 $26.4 113.3% 115.0%1 117.3%2 111.4%1 $6.4 $5.9 20% 11.7% 11.3% 16.1% 10.5% 19% Personal Personal 20% 44% Personal 1.4% 5.3% 1.5% 43% 20% 4.0% 42% Personal 24% 45% 24% 100.2% 98.8% 97.1% 99.7% 22% 25% 15.1% 12.5% 14.3% 14.0% 16% 16% 16

  8. Slide 8: General Insurance – General Operating Expenses (GOE)

    General Insurance – General Operating Expenses (GOE) 4Q17 to 4Q18 | FY’17 and FY’18 GI GOE Ratios: Full Year Excl. Validus & Glatfelter 15.1% 14.9% 14.5% 14.2% 12.6% 14.3% 14.1% Incl. Validus & Glatfelter 15.1% 14.9% 14.5% 14.1% 12.5% 14.3% 14.0% 3,837 3,712 173 ($ M) 995 995 962 953 89 894 Validus

  9. Slide 9: Reserves

    Reserves ($ in millions) Unfavorable (Favorable) 4Q17 4Q18 FY’17 FY’18 General Insurance North America Commercial Lines ($105) $326 $357 $81 Personal Insurance 8 - 14 247 Total North America ($97) $326 $371 $328 International Commercial Lines 193 74 653 133 Personal Insurance (16) (37) (25) (95) Tot

  10. Slide 10: 4Q18 Reserve Summary

    4Q18 Reserve Summary Q4 2018 YTD 2018 By Business Profit Center($ M) Total Total Total Total Total (Pre-ADC) (Post-ADC) (Post-Amort) (Pre-ADC) (Post-Amort) North America Commercial 400 381 326 1,046 81 US Excess Casualty 17 10 - - - US Fin Lines - D&O 243 209 - - - US Fin Lines - EPLI 119 362 87 296

  11. Slide 11: AlG

    AlG

  12. Slide 12: Life and Retirement – Select Metrics

    Life and Retirement – Select Metrics Adjusted ROE Premiums and Deposits ($B)1 $29.8 $8.0 $8.2 $27.5 $0.8 $3.0 $2.0 $1.0 $4.2 $3.9 $3.8 $1.0 $2.1 $8.4 $7.6 12.4% 12.6% $1.8 10.2% 9.8% $4.2 $11.9 $14.5 $3.1 4Q17 4Q18 FY'17 FY'18 4Q17 4Q18 FY'17 FY'18 Individual Retirement Group Retirement Life Insuran

  13. Slide 13: Life and Retirement – Individual Retirement

    Life and Retirement – Individual Retirement ($ in millions) 4Q17 4Q18 FY’17 FY’18 Key Takeaways Premiums and deposits1 $3,106 $4,225 $11,906 $14,474  Premiums and deposits were strong across Fixed and Index Annuity Premiums 10 15 91 52 products. Higher surrenders and other withdrawals driven by con

  14. Slide 14: Life and Retirement – Group Retirement

    Life and Retirement – Group Retirement ($ in millions) 4Q17 4Q18 FY’17 FY’18 Key Takeaways Premiums and deposits1 $1,848 $2,106 $7,550 $8,430  Record sales year driven by higher individual deposits. Premiums 6 4 27 34  AUA has declined as a result of equity market declines in 4Q18. Policy fees 114

  15. Slide 15: Life and Retirement – Life Insurance

    Life and Retirement – Life Insurance ($ in millions) 4Q17 4Q18 FY’17 FY’18 Premiums and deposits $963 $987 $3,755 $3,914 Key Takeaways Premiums 362 378 1,530 1,554  Premiums and deposits reflect strong U.S. individual and international growth. Policy fees 370 363 1,430 1,258  Net investment income

  16. Slide 16: Life and Retirement – Institutional Markets

    Life and Retirement – Institutional Markets ($ in millions) 4Q17 4Q18 FY’17 FY’18 Premiums and deposits $2,048 $848 $4,247 $3,032 Premiums 1,019 816 2,398 952 Key Takeaways Policy fees 42 40 174 161  FY’18 adjusted pre-tax income decreased compared to FY’17 Net investment income 160 205 595 786 pri

