American International Group, Inc. New · NYSE:AIG
American International Group, Inc. New — American International Group — Q2 2019 Earnings Presentation
29 slides from American International Group, Inc. New's earnings presentation, Aug 8, 2019
Slide 1: Conference Call Presentation Second Quarter 2019
Conference Call Presentation Second Quarter 2019 August 8, 2019
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 that
Slide 3: Second Quarter 2019 Key Outcomes
Second Quarter 2019 Key Outcomes 2Q19 Adjusted After-Tax Income Attributable to AIG Common Shareholders (AATI) of $1.3B ($1.43/share) Adjusted Book Value Per Share of $56.89, up approximately 4% from $54.95 at year-end Consolidated 2Q19 net investment income (NII) increased from 2Q18 largely due
Slide 4: Consolidated Operating Financial Highlights
Consolidated Operating Financial Highlights ($ in millions, except per common share amounts) 2Q18 2Q19 Adjusted Pre-tax Income (Loss): General Insurance North America $407 $718 International 161 262 Total General Insurance 568 980 Life and Retirement Individual Retirement 462 588 Group Retirement 25
Slide 5: Net Investment Income
Investments ($ in millions, unless otherwise indicated) First Half Second Quarter 2018 2019 2018 2019 Net Investment Income General Insurance $1,418 $1,922 $657 $833 Life and Retirement 4,041 4,312 1,995 2,270 Legacy 1,188 1,178 623 603 Other Operations (7) 187 (6) 96 Consolidations and Eliminations
Slide 6: Strong Capital Position
Strong Capital Position Capital Structure ($B) Risk Based Capital (RBC) Ratios2 $90.4 Life and Retirement General Insurance Year-end $81.0 $1.5 Companies Companies $1.5 $22.8 $22.2 $1.6 Hybrids 2017 480% (CAL) 409% (ACL) $0.9 $5.0 Financial Debt 1 $10.2 $9.6 $0.5 NCI Total Equity: AOCI Total Equity:
Slide 7: Parent Liquidity
Parent Liquidity Changes in Parent Liquidity ($B) Cash & S/T Investments Unencumbered Securities $1.4 $6.0 ($0.3) ($0.3) $5.2 Includes: Life Dividends: $0.5B $3.6 GI Dividends: $0.4B $3.5 Tax Payments from Subsidiaries: $0.5B $2.4 $1.6 Balance at Insurance Dividends Debt Repurchases & Balance at 3/3
Slide 8: General Insurance – Select Metrics
General Insurance – Select Metrics ($ in millions) 2Q18 2Q19 Catastrophe Losses, Net of Reinsurance ($M) Net premiums written $6,977 $6,581 Net premiums earned $6,570 $6,694 $174 $150 $4 Loss and loss adjustment expense 4,317 4,215 $43 Acquisition expenses 1,389 1,488 General operating expenses 953
Slide 9: General Insurance – North America
General Insurance – North America ($ in millions) 2Q18 2Q19 Net premiums written $3,236 $3,307 Commercial Lines 2,321 2,364 Key Takeaways: Personal Insurance 915 943 NPW growth driven by strategic acquisitions partially offset by underwriting and reinsurance actions Net premiums earned $2,892 $3,3
Slide 10: General Insurance – International
General Insurance – International ($ in millions) 2Q18 2Q19 Net premiums written $3,741 $3,274 Key Takeaways: Commercial Lines 1,590 1,516 Personal Insurance 2,151 1,758 NPW decreased primarily due to underwriting actions taken to strengthen the portfolio and to maintain pricing discipline, Net pr
Slide 11: Reserves
Reserves ($ in millions) Unfavorable (Favorable) 2Q18 2Q19 General Insurance North America Commercial Lines ($95) ($81) Personal Insurance 41 20 Total North America ($54) ($61) International Commercial Lines (8) (6) Personal Insurance 1 1 Total International (7) (5) Total General Insurance (61) (66)
Slide 12: Life and Retirement – Select Metrics
Life and Retirement – Select Metrics Adjusted Return on Common Equity Premiums and Deposits ($B) $7.4 $7.2 $0.7 $0.3 $1.0 $1.0 $2.3 $2.0 17.3% 15.0% $3.4 $3.9 2Q18 2Q19 2Q18 2Q19 Individual Retirement Group Retirement Life Insurance Institutional Markets Adjusted Pre-Tax Income ($M) General Operatin
Slide 13: Life and Retirement – Individual Retirement
Life and Retirement – Individual Retirement ($ in millions) 2Q18 2Q19 Key Takeaways Premiums and deposits $ 3,422 $ 3,865 Adjusted pre-tax income increased largely due to strong private Premiums 16 16 equity returns and higher yield enhancements resulting from lower interest rates Policy fees 202
Slide 14: Life and Retirement – Group Retirement
Life and Retirement – Group Retirement ($ in millions) 2Q18 2Q19 Key Takeaways Premiums and deposits $ 2,345 $ 2,047 New business declined as 2Q18 included two large plan Premiums 15 5 acquisitions offset by higher individual product sales Adjusted pre-tax income increased largely due to strong
