American International Group, Inc. New · NYSE:AIG
American International Group, Inc. New — American International Group — Investor Presentation (May 2014)
44 slides from American International Group, Inc. New's investor presentation, May 14, 2014
Slide 1: American International Group, Inc. Investor Presentation
Exhibit 99.1 American International Group, Inc. Investor Presentation May 14, 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: 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 1Q14 NPW growth of 3%, excluding FX, compared to 1Q13 Grow high value lines and optimize business mix Casualty business achieved risk adju
Slide 4: AIG – Building on Capital Strength
AIG – Building on Capital Strength 25% increase in quarterly dividend to $0.125/sh. in Feb. 2014 Approximately $867 million of shares AIG Shareholders’ Equity - repurchased in 1Q14 $103.8 bn at March 31, 2014 Active Capital Management Since May 2011, deployed over $20 billion through share repurchas
Slide 5: AIG Property Casualty
AIG Property Casualty AIG
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 2013 NPW of over $34 billion. #1 U.S.-based property casualty EMEA(1) insurance organization in Europe, with 2013 NPW: $6.8 bn established and growing positions in 20% of total NPW t
Slide 7: AIG Property Casualty – Financial Highlights
AIG Property Casualty – Financial Highlights First Full Year Quarter ($ in billions) 2011 2012 2013 2014 Net premiums written $34.8 $34.4 $34.4 $8.3 Net investment income 4.3 4.8 5.3 1.3 Pre-tax operating income $1.1 $1.8 $4.8 $1.2 Accident year loss ratio, as adjusted 68.7 65.2 63.8 63.2 Expense ra
Slide 8: AIG Property Casualty – Business Overview
AIG Property Casualty – Business Overview A broad product platform. Commercial Insurance Consumer Insurance Full Year 2013 NPW – $20.8 bn Full Year 2013 NPW – $13.6 bn Global – Unique ability to serve multinational clients Innovative – Often first to market in new products and services, such as Cybe
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 standards for
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. Business Insurance Insurance Times - UK PropertyCasualty360 2014 Innovation Award - AIG 2014 Insurer Claims Initiative of the 2013 Best Overall Commercial Multinational Program
Slide 11: AIG Property Casualty – Product Diversification
AIG Property Casualty – Product Diversification Commercial Insurance Consumer Insurance General Liability Commercial Auto Casualty Workers’ Compensation Excess Casualty Personal Accident Crisis Management Accident and Supplemental Medical Health Travel Global Property including high deductible Life
Slide 12: AIG Property Casualty – Reserves
AIG Property Casualty – Reserves Business mix shifts away from long tail casualty lines and accelerated commutation of legacy portfolios (especially 2004 and prior) are expected to also reduce reserve variability. Net Reserves by Accident Year $66.3 billion at March 31, 2014 2004 & Prior 15% Busines
Slide 13: AIG Property Casualty – Accident Year Loss Ratio, As Adjusted, Progression
AIG Property Casualty – Accident Year Loss Ratio, As Adjusted, Progression Total Property Casualty Commercial Insurance Consumer Insurance 13
Slide 14: AIG Property Casualty – Investment Composition & Ratings
AIG Property Casualty – Investment Composition & Ratings Cash & Invested Assets – Total Portfolio Composition (1) Cash & Invested Assets – Total Portfolio Composition (1) March 31, 2014 - $123.0 billion December 31, 2013 - $123.1 billion Bond Portfolio – By Agency Credit Rating Bond Portfolio – By A
Slide 15: AIG Life and Retirement
AIG Life and Retirement AIG
Slide 16: AIG Life and Retirement – Operating from a Position of Strength
AIG Life and Retirement – Operating from a Position of Strength Long standing leading market positions Market Leader Scale advantage in key product lines Comprehensive portfolio of life insurance, A&H, annuity, group retirement, Product Diversity group benefits, institutional products and mutual fun
Slide 17: AIG Life and Retirement – Financial Highlights
AIG Life and Retirement – Financial Highlights First Full Year Quarter ($ in billions) 2011 2012 2013 2014 Premiums and deposits $24.4 $21.0 $28.8 $7.1 Net investment income 9.9 10.7 10.9 2.8 Pre-tax operating income 3.3 4.2 5.1 1.4 Cash & invested assets(1) 194.2 205.3 196.9 200.1 Assets under mana
Slide 18: AIG Life and Retirement – Diversified Business Mix
