American International Group, Inc. New · NYSE:AIG
American International Group, Inc. New — American International Group — Q1 2015 Earnings Presentation
30 slides from American International Group, Inc. New's earnings presentation, May 1, 2015
Slide 1: Conference Call Presentation First Quarter 2015
American International Group, Inc. Conference Call Presentation First Quarter 2015 May 1, 2015
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
Slide 3: First Quarter 2015 Highlights
First Quarter 2015 Highlights Progress on Financial Targets and Continued Capital Management Book value per share, ex. AOCI and DTA, of $60.69 grew 4% from year-end 2014 and 14% year-over-year Normalized ROE, ex. AOCI and DTA, of 7.8% Sustainable Progress Commercial Insurance – Property Casual
Slide 4: Building a Foundation for Sustainability
Building a Foundation for Sustainability Demonstrating Progress in Simplifying the Balance Sheet and Reducing Risk (As of Period End) Super Senior CDS Total Assets to AIG 5-Year CDS (bps) ($ in Billions, Notional Amounts) Shareholders’ Equity ~92% ~14% 130 ~54% $15.9 $15.1 5.6x 5.4x 72 60 4.8x 48 $5
Slide 5: AIG Consolidated Operating Financial Highlights
AIG Consolidated Operating Financial Highlights ($ in Millions, Except per Share Amounts) 1Q14 1Q15 Inc. / Dec. Operating revenues $15,100 $14,590 (3%) Pre-tax operating income (loss): Commercial Insurance: Property Casualty 1,116 1,170 5% Mortgage Guaranty 76 145 91% Institutional Markets 229 147 (
Slide 6: Corporate and Other Operations
Corporate and Other Operations ($ in Millions) 1Q14 1Q15 Corporate and Other Operations: Direct Investment book $440 $145 Global Capital Markets 29 114 Runoff insurance lines 5 (19) Other operations1 1 234 Equity in pre-tax operating earnings of AerCap - 128 Fair value of PICC investments - 47 Corpo
Slide 7: Progress on Financial Targets
Progress on Financial Targets ($ in Millions, Except per Share Amounts) Progress on Financial Targets Annual Targets 2015 1Q15 Commentary Through 2017 Target 10+% Growth in Growth of 4% since year-end 2014 was Book Value largely driven by net earnings, including $64.05 $60.69 Per Share, ex. signif
Slide 8: General Operating Expenses
General Operating Expenses Targeting 3-5% of Annual Reduction Through 2017 General Operating Expenses, Operating Basis ($ in Millions) $3,052 $2,993 $3,016 $2,879 $28 $2,784 $25 $24 $11 $20 $418 $408 $434 $407 $423 $368 $355 $365 $376 $369 $2,071 $2,238 $2,206 $2,206 $1,972 1Q14 2Q14 3Q14 4Q14 1Q15
Slide 9: Strong Capital Position
Strong Capital Position ($ in Billions, Except per Share Amounts) Capital Structure Book Value Per Share 1 Total Equity Financial Debt Hybrids BVPS, ex. AOCI & DTA AOCI DTA $124.1 $126.4 $129.6 $122.3 $2.4 $90.00 $2.5 $9.4 $5.5 $16.6 $18.8 $80.16 $15.7 $77.69 +3% $16.1 $11.56 $11.75 $7.91 $107.3 $10
Slide 10: Parent Liquidity – A Source of Strength
Parent Liquidity – A Source of Strength Changes in Parent Liquidity ($ in Billions) $11.3 $1.6 $3.5 $2.1 $0.9 $0.9 Cash & $0.2 $2.3 S/T Inv. $6.3 $9.1 $6.9 Securities $5.0 Balance at Issuance Insurance Share Purchase of Interest Paid Other, net Balance at Add: AIG Parent 3 12/31/14 of Debt Company R
Slide 11: Commercial Insurance
Commercial Insurance AIG
Slide 12: Commercial Insurance – Property Casualty Financial Highlights
Commercial Insurance – Property Casualty Financial Highlights Property Casualty NPW, excluding the effects of foreign exchange, increased 6% ($ in Millions) 1Q14 1Q15 compared to 1Q14 (0.8% on a reported basis), primarily driven by new business growth in Financial lines and Property as well as a r
Slide 13: Commercial Insurance – Mortgage Guaranty Financial Highlights
Commercial Insurance – Mortgage Guaranty Financial Highlights ($ in Millions) 1Q14 1Q15 New insurance written1 $7,605 $10,542 New insurance written increased 39% from 1Q14 on increased refinancings resulting from lower mortgage Net premiums written 231 258 interest rates. Net premiums earned 213 2
Slide 14: Commercial Insurance – Institutional Markets Financial Highlights
Commercial Insurance – Institutional Markets Financial Highlights ($ in Millions) 1Q14 1Q15 Reserves & Stable Value Wrap Assets Under Management Premiums and deposits $147 $146 $80,000 $68,449 $68,925 Premiums 99 96 $60,000 Policy fees 44 49 $32,320 $32,422 $40,000 Net investment income 552 479 Tota
Slide 15: Consumer Insurance
Consumer Insurance AIG
Slide 16: Consumer Insurance – Retirement Financial Highlights
Consumer Insurance – Retirement Financial Highlights ($ in Millions) 1Q14 1Q15 Premiums and deposits 1 $6,016 $5,522 Premiums and deposits declined 8% from 1Q14, due to declines in Fixed Annuities, which continued to be affected by Premiums 57 46 the low interest rate environment, and lower deposi