Slide 15: Life and Retirement – Life Insurance
Life and Retirement – Life Insurance ($ in millions) 2Q18 2Q19 Premiums and deposits $ 980 $ 1,032 Key Takeaways Premiums 418 425 Continued premiums and deposits growth includes strong international life sales Policy fees 377 381 Higher base investment income on a growing asset base and Net inve
Slide 16: Life and Retirement – Institutional Markets
Life and Retirement – Institutional Markets ($ in millions) 2Q18 2Q19 Premiums and deposits $ 652 $ 268 Key Takeaways Premiums 41 152 Premiums and deposits are lower as 2Q18 included a large Policy fees 40 43 Guaranteed Investment Contract issuance, offset by slightly higher Net investment income
Slide 17: Legacy
Legacy ($ in millions) 2Q18 2Q19 General Insurance run-off lines 44 43 Life and Retirement run-off lines 58 38 Legacy Investments 32 38 Adjusted pre-tax income $134 $119 Key Takeaways Life and Retirement run-off lines adjusted pre-tax income decreased primarily due to an increase in structured set
Slide 18: Appendix
Appendix AIG
Slide 19: Glossary of Non-GAAP Financial Measures and Non-GAAP Reconciliations
Glossary of Non-GAAP Financial Measures and Non-GAAP Reconciliations 19
Slide 20: Glossary of Non-GAAP Financial Measures
Glossary of Non-GAAP Financial Measures Glossary of Non-GAAP 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 me
Slide 21: Glossary of Non-GAAP Financial Measures
Glossary of Non-GAAP Financial Measures Glossary of Non-GAAP 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 meaning
Slide 22: Glossary of Non-GAAP Financial Measures
Glossary of Non-GAAP Financial Measures Glossary of Non-GAAP Accident year loss and combined ratios, as adjusted: both the accident year loss and combined ratios, as adjusted, exclude catastrophe losses and related reinstatement premiums, prior year development, net of premium adjustments, and the
Slide 23: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted Pre-tax and After-tax Income - Consolidated (in millions) Quarterly 2Q18 2Q19 Pre-tax income from continuing operations $ 1,252 $ 1,837 Adjustments to arrive at Adjusted pre-tax income Changes in fair value of securities used to hedge guaranteed living benefits 36 (
Slide 24: Non-GAAP Reconciliations
Non-GAAP Reconciliations Book Value Per Common Share and Return on Common Equity (in millions, except per common share data) Book Value Per Common Share 4Q18 1Q19 2Q19 Total AIG shareholders' equity $ 56,361 $ 60,787 $ 64,539 Less: Preferred equity - 485 485 Total AIG common shareholders' equity (a)
Slide 25: Non-GAAP Reconciliations
Non-GAAP Reconciliations Return on Common Equity General Insurance Life and Retirement (in millions) Quarterly (in millions) Quarterly 2Q18 2Q19 2Q18 2Q19 Adjusted pre-tax income $ 568 $ 980 Adjusted pre-tax income $ 962 $ 1,049 Interest expense on attributed financial debt 137 147 Interest expense
Slide 26: Non-GAAP Reconciliations
Non-GAAP Reconciliations Accident Year Loss Ratio, as adjusted, and Accident Year Combined Ratio, as adjusted General Insurance General Insurance - North America Quarterly Quarterly 2Q18 2Q19 2Q18 2Q19 Loss ratio 65.7 63.0 Loss ratio 73.1 69.2 Catastrophe losses and reinstatement premiums (2.3) (2.6
Slide 27: Non-GAAP Reconciliations
Non-GAAP Reconciliations Accident Year Loss Ratio, as adjusted, and Accident Year Combined Ratio, as adjusted General Insurance - International General Insurance - International - Quarterly Commercial Lines Quarterly 2Q18 2Q19 2Q18 2Q19 Loss ratio 59.9 56.9 Loss ratio 68.2 61.5 Catastrophe losses an
Slide 28: Non-GAAP Reconciliations
Non-GAAP Reconciliations Net Premiums Written – Change in Constant Dollar General Insurance International Foreign exchange effect on worldwide premiums: 2Q19 2Q19 Change in net premiums written Increase (decrease) in original currency (3.7) % (8.2) % Foreign exchange effect (2.0) (4.3) Increase (dec
Slide 29: Non-GAAP Reconciliations
Non-GAAP Reconciliations Premiums (in millions) Quarterly Individual Retirement: 2Q18 2Q19 Premiums $ 16 $ 16 Deposits 3,408 3,852 Other (2) (3) Premiums and deposits $ 3,422 $ 3,865 Individual Retirement (Fixed Annuities): Premiums $ 17 $ 16 Deposits 1,112 1,489 Other (4) (3) Premiums and deposits
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