American International Group, Inc. New · NYSE:AIG
American International Group, Inc. New — American International Group — Q3 2014 Earnings Presentation
24 slides from American International Group, Inc. New's earnings presentation, Nov 4, 2014
Slide 1: Earnings Conference Call Presentation Third Quarter 2014
American International Group, Inc. Earnings Conference Call Presentation Third Quarter 2014 November 4, 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: Third Quarter 2014 Key Themes
Third Quarter 2014 Key Themes Highlights: Noteworthy Items Repurchased approximately $1.5 billion of AIG Common Stock during 3Q14; increased share repurchase authorization by $1.5 billion on October 31, 2014 Repurchased, in tender offers, certain high coupon hybrid and senior notes issued or gua
Slide 4: Financial Highlights
Financial Highlights Third Quarter Inc. ($ in millions, except per share amounts) 2013 2014 /(Dec.) Revenues $15,944 $16,654 4% Net income attributable to AIG 2,170 2,192 1% Diluted earnings per common share $ 1.46 $1.52 4% After-tax operating income attributable to AIG $1,421 $1,745 23% After-tax o
Slide 5: After-Tax Operating Income
After-Tax Operating Income Third Quarter ($ in millions, except per share amounts) 2013 2014 Insurance operations: AIG Property Casualty $1,079 $1,096 AIG Life and Retirement 1,144 1,348 Mortgage Guaranty 43 135 Total Insurance Operations 2,266 2,579 Other operations: Direct Investment book 110 314
Slide 6: Strong Capital Position
Strong Capital Position Capital Structure Book Value Per Share ($ in billions, except per share data) $130.3 +13% $77.35 $0.4 $80.0 $122.3 $0.6 $17.2 $68.62 $11.17 $15.7 $70.0 $4.1 Non-redeemable $5.5 $12.16 $8.07 $60.0 noncontrolling interests $4.34 $50.0 (1) Financial Debt $40.0 $108.6 $100.5 $30.
Slide 7: Financial Flexibility – A Source of Strength
Financial Flexibility – A Source of Strength Insurance Company Changes in AIG Parent Liquidity Cash Distributions AIG Parent Liquidity ($ in millions) ($ in billions) ($ in billions) $5,378 $13.1 $12.6 AIG Parent Liquidity, excluding DIB/GCM: $3.0 Balance, July 1, 2014 $9.7 $3.9 Issuance of debt 2.5
Slide 8: AIG Property Casualty – Financial Results
AIG Property Casualty – Financial Results ($ in millions) 3Q13 3Q14 Net premiums written $8,660 $8,953 Net premiums earned 8,427 8,630 Underwriting loss (134) (169) Net investment income 1,213 1,265 Pre-tax operating income $1,079 $1,096 Global Combined Ratios Calendar Year Accident Year, as adjuste
Slide 9: Commercial Insurance – Underwriting Results
Commercial Insurance – Underwriting Results Net Premiums Written Commercial Insurance NPW, excluding the effects of foreign exchange and additional premiums on loss sensitive business, ($ in millions) increased 3% from 3Q13 driven by growth in Property and Financial Lines. On an as reported basis,
Slide 10: Mortgage Guaranty – Financial Results and Trends
Mortgage Guaranty – Financial Results and Trends Percentage of net premiums earned from business written after 2008 grew to 69%. Business Trends(1) ($ in millions) 3Q13 3Q14 NIW Persistency $15.0 85% Net premiums written $272 $271 83% NIW ($ in billions) $12.0 Persistency (%) 81% Net premiums earned
Slide 11: Consumer Insurance – Underwriting Results
Consumer Insurance – Underwriting Results Net Premiums Written Consumer Insurance NPW, excluding the effects of foreign ($ in millions) exchange, increased 2% from 3Q13 reflecting growth in Personal $4,000 Property and Auto, partially offset by declines in U.S. warranty and $3,441 $3,454 certain c
Slide 12: AIG Property Casualty – Investments
