American International Group, Inc. New · NYSE:AIG
American International Group, Inc. New — American International Group — Q3 2022 Earnings Presentation
35 slides from American International Group, Inc. New's earnings presentation, Nov 2, 2022
Slide 1: Third Quarter 2022 Financial Results Presentation
Third Quarter 2022 Financial Results Presentation November 2nd, 2022 Copyright ® 2022 by American International Group, Inc. All rights reserved. No part of this document may be reproduced, republished or reposted without the permission of AIG.
Slide 2: Cautionary Statement Regarding Forward-Looking Information
Certain statements in this presentation and other publicly available documents may include, and members of American International Group (AIG) management may from Cautionary Statement time to time make and discuss, statements which, to the extent they are not statements of historical or present fact,
Slide 3: 3Q22 Results reflect continued strong underwriting margin in General Insurance
3Q22 Net income attributable to AIG common shareholders was $2.7B, or $3.50 per diluted common share, compared to $1.7B, or $1.92 Financial per diluted common share, in 3Q21, driven by an increase in net realized gains on embedded derivatives and higher underwriting 3Q22 Results reflect Results in
Slide 4: Continued strong operating performance in General Insurance
Continued strong operating ($M, except per common share amounts) 3Q21 3Q22 Variances performance in General Adjusted Pre-tax Income (Loss): Insurance General Insurance $811 $750 ($61) Life and Retirement 877 589 ($288) General Insurance APTI of $750M reflects a $209M decrease in NII offset by $148
Slide 5: General Insurance: Built a stable and profitable underwriting portfolio
General Insurance: Built a General Insurance Accident Year Combined Ratio*, As Adjusted stable and profitable (1,260) bps underwriting portfolio 101.0% 99.4% 98.8% 96.1% 96.1% 95.9% 95.8% 95.5% 94.9% 93.3% 92.9% 92.4% 91.1% 90.5% 89.8% 89.5% 88.5% 88.4% between 2018 and 2021 14.5% 14.1% 12.5% 12.5%
Slide 6: Gross investment income, APTI basis
Gross investment income, Invested Assets & Gross Investment Income, APTI Basis APTI basis* General Insurance Life and Retirement Other Operations Total AIG Gross Investment Income, APTI basis ($M) $3,382 $194 $2,626 $2,478 $616 $2,057 $84 $84 $308 $10 Interest & dividends Alternative investments All
Slide 7: AIG investment portfolio is well diversified, with solid credit characteristics
AIG investment portfolio is Investment Portfolio Composition – $276B ($B) 1 Investment Portfolio Composition by Segment ($B) 1 well diversified, with solid All other investments 2 credit characteristics Short-term investments 1 $14.5 Bonds, FVO Other invested assets $13.8 $181.2 Government and munic
Slide 8: Investment Income on Fixed Maturity Securities and Mortgage and Other Loans Receivables
Investment Income on Investment Income on FMS and Mortgage and Other Loans Receiveables1,3 Fixed Maturity Securities $3,500 $3,126 8.0% (FMS) and Mortgage and $3,071 $3,040 $3,039 $3,012 $3,000 $2,901 7.0% Other Loans Receivables $2,500 $2,494 $2,456 $2,417 $2,443 $2,411 $2,389 $2,410 $2,469 $2,564
Slide 9: 3Q21 and 3Q22 noteworthy items
3Q21 and 3Q22 noteworthy items 3Q21 3Q22 EPS – EPS – ($M, except per share amounts) APTI AATI1 APTI AATI1 Diluted2 Diluted2 Expense Items: Catastrophe-related losses, net of reinsurance $646 $510 $0.59 $600 $474 $0.61 Reinstatement premiums related to catastrophes (10) (8) (0.01) 55 43 0.06 Unfavora
Slide 10: General Insurance: GAAP Combined Ratio of 97.3% improved 2.4 points in 3Q22
General Insurance: GAAP ($M) 3Q21 3Q22 General Insurance Net Premiums Written ($M) Combined Ratio of 97.3% Net premiums written $6,590 $6,403 Global Commercial Lines Global Personal Insurance improved 2.4 points in 3Q22 Net premiums earned $6,423 $6,407 $4,647 $4,749 Loss and loss adjustment expense
Slide 11: General Insurance: North America NPW growth of 4%