AIG Life and Retirement – Diversified Business Mix Premiums and Deposits Premiums and Deposits Full Year 2013 - $28.8 billion Full Year 2012 - $21.0 billion Retail: 69% Institutional: 31% Retail: 59% Institutional: 41% Life Insurance Life Insurance and A&H and A&H Group Retirement Group Retirement 1
Slide 19: AIG Life and Retirement – Assets Under Management
AIG Life and Retirement – Assets Under Management Year-over-year growth in AUM reflects strong retail investment product net flows, higher separate account balances and greater institutional assets. March 31, 2014 - $324.4 billion March 31, 2013 - $296.9 billion Retail Mutual Retail Funds Mutual Ret
Slide 20: AIG Life and Retirement – Leading Market Positions
AIG Life and Retirement – Leading Market Positions Market Positions Excellence in Service, Marketing and Technology Rank* Market Tools International MarCom Metric 2013 Achievement in Awards 2013 2012 Customer Excellence 2012 and 2013 Platinum th (ACE award for 7 and Gold Awards 2 6 Total Annuity Sal
Slide 21: AIG Life and Retirement – Broad Multichannel Distribution Network
AIG Life and Retirement – Broad Multichannel Distribution Network 2013 Sales By Distribution Channel 2012 Sales By Distribution Channel Affiliated: 33% Non-affiliated: 67% Affiliated: 43% Non-affiliated: 57% VALIC FAs VALIC FAs 26% 33% B-Ds B-Ds 29% 34% AIG Direct & Other 1% AIG Financial Network 3%
Slide 22: AIG Life and Retirement – Individual Variable Annuities
AIG Life and Retirement – Individual Variable Annuities A strategic growth opportunity for AIG. Industry Retail Variable Annuity Sales* Account Value by GMWB Guarantee at 3/31/14 (1) Company FY 2013 % Change FY 2012 ($ in millions) Rank Sales From FY 2012 Rank Sales Jackson National 1 $20,931 6% 1 $
Slide 23: 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) Evolving Market In past years, many leading carriers avoided the index annuity market due to issues centered around suitability
Slide 24: AIG Life and Retirement – Investment Composition & Ratings
AIG Life and Retirement – Investment Composition & Ratings Cash & Invested Assets – Total Portfolio Composition (1) Cash & Invested Assets – Total Portfolio Composition (1) March 31, 2014 - $200.1 billion December 31, 2013 - $196.9 billion Bond Portfolio – By Agency Credit Rating Bond Portfolio – By
Slide 25: AIG Life and Retirement – Net Investment Spread Management
AIG Life and Retirement – Net Investment Spread Management Base Portfolio Yields (1) Cost of Funds (2) Base Net Investment Spreads (1) 1) Includes return on base portfolio. Quarterly results are annualized. Total Base Yield 2) Excludes the amortization of sales inducement assets. At March 31, 2014,
Slide 26: Mortgage Guaranty (United Guaranty Corporation)
Mortgage Guaranty (United Guaranty Corporation)
Slide 27: United Guaranty – Financial Highlights
United Guaranty – Financial Highlights First Full Year Quarter ($ in millions) 2011 2012 2013 2014 Net premiums written $801 $858 $1,048 $231 Net investment income 132 146 132 35 Pre-tax operating income (loss) ($97) $9 $205 76 Combined ratio 128.9 119.2 90.9 80.8 Cash & invested assets (1) $4,081 $
Slide 28: United Guaranty – A Market Leader
United Guaranty – A Market Leader Risk based pricing driving profitable new business. New Insurance Written(1) Vintage Average ($ in billions) Year (2) FICO Score LTV Ratio 2010 760 90 2011 757 91 2012 758 91 2013 753 91 1Q14 751 92 UGC’s risk-based pricing plan, Performance Premium, utilizes over a
Slide 29: United Guaranty – Shrinking Legacy In-Force
United Guaranty – Shrinking Legacy In-Force Primary Delinquency Rate Primary Risk-in-force (RIF) – $37.4 billion As of March 31, 2014 (by vintage year) 2014 2005 and prior 4% 8% 2006 5% 2007 2013 10% 32% 2008 6% 2009 2% 2010 3% 2011 8% 2012 22% New business generated after 2008 represents 71% of pri
Slide 30: United Guaranty – Financial Strength
United Guaranty – Financial Strength Capitalization and Risk Asset Composition At December 31, 2013 At March 31, Default Post 2008 Risk-to- 2014 Rate (%) RIF (%) Capital(1) Cash & Bonds to Total Admitted Assets United Guaranty 5.3 71 18.4 Genworth 7.4 47 18.7 MGIC 9.7 44 15.3 Radian 6.3 62 19.2 Esse
Slide 31: Capital Strength
Capital Strength AIG
Slide 32: Capital Position and Ratings
Capital Position and Ratings Capital Structure Credit Ratings (2) ($ in billions, except per share data) $125.6 S&P Moody’s Fitch AM Best $122.3 $0.6 $0.6 AIG – Senior A- Baa1 BBB+ NR Debt AIG PC(3) – A+ A1 A A FSR AIG L&R (3) – A+ A2 A+ A FSR Book Value Per Share $68.62 $71.77 $66.38 Dec. 31, Mar.
