- General Insurance combined ratio of 87.4% improved by 5.1
points from the prior year quarter and was the first sub-90%
combined ratio in over fifteen years
- General Insurance adjusted accident year combined ratio* of
88.5% improved by 2.6 points from the prior year quarter
- Global Commercial Lines adjusted accident year combined
ratio* of 85.3% improved by 4.0 points from the prior year
quarter
- Global Commercial Lines Net Premiums Written (NPW) growth of
5% (8% on a constant dollar basis)
- Life and Retirement posted its second consecutive quarter
with more than $1.3 billion in fixed annuity deposits and overall
positive net flows
- Net income per diluted common share was $3.78 compared to
$0.11 in the prior year quarter
- Adjusted after-tax income* (AATI) per diluted common share
of $1.19 compared to $1.52 in the prior year quarter, driven by a
73% increase in General Insurance underwriting income, offset by
lower alternative investment income
- Repurchased $1.7 billion of AIG common stock in the second
quarter and $3.1 billion as of June 30, 2022
- Redeemed and repurchased $7.6 billion in aggregate principal
amount of debt
SECOND QUARTER NOTEWORTHY ITEMS
- General Insurance adjusted pre-tax income (APTI) of $1.3
billion reflects a $336 million increase in underwriting income
from the prior year quarter with 5.1 points of combined ratio
improvement driven by higher premiums marked by higher renewal
retentions, positive rate change and strong new business
production, focused risk selection and improved terms and
conditions as well as more favorable prior year development
(PYD).
- Life and Retirement APTI of $563 million reflects lower net
investment income (NII) due in large part to lower alternative
investment returns and lower yield enhancements, partially offset
by more favorable mortality compared to the prior year quarter. In
the current quarter, the impact of higher new money rates, which
reflects benefits from higher interest rates, and wider credit
spreads has provided uplift to base portfolio NII. Life and
Retirement return on adjusted segment common equity* (Adjusted
ROCE) for the second quarter was 7.6%.
- Return on common equity (ROCE) and Adjusted ROCE* were 24.1%
and 7.0%, respectively, on an annualized basis for the second
quarter of 2022.
* 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, 2022.
AIG Chairman & Chief Executive Officer Peter Zaffino said:
“AIG had another excellent quarter. General Insurance reported
outstanding results and Life and Retirement again delivered a solid
performance considering the significant market headwinds in the
second quarter.
“Due to the high degree of equity market volatility in May and
June, we decided to defer the launch of the Corebridge Financial
initial public offering (IPO). Deferring the IPO provided us with
an opportunity to further accelerate progress on numerous
separation initiatives and to solidify the capital structure of
this business as a standalone company. Completing the IPO is a
significant priority for us and we remain ready to execute, subject
to regulatory approvals and market conditions.
“General Insurance’s culture of underwriting excellence
continues to be evidenced in our financial results. Meaningful
top-line growth, strong renewal retention and new business,
intentional improvements in business mix, rate above loss cost
trends, coupled with a disciplined and focused approach to
minimizing volatility, led to impressive profitability
improvement.
“The combined ratio of 87.4% represents AIG’s first sub-90
quarter in over fifteen years and improved 510 basis points
year-over-year. Consistent with our strategy to manage volatility,
catastrophe losses were very modest in the quarter coming in at
$121 million, or 1.8 points of the combined ratio. The adjusted
accident year combined ratio of 88.5% improved for the 16th
consecutive quarter – totaling 1,250 basis points of improvement
over this period and 2,080 basis points of improvement in Global
Commercial Lines. Overall, I am very pleased with our overall
performance and the momentum we have heading into the second half
of 2022.
“Life and Retirement experienced another solid quarter of sales
growth in fixed annuities supported by Blackstone’s origination
capabilities. Additionally, Life and Retirement is starting to see
a positive impact in its base portfolio net investment income from
higher interest rates and credit spreads.
“During the second quarter, we began to transfer certain assets
under management to BlackRock in accordance with our recently
announced asset management arrangement. We expect the majority of
the remainder of the approximately $150 billion of assets under
management to be transferred by the end of 2022.
“Lastly, certain capital management priorities were accelerated
in the second quarter, including issuing $6.5 billion of Corebridge
Financial debt and subsequently redeeming or repurchasing $7.6
billion in aggregate principal debt of AIG. In addition, we
returned $2.0 billion to shareholders through $1.7 billion of AIG
common stock repurchases and $256 million of dividends.
“Thanks to the outstanding efforts and hard work of our global
colleagues, AIG continues to drive excellence across the company
that will create long-term value for all our stakeholders.”
For the second quarter of 2022, pre-tax income from continuing
operations was $4.3 billion, up from $147 million from the prior
year quarter. Second quarter of 2022 net income attributable to AIG
common shareholders was $3.0 billion, or $3.78 per diluted common
share, compared to net income of $91 million, or $0.11 per diluted
common share, in the prior year quarter. The pre-tax income
increase was primarily due to an increase in net realized gains on
the Fortitude Re funds withheld embedded derivative, and overall
strong General Insurance underwriting results, including higher
premiums earned, margin expansion, and higher favorable PYD,
partially offset by lower alternative investment income. The
pre-tax income increase was partially offset by income attributable
to noncontrolling interest associated with Blackstone’s 9.9%
interest in the Life and Retirement business, mitigated by the use
of proceeds received in the transaction through debt reduction and
share repurchase activities.
