- Net income per diluted share was $2.81, and adjusted
after-tax income* (AATI) per diluted share was $1.61, an increase
of 92% from the prior year quarter
- General Insurance combined ratio was 90.5%, an improvement
of 680 basis points from the prior year quarter, including 6.9
points of catastrophe losses and 2.7 points of favorable prior year
development (PYD), net of reinsurance and prior year
premiums
- General Insurance accident year combined ratio, as adjusted*
(AYCR) was 86.3%, an improvement of 210 basis points from the prior
year quarter, driven by the outstanding performance of the
Commercial Lines AYCR of 81.7%
- General Insurance net premiums written (NPW) increased 1%
year-over-year, or 9% on a comparable basis*†, driven by 16% growth
in Personal Insurance and 6% growth in Commercial Lines
- Life and Retirement adjusted pre-tax income (APTI) was $971
million, up 24% from the prior year quarter, benefiting from
continued growth in net investment spread
- Returned over $1 billion to shareholders through $785
million of common stock repurchases and $261 million of dividends
in the third quarter
- On November 1, AIG announced the successful closing of the
sale of Validus Re to RenaissanceRe, simplifying our portfolio and
allowing us to accelerate capital management plans
- On October 31, Corebridge announced the closing of the sale
of Laya Healthcare Limited to AXA for €650 million, the net
proceeds from which will be distributed by a special dividend of
approximately $730 million to Corebridge shareholders
THIRD QUARTER 2023 NOTEWORTHY ITEMS
- General Insurance APTI of $1.4 billion increased $617 million
from the prior year quarter, driven by higher underwriting income
as a result of an improved accident year loss ratio, higher
favorable PYD and increased net investment income. General
Insurance underwriting results for the current quarter exclude Crop
Risk Services (CRS), the sale of which closed on July 3, 2023.
- Life and Retirement APTI increased $187 million from the prior
year quarter to $971 million, driven by continued spread expansion
and strong sales, particularly in Fixed Index Annuities.
- Net income attributable to AIG common shareholders was $2.0
billion compared to $2.7 billion in the prior year quarter, or
$2.81 per diluted common share compared to $3.55 per diluted common
share.
- AATI was $1.2 billion compared to $0.6 billion in the prior
year quarter, or $1.61 per diluted common share compared to $0.84
per diluted common share, reflective of improved results across
General Insurance, Life and Retirement and Other Operations, and a
7% reduction in weighted average diluted shares outstanding.
- Annualized return on common equity (ROCE) was 19.8% and
annualized adjusted ROCE* was 8.5%. Annualized adjusted ROCE was
12.4% for General Insurance and 11.4% for Life and Retirement.
* 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.
† Net premiums written on a comparable basis reflects
year-over-year comparison on a constant dollar basis adjusted for
the International lag elimination, the sale of Crop Risk Services
(CRS) and the sale of Validus Re. Refer to page 18 for more
detail.
American International Group, Inc. (NYSE: AIG) today reported
financial results for the third quarter ended September 30,
2023.
AIG Chairman & Chief Executive Officer Peter Zaffino said:
“In the third quarter, AIG delivered exceptional results driven by
continued improvement in underwriting profitability and an
outstanding quarter in our Commercial Lines business with an 81.7%
accident year combined ratio, as adjusted. This quarter’s adjusted
after-tax income per diluted share of $1.61 increased 92% from the
prior year quarter. Our relentless focus on our strategic
priorities has enabled us to accelerate our execution and generate
significant sustainable value for shareholders and other
stakeholders.
“On November 1, we announced the successful closing of the sale
of Validus Re to RenaissanceRe for which we received total
consideration of $3.3 billion in cash, including a pre-closing
dividend, and approximately $275 million in RenaissanceRe stock.
This sale significantly contributes to our efforts to streamline
our business model, simplify our portfolio and further reduce
volatility.
“Our continued attention to underwriting excellence and
portfolio optimization has manifested in outstanding results for
General Insurance. The General Insurance combined ratio improved to
90.5%. The combined ratio included $462 million of total
catastrophe-related charges, or 6.9 loss ratio points. Accident
year combined ratio, as adjusted, of 86.3% represents an
improvement of 210 basis points from the prior year quarter.
Additionally, the third quarter results reflect favorable prior
year reserve development, net of reinsurance and prior year
premiums, of $210 million, or a 2.7 loss ratio point benefit.
“Our continued growth across the portfolio was impressive in the
third quarter. General Insurance net premiums written increased 1%
year-over-year, or 9% on a comparable basis†, driven by 16% growth
in Personal Insurance and 6% growth in Commercial Lines. North
America Commercial pricing, which includes rate and exposure,
increased 9% excluding Workers’ Compensation, while International
Commercial pricing increased 6% year-over-year. Global Commercial
pricing increased 8% excluding Workers’ Compensation and remains
above loss cost trend.
