- Net income per diluted common share was $2.03, compared to
$3.43 in the prior year quarter, and adjusted after-tax income
attributable to AIG common shareholders* (AATI) per diluted common
share was $1.75, the highest quarterly adjusted earnings per share*
(EPS) for AIG since 2007, compared to $1.39 in the prior year
quarter
- General Insurance net premiums written (NPW) grew 10% and
Commercial Lines NPW grew 14% year-over-year, or 11% and 13%,
respectively, on a constant dollar basis and adjusted for the
International lag elimination*
- General Insurance combined ratio was 90.9% and accident year
combined ratio, as adjusted* (AYCR) was 88.0%, representing the
best second quarter AYCR since 2007
- Life and Retirement adjusted pre-tax income (APTI) was $991
million, up 33% from the prior year quarter, benefiting from strong
growth in base investment yield. Premiums were $2.5 billion, up
128% from the prior year quarter, and premiums and deposits* were
$10.1 billion, up 42% from the prior year quarter supported by
record Fixed Index Annuity sales
- AIG repurchased $554 million of common stock in the second
quarter and paid $268 million in dividends, reflecting a 12.5%
increase in the quarterly common stock dividend
- Announced the sale of Validus Reinsurance, Ltd. (Validus Re)
to RenaissanceRe Holdings Ltd. (RenaissanceRe) for approximately
$2.74 billion in cash and $250 million in RenaissanceRe common
stock, representing another significant milestone in AIG’s
strategic repositioning of its global portfolio, reducing overall
volatility and creating capital efficiencies
- Successfully executed a secondary offering of Corebridge
Financial common stock; following Corebridge Financial share
repurchases, AIG ownership reduced to 65.3%
- In early July, closed sale of Crop Risk Services for
approximately $240 million in cash and completed the formation of
Private Client Select with Stone Point Capital LLC to serve as a
managing general agent for the high and ultra-high net worth
personal lines business
- On August 1, AIG Board of Directors increased share
repurchase authorization to $7.5 billion
SECOND QUARTER 2023 NOTEWORTHY ITEMS
- General Insurance APTI increased $62 million from the prior
year quarter to $1.3 billion, driven by higher investment income,
partially offset by lower underwriting income due to higher
catastrophe losses and lower favorable prior year development, net
of reinsurance and prior year premiums.
- Life and Retirement APTI increased $244 million from the prior
year quarter to $991 million, primarily due to higher base
portfolio spread income, partially offset by lower alternative
investment income and lower fee income.
- Net income attributable to AIG common shareholders was $1.5
billion, compared to $2.7 billion in the prior year quarter, or
$2.03 compared to $3.43 per diluted common share.
- AATI was $1.3 billion, compared to $1.1 billion in the prior
year quarter, or $1.75 compared to $1.39 per diluted common share,
primarily due to higher Life and Retirement results and a 9%
reduction in weighted average diluted shares outstanding.
- Return on common equity (ROCE) was 14.0% and adjusted ROCE* was
9.4% on an annualized basis. Adjusted ROCE for both General
Insurance and Life and Retirement was 12.2%.
* Refers to financial measure not calculated in accordance with
generally accepted accounting principles (non-GAAP); definitions of
non-GAAP measures and reconciliations to their closest GAAP
measures can be found in this news release under the heading
Comment on Regulation G and Non-GAAP Financial Measures.
American International Group, Inc. (NYSE: AIG) today reported
financial results for the second quarter ended June 30, 2023.
AIG Chairman & Chief Executive Officer Peter Zaffino said:
“In the second quarter, we continued to build on our momentum,
delivering outstanding financial results as well as successfully
executing on multiple strategic priorities. Second quarter adjusted
after-tax income attributable to AIG common shareholders per
diluted common share was $1.75, AIG’s highest adjusted EPS since
2007, representing another significant milestone on our path toward
sustainable earnings growth over the long-term.
“Our ability to continue to grow, manage volatility and improve
profitability reflects our commitment to underwriting and
operational excellence. In addition to our strong financial
performance, our team executed on several transactions that will
simplify AIG, reduce volatility, generate liquidity and capital
efficiencies, and allow us to accelerate our capital management
plans.
“In General Insurance, continued accident year underwriting
margin improvement and strong growth resulted in yet another
quarter of excellent financial results. Net premiums written
increased 11%† year-over-year and Commercial Lines net premiums
written grew 13%† driven by strong growth in North America
Commercial Lines of 18%†. North America Commercial rate increased
8% or 9% excluding Workers’ Compensation while International
Commercial rate increased 9%.
“The General Insurance combined ratio was 90.9%, inclusive of
$250 million of catastrophe losses, or 3.9 loss ratio points, a
tremendous result against the backdrop of a very challenging
quarter for the industry. The second quarter accident year combined
ratio, ex-CAT, was 88.0% and the lowest ratio recorded for the
second quarter since 2007. This ratio improved by 50 basis points
year-over-year and was driven by an excellent Global Commercial
accident year combined ratio, ex-CAT, of 84.4%.
“Life & Retirement delivered very good results, with
premiums and deposits of over $10 billion, a 42% increase
year-over-year, benefiting from record sales in Fixed Index
Annuities. Results included strong continued base net investment
spread expansion.
“With respect to capital management, we continued to execute
against our balanced strategy. In the second quarter, we increased
our quarterly common stock dividend by 12.5% to $0.36 per share,
representing the first increase since 2016 and we returned $822
million to shareholders through $554 million of AIG common stock
repurchases and $268 million of dividends.
“In May, we announced the sale of Validus Re to RenaissanceRe
for $3 billion, which is expected to close in the fourth quarter of
2023. In addition, we announced and successfully completed the sale
of AIG’s Crop Risk Services business to American Financial Group,
Inc. for approximately $240 million. We also launched Private
Client Select as a Managing General Agency with our partner Stone
Point Capital LLC that will serve as an independent platform for
the high and ultra-high net worth markets.
“In June, we completed a secondary offering of Corebridge
Financial common stock. Furthermore, Corebridge issued a $400
million special dividend to its shareholders and executed the
repurchase of $200 million of common stock from AIG and Blackstone.
Including approximately $600 million in regular dividends, these
actions resulted in approximately $1.2 billion of total capital
returned to Corebridge shareholders since its initial public
offering in September 2022. As a result of these actions, AIG
received gross proceeds of approximately $1.7 billion and reduced
its ownership in Corebridge to 65.3%.
“The scale of what AIG colleagues accomplished in the second
quarter is extraordinary. I am more confident than ever in AIG’s
promising future as we continue our journey to be a top performing
company delivering excellence in all that we do and creating
sustainable long-term value for our stakeholders.”
† On a constant dollar basis for North America and on a constant
dollar basis and adjusted for the International lag elimination for
International. These measures are not calculated in accordance with
generally accepted accounting principles (non-GAAP); definitions of
non-GAAP measures and reconciliations to their closest GAAP
measures can be found in this news release under the heading
Comment on Regulation G and Non-GAAP Financial Measures.
For the second quarter of 2023, pre-tax income from continuing
operations was $1.9 billion, compared to $3.9 billion in the prior
year quarter. Net income attributable to AIG common shareholders
was $1.5 billion, or $2.03 per diluted common share, compared to
$2.7 billion, or $3.43 per diluted common share, in the prior year
quarter. The decline in pre-tax income was primarily driven by a
decrease in net realized gains on Fortitude Re funds withheld
assets and embedded derivative as well as a decrease in net
realized gains excluding Fortitude Re funds withheld assets and
embedded derivative, higher catastrophe losses, lower net favorable
prior year development (PYD) and higher interest crediting rates at
Life and Retirement. The decline was partially offset by higher net
investment income and continued improvement in accident year
underwriting margin. These pre-tax items were partially offset by
lower income tax expense due to a decrease in income from
continuing operations and lower income attributable to the
noncontrolling interest (NCI) due to a decrease in net income at
Corebridge compared to the prior year quarter despite higher income
attributable to NCI as a result of lower AIG ownership in
Corebridge.
