American International Group, Inc. New · NYSE:AIG
American International Group, Inc. New — American International Group — Q2 2022 Earnings Presentation
34 slides from American International Group, Inc. New's earnings presentation, Aug 9, 2022
Slide 1: Second Quarter 2022 Financial Results Presentation
Second Quarter 2022 Financial Results Presentation August 9th, 2022 Copyright ® 2022 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: Cautionary Statement Regarding Forward-Looking Information
Cautionary Statement This document and the remarks made within this presentation may include, and officers and representatives of AIG may from time to time make and discuss, statements which, to the extent they are not statements of historical or present fact, may constitute “forward-looking stateme
Slide 3: 2Q22 Net Income and APTI reflect continued strong underwriting margin
2Q22 ▪ Net income attributable to AIG common shareholders was $3.0B, or $3.78 per diluted common share, compared to $91M, or $0.11 per diluted common share, in 2Q21, primarily due to higher net realized gains on Fortitude Re funds withheld embedded derivative 2Q22 Net Income and APTI Financial Resul
Slide 4: Continued strong operating performance in General Insurance
Continued strong operating ($M, except per common share amounts) 2Q21 2Q22 Variances performance in General Adjusted Pre-tax Income (Loss): Insurance General Insurance $1,194 $1,257 5% ▪ General Insurance APTI of $1.3B includes the highest Life and Retirement 1,124 563 (50%) underwriting income sinc
Slide 5: General Insurance: Built a stable and profitable underwriting portfolio
General Insurance: Built a General Insurance Accident Year Combined Ratio*, As Adjusted stable and profitable (1,250) bps underwriting portfolio 101.0% 99.4% 98.8% 96.1% 96.1% 95.9% 95.8% 95.5% 94.9% 93.3% 92.9% 92.4% 91.1% 90.5% 89.8% 89.5% 88.5% between 2018 and 2021 14.5% 14.1% 12.5% 12.5% 12.6%
Slide 6: Gross investment income (GII), APTI basis
Gross investment income Invested Assets & Gross Investment Income, APTI Basis (GII), APTI basis* General Insurance Life and Retirement Other Operations Total AIG Gross Investment Income, APTI basis ($M) $3,273 $146 $2,597 $579 $2,442 $109 $85 $2,071 $325 Interest & dividends $101 Alternative investm
Slide 7: AIG investment portfolio is well diversified, with solid credit characteristics
AIG investment portfolio is Investment Portfolio Composition – $283B ($B) 1 Investment Portfolio Composition by Segment ($B) 1 well diversified, with solid All other investments 2 credit characteristics Short-term investments 1 $9.3 Bonds, FVO Other invested assets $188.9 $14.1 Government and 1 $10.
Slide 8: Investment Income on Fixed Maturity Securities
Investment Income on 1 Investment Income on Fixed Maturity Securities Fixed Maturity Securities $3,000 6.00% Investment Yield ex. Call & Tender Income (%) $2,579 $2,622 $2,553 $2,541 $2,504 $2,500 $2,431 5.00% Investment Income ($M) ▪ Yield (excluding call and tender income) on Fixed Maturity Securi
Slide 9: 2Q21 and 2Q22 noteworthy items
2Q21 and 2Q22 noteworthy items 2Q21 2Q22 EPS – EPS – ($M, except per share amounts) APTI AATI1 APTI AATI1 Diluted2 Diluted2 Catastrophe losses, net of reinsurance $120 $95 $0.11 $120 $95 $0.12 Reinstatement premiums related to current year catastrophes 20 16 0.02 2 2 0.00 Favorable (unfavorable) PYD
Slide 10: General Insurance: AYCR, as adjusted improved by 2.6 points in 2Q22
General Insurance: AYCR, as ($M) 2Q21 2Q22 General Insurance Net Premiums Written ($M) adjusted improved by 2.6 Net premiums written $6,860 $6,866 Global Commercial Lines Global Personal Insurance points in 2Q22 and GAAP Net premiums earned $6,215 $6,386 $4,717 $4,955 Loss and loss adjustment expens
Slide 11: General Insurance: North America NPW growth of 8%
General Insurance: North ($M) 2Q21 2Q22 North America Net Premiums Written ($M) America NPW growth of 8% Net premiums written Commercial Lines $3,156 2,655 $3,401 2,918 $3,156 $3,401 $483 and a 2.5 point improvement Personal Insurance 501 483 $501 in AYCR, as adjusted Net premiums earned $2,685 $2,9