“Life & Retirement also delivered solid third-quarter
results, which were attributable to continued spread expansion and
strong Fixed Index Annuities sales which exceeded $2 billion for
the third consecutive quarter. Base net investment income continued
to see benefits from the higher interest rate environment and
Individual and Group Retirement produced a 41 basis point base
spread expansion year-over-year.
“Corebridge continues to make significant progress in
simplifying its portfolio. In September, Corebridge announced the
sale of AIG Life Limited to Aviva plc for a consideration of £460
million. On October 31, Corebridge closed the sale of Laya
Healthcare to AXA for €650 million, the net proceeds from which
will be distributed by a special dividend of approximately $730
million to Corebridge shareholders of record. These transactions
will enable Corebridge to concentrate on U.S. Life & Retirement
solutions where it has proven market strength and distribution
capabilities.”
† Net premiums written on a comparable
basis reflects year-over-year comparison on a constant dollar basis
adjusted for the International lag elimination, the sale of CRS and
the sale of Validus Re. Refer to page 18 for more detail.
For the third quarter of 2023, net income attributable to AIG
common shareholders was $2.0 billion, or $2.81 per diluted common
share, compared to $2.7 billion, or $3.55 per diluted common share,
in the prior year quarter. The decline was primarily driven by a
decrease in net realized gains, both including and excluding
Fortitude Re funds withheld assets and embedded derivative,
partially offset by higher General Insurance underwriting income
and total net investment income. The decrease in net income was
also attributable to lower ownership in Corebridge following the
Corebridge secondary offering in June.
AATI was $1.2 billion, or $1.61 per diluted common share, for
the third quarter of 2023 compared to $0.6 billion, or $0.84 per
diluted common share, in the prior year quarter. The increase in
AATI was due to higher underwriting income in General Insurance,
higher net investment income and better results in Other
Operations, partially offset by an increase in adjusted income tax
expenses as well as an increase in non-controlling interest expense
due to the Corebridge secondary offering. The third quarter
adjusted effective tax rate was 26.3% compared to 20.5% in the
prior year quarter, driven by higher foreign income, which is taxed
at rates higher than the U.S. federal income tax rate of 21%, and
tax adjustments related to prior year tax returns.
Total net investment income for the third quarter of 2023 was
$3.6 billion, an increase of 33% from $2.7 billion in the prior
year quarter, primarily driven by higher income from fixed maturity
securities and loans due to higher reinvestment rates and improved
alternative investment income compared to losses from both the
hedge fund and private equity portfolios in the prior year quarter.
Total net investment income on an APTI basis* was $3.3 billion, an
increase of $747 million from the prior year quarter, reflecting
the same trends.
Book value per common share was $56.06 as of September 30, 2023,
a decrease of 4% from June 30, 2023, driven by an increase in
accumulated other comprehensive loss (AOCL) due to higher interest
rates, and an increase of 2% from December 31, 2022, driven by the
net impact of share repurchases. Adjusted book value per common
share* was $78.17, an increase of approximately 3% compared to both
June 30, 2023 and December 31, 2022, primarily driven by share
repurchases. Adjusted tangible book value per common share* was
$72.62, an increase of 4% from June 30, 2023 and an increase of 5%
from December 31, 2022, both primarily driven by the net impact of
share repurchases.
In the third quarter of 2023, AIG repurchased $785 million of
common stock, or approximately 14 million shares, paid $261 million
of common and preferred dividends and redeemed Validus debt for
$289 million, inclusive of the loss on extinguishment of debt. AIG
also received gross proceeds of $234 million from the sale of CRS.
AIG parent liquidity was $3.6 billion as of September 30, 2023.
Total debt and preferred stock to total capital ratio at September
30, 2023 was 33.7%, up from 32.3% at June 30, 2023, primarily
driven by an increase in AOCL. Excluding AOCL adjusted for
cumulative unrealized gains and losses related to Fortitude Re
funds withheld assets, the total debt and preferred stock to total
capital ratio* was 25.9% at September 30, 2023, relatively flat
compared to June 30, 2023.
On November 1, 2023, the AIG Board of Directors declared a
quarterly cash dividend on AIG common stock of $0.36 per share. The
dividend is payable on December 28, 2023 to stockholders of record
at the close of business on December 14, 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
$0.365625 per depositary share. The dividend is payable on December
15, 2023 to holders of record at the close of business on November
30, 2023.