AATI was $1.3 billion, or $1.75 per diluted common share, for
the second quarter of 2023, compared to $1.1 billion, or $1.39 per
diluted common share, in the prior year quarter. The increase in
AATI was due to higher Life and Retirement results, partially
offset by higher catastrophe losses and lower net favorable
PYD.
Total consolidated net investment income for the second quarter
of 2023 was $3.6 billion, an increase of 37% from $2.6 billion in
the prior year quarter, benefiting from higher income from fixed
maturity securities and loan portfolios due to the higher
reinvestment rates on new investments and floating rate securities.
Total net investment income on an APTI basis* was $3.3 billion, an
increase of $774 million from the prior year quarter.
Book value per common share was $58.49 as of June 30, 2023, a
decrease of 1% from March 31, 2023 and an increase of 6% from
December 31, 2022. The decrease from March 31, 2023 was driven by
an increase in accumulated other comprehensive loss (AOCI) due to
increased interest rates and the increase from December 31, 2022
was driven by a decrease in AOCI as a result of the Corebridge
secondary offering and share repurchases discussed above. Adjusted
book value per common share* was $75.76, almost flat compared to
March 31, 2023 and December 31, 2022. Adjusted tangible book value
per common share* was $69.99, an increase of approximately 1% from
both March 31, 2023 and December 31, 2022.
In the second quarter of 2023, AIG repurchased $554 million of
common stock, or approximately 10 million shares, paid $268 million
of common and preferred dividends and repaid $388 million of debt
maturities. AIG also received proceeds of approximately $1.2
billion from the Corebridge secondary offering, $264 million from
the Corebridge special dividend and $180 million from the
Corebridge share repurchase, contributing to parent liquidity of
$4.3 billion as of June 30, 2023. AIG’s ratio of total debt and
preferred stock to total capital at June 30, 2023 was 32.3%, down
from 32.8% at March 31, 2023, primarily driven by repayment of $388
million of debt and the Corebridge secondary offering. Excluding
AOCI, the total debt and preferred stock to total capital ratio*
was 26.0% at June 30, 2023.
On August 1, the AIG Board of Directors declared a quarterly
cash dividend on AIG common stock of $0.36 per share. The dividend
is payable on September 29, 2023 to stockholders of record at the
close of business on September 15, 2023.
The AIG Board of Directors also declared a quarterly cash
dividend of $365.625 per share on AIG Series A 5.85% Non-Cumulative
Perpetual Preferred Stock, with a liquidation preference of $25,000
per share, which is represented by depositary shares (NYSE: AIG
PRA), each representing a 1/1,000th interest in a share of
preferred stock. Holders of depositary shares will receive
$0.365625 per depositary share. The dividend is payable on
September 15, 2023 to holders of record at the close of business on
August 31, 2023.
FINANCIAL SUMMARY
Three Months Ended
June 30,
($ in millions, except per common share
amounts)
2022
2023
Net income attributable to AIG common
shareholders
$
2,746
$
1,485
Net income per diluted share attributable
to AIG common shareholders
$
3.43
$
2.03
Adjusted pre-tax income (loss)
$
1,543
$
1,890
General Insurance
1,257
1,319
Life and Retirement
747
991
Other Operations
(461)
(420)
Net investment income
$
2,604
$
3,571
Net investment income, APTI basis
2,504
3,278
Adjusted after-tax income attributable to
AIG common shareholders
$
1,111
$
1,282
Adjusted after-tax income per diluted
share attributable to AIG common shareholders
$
1.39
$
1.75
Weighted average common shares outstanding
- diluted (in millions)
800.7
730.5
Return on common equity
21.7
%
14.0
%
Adjusted return on common equity
7.7
%
9.4
%
Book value per common share
$
58.64
$
58.49
Adjusted book value per common share
$
73.78
$
75.76
Common shares outstanding (in
millions)
771.3
717.5
GENERAL INSURANCE
Three Months Ended June
30,
($ in millions)
2022
2023
Change
Gross premiums written
$
9,581
$
10,399
9
%
Net premiums written
$
6,866
$
7,537
10
%
North America
3,401
3,973
17
North America Commercial Lines
2,918
3,410
17
North America Personal Insurance
483
563
17
International
3,465
3,564
3
International Commercial Lines
2,037
2,223
9
International Personal Insurance
1,428
1,341
(6)
Underwriting income (loss)
$
799
$
594
(26)
%
North America
406
352
(13)
North America Commercial Lines
416
403
(3)
North America Personal Insurance
(10)
(51)
(410)
International
393
242
(38)
International Commercial Lines
349
216
(38)
International Personal Insurance
44
26
(41)
Net investment income, APTI basis
$
458
$
725
58
%
Adjusted pre-tax income
$
1,257
$
1,319
5
%
Return on adjusted segment common
equity
12.0
%
12.2
%
0.2
pts
Underwriting ratios:
North America Combined Ratio (CR)
86.3
89.0
2.7
pts
North America Commercial Lines CR
83.6
85.6
2.0
North America Personal Insurance CR
102.3
112.9
10.6
International CR
88.5
92.6
4.1
International Commercial Lines CR
82.4
89.0
6.6
International Personal Insurance CR
96.9
98.0
1.1
General Insurance (GI) CR
87.4
90.9
3.5
GI Loss ratio
56.2
59.3
3.1
pts
Less: impact on loss ratio
Catastrophe losses and reinstatement
premiums
(1.8)
(3.9)
(2.1)
Prior year development, net of reinsurance
and prior year premiums
2.9
1.0
(1.9)
GI Accident year loss ratio, as
adjusted
57.3
56.4
(0.9)
GI Expense ratio
31.2
31.6
0.4
GI Accident year combined ratio, as
adjusted
88.5
88.0
(0.5)
Accident year
combined ratio, as adjusted (AYCR):
North America AYCR
89.9
87.8
(2.1)
pts
North America Commercial Lines AYCR
88.2
85.1
(3.1)
North America Personal Insurance AYCR
99.7
107.1
7.4
International AYCR
87.2
88.0
0.8
International Commercial Lines AYCR
81.4
83.1
1.7
International Personal Insurance AYCR
95.2
95.3
0.1
General Insurance
- Second quarter 2023 NPW of $7.5 billion was a 10% increase from
the prior year quarter, or 11% on a constant dollar basis and
adjusted for the International lag elimination, driven by
Commercial Lines. North America Commercial Lines delivered 17% NPW
growth, or 18% on a constant dollar basis, from the prior year
quarter, benefiting from positive rate changes, higher renewal
retentions and strong new business production, particularly in
Retail Property, Lexington and Validus Re, partially offset by
continued selectivity in Financial Lines Director & Officer and
transactional products. International Commercial Lines delivered 9%
NPW growth, or 6% on a constant dollar basis and adjusted for the
International lag elimination, from the prior year quarter,
attributed to continued positive rate changes and strong new
business production, mainly in Property and Global Specialty,
partially offset by headwinds from a lack of capital market
transaction activity. Global Personal Insurance NPW decreased 0.4%,
but grew 5% on a constant dollar basis and adjusted for the
International lag elimination, from the prior year quarter,
primarily driven by growth in Private Client Group resulting from
changes in our reinsurance program, partially offset by a decrease
in Travel and Warranty.