Slide 12: General Insurance: International Commercial Lines NPW growth of 5%
General Insurance: ($M) 2Q21 2Q22 International Net Premiums Written ($M) International Commercial Net premiums written Commercial Lines $3,704 2,062 $3,465 2,037 $3,704 $3,465 Lines NPW growth of 5% Personal Insurance 1,642 1,428 (constant FX) and a 5.5 point Net premiums earned $3,530 $3,414 $1,64
Slide 13: Life and Retirement: Capital markets performance unfavorably impacts results
Life and Retirement: Capital Adjusted Pre-tax Income (APTI) ($M) Noteworthy Items ($M) markets performance 2Q21 2Q22 Variance unfavorably impacts results $1,124 $140 $20 Return on alternative investments 325 101 (224) $347 Other yield enhancements 151 30 (121) • APTI is lower primarily due to a vola
Slide 14: Life and Retirement: Individual Retirement
Life and Retirement: Individual Retirement Capital markets pressures Premiums and Deposits ($M) Net Flows ($M) Assets Under Management / APTI ($M) 2Q22 vs 2Q21 APTI reflects Unfavorable impacts from: results; tailwinds from $3,620 $628 Administration ($B) $138.4 $204 ▪ Lower returns from alternative
Slide 15: Life and Retirement: Life Insurance
Life and Retirement: Life Insurance Life Insurance reflects less New Business Sales ($M) Premiums and Deposits ($M) APTI ($M) 2Q22 vs 2Q21 APTI reflects Favorable impacts from: adverse mortality; Strong $112 (-10% vs. 2Q21) $1,157 (-0% vs. 2Q21) $117 (+485% vs. 2Q21) ▪ Less adverse mortality ▪ Highe
Slide 16: Other Operations: APTL improved due to lower general operating expenses
Other Operations: APTL improved due to lower general operating expenses and interest expense ($M) 2Q21 2Q22 ▪ Other Operations APTL was $461M, including $130M of Corporate and Other reductions from consolidation and eliminations, compared to ($617) ($494) APTL of $610M, including $94M of reductions
Slide 17: Continued Progress on Capital Management Initiatives
Continued Progress on Capital Structure ($B) Risk-Based Capital (RBC) Ratios5 Capital Management $90.8 $1.2 $67.3 $1.0 Hybrids 1 Period Life and Retirement Companies General Insurance Companies Initiatives $20.7 $6.9 Financial Debt - Corebridge 1,2 $3.0 $1.5 $12.6 1,3 2020 433% (CAL) 460% (ACL) $3.9
Slide 18: Share Repurchases
Share Repurchases ▪ Aggregated share repurchase of $5.2B over the last four Share Repurchases quarters (in millions, except per share ▪ 11% reduction in shares outstanding over the last four 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 quarters data) Aggregate Share Repurchases $362 $230 $1,059 $992 $1,403 $1,699
Slide 19: Multiple areas of progress towards the separation of Corebridge
Multiple areas of progress Key Milestones Associated with the Separation of Corebridge towards the separation of ✓ On July 14, 2021 AIG announced sale of 9.9% equity stake of Life & Retirement (Corebridge) for $2.2B Corebridge ✓ Inamount. 4Q21 Corebridge declared $8.3B dividend payable to AIG and is
Slide 20: AIG 200: Achieved run-rate savings goal of $1B
AIG 200: Achieved run-rate 1 The Standard Commercial Underwriting Platform will modernize global underwriting capabilities by simplifying processes and tools to create a contemporary data architecture savings goal of $1B, six General 2 Transform Japan business into a next-generation digital insuranc
Slide 21: Copyright notice
Copyright ® 2021 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 22: Glossary of Non-GAAP Financial Measures
Glossary of Non-GAAP 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 Financial Measures representative of our business results. Some of the measurements we use are “Non-GAAP financial me
Slide 23: Glossary of Non-GAAP Financial Measures
Glossary of Non-GAAP Glossary of Non-GAAP ▪ Book Value per Common Share, Excluding Accumulated Other Comprehensive Income (Loss) (AOCI) adjusted for the cumulative unrealized gains Financial Measures and losses related to Fortitude Re funds withheld assets and Deferred Tax Assets (DTA) (Adjusted Boo
Slide 24: Glossary of Non-GAAP Financial Measures