FINANCIAL SUMMARY
Three Months Ended
September 30,
($ in millions, except per common share
amounts)
2022
2023
Net income attributable to AIG common
shareholders
$
2,741
$
2,020
Net income per diluted share attributable
to AIG common shareholders
$
3.55
$
2.81
Adjusted pre-tax income (loss)
$
920
$
1,873
General Insurance
750
1,367
Life and Retirement
784
971
Other Operations
(614
)
(465
)
Net investment income
$
2,668
$
3,556
Net investment income, APTI basis
2,535
3,282
Adjusted after-tax income attributable to
AIG common shareholders
$
644
$
1,158
Adjusted after-tax income per diluted
share attributable to AIG common shareholders
$
0.84
$
1.61
Weighted average common shares outstanding
- diluted (in millions)
771.1
718.7
Return on common equity
25.9
%
19.8
%
Adjusted return on common equity
4.6
%
8.5
%
Book value per common share
$
52.76
$
56.06
Adjusted book value per common share
$
74.90
$
78.17
Common shares outstanding (in
millions)
747.2
704.6
GENERAL INSURANCE
Three Months Ended September
30,
($ in millions)
2022
2023
Change
Gross premiums written
$
9,238
$
8,870
(4
)
%
Net premiums written
$
6,403
$
6,462
1
%
North America
3,138
3,151
—
North America Commercial Lines
2,757
2,544
(8
)
North America Personal Insurance
381
607
59
International
3,265
3,311
1
International Commercial Lines
1,992
2,038
2
International Personal Insurance
1,273
1,273
—
Underwriting income (loss)
$
168
$
611
264
%
North America
(439
)
235
NM
North America Commercial Lines
(374
)
292
NM
North America Personal Insurance
(65
)
(57
)
12
International
607
376
(38
)
International Commercial Lines
469
339
(28
)
International Personal Insurance
138
37
(73
)
Net investment income, APTI basis
$
582
$
756
30
%
Adjusted pre-tax income
$
750
$
1,367
82
%
Return on adjusted segment common
equity
6.7
%
12.4
%
5.7
pts
Underwriting ratios:
North America Combined Ratio (CR)
114.0
92.3
(21.7
)
pts
North America Commercial Lines CR
113.6
88.9
(24.7
)
North America Personal Insurance CR
116.4
113.0
(3.4
)
International CR
81.4
88.7
7.3
International Commercial Lines CR
75.4
83.4
8.0
International Personal Insurance CR
89.8
97.2
7.4
General Insurance (GI) CR
97.3
90.5
(6.8
)
GI Loss ratio
67.5
59.6
(7.9
)
pts
Less: impact on loss ratio
Catastrophe losses and reinstatement
premiums
(9.8
)
(6.9
)
2.9
Prior year development, net of reinsurance
and prior year premiums
0.9
2.7
1.8
GI Accident year loss ratio, as
adjusted
58.6
55.4
(3.2
)
GI Expense ratio
29.8
30.9
1.1
GI Accident year combined ratio, as
adjusted
88.4
86.3
(2.1
)
Accident year combined ratio, as adjusted
(AYCR):
North America AYCR
88.2
86.6
(1.6
)
pts
North America Commercial Lines AYCR
84.6
83.0
(1.6
)
North America Personal Insurance AYCR
112.8
108.4
(4.4
)
International AYCR
88.6
86.0
(2.6
)
International Commercial Lines AYCR
80.4
79.7
(0.7
)
International Personal Insurance AYCR
99.9
95.9
(4.0
)
General Insurance
- On July 3, 2023, AIG closed the sale of CRS for a pre-tax gain
of $126 million. On November 1, 2023, AIG closed the sale of
Validus Re. As a result of the sale of CRS, its premiums and
underwriting results were not included in General Insurance third
quarter 2023 results.
- Third quarter 2023 NPW of $6.5 billion increased 1% from the
prior year quarter, or 9% on a comparable basis†, driven by 16%
growth in Personal Insurance and 6% growth in Commercial Lines.
North America Commercial Lines NPW declined 8% as reported, or grew
5% from the prior year quarter on a comparable basis†, attributable
to positive rate changes, higher renewal retentions and strong new
business production in Lexington and Retail Property, partially
offset by lower Financial Lines premiums reflecting our continued
underwriting discipline. International Commercial Lines delivered
2% NPW growth from the prior year quarter, or 7% on a comparable
basis†, attributable to continued positive rate changes, strong
retention, and robust new business production, partially offset by
a decrease in Financial Lines. Global Personal Insurance NPW
increased 14% from the prior year quarter, or 16% on a comparable
basis†, primarily driven by Private Client Select resulting from
changes in our reinsurance program, as well as growth in Travel and
Personal Property.
- Third quarter 2023 underwriting income increased $443 million
from the prior year quarter to $611 million, and included $462
million of total catastrophe-related charges, representing 6.9 loss
ratio points, of which $367 million was in North America, mainly
attributable to the Lahaina Wildfire and Hurricane Idalia, and $95
million in International. Third quarter 2023 catastrophe-related
charges of $462 million were down 29% compared to third quarter
2022 catastrophe-related charges of $655 million, which included
losses from Hurricane Ian. Third quarter 2023 also included
favorable PYD of $139 million compared to favorable PYD of $72
million in the prior year quarter. The development in the third
quarter 2023 was largely driven by favorable development on U.S.
Workers’ Compensation business, partially offset by unfavorable
development on UK/Europe Casualty and UK Financial Lines.
