American International Group, Inc. New · NYSE:AIG
American International Group, Inc. New — American International Group — Q2 2014 Earnings Presentation
24 slides from American International Group, Inc. New's earnings presentation, Aug 5, 2014
Slide 1: Earnings Conference Call Presentation Second Quarter 2014
American International Group, Inc. Earnings Conference Call Presentation Second Quarter 2014 August 5, 2014
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
Slide 3: Second Quarter 2014 Key Themes
Second Quarter 2014 Key Themes Highlights: Noteworthy Items Closed the sale of ILFC; total value of consideration of approximately $7.6 billion(1) Repurchased approximately $1.1 billion of AIG Common Stock during 2Q14; remaining share repurchase authorization of $1.5 billion In July 2014, repu
Slide 4: Financial Highlights
Financial Highlights Net income in 2Q14 includes $1.4 billion after-tax gain on sale of ILFC ($0.96 per diluted share). Second Quarter Inc. ($ in millions, except per share amounts) 2013 2014 /(Dec.) Revenues $18,426 $16,105 (13%) Net income attributable to AIG 2,731 3,073 13% Diluted earnings per c
Slide 5: After-Tax Operating Income
After-Tax Operating Income Operating results driven by growth in insurance operations. Second Quarter ($ in millions, except per share amounts) 2013 2014 Insurance operations: AIG Property Casualty $1,086 $1,355 AIG Life and Retirement 1,151 1,180 Mortgage Guaranty 73 210 Total Insurance Operations
Slide 6: Strong Capital Position
Strong Capital Position Capital Structure Book Value Per Share ($ in billions, except per share data) $129.8 $80.0 $75.71 $122.3 $0.4 $0.6 $15.7 $68.62 $8.06 $15.7 $70.0 $5.6 $4.34 Non-redeemable $5.5 noncontrolling $60.0 interests $50.0 (1) Financial Debt AOCI $40.0 $108.2 $67.65 BVPS, $100.5 $64.2
Slide 7: Financial Flexibility – A Source of Strength
Financial Flexibility – A Source of Strength Insurance Company Cash Distributions* AIG Parent Liquidity ($ in millions) ($ in billions) $5,000 $14.1 $13.1 $4,052 $90 $3.5 $4,000 $3.0 $1,322 Unencumbered $3,000 Fixed Maturity Securities $1,933 Cash & Short-term $2,000 $1,653 $1,587 $10.2 $10.6 Invest
Slide 8: AIG Property Casualty – Financial Results
AIG Property Casualty – Financial Results Operating results reflect pricing discipline and lower catastrophe losses. ($ in millions) 2Q13 2Q14 Net premiums written $9,263 $9,213 Net premiums earned 8,347 8,531 Underwriting income (loss) (223) 101 Net investment income 1,309 1,254 Pre-tax operating i
Slide 9: Commercial Insurance – Underwriting Results
Commercial Insurance – Underwriting Results Net Premiums Written Commercial Insurance NPW, excluding the effects of foreign exchange, declined 1% from 2Q13 driven by lower retention in ($ in millions) U.S. Property catastrophe and certain Casualty lines. Net $7,000 premiums written on an as-report
Slide 10: Consumer Insurance – Underwriting Results
Consumer Insurance – Underwriting Results Net Premiums Written Consumer Insurance NPW, excluding the effects of foreign ($ in millions) exchange, grew 4% from 2Q13 reflecting growth in sales of Life $4,000 & Health products in Japan and personal property in the U.S. $3,390 $3,407 On an as-reported
Slide 11: AIG Property Casualty – Investments
AIG Property Casualty – Investments Net investment income: Second Quarter ($ in millions) 2013 2014 Inc./(Dec.) Interest and dividends $ 1,008 $ 987 (2%) Alternative investments(1) 240 188 (22%) Other, net(2) 61 79 30% Net investment income $ 1,309 $ 1,254 (4%) Yield 4.13% 4.06% (0.07) Total Cash &
Slide 12: Mortgage Guaranty – Financial Results and Trends
Mortgage Guaranty – Financial Results and Trends Percentage of net premiums earned from business written after 2008 grew to 67%. Business Trends(1) ($ in millions) 2Q13 2Q14 NIW Persistency $15.0 84% Net premiums written $275 $249 NIW ($ in billions) $12.0 82% Persistency (%) Net premiums earned 208
