UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 8, 2014
AMERICAN INTERNATIONAL GROUP, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 1-8787 | 13-2592361 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
175 Water Street
New York, New York 10038
(Address of principal executive offices)
Registrant’s telephone number, including area code: (212) 770-7000
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Section 7 — Regulation FD
Item 7.01. Regulation FD Disclosure.
American International Group, Inc. (the “Company”) is furnishing the Investor Presentation, dated August 8, 2014, attached as Exhibit 99.1 to this Current Report on Form 8-K (the “Investor Presentation”), which the Company may use from time to time in presentations to investors and other stakeholders. The Investor Presentation will also be available on the Company’s website at www.aig.com.
Section 9 — Financial Statements and Exhibits
Item 9.01. Financial Statements and Exhibits.
| (d) | Exhibits. |
| 99.1 | Investor Presentation dated August 8, 2014 (furnished and not filed for purposes of Item 7.01). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| AMERICAN INTERNATIONAL GROUP, INC. (Registrant) | ||||||
| Date: August 8, 2014 |
By: | /s/ James J. Killerlane III | ||||
| Name: | James J. Killerlane III | |||||
| Title: | Associate General Counsel and Assistant Secretary | |||||
EXHIBIT INDEX
| Exhibit No. |
Description | |
| 99.1 | Investor Presentation dated August 8, 2014 (furnished and not filed for purposes of Item 7.01). | |
 American International Group, Inc.
Investor Presentation
Second Quarter 2014
August 8, 2014
Exhibit 99.1 |
 2
Cautionary Statement Regarding Forward-Looking Information
This document and the remarks made within this presentation may include, and officers and
representatives of American International Group, Inc. (AIG) may from time to time make,
projections, goals, assumptions and statements that may constitute “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These
projections, goals, assumptions and statements are not historical facts but instead represent
only AIG’s belief regarding future events, many of which, by their nature, are inherently
uncertain and outside AIG’s control. These projections, goals, assumptions and statements include statements preceded by,
followed by or including words such as “believe,” “anticipate,”
“expect,” “intend,” “plan,” “view,” “target” or “estimate”. It is possible that AIG’s
actual results and financial condition will differ, possibly materially, from the results and
financial condition indicated in these projections, goals, assumptions and statements. Factors
that could cause AIG’s actual results to differ, possibly materially, from those in the specific
projections, goals, assumptions and statements include: changes in market conditions; the occurrence
of catastrophic events, both natural and man-made; significant legal proceedings; the
timing and applicable requirements of any new regulatory framework to which AIG is subject as a
nonbank systemically important financial institution and as a global systemically important insurer; concentrations in AIG’s
investment portfolios; actions by credit rating agencies; judgments concerning casualty insurance
underwriting and insurance liabilities; judgments concerning the recognition of deferred tax
assets; 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, 2014, in Part I, Item 2. MD&A in AIG’s Quarterly Report on Form 10-Q for
the quarterly period ended March 31, 2014 and in Part I, Item 1A. Risk Factors and Part II,
Item 7. MD&A in AIG’s Annual Report on Form 10-K for the fiscal year ended December 31,
2013.
AIG is not under any obligation (and expressly disclaims any obligation) to update or alter any
projections, goals, assumptions or other statements, whether written or oral, that may be made
from time to time, whether as a result of new information, future events or otherwise. This
document and the remarks made orally may also contain certain non-GAAP financial measures. The reconciliation of such measures
to the most comparable GAAP measures in accordance with Regulation G is included in the Second Quarter
2014 Financial Supplement available in the Investor Information section of AIG's
corporate website, www.aig.com, as well as in this presentation.
IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you
that (i) any U.S. tax advice contained in this communication (including any attachments) is not
intended or written to be used, and cannot be used, for the purpose of avoiding penalties under
the Internal Revenue Code; (ii) any such tax advice is written in connection with the promotion or marketing of the
matters addressed; and (iii) if you are not the original addressee of this communication, you should
seek advice based on your particular circumstances from an independent advisor.