AIG Property Casualty – Investments Net investment income: Third Quarter ($ in millions) 2013 2014 Inc./(Dec.) Interest and dividends $ 1,071 $ 1,014 (5%) Alternative investments(1) 69 194 181% Other, net(2) 73 57 (22%) Net investment income $ 1,213 $ 1,265 4% Yield 3.88% 4.08% 0.20 Total Cash & Inv
Slide 13: AIG Life and Retirement – Financial Results
AIG Life and Retirement – Financial Results ($ in millions) 3Q13 3Q14 Pre-tax operating income growth was driven by an increase in fee income on higher assets under management and Premiums and deposits $8,422 $9,662 strong alternative investment income. Premiums 721 599 Premiums and deposits ben
Slide 14: AIG Life and Retirement – Retail & Institutional Results
AIG Life and Retirement – Retail & Institutional Results Line of business comparisons impacted by the annual review of updated assumptions(1). Retail Pre-Tax Operating Income(2) Institutional Pre-Tax Operating Income(3) ($ in millions) ($ in millions) $900 $846 $900 $803 $132 $211 $600 $600 $545 $15
Slide 15: AIG Life and Retirement – Base Yields and Spreads
AIG Life and Retirement – Base Yields and Spreads Base Yields(1) 5.50% 5.32% 5.29% 5.30% 5.26% 5.17% 5.24% 5.11% 5.17% 5.25% 5.10% 5.06% 5.11% 4.90% 5.08% 5.10% 5.11% 5.00% 4.92% 4.70% 3Q13 4Q13 1Q14 2Q14 3Q14 Cost of Funds(2) 3.20% 3.08% 3.05% 3.03% 3.02% 2.99% 3.00% 2.80% 2.93% 2.91% 2.85% 2.83% 2
Slide 16: AIG Life and Retirement – Investments
AIG Life and Retirement – Investments Net investment income: Third Quarter ($ in millions) 2013 2014 Inc./(Dec.) Base portfolio(1) $ 2,242 $ 2,224 (1%) (2) Alternative investments 137 290 112% Other enhancements(3) 88 100 14% Net investment income $ 2,467 $ 2,614 6% (4) Base Yield 5.26% 5.11% (0.15)
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 3Q14 AIG AIG Mortgage Other (1) ($ in millions) Property Casualty Life and Retirement Guaranty Operations Total Income (loss) from continuing operations, before tax $ 1,207 $ 1,931 $ 135 $ (254) $ 3,019 Adjustments to arrive at pre-tax operating inc
Slide 20: Non-GAAP Reconciliation – After-Tax Operating Income
Non-GAAP Reconciliation – After-Tax Operating Income After-tax Operating Income Attributable to AIG Third Quarter ($ in millions) 2013 2014 Net income (loss) attributable to AIG $ 2,170 $ 2,192 Adjustments to arrive at After-tax operating income attributable to AIG: (Income) loss from discontinued o
Slide 21: Non-GAAP Reconciliation – Return On Equity
Non-GAAP Reconciliation – Return On Equity Third Quarter Return On Equity 2013 2014 Annualized Net income attributable to AIG (1) $ 8,680 $ 8,768 Annualized After-tax operating income attributable to AIG (2) 5,684 6,980 Average AIG Shareholders' equity (3) 98,128 108,371 Less: Average AOCI 6,774 11,
Slide 22: Non-GAAP Reconciliation – Book Value Per Share and Premiums and Deposits
Non-GAAP Reconciliation – Book Value Per Share and Premiums and Deposits Book Value Per Common Share - Ex. AOCI December 31, September 30, ($ in millions, except per share data) 2013 2013 2014 Total AIG shareholders' equity (1) $ 100,470 $ 98,793 $ 108,581 Less: Accumulated other comprehensive incom
Slide 23: Non-GAAP Reconciliation – Accident Year Combined Ratio, As Adjusted
Non-GAAP Reconciliation – Accident Year Combined Ratio, As Adjusted AIG Property Casualty Quarterly Trend Accident year com bined ratio, as adjusted 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 Com m ercial Insurance Loss ratio 78.0 100.9 64.9 72.6 71.8 77.9 69.4 67.7 74.3 Catastrophe losses and rei
Slide 24: About American International Group, Inc. (AIG)
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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