American International Group, Inc. New · NYSE:AIG

American International Group, Inc. New — American International Group — Q2 2013 Earnings Presentation

41 slides from American International Group, Inc. New's earnings presentation, Aug 13, 2013

  1. Slide 1: American International Group, Inc. Investor Presentation

    American International Group, Inc. Investor Presentation August 13, 2013

  2. 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

  3. Slide 3: AIG – An Established Global Insurance Franchise

    AIG – An Established Global Insurance Franchise A platform for delivering sustainable profitable growth. Core Insurance Strategies Key Accomplishments Businesses HSBC agreement / PICC joint venture.  Capitalize on global footprint; presence in over 90 countries 11% of 2012 NPW from growth economies

  4. Slide 4: AIG – Building on Capital Strength

    AIG – Building on Capital Strength  Declared $0.10/sh. quarterly cash dividend; $1 billion share repurchase authorization, both in Aug. ‘13 Active Capital Management  First half 2013 debt calls and tenders of $2.9 AIG Shareholders’ Equity - billion (face amount) $97.5 bn at June 30, 2013  $13 bil

  5. Slide 5: AIG Property Casualty

    AIG Property Casualty ~t AIG

  6. Slide 6: AIG Property Casualty – A Truly Global Franchise

    AIG Property Casualty – A Truly Global Franchise AIG Property Casualty is a diversified global P&C market leader with 2012 NPW of over $34 billion.  #1 U.S.-based property casualty EMEA(1) insurance organization in Europe, with 2012 NPW: $6.4 bn established and growing positions in 19% of total NPW

  7. Slide 7: AIG Property Casualty – Financial Highlights

    AIG Property Casualty – Financial Highlights Full Year Six Months 2013 ($ in billions) 2010 2011 2012 Net premiums written $31.6 $34.8 $34.4 $17.7 Net investment income 4.4 4.3 4.8 2.7 Operating income (loss) (1) (1.1) 1.2 1.8 2.7 Cash & invested assets (2) 123.2 127.0 131.4 125.9 Accident year comb

  8. Slide 8: AIG Property Casualty – Business Overview

    AIG Property Casualty – Business Overview AIG Property Casualty offers a broad product platform. Commercial 2012 NPW – $20.3 bn Consumer 2012 NPW – $14.1 bn Property Financial 21% Lines 19% Accident Personal & Health Lines 49% 51% Specialty 18% Casualty 42%  Global – Unique ability to serve multina

  9. Slide 9: AIG Property Casualty – Strategic Focus

    AIG Property Casualty – Strategic Focus Strategic levers driving shareholder value creation. Business Underwriting Claims Operational Capital Mix Excellence Service Effectiveness Management  Balance growth with  Globalize  Global Claims  Simplify and  Use RAP as a key profitability and risk sta

  10. Slide 10: AIG Property Casualty – Strong Brands and Customer Loyalty

    AIG Property Casualty – Strong Brands and Customer Loyalty AIG Property Casualty continues to be recognized for excellence. AIG Property Casualty Clients as a Percentage of Each Category 40% 98% 90% (as of 6/1/2013) PropertyCasualty360 SAS World Travel Fair 2013 Best Overall Commercial 2012 Enterpri

  11. Slide 11: AIG Property Casualty – Product Diversification

    AIG Property Casualty – Product Diversification Commercial Insurance Consumer Insurance  General Liability  Commercial Auto Casualty  Workers’ Compensation  Personal Accident  Crisis Management Accident and  Supplemental Medical  Industrial, Energy and Commercial Health  Travel Property Prop

  12. Slide 12: AIG Property Casualty – Growth Economies

    AIG Property Casualty – Growth Economies Growth economies accounted for 11% of NPW in 2012, increased 9% from 2011  Growth economies are those within Central Europe, Middle East, Africa, Latin America and Asia Pacific, excluding Japan  #1 foreign property casualty insurance organization in China(1

  13. Slide 13: AIG Property Casualty – Investment Composition & Ratings

    AIG Property Casualty – Investment Composition & Ratings Total Cash & Invested Assets as of June 30, 2013 - $125.9 billion(1) Total Portfolio Composition Bond Portfolio - $102.1 billion - by Agency Credit Rating CMBS CDO/ABS Other invested 2% 5% Equities assets 10% 3% BB RMBS A BBB 2% Loans 10% 26%

  14. Slide 14: AIG Life and Retirement

    AlG Life and Retirement | AIG

  15. 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 and customer brands Market Leader  Scale advantage in key product lines Product Diversity  Comprehensive portfolio of life insurance, A&H, annuity, group retirement, & Capacity for group benefi