Note: Information included in the presentation is as of August 8, 2014, unless otherwise
indicated. |
 3
AIG Consolidated Financial Highlights
Full Year
Six
Months
($ in millions, except per share amounts)
2011
2012
2013
2014
Revenues
$65,105
$71,021
$68,678
$32,217
Net income attributable to AIG
20,622
3,438
9,085
4,682
Diluted earnings per common share
$11.01
$2.04
$6.13
$3.19
ROE, Ex. AOCI
(2)
26.6%
3.7%
10.1%
9.8%
After-tax operating income attributable to AIG
$2,086
$6,635
$6,762
$3,614
After-tax operating income attributable to AIG per common share
$1.16
$3.93
$4.56
$2.46
ROE –
After-tax operating income, excluding AOCI & DTA
(3)
2.8%
9.1%
9.4%
9.3%
ROE –
After-tax operating income, excluding AOCI
(4)
2.7%
7.2%
7.5%
7.6%
Period-end:
Book value per common share
$53.53
$66.38
$68.62
$75.71
Book
value
per
common
share
-
excluding
AOCI
$50.11
$57.87
$64.28
$67.65
1)
Includes
deferred
tax
asset
valuation
allowance
release
of
$18.3
billion
in
2011.
2)
Computed as Actual or Annualized Net income (loss) attributable to AIG divided by
Average AIG Shareholders' equity, excluding AOCI. 3)
Computed as Actual or Annualized After-tax operating income divided by Average
AIG Shareholders' equity, excluding AOCI and tax attribute DTA. 4)
Computed as Actual or Annualized After-tax operating income divided by Average
AIG Shareholders' equity, excluding AOCI. (1) |
 4
Core
Insurance
Businesses
Strategies
Key Accomplishments
AIG Property
Casualty
Grow high value lines and optimize business mix
Year-to-date NPW growth across all Commercial
lines, ex. Casualty. YTD Consumer NPW growth
of 3%, excluding FX.
Execute on technical
underwriting, improved claims
management, and analytics
Year-to-date accident year loss ratio, as
adjusted, improvement since the beg. of 2011;
Capitalize on global footprint; Focus on targeted growth in
key markets
13% of year-to-date NPW from growth
economies
(1)
AIG Life and
Retirement
Maintain balanced portfolio of products and leverage scale
advantage
Diversified sources of net flows and earnings
Optimize spread management through new business pricing
and active crediting rate management
Profitability enhanced through ongoing spread
management actions
Expand distribution network and increase penetration of
multiple products through each distribution partner
Mortgage
Guaranty
Underwrite based on multivariate model to achieve higher
risk adjusted returns
Earnings reflect new business; 67% of net
premiums earned in 2Q14 were from business
written after 2008
Actively manage legacy book
Delinquency ratio declined 50 bps from 1Q14 to
4.8% at 2Q14
AIG –
An Established Global Insurance Franchise
A platform for delivering sustainable profitable growth.