General Insurance: North ($M) 3Q21 3Q22 North America Net Premiums Written ($M) America NPW growth of 4% Net premiums written Commercial Lines $3,005 2,576 $3,138 2,757 $3,005 $3,138 and a 3.3 point improvement Personal Insurance 429 381 $429 $381 in AYCR, as adjusted Net premiums earned $2,907 $3,1
Slide 12: General Insurance: International AYCR, as adjusted improved 1.0 point
General Insurance: ($M) 3Q21 3Q22 International Net Premiums Written ($M) International AYCR, as Net premiums written Commercial Lines $3,585 2,071 $3,265 1,992 $3,585 $3,265 adjusted improved 1.0 point Personal Insurance 1,514 1,273 in 3Q22 Net premiums earned $3,516 $3,267 $1,514 $1,273 Commercial
Slide 13: Life and Retirement 3Q22
Life and Retirement 3Q22 Adjusted Pre-tax Income (APTI) ($M) Noteworthy Items ($M) 3Q21 3Q22 Variance $877 APTI reflects lower variable investment income offset by $135 Return on alternative investments 308 (18) (326) higher base portfolio spread and less adverse mortality; Year- over-year change
Slide 14: Life and Retirement: Individual Retirement tailwinds from higher interest rates
Life and Retirement: Individual Retirement Tailwinds from higher Premiums and Deposits ($M) Net Flows ($M) Assets Under Management / APTI ($M) 3Q22 vs 3Q21 APTI reflects Unfavorable impact from: interest rates and wider $3,792 $696 Administration ($B) $132.9 $200 Lower returns from alternative inv
Slide 15: Life and Retirement: Life Insurance reflects less adverse mortality
Life and Retirement: Life Insurance Life Insurance reflects less New Business Sales ($M) Premiums and Deposits ($M) APTI ($M) 3Q22 vs 3Q21 APTI reflects Unfavorable impact from: adverse mortality; Reserve $111 (flat vs. 3Q21) $1,166 (+1% vs. 3Q21) $123 (-8% vs. 3Q21) Lower returns from alternative
Slide 16: Life and Retirement: 3Q22 actuarial assumption update
Life and Retirement: 3Q22 actuarial assumption update Annual Actuarial Assumption Review ($M) 3Q22 Individual Retirement (86) Individual Retirement charge primarily reflects the impact of higher interest rates on expected lapses for our fixed annuity blocks of business Group Retirement 2 Group R
Slide 17: Other Operations: APTL increased due to lower investment income
Other Operations: APTL increased due to lower investment income due to significant market volatility in the quarter ($M) 3Q21 3Q22 Other Operations APTL was $614M, including $147M of Corporate and Other ($583) ($518) reductions from consolidation and eliminations, compared to APTL of $562M, includ
Slide 18: Continued Progress on Capital Management Initiatives
Capital Structure ($B) Risk-Based Capital (RBC) Ratios5 Continued Progress on $90.8 $63.8 Life and Retirement General Insurance Hybrids - CRBG Period Capital Management $1.2 $20.7 $1.0 $1.0 Companies Companies $8.4 Hybrids - AIG 1 Initiatives $3.0 $2.0 $12.4 2020 433% (CAL) 460% (ACL) $3.9 Financial
Slide 19: Share Repurchases
Share Repurchases Aggregated share repurchase of $5.4B over the last four Share Repurchases quarters (in millions, except per share 11% reduction in shares outstanding over the last four 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 quarters data) Aggregate Share Repurchases $230 $1,059 $992 $1,403 $1,699 $1,26
Slide 20: Completion of Corebridge IPO creates two independent, market-leading companies
Progress of Corebridge Separation Completion of Corebridge IPO creates two independent, April 2022 market-leading companies Corebridge issued $6.5B Senior Notes and repaid portion of AIG note. AIG used those proceeds to redeem $7.6B of Corebridge is the largest US IPO this year to date, with the o
Slide 21: AIG 200: Executed or contracted run-rate savings goal of $1B
General Insurance Shared Services AIG 200: Executed or The Standard Commercial Underwriting Platform will modernize global underwriting Create AIG Global Operations, a multifunctional, fully integrated operating model with contracted run-rate savings capabilities by simplifying processes and too
Slide 22: Copyright notice
Copyright ® 2021 by American International Group, Inc. All rights reserved. No part of this document may be reproduced, republished or reposted without the permission of AIG.