AATI was $979 million, or $1.19 per diluted common share, for
the second quarter of 2022 compared to $1.3 billion, or $1.52 per
diluted common share, in the prior year quarter. The decrease in
AATI was primarily due to lower alternative investment income,
offset in part by a $336 million pre-tax increase in General
Insurance underwriting results.
Total consolidated NII for the second quarter of 2022 was $2.6
billion, down 29% from $3.7 billion in the prior year quarter,
primarily due to lower alternative investment income, lower call
and tender income and lower returns from fair value option equity
securities. Total NII on an APTI basis* was $2.5 billion, a
decrease of $678 million compared to the prior year quarter.
Book value per common share was $58.16 as of June 30, 2022, a
decrease of 16% from March 31, 2022 and 27% from December 31, 2021,
reflecting a reduction in accumulated other comprehensive income
(AOCI) as a result of higher market interest rates. Adjusted book
value per common share* was $72.23, an increase of 2% from March
31, 2022 and 5% from December 31, 2021 reflecting growth in
retained earnings from net income in excess of dividends and share
repurchases. Adjusted tangible book value per common share was
$66.06, an increase of 2% from March 31, 2022 and 5% from December
31, 2021.
For the second quarter of 2022, AIG repurchased approximately
$1.7 billion of common stock or approximately 30 million shares and
paid $256 million of common and preferred dividends, resulting in
AIG Parent liquidity of $5.6 billion as of June 30, 2022. AIG’s
ratio of total debt and preferred stock to total capital at June
30, 2022 was 31.1%, up from 27.8% at March 31, 2022, principally
due to the impact of higher interest rates on of AOCI.
Today, the AIG Board of Directors declared a quarterly cash
dividend of $0.32 per share on AIG common stock (NYSE: AIG). The
dividend is payable on September 30, 2022 to stockholders of record
at the close of business on September 16, 2022.
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
$0.365625 per depositary share. The dividend is payable on
September 15, 2022 to holders of record at the close of business on
August 31, 2022.
FINANCIAL SUMMARY
Three Months Ended June
30,
($ in millions, except per common share
amounts)
2021
2022
Net income attributable to AIG common
shareholders
$
91
$
3,028
Net income per diluted share
attributable
to AIG common shareholders
$
0.11
$
3.78
Adjusted pre-tax income (loss)
$
1,708
$
1,359
General Insurance
1,194
1,257
Life and Retirement
1,124
563
Other Operations
(610)
(461)
Net investment income
$
3,675
$
2,604
Net investment income, APTI basis
3,182
2,504
Adjusted after-tax income attributable to
AIG common
shareholders
$
1,331
$
979
Adjusted after-tax income per diluted
share attributable
to AIG common shareholders*
$
1.52
$
1.19
Weighted average common shares
outstanding
- diluted(in millions)
872.9
800.7
Return on common equity
0.6
%
24.1
%
Adjusted return on common equity
10.5
%
7.0
%
Book value per common share
$
76.73
$
58.16
Adjusted book value per common share
$
60.07
$
72.23
Common shares outstanding (in
millions)
854.9
771.3
* For the three-month period ended June 30, 2022, an option for
Blackstone to exchange all or a portion of its ownership interest
in Corebridge for AIG common shares was dilutive for the
calculation of AATI per common share. The dilutive impact was an
additional 42,572,031 shares for the period.
The comparisons on the following pages are against the first
quarter of 2021, unless otherwise indicated. Refer to the AIG
Second Quarter 2022 Financial Supplement, which is posted on AIG's
website in the Investors section, for further information.
GENERAL INSURANCE
Three Months Ended June
30,
($ in millions)
2021
2022
Change
Gross premiums written
$
9,503
$
9,581
1
%
Net premiums written
$
6,860
$
6,866
—
%
North America
3,156
3,401
8
North America Commercial Lines
2,655
2,918
10
North America Personal Insurance
501
483
(4)
International
3,704
3,465
(6)
International Commercial Lines
2,062
2,037
(1)
International Personal Insurance
1,642
1,428
(13)
Underwriting income (loss)
$
463
$
799
73
%
North America
169
406
140
North America Commercial Lines
162
416
157
North America Personal Insurance
7
(10)
NM
International
294
393
34
International Commercial Lines
218
349
60
International Personal Insurance
76
44
(42)
Net investment income, APTI basis
$
731
$
458
(37)
%
Adjusted pre-tax income
$
1,194
$
1,257
5
%
Return on adjusted segment common
equity
12.3
%
12.0
%
(0.3)
pts
Underwriting ratios:
North America Combined Ratio (CR)
93.7
86.3
(7.4)
pts
North America Commercial Lines CR
93.0
83.6
(9.4)
North America Personal Insurance CR
98.1
102.3
4.2
International CR
91.8
88.5
(3.3)
International Commercial Lines CR
88.7
82.4
(6.3)
International Personal Insurance CR
95.2
96.9
1.7
General Insurance (GI) CR
92.5
87.4
(5.1)
GI Loss ratio
61.3
56.2
(5.1)
pts
Less: impact on loss ratio
Catastrophe losses and reinstatement
premiums
(2.1)
(1.8)
0.3
Prior year development, net of reinsurance
and prior year premiums
0.7
2.9
2.2
GI Accident year loss ratio, as
adjusted
59.9
57.3
(2.6)
GI Expense ratio
31.2
31.2
—
GI Accident year combined ratio, as
adjusted
91.1
88.5
(2.6)
Accident year
combined ratio, as adjusted (AYCR):
North America AYCR
92.4
89.9
(2.5)
pts
North America Commercial Lines AYCR
91.2
88.2
(3.0)
North America Personal Insurance AYCR
100.1
99.7
(0.4)
International AYCR
90.2
87.2
(3.0)
International Commercial Lines AYCR
86.9
81.4
(5.5)
International Personal Insurance AYCR
94.0
95.2
1.2
General Insurance
- Net premiums written in the second quarter of 2022 increased
0.1% (5% on a constant dollar basis) to $6.9 billion and included
Global Commercial Lines growth of 5% (8% on a constant dollar
basis), reflected continued positive rate change, higher renewal
retentions and strong new business production, particularly in
Property. This growth was offset by a $232 million decrease in
Global Personal Insurance, which had lower production in Warranty
and was impacted by underwriting actions taken in Private Client
Group to improve risk-adjusted returns, partially offset by growth
in Travel and Personal Accident & Health.