- The combined ratio improved 6.8 points from the prior year
quarter to 90.5%, driven by a 7.9 point decrease in the loss ratio
to 59.6%. The AYCR improved 2.1 points from the prior year quarter
to 86.3%, driven by a 3.2 point decrease in the accident year loss
ratio, as adjusted* (AYLR) to 55.4%, reflecting continued earn-in
of premium rate increases in excess of loss cost trends and
continued benefit from the business mix shift, coupled with our
execution on portfolio management strategies focusing on risk
selection and improved terms and conditions. The expense ratio was
30.9%, a 1.1 point increase from the prior year quarter, largely
from the business mix shift impact on the acquisition ratio.
- The North America Commercial Lines combined ratio improved 24.7
points from the prior year quarter to 88.9%, driven by favorable
PYD compared to unfavorable PYD in the prior year quarter as well
as lower catastrophe losses. The AYCR improved 1.6 points to 83.0%,
driven by a 4.7 point improvement in the AYLR to 57.8%.
International Commercial Lines combined ratio increased 8.0 points
from the prior year quarter to 83.4%, driven by unfavorable PYD.
The AYCR improved 0.7 point to 79.7% due to a decrease in the
acquisition ratio, mainly attributable to changes in the business
mix.
- The North America Personal Insurance combined ratio improved
3.4 points from the prior year quarter to 113.0% and the AYCR
improved 4.4 points to 108.4%, primarily driven by the expense
ratio improving 8.4 points to 46.0%. The International Personal
Insurance combined ratio increased 7.4 points from the prior year
quarter to 97.2%, driven by a decrease in favorable PYD. The AYCR
improved 4.0 points to 95.9%, driven by a 5.6 point improvement in
the AYLR to 54.5%, as the prior year quarter had elevated losses
related to COVID-19 within Accident & Health.
- Annualized return on adjusted segment common equity* for the
third quarter and year-to-date were 12.4% and 12.0%, respectively,
compared to 6.7% and 10.3% in the prior year.
† Net premiums written on a comparable
basis reflects year-over-year comparison on a constant dollar basis
adjusted for the International lag elimination, the sale of CRS and
the sale of Validus Re. Refer to page 18 for more detail.
*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.
LIFE AND RETIREMENT
Three Months Ended
September 30,
($ in millions, except as indicated)
2022
2023
Change
Adjusted pre-tax income
$
784
$
971
24
%
Individual Retirement
377
572
52
Group Retirement
193
191
(1
)
Life Insurance
131
133
2
Institutional Markets
83
75
(10
)
Premiums and fees
$
2,133
$
1,512
(29
)
%
Individual Retirement
248
211
(15
)
Group Retirement
104
108
4
Life Insurance
928
946
2
Institutional Markets
853
247
(71
)
Premiums and deposits
$
8,894
$
9,248
4
%
Individual Retirement
3,792
3,961
4
Group Retirement
2,039
1,831
(10
)
Life Insurance
1,166
1,200
3
Institutional Markets
1,897
2,256
19
Net flows
$
(92
)
$
(2,931
)
NM
%
Individual Retirement
696
(743
)
NM
Group Retirement
(788
)
(2,188
)
(178
)
Net investment income, APTI basis
$
2,004
$
2,465
23
%
Return on adjusted segment common
equity
9.7
%
11.4
%
1.7
pts
Life and Retirement
- Life and Retirement reported APTI of $971 million for the third
quarter of 2023, up 24% from $784 million in the prior year
quarter. The increase was primarily due to higher base portfolio
spread income as a result of improved base portfolio yields and
higher alternative investment income. Combined base net investment
spreads in Individual and Group Retirement continued to widen with
a 41 basis point improvement year-over-year.
- Premiums declined 42% from the prior year quarter to $0.8
billion due to lower pension risk transfer volumes. Premiums and
deposits* increased 4% to $9.2 billion. Fixed Index Annuities
continued to be the top driver of strong sales and Institutional
Markets also had strong sales, supported by $1.9 billion of new
guaranteed investment contracts, partially offset by lower volume
of Variable Annuities and pension risk transfer deals.
- Annualized return on adjusted segment common equity* for the
third quarter and year-to-date were both 11.4% compared to 9.7% and
10.5%, respectively, in the prior year.
- During the third quarter, Corebridge returned $192 million to
shareholders through approximately $146 million of common stock
dividends and $46 million in share repurchases.
OTHER OPERATIONS
Three Months Ended
September 30,
($ in millions)
2022
2023
Change
Corporate and Other
$
(518
)
$
(421
)
19
%
Asset Management Group
51
(47
)
NM
Adjusted pre-tax loss before consolidation
and eliminations
(467
)
(468
)
—
Consolidation and eliminations
(147
)
3
NM
Adjusted pre-tax loss
$
(614
)
$
(465
)
24
%
Other Operations
- Other Operations adjusted pre-tax loss (APTL) of $465 million
improved $149 million, or 24%, from the prior year quarter,
primarily due to the impact of Variable Interest Entities (VIEs),
in addition to improved results in Corporate and Other.