- Second quarter 2023 underwriting income was $594 million and
included $250 million of total catastrophe-related charges,
representing 3.9 loss ratio points, of which $159 million was in
North America, mainly attributable to U.S. convective storms, and
$91 million in International, mainly attributable to Typhoon Mawar,
compared to $121 million, or 1.8 loss ratio points, in the prior
year quarter. Second quarter 2023 also included lower favorable PYD
of $115 million compared to favorable PYD of $202 million in the
prior year quarter.
- The combined ratio was 90.9%, a 3.5 point increase from the
prior year quarter, driven by a 3.1 point increase in the loss
ratio. The AYCR improved 0.5 point from the prior year quarter to
88.0%, driven by a 0.9 point decrease in the accident year loss
ratio, as adjusted* (AYLR) to 56.4%, reflecting continued earn-in
of premium rate increases exceeding loss cost trends in Commercial
Lines. The AYCR improvement also reflects business mix benefit,
continued positive rate changes, focused risk selection and
improved terms and conditions. The expense ratio was 31.6%, a 0.4
point increase from the prior year quarter, driven by an increase
in the general operating expense ratio while the acquisition ratio
remained flat.
- The North America Commercial Lines combined ratio was 85.6% and
International Commercial Lines combined ratio was 89.0%, a 2.0
point and a 6.6 point increase, respectively, from the prior year
quarter. The AYCR for North America Commercial Lines improved 3.1
points from the prior year quarter to 85.1%, with a 2.8 point
improvement in AYLR. The AYCR for International Commercial Lines
increased 1.7 points from the prior year quarter to 83.1% due to a
higher general operating expense ratio driven by changes in
business mix.
- The North America Personal Insurance combined ratio increased
10.6 points to 112.9% and the AYCR increased 7.4 points to 107.1%
compared to the prior year quarter, driven by higher catastrophe
losses, changes in business mix, reinsurance cessions and an
increase in general operating expense ratio attributable to the
decline in premiums earned. The International Personal Insurance
combined ratio increased 1.1 points to 98.0% and the AYCR increased
0.1 point to 95.3% from the prior year quarter, driven by higher
catastrophe losses and a higher expense ratio, partially offset by
improvement in the AYLR from changes in business mix and reflecting
earned-in rate exceeding loss costs.
- General Insurance return on adjusted segment common equity* for
the second quarter was 12.2% on an annualized basis, compared with
12.0% in the prior year quarter.
LIFE AND RETIREMENT
Three Months Ended
June 30,
($ in millions, except as
indicated)
2022
2023
Change
Adjusted pre-tax income
$
747
$
991
33
%
Individual Retirement
370
585
58
Group Retirement
180
201
12
Life Insurance
120
78
(35)
Institutional Markets
77
127
65
Premiums and fees
$
1,846
$
3,238
75
%
Individual Retirement
246
238
(3)
Group Retirement
109
106
(3)
Life Insurance
946
934
(1)
Institutional Markets
545
1,960
260
Premiums and deposits
$
7,099
$
10,054
42
%
Individual Retirement
3,620
4,045
12
Group Retirement
1,772
1,923
9
Life Insurance
1,157
1,176
2
Institutional Markets
550
2,910
429
Net flows
$
80
$
(2105)
NM
%
Individual Retirement
628
(359)
NM
Group Retirement
(548)
(1,746)
(219)
Net investment income, APTI
basis
$
1,989
$
2,478
25
%
Return on adjusted segment common
equity
9.7
%
12.2
%
2.5
pts
Life and Retirement
- Life and Retirement reported APTI of $991 million for the
second quarter of 2023, up 33% from $747 million in the prior year
quarter. The increase was primarily driven by higher base portfolio
income, partially offset by a decline in alternative investment
returns and fee income. Base net investment spreads in Individual
and Group Retirement continued to widen with a 64-basis point
improvement year-over-year, driven by higher reinvestment
rates.
- Premiums increased 128% to $2.5 billion from $1.1 billion and
premiums and deposits increased 42% to $10.1 billion from $7.1
billion in the prior year quarter. The second quarter saw record
sales in Fixed Index Annuities and a higher volume of transactional
businesses with $1.9 billion of pension risk transfer activity and
$0.9 billion of guaranteed investment contracts.
- The balance sheet and the capital position of the business
continue to remain strong. During the second quarter, Corebridge
returned approximately $750 million to its shareholders (including
AIG) through approximately $550 million of common stock dividends
and $200 million in share repurchases.
- Life and Retirement return on adjusted segment common equity*
for the second quarter was 12.2% on an annualized basis, compared
with 9.7% in the prior year quarter.
OTHER OPERATIONS
Three Months Ended
June 30,
($ in millions)
2022
2023
Change
Corporate and Other
$
(494)
$
(414)
16
%
Asset Management Group
163
(9)
NM
Adjusted pre-tax loss before consolidation
and eliminations
(331)
(423)
(28)
Consolidation and eliminations
(130)
3
NM
Adjusted pre-tax loss
$
(461)
$
(420)
9
%
Other Operations
- Other Operations adjusted pre-tax loss (APTL) of $420 million
improved $41 million from the prior year quarter, primarily due to
the impact of Variable Interest Entities (VIEs), in addition to
better results from Corporate and Other.
- Corporate and Other APTL improved $80 million, or 16%, from the
prior year quarter, largely due to the absence of mark-to-market
losses on a legacy investment portfolio that was sold in the fourth
quarter of 2022, as well as higher income from short-term
investments as a result of high short-term yields on parent
liquidity funds.
- Asset Management Group (AMG) APTL decreased $172 million from
the prior year quarter largely due to lower net investment income
associated with VIEs compared to the prior year quarter, which
reflected gains on sales. AMG results in the second quarter also
reflected the sale of our Collateralized Loan Obligations manager
in the first quarter of 2023 and the subsequent deconsolidation of
associated securitizations by the end of the second quarter, which
resulted in lower investment income and an offsetting impact on
interest expense with minimal impact to APTL.
- Changes in Consolidation and eliminations were attributed to
realized capital gains associated with VIEs, which the insurance
subsidiaries report as net investment income and are eliminated in
Other Operations.
CONFERENCE CALL AIG will host a conference call tomorrow,
Wednesday, August 2, 2023 at 8:30 a.m. ET to review these results.
The call is open to the public and can be accessed via a live
listen-only webcast in the Investors section of www.aig.com. A
replay will be available after the call at the same location.
# # #
Additional supplementary financial data is available in the
Investors section at www.aig.com.
Certain statements in this press release and other publicly
available documents may include, and members of AIG management may
from time to time make and discuss, statements which, to the extent
they are not statements of historical or present fact, may
constitute “forward-looking statements” within the meaning of the
U.S. Private Securities Litigation Reform Act of 1995. These
forward‑looking statements are intended to provide management’s
current expectations or plans for AIG’s future operating and
financial performance, based on assumptions currently believed to
be valid and accurate. Forward-looking statements are often
preceded by, followed by or include words such as “will,”
“believe,” “anticipate,” “expect,” “expectations,” “intend,”
“plan,” “strategy,” “prospects,” “project,” “anticipate,” “should,”
“guidance,” “outlook,” “confident,” “focused on achieving,” “view,”
“target,” “goal,” “estimate,” and other words of similar meaning in
connection with a discussion of future operating or financial
performance. These statements may include, among other things,
projections, goals and assumptions that relate to future actions,
prospective services or products, future performance or results of
current and anticipated services or products, sales efforts,
expense reduction efforts, the outcome of contingencies such as
legal proceedings, anticipated organizational, business or
regulatory changes, such as the separation of the Life and
Retirement business from AIG, the effect of catastrophic events,
both natural and man-made, and macroeconomic and/or geopolitical
events, anticipated dispositions, monetization and/or acquisitions
of businesses or assets, the successful integration of acquired
businesses, management succession and retention plans, exposure to
risk, trends in operations and financial results, and other
statements that are not historical facts.