Slide 13: AIG Life and Retirement – Financial Results
AIG Life and Retirement – Financial Results ($ in millions) 2Q13 2Q14 Pre-tax operating income benefited from strong growth in Premiums and deposits $6,765 $7,360 fee income driven by higher account balances and significant net flows in fee-based businesses over the Premiums 649 700 last twelve mo
Slide 14: AIG Life and Retirement – Retail & Institutional Results
AIG Life and Retirement – Retail & Institutional Results Retail Pre-Tax Operating Income(1) Institutional Pre-Tax Operating Income(2) ($ in millions) ($ in millions) $800 $600 $670 $684 $496 $500 $481 $600 $130 $185 $400 $170 $172 $400 $300 $343 $304 $200 $200 $295 $309 $100 $196 $178 $0 $0 2Q13 2Q1
Slide 15: AIG Life and Retirement – Base Yields and Spreads
AIG Life and Retirement – Base Yields and Spreads Base Yields(1) 5.50% 5.32% 5.35% 5.26% 5.29% 5.30% 5.17% 5.25% 5.24% 5.25% 5.10% 5.17% 5.11% 5.14% 5.10% 5.11% 4.90% 5.08% 5.00% 4.70% 2Q13 3Q13 4Q13 1Q14 2Q14 Cost of Funds(2) 3.10% 3.06% 3.08% 3.05% 3.02% 3.03% 3.00% 2.90% 2.80% 2.93% 2.91% 2.89% 2
Slide 16: AIG Life and Retirement – Investments
AIG Life and Retirement – Investments Net investment income: Second Quarter ($ in millions) 2013 2014 Inc./(Dec.) Base portfolio(1) $ 2,267 $ 2,238 (1%) (2) Alternative investments 436 252 (42%) Other enhancements(3) (66) 71 NM Net investment income $ 2,637 $ 2,561 (3%) (4) Base Yield 5.35% 5.17% (0
Slide 17: Q&A
AIG Q&A
Slide 18: Appendix
AIG Appendix
Slide 19: Non-GAAP Reconciliation – Pre-Tax Operating Income
Non-GAAP Reconciliation – Pre-Tax Operating Income 2Q14 AIG AIG Mortgage Other (2) ($ in millions) Property Casualty Life and Retirement Guaranty Operations Total Income (loss) from continuing operations, before tax $ 1,490 $ 1,249 $ 211 $ 1,530 $ 4,480 Adjustments to arrive at pre-tax operating inc
Slide 20: Non-GAAP Reconciliation – After-Tax Operating Income
Non-GAAP Reconciliation – After-Tax Operating Income After-tax Operating Income Attributable to AIG Second Quarter ($ in millions) 2013 2014 Net income (loss) attributable to AIG $ 2,731 $ 3,073 Adjustments to arrive at After-tax operating income attributable to AIG: (Income) loss from discontinued
Slide 21: Non-GAAP Reconciliation – Return On Equity
Non-GAAP Reconciliation – Return On Equity (1) (1) (2) (3) (4) 1) Includes net deferred tax asset. 2) Computed as Annualized Net income (loss) attributable to AIG divided by Average AIG Shareholders' equity. 21 3) Computed as Annualized Net income (loss) attributable to AIG divided by Average AIG Sh
Slide 22: Non-GAAP Reconciliation – BVPS ex. AOCI and Premiums & Deposits
Non-GAAP Reconciliation – BVPS ex. AOCI and Premiums & Deposits Book Value Per Common Share - Ex. AOCI December 31, June 30, ($ in millions, except per share data) 2013 2013 2014 Total AIG shareholders’ equity $ 100,470 $ 97,463 $ 108,161 Less: AOCI $ 6,360 $ 7,039 $ 11,511 Total AIG shareholders’ e
Slide 23: Non-GAAP Reconciliation – Accident Year Combined Ratio, As Adjusted
Non-GAAP Reconciliation – Accident Year Combined Ratio, As Adjusted AIG Property Casualty Quarterly Accident year com bined ratio, as adjusted 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 Com m ercial Insurance Loss ratio 80.3 72.3 70.7 78.0 100.9 64.9 72.6 71.8 77.9 69.4 67.7 Catastrophe
Slide 24: About American International Group, Inc.
American International Group, Inc. (AIG) is a leading international insurance organization serving customers in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional, and individual customers through one of the most extensive worldwide property-casualty networks of
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