American International Group, Inc. New · NYSE:AIG
American International Group, Inc. New — American International Group — Investor Day (June 2018)
29 slides from American International Group, Inc. New's investor day presentation, Jun 7, 2018
Slide 1: Life & Retirement Investor Meeting
Life & Retirement Investor Meeting JUNE 7, 2018 ©
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 tha
Slide 3: Life & Retirement: Key messages
Life & Retirement: Key messages Rigorous and holistic risk management approach Large, diverse in - force portfolio positioned to generate stable earnings and cash flows Well - positioned to meet growing needs in the U.S. and overseas Prepared for selective expansion following extensive transformatio
Slide 4: Life & Retirement: Large, diverse and profitable in-force portfolio
Life & Retirement: Large, diverse and profitable in - force portfolio 1 Represents Stable Value Wrap Separate Account liabilities 2 Life Insurance and Institutional Markets includes small amounts of Separate Account assets 3 Excludes $37.6B Stable Value Wrap notional value P&D by Product ($B) APTI b
Slide 5: Life & Retirement: Consistent performance in a competitive environment
30.4 29.3 27.5 2015 2016 2017 Life & Retirement: Consistent performance in a competitive environment Adjusted Return on Equity Adjusted Pre - Tax Income ($M) Premiums and Deposits ($B) 1,788 1,557 1,419 2015 2016 2017 3,124 3,428 3,831 2015 2016 2017 9.6% 10.8% 12.4% 2015 2016 2017 5 ~ 1 1 Life & Re
Slide 6: Life & Retirement: Transformed organization to optimize capital efficiency
Legal Entity Consolidation • Number of operating companies reduced from 10 to 3 and regulatory jurisdictions from 7 to 2 • Enhanced capital efficiency and lowered costs associated with running multiple legal entities • Decreased volatility in statutory balance sheets • Diversification of business ri
Slide 7: Life & Retirement: Capital deployed to most attractive new business opportunities
616 743 1,043 1,732 2,153 3,648 2012 2013 2014 2015 2016 2017 271 418 1,254 2,826 2,687 2,713 2012 2013 2014 2015 2016 2017 4,575 8,199 9,080 8,012 4,507 3,208 2012 2013 2014 2015 2016 2017 316 387 350 403 416 491 2012 2013 2014 2015 2016 2017 7,028 7,251 6,743 6,920 7,570 7,550 2012 2013 2014 2015
Slide 8: Life & Retirement: Flows for 2017 reflect discipline in challenging market conditions
Life & Retirement: Flows for 2017 reflect discipline in challenging market conditions 2017 Sales and Outflows ($ M) 3,010 (5,699) 3,208 (4,372) 2,713 (389) 7,550 (8,581) 491 3 3,648 2,975 (3,572) 3,264 Fixed Annuities Variable Annuities Index Annuities Group Retirement Life Insurance 1 Retail Mutual
Slide 9: Life & Retirement: Building blocks for net investment income
Life & Retirement: Building blocks for net investment income Absent significant changes in the overall rate environment, expectation is that base net investment spreads will decline by approximately 0 to 2 basis points per quarter Return of ~8% for Alternative Investments over the coming years Incre
Slide 10: Life & Retirement: Comprehensive risk management approach
Life & Retirement: Comprehensive risk management approach 1 De - risked benefits represent products issued since 2010 with VIX index fees or volatility control funds and pre - 2010 benefits wi th a revised fee structure 2 Based on internal capital model, which is calibrated once a year or for materi
Slide 11: Life & Retirement: Well positioned to meet growing market needs
Life & Retirement: Well positioned to meet growing market needs ▪ Increasing need for guaranteed lifetime income solutions ▪ Growing not - for - profit defined contribution market ▪ Large unmet protection and retirement savings gap ▪ Improved funded status of pension plans 11
Slide 12: Life & Retirement: Broad leadership position
Life & Retirement: Broad leadership position Source: LIMRA 4Q 2017 except where noted. Annuities include Employer Plan Sales. Fixed Annuity also includes immediate, structured settlement, and deferred income annuities. For Institutional Markets, Stable Value Wrap ranking represents notional value an
Slide 13: Retirement: Industry leader across annuity lines
1 Source : LIMRA 4Q 2017; in cluding Employer Plan sales . Fixed Annuity also includes immediate, structured settlement, and deferred income annuities Jackson AIG NY Life TIAA AXA Nationwide Allianz Lincoln Pacific Life Prudential Top 10 Annuity Providers 1 2017 Sales by Product ($B) 14.3 Sales