  17. Slide 17: Q&A and Closing Remarks

    Q&A and Closing Remarks AIG

  18. Slide 18: Appendix

    Appendix AIG

  19. Slide 19: Consolidated Operating Financial Highlights

    Consolidated Operating Financial Highlights ($ in millions, except per share amounts) 4Q17 4Q18 FY’17 FY’18 Adjusted Pre-tax Income (Loss): General Insurance North America $412 ($575) ($232) ($8) International (399) (147) (581) (461) Total General Insurance 13 (722) (813) (469) Life and Retirement I

  20. Slide 20: Parent Liquidity

    Parent Liquidity Changes in Parent Liquidity ($B) Cash & S/T Investments Unencumbered Securities $0.4 $0.4 $4.5 Includes: Life Dividends: ($1.0) $3.8 $0.5B ($0.2) Tax Settlements ($0.3) to Subsidiaries: ($0.1B) $3.7 $3.2 $0.9 $0.6 Balance at Insurance Sale of 19.9% of Share & Warrant Interest Paid O

  21. Slide 21: Strong Capital Position

    Strong Capital Position Capital Structure ($B) Capital Return ($M) $87.9 FY'17 FY'18 $81.0 $0.8 $21.3 $1.5 Share & warrant repurchases $6,278 $1,750 $22.2 $0.5 Hybrids Dividends declared 1,172 1,138 $5.5 $0.9 Financial Debt 1 $10.5 $10.2 Total $7,450 $2,888 NCI Total Equity: Total Equity: AOCI Risk

  22. Slide 22: General Insurance – North America

    General Insurance – North America ($ in millions) 4Q17 4Q18 FY’17 FY’18 Net premiums written $2,583 $2,944 $10,973 $11,383 Key Takeaways: Commercial Lines 1,808 2,161 7,849 8,025  Strategic acquisitions of Validus and Glatfelter contribute to Personal Insurance 775 783 3,124 3,358 NPW growth Net pr

  23. Slide 23: General Insurance – International

    General Insurance – International ($ in millions) 4Q17 4Q18 FY’17 FY’18 Key Takeaways: Net premiums written $3,309 $3,480 $14,465 $15,024 Commercial Lines 1,422 1,561 6,606 6,916  Strategic acquisition of Validus and strong A&H performance in APAC contribute to NPW growth Personal Insurance 1,887 1

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

    Glossary of Non-GAAP Financial Measures and Non-GAAP Reconciliations 24

  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) Twelve Months Ended Quarterly December 31, 4Q17 4Q18 2017 2018 Pre-tax income (loss) from continuing operations $ 875 $ (695) $ 1,466 $ 257 Adjustments to arrive at Adjusted pre-tax income (loss) Changes in f

  29. Slide 29: 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 2017 2018 Total AIG shareholders' equity (a) $ 65,171 $ 56,361 Less: Accumulated other comprehensive income (AOCI) 5,465 (1,413) Total AIG sha

  30. Slide 30: Non-GAAP Reconciliations

    Non-GAAP Reconciliations Return on Equity Twelve Months Twelve Months General Insurance Ended Life and Retirement Ended (in millions) Quarterly December 31, (in millions) Quarterly December 31, 4Q17 4Q18 2017 2018 4Q17 4Q18 2017 2018 Adjusted pre-tax income (loss) $ 13 $ (722) $ (813) $ (469) Adjust

  31. Slide 31: 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, 4Q17 4Q18 2017 2018 4Q17 4Q18 2017 2018 Loss ratio 7

  32. Slide 32: 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, 4Q17 4Q18 2017 20

  33. Slide 33: Non-GAAP Reconciliations

    Non-GAAP Reconciliations1 Premiums (in millions) Twelve Months Ended Quarterly December 31, Individual Retirement: 4Q17 4Q18 2017 2018 Premiums $ 10 $ 15 $ 91 $ 52 Deposits 3,096 4,213 11,819 15,577 Other - (3) (4) (8) Premiums and deposits $ 3,106 $ 4,225 $ 11,906 $ 15,621 Individual Retirement (Fi

American International Group — Q4 2018 Earnings Presentation on 6ix