- Corporate and Other APTL improved $97 million, or 19%, from the
prior year quarter, largely due to lower general operating
expenses, higher income from parent short-term investments, and the
absence of mark-to-market losses on a legacy investment portfolio
that was sold in the fourth quarter of 2022. The improvement was
partially offset by higher interest expenses related to Corebridge
financial debt compared to the third quarter of 2022.
- The Asset Management Group (AMG), which includes the
consolidated results of VIEs, recorded adjusted pre-tax loss of $47
million, reflecting a $98 million decrease from the prior year
quarter, largely due to lower interest income and net losses
associated with VIEs compared to net gains in the prior year
quarter.
- Changes in consolidation and eliminations were attributable to
elimination of intercompany net investment income of VIEs that are
consolidated by AMG within Other Operations whereby the insurance
subsidiaries report as net investment income for their investment
in consolidated VIEs included in AMG. The third quarter of 2023
included the elimination of net losses compared to modest net gains
in the prior year quarter.
CONFERENCE CALL
AIG will host a conference call tomorrow, Thursday, November 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, a potential U.S. federal government
shutdown and geopolitical events or conflicts, including the
conflict between Russia and Ukraine and the conflict in Israel and
the surrounding areas;
- 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 September 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’s 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 Third
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 16 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 ratio = [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 ratio = [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 September
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
$
3,904
$
817
$
—
$
3,087
$
3,568
$
821
$
—
$
2,747
Noncontrolling interests
(339
)
(339
)
(720
)
(720
)
Pre-tax income/net income attributable
to AIG
3,904
817
(339
)
2,748
3,568
821
(720
)
2,027
Dividends on preferred stock
7
7
Net income attributable to AIG common
shareholders
2,741
2,020
Adjustments:
Changes in uncertain tax positions and
other tax adjustments
2
—
(2
)
15
—
(15
)
Deferred income tax valuation allowance
(releases) charges
(8
)
—
8
52
—
(52
)
Changes in fair value of securities used
to hedge guaranteed living benefits
(6
)
(1
)
—
(5
)
6
1
—
5
Change in market risk benefit, net(a)
(435
)
(91
)
—
(344
)
(418
)
(88
)
—
(330
)
Changes in benefit reserves related to net
realized gains (losses)
(2
)
—
—
(2
)
(2
)
—
—
(2
)
Changes in the fair value of equity
securities
(16
)
(3
)
—
(13
)
(40
)
(8
)
—
(32
)
Loss on extinguishment of debt
—
—
—
—
21
4
—
17
Net investment income on Fortitude Re
funds withheld assets
(155
)
(32
)
—
(123
)
(264
)
(55
)
—
(209
)
Net realized losses on Fortitude Re funds
withheld assets
86
17
—
69
227
48
—
179
Net realized gains on Fortitude Re funds
withheld embedded derivative
(1,757
)
(369
)
—
(1,388
)
(1,137
)
(239
)
—
(898
)
Net realized gains(b)
(846
)
(172
)
—
(674
)
(133
)
(67
)
—
(66
)
Net gain on divestitures and other
(6
)
(1
)
—
(5
)
(101
)
(21
)
—
(80
)
Non-operating litigation reserves and
settlements
(3
)
(1
)
—
(2
)
—
—
—
—
Favorable prior year development and
related amortization changes ceded under retroactive reinsurance
agreements
(62
)
(13
)
—
(49
)
(75
)
(16
)
—
(59
)
Net loss reserve discount charge
10
2
—
8
5
1
—
4
Pension expense related to a one-time lump
sum payment to former employees
—
—
—
—
8
2
—
6
Integration and transaction costs
associated with acquiring or divesting businesses
52
11
—
41
65
13
—
52
Restructuring and other costs
147
29
—
118
132
27
—
105
Non-recurring costs related to regulatory
or accounting changes
9
2
—
7
11
3
—
8
Noncontrolling interests(d)
259
259
505
505
Adjusted pre-tax income/Adjusted
after-tax income attributable to AIG common shareholders
$
920
$
189
$
(80
)
$
644
$
1,873
$
493
$
(215
)
$
1,158
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)
Nine Months Ended September
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
$
13,543
$
2,816
$
—
$
10,726
$
5,204
$
853
$
—
$
4,351
Noncontrolling interests
(1,051)
(1,051)
