American International Group, Inc. New · NYSE:AIG
American International Group, Inc. New — American International Group — Q1 2014 Earnings Presentation
24 slides from American International Group, Inc. New's earnings presentation, May 6, 2014
Slide 1: First Quarter 2014 Results Conference Call Presentation
American International Group, Inc. First Quarter 2014 Results Conference Call Presentation May 6, 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: First Quarter 2014 Key Themes
First Quarter 2014 Key Themes Highlights: Noteworthy Items Repurchased approximately 17.4 million shares of AIG common stock at a total cost of approximately $867 million $1.7 billion of cash dividends from AIG Life and Retirement Capital Management, Liquidity & Other Reduced DIB debt by $2.2
Slide 4: Financial Highlights
Financial Highlights First Quarter Inc. ($ in millions, except per share amounts) 2013 2014 (Dec.) Revenues $16,962 $16,112 (5%) Net income attributable to AIG 2,206 1,609 (27%) Diluted earnings per common share $1.49 $1.09 (27%) ROE, Ex. AOCI (1) 10.2% 6.8% After-tax operating income attributable t
Slide 5: After-tax Operating Income
After-tax Operating Income First Quarter ($ in millions, except per share amounts) 2013 2014 Insurance operations: AIG Property Casualty $1,557 $1,159 AIG Life and Retirement 1,394 1,417 Mortgage Guaranty 41 76 Total Insurance Operations 2,992 2,652 Other operations: Direct Investment book 329 440 G
Slide 6: Strong Capital Position
Strong Capital Position Capital Structure Book Value Per Share ($ in billions, except per share data) $125.6 $80.0 $122.3 $71.77 $0.6 $68.62 $0.6 $15.7 $70.0 $15.7 $6.28 $5.5 $4.34 Non-redeemable $5.5 noncontrolling $60.0 interests $50.0 (1) Financial Debt AOCI $40.0 $100.5 $103.8 $64.28 $65.49 BVPS
Slide 7: Financial Flexibility – A Source of Strength
Financial Flexibility – A Source of Strength Parent Cash, Short-Term Investments & Insurance Company Distributions Unencumbered Securities ($ in millions) ($ in billions) $13.1 $5,000 $4,274 $3.0 $11.2 $90 $4,000 $3.0 $1,322 Unencumbered $3,000 Fixed Maturity Securities $1,933 Cash & Short-term $2,0
Slide 8: AIG Property Casualty – Financial Results
AIG Property Casualty – Financial Results ($ in millions) 1Q13 1Q14 Global Combined Ratios Calendar Year Accident Year, Net premiums written $8,437 $8,334 as adjusted(1) 120 97.3 101.2 97.3 97.2 Net premiums earned 8,558 8,230 100 14.3 14.2 14.2 14.3 80 19.9 19.7 19.7 19.9 Underwriting income (loss)
Slide 9: Commercial Insurance – Underwriting Results
Commercial Insurance – Underwriting Results Net Premiums Written Commercial Insurance NPW, excluding the effects of foreign exchange, increased 3% from 1Q13. This increase reflects ($ in millions) changes in the reinsurance program and new business growth across commercial lines except for Primary
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 2% from 1Q13. On an as-reported basis $4,000 NPW declined 5% from 1Q13. $3,532 $3,338 Growth in NPW excluding the effect of foreign exchange $3,0
Slide 11: AIG Property Casualty – Investments
AIG Property Casualty – Investments Net investment income: First Quarter ($ in millions) 2013 2014 Inc./(Dec.) Interest and dividends $ 1,004 $ 958 (5%) (1) Alternative investments 258 269 4% Other, net(2) 63 29 (54%) Net investment income $ 1,325 $ 1,256 (5%) Total Yield 4.09% 4.08% (0.01%) Total C
Slide 12: Mortgage Guaranty – Financial Results and Trends
Mortgage Guaranty – Financial Results and Trends Percentage of net premiums earned from business written after 2008 grows to 62%. Business Trends(1) ($ in millions) 1Q13 1Q14 NIW Persistency $15.0 84% Net premiums written $246 $231 NIW ($ in billions) $12.0 82% Persistency (%) Net premiums earned 19
Slide 13: AIG Life and Retirement – Financial Results
AIG Life and Retirement – Financial Results ($ in millions) 1Q13 1Q14 Increase in pre-tax operating income benefited from strong growth in fee income and enhanced spread Premiums and deposits $5,580 $7,129 income. Premiums 620 597 Management actions continue to drive profitability Policy fees 61
Slide 14: AIG Life and Retirement – Retail & Institutional Results
AIG Life and Retirement – Retail & Institutional Results Retail Pre-Tax Operating Income(1) Institutional Pre-Tax Operating Income(2) ($ in millions) ($ in millions) $1,000 $700 $821 $834 $600 $573 $583 $800 $173 $196 $500 $242 $229 $600 $400 $400 $427 $405 $300 $200 $326 $339 $200 $100 $214 $208 $0
Slide 15: AIG Life and Retirement – Base Yields and Spreads
AIG Life and Retirement – Base Yields and Spreads Base Yields(1) 5.50% 5.35% 5.26% 5.29% 5.32% 5.30% 5.30% 5.25% 5.10% 5.25% 5.24% 5.10% 5.17% 4.85% 5.14% 5.10% 5.11% 4.90% 5.08% 4.70% 1Q13 2Q13 3Q13 4Q13 1Q14 Cost of Funds(2) 3.20% 3.10% 3.06% 3.08% 3.05% 3.02% 3.10% 3.00% 2.90% 2.80% 2.91% 2.89% 2
Slide 16: AIG Life and Retirement – Investments
AIG Life and Retirement – Investments Net investment income: First Quarter ($ in millions) 2013 2014 Inc./(Dec.) Base portfolio(1) $ 2,258 $ 2,299 2% (2) Alternative investments 489 540 10% (3) Other enhancements 130 (22) NM Net investment income $ 2,877 $ 2,817 (2%) (4) Base portfolio yield 5.30% 5
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 1Q13 AIG AIG Mortgage Other ($ in millions) Property Casualty Life and Retirement Guaranty Operations Total Income (loss) from continuing operations, before tax $ 1,614 $ 1,570 $ 44 $ (353) $ 2,875 Adjustments to arrive at pre-tax operating income:
Slide 20: Non-GAAP Reconciliation – After-tax Operating Income
Non-GAAP Reconciliation – After-tax Operating Income After-tax Operating Income Attributable to AIG First Quarter ($ in millions) 2013 2014 Net income (loss) attributable to AIG 2,206 1,609 Adjustments to arrive at After-tax operating income attributable to AIG: (Income) loss from discontinued opera
Slide 21: Non-GAAP Reconciliation – Return On Equity
Non-GAAP Reconciliation – Return On Equity First Quarter Return On Equity 2013 2014 Annualized Net income attributable to AIG $ 8,824 $ 6,436 Annualized After-tax operating income attributable to AIG $ 7,928 7,124 (1) Average AIG Shareholders' equity 98,761 102,152 Less: Average AOCI 12,206 7,723 (1
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, March 31, ($ in millions, except per share data) 2013 2013 2014 Total AIG shareholders’ equity $ 100,470 $ 99,520 $ 103,833 Less: AOCI 6,360 11,839 9,085 Total AIG shareholders’ equity
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 combined ratio, as adjusted 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 Commercial Insurance Loss ratio 70.7 78.0 100.9 64.9 72.6 71.8 77.9 69.4 Catastrophe losses and reinstatement premiums
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.. AIG companies serve commercial, institutional, and individual customers through one of the most extensive worldwide property-casualty networks of any insurer. In
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