American International Group, Inc. New · NYSE:AIG
American International Group, Inc. New — American International Group — Q4 2012 Earnings Presentation
21 slides from American International Group, Inc. New's earnings presentation, Feb 22, 2013
Slide 1: Fourth Quarter 2012 Results Conference Call Presentation
American International Group, Inc. Fourth Quarter 2012 Results Conference Call Presentation February 22nd, 2013
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: Fourth Quarter 2012 Key Themes
Fourth Quarter 2012 Key Themes Highlights: Noteworthy Items Sold remaining AIA shares for $6.5 billion (realized gain of $240 million) Entered into agreement to sell up to 90% of ILFC; recorded as held-for-sale Strategic Activities Strategic investment of $500 million in PICC Group through lif
Slide 4: Financial Highlights
Financial Highlights GAAP results for 4Q12 reflect a $4.4 billion ($2.97 per share) net loss on ILFC sale. Fourth Quarter Inc. ($ in millions, except per share amounts) 2011 2012 (Dec.) Revenues $16,376 $15,854 (3%) (1) Net income (loss) attributable to AIG 21,479 (3,958) NM After-tax operating inco
Slide 5: After-tax Operating Income (Loss)
After-tax Operating Income (Loss) Insurance operating results reflect Storm Sandy losses of $2.0 billion. Fourth Quarter ($ in millions, except per share amounts) 2011 2012 Insurance operations AIG Property Casualty $367 ($945) AIG Life and Retirement 912 1,090 Mortgage Guaranty (reported in Other)
Slide 6: Deferred Tax Asset Overview
Deferred Tax Asset Overview AIG has substantial tax attribute carryforwards that are available under U.S. tax law to offset future U.S. federal income tax obligations. Amounts are presented on a U.S. GAAP basis. As of 12/31/11 As of 12/31/12 Gross Deferred Gross Deferred ($ in billions) Type Attribu
Slide 7: Strong Capital Position
Strong Capital Position Capital Structure Book Value Per Share ($ in billions, except per share data) As of Dec. 31, +24% $134.8 70.0 $66.38 $9.4 $124.5 $9.3 $1.0 $8.51 $9.4 60.0 $14.6 $53.53 Non-controlling $16.1 $3.42 interest 50.0 Hybrids 40.0 AOCI (1) Financial Debt 30.0 $57.87 BVPS, (2) $101.5
Slide 8: Financial Flexibility – A Source of Strength
Financial Flexibility – A Source of Strength Parent liquidity reflects the sale of AIA shares in the fourth quarter. Insurance Company Distributions Parent Liquidity ($ in millions) ($ in billions) AIG Property Casualty AIG Life and Retirement $16.1 3,000 $2,606 $0.5 $5.3 billion $14.0 2,500 $3.0 Gr
Slide 9: AIG Property Casualty – Financial Results
AIG Property Casualty – Financial Results Underwriting results in 4Q12 reflect Storm Sandy losses of $2.0 billion. ($ in millions) 4Q11 4Q12 Global Combined Ratios Calendar Year Accident Year, Net premiums written $7,848 $7,809 as adjusted(1) 140 125.1 120 107.1 Net premiums earned 8,962 8,613 101.9
Slide 10: Commercial Insurance – Underwriting Results
Commercial Insurance – Underwriting Results Commercial results reflect mix shift, enhanced risk selection, and price increases. Net Premiums Written ($ in millions) Global Commercial Insurance rates increased +6.0% 5,000 (+8.6% for the U.S.), led by U.S. Property at +14.6% and $4,424 $4,410 U.S. W
Slide 11: Consumer Insurance – Underwriting Results
Consumer Insurance – Underwriting Results Consumer results reflect continued execution of global strategies. Net Premiums Written ($ in millions) Represents 41% of total AIG Property Casualty NPW for 4,000 2012, reflecting growth across the business using multiple $3,427 $3,395 distribution channe
Slide 12: AIG Property Casualty – Investments
AIG Property Casualty – Investments Net investment income: Fourth Quarter Full Year ($ in millions) 2011 2012 Inc./(Dec.) 2011 2012 Inc./(Dec.) Interest and dividends $ 963 $ 968 1% $ 3,742 $ 3,949 6% Alternative investments (86) 157 NM 371 484 30% (1) Other, net 126 92 (27%) 235 387 65% Net investm
Slide 13: AIG Life and Retirement – Financial Results
AIG Life and Retirement – Financial Results Results reflect active management of net investment spreads. Operating income Operating income in 4Q12 reflects strong alternative 4Q11 4Q12 investment income, a $57 million gain on PICC Group ($ in millions) investment, active net investment spread mana
Slide 14: AIG Life and Retirement – Investments
AIG Life and Retirement – Investments Net investment income: Fourth Quarter Full Year ($ in millions) 2011 2012 Inc./(Dec.) 2011 2012 Inc./(Dec.) Interest and dividends $ 2,372 $ 2,316 (2%) $ 9,043 $ 9,650 7% Alternative investments 31 332 NM 842 954 13% Call and tender income 24 42 75% 222 146 (34%
Slide 15: AIG Life and Retirement – Base Yields and Spreads
AIG Life and Retirement – Base Yields and Spreads Base Yields(1) Base Net Investment Spreads(1) 5.50% 2.08% 1.99% 5.33% 1.95% 1.92% 5.28% 5.30% 5.30% 1.80% 1.83% 5.17% 1.86% 1.95% 5.11% 1.90% 5.10% 5.17% 1.81% 5.13% 1.64% 1.73% 5.08% 5.04% 4.90% 4.99% 1.66% 1.42% 4.70% 4.50% 1.20% 4Q11 1Q12 2Q12 3Q1
Slide 16: Mortgage Guaranty – Results
Mortgage Guaranty – Results 4Q12 operating loss of $45 million reflects a lengthening of foreclosure timelines and a change in estimated ultimate cure rate, both of which negatively impacted loss reserves. New Insurance Written (NIW)(1) Primary Delinquency (DQ) Ratio (%) ($ in billions) 16.0% Growth
Slide 17: Q&A
AIG Q&A
Slide 18: Appendix
AIG Appendix
Slide 19: Legacy AIGFP: What We've Accomplished
Legacy AIGFP: What We’ve Accomplished AIG will continue to de-risk the legacy AIGFP portfolio while ensuring the firm retains the maximum economic benefit possible. (2) Net Notional Exposures ($ in billions) (1) Gross Vega ($ in billions) 1.5 1.25 December 31, % Reduction 99% 1 Reduction Derivatives
Slide 20: Legacy AIGFP: Where We're Going
Legacy AIGFP: Where We’re Going Actively managing the portfolio for maximum profit contribution and with limited risk. Estimated Type Average Description Life AIG Derisking Activities and Portfolio Hedging - ~$73 billion: Aggregate Value at Risk on Market Derivatives is effectively zero at a 95% c
Slide 21: American International Group, Inc. (AIG) is a leading international insurance organization
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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