(801)
(801)
Pre-tax income/net income attributable
to AIG
13,543
2,816
(1,051)
9,675
5,204
853
(801)
3,550
Dividends on preferred stock
22
22
Net income attributable to AIG common
shareholders
9,653
3,528
Adjustments:
Changes in uncertain tax positions and
other tax adjustments
90
—
(90)
377
—
(377)
Deferred income tax valuation allowance
(releases) charges
15
—
(15)
(45)
—
45
Changes in fair value of securities used
to hedge guaranteed living benefits
(29)
(6)
—
(23)
12
2
—
10
Change in market risk benefit, net(a)
(713)
(150)
—
(563)
(484)
(102)
—
(382)
Changes in benefit reserves related to net
realized gains (losses)
(11)
(2)
—
(9)
(7)
(1)
—
(6)
Changes in the fair value of equity
securities
41
9
—
32
(134)
(28)
—
(106)
Loss on extinguishment of debt
299
63
—
236
21
4
—
17
Net investment income on Fortitude Re
funds withheld assets
(634)
(133)
—
(501)
(1,001)
(210)
—
(791)
Net realized losses on Fortitude Re funds
withheld assets
312
65
—
247
396
83
—
313
Net realized (gains) losses on Fortitude
Re funds withheld embedded derivative
(7,851)
(1,649)
—
(6,202)
(152)
(32)
—
(120)
Net realized (gains) losses(b)
(1,055)
(270)
—
(785)
1,023
218
—
805
Loss from discontinued operations
1
—
Net gain on divestitures and other
(45)
(9)
—
(36)
(142)
(30)
—
(112)
Non-operating litigation reserves and
settlements
(41)
(9)
—
(32)
—
—
—
—
Favorable prior year development and
related amortization changes ceded under retroactive reinsurance
agreements
(206)
(43)
—
(163)
(112)
(24)
—
(88)
Net loss reserve discount charge
4
1
—
3
85
18
—
67
Pension expense related to a one-time lump
sum payment to former employees
—
—
—
—
75
16
—
59
Integration and transaction costs
associated with acquiring or divesting businesses
136
29
—
107
196
41
—
155
Restructuring and other costs
415
85
—
330
402
84
—
318
Non-recurring costs related to regulatory
or accounting changes
22
5
—
17
36
8
—
28
Net impact from elimination of
international reporting lag(c)
—
—
—
—
(12)
(3)
—
(9)
Noncontrolling interests(d)
776
776
297
297
Adjusted pre-tax income/Adjusted
after-tax income attributable to AIG common shareholders
$
4,187
$
907
$
(275)
$
2,983
$
5,406
$
1,229
$
(504)
$
3,651
(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 September
30,
Nine Months Ended September
30,
Earnings per common share:
2022
2023
% Inc. (Dec.)
2022
2023
% Inc. (Dec.)
Basic
Income from continuing operations
$
3.59
$
2.83
(21.2)
%
$
12.22
$
4.86
(60.2)
%
Income from discontinued operations
—
—
NM
—
—
NM
Net income attributable to AIG common
shareholders
$
3.59
$
2.83
(21.2)
$
12.22
$
4.86
(60.2)
Diluted
Income from continuing operations
3.55
$
2.81
(20.8)
$
12.08
$
4.83
(60.0)
Income from discontinued operations
—
—
NM
—
—
NM
Net income attributable to AIG common
shareholders
$
3.55
$
2.81
(20.8)
$
12.08
$
4.83
(60.0)
Adjusted after-tax income attributable
to AIG common shareholders per diluted share
$
0.84
$
1.61
91.7
%
$
3.73
$
4.99
33.8
%
Weighted average shares
outstanding:
Basic
763.1
712.6
789.9
725.6
Diluted
771.1
718.7
799.1
731.0
Reconciliation of Book Value per Common
Share
As of period
end:
September 30, 2022
December 31, 2022
June 30, 2023
September 30,
2023
Total AIG shareholders' equity
$
39,906
$
40,970
$
42,454
$
39,984
Less: Preferred equity
485
485
485
485
Total AIG common shareholders' equity
(a)
39,421
40,485
41,969
39,499
Less: Deferred tax assets (DTA)*
4,553
4,518
4,263
3,974
Less: Accumulated other comprehensive
income (AOCI)
(24,121
)
(22,616
)
(18,982
)
(22,529
)
Add: Cumulative unrealized gains and
losses related to Fortitude Re Funds withheld assets
(3,021
)
(2,862
)
(2,331
)
(2,973
)
Subtotal: AOCI plus cumulative unrealized
gains and losses related to Fortitude Re funds withheld assets
(21,100
)
(19,754
)
(16,651
)
(19,556
)
Total adjusted common shareholders' equity
(b)
$
55,968
$
55,721
$
54,357
$
55,081
Less: Intangible assets:
Goodwill
3,860
3,927
3,617
3,498
Value of business acquired
89
92
92
16
Value of distribution channel acquired
428
418
188
149
Other intangibles
286
286
244
249
Total intangible assets
4,663
4,723
4,141
3,912
Total adjusted tangible common
shareholders' equity (c)
$
51,305
$
50,998
$
50,216
$
51,169
Total common shares outstanding
(d)
747.2
734.1
717.5
704.6
As of period
end:
September 30, 2022
% Inc. (Dec.)
December 31, 2022
% Inc. (Dec.)
June 30, 2023
% Inc. (Dec.)