Slide 33: Financial Flexibility – A Source of Strength
Financial Flexibility – A Source of Strength AIG Parent Cash, Short-Term Investments & Insurance Company Distributions Unencumbered Fixed Maturity Securities ($ in millions) ($ in billions) AIG Property Casualty AIG Life and Retirement UGC $13.1 $8,893 90 $11.2 $3.0 $3.0 $4,433 $5,349 Unencumbered F
Slide 34: Other Sources of Value
Other Sources of Value AIG
Slide 35: Direct Investment Book and Global Capital Markets
Direct Investment Book and Global Capital Markets ($ in billions) Direct Investment Book (1) Global Capital Markets (1) Assets $21.1 $7.0 Liabilities $16.5 $3.7 Net Asset Value $4.6 $3.3 Legacy Matched AIG Hedging & Legacy AIGFP Stable Value Go Forward Assets & Liabilities Market Derivatives (2) CDS
Slide 36: Direct Investment Book Long-Term Debt
Direct Investment Book Long-Term Debt ($ in billions) 1) In May 2014, AIG reduced DIB debt through a redemption of $750 million aggregate principal amount of its 3.000% Notes due 2015 using cash allocated to the DIB. 36
Slide 37: Deferred Tax Asset Overview
Deferred Tax Asset Overview AIG continues to have substantial deferred tax assets that are available to offset future tax obligations. As of 12/31/12 As of 12/31/13 Gross Deferred Gross Deferred ($ in billions) Type Attributes Tax Asset Attributes Tax Asset Utilization/Expiration Utilize against AIG
Slide 38: Appendix
Appendix AIG
Slide 39: 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, net loss (gain) on sale of divested businesses and properties, i
Slide 40: AIG Consolidated Financial Highlights
AIG Consolidated Financial Highlights First Full Year Quarter ($ in millions, except per share amounts) 2011 2012 2013 2014 Revenues $65,105 $71,021 $68,678 $16,112 (1) Net income attributable to AIG 20,622 3,438 9,085 1,609 Diluted earnings per common share $11.01 $2.04 $6.13 $1.09 ROE, Ex. AOCI (2
Slide 41: Non-GAAP Reconciliation – Pre-tax Operating Income
Non-GAAP Reconciliation – Pre-tax Operating Income AIG Property Casualty Full Year First Quarter ($ in millions) 2011 2012 2013 2014 Income from continuing operations, before tax $ 2,100 $ 2,023 $ 5,133 $ 1,309 Adjustments to arrive at pre-tax operating income: Net realized capital (gains) losses (9
Slide 42: Non-GAAP Reconciliation – After-tax Operating Income and Foreign Exchange Effect on NPW
Non-GAAP Reconciliation – After-tax Operating Income and Foreign Exchange Effect on NPW After-tax Operating Income Attributable to AIG Full Year March 31, ($ in millions) 2011 2012 2013 2014 Net income attributable to AIG $ 20,622 $ 3,438 $ 9,085 $ 1,609 Adjustments to arrive at After-tax operating
Slide 43: 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, March 31, ($ in millions, except per share data) 2011 2012 2013 2014 Total AIG shareholders’ equity $ 101,538 $ 98,002 $ 100,470 $ 103,833 Less:
Slide 44: About American International Group, Inc. (AIG)
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
American International Group — Investor Presentation (May 2014) on 6ix