- Second quarter 2022 APTI increased by $63 million to $1.3
billion from the prior year quarter driven by stronger underwriting
results, offset by lower alternative investment income.
Underwriting income increased by $336 million and was $799 million
in the second quarter of 2022, from $463 million in the prior year
quarter. The second quarter of 2022 underwriting income included
$119 million of catastrophe losses, net of reinsurance, compared to
$118 million in the prior year quarter, which was flat year over
year. During the second quarter of 2022 General Insurance had
favorable net PYD of $202 million compared to favorable net PYD of
$51 million in the prior year quarter.
- General Insurance combined ratio was 87.4, a 5.1 point
improvement and strong result compared to 92.5 in the prior year
quarter, driven by loss ratio improvement that included higher
favorable PYD. The General Insurance accident year combined ratio,
as adjusted, was 88.5, an improvement of 2.6 points from the prior
year quarter primarily as a result of continued earn-in of rate in
excess of loss cost trends, favorable business mix and portfolio
management strategy execution, resulting in a 57.3 accident year
loss ratio, as adjusted*. The expense ratio of 31.2 was unchanged
from the prior year quarter.
- Commercial Lines underwriting results reflect the quality of
the portfolio and its continued profitable growth. The accident
year combined ratio, as adjusted, for North America Commercial
Lines improved 3.0 points to 88.2, and for International Commercial
Lines improved 5.5 points to 81.4 compared to the prior year
quarter.
- Personal Insurance underwriting results slightly decreased,
largely reflecting mix shifts in the business as well as lower
premiums in the period. The North America Personal Insurance
accident year combined ratio, as adjusted, improved 0.4 points to
99.7 compared to the prior year quarter, reflecting favorable
changes in business mix and strong growth in Travel premiums. The
International Personal Insurance accident year combined ratio, as
adjusted, deteriorated by 1.2 points to 95.2 due to an increased
accident year loss ratio, driven by mix of business changes,
increased claims, as well as a higher acquisition ratio.
LIFE AND RETIREMENT
Three Months Ended
June 30,
($ in millions, except as indicated)
2021
2022
Change
Adjusted pre-tax income
$
1,124
$
563
(50)
%
Individual Retirement
617
204
(67)
Group Retirement
347
164
(53)
Life Insurance
20
117
485
Institutional Markets
140
78
(44)
Premiums and fees
$
2,417
$
1,862
(23)
%
Individual Retirement
273
267
(2)
Group Retirement
134
119
(11)
Life Insurance
887
931
5
Institutional Markets
1,123
545
(51)
Premiums and deposits
$
9,035
$
7,099
(21)
%
Individual Retirement
3,978
3,620
(9)
Group Retirement
2,255
1,772
(21)
Life Insurance
1,161
1,157
—
Institutional Markets
1,641
550
(66)
Net flows
$
(306)
$
80
NM
%
Individual Retirement*
(77)
628
NM
Group Retirement
(229)
(548)
(139)
Net investment income, APTI basis
$
2,376
$
1,989
(16)
%
Return on adjusted segment common
equity
16.4
%
7.6
%
(8.8)
pts
*2021 includes $0.6 billion of
net outflows from Retail Mutual Funds that were transferred or
liquidated in the third quarter of 2021.
Life and Retirement
- Life and Retirement reported APTI of $563 million for the
second quarter of 2022, compared to $1.1 billion in the prior year
quarter, primarily due to the impact of higher interest rates,
lower equity markets, and NII. Declining equity markets together
with rising interest rates and widening credit spreads drove
accelerated deferred policy acquisition cost (DAC) amortization,
higher policyholder reserves, and lower fee income in Individual
Retirement and Group Retirement, as well as lower NII, including
alternative investments returns, lower income from fair value
options bonds and lower call and tender activity. Accelerated DAC
amortization and increased SOP 03-1 reserves resulted in lower
asset values which led to a non-cash impact of approximately $202
million compared to the prior year quarter.
- These decreases are partially offset by less adverse mortality;
the adverse mortality experience in Life Insurance is in line with
the previously disclosed estimate of exposure sensitivity of $65
million to $75 million per 100,000 population deaths based on the
reported second quarter COVID-related deaths in the United
States.