September 30,
2023
Book value per common share (a÷d)
$
52.76
6.3
%
$
55.15
1.7
%
$
58.49
(4.2
)%
$
56.06
Adjusted book value per common share
(b÷d)
74.90
4.4
75.90
3.0
75.76
3.2
78.17
Adjusted tangible book value per common
share (c÷d)
68.66
5.8
69.47
4.5
69.99
3.8
72.62
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 September
30,
2022
2023
Actual or annualized net income (loss)
attributable to AIG common shareholders (a)
$
10,964
$
8,080
Actual or annualized adjusted after-tax
income attributable to AIG common shareholders (b)
$
2,576
$
4,632
Average AIG Common Shareholders' equity
(c)
$
42,325
$
40,734
Less: Average DTA*
4,650
4,119
Less: Average AOCI
(21,384
)
(20,756
)
Add: Average cumulative unrealized gains
and losses related to Fortitude Re funds withheld assets
(2,622
)
(2,652
)
Subtotal: AOCI plus cumulative unrealized
gains and losses related to Fortitude Re funds withheld assets
(18,762
)
(18,104
)
Average adjusted common shareholders'
equity (d)
$
56,437
$
54,719
ROCE (a÷c)
25.9
%
19.8
%
Adjusted return on common equity (b÷d)
4.6
%
8.5
%
* 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
September 30,
2022
2023
Net Investment Income per Consolidated
Statements of Operations
$
2,668
$
3,556
Changes in fair value of securities used
to hedge guaranteed living benefits
(14
)
(13
)
Changes in the fair value of equity
securities
(16
)
(40
)
Net investment income on Fortitude Re
funds withheld assets
(155
)
(264
)
Net realized gains (losses) related to
economic hedges and other
52
43
Total Net Investment Income - APTI
Basis
$
2,535
$
3,282
Net Premiums Written - Comparable
Basis
Three Months Ended September
30, 2023
North
Global -
Global -
America -
International -
General
Commercial
Personal
Commercial
Commercial
General
Insurance
Insurance
Lines
Insurance
Lines
Lines
Change in net premiums written
Increase (decrease) as reported in U.S.
dollars
0.9
%
(3.5
)%
13.7
%
(7.7
)%
2.3
%
Foreign exchange effect
0.1
(0.5
)
1.9
—
(1.3
)
Lag elimination impact
1.9
2.4
0.3
—
6.4
Validus Re
1.9
2.2
—
3.7
—
Crop Risk Services
4.1
5.4
—
8.9
—
Increase (decrease) on comparable
basis
8.9
%
6.0
%
15.9
%
4.9
%
7.4
%
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
September 30,
2022
2023
Total General Insurance
Combined ratio
97.3
90.5
Catastrophe losses and reinstatement
premiums
(9.8
)
(6.9
)
Prior year development, net of reinsurance
and prior year premiums
0.9
2.7
Accident year combined ratio, as
adjusted
88.4
86.3
North America
Combined ratio
114.0
92.3
Catastrophe losses and reinstatement
premiums
(17.2
)
(11.3
)
Prior year development, net of reinsurance
and prior year premiums
(8.6
)
5.6
Accident year combined ratio, as
adjusted
88.2
86.6
North America - Commercial
Lines
Loss ratio
91.5
63.7
Catastrophe losses and reinstatement
premiums
(18.1
)
(11.7
)
Prior year development, net of reinsurance
and prior year premiums
(10.9
)
5.8
Accident year loss ratio, as adjusted
62.5
57.8
Combined ratio
113.6
88.9
Catastrophe losses and reinstatement
premiums
(18.1
)
(11.7
)
Prior year development, net of reinsurance
and prior year premiums
(10.9
)
5.8
Accident year combined ratio, as
adjusted
84.6
83.0
North America - Personal
Insurance
Combined ratio
116.4
113.0
Catastrophe losses and reinstatement
premiums
(11.4
)
(9.7
)
Prior year development, net of reinsurance
and prior year premiums
7.8
5.1
Accident year combined ratio, as
adjusted
112.8
108.4
International
Combined ratio
81.4
88.7
Catastrophe losses and reinstatement
premiums
(3.0
)
(2.8
)
Prior year development, net of reinsurance
and prior year premiums
10.2
0.1
Accident year combined ratio, as
adjusted
88.6
86.0
International - Commercial
Lines
Combined ratio
75.4
83.4
Catastrophe losses and reinstatement
premiums
(2.7
)
(3.3
)
Prior year development, net of reinsurance
and prior year premiums
7.7
(0.4
)
Accident year combined ratio, as
adjusted
80.4
79.7
International - Personal
Insurance
Loss ratio
50.0
55.8
Catastrophe losses and reinstatement
premiums
(3.3
)
(2.1
)
Prior year development, net of reinsurance
and prior year premiums
13.4
0.8
Accident year loss ratio, as adjusted
60.1
54.5
Combined ratio
89.8
97.2
Catastrophe losses and reinstatement
premiums
(3.3
)
(2.1
)
Prior year development, net of reinsurance
and prior year premiums
13.4
0.8
Accident year combined ratio, as
adjusted
