American International Group, Inc. New · NYSE:AIG

American International Group, Inc. New — American International Group — Q4 2013 Earnings Presentation

43 slides from American International Group, Inc. New's earnings presentation, Mar 3, 2014

  1. Slide 1: American International Group, Inc. Investor Presentation

    American International Group, Inc. Investor Presentation March 3, 2014

  2. 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, projections, goals, assumptions and statements that may constit

  3. Slide 3: AIG – An Established Global Insurance Franchise

    AIG – An Established Global Insurance Franchise A platform for delivering sustainable profitable growth. Core Insurance Strategies Key Accomplishments Businesses Full year 2013 NPW growth of 3.8%, excluding FX,  Grow high value lines and optimize business mix compared to full year 2012 Optimizing C

  4. Slide 4: AIG – Building on Capital Strength

    AIG – Building on Capital Strength  25% increase in quarterly dividend to $0.125/sh. in Feb. 2014  2013 non-DIB debt calls and tenders of $5.3 billion (face amount) AIG Shareholders’ Equity - Active Capital Management  $597 million of shares repurchased in 2013; $100.5 bn at December 31, 2013 $1.

  5. Slide 5: AIG Property Casualty

    AIG Property Casualty ~t AIG

  6. Slide 6: AIG Property Casualty – A Truly Global Franchise

    AIG Property Casualty – A Truly Global Franchise AIG Property Casualty is a diversified global P&C market leader with 2013 NPW of over $34 billion.  #1 U.S.-based property casualty EMEA(1) insurance organization in Europe, with 2013 NPW: $6.8 bn established and growing positions in 20% of total NPW

  7. Slide 7: AIG Property Casualty – Financial Highlights

    AIG Property Casualty – Financial Highlights Full Year ($ in billions) 2011 2012 2013 Net premiums written $34.8 $34.4 $34.4 Net investment income 4.3 4.8 5.3 Pre-tax operating income $1.1 $1.8 $4.8 Accident year loss ratio, as adjusted 68.7 65.2 63.8 Expense ratio 30.4 34.6 34.6 Accident year combi

  8. Slide 8: AIG Property Casualty – Business Overview

    AIG Property Casualty – Business Overview A broad product platform. Commercial Insurance Consumer Insurance Full Year 2013 NPW – $20.8 bn Full Year 2013 NPW – $13.6 bn Casualty 39% Personal Accident Financial & Health Lines Lines 49% 51% 20% Property 23% Specialty 18%  Global – Unique ability to se

  9. Slide 9: AIG Property Casualty – Strategic Focus

    AIG Property Casualty – Strategic Focus Strategic levers driving shareholder value creation. Business Underwriting Claims Operational Capital Mix Excellence Service Effectiveness Management  Balance growth with  Globalize  Global Claims  Simplify and  Use RAP as a key profitability and risk sta

  10. Slide 10: AIG Property Casualty – Strong Brands and Customer Loyalty

    AIG Property Casualty – Strong Brands and Customer Loyalty AIG Property Casualty continues to be recognized for excellence. PropertyCasualty360 British Insurance Award World Travel Fair 2013 Best Overall Commercial 2013 Underwriter of the Year 2013 Best Quality Service, Travel Insurance Insurance Pr

  11. Slide 11: AIG Property Casualty – Product Diversification

    AIG Property Casualty – Product Diversification Commercial Insurance Consumer Insurance  General Liability  Commercial Auto Casualty  Workers’ Compensation  Excess Casualty  Personal Accident  Crisis Management Accident and  Supplemental Medical Health  Travel  Global Property including hig

  12. Slide 12: AIG Property Casualty – Growth Economies

    AIG Property Casualty – Growth Economies Growth economies accounted for approximately 13% of NPW in 2013, up over 12% from 2012  Growth economies are those within Central Europe, Middle East, Africa, Latin America and Asia Pacific, excluding Japan  The largest foreign property and casualty insurer