OTHER OPERATIONS
Three Months Ended
June 30,
($ in millions)
2021
2022
Change
Corporate and Other
$
(617)
$
(494)
20
%
Asset Management
101
163
61
Adjusted pre-tax loss before consolidation
and eliminations
(516)
(331)
36
Consolidation and eliminations
(94)
(130)
(38)
Adjusted pre-tax loss
$
(610)
$
(461)
24
%
Other Operations
- Second quarter adjusted pre-tax loss (APTL) was $461 million,
including $130 million of reductions from consolidation and
eliminations, compared to APTL of $610 million, including $94
million of reductions from consolidation and eliminations, in the
prior year quarter. The improvement in APTL before consolidation
and eliminations reflects lower general operating expenses and
corporate interest expense as well as improvement in run-off
underwriting results.
- Before consolidation and eliminations, the improvement in APTL
reflects lower underwriting loss attributable to absence of
unfavorable PYD within the run-off business, lower corporate and
other general operating expenses and lower corporate interest
expense primarily driven by interest savings from debt redemptions
and repurchases and cash tender offers.
LIFE AND RETIREMENT SEPARATION On October 26, 2020, AIG
announced its intention to separate its Life and Retirement
business from AIG.
On November 2, 2021, AIG and Blackstone Inc. (Blackstone)
completed the acquisition by Blackstone of a 9.9 percent equity
stake in Corebridge Financial, Inc., formerly known as SAFG
Retirement Services, Inc. (Corebridge), which is the holding
company for AIG’s Life and Retirement business. Pursuant to the
definitive agreement, Blackstone will be required to hold its
ownership interest in Corebridge following the completion of the
separation of the Life and Retirement business, subject to
exceptions permitting Blackstone to sell 25%, 67% and 75% of its
shares after the first, second and third anniversaries,
respectively, of the initial public offering of Corebridge (the
IPO), with the transfer restrictions terminating in full on the
fifth anniversary of the IPO. In the event that the IPO of
Corebridge is not completed prior to November 2, 2023, Blackstone
will have the right to require AIG to undertake the IPO, and in the
event that the IPO has not been completed prior to November 2,
2024, Blackstone will have the right to exchange all or a portion
of its ownership interest in Corebridge for shares of AIG’s common
stock on the terms set forth in the definitive agreement. On
November 1, 2021, Corebridge declared a dividend payable to AIG
Parent in the amount of $8.3 billion. In connection with such
dividend, Corebridge issued a promissory note to AIG Parent in the
amount of $8.3 billion, which is required to be paid to AIG Parent
prior to the IPO of Corebridge. On April 5, 2022, Corebridge issued
senior unsecured notes in the aggregate principal amount of $6.5
billion, the proceeds of which were used to repay a portion of the
$8.3 billion promissory note previously issued by Corebridge to
AIG. While we currently believe the IPO is the next step in the
separation of the Life and Retirement business from AIG, no
assurance can be given regarding the form that future separation
transactions may take or the specific terms or timing thereof, or
that a separation will in fact occur. Any separation transaction
will be subject to the satisfaction of various conditions and
approvals, including approval by the AIG Board of Directors,
receipt of insurance and other required regulatory approvals, and
satisfaction of any applicable requirements of the Securities and
Exchange Commission.
Additionally, on March 28, 2022, AIG announced that it plans to
rebrand SAFG Retirement Services, Inc., the parent company of its
Life and Retirement business, as Corebridge Financial, Inc. when it
becomes a public company. Also on this date, AIG and BlackRock
entered into a binding letter of intent pursuant to which BlackRock
will manage certain liquid fixed income and private placement
assets representing up to $60 billion of assets on behalf of AIG
and up to $90 billion of assets on behalf of AIG’s Life and
Retirement business; AIG and AIG’s Life and Retirement business
will gain access to BlackRock’s world-class asset management
capabilities as well as its investment management technology,
Aladdin.
CONFERENCE CALL AIG will host a conference call tomorrow,
Tuesday, August 9, 2022 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
http://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 officers and representatives
of AIG 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 or 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 catastrophes and
macroeconomic and/or geopolitical events, anticipated dispositions,
monetization and/or acquisitions of businesses or assets, or
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 the specific
projections, goals, assumptions and statements include, without
limitation:
- AIG’s ability to continue to separate the Life and Retirement
business, including through an initial public offering, and the
impact separation may have on AIG, its businesses, employees,
contracts and customers;
- the effects of economic conditions in the markets in which AIG
and its businesses operate in the U.S. and globally and any changes
therein, including financial market conditions, fluctuations in
interest rates and foreign currency exchange rates and inflationary
pressures, each of which may also be affected by geopolitical
conflicts, including the conflict between Russia and Ukraine;
- the occurrence of catastrophic events, both natural and
man-made, including geopolitical conflicts, pandemics, civil unrest
and the effects of climate change;
- disruptions in the availability of AIG’s electronic data
systems or those of third parties, including as a result of
potential information technology, cybersecurity or data security
breaches due to supply chain disruptions, cyber-attacks or security
vulnerabilities, the likelihood of which may increase as a result
of remote business operations;
- 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;
- availability of reinsurance or access to reinsurance on
acceptable terms;
- concentrations in AIG’s investment portfolios, including as a
result of our asset management relationships with Blackstone and
BlackRock;
- changes in the valuation of AIG’s investments;
- the effectiveness of strategies to recruit and retain key
personnel and to implement effective succession plans;
- 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;
- AIG’s ability to successfully dispose of, monetize and/or
acquire businesses or assets or successfully integrate acquired
businesses;
- nonperformance or defaults by counterparties, including
Fortitude Reinsurance Company Ltd. (Fortitude Re);
- the requirements, which may change from time to time, of the
global regulatory framework to which AIG is subject;
- significant legal, regulatory or governmental proceedings;
- the effects of sanctions related to the conflict between Russia
and Ukraine and failure to comply therewith;
- AIG's ability to effectively execute on the AIG 200 operational
programs designed to modernize AIG's operating infrastructure and
enhance user and customer experiences, and AIG’s ability to achieve
anticipated cost savings from AIG 200;
- the impact of COVID-19 and its variants and responses
thereto;
- AIG’s ability to effectively execute on environmental, social
and governance targets and standards; 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, 2022 (which will be filed with
the SEC), and Part I, Item 1A. Risk Factors and Part II, Item 7.