Slide 17: Consumer Insurance – Retirement – Base Yields and Spreads
Consumer Insurance – Retirement – Base Yields and Spreads Base Yields1 5.35% 5.25% 5.11% 5.06% 5.15% 5.03% 4.99% 4.95% 5.11% 5.00% 4.92% 4.96% 4.92% 4.75% 1Q14 2Q14 3Q14 4Q14 1Q15 Cost of Funds2 3.50% 3.02% 3.03% 2.99% 2.98% 2.97% 3.00% 2.50% 2.85% 2.83% 2.81% 2.80% 2.78% 2.00% 1Q14 2Q14 3Q14 4Q14 1
Slide 18: Consumer Insurance – Life Financial Highlights
Consumer Insurance – Life Financial Highlights ($ in Millions) 1Q14 1Q15 Premiums, excluding the effects of foreign exchange, grew 10% from 1Q14 (5% on a reported basis) primarily due to Premiums and deposits $1,187 $1,223 growth in Japan and the acquisition of Ageas Protect Limited (now AIG Life
Slide 19: Consumer Insurance – Personal Insurance Financial Highlights
Consumer Insurance – Personal Insurance Financial Highlights ($ in Millions) 1Q14 1Q15 Personal Insurance NPW, excluding the effects of foreign exchange, increased 1% (down 7% on a reported basis), reflecting targeted premium rate increases, execution of our targeted growth strategies, and Net pre
Slide 20: Q&A
Q&A AIG
Slide 21: Appendix – Non-GAAP Reconciliations
Appendix – Non-GAAP Reconciliations 21
Slide 22: Glossary of Non-GAAP Financial Measures
Glossary of Non-GAAP Financial Measures AIG We use the following operating performance measures because we believe they enhance the understanding of the underlying profitability of continuing operations and trends of our business segments. We believe they also allow for more meaningful comparisons w
Slide 23: Glossary of Non-GAAP Financial Measures (continued)
Glossary of Non-GAAP Financial Measures (continued) AIG Normalized Return on Equity, Excluding AOCI and DTA further adjusts Return on Equity – After-tax Operating Income, excluding AOCI and DTA for the effects of certain volatile or market related items. Normalized Return on Equity, Excluding AOCI
Slide 24: Glossary of Non-GAAP Financial Measures (continued)
Glossary of Non-GAAP Financial Measures (continued) Commercial Insurance: Institutional Markets; Consumer Insurance: Retirement and Life Pre-tax operating income is derived by excluding the following items from pre-tax income: – changes in fair values of fixed maturity securities designated to hed
Slide 25: Non-GAAP Reconciliation – Premiums and Deposits, Operating Revenues, and General Operating Expenses
Non-GAAP Reconciliation – Premiums and Deposits, Operating Revenues, and General Operating Expenses Institutional Markets Retirement Life Premiums and Deposits 1Q14 1Q15 1Q14 1Q15 1Q14 1Q15 ($ in Millions) Premiums and Deposits $147 $146 $6,016 $5,522 $1,187 $1,223 Deposits (43) (45) (6,078) (5,650)
Slide 26: Non-GAAP Reconciliation – Pre-tax and After-tax Operating Income
Non-GAAP Reconciliation – Pre-tax and After-tax Operating Income Pre-tax and After-tax Operating Income 1Q14 1Q15 (In Millions, Except Per Share Data) Pre-tax income from continuing operations $2,273 $3,776 Adjustments to arrive at Pre-tax operating income: Changes in fair values of fixed maturity s
Slide 27: Non-GAAP Reconciliation – Book Value Per Share and Return On Equity
Non-GAAP Reconciliation – Book Value Per Share and Return On Equity Book Value Per Common Share Dec. 31, 2014 March 31, 2014 March 31, 2015 ($ in Millions, Except Per Share Data) Total AIG shareholders’ equity (a) $106,898 $103,833 $107,979 Less: Accumulated other comprehensive income (AOCI) (10,617
Slide 28: Non-GAAP Reconciliation – Accident Year Combined Ratio, as Adjusted
Non-GAAP Reconciliation – Accident Year Combined Ratio, as Adjusted Property Casualty Mortgage Guaranty Personal Insurance Accident Year Combined Ratio, As Adjusted 1Q14 1Q15 1Q14 1Q15 1Q14 1Q15 Loss ratio 69.4 68.1 55.4 25.2 59.2 58.8 Catastrophe losses and reinstatement premiums (3.6) (1.4) N/M N/
Slide 29: Non-GAAP Reconciliation – Normalized ROE, Ex. AOCI & DTA
Non-GAAP Reconciliation – Normalized ROE, Ex. AOCI & DTA* Full Year 2014 1Q15 Pre-tax After-tax ROE Pre-tax After-tax ROE As reported $9,574 $6,630 8.4% $2,527 $1,691 8.4% Adjustments to arrive at Normalized ROE, ex. AOCI & DTA: Catastrophe losses below expectations (821) (534) (0.7%) (113) (74) (0.
Slide 30: About American International Group, Inc. (AIG)
American International Group, Inc. (AIG) is a leading global insurance organization serving customers in more than 100 countries and jurisdictions. AIG companies serve commercial, institutional, and individual customers through one of the most extensive worldwide property-casualty networks of any in
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