1)
Growth economies are those within Central Europe, Middle East, Africa, Latin
America and Asia Pacific, excluding Japan. –
Commercial improved 8.4 pts
–
Consumer improved 2.3 pts
Approximately $0.8 bn –
$1.4 bn in quarterly pre-
tax operating income since 4Q11 |
 5
AIG –
Building on Capital Strength
AIG
Property
Casualty
$48.8 bn
AIG Life and
Retirement
$41.0 bn
Other
$15.9 bn
(2)
Mortgage
Guaranty
$2.5 bn
AIG Shareholders’
Equity -
$108.2 bn at June 30, 2014
Active Capital Management
Approximately $1.9 billion of shares repurchased
YTD; remaining share repurchase authorization of
$1.5 billion
In July 2014 repurchased in tender offers, for an
aggregate purchase price of $2.5 billion, certain
high coupon hybrid and senior notes issued or
guaranteed by AIG Parent
In July 2014 issued $1 billion of 2.300% Notes due
2019 and $1.5 billion of 4.500% Notes due 2044
Deployed over $24 billion through share
repurchases, dividends and liability management
(non-DIB) between May 2011 and July 2014
Reduced DIB debt by approx. $5 billion YTD
through July 2014 using cash allocated to the DIB
Robust Statutory Capital
2013 RBC ratios
(1)
:
AIG PC U.S.: 416% (ACL)
AIG L&R: 568% (CAL)
2013 total adjusted statutory capital
(1)
:
AIG PC U.S.: $22.0 billion
AIG L&R: $22.6 billion
Growth in BVPS
June 30, 2014 BVPS (ex. AOCI) of
$67.65 –
up
10% from 6/30/2013
Strong Liquidity
& Cash Flows
YTD insurance company cash distributions and
loan repayments of $3.2 billion –
Expected $5 -
6
billion for 2014
YTD tax sharing payments from insurance
businesses of $781 million
$14.1 billion of total AIG Parent liquidity
Monetization of
Deferred Tax Assets
U.S. tax attribute DTA of $17.8 billion at 12/31/13
Net DTA of $21.2 billion at 12/31/13
Note: Data as of June 30, 2014 unless otherwise noted.
1)
2)
The inclusion of RBC measures and total adjusted statutory capital is intended
solely for the information of investors and is not intended for the purpose of ranking any
insurance company or for use in connection with any marketing, advertising or
promotional activities. ACL is defined as Authorized Control Level and CAL is defined as
Company Action Level. Total adjusted statutory capital and RBC ratio for AIG Life
and Retirement excludes holding company, AGC Life Insurance Company. Other
includes AIG Parent (including deferred tax assets and investment in AerCap), Global Capital Markets, Direct Investment book, AIG Life
Holdings, Inc. (a non-operating holding company), net of consolidation and
eliminations. |
 AIG
Property Casualty |
 7
42,000 employees who serve clients worldwide
51% of premiums written outside of U.S. and Canada in 2013
Average claims paid each business day of over $100 million in 2013
Asia Pacific
2013 NPW: $9.7 bn
28% of total NPW
AIG
Property
Casualty
–
A
Truly
Global
Franchise
AIG Property Casualty is a diversified global P&C market leader with 2013 NPW of
over $34 billion. Americas
2013 NPW: $17.9 bn
52% of total NPW
EMEA
(1)
2013 NPW: $6.8 bn
20% of total NPW
#1 commercial insurance
organization in
U.S./Canada, with
established and growing
position in Latin America
(2)
#1 U.S.-based non-life insurer in
Europe, with established and growing
positions in the Middle East and
Africa
(3)
#1 foreign property
casualty insurer in
Japan
(3)
and the largest
wholly-owned foreign
non-life insurer in
China
(2)
1)
EMEA region consists of Europe, Middle East and Africa.
2)
As measured by full year 2013 direct premiums written.
3)
As measured by full year 2012 total written premiums.
|
 8
AIG
Property
Casualty
–
Strong
Brands
and
Customer
Loyalty
AIG Property Casualty continues to be recognized for excellence.