MD&A in AIG’s Annual Report on Form 10-K for the year ended
December 31, 2021.
The 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 the 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 Securities and
Exchange Commission 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 2022 Financial Supplement available in the
Investors section of AIG’s website, www.aig.com.
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 AIG’s net
worth on a per-common share basis after eliminating items that can
fluctuate significantly from period to period including changes in
fair value of AIG’s available for sale securities portfolio,
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 AIG’s available for
sale securities portfolio wherein there is largely no offsetting
impact for certain related insurance liabilities. In addition, AIG
adjusts 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.
AIG excludes 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 – 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. AIG believes this measure is
useful to investors because it eliminates items that can fluctuate
significantly from period to period, including changes in fair
value of AIG’s available for sale securities portfolio, 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 AIG’s available for sale
securities portfolio wherein there is largely no offsetting impact
for certain related insurance liabilities. In addition, AIG adjusts
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. AIG excludes 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
AIG’s 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) and changes in fair value of securities
used to hedge guaranteed living benefits (included in Net
investment income for GAAP purposes). Adjusted revenues is a GAAP
measure for AIG’s 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 AIG’s
segments. These items generally fall into one or more of the
following broad categories: legacy matters having no relevance to
AIG’s current businesses or operating performance; adjustments to
enhance transparency to the underlying economics of transactions;
and measures that AIG believes to be common to the industry. APTI
is a GAAP measure for AIG’s segments. Excluded items include the
following:
- changes in fair value of securities used to hedge guaranteed
living benefits;
- changes in benefit reserves and deferred policy acquisition
costs (DAC), value of business acquired (VOBA), and deferred sales
inducements (DSI) 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;
- non-operating litigation reserves and settlements;
- restructuring and other costs related to initiatives designed
to reduce operating expenses, improve efficiency and simplify AIG’s
organization;
- the portion of favorable or unfavorable prior year reserve
development for which AIG has 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; and
- non-recurring costs associated with the implementation of
non-ordinary course legal or regulatory changes or changes to
accounting principles.
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 AIG’s current businesses
or operating performance; and
- net tax charge related to the enactment of the Tax Cuts and
Jobs Act (Tax Act).
See page 16 for the reconciliation of Net income attributable to
AIG to Adjusted After-tax Income Attributable to AIG.
Ratios: AIG, along with most property and casualty
insurance companies, uses 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. AIG’s 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. AIG
believes that as adjusted ratios are meaningful measures of AIG’s
underwriting results on an ongoing basis as they exclude
catastrophes and the impact of reserve discounting which are
outside of management’s control. AIG also excludes 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 (FHLB) 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 a wide range
of property casualty insurance, life insurance, retirement
solutions and other financial services to customers in
approximately 70 countries and jurisdictions. These diverse
offerings include products and services that help businesses and
individuals protect their assets, manage risks and provide for
retirement security. AIG common stock is listed on the New York
Stock Exchange.
Additional information about AIG can be found at www.aig.com |
YouTube: www.youtube.com/aig | Twitter: @AIGinsurance
www.twitter.com/AIGinsurance | LinkedIn:
www.linkedin.com/company/aig. These references with additional
information about AIG have been provided as a convenience, and the
information contained on such websites is not incorporated by
reference into this press release.
