American International Group, Inc. New · NYSE:AIG

American International Group, Inc. New — American International Group — Q3 2012 Earnings Presentation

19 slides from American International Group, Inc. New's earnings presentation, Nov 2, 2012

  1. Slide 1: Third Quarter 2012 Results Conference Call Presentation

    American International Group, Inc. Third Quarter 2012 Results Conference Call Presentation November 2nd, 2012

  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: Third Quarter 2012 Key Themes

    Third Quarter 2012 Key Themes Highlights Noteworthy Items  $8.0 billion shares repurchased ($13.0 billion YTD)  Sold $2.0 billion of AIA shares ($6.1 billion remaining value at Sept. 30, 2012) Capital Management Activities  UST ownership in AIG reduced to 15.9%  $4.0 billion amended bank credit

  4. Slide 4: Financial Highlights

    Financial Highlights Third Quarter Inc. ($ in millions, except earnings and book value per share) 2012 2011 (Dec.) Revenues $17,648 $12,719 39% Net income attributable to AIG 1,856 (3,990) NM After-tax operating income attributable to AIG $1,641 $(2,996) NM Diluted earnings per common share: Net Inc

  5. Slide 5: After-tax Operating Income (Loss)

    After-tax Operating Income (Loss) Improvement in insurance operations and valuation adjustments drive earnings growth. Third Quarter ($ in millions except per share amounts) 2012 2011 Insurance operations AIG Property Casualty $786 $492 AIG Life and Retirement 826 471 Mortgage Guaranty (reported in

  6. Slide 6: Strong Capital Position

    Strong Capital Position Execution of $13.0 billion in share repurchases year-to-date increased BVPS by $6.47/share. Capital Structure Book Value Per Share ($ in billions, except per share data) $128.1 $68.87 70.0 $16.2 $7.38 +29% 60.0 $9.4 $53.53 $2.72 (1) 50.0 Financial Debt 40.0 Hybrids 30.0 $61.4

  7. Slide 7: Financial Flexibility – A Source of Strength

    Financial Flexibility – A Source of Strength Insurance Company Distributions ($ in millions) 3,000 $2,606  Distributions approximate $5.3 billion year- to-date and were $4.0 billion through 2,250 September 30, 2012. $1,606 1,500 $1,326  Distributions received in October 2012 of $953 $807 $1.25 bil

  8. Slide 8: AIG Property Casualty – Consolidated Financial Highlights

    AIG Property Casualty – Consolidated Financial Highlights Global Combined Ratios Calendar Year Accident Year,  Decrease in accident year loss ratio, as as adjusted(1) adjusted, reflects shift in mix of business to 120 105.9 105.0 higher value lines and geographies, 98.7 100.1 100 improved pricing a

  9. Slide 9: AIG Property Casualty – Commercial Insurance Results

    AIG Property Casualty – Commercial Insurance Results Results reflect continued business mix shift and enhanced risk selection. Net Premiums Written ($ in millions) Constant $ growth rate of -0.2% (-1.9% incl. FX)  Global commercial insurance rates increased +6.2% over the prior year period (+8.4% f

  10. Slide 10: AIG Property Casualty – Consumer Insurance Results

    AIG Property Casualty – Consumer Insurance Results Consumer growth reflects continued progress on global growth strategies. Net Premiums Written ($ in millions) Constant $ growth rate of 6.2% (4.3% incl. FX)  Consumer Insurance NPW was 40% of total AIG Property Casualty NPW for year to date 4,000 $

  11. Slide 11: AIG Property Casualty – Investment Returns and Asset Allocation

    AIG Property Casualty – Investment Returns and Asset Allocation Net Investment Income Third Quarter Year-to-Date Inc. Inc. ($ in millions) 2012 2011 (Dec.) 2012 2011 (Dec.) Interest and dividends $ 1,000 $ 970 3% $ 2,981 $ 2,779 7% Alternative investments 87 55 58% 327 457 (28%) Other, net (1) 140 (

  12. Slide 12: AIG Life and Retirement – Financial Highlights

    AIG Life and Retirement – Financial Highlights Positive equity markets and noteworthy charges impact results. Operating Income ($ in millions)  Operating income in 3Q12 reflected the 1,000 positive impact from equity markets and $826 stronger partnership returns. 800 +75%  Noteworthy charges total

  13. Slide 13: AIG Life and Retirement – Investment Returns and Asset Allocation

    AIG Life and Retirement – Investment Returns and Asset Allocation Net Investment Income Third Quarter Year-to-Date Inc. Inc. ($ in millions) 2012 2011 (Dec.) 2012 2011 (Dec.) Interest and dividends $ 2,293 $ 2,247 2% $ 7,285 $ 6,671 9% Alternative investments 170 89 91% 622 811 (23%) Call and tender

  14. Slide 14: AIG Life and Retirement – Base Yields and Net Investment Spreads

    AIG Life and Retirement – Base Yields and Net Investment Spreads Base Yields and Net spreads decreased in the Third Quarter. Base Yields(1) 5.50%  Base net investment spreads declined in 3Q12 5.28% 5.28% 5.33% reflecting lower base yields. 5.30% 5.30% 5.17%  Sequential decline in base yields refle

  15. Slide 15: AIG Life and Retirement – Proactively Addressing Sustained Low Interest Rates

    AIG Life and Retirement – Proactively Addressing Sustained Low Interest Rates 2012 Management Actions Effect of Low Rates on Annual Earnings(1) $ in millions 2013 2014 2015  Continued disciplined Estimated impact on pre- ($60) – ($140) – ($250) – tax operating income ($80) ($180) ($300) approach to

  16. Slide 16: Mortgage Guaranty – Stable Trends

    Mortgage Guaranty – Stable Trends  In 3Q 2012, Mortgage Guaranty generated  New insurance written (NIW)(1) of $10.7 billion operating income of $3 million, driven by in 3Q 2012 with consistently high quality risks. favorable reserve development of $44 million partially offset by continued high lev

  17. Slide 17: Appendix

    AIG Appendix

  18. Slide 18: Legacy AIGFP: What We've Accomplished

    Legacy AIGFP: What We’ve Accomplished AIG will continue to de-risk the legacy AIGFP portfolio while ensuring the firm retains the maximum economic benefit possible. Gross Vega ($ billion)(2) 1.5 1.25 (1) 98% 1 Net Notional Exposures ($ billion) % Reduction Reduction December December September 2008

  19. Slide 19: Legacy AIGFP: Where We're Going

    Legacy AIGFP: Where We’re Going Actively managing the portfolio for maximum profit contribution and limited risk. Estimated (1) Type Average Description Life AIG Derisking Activities and portfolio hedging - ~$81 bn:  Aggregate Value at Risk on Market Derivatives is effectively zero at a 95% confide

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