Confirmit
2013 Achievement in Customer
Excellence
Reader’s Digest
2014 Trusted Brand Award for
Auto Insurance (2
Consecutive Year)
World Travel Fair
2014 Best Quality Service, Travel Insurance
Company (4 Consecutive Year)
Business Insurance
2014
Innovation
Award
-
AIG
Multinational Program Design Tool
Motordata Research Consortium
2014 Insurer of the Year (3
Consecutive
Year)
Nanfang Daily
2013 Most Trustworthy Financial Brand
(2 Consecutive Year)
Global Finance
2013 Best in Insurance Awards
British Insurance Award
2013 Underwriter of the Year
MENA Insurance Review
2014 Financial Insurer of the Year
UK CIR Magazine
2014 Commercial Insurer and
Specialist Provider of the Year
Awards
PropertyCasualty360
2013 Best Overall Commercial
Insurance Provider
Risk & Försäkring
2013 Insurance Company of the Year
Australian Business Award
2013 Service Excellence
UK Insurance Claims Award
2013 Innovation of the Year
Reaction Magazine
2013 Best Global Insurance
Company Overall
Celent Model Insurer Award
2011
-
2013
Australia and New Zealand Institute
of Insurance & Finance (ANZIIF)
UK Captive Review
2014 Innovation in Fronting Award
The Tempkin Group
2013 Customer Experience Excellence
Award
Insurance
Times
-
UK
2014 Insurer Claims Initiative of the
Year -
Commercial Lines `
98+%
As of
6/1/14
89+%
As of
6/1/14
40%
As of
1/1/14
nd
nd
rd
th
2013 Innovation of the Year – CyberEdge
AIG Clients as a Percentage of Each Category |
 9
AIG
Property
Casualty
–
Financial
Highlights
Full Year
Six
Months
($ in billions)
2011
2012
2013
2014
Net premiums written
$34.8
$34.4
$34.4
$17.5
Net investment income
4.3
4.8
5.3
2.5
Pre-tax operating income
$1.1
$1.8
$4.8
$2.5
Accident year loss ratio, as adjusted
68.7
65.2
63.8
62.9
Expense ratio
30.4
34.6
34.6
34.1
Accident year combined ratio, as adjusted
99.1
99.8
98.4
97.0
Period-end:
Cash & invested assets
(1)
$126.3
$130.8
$123.1
$123.9
Shareholders’
equity
47.3
48.9
46.3
48.8
Shareholders’
equity, excluding AOCI
$44.3
$43.7
$43.1
$44.6
1)
Includes intercompany invested assets that are eliminated in consolidation.
|
 10
AIG
Property
Casualty
–
Business
Overview
A broad product platform.
Commercial Insurance
Six
Months
2014
NPW
–
$10.8
billion
Consumer Insurance
Six
Months
2014
NPW
–
$6.7
billion
1)
The inclusion of total adjusted statutory capital is intended solely for the
information of investors and is not intended for the purpose of ranking any
insurance company or for use in connection with any marketing, advertising or
promotional activities. Casualty
37%
Property
25%
Specialty
17%
Financial
Lines
21%
Accident
& Health
49%
Personal
Lines
51%
Global
–
Unique
ability
to
serve
multinational
clients
Innovative
–
Often
first
to
market
in
new
products
and
services,
such
as
CyberEdge
Capital
Strength
–
U.S.
total
adjusted
statutory
capital
(1)
of
$22.0
billion
at
year-end
2013 |
 11
AIG
Property
Casualty
–
Strategic
Focus
Business
Mix
Underwriting
Excellence
Claims
Service
Operational
Effectiveness
Capital
Management
Balance growth with
profitability and risk
Growth in Risk
Adjusted Profitability
(RAP), accretive
products and
geographies
Achieve scale in key
markets over a
reasonable period of
time
Rationalize/price for
capital intensive
product lines
Globalize
standards for
underwriting and
pricing
Enhance
underwriters’
analytical
capabilities
Balance between
art and science
intertwined with
finer segmentation
Global Claims
Initiative leading to
claims cost savings
and enhanced client
service
Improved claims
practices in medical
and anti-fraud
driven by data
analytics
Build advanced
claims IT
architecture
Simplify and
standardize legacy
operating models
Reduce overhead
with cost
optimization and
shared services
Use RAP as a key
performance
indicator
Increase
underwriting
leverage
Redeployment of
capital from legacy
run-off lines over
time
Strategic levers are driving shareholder value creation
AIG Property Casualty |
 12
AIG
Property
Casualty
–
Product
Diversification
Commercial Insurance
•
General Liability
•
Commercial Auto
•
Workers’
Compensation
•
Excess Casualty
•
Defense Base Act
•
Crisis Management
•
Global Property including high limits
•
Industrial, Energy and Commercial Property
•
Multinational Property
•
Inland Marine
•
D&O, E&O
•
Cyber Security
•
Fidelity
•
Employment Practices
•
Kidnap and Ransom
•
Aerospace
•
Environmental
•
Political Risk
•
Trade Credit
•
Marine
•
Surety
Consumer Insurance
•
Personal Accident
•
Supplemental Medical
•
Travel
•
Life
•
Automobile
•
Homeowners
•
Extended Warranty
•
Specialty (e.g. identity theft, credit card
protection)
•
Private Client Group |
 13
AIG
Property
Casualty
–
Reserves
Business mix shift to shorter-tail lines,
expected to reduce net reserves.