AIG is the marketing name for the worldwide property-casualty,
life and retirement and general insurance operations of American
International Group, Inc. For additional information, please visit
our website at www.aig.com. 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,
2021
2022
Total Tax
Non-
Total Tax
Non-
(Benefit)
controlling
(Benefits)
controlling
After
Pre-tax
Charge
Interests(d)
Tax
Pre-tax
Charge
Interests(d)
Tax
Pre-tax income/net income, including
noncontrolling interests
$
147
$
(3)
$
—
$
150
$
4,321
$
928
$
—
$
3,392
Noncontrolling interests
(51)
(51)
(356)
(356)
Pre-tax income/net income attributable
to AIG
147
(3)
(51)
99
4,321
928
(356)
3,036
Dividends on preferred stock
8
8
Net income attributable to AIG common
shareholders
91
3,028
Adjustments:
Changes in uncertain tax positions and
other tax adjustments(a)
(35)
—
35
(3)
—
3
Deferred income tax valuation allowance
releases(b)
25
—
(25)
17
—
(17)
Changes in fair value of securities used
to hedge guaranteed living benefits
(13)
(2)
—
(11)
(10)
(2)
—
(8)
Changes in benefit reserves and DAC, VOBA
and DSI related to net realized gains (losses)
(120)
(25)
—
(95)
128
27
—
101
Changes in the fair value of equity
securities
13
3
—
10
30
6
—
24
Loss on extinguishment of debt
106
23
—
83
299
63
—
236
Net investment income on Fortitude Re
funds withheld assets
(507)
(107)
—
(400)
(188)
(40)
—
(148)
Net realized (gains) losses on Fortitude
Re funds withheld assets
(173)
(37)
—
(136)
86
19
—
67
Net realized (gains) losses on Fortitude
Re funds withheld embedded derivative
2,056
431
—
1,625
(2,776)
(583)
—
(2,193)
Net realized (gains) losses(c)
59
17
—
42
(620)
(154)
—
(466)
Loss from discontinued operations
—
1
Net loss on divestitures
1
—
—
1
1
1
—
—
Non-operating litigation reserves and
settlements
—
—
—
—
(4)
(1)
—
(3)
Favorable prior year development and
related amortization changes ceded under retroactive reinsurance
agreements
(65)
(14)
—
(51)
(144)
(30)
—
(114)
Net loss reserve discount charge
22
5
—
17
14
4
—
10
Integration and transaction costs
associated with acquiring or divesting businesses
35
7
—
28
38
8
—
30
Restructuring and other costs
126
26
—
100
175
37
—
138
Non-recurring costs related to regulatory
or accounting changes
21
4
—
17
9
2
—
7
Noncontrolling interests(d)
—
—
283
283
Adjusted pre-tax income/Adjusted
after-tax income attributable to AIG common shareholders
$
1,708
$
318
$
(51)
$
1,331
$
1,359
$
299
$
(73)
$
979
Reconciliations of Adjusted Pre-tax and
After-tax Income
Six Months Ended June
30,
2021
2022
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
$
4,875
$
795
$
—
$
4,080
$
10,156
$
2107
$
—
$
8,048
Noncontrolling interests
(105)
(105)
(752)
(752)
Pre-tax income/net income attributable
to AIG
4,875
795
(105)
3,975
10,156
2,107
(752)
7,296
Dividends on preferred stock
15
15
Net income attributable to AIG common
shareholders
3,960
7,281
Adjustments:
Changes in uncertain tax positions and
other tax adjustments(a)
866
—
(866)
88
—
(88)
Deferred income tax valuation allowance
(releases) charges(b)
(661)
—
661
23
—
(23)
Changes in fair value of securities used
to hedge guaranteed living benefits
(35)
(7)
—
(28)
(23)
(5)
—
(18)
Changes in benefit reserves and DAC, VOBA
and DSI related to net realized gains (losses)
83
18
—
65
401
84
—
317
Changes in the fair value of equity
securities
(9)
(2)
—
(7)
57
12
—
45
Loss on extinguishment of debt
98
21
—
77
299
63
—
236
Net investment income on Fortitude Re
funds withheld assets
(993)
(209)
—
(784)
(479)
(101)
—
(378)
Net realized (gains) losses on Fortitude
Re funds withheld assets
(346)
(73)
—
(273)
226
48
—
178
Net realized gains on Fortitude Re funds
withheld embedded derivative
(326)
(68)
—
(258)
(6,094)
(1,280)
—
(4,814)
Net realized gains(c)
(568)
(128)
—
(440)
(1,808)
(435)
—
(1,373)
Loss from discontinued operations
—
1
Net gain on divestitures
(6)
(1)
—
(5)
(39)
(8)
—
(31)
Non-operating litigation reserves and
settlements
—
—
—
—
(38)
(8)
—
(30)
Favorable prior year development and
related amortization changes ceded under retroactive reinsurance
agreements
(84)
(18)
—
(66)
(144)
(30)
—
(114)
Net loss reserve discount benefit
(10)
(2)
—
(8)
(6)
(1)
—
(5)
Integration and transaction costs
associated with acquiring or divesting businesses
44
9
—
35
84
18
—
66
Restructuring and other costs
200
42
—
158
268
56
—
212
Non-recurring costs related to regulatory
or accounting changes
41
8
—
33
13
3
—
10
Noncontrolling interests(d)
—
—
581
581
Adjusted pre-tax income/Adjusted
after-tax income attributable to AIG common shareholders
$
2,964
$
590
$
(105)
$
2,254
$
2,873
$
634
$
(171)
$
2,053
(a) Six months ended June 30, 2021 includes the completion of
audit activity by the Internal Revenue Service. (b) Six months
ended June 30, 2021 includes an increase in the valuation allowance
against a portion of certain tax attribute carryforwards of AIG's
U.S. federal consolidated income tax group, as well as net
valuation allowance release in certain foreign jurisdictions. (c)
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. (d) For the three and six
months ended June 30, 2022, noncontrolling interests include
Blackstone’s 9.9 percent equity stake in Corebridge.
Summary of Key Financial
Metrics
Three Months Ended June
30,
Six Months Ended June
30,
Earnings per common share:
2021
2022
% Inc. (Dec.)
2021
2022
% Inc. (Dec.)
Basic
Income from continuing operations
$
0.11
$
3.83
NM
%
$
4.58
$
9.06
97.8
%
Income from discontinued operations
—
—
NM
—
—
NM
Net income attributable to AIG common
shareholders
$
0.11
$
3.83
NM
$
4.58
$
9.06
97.8
Diluted
Income from continuing operations
0.11
$
3.78
NM
4.53
$
8.95
97.6
Income from discontinued operations
—
—
NM
—
—
NM
Net income attributable to AIG common
shareholders
$
0.11
$
3.78
NM
$
4.53
$
8.95
97.6
Adjusted after-tax income attributable
to AIG common shareholders per diluted share (a)
$
1.52
$
1.19
(21.7)
%
$
2.58
$
2.50
(3.1)
%
Weighted average shares
outstanding:
Basic
862.9
790.9
865.5
803.5
Diluted
872.9
800.7
874.6
813.3
(a) For the three- and six-month periods ended June 30, 2022, an
option for Blackstone to exchange all or a portion of its ownership
interest in Corebridge for AIG common shares was dilutive for the
calculation of Adjusted after-tax income per common share
attributable to AIG common shareholders. The dilutive impact was an
additional 42,572,031 shares for both periods.
