American International Group, Inc. New · NYSE:AIG
American International Group, Inc. New — American International Group — Investor Day (December 2014)
37 slides from American International Group, Inc. New's investor day presentation, Dec 11, 2014
Slide 1: American International Group, Inc. Consumer Insurance
American International Group, Inc. Consumer Insurance Presented by: Kevin Hogan, Chief Executive Officer, Global Consumer Insurance Robert Scheinerman, Executive Vice President, Individual & Group Retirement December 11, 2014
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: We are One AIG
We are One AIG We have transformed our management approach, emphasizing collaboration among our businesses, making ourselves One AIG. Our 2014 priorities—intense focus on customers; strong growth and profitability in our operating businesses; operational efficiency; and our people—will help us reali
Slide 4: AIG Global Consumer Insurance Strategy
AIG Global Consumer Insurance Strategy Distinguish ourselves in the markets and products we choose. Be the provider of choice among our target segments and channels. Unique Franchise Data Driven Pricing Focused Growth Bringing together our Life Deep customer insight and Target growth in select and P
Slide 5: Global Consumer Insurance Market Opportunities
Global Consumer Insurance Market Opportunities $780 BN Global Consumer PC Market AIG’s Share of the AIG’s Share of Global Consumer the Global Life PC Market: Market: 1.7% .002% $2.3 TN Global Consumer Life Market Source: Internal AIG data and McKinsey & Co. 2013 data. Note: Property Casualty (PC). 5
Slide 6: AIG Global Consumer Insurance – Building on History and Strength
AIG Global Consumer Insurance – Building on History and Strength Property Casualty Consumer U.S. Life Insurance and A&H A Global Franchise – Consumer represented Selectively Targeting International Markets 75% of Non-U.S. Property Casualty NPW in – Our U.S. Life and A&H business represents first
Slide 7: AIG Global Consumer Insurance – A Unique Franchise
AIG Global Consumer Insurance – A Unique Franchise A Market Leader and Innovator Distribution Breadth and Customer Focus A leading global travel, medical and security Extensive experience in sponsored and assistance services provider – AIG Travel direct marketing; long term distribution Guard® p
Slide 8: AIG Global Consumer Insurance – Property Casualty Portfolio
AIG Global Consumer Insurance – Property Casualty Portfolio Underwriting results continue to improve, partially offset by lower net investment income. Full Year Nine Months ($ in millions) 2012 2013 2014 Net premiums written $14,150 $13,552 $10,199 Net premiums earned 13,952 13,229 9,696 Underwritin
Slide 9: AIG Global Consumer Insurance – Premiums and Deposits
AIG Global Consumer Insurance – Premiums and Deposits AIG Global Consumer Insurance diversification provides significant opportunity for growth and expanding profitability. First Nine Months 2014 Pro Forma Premiums and Deposits of $12.7 BN, up 2% YoY in Original Currency By Product Line By Region EM
Slide 10: AIG Global Consumer Insurance – Property Casualty Portfolio
AIG Global Consumer Insurance – Property Casualty Portfolio The short tail nature of AIG Global Consumer’s property casualty portfolios enhance earnings stability and contribute to AIG’s valued business diversification. AIG Global Consumer Insurance - Property Casualty Portfolio $10.2 BN Net Premium
Slide 11: Data Driven Strategy – Impacting Results
Data Driven Strategy – Impacting Results Consumer Insurance AY loss ratio has remained very stable over the past 12 quarters with improvement in the first nine months 2014. Consumer Insurance AY Loss Ratio, As Adjusted 80 75 70 Fuji Auto U.S. U.S. Travel and 65 winter-related Warranty EMEA A&H losse
Slide 12: Focused Growth – Consumer Market Maturity Model
Focused Growth – Consumer Market Maturity Model Advanced Stage Market Early Stage Market Product Personal Travel or Auto & Retirement PLUS+ Life Health Accident Warranty Home Services Channel Sponsor DM including Career Micro Broad Market/ Public Financial Banks & Broker / Partners Agency, Insurance