All forward-looking statements involve risks, uncertainties and
other factors that may cause AIG’s actual results and financial
condition to differ, possibly materially, from the results and
financial condition expressed or implied in the forward-looking
statements. Factors that could cause AIG’s actual results to
differ, possibly materially, from those in specific projections,
goals, assumptions and other forward-looking statements include,
without limitation:
- the impact of adverse developments affecting economic
conditions in the markets in which AIG and its businesses operate
in the U.S. and globally, including adverse developments related to
financial market conditions, macroeconomic trends, fluctuations in
interest rates and foreign currency exchange rates, inflationary
pressures, pressures on the commercial real estate market, an
economic slowdown or recession, geopolitical events or conflicts,
including the conflict between Russia and Ukraine, and stress and
instability in the banking sector;
- occurrence of catastrophic events, both natural and man-made,
including the effects of climate change, geopolitical events and
conflicts and civil unrest;
- disruptions in the availability or accessibility of AIG's or a
third party’s information technology systems, including hardware
and software, infrastructure or networks, and the inability to
safeguard the confidentiality and integrity of customer, employee
or company data due to cyberattacks, data security breaches, or
infrastructure vulnerabilities;
- AIG’s ability to successfully dispose of, monetize and/or
acquire businesses or assets or successfully integrate acquired
businesses, and the anticipated benefits thereof;
- AIG's ability to realize expected strategic, financial,
operational or other benefits from the separation of Corebridge as
well as AIG’s equity market exposure to Corebridge;
- the effectiveness of strategies to retain and recruit key
personnel and to implement effective succession plans;
- concentrations in AIG’s investment portfolios;
- AIG’s reliance on third-party investment managers;
- changes in the valuation of AIG’s investments;
- AIG’s reliance on third parties to provide certain business and
administrative services;
- availability of adequate reinsurance or access to reinsurance
on acceptable terms;
- concentrations of AIG’s insurance, reinsurance and other risk
exposures;
- nonperformance or defaults by counterparties, including
Fortitude Reinsurance Company Ltd. (Fortitude Re);
- AIG's ability to adequately assess risk and estimate related
losses as well as the effectiveness of AIG’s enterprise risk
management policies and procedures, including with respect to
business continuity and disaster recovery plans;
- changes in judgments concerning potential cost-saving
opportunities;
- AIG's ability to effectively implement changes under AIG 200,
including the ability to realize cost savings;
- difficulty in marketing and distributing products through
current and future distribution channels;
- actions by rating agencies with respect to AIG’s credit and
financial strength ratings as well as those of its businesses and
subsidiaries;
- changes to sources of or access to liquidity;
- changes in judgments concerning the recognition of deferred tax
assets and the impairment of goodwill;
- changes in judgments or assumptions concerning insurance
underwriting and insurance liabilities;
- changes in accounting principles and financial reporting
requirements;
- the effects of sanctions, including those related to the
conflict between Russia and Ukraine, and the failure to comply with
those sanctions;
- the effects of changes in laws and regulations, including those
relating to the regulation of insurance, in the U.S. and other
countries in which AIG and its businesses operate;
- changes to tax laws in the U.S. and other countries in which
AIG and its businesses operate;
- the outcome of significant legal, regulatory or governmental
proceedings;
- AIG’s ability to effectively execute on sustainability targets
and standards;
- AIG’s ability to address evolving stakeholder expectations with
respect to environmental, social and governance matters;
- the impact of COVID-19 or other epidemics, pandemics and other
public health crises and responses thereto; and
- such other factors discussed in Part I, Item 2. Management’s
Discussion and Analysis of Financial Condition and Results of
Operations (MD&A) in AIG’s Quarterly Report on Form 10-Q for
the quarterly period ended June 30, 2023 (which will be filed with
the Securities and Exchange Commission (SEC)) and Part I, Item 1A.
Risk Factors and Part II, Item 7. MD&A in AIG Annual Report on
Form 10-K for the year ended December 31, 2022.
Forward-looking statements speak only as of the date of this
press release, or in the case of any document incorporated by
reference, the date of that document. AIG is not under any
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by applicable law. Additional
information as to factors that may cause actual results to differ
materially from those expressed or implied in any forward-looking
statements is disclosed from time to time in our filings with the
SEC.
# # #
COMMENT ON REGULATION G AND NON-GAAP FINANCIAL
MEASURES
Throughout this press release, including the financial
highlights, AIG presents its financial condition and results of
operations in the way it believes will be most meaningful and
representative of its business results. Some of the measurements
AIG uses are “Non-GAAP financial measures” under SEC rules and
regulations. GAAP is the acronym for generally accepted accounting
principles in the United States. The non-GAAP financial measures
AIG presents are listed below and may not be comparable to
similarly-named measures reported by other companies. The
reconciliations of such measures to the most comparable GAAP
measures in accordance with Regulation G are included within the
relevant tables attached to this news release or in the Second
Quarter 2023 Financial Supplement available in the Investors
section of AIG’s website, www.aig.com.
Unless otherwise mentioned or unless the context indicates
otherwise, we use the terms “AIG,” “we,” “us” and “our” to refer to
American International Group, Inc., a Delaware corporation, and its
consolidated subsidiaries.
AIG uses the following operating performance measures because
AIG believes they enhance the understanding of the underlying
profitability of continuing operations and trends of AIG’s business
segments. AIG believes they also allow for more meaningful
comparisons with AIG’s insurance competitors. When AIG uses these
measures, reconciliations to the most comparable GAAP measure are
provided on a consolidated basis.
Book value per common share, excluding accumulated other
comprehensive income (loss) (AOCI) adjusted for the cumulative
unrealized gains and losses related to Fortitude Re funds withheld
assets and deferred tax assets (DTA) (Adjusted book value per
common share) is used to show the amount of our net worth on a
per-common share basis after eliminating items that can fluctuate
significantly from period to period, including changes in fair
value (1) of AIG’s available for sale securities portfolio, (2) of
market risk benefits attributable to our own credit risk and (3)
due to discount rates used to measure traditional and limited
payment long-duration insurance contracts, foreign currency
translation adjustments and U.S. tax attribute deferred tax assets.
This measure also eliminates the asymmetrical impact resulting from
changes in fair value of our available for sale securities
portfolio wherein there is largely no offsetting impact for certain
related insurance liabilities. In addition, we adjust for the
cumulative unrealized gains and losses related to Fortitude Re
funds withheld assets held by AIG in support of Fortitude Re’s
reinsurance obligations to AIG post deconsolidation of Fortitude Re
(Fortitude Re funds withheld assets) since these fair value
movements are economically transferred to Fortitude Re. We exclude
deferred tax assets representing U.S. tax attributes related to net
operating loss carryforwards and foreign tax credits as they have
not yet been utilized. Amounts for interim periods are estimates
based on projections of full-year attribute utilization. As net
operating loss carryforwards and foreign tax credits are utilized,
the portion of the DTA utilized is included in these book value per
common share metrics. Adjusted book value per common share is
derived by dividing total AIG common shareholders’ equity,
excluding AOCI adjusted for the cumulative unrealized gains and
losses related to Fortitude Re funds withheld assets, and DTA
(Adjusted common shareholders’ equity), by total common
shares outstanding.
Book Value per Common Share, Excluding Goodwill, Value of
Business Acquired (VOBA), Value of Distribution Channel Acquired
(VODA), Other Intangible Assets, AOCI adjusted for the cumulative
unrealized gains and losses related to Fortitude Re funds withheld
assets, and Deferred Tax Assets (DTA) (Adjusted Tangible Book Value
per Common Share) is used to provide more accurate measure of
the realizable value of shareholder on a per-common share basis.