Over 50% of reserves are now from
business that has been substantially re-
underwritten (i.e. post 2011).
Reduction in outstanding loss reserves
for long tail reserve segments expected
to reduce reserve variability.
Business mix shifts away from long tail casualty lines and accelerated commutation
of legacy portfolios (especially 2004 and prior) are expected to also reduce
reserve variability. Net Reserves by Accident Year
$65.6 billion at June 30, 2014
2004 & Prior
14%
2005 -
2007
9%
2008 -
2010
21%
2011 -
2014
56%
Note: Allocation by accident year for illustration purposes only and subject to change. Net reserves
presented above are shown before the effect of a $3.6 billion loss reserve discount and
do not include reserves for mortgage guaranty business. |
 14
AIG
Property
Casualty
–
Accident
Year
Loss
Ratio,
As
Adjusted,
Progression
Note: Excludes catastrophe losses and related reinstatement premiums, prior
year development, net of premium adjustments, and the impact of reserve
discounting.
69.3
66.3
64.8
66.5
63.3
63.2
61.9
63.7
66.4
63.2
62.7
76.9
70.3
67.3
70.8
66.4
65.4
62.2
66.2
67.3
65.1
66.4
57.7
58.4
59.1
57.7
58.0
58.8
60.2
58.5
60.7
59.3
55.7
50
55
60
65
70
75
80
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
Total Property Casualty
Commercial Insurance
Consumer Insurance |
 15
AIG
Property
Casualty
–
Investment
Composition
&
Ratings
Note: As of June 30, 2014.
1)
Includes intercompany invested assets that are eliminated in consolidation.
Cash
&
Invested
Assets
-
$123.9
billion
(1)
Bond
Portfolio
-
$99.1
billion
-
by
Agency
Credit
Rating
States,
municipalities,
and political
subdivisions
18%
U.S. Governments
2%
Non
-U.S.
governments
14%
Corporate debt
29%
RMBS
10%
CMBS
2%
CDO/ABS
5%
Equities
3%
Alternatives &
Other
8%
Loans
5%
Cash and short-
term investments
4%
AAA
20%
AA
27%
A
27%
BBB
15%
BB
2%
B
2%
<B
7% |
 AIG Life and Retirement |
 17
AIG
Life
and
Retirement
–
Operating
from
a
Position
of
Strength
Market Leader
Long standing leading market positions
Scale advantage in key product lines
Product Diversity
& Capacity for
Growth
Comprehensive portfolio of life insurance, A&H, annuity, group retirement,
group benefits, institutional products and mutual funds
Breadth of products allows for growth as demographics and operating
environments shift
Multi-channel
Distribution
Distribution
organization
leverages
broad product portfolio across all channels
Over 300,000 financial professionals
Strong Capital
Position
Cash distributions and loan repayments to AIG Parent of $2.5 billion in the
first six months of 2014 and $4.4 billion in 2013
Year-end 2013 RBC ratio
(1)
at 568% (CAL) supports sales growth
Total adjusted statutory capital
(1)
of $22.6 billion at year-end 2013
1)
The inclusion of RBC measures and total adjusted statutory capital is intended solely for the
information of investors and is not intended for the purpose of ranking any insurance company
or for use in connection with any marketing, advertising or promotional activities. CAL is
defined as Company Action Level. Total adjusted statutory capital and RBC ratio excludes holding
company, AGC Life Insurance Company. |
 18
AIG
Life
and
Retirement
–
Financial
Highlights
Full Year
Six
Months
($ in billions)
2011
2012
2013
2014
Premiums and deposits
$24.4
$21.0
$28.8
$14.5
Net investment income
9.9
10.7
10.9
5.4
Pre-tax operating income
3.3
4.2
5.1
2.6
Net flows
$2.9
$(1.3)
$4.6
$2.0
Period-end:
Cash & invested assets
(1)
$194.2
$205.3
$196.9
$203.5
Assets under management
256.9
290.4
318.0
332.8
Shareholders’
equity
34.2
40.0
38.7
41.0
Shareholders’
equity, excluding AOCI
$29.5
$31.6
$34.9
$34.5
1)
Includes intercompany invested assets that are eliminated in consolidation.