Slide 13: Focused Growth – Select Product and Geographic Expansion
Focused Growth – Select Product and Geographic Expansion Advanced Stage Market Early Stage Market Developing Emerging Mature Focus on simplest and Commit to building Auto Choice to enter Life lowest-cost products and/or Personal Property (potentially including Health (e.g., Travel, Warranty) b
Slide 14: AIG Life and Retirement
AIG Life and Retirement AlG
Slide 15: AIG Life and Retirement – Operating from a Position of Strength
AIG Life and Retirement – Operating from a Position of Strength Long standing leading market positions Market Leader Scale advantage in key product lines Product Diversity Comprehensive portfolio of life insurance, A&H, annuity, group retirement, group benefits, & Capacity for institutional pr
Slide 16: AIG Life and Retirement – Financial Highlights
AIG Life and Retirement – Financial Highlights Nine Full Year Months ($ in billions) 2011 2012 2013 2014 Premiums and deposits $24.4 $21.0 $28.8 $24.2 Net investment income 9.9 10.7 10.9 8.0 Pre-tax operating income 3.3 4.2 5.1 3.9 Investment Product – Net flows $2.9 $(1.3) $4.6 $1.8 Period-end: Cas
Slide 17: AIG Life and Retirement – Net Investment Spread Management
AIG Life and Retirement – Net Investment Spread Management Base Portfolio Yields(1) 5.33% 5.35% 5.32% 5.30% 5.26% 5.29% 5.25% 5.17% 5.12% 5.17% 5.11% 5.10% 5.24% 5.25% 5.14% 5.06% 5.08% 5.10% 5.11% 5.11% 5.00% 4.95% 4.92% 4.85% 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 Cost of Funds(2) 3.26% 3.10% 3.0
Slide 18: AIG Life and Retirement – Leading Market Positions
AIG Life and Retirement – Leading Market Positions Year-to-Date Market Positions Excellence in Service, Marketing and Technology Rank* Market Tools International MarCom Metric 2013 Achievement in Awards 3Q14 3Q13 Customer Excellence 2012 and 2013 Platinum (ACE award for 7th and Gold Awards 2 2 Total
Slide 19: AIG Life and Retirement – Diversified Business Mix
AIG Life and Retirement – Diversified Business Mix Premiums and Deposits Premiums and Deposits First Nine Months 2014 - $24.2 billion First Nine Months 2013 - $20.8 billion Retail: 64% Institutional: 36% Retail: 69% Institutional: 31% Life Insurance Life Insurance and A&H and A&H 10% Group Retiremen
Slide 20: AIG Life and Retirement – Assets Under Management
AIG Life and Retirement – Assets Under Management Year-over-year growth in AUM reflects strong Retirement Income Solutions net flows, higher separate account balances and increased institutional assets. September 30, 2014 - $334.0 billion September 30, 2013 - $304.4 billion Retail Mutual Funds Retai
Slide 21: AIG Life and Retirement – Broad Multichannel Distribution Network
AIG Life and Retirement – Broad Multichannel Distribution Network 2013 Sales By Distribution Channel 2012 Sales By Distribution Channel Affiliated: 33% Non-affiliated: 67% Affiliated: 43% Non-affiliated: 57% VALIC FAs VALIC FAs 26% 33% B-Ds B-Ds 29% 34% AIG Direct & Other 1% AIG Financial Network 3%
Slide 22: AIG Life and Retirement – Diversification Trends
AIG Life and Retirement – Diversification Trends AIG Life and Retirement Premiums & Deposits AIG Life and Retirement Sales by Distribution Channel 3% 100% 3% 100% 4% 80% B-DsRetirement Group 4% 80% 32% VALIC FAs IMOs 60% Retail MF 60% Banks RIS 10% 12% B-Ds 40% 40% Fixed Annuities Banks VALIC FAs 32
Slide 23: AIG Life and Retirement – Money In Motion
AIG Life and Retirement – Money In Motion Industry Realization of Retirement Assets Retirement Assets are estimated to grow from $14.4 trillion in 2013 to $19.8 trillion by 2018, with $8.9 trillion in Retail IRA Assets Source: Cerulli Associates Retirement Markets 2013. 23
Slide 24: AIG Life and Retirement – Individual Variable Annuities
AIG Life and Retirement – Individual Variable Annuities A strategic growth opportunity for AIG. Industry Retail Variable Annuity Sales* Account Value by GMWB Guarantee at 9/30/14(1) 3Q YTD 2014 3Q YTD 2013 % Change Company Rank Sales Rank Sales Jackson National 1 18,413 19% 1 15,461 16% Lincoln Fina
Slide 25: AIG Life and Retirement – Index Annuities