  16. Slide 16: AIG Life and Retirement – Financial Highlights

    AIG Life and Retirement – Financial Highlights Full Year Six Months 2013 ($ in billions) 2010 2011 2012 Premiums and deposits (1) $19.5 $24.4 $21.0 $12.3 Net investment income 10.8 9.9 10.7 5.5 Operating income (2) 4.1 3.3 4.2 2.5 Cash & invested assets (3) 183.8 194.2 205.3 196.8 Assets under manag

  17. Slide 17: AIG Life and Retirement – Diversified Business Mix

    AIG Life and Retirement – Diversified Business Mix 2012 Premiums and Deposits - $21.0 billion(1) 2012 Operating Income - $4.2 billion(2) Retail: 59% Institutional: 41% Retail: 59% Institutional: 41% Life Insurance Life Insurance and A&H Group and A&H Group 16% Retirement 16% Retirement 34% 28% Fixed

  18. Slide 18: AIG Life and Retirement – Assets Under Management

    AIG Life and Retirement – Assets Under Management Year-over-year growth in AUM reflects strong sales generated by our realigned distribution system, equity market performance and Institutional business asset gathering strategies. Assets Under Management - $293.7 billion at June 30, 2013 Retirement I

  19. Slide 19: AIG Life and Retirement – Powerful Brands and Market Position

    AIG Life and Retirement – Powerful Brands and Market Position Market Positions Excellence in Service, Marketing and Technology #1 in Fixed-Rate Deferred Annuity Sales Market Tools International MarCom Awards 2012 Achievement in Customer 2012 Platinum and Gold Awards Excellence (ACE award for 6th (23

  20. Slide 20: AIG Life and Retirement – Broad Multichannel Distribution Network

    AIG Life and Retirement – Broad Multichannel Distribution Network 2012 Sales by Channel Diversified Distribution Network Affiliated: 43% Non-affiliated: 57% VALIC financial advisors Affiliated AGLA agents B-Ds 29% VALIC FAs 33% Advisor Group AIG Direct Direct & Other Broker-dealers 3% Non-affiliated

  21. Slide 21: AIG Life and Retirement – Variable Annuities

    AIG Life and Retirement – Variable Annuities Changing competitive environment offers a unique opportunity. Variable Annuity “Non-Captive” Industry Sales(1) ($ millions) 1Q13 FY 2012 FY 2011 FY 2010 FY 2009 Rank Sales Share Rank Sales Share Rank Sales Share Rank Sales Share Rank Sales Share Jackson N

  22. Slide 22: AIG Life and Retirement – Investment Composition & Ratings

    AIG Life and Retirement – Investment Composition & Ratings Total Cash & Invested Assets as of June 30, 2013 - $196.8 billion(1) Total Portfolio Composition Bond Portfolio - $157.3 billion - by Agency Credit Rating CMBS 4% CDO/ABS BB RMBS 5% 4% 12% BBB 41% B Other invested assets 2% 6% <B Cash and sh

  23. Slide 23: AIG Life and Retirement – Net Investment Spread Management

    AIG Life and Retirement – Net Investment Spread Management Base Yields(1) 5.50% 5.50% 5.38% 5.33% 5.35% 5.26% 5.30% 5.31% 5.12% 5.25% 5.12% 5.10% 5.19% 5.23% 5.14% 5.01% 4.95% 4.85% 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 Cost of Funds(2) 3.28% 3.27% 3.26% 3.26% 3.10% 3.06% 3.13% 3.13% 3.15% 3.14% 2.91% 2.89%

  24. Slide 24: Mortgage Guaranty (United Guaranty Corporation)

    Mortgage Guaranty (United Guaranty Corporation) 24

  25. Slide 25: United Guaranty – A Market Leader

    United Guaranty – A Market Leader Risk based pricing driving profitable new business. New Insurance Written (NIW)(1) Average ($ in billions) (2) Vintage Year $16.0 FICO Score LTV Ratio $14.0 2010 760 90 $12.0 New Insurance Written 2011 757 91 $8.6 $8.0 2012 758 91 $4.0 $3.2 1Q13 757 90 2Q13 755 92 $

  26. Slide 26: United Guaranty – Shrinking Legacy In-Force

    United Guaranty – Shrinking Legacy In-Force Domestic 1st Lien Primary Delinquency Rate Primary Risk-in-force (RIF) – $32.2 billion As of June 30, 2013 (by vintage year) 20% 2004 & Prior 2013 6% 2005 18% 16% 5% 16% 2006 7% 14% 12% 10% 2007 8% 13% 6% 2012 4% 27% 2% 2008 7% 0% 2009 3/31/08 6/30/08 9/30

  27. Slide 27: United Guaranty – Financial Strength

    United Guaranty – Financial Strength Risk to Capital Asset Composition At December 31, 2012 100% 90% Other Assets 80% 70% Af f iliated 60% Investments 50% Unaf f iliated 40% Stocks 30% Unaf f iliated 20% Bonds 10% Cash 0% UGRIC Genworth MGIC Radian  UGC’s primary statutory insurance subsidiary, Uni