Adjusted Tangible Book Value per Common Share is derived by
dividing Total AIG common shareholders’ equity, excluding
intangible assets, AOCI adjusted for the cumulative unrealized
gains and losses related to Fortitude Re funds withheld assets, and
DTA (Adjusted Tangible Common Shareholders’ Equity), by
total common shares outstanding.
AIG Return on Common Equity (ROCE) – Adjusted After-tax
Income Excluding AOCI adjusted for the cumulative unrealized gains
and losses related to Fortitude Re funds withheld assets and DTA
(Adjusted return on common equity) is used to show the rate of
return on common shareholders’ equity. We believe this measure is
useful to investors because it eliminates items that can fluctuate
significantly from period to period, including changes in fair
value (1) of AIG’s available for sale securities portfolio, (2) of
market risk benefits attributable to our own credit risk and (3)
due to discount rates used to measure traditional and limited
payment long-duration insurance contracts, foreign currency
translation adjustments and U.S. tax attribute deferred tax assets.
This measure also eliminates the asymmetrical impact resulting from
changes in fair value of our available for sale securities
portfolio wherein there is largely no offsetting impact for certain
related insurance liabilities. In addition, we adjust for the
cumulative unrealized gains and losses related to Fortitude Re
funds withheld assets since these fair value movements are
economically transferred to Fortitude Re. We exclude deferred tax
assets representing U.S. tax attributes related to net operating
loss carryforwards and foreign tax credits as they have not yet
been utilized. Amounts for interim periods are estimates based on
projections of full-year attribute utilization. As net operating
loss carryforwards and foreign tax credits are utilized, the
portion of the DTA utilized is included in Adjusted Return on
Common Equity. Adjusted Return on Common Equity is derived by
dividing actual or annualized adjusted after-tax income
attributable to AIG common shareholders by average Adjusted Common
Shareholders’ Equity.
General Insurance and Life and Retirement Adjusted Segment
Common Equity is based on segment equity adjusted for the
attribution of debt and preferred stock (Segment Common Equity) and
is consistent with AIG’s Adjusted Common Shareholders’ Equity
definition.
General Insurance and Life and Retirement Return on Adjusted
Segment Common Equity – Adjusted After-tax Income (Return on
adjusted segment common equity) is used to show the rate of
return on Adjusted Segment Common Equity. Return on Adjusted
Segment Common Equity is derived by dividing actual or annualized
Adjusted After-tax Income by Average Adjusted Segment Common
Equity.
Adjusted After-tax Income Attributable to General Insurance
and Life and Retirement is derived by subtracting attributed
interest expense, income tax expense and attributed dividends on
preferred stock from APTI. Attributed debt and the related interest
expense and dividends on preferred stock are calculated based on
our internal allocation model. Tax expense or benefit is calculated
based on an internal attribution methodology that considers among
other things the taxing jurisdiction in which the segments conduct
business, as well as the deductibility of expenses in those
jurisdictions.
Adjusted revenues exclude Net realized gains (losses),
income from non-operating litigation settlements (included in Other
income for GAAP purposes), changes in fair value of securities used
to hedge guaranteed living benefits (included in Net investment
income for GAAP purposes) and income from elimination of the
International reporting lag. Adjusted revenues is a GAAP measure
for our segments.
Adjusted Pre-tax Income (APTI) is derived by excluding the items
set forth below from income from continuing operations before
income tax. This definition is consistent across our segments.
These items generally fall into one or more of the following broad
categories: legacy matters having no relevance to our current
businesses or operating performance; adjustments to enhance
transparency to the underlying economics of transactions; and
measures that we believe to be common to the industry. APTI is a
GAAP measure for our segments. Excluded items include the
following:
- changes in fair value of securities used to hedge guaranteed
living benefits;
- net change in market risk benefits (MRBs);
- changes in benefit reserves related to net realized gains and
losses;
- changes in the fair value of equity securities;
- net investment income on Fortitude Re funds withheld
assets;
- following deconsolidation of Fortitude Re, net realized gains
and losses on Fortitude Re funds withheld assets;
- loss (gain) on extinguishment of debt;
- all net realized gains and losses except earned income
(periodic settlements and changes in settlement accruals) on
derivative instruments used for non-qualifying (economic) hedging
or for asset replication. Earned income on such economic hedges is
reclassified from net realized gains and losses to specific APTI
line items based on the economic risk being hedged (e.g. net
investment income and interest credited to policyholder account
balances);
- income or loss from discontinued operations;
- net loss reserve discount benefit (charge);
- pension expense related to lump sum payments to former
employees;
- net gain or loss on divestitures and other;
- non-operating litigation reserves and settlements;
- restructuring and other costs related to initiatives designed
to reduce operating expenses, improve efficiency and simplify our
organization;
- the portion of favorable or unfavorable prior year reserve
development for which we have ceded the risk under retroactive
reinsurance agreements and related changes in amortization of the
deferred gain;
- integration and transaction costs associated with acquiring or
divesting businesses;
- losses from the impairment of goodwill;
- non-recurring costs associated with the implementation of
non-ordinary course legal or regulatory changes or changes to
accounting principles; and
- income from elimination of the international reporting
lag.
Adjusted After-tax Income attributable to AIG common
shareholders (AATI) is derived by excluding the tax effected
APTI adjustments described above, dividends on preferred stock,
noncontrolling interest on net realized gains (losses), other
non-operating expenses and the following tax items from net income
attributable to AIG:
- deferred income tax valuation allowance releases and
charges;
- changes in uncertain tax positions and other tax items related
to legacy matters having no relevance to our current businesses or
operating performance; and
- net tax charge related to the enactment of the Tax Cuts and
Jobs Act.
See page 15 for the reconciliation of Net income attributable to
AIG to Adjusted After-tax Income Attributable to AIG.
Ratios: We, along with most property and casualty
insurance companies, use the loss ratio, the expense ratio and the
combined ratio as measures of underwriting performance. These
ratios are relative measurements that describe, for every $100 of
net premiums earned, the amount of losses and loss adjustment
expenses (which for General Insurance excludes net loss reserve
discount), and the amount of other underwriting expenses that would
be incurred. A combined ratio of less than 100 indicates
underwriting income and a combined ratio of over 100 indicates an
underwriting loss. Our ratios are calculated using the relevant
segment information calculated under GAAP, and thus may not be
comparable to similar ratios calculated for regulatory reporting
purposes. The underwriting environment varies across countries and
products, as does the degree of litigation activity, all of which
affect such ratios. In addition, investment returns, local taxes,
cost of capital, regulation, product type and competition can have
an effect on pricing and consequently on profitability as reflected
in underwriting income and associated ratios.
Accident year loss and Accident year combined ratios, as
adjusted (Accident year loss ratio, ex-CAT and Accident year
combined ratio, ex-CAT): both the accident year loss and
accident year combined ratios, as adjusted, exclude catastrophe
losses (CATs) and related reinstatement premiums, prior year
development, net of premium adjustments, and the impact of reserve
discounting. Natural catastrophe losses are generally weather or
seismic events, in each case, having a net impact on AIG in excess
of $10 million and man-made catastrophe losses, such as terrorism
and civil disorders that exceed the $10 million threshold. We
believe that as adjusted ratios are meaningful measures of our
underwriting results on an ongoing basis as they exclude
catastrophes and the impact of reserve discounting which are
outside of management’s control. We also exclude prior year
development to provide transparency related to current accident
year results.