Glossary of Non-GAAP Glossary of Non-GAAP ▪ Adjusted Revenues exclude Net realized gains (losses), income from non-operating litigation settlements (included in Other income for GAAP purposes) and changes in fair Financial Measures value of securities used to hedge guaranteed living benefits (includ
Slide 25: Non-GAAP Reconciliations - Adjusted Pre-tax and After-tax Income
Non-GAAP Reconciliations- (in millions) 2Q21 Quarterly 2Q22 Adjusted Pre-tax and Pre-tax income from continuing operations Adjustments to arrive at Adjusted pre-tax income Changes in fair value of securities used to hedge guaranteed living benefits $ 147 (13) $ 4,321 (10) After-tax Income - Changes
Slide 26: Non-GAAP Reconciliations - Adjusted Pre-tax and After-tax Income
Non-GAAP Reconciliations- Quarterly (in millions) 2Q21 2Q22 After-tax net income, including noncontrolling interests $ 150 $ $ 3,392 Adjusted Pre-tax and Noncontrolling interests (income) loss Net income attributable to AIG $ (51) 99 $ $ (356) 3,036 After-tax Income - Dividends on preferred stock Ne
Slide 27: Non-GAAP Reconciliations - Book Value Per Common Share
Non-GAAP Reconciliations- Book Value Per Common Share Book Value Per Common (in millions, except per common share data) As of June 30, December 31, Share Book Value Per Common Share Total AIG shareholders' equity $ 2021 66,083 $ 2022 45,344 $ 2021 65,956 Less: Preferred equity 485 485 485 Total AIG
Slide 28: Non-GAAP Reconciliations - Return on Common Equity
Non-GAAP Reconciliations- Return on Common Equity Return on Common Equity (in millions) Return On Common Equity Computations 2Q21 Quarterly 2Q22 Annualized net income attributable to AIG common shareholders (a) $ 364 $ 12,112 Annualized adjusted after-tax income attributable to AIG common shareholde
Slide 29: Non-GAAP Reconciliations - Total Debt and Preferred Stock Leverage
Non-GAAP Reconciliations- Total Debt and Preferred Stock Leverage Total Debt and Preferred Stock Leverage and Net Quarterly 1Q22 2Q22 Financial Debt $ 20,530 $ 19,432 Investment Income Hybrid – debt securities Preferred Stock 1,159 485 989 485 Total debt and preferred stock $ 22,174 $ 20,906 Total C
Slide 30: Non-GAAP Reconciliations - Accident Year Loss Ratio, as adjusted
Non-GAAP Reconciliations- General Insurance General Insurance - North America Accident Year Loss Ratio, Quarterly 2Q21 2Q22 Quarterly 2Q21 2Q22 as adjusted, and Accident Loss ratio Catastrophe losses and reinstatement premiums 61.3 (2.1) 56.2 (1.8) Loss ratio Catastrophe losses and reinstatement pre
Slide 31: Non-GAAP Reconciliations - Accident Year Loss Ratio, as adjusted
Non-GAAP Reconciliations- General Insurance - International General Insurance - International - Accident Year Loss Ratio, Quarterly 2Q21 2Q22 Commercial Lines Quarterly 2Q21 2Q22 as adjusted, and Accident Loss ratio Catastrophe losses and reinstatement premiums 56.7 (1.5) 54.7 (2.0) Loss ratio Catas
Slide 32: Non-GAAP Reconciliations - Accident Year Loss Ratio, as adjusted
Non-GAAP Reconciliations- Accident Year Loss Ratio, as General Insurance 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19 4Q'19 Quarterly 1Q'20 2Q'20 3Q'20 4Q'20 1Q'21 2Q'21 3Q'21 4Q'21 1Q’22 FY'18 FY'21 adjusted, and Accident Year Loss ratio Catastrophe losses and 65.7 88.6 80.1 63.1 63.0 69.3 65.6 66.8 72.6 74
Slide 33: Non-GAAP Reconciliations - Gross and Net Premiums Written
Non-GAAP Reconciliations- Gross Premiums Written – Change in Constant Dollar Gross and Net Premiums Commercial Personal Written – Change in General Insurance Total Insurance Insurance Foreign exchange effect on worldwide premiums: 2Q22 2Q22 2Q22 Change in gross premiums written Constant Dollar Incre
Slide 34: Non-GAAP Reconciliations - Premiums
Non-GAAP Reconciliations- (in millions) Quarterly Premiums Individual Retirement: Premiums Deposits $ 2Q21 32 $ 3,949 2Q22 57 3,566 Other (3) (3) Premiums and deposits $ 3,978 $ 3,620 Individual Retirement (Fixed Annuities): Premiums $ 32 $ 57 Deposits 909 1,330 Other (3) (3) Premiums and deposits $
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