  13. Slide 13: AIG Property Casualty – Investment Composition & Ratings

    AIG Property Casualty – Investment Composition & Ratings (As of December 31, 2013) Total Cash & Invested Assets - $123.1 billion(1) Bond Portfolio - $99.0 billion(1) - by Agency Credit Rating CMBS CDO/ABS 2% 5% Equities 3% Other invested assets 8% BB Loans BBB 2% RMBS 3% A 14% 10% B Cash and short-t

  14. Slide 14: AIG Life and Retirement

    AlG Life and Retirement | AIG

  15. Slide 15: AIG Life and Retirement – Operating from a Position of Strength

    AIG Life and Retirement – Operating from a Position of Strength  Long standing leading market positions Market Leader  Scale advantage in key product lines Product Diversity  Comprehensive portfolio of life insurance, A&H, annuity, group retirement, & Capacity for group benefits, institutional pr

  16. Slide 16: AIG Life and Retirement – Financial Highlights

    AIG Life and Retirement – Financial Highlights Full Year ($ in billions) 2011 2012 2013 Premiums and deposits $24.4 $21.0 $28.8 Net investment income 9.9 10.7 10.9 Pre-tax operating income 3.3 4.2 5.1 Cash & invested assets (1) 194.2 205.3 196.9 Assets under management 256.9 290.4 318.0 Shareholders

  17. Slide 17: AIG Life and Retirement – Diversified Business Mix

    AIG Life and Retirement – Diversified Business Mix Full Year 2013 Full Year 2013 Premiums and Deposits - $28.8 billion Pre-tax Operating Income - $5.1 billion Retail: 69% Institutional: 31% Retail: 62% Institutional: 38% Life Insurance Life Insurance and A&H Group and A&H Group 12% Retirement 14% Re

  18. Slide 18: AIG Life and Retirement – Assets Under Management

    AIG Life and Retirement – Assets Under Management Year-over-year growth in AUM reflects strong retail investment product net flows, higher separate account balances and greater institutional assets. Assets Under Management – $318.0 billion at December 31, 2013 Retail Mutual Funds Retirement 4% Fixed

  19. Slide 19: AIG Life and Retirement – Leading Market Positions

    AIG Life and Retirement – Leading Market Positions Market Positions Excellence in Service, Marketing and Technology Market Tools International MarCom Rank* 2013 Achievement in Awards Metric Customer Excellence 2012 and 2013 Platinum 9M’13 FY’12 (ACE award for 7th and Gold Awards Consecutive Year) (4

  20. Slide 20: AIG Life and Retirement – Broad Multichannel Distribution Network

    AIG Life and Retirement – Broad Multichannel Distribution Network 2013 Sales by Channel Diversified Distribution Network Affiliated: 33% Non-affiliated: 67% VALIC Financial Advisors Affiliated AIG Financial Network VALIC FAs 26% B-Ds Advisor Group 34% AIG Direct AIG Direct & Other 1% AIG Financial N

  21. Slide 21: AIG Life and Retirement – Variable Annuities

    AIG Life and Retirement – Variable Annuities Changing competitive environment offers a unique opportunity. Variable Annuity “Non-Captive” Industry Sales(1) ($ millions) Nine Months 2013 FY 2012 FY 2011 FY 2010 FY 2009 Rank Sales Share Rank Sales Share Rank Sales Share Rank Sales Share Rank Sales Sha

  22. Slide 22: AIG Life and Retirement – Investment Composition & Ratings

    AIG Life and Retirement – Investment Composition & Ratings (As of December 31, 2013) Total Cash & Invested Assets - $196.9 billion(1) Bond Portfolio - $157.2 billion(1) - by Agency Credit Rating CMBS 4% RMBS BB CDO/ABS 4% 12% 5% BBB B 42% 2% Other invested assets 7% <B 8% Cash and short-term Loans C