Underwriting ratios are
computed as follows:
- Loss ratio = Loss and loss adjustment expenses incurred ÷ Net
premiums earned (NPE)
- Acquisition ratio = Total acquisition expenses ÷ NPE
- General operating expense ratio = General operating expenses ÷
NPE
- Expense ratio = Acquisition ratio + General operating expense
ratio
- Combined ratio = Loss ratio + Expense ratio
- CATs and reinstatement premiums = [Loss and loss adjustment
expenses incurred – (CATs)] ÷ [NPE +/(-) Reinstatement premiums
related to catastrophes] – Loss ratio
- Accident year loss ratio, as adjusted (AYLR ex-CAT) = [Loss and
loss adjustment expenses incurred – CATs – PYD] ÷ [NPE +/(-)
Reinstatement premiums related to catastrophes +/(-) Prior year
premiums + Adjustment for ceded premium under reinsurance contracts
related to prior accident years]
- Accident year combined ratio, as adjusted (AYCR ex-CAT) = AYLR
ex-CAT + Expense ratio
- Prior year development net of reinsurance and prior year
premiums = [Loss and loss adjustment expenses incurred – CATs –
PYD] ÷ [NPE +/(-) Reinstatement premiums related to catastrophes
+/(-) Prior year premiums] – Loss ratio – CATs and reinstatement
premiums ratio.
Premiums and deposits: includes direct and assumed
amounts received and earned on traditional life insurance policies,
group benefit policies and life‑contingent payout annuities, as
well as deposits received on universal life, investment‑type
annuity contracts, Federal Home Loan Bank funding agreements and
mutual funds. We believe the measure of premiums and deposits is
useful in understanding customer demand for our products, evolving
product trends and our sales performance period over period.
Results from discontinued operations are excluded from all of
these measures.
# # #
American International Group, Inc. (AIG) is a leading global
insurance organization. AIG member companies provide insurance
solutions that help businesses and individuals in approximately 70
countries and jurisdictions protect their assets and manage risks.
For additional information, visit www.aig.com. AIG common stock is
listed on the New York Stock Exchange.
AIG is the marketing name for the worldwide operations of
American International Group, Inc. All products and services are
written or provided by subsidiaries or affiliates of American
International Group, Inc. Products or services may not be available
in all countries and jurisdictions, and coverage is subject to
underwriting requirements and actual policy language. Non-insurance
products and services may be provided by independent third parties.
Certain property casualty coverages may be provided by a surplus
lines insurer. Surplus lines insurers do not generally participate
in state guaranty funds, and insureds are therefore not protected
by such funds.
American International Group, Inc.
Selected Financial Data and Non-GAAP Reconciliation ($ in
millions, except per common share data)
Reconciliations of Adjusted Pre-tax and
After-tax Income
Three Months Ended June
30,
2022
2023
Total Tax
Non-
Total Tax
Non-
(Benefit)
controlling
After
(Benefits)
controlling
After
Pre-tax
Charge
Interests(d)
Tax
Pre-tax
Charge
Interests(d)
Tax
Pre-tax income/net income, including
noncontrolling interests
$
3,925
$
845
$
—
$
3,079
$
1,867
$
176
$
—
$
1,691
Noncontrolling interests
(325)
(325)
(198)
(198)
Pre-tax income/net income attributable
to AIG
3,925
845
(325)
2,754
1,867
176
(198)
1,493
Dividends on preferred stock
8
8
Net income attributable to AIG common
shareholders
2,746
1,485
Adjustments:
Changes in uncertain tax positions and
other tax adjustments
(3)
—
3
340
—
(340)
Deferred income tax valuation allowance
(releases) charges
17
—
(17)
(78)
—
78
Changes in fair value of securities used
to hedge guaranteed living benefits
(10)
(2)
—
(8)
3
—
—
3
Change in market risk benefit, net(a)
(45)
(10)
—
(35)
(262)
(55)
—
(207)
Changes in benefit reserves related to net
realized gains (losses)
(7)
(2)
—
(5)
1
—
—
1
Changes in the fair value of equity
securities
30
6
—
24
(43)
(9)
—
(34)
Loss on extinguishment of debt
299
63
—
236
—
—
—
—
Net investment income on Fortitude Re
funds withheld assets
(188)
(40)
—
(148)
(291)
(61)
—
(230)
Net realized losses on Fortitude Re funds
withheld assets
86
19
—
67
138
28
—
110
Net realized gains on Fortitude Re funds
withheld embedded derivative
(2,776)
(583)
—
(2,193)
(180)
(38)
—
(142)
Net realized losses(b)
140
7
—
133
390
77
—
313
Loss from discontinued operations
1
—
Net (gain) loss on divestitures and
other
1
1
—
—
(43)
(9)
—
(34)
Non-operating litigation reserves and
settlements
(4)
(1)
—
(3)
1
—
—
1
Favorable prior year development and
related amortization changes ceded under retroactive reinsurance
agreements
(144)
(30)
—
(114)
(18)
(4)
—
(14)
Net loss reserve discount charge
14
4
—
10
16
4
—
12
Pension expense related to a one-time lump
sum payment to former employees
—
—
—
—
67
14
—
53
Integration and transaction costs
associated with acquiring or divesting businesses
38
8
—
30
79
17
—
62
Restructuring and other costs
175
37
—
138
153
32
—
121
Non-recurring costs related to regulatory
or accounting changes
9
2
—
7
12
2
—
10
Net impact from elimination of
international reporting lag(c)
—
—
—
—
—
—
—
—
Noncontrolling interests(d)
239
239
34
34
Adjusted pre-tax income/Adjusted
after-tax income attributable to AIG common shareholders
$
1,543
$
338
$
(86)
$
1,111
$
1,890
$
436
$
(164)
$
1,282
American International Group, Inc.
Selected Financial Data and Non-GAAP Reconciliation
(continued) ($ in millions, except per common share
data)
Reconciliations of Adjusted Pre-tax and
After-tax Income (continued)
Six Months Ended June
30,
2022
2023
Total Tax
Non-
Total Tax
Non-
(Benefit)
controlling
After
(Benefit)
controlling
After
Pre-tax
Charge
Interests(d)
Tax
Pre-tax
Charge
Interests(d)
Tax
Pre-tax income/net income, including
noncontrolling interests
$
9,639
$
1,999
$
—
$
7,639
$
1,636
$
32
$
—
$
1,604
Noncontrolling interests
(712)
(712)
(81)
(81)
Pre-tax income/net income attributable
to AIG
9,639
1,999
(712)
6,927
1,636
32
(81)
1,523
Dividends on preferred stock
15
15
Net income attributable to AIG common
shareholders
6,912
1,508
Adjustments:
Changes in uncertain tax positions and
other tax adjustments
88
—
(88)
362
—
(362)
Deferred income tax valuation allowance
(releases) charges
23
—
(23)
(97)
—
97
Changes in fair value of securities used
to hedge guaranteed living benefits
(23)
(5)
—
(18)
6
1
—
5
Change in market risk benefit, net(a)
(278)
(59)
—
(219)
(66)
(14)
—
(52)
Changes in benefit reserves related to net
realized gains (losses)
(9)
(2)
—
(7)
(5)
(1)
—
(4)
Changes in the fair value of equity
securities
57
12
—
45
(94)
(20)
—
(74)
Loss on extinguishment of debt
299
63
—
236
—
—
—
—
Net investment income on Fortitude Re
funds withheld assets
(479)
(101)
—
(378)
(737)
(155)
—
(582)
Net realized losses on Fortitude Re funds
withheld assets
226
48
—
178
169
35
—
134
Net realized (gains) losses on Fortitude
Re funds withheld embedded derivative
(6,094)
(1,280)
—
(4,814)
985
207
—
778
Net realized (gains) losses(b)
(209)
(98)
—
(111)
1,156
285
—
871
Loss from discontinued operations
1
—
Net gain on divestitures and other
(39)
(8)
—
(31)
(41)
(9)
—
(32)
Non-operating litigation reserves and
settlements
(38)
(8)
—
(30)
—
—
—
—
Favorable prior year development and
related amortization changes ceded under retroactive reinsurance
agreements
(144)
(30)
—
(114)
(37)
(8)
—
(29)
Net loss reserve discount (benefit)
charge
(6)
(1)
—
(5)
80
17
—
63
Pension expense related to a one-time lump
sum payment to former employees
—
—
—
—
67
14
—
53
Integration and transaction costs
associated with acquiring or divesting businesses
84
18
—
66
131
28
—
103
Restructuring and other costs
268
56
—
212
270
57
—
213
Non-recurring costs related to regulatory
or accounting changes
13
3
—
10
25
5
—
20
Net impact from elimination of
international reporting lag(c)
—
—
—
—
(12)
(3)
—
(9)
Noncontrolling interests(d)
517
517
(208)
(208)
Adjusted pre-tax income/Adjusted
after-tax income attributable to AIG common shareholders
$
3,267
$
718
$
(195)
$
2,339
$
3,533
$
736
$
(289)
$
2,493
(a)
Includes realized gains and losses on
certain derivative instruments used for non-qualifying (economic)
hedging.