Reconciliation of Book Value per Common
Share
As of period
end:
June 30, 2021
December 31, 2021
March 31, 2022
June 30, 2022
Total AIG shareholders' equity
$
66,083
$
65,956
$
55,944
$
45,344
Less: Preferred equity
485
485
485
485
Total AIG common shareholders' equity
(a)
65,598
65,471
55,459
44,859
Less: Deferred tax assets (DTA)*
7,374
5,221
4,816
4,582
Less: Accumulated other comprehensive
income (AOCI)
10,209
6,687
(5,900)
(17,656)
Add: Cumulative unrealized gains and
losses related to Fortitude Re Funds withheld assets
3,341
2,791
48
(2,223)
Subtotal: AOCI plus cumulative unrealized
gains and losses related to Fortitude Re funds withheld assets
6,868
3,896
(5,948)
(15,433)
Total adjusted common shareholders' equity
(b)
$
51,356
$
56,354
$
56,591
$
55,710
Less: Intangible assets:
Goodwill
4,083
4,056
4,009
3,935
Value of business acquired
121
111
107
99
Value of distribution channel acquired
477
458
448
438
Other intangibles
305
300
291
289
Total intangible assets
4,986
4,925
4,855
4,761
Total adjusted tangible common
shareholders' equity (c)
$
46,370
$
51,429
$
51,736
$
50,949
Total common shares outstanding
(d)
854.9
818.7
800.2
771.3
As of period
end:
June 30,
2021
% Inc.
(Dec.)
December 31,
2021
% Inc.
(Dec.)
March 31,
2022
% Inc.
(Dec.)
June 30,
2022
Book value per common share (a÷d)
$
76.73
(24.2)
%
$
79.97
(27.3)
%
$
69.30
(16.1)
%
$
58.16
Adjusted book value per common share
(b÷d)
60.07
20.2
68.83
4.9
70.72
2.1
72.23
Adjusted tangible book value per common
share (c÷d)
54.24
21.8
62.82
5.2
64.65
2.2
66.06
Reconciliation of Return On Common
Equity
Three Months Ended June
30,
2021
2022
Annualized net income (loss) attributable
to AIG common shareholders (a)
$
364
$
12,112
Annualized adjusted after-tax income
attributable to AIG common shareholders (b)
$
5,324
$
3,916
Average AIG Common Shareholders' equity
(c)
$
63,896
$
50,159
Less: Average DTA*
7,457
4,699
Less: Average AOCI
8,338
(11,778)
Add: Average cumulative unrealized gains
and losses related to Fortitude Re funds withheld assets
2,794
(1,088)
Subtotal: AOCI plus cumulative unrealized
gains and losses related to Fortitude Re funds withheld assets
5,544
(10,690)
Average adjusted common shareholders'
equity (d)
$
50,895
$
56,150
ROCE (a÷c)
0.6
%
24.1
%
Adjusted return on common equity (b÷d)
10.5
%
7.0
%
* 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,
2021
2022
Net Investment Income per Consolidated
Statements of Operations
$
3,675
$
2,604
Changes in fair value of securities used
to hedge guaranteed living benefits
(13)
(13)
Changes in the fair value of equity
securities
13
30
Net investment income on Fortitude Re
funds withheld assets
(507)
(188)
Net realized gains (losses) related to
economic hedges and other
14
71
Total Net Investment Income - APTI
Basis
$
3,182
$
2,504
Net Premiums Written - Change in
Constant Dollar
Three Months Ended June 30,
2022
North
Global -
Global -
America
International -
General
Commercial
Personal
Commercial
Commercial
Personal
General
Insurance
Insurance
Lines
Insurance
Lines
Lines
Insurance
Foreign exchange effect on worldwide
premiums:
premiums:
Change in net premiums written
Increase (decrease) in original
currency
5
%
8
%
(4)
%
10
%
5
%
(4)
%
Foreign exchange effect
(5)
(3)
(7)
—
(6)
(9)
Increase (decrease) as reported in U.S.