  23. Slide 23: AIG Life and Retirement – Net Investment Spread Management

    AIG Life and Retirement – Net Investment Spread Management Base Yields(1) 5.50% 5.50% 5.38% 5.33% 5.35% 5.26% 5.30% 5.26% 5.29% 5.31% 5.25% 5.24% 5.12% 5.12% 5.10% 5.17% 5.19% 5.23% 5.14% 5.10% 5.08% 5.01% 4.95% 4.85% 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 Cost of Funds(2) 3.28% 3.27% 3.26% 3.26% 3

  24. Slide 24: Mortgage Guaranty (United Guaranty Corporation)

    Mortgage Guaranty (United Guaranty Corporation) 24

  25. Slide 25: United Guaranty – Financial Highlights

    United Guaranty – Financial Highlights Full Year ($ in millions) 2011 2012 2013 Net premiums written $801 $858 $1,048 Net investment income 132 146 132 Pre-tax operating income (loss) ($97) $9 $205 Combined ratio 128.9 119.2 90.9 Cash & invested assets (1) $4,081 $4,222 $3,934 Shareholders’ equity 2

  26. Slide 26: United Guaranty – A Market Leader

    United Guaranty – A Market Leader Risk based pricing driving profitable new business. New Insurance Written(1) Average ($ in billions) Vintage Year(2) FICO Score LTV Ratio $60.0 $49.9 $50.0 2010 760 90 New Insurance Written $40.0 $37.5 2011 757 91 $30.0 $18.8 2012 758 91 $20.0 $10.0 2013 753 91 $0.0

  27. Slide 27: United Guaranty – Shrinking Legacy In-Force

    United Guaranty – Shrinking Legacy In-Force Primary Delinquency Rate Primary Risk-in-force (RIF) – $36.4 billion 20% As of December 31, 2013 (by vintage year) 2004 and prior 5% 2005 16% 4% 2006 5% 2013 12% 32% 2007 11% 8% 2008 4% 6% 2009 0% 3% 2010 12/31/08 12/31/09 12/31/10 12/31/11 12/31/12 12/31/

  28. Slide 28: United Guaranty – Financial Strength

    United Guaranty – Financial Strength Capitalization and Risk Asset Composition At September 30, 2013 Default Post 2008 Risk-to- Cash & Bonds to Total Admitted Assets At Dec. 31, 2013 Rate (%) RIF (%) Capital(1) United Guaranty 5.9 69 17.9 Genworth 8.2 45 19.3 MGIC 10.8 42 15.8 Radian 7.3 60 19.4 Ess

  29. Slide 29: Capital Strength

    Capital Strength AIG

  30. Slide 30: Capital Position and Ratings

    Capital Position and Ratings Capital Structure Credit Ratings(2) ($ in billions, except per share data) S&P Moody’s Fitch AM Best $124.1 $122.3 $0.7 $0.6 Non-redeemable $16.1 $15.7 noncontrolling AIG – Senior $5.5 A- Baa1 BBB+ NR interests $9.4 Debt (1) Financial Debt AIG PC(3) – A+ A1 A A FSR $98.0

  31. Slide 31: Financial Flexibility – A Source of Strength

    Financial Flexibility – A Source of Strength AIG Parent Cash, Short-Term Investments & Insurance Company Distributions Unencumbered Securities ($ in millions) ($ in billions) AIG Property Casualty AIG Life and Retirement UGC $13.1 $8,893 $12.6 90 $3.0 $4,433 $5,349 Unencumbered Fixed Maturity $2,853

  32. Slide 32: Other Sources of Value

    Other Sources of Value | AIG

  33. Slide 33: Direct Investment Book and Global Capital Markets

    Direct Investment Book and Global Capital Markets Direct Investment Book (1) Global Capital Markets (1) ($ in billions) Assets $23.3 $7.7 Liabilities $20.0 $3.1 Net Asset Value $3.3 $4.6 Legacy Matched AIG Hedging & Legacy AIGFP Stable Value Go Forward Assets & Liabilities Market Derivatives(2) CDS