(b)
Includes all net realized gains and losses
except earned income (periodic settlements and changes in
settlement accruals) on derivative instruments used for
non-qualifying (economic) hedging or for asset replication and net
realized gains and losses on Fortitude Re funds withheld
assets.
(c)
Effective in the quarter ended December
31, 2022, the foreign property and casualty subsidiaries report on
a calendar year ending December 31. We determined that the effect
of not retroactively applying this change was immaterial to our
Consolidated Financial Statements for the current and prior
periods. Therefore, we reported the cumulative effect of the change
in accounting principle within the Consolidated Statements of
Income (Loss) for the year ended December 31, 2022 and did not
retrospectively apply the effects of this change to prior
periods.
(d)
Includes the portion of equity interest of
non-operating income of Corebridge and consolidated investment
entities that AIG does not own.
American International Group, Inc.
Selected Financial Data and Non-GAAP Reconciliation
(continued) ($ in millions, except per common share
data)
Summary of Key Financial
Metrics
Three Months Ended June 30,
Six Months Ended June 30,
Earnings per common share:
2022
2023
% Inc. (Dec.)
2022
2023
% Inc. (Dec.)
Basic
Income from continuing operations
$
3.47
$
2.05
(40.9)
%
$
8.60
$
2.06
(76.0)
%
Income from discontinued operations
—
—
NM
—
—
NM
Net income attributable to AIG common
shareholders
$
3.47
$
2.05
(40.9)
$
8.60
$
2.06
(76.0)
Diluted
Income from continuing operations
3.43
$
2.03
(40.8)
$
8.50
$
2.05
(75.9)
Income from discontinued operations
—
—
NM
—
—
NM
Net income attributable to AIG common
shareholders
$
3.43
$
2.03
(40.8)
$
8.50
$
2.05
(75.9)
Adjusted after-tax income attributable
to AIG common shareholders per diluted share
$
1.39
$
1.75
25.9
%
$
2.88
$
3.38
17.4
%
Weighted average shares
outstanding:
Basic
790.9
725.8
803.5
732.2
Diluted
800.7
730.5
813.3
737.3
Reconciliation of Book Value per Common
Share
As of period
end:
June 30, 2022
December 31, 2022
March 31, 2023
June 30, 2023
Total AIG shareholders' equity
$
45,713
$
40,970
$
43,317
$
42,454
Less: Preferred equity
485
485
485
485
Total AIG common shareholders' equity
(a)
45,228
40,485
42,832
41,969
Less: Deferred tax assets (DTA)*
4,747
4,518
4,543
4,263
Less: Accumulated other comprehensive
income (AOCI)
(18,647
)
(22,616
)
(19,329
)
(18,982
)
Add: Cumulative unrealized gains and
losses related to Fortitude Re Funds withheld assets
(2,223
)
(2,862
)
(2,418
)
(2,331
)
Subtotal: AOCI plus cumulative unrealized
gains and losses related to Fortitude Re funds withheld assets
(16,424
)
(19,754
)
(16,911
)
(16,651
)
Total adjusted common shareholders' equity
(b)
$
56,905
$
55,721
$
55,200
$
54,357
Less: Intangible assets:
Goodwill
3,935
3,927
3,939
3,617
Value of business acquired
98
92
92
92
Value of distribution channel acquired
438
418
408
188
Other intangibles
289
286
284
244
Total intangible assets
4,760
4,723
4,723
4,141
Total adjusted tangible common
shareholders' equity (c)
$
52,145
$
50,998
$
50,477
$
50,216
Total common shares outstanding
(d)
771.3
734.1
727.6
717.5
As of period
end:
June 30, 2022
% Inc. (Dec.)
December 31, 2022
% Inc. (Dec.)
March 31, 2023
% Inc. (Dec.)
June 30, 2023
Book value per common share (a÷d)
$
58.64
(0.3
)%
$
55.15
6.1
%
$
58.87
(0.6
)%
$
58.49
Adjusted book value per common share
(b÷d)
73.78
2.7
75.90
(0.2
)
75.87
(0.1
)
75.76
Adjusted tangible book value per common
share (c÷d)
67.61
3.5
69.47
0.7
69.37
0.9
69.99
American International Group, Inc.
Selected Financial Data and Non-GAAP Reconciliation
(continued) ($ in millions, except per common share
data)
Reconciliation of Return On Common
Equity
Three Months Ended June
30,
2022
2023
Actual or annualized net income (loss)
attributable to AIG common shareholders (a)
$
10,984
$
5,940
Actual or annualized adjusted after-tax
income attributable to AIG common shareholders (b)
$
4,444
$
5,128
Average AIG Common Shareholders' equity
(c)
$
50,600
$
42,401
Less: Average DTA*
4,844
4,403
Less: Average AOCI
(12,838)
(19,156)
Add: Average cumulative unrealized gains
and losses related to Fortitude Re funds withheld assets
(1,088)
(2,375)
Subtotal: AOCI plus cumulative unrealized
gains and losses related to Fortitude Re funds withheld assets
(11,750)
(16,781)
Average adjusted common shareholders'
equity (d)
$
57,506
$
54,779
ROCE (a÷c)
21.7
%
14.0
%
Adjusted return on common equity (b÷d)
7.7
%
9.4
%
* Represents deferred tax assets only
related to U.S. net operating loss and foreign tax credit
carryforwards on a U.S. GAAP basis and excludes other balance sheet
deferred tax assets and liabilities.
Reconciliation of Net Investment
Income
Three Months Ended
June 30,
2022
2023
Net Investment Income per Consolidated
Statements of Operations
$
2,604
$
3,571
Changes in fair value of securities used
to hedge guaranteed living benefits
(13)
(14)
Changes in the fair value of equity
securities
30
(43)
Net investment income on Fortitude Re
funds withheld assets
(188)
(291)
Net realized gains (losses) related to
economic hedges and other
71
55
Total Net Investment Income - APTI
Basis
$
2,504
$
3,278
Net Premiums Written - Change in
Constant Dollar and Lag Adjusted
Three Months Ended June 30,
2023
North
Global -
Global -
America
International -
General
Commercial
Personal
Commercial
Commercial
Personal
General
Insurance
Insurance
Lines
Insurance
Lines
Lines
Insurance
Change in net premiums written
Increase (decrease) in original currency
and adjusted for lag elimination
10.7
%
12.6
%
5.3
%
17.6
%
5.7
%
1.1
%
Foreign exchange effect
(2.1
)
(1.2
)
(4.3
)
(0.7
)
(2.0
)
(5.5
)
Lag elimination impact
1.2
2.3
(1.4
)
—
5.4
(1.7
)
Increase (decrease) as reported in U.S.
dollars
9.8
%
13.7
%
(0.4
)%
16.9
%
9.1
%
(6.1
)%
American International Group, Inc.