  28. Slide 28: Capital Strength

    Capital Strength AIG

  29. Slide 29: Capital Position and Ratings

    Capital Position and Ratings Outstanding borrowings reflect $2.9 billion notional amount of hybrid calls and tenders in the first half of 2013. Capital Structure Credit Ratings(2) ($ in billions, except per share data) S&P Moody’s Fitch AM Best $124.1 $0.7 $119.2 Non-redeemable $0.7 $16.1 AIG – Seni

  30. Slide 30: Financial Flexibility – A Source of Strength

    Financial Flexibility – A Source of Strength Parent liquidity balance reflects subsidiary distributions and liability management actions year-to-date. Parent Cash, Short-Term Investments & Insurance Company Distributions Unencumbered Securities ($ in millions) ($ in billions) AIG Property Casualty A

  31. Slide 31: Other Sources of Value

    Other Sources of Value | AIG

  32. Slide 32: Direct Investment Book and Global Capital Markets

    Direct Investment Book and Global Capital Markets Direct Investment Book (1) Global Capital Markets (1) ($ in billions) Assets $25.7 $8.6 Liabilities 21.8 3.8 Net Asset Value $3.9 $4.8 Legacy Matched AIG Hedging & Legacy AIGFP Stable Value Go Forward Assets & Liabilities Market Derivatives(2) CDS Po

  33. Slide 33: Direct Investment Book Long-Term Debt Maturities

    Direct Investment Book Long-Term Debt Maturities ($ in billions) $25 90% 80% 80% $19.4 $20 $18.4 70% $1.2 $1.1 $16.2 60% $1.1 $14.4 57% $15 $5.8 $5.6 $0.8 $12.6 50% $5.0 $0.6 $4.5 40% $3.5 $10 $3.5 35% $8.3 $4.1 $3.5 $0.5 30% $3.5 26% $8.9 $3.5 $8.2 $3.9 20% $5 $3.8 $6.6 16% $0.3 $5.6 10% 0% $4.4 $3

  34. Slide 34: Deferred Tax Asset Overview

    Deferred Tax Asset Overview AIG has substantial tax attribute carryforwards that are available under U.S. tax law to offset future U.S. federal income tax obligations. Amounts are presented on a U.S. GAAP basis. As of 12/31/11 As of 12/31/12 Gross Deferred Gross Deferred ($ in billions) Type Attribu

  35. Slide 35: Appendix

    Appendix AIG

  36. Slide 36: AIG Consolidated Financial Highlights

    AIG Consolidated Financial Highlights Six Months Inc. ($ in millions, except per share amounts) 2012 2013 (Dec.) Revenues $33,718 $33,203 (2%) Net income attributable to AIG 5,540 4,937 (11%) After-tax operating income attributable to AIG $4,724 $3,637 (23%) Diluted earnings per common share: Income

  37. Slide 37: Non-GAAP Reconciliation – Pre-tax Operating Income

    Non-GAAP Reconciliation – Pre-tax Operating Income Six Months 2013 AIG AIG Mortgage Other ($ in millions) Property Casualty Life and Retirement Guaranty Operations Total Income from continuing operations, before tax $ 2,772 $ 3,289 $ 119 $ (201) $ 5,979 Adjustments to arrive at operating income: Net

  38. Slide 38: Non-GAAP Reconciliation – Full Year & Six Months Pre-tax Operating Income

    Non-GAAP Reconciliation – Full Year & Six Months Pre-tax Operating Income AIG Property Casualty Full Year Six Months ($ in millions) 2010 2011 2012 2013 Income from continuing operations, before tax $ (93) $ 1,820 $ 1,837 $ 2,772 Adjustments to arrive at operating income: Net realized capital (gains

  39. Slide 39: Non-GAAP Reconciliation – After-tax operating income

    Non-GAAP Reconciliation – After-tax operating income Six Months ($ in millions) 2012 2013 Net income attributable to AIG $5,540 $4,937 Income from discontinued operations, net of income tax expense (243) (126) Net losses on sale of divested businesses 2 31 Uncertain tax positions and other tax adjus

  40. Slide 40: Non-GAAP Reconciliation – BVPS ex. AOCI, Premiums & Deposits, Accident Year Combined Ratio

    Non-GAAP Reconciliation – BVPS ex. AOCI, Premiums & Deposits, Accident Year Combined Ratio, As Adjusted Book Value Per Common Share - Ex. AOCI December 31, June 30, ($ in millions, except per share data) 2011 2012 2012 2013 Total AIG shareholders’ equity $ 101,538 $ 98,002 $ 104,709 $ 97,463 Accumul

  41. Slide 41: AIG – Bring on tomorrow

    AIG Bring on tomorrow

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