  34. Slide 34: Direct Investment Book Long-Term Debt

    Direct Investment Book Long-Term Debt ($ in billions) $25 90% 80% 80% $20 (1) $17.9 70% $1.2 60% $14.6 62% $15 $5.5 $1.1 $12.9 50% $0.9 $11.1 $4.9 $0.7 40% 38% $10 $3.2 $4.3 $4.0 $6.9 30% $2.2 28% $2.2 $0.5 $8.0 20% $5 $6.4 19% $2.2 $3.7 $5.5 $3.7 $0.4 0% 10% $4.3 $3.1 $2.2 $0.4 $0.2 $0 0% as of 12/

  35. Slide 35: Deferred Tax Asset Overview

    Deferred Tax Asset Overview AIG continues to have substantial deferred tax assets that are available to offset future tax obligations. As of 12/31/12 As of 12/31/13 Gross Deferred Gross Deferred ($ in billions) Type Attributes Tax Asset Attributes Tax Asset Utilization/Expiration  Utilize against A

  36. Slide 36: Appendix

    Appendix AIG

  37. Slide 37: Glossary of Non-GAAP Financial Measures

    Glossary of Non-GAAP Financial Measures AIG After-tax operating income (loss) attributable to AIG: is derived by excluding the following items from net income (loss) attributable to AIG: income (loss) from discontinued operations, net loss (gain) on sale of divested businesses and properties, income

  38. Slide 38: AIG Consolidated Financial Highlights

    AIG Consolidated Financial Highlights Full Year ($ in millions, except per share amounts) 2011 2012 2013 Revenues $65,105 $71,021 $68,678 (1) Net income attributable to AIG 20,622 3,438 9,085 Diluted earnings per common share $11.01 $2.04 $6.13 ROE, Ex. AOCI (2) 26.6% 3.7% 10.1% After-tax operating

  39. Slide 39: Non-GAAP Reconciliation – Pre-tax Operating Income

    Non-GAAP Reconciliation – Pre-tax Operating Income Full Year 2012 AIG AIG Mortgage Other ($ in millions) Property Casualty Life and Retirement Guaranty Operations Total Income (loss) from continuing operations, before tax $ 2,023 $ 3,780 $ 15 $ 3,504 $ 9,322 Adjustments to arrive at pre-tax operatin

  40. Slide 40: Non-GAAP Reconciliation – Full Year Pre-tax Operating Income

    Non-GAAP Reconciliation – Full Year Pre-tax Operating Income AIG Property Casualty Full Year ($ in millions) 2011 2012 2013 Income from continuing operations, before tax $ 2,100 $ 2,023 $ 5,133 Adjustments to arrive at pre-tax operating income: Net realized capital (gains) losses (957) (211) (380) L

  41. Slide 41: Non-GAAP Reconciliation

    Non-GAAP Reconciliation After-tax Operating Income Attributable to AIG Full Year ($ in millions) 2012 2013 Net income attributable to AIG $ 3,438 $ 9,085 Adjustments to arrive at After-tax operating income attributable to AIG: (Income) loss from discontinued operations (1) (84) Net (income) loss fro

  42. Slide 42: Non-GAAP Reconciliation – BVPS ex. AOCI, Premiums & Deposits, Accident Year Combined Ratio

    Non-GAAP Reconciliation – BVPS ex. AOCI, Premiums & Deposits, Accident Year Combined Ratio, As Adjusted Book Value Per Common Share - Ex. AOCI December 31, ($ in millions, except per share data) 2012 2013 Total AIG shareholders’ equity $ 98,002 $ 100,470 Less: AOCI (12,574) (6,360) Total AIG shareho

  43. Slide 43: AIG – Bring on tomorrow

    AIG Bring on tomorrow

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