Selected Financial Data and Non-GAAP Reconciliation
(continued) ($ in millions, except per common share
data)
Reconciliations of Accident Year Loss
and Accident Year Combined Ratios, as Adjusted
Three Months Ended
June 30,
2022
2023
Total General Insurance
Combined ratio
87.4
90.9
Catastrophe losses and reinstatement
premiums
(1.8)
(3.9)
Prior year development, net of reinsurance
and prior year premiums
2.9
1.0
Accident year combined ratio, as
adjusted
88.5
88.0
North America
Combined ratio
86.3
89.0
Catastrophe losses and reinstatement
premiums
(1.7)
(5.0)
Prior year development, net of reinsurance
and prior year premiums
5.3
3.8
Accident year combined ratio, as
adjusted
89.9
87.8
North America - Commercial
Lines
Loss ratio
58.7
61.0
Catastrophe losses and reinstatement
premiums
(1.9)
(5.3)
Prior year development, net of reinsurance
and prior year premiums
6.5
4.8
Accident year loss ratio, as adjusted
63.3
60.5
Combined ratio
83.6
85.6
Catastrophe losses and reinstatement
premiums
(1.9)
(5.3)
Prior year development, net of reinsurance
and prior year premiums
6.5
4.8
Accident year combined ratio, as
adjusted
88.2
85.1
North America - Personal
Insurance
Combined ratio
102.3
112.9
Catastrophe losses and reinstatement
premiums
(0.5)
(3.3)
Prior year development, net of reinsurance
and prior year premiums
(2.1)
(2.5)
Accident year combined ratio, as
adjusted
99.7
107.1
International
Combined ratio
88.5
92.6
Catastrophe losses and reinstatement
premiums
(2.0)
(2.7)
Prior year development, net of reinsurance
and prior year premiums
0.7
(1.9)
Accident year combined ratio, as
adjusted
87.2
88.0
International - Commercial
Lines
Combined ratio
82.4
89.0
Catastrophe losses and reinstatement
premiums
(2.3)
(2.5)
Prior year development, net of reinsurance
and prior year premiums
1.3
(3.4)
Accident year combined ratio, as
adjusted
81.4
83.1
International - Personal
Insurance
Loss ratio
56.4
56.3
Catastrophe losses and reinstatement
premiums
(1.6)
(3.2)
Prior year development, net of reinsurance
and prior year premiums
(0.1)
0.5
Accident year loss ratio, as adjusted
54.7
53.6
Combined ratio
96.9
98.0
Catastrophe losses and reinstatement
premiums
(1.6)
(3.2)
Prior year development, net of reinsurance
and prior year premiums
(0.1)
0.5
Accident year combined ratio, as
adjusted
95.2
95.3
Global - Commercial Insurance
Combined ratio
83.1
87.0
Catastrophe losses and reinstatement
premiums
(2.1)
(4.0)
Prior year development, net of reinsurance
and prior year premiums
4.3
1.4
Accident year combined ratio, as
adjusted
85.3
84.4
American International Group, Inc.
Selected Financial Data and Non-GAAP Reconciliation
(continued) ($ in millions, except per common share
data)
Reconciliation of General Insurance
Return on Adjusted Segment Common Equity
Three Months Ended
June 30,
2022
2023
Adjusted pre-tax income
$
1,257
$
1,319
Interest expense on attributed financial
debt
149
133
Adjusted pre-tax income including
attributed interest expense
1,108
1,186
Income tax expense
254
274
Adjusted after-tax income
854
912
Dividends declared on preferred stock
3
3
Adjusted after-tax income attributable
to common shareholders
$
851
$
909
Ending adjusted segment common
equity
$
30,104
$
30,153
Average adjusted segment common
equity
$
28,361
$
29,848
Return on adjusted segment common
equity
12.0
%
12.2
%
Total segment shareholder’s equity
$
25,651
$
24,619
Less: Preferred equity
210
202
Total segment common equity
25,441
24,417
Less: Accumulated other comprehensive
income (AOCI)
(5,163)
(6,390)
Add: Cumulative unrealized gains and
losses related to Fortitude Re funds withheld assets
(500)
(654)
Subtotal: AOCI plus cumulative unrealized
gains and losses related to Fortitude Re funds withheld assets
(4,663)
(5,736)
Total adjusted segment common equity
$
30,104
$
30,153
Reconciliation of Life and Retirement
Return on Adjusted Segment Common Equity
Three Months Ended
June 30,
2022
2023
Adjusted pre-tax income
$
747
$
991
Interest expense on attributed financial
debt
68
113
Adjusted pre-tax income including
attributed interest expense
679
878
Income tax expense
134
174
Adjusted after-tax income
545
704
Dividends declared on preferred stock
2
2
Adjusted after-tax income attributable
to common shareholders
$
543
$
702
Ending adjusted segment common
equity
$
22,011
$
23,270
Average adjusted segment common
equity
$
22,452
$
23,108
Return on adjusted segment common
equity
9.7
%
12.2
%
Total segment shareholder’s equity
$
11,870
$
9,819
Less: Preferred equity
154
161
Total segment common equity
11,716
9,658
Less: Accumulated other comprehensive
income (AOCI)
(12,018)
(15,289)
Add: Cumulative unrealized gains and
losses related to Fortitude Re funds withheld assets
(1,723)
(1,677)
Subtotal: AOCI plus cumulative unrealized
gains and losses related to Fortitude Re funds withheld assets
(10,295)
(13,612)
Total adjusted segment common equity
$
22,011
$
23,270
American International Group, Inc.
Selected Financial Data and Non-GAAP Reconciliation
(continued) ($ in millions, except per common share
data)
Reconciliations of Premiums and
Deposits
Three Months Ended
June 30,
2022
2023
Individual
Retirement:
Premiums
$
60
$
66
Deposits
3,566
3,984
Other
(6)
(5)
Premiums and deposits
$
3,620
$
4,045
Group
Retirement:
Premiums
$
5
$
4
Deposits
1,767
1,919
Other
—
—
Premiums and deposits
$
1,772
$
1,923
Life
Insurance:
Premiums
$
556
$
563
Deposits
388
384
Other
213
229
Premiums and deposits
$
1,157
$
1,176
Institutional
Markets:
Premiums
$
496
$
1,911
Deposits
46
991
Other
8
8
Premiums and deposits
$
550
$
2,910
Total Life and
Retirement:
Premiums
$
1,117
$
2,544
Deposits
5,767
7,278
Other
215
232
Premiums and deposits
$
7,099
$
10,054
Total Debt and Preferred Stock
Leverage
Three Months Ended
June 30, 2023
Hybrid - debt securities / Total
capital
2.9
%
Financial debt and debt held for sale /
Total capital
28.7
Total debt / Total capital
31.6
Preferred stock / Total capital
0.7
Total debt and preferred stock / Total
capital (incl. AOCI)
32.3
AOCI Impact
(6.3
)
Total debt and preferred stock / Total
capital (ex. AOCI)
26.0
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230801959349/en/
Quentin McMillan (Investors): quentin.mcmillan@aig.com
Claire Talcott (Media): claire.talcott@aig.com
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