AIG Life and Retirement – Index Annuities Provides an opportunity to diversify Retirement Income Solutions offerings. Quarterly Index Annuity Industry Sales ($ in billions) $13.0 Evolving Market $11.9 $11.7 In past years, many leading carriers avoided the index $11.3 $10.2 annuity market due to is
Slide 26: AIG Life and Retirement – Fixed-Rate Deferred Annuity
AIG Life and Retirement – Fixed-Rate Deferred Annuity Sales Volume Trends ($ in billions) Industry AIG $30.0 3.9% $10.0 3.4% 22.5 2.7% 7.5 2.5% 2.6% 2.3% 17.7 15.0 5.0 13.0 1.6% 9.2 9.7 8.1 7.5 6.6 2.5 5.7 2.2 1.5 1.6 1.5 1.1 0.8 0.4 0.0 0.0 3Q08 3Q09 3Q10 3Q11 3Q12 3Q13 3Q14 Industry AIG Average 10
Slide 27: AIG Global Consumer Insurance – U.S. Life and A&H Portfolio
AIG Global Consumer Insurance – U.S. Life and A&H Portfolio Well-diversified sales by product type and distribution channels. $183 MN in New Business Annualized Life and A&H Distribution Sales in First Nine Months 2014 AIG AIG Insured Financial Partners Solutions Brokerage AIG Direct Universal Term
Slide 28: AIG Life and Retirement – Investment Composition & Ratings
AIG Life and Retirement – Investment Composition & Ratings Cash & Invested Assets - $201.8 billion(1) Bond Portfolio – $164.5 billion Total Portfolio Composition By Agency Credit Rating By NAIC Ratings(2) Not Rated CMBS B 1% 5% RMBS 3% 12% CDO/ABS <B AAA BB 5% 8% 13% 3% NAIC 2 Other invested assets
Slide 29: Appendix
Appendix AlIG
Slide 30: Glossary of Non-GAAP Financial Measures
Glossary of Non-GAAP Financial Measures AIG AIG – After-tax operating income (loss) attributable to AIG is derived by excluding the following items from net income (loss) attributable to AIG: income (loss) from discontinued operations, income (loss) from divested businesses (including gain on the sa
Slide 31: AIG Consolidated Financial Highlights
AIG Consolidated Financial Highlights Nine Full Year Months ($ in millions, except per share amounts) 2011 2012 2013 2014 Revenues $65,105 $71,021 $68,678 $48,871 (1) Net income attributable to AIG 20,622 3,438 9,085 6,874 Diluted earnings per common share $11.01 $2.04 $6.13 $4.71 After-tax operatin
Slide 32: AIG Consolidated Balance Sheet – Selected Highlights
AIG Consolidated Balance Sheet – Selected Highlights Full Year Sept. 30, ($ in billions, except per share amounts) 2011 2012 2013 2014 Cash and investments $411.9 $377.0 $358.7 $368.4 Total assets $553.1 $548.6 $541.3 $527.2 Total Property Casualty reserves (1) $71.2 $70.2 $66.6 $64.9 AIG shareholde
Slide 33: Non-GAAP Reconciliation – After-Tax Operating Income
Non-GAAP Reconciliation – After-Tax Operating Income After-tax Operating Income Attributable to AIG Full Year Nine Months ($ in millions) 2011 2012 2013 2014 Net income attributable to AIG $ 20,622 $ 3,438 $ 9,085 $ 6,874 Adjustments to arrive at After-tax operating income attributable to AIG: (Inco
Slide 34: Non-GAAP Reconciliation – BVPS ex. AOCI and Premiums and Deposits
Non-GAAP Reconciliation – BVPS ex. AOCI and Premiums and Deposits Book Value Per Common Share - Ex. AOCI December 31, September 30, ($ in millions, except per share data) 2011 2012 2013 2014 Total AIG shareholders' equity (1) $ 101,538 $ 98,002 $ 100,470 $ 108,581 Less: Accumulated other comprehensi
Slide 35: Non-GAAP Reconciliation – Return On Equity
Non-GAAP Reconciliation – Return On Equity Return on equity (ROE) computations Full Year Nine Months ($ in millions) 2011 2012 2013 2014 Annualized Net income attributable to AIG (1) $ 20,622 $ 3,438 $ 9,085 $ 9,165 Annualized After-tax operating income attributable to AIG (2) 2,086 6,635 6,762 7,14
Slide 36: Non-GAAP Reconciliation – Accident Year Combined Ratio, As Adjusted
Non-GAAP Reconciliation – Accident Year Combined Ratio, As Adjusted AIG Property Casualty Quarterly Accident year com bined ratio, as adjusted 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 Com m ercial Insurance Loss ratio 80.3 72.3 70.7 78.0 100.9 64.9 72.6 71.8 77.9 69.4 67.7 74.3 Ca
Slide 37: American International Group, Inc. (AIG) is a leading international insurance organization
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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