dollars
—
%
5
%
(11)
%
10
%
(1)
%
(13)
%
Reconciliations of Accident Year Loss
and Accident Year Combined Ratios, as Adjusted
Three Months Ended
June 30,
2018
2021
2022
Total General
Insurance
Combined ratio
101.3
92.5
87.4
Catastrophe losses and reinstatement
premiums
(2.3)
(2.1)
(1.8)
Prior year development, net of reinsurance
and prior year premiums
0.8
0.7
2.9
Adjustments for ceded premium under
reinsurance contracts and other
1.2
—
—
Accident year combined ratio, as
adjusted
101.0
91.1
88.5
North
America
Combined ratio
93.7
86.3
Catastrophe losses and reinstatement
premiums
(2.9)
(1.7)
Prior year development, net of reinsurance
and prior year premiums
1.6
5.3
Accident year combined ratio, as
adjusted
92.4
89.9
North America -
Commercial Lines
Combined ratio
93.0
83.6
Catastrophe losses and reinstatement
premiums
(2.9)
(1.9)
Prior year development, net of reinsurance
and prior year premiums
1.1
6.5
Accident year combined ratio, as
adjusted
91.2
88.2
North America -
Personal Insurance
Combined ratio
98.1
102.3
Catastrophe losses and reinstatement
premiums
(3.0)
(0.5)
Prior year development, net of reinsurance
and prior year premiums
5.0
(2.1)
Accident year combined ratio, as
adjusted
100.1
99.7
International
Combined ratio
91.8
88.5
Catastrophe losses and reinstatement
premiums
(1.5)
(2.0)
Prior year development, net of reinsurance
and prior year premiums
(0.1)
0.7
Accident year combined ratio, as
adjusted
90.2
87.2
International -
Commercial Lines
Combined ratio
88.7
82.4
Catastrophe losses and reinstatement
premiums
(1.4)
(2.3)
Prior year development, net of reinsurance
and prior year premiums
(0.4)
1.3
Accident year combined ratio, as
adjusted
86.9
81.4
International -
Personal Insurance
Loss ratio
55.2
56.4
Catastrophe losses and reinstatement
premiums
(1.6)
(1.6)
Prior year development, net of reinsurance
and prior year premiums
0.4
(0.1)
Accident year loss ratio, as adjusted
54.0
54.7
Combined ratio
95.2
96.9
Catastrophe losses and reinstatement
premiums
(1.6)
(1.6)
Prior year development, net of reinsurance
and prior year premiums
0.4
(0.1)
Accident year combined ratio, as
adjusted
94.0
95.2
Global -
Commercial Insurance
Combined ratio
104.5
91.1
83.1
Catastrophe losses and reinstatement
premiums
(3.3)
(2.2)
(2.1)
Prior year development, net of reinsurance
and prior year premiums
2.6
0.4
4.3
Adjustments for ceded premium under
reinsurance contracts and other
2.3
—
—
Accident year combined ratio, as
adjusted
106.1
89.3
85.3
Reconciliation of General Insurance
Return on Adjusted Segment Common Equity
Three Months Ended
June 30,
2021
2022
Adjusted pre-tax income
$
1,194
$
1,257
Interest expense on attributed financial
debt
147
149
Adjusted pre-tax income including
attributed interest expense
1,047
1,108
Income tax expense
263
254
Adjusted after-tax income
784
854
Dividends declared on preferred stock
3
3
Adjusted after-tax income attributable
to common shareholders
$
781
$
851
Ending adjusted segment common
equity
$
25,473
$
30,078
Average adjusted segment common
equity
$
25,369
$
28,334
Return on adjusted segment common
equity
12.3
%
12.0
%
Total segment shareholder’s equity
$
26,308
$
25,574
Less: Preferred equity
197
210
Total segment common equity
26,111
25,364
Less: Accumulated other comprehensive
income (AOCI)
849
(5,214)
Add: Cumulative unrealized gains and
losses related to Fortitude Re funds withheld assets
211
(500)
Subtotal: AOCI plus cumulative unrealized
gains and losses related to Fortitude Re funds withheld assets
638
(4,714)
Total adjusted segment common equity
$
25,473
$
30,078
Reconciliations of Premiums and
Deposits
Three Months Ended
June 30,
2021
2022
Individual
Retirement:
Premiums
$
32
$
57
Deposits
3,949
3,566
Other
(3)
(3)
Premiums and deposits
$
3,978
$
3,620
Group
Retirement:
Premiums
$
4
$
5
Deposits
2,251
1,767
Other
—
—
Premiums and deposits
$
2,255
$
1,772
Life
Insurance:
Premiums
$
532
$
561
Deposits
409
388
Other
220
208
Premiums and deposits
$
1,161
$
1,157
Institutional
Markets:
Premiums
$
1,077
$
496
Deposits
559
46
Other
5
8
Premiums and deposits
$
1,641
$
550
Total Life and
Retirement:
Premiums
$
1,645
$
1,119
Deposits
7,168
5,767
Other
222
213
Premiums and deposits
$
9,035
$
7,099
Reconciliation of Life and Retirement
Return on Adjusted Segment Common Equity
Three Months Ended
June 30,
2021
2022
Adjusted pre-tax income
$
1,124
$
563
Interest expense on attributed financial
debt
74
68
Adjusted pre-tax income including
attributed interest expense
1,050
495
Income tax expense
211
95
Adjusted after-tax income
839
400
Dividends declared on preferred stock
2
2
Adjusted after-tax income attributable
to common shareholders
$
837
$
398
Ending adjusted segment common
equity
$
20,689
$
20,537
Average adjusted segment common
equity
$
20,458
$
20,891
Return on adjusted segment common
equity
16.4
%
7.6
%
Total segment shareholder’s equity
$
29,558
$
11,546
Less: Preferred equity
139
147
Total segment common equity
29,419
11,399
Less: Accumulated other comprehensive
income (AOCI)
11,860
(10,861)
Add: Cumulative unrealized gains and
losses related to Fortitude Re funds withheld assets
3,130
(1,723)
Subtotal: AOCI plus cumulative unrealized
gains and losses related to Fortitude Re funds withheld assets
8,730
(9,138)
Total adjusted segment common equity
$
20,689
$
20,537
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220808005558/en/
Quentin McMillan (Investors): quentin.mcmillan@aig.com Claire
Talcott (Media): claire.talcott@aig.com
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