Slide 14: Individual Retirement: Overview
4,507 3,208 2,687 2,713 3,982 3,010 4,886 2,975 2016 2017 Individual Retirement: Overview Adjusted pre - tax income has remained strong due to a large, well - managed in - force annuity block despite the industry - wide decrease in new annuity sales and persistent low interest rate environment 2016
Slide 15: Group Retirement: Overview
Group Retirement: Overview Non - Periodic Periodic Industry leader in the growing not - for - profit Defined Contribution plan market 931 1,004 2016 2017 Adjusted Pre - Tax Income ($M) 1 Cerulli Associates expects ~$ 120B of total net inflows from 2016 to 2020 into the 403(b) market. By comparison,
Slide 16: Group Retirement: Digital and service enhancements driving group acquisition growth
Group Retirement: Digital and service enhancements driving group acquisition growth 2015 2016 2017 New Group Acquisition Deposit Growth CAGR +49 % Investments in Technology & Service Recognition for 2017 ▪ 54 Best in Class Awards from PLANSPONSOR Magazine ‒ Service Star Team Award for exemplary serv
Slide 17: Insurance: Overview
Life Insurance: Overview Progress on business transformation Premiums and Deposits ($M) 1,252 1,309 1,378 1,477 557 454 332 515 2016 2017 Sales have grown to expected levels Focused operational strategy following Legacy separation Early successes in international expansion Key Messages U.S. Term U.S
Slide 18: Life Insurance: Management actions driving results
108 136 139 107 90 158 36 38 58 59 57 65 FY 2015 FY 2016 FY 2017 321 420 310 Life Insurance: Management actions driving results Platform Modernization Product Expertise Distribution Focus Sales by Product, CPPE 1,2 ($M) 1 CPPE – Continuous Paid Premium Equivalent, is the sum of 100% of periodic prem
Slide 19: International Life: Selective international expansion demonstrating early success
International Life: Selective international expansion demonstrating early success 1 Compound Annual Growth Rate 2 GWP = gross written premium 3 APE = annual premium equivalent 4 MGA = Managing General Agency 5 Administered by Laya and results accounted for as commissions profit share income Overview
Slide 20: Institutional Markets: Overview
2016 2017 688 265 264 2016 2017 Institutional Markets: Overview Premium and Deposits ($B) Adjusted Pre - Tax Income ($M) 2,153 Attractive return business Long history of successfully providing customized solutions Well - positioned to capitalize on market opportunities Key Messages Opportunistically
Slide 21: Institutional Markets: Well-positioned in growing pension risk transfer market
1 Source: LIMRA 4Q 2017 Portfolio Highlights (as of 12/31/2017) ▪ GAAP Reserves: ~$3.7 B Core/ $2.5 B Legacy ▪ ~ 145K participants being administered ‒ 96K immediates ‒ 49K deferred ▪ Average duration of liabilities is approximately 14 years Institutional Markets: Well - positioned to participate in
Slide 22: Life & Retirement: Key messages
Life & Retirement: Key messages Rigorous and holistic risk management approach Large, diverse in - force portfolio positioned to generate stable earnings and cash flows Well - positioned to meet growing needs in the U.S. and overseas Prepared for selective expansion following extensive transformatio
Slide 23: Q&A and Closing Remarks
AIG]. Q&A and Closing Remarks
Slide 24: Appendix
Appendix ©
Slide 25: Glossary of Non-GAAP Financial Measures and Non-GAAP Reconciliations
Glossary of Non - GAAP Financial Measures and Non - GAAP Reconciliations ©
Slide 26: Glossary of Non-GAAP Financial Measures
26 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
Slide 27: Non-GAAP Reconciliations: Life and Retirement
27 Non - GAAP Reconciliations Life and Retirement Twelve Months Ended (in millions) December 31, 2015 2016 2017 Adjusted pre - tax income $ 3,124 $ 3,428 $ 3,831 Interest expense on attributed fina n cial debt 133 92 23 Adjusted pre - tax income including attributed interest expense 2,991 3,336 3,80
Slide 28: Non-GAAP Reconciliations: Premiums (continued)
28 Non - GAAP Reconciliations Premiums (continued) (in millions) Twelve Months Ended December 31, Individual Retirement: 2016 2017 Premiums $ 163 $ 91 Deposits 15,898 11,819 Other 1 (4) Premiums and deposits $ 16,062 $ 11,906 Individual Retirement (Fixed Annuities): Premiums $ 170 $ 96 Deposits 3,82
Slide 29: Life & Retirement Investor Meeting
Life & Retirement Investor Meeting JUNE 7, 2018 ©
American International Group — Investor Day (June 2018) on 6ix