Slide 23: Glossary of Non-GAAP Financial Measures
Glossary of Non-GAAP 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 Financial Measures representative of our business results. Some of the measurements we use are “Non-GAAP financial me
Slide 24: Glossary of Non-GAAP Financial Measures
Glossary of Non-GAAP Glossary of Non-GAAP Book Value per Common Share, Excluding Accumulated Other Comprehensive Income (Loss) (AOCI) adjusted for the cumulative unrealized gains Financial Measures and losses related to Fortitude Re funds withheld assets and Deferred Tax Assets (DTA) (Adjusted Boo
Slide 25: Glossary of Non-GAAP Financial Measures
Glossary of Non-GAAP Glossary of Non-GAAP Adjusted Revenues exclude Net realized gains (losses), income from non-operating litigation settlements (included in Other income for GAAP purposes) and changes in fair Financial Measures value of securities used to hedge guaranteed living benefits (includ
Slide 26: Non-GAAP Reconciliations - Adjusted Pre-tax and After-tax Income
Non-GAAP Reconciliations- (in millions) 3Q21 Quarterly 3Q22 Adjusted Pre-tax and Pre-tax income from continuing operations Adjustments to arrive at Adjusted pre-tax income Changes in fair value of securities used to hedge guaranteed living benefits $ 2,176 (26) $ 3,847 (6) After-tax Income - Changes
Slide 27: Non-GAAP Reconciliations - Adjusted Pre-tax and After-tax Income
Non-GAAP Reconciliations- (in millions) Quarterly Adjusted Pre-tax and 3Q21 3Q22 After-tax net income, including noncontrolling interests $ 1,737 $ 3,041 Noncontrolling interests income (70) (332) After-tax Income - Net income attributable to AIG Dividends on preferred stock $ 1,667 7 $ 2,709 7 Cons
Slide 28: Non-GAAP Reconciliations - Book Value Per Common Share
Non-GAAP Reconciliations- Book Value Per Common Share Book Value Per Common (in millions, except per common share data) As of September 30, December 31, Share Book Value Per Common Share Total AIG shareholders' equity $ 2021 64,863 $ 2022 39,023 $ 2021 65,956 Less: Preferred equity 485 485 485 Total
Slide 29: Non-GAAP Reconciliations - Return on Common Equity
Non-GAAP Reconciliations- Return on Common Equity Return on Common Equity (in millions) Return On Common Equity Computations 3Q21 Quarterly 3Q22 Annualized net income attributable to AIG common shareholders (a) $ 6,640 $ 10,808 Annualized adjusted after-tax income attributable to AIG common sharehol
Slide 30: Non-GAAP Reconciliations - Total Debt and Preferred Stock Leverage
Non-GAAP Reconciliations- Total Debt and Preferred Stock Leverage Total Debt and Preferred 3Q21 4Q21 Quarterly 2Q22 3Q22 Stock Leverage and Net Financial Debt Hybrid – debt securities $ 21,044 $ 1,550 20,685 $ 1,164 19,432 989 $ 20,818 1,976 Investment Income Preferred Stock Total debt and preferred
Slide 31: Non-GAAP Reconciliations - Accident Year Loss Ratio, as adjusted
Non-GAAP Reconciliations- General Insurance General Insurance - North America Accident Year Loss Ratio, Quarterly 3Q21 3Q22 Quarterly 3Q21 3Q22 as adjusted, and Accident Loss ratio Catastrophe losses and reinstatement premiums 68.4 (9.7) 67.5 (9.8) Loss ratio Catastrophe losses and reinstatement pre
Slide 32: Non-GAAP Reconciliations - Accident Year Loss Ratio, as adjusted
Non-GAAP Reconciliations- General Insurance - International General Insurance - International - Accident Year Loss Ratio, Quarterly 3Q21 3Q22 Commercial Lines Quarterly 3Q21 3Q22 as adjusted, and Accident Loss ratio Catastrophe losses and reinstatement premiums 59.3 (5.1) 48.0 (3.0) Loss ratio Catas
Slide 33: Non-GAAP Reconciliations - Accident Year Loss Ratio, as adjusted
Non-GAAP Reconciliations- Accident Year Loss Ratio, as General Insurance Quarterly 2Q’18 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19 4Q'19 1Q'20 2Q'20 3Q'20 4Q'20 1Q'21 2Q'21 3Q'21 4Q'21 1Q’22 2Q’22 FY'18 FY'21 adjusted, and Accident Year Loss ratio Catastrophe losses and 65.7 88.6 80.1 63.1 63.0 69.3 65.6 66.8 7
Slide 34: Non-GAAP Reconciliations - Gross and Net Premiums Written
Non-GAAP Reconciliations- Gross Premiums Written – Change in Constant Dollar Gross and Net Premiums Written – Change in Commercial Personal General Insurance Total Insurance Insurance Foreign exchange effect on worldwide premiums: 3Q22 3Q22 3Q22 Constant Dollar Change in gross premiums written Incre
Slide 35: Non-GAAP Reconciliations - Premiums
Non-GAAP Reconciliations- (in millions) Quarterly Premiums Individual Retirement: Premiums Deposits $ 3Q21 66 3,190 $ 3Q22 56 3,740 Other 1 (4) Premiums and deposits $ 3,257 $ 3,792 Individual Retirement (Fixed Annuities): Premiums $ 67 $ 56 Deposits 567 1,264 Other (1) (4) Premiums and deposits $ 6
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