99.9
95.9
Global - Commercial Insurance
Combined ratio
98.0
86.6
Catastrophe losses and reinstatement
premiums
(11.7
)
(8.0
)
Prior year development, net of reinsurance
and prior year premiums
(3.3
)
3.1
Accident year combined ratio, as
adjusted
83.0
81.7
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
Nine Months Ended
September 30,
September 30,
2022
2023
2022
2023
Adjusted pre-tax income
$
750
$
1,367
$
3,218
$
3,934
Interest expense on attributed financial
debt
132
130
429
389
Adjusted pre-tax income including
attributed interest expense
618
1,237
2,789
3,545
Income tax expense
129
289
629
815
Adjusted after-tax income
489
948
2,160
2,730
Dividends declared on preferred stock
3
3
9
9
Adjusted after-tax income attributable
to common shareholders
$
486
$
945
$
2,151
$
2,721
Ending adjusted segment common
equity
$
28,164
$
30,571
$
28,164
$
30,571
Average adjusted segment common
equity
$
29,134
$
30,362
$
27,838
$
30,149
Return on adjusted segment common
equity
6.7
%
12.4
%
10.3
%
12.0
%
Total segment shareholder’s equity
$
21,672
$
24,225
$
21,672
$
24,225
Less: Preferred equity
209
213
209
213
Total segment common equity
21,463
24,012
21,463
24,012
Less: Accumulated other comprehensive
income (AOCI)
(7,429
)
(7,276
)
(7,429
)
(7,276
)
Add: Cumulative unrealized gains and
losses related to Fortitude Re funds withheld assets
(728
)
(717
)
(728
)
(717
)
Subtotal: AOCI plus cumulative unrealized
gains and losses related to Fortitude Re funds withheld assets
(6,701
)
(6,559
)
(6,701
)
(6,559
)
Total adjusted segment common equity
$
28,164
$
30,571
$
28,164
$
30,571
Reconciliation of Life and Retirement
Return on Adjusted Segment Common Equity
Three Months Ended
Nine Months Ended
September 30,
September 30,
2022
2023
2022
2023
Adjusted pre-tax income
$
784
$
971
$
2,465
$
2,848
Interest expense on attributed financial
debt
93
117
235
345
Adjusted pre-tax income including
attributed interest expense
691
854
2,230
2,503
Income tax expense
141
168
449
496
Adjusted after-tax income
550
686
1,781
2,007
Dividends declared on preferred stock
2
2
6
6
Adjusted after-tax income attributable
to common shareholders
$
548
$
684
$
1,775
$
2,001
Ending adjusted segment common
equity
$
23,051
$
24,615
$
23,051
$
24,615
Average adjusted segment common
equity
$
22,531
$
23,943
$
22,469
$
23,502
Return on adjusted segment common
equity
9.7
%
11.4
%
10.5
%
11.4
%
Total segment shareholder’s equity
$
7,512
$
7,628
$
7,512
$
7,628
Less: Preferred equity
163
171
163
171
Total segment common equity
7,349
7,457
7,349
7,457
Less: Accumulated other comprehensive
income (AOCI)
(17,995
)
(19,414
)
(17,995
)
(19,414
)
Add: Cumulative unrealized gains and
losses related to Fortitude Re funds withheld assets
(2,293
)
(2,256
)
(2,293
)
(2,256
)
Subtotal: AOCI plus cumulative unrealized
gains and losses related to Fortitude Re funds withheld assets
(15,702
)
(17,158
)
(15,702
)
(17,158
)
Total adjusted segment common equity
$
23,051
$
24,615
$
23,051
$
24,615
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
September 30,
2022
2023
Individual
Retirement:
Premiums
$
56
$
29
Deposits
3,740
3,935
Other
(4
)
(3
)
Premiums and deposits
$
3,792
$
3,961
Group
Retirement:
Premiums
$
3
$
6
Deposits
2,036
1,825
Other
—
—
Premiums and deposits
$
2,039
$
1,831
Life
Insurance:
Premiums
$
535
$
575
Deposits
405
393
Other
226
232
Premiums and deposits
$
1,166
$
1,200
Institutional
Markets:
Premiums
$
804
$
200
Deposits
1,085
2,048
Other
8
8
Premiums and deposits
$
1,897
$
2,256
Total Life and
Retirement:
Premiums
$
1,398
$
810
Deposits
7,266
8,201
Other
230
237
Premiums and deposits
$
8,894
$
9,248
Total Debt and Preferred Stock
Leverage
Three Months Ended
Three Months Ended
June 30, 2023
September 30, 2023
Hybrid - debt securities / Total
capital
2.9
%
3.1
%
Financial debt and debt held for sale /
Total capital
28.7
29.8
Total debt / Total capital
31.6
32.9
Preferred stock / Total capital
0.7
0.8
Total debt and preferred stock / Total
capital (incl. AOCI)
32.3
33.7
AOCI Impact
(6.3
)
(7.8
)
Total debt and preferred stock / Total
capital (ex. AOCI)
26.0
%
25.9
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231101213581/en/
Quentin McMillan (Investors): quentin.mcmillan@aig.com Claire Talcott
(Media): claire.talcott@aig.com
www.aig.com
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