|
 19
AIG Life and Retirement –
Net Investment Spread Management
Base
Portfolio
Yields
(1)
Cost of Funds
(2)
Base
Net
Investment
Spreads
(1)
1)
Includes return on base portfolio. Quarterly results are annualized.
2)
Excludes the amortization of sales inducement assets. At June 30, 2014, a total of
71% of fixed annuity and universal life account values are at contractual
minimum guaranteed crediting rates vs. 73% at December 31, 2013. 1.97%
1.98%
2.19%
2.36%
2.24%
2.33%
2.40%
2.28%
1.75%
1.69%
1.75%
2.08%
2.00%
2.05%
2.09%
1.97%
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
Total Base Yield
Fixed Annuities
Group Retirement
3.15%
3.14%
2.91%
2.89%
2.93%
2.91%
2.85%
2.83%
3.26%
3.26%
3.10%
3.06%
3.08%
3.05%
3.02%
3.03%
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
5.38%
5.33%
5.30%
5.35%
5.26%
5.29%
5.32%
5.17%
5.12%
5.12%
5.10%
5.25%
5.17%
5.24%
5.25%
5.11%
5.01%
4.95%
4.85%
5.14%
5.08%
5.10%
5.11%
5.00%
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14 |
 20
AIG
Life
and
Retirement
–
Leading
Market
Positions
* Based on LIMRA rankings for respective periods.
Rank*
Metric
1Q14
1Q13
2
5
Total Annuity Sales
1
1
Fixed-Rate Deferred Annuity Sales
4
6
Variable Annuity Sales
5
4
Structured Settlement Annuity Sales
7
6
Term Life Sales
11
12
Universal Life Sales
2
2
Total K-12 Assets
3
3
Total 403(b) Assets
Market Positions
Excellence in Service, Marketing and Technology
Market Tools
2013 Achievement in
Customer Excellence
(ACE award for 7
th
Consecutive Year)
DALBAR
2013 Annuity Service
Excellence Award
(7
th
Consecutive Year)
2013 #1 Ranking for
Annuity Client Quarterly
Statements
(13
th
Consecutive Year)
PlanSponsor Magazine
Earned 17 Best-in-Class
Awards for Participant and
Plan Sponsor Services in
2013
International MarCom
Awards
2012 and 2013 Platinum
and Gold Awards
(42 in total)
Insurance & Financial
Communications
Association
2012 and 2013 Best in
Show and Awards of
Excellence (15 in total)
InformationWeek 500
2012 and 2013 Top
Technology Innovators
Best’s Review
2012 and 2013 Innovators
Showcase |
 21
AIG
Life
and
Retirement
–
Diversified
Business
Mix
Pre-tax Operating Income
Six Months 2014 -
$2.6 billion
Pre-tax Operating Income
First Six Months 2013 -
$2.5 billion
Retirement
Income Solutions
12%
Retail: 58%
Institutional: 42%
Group Retirement
25%
Retirement
Income Solutions
15%
Fixed Annuities
27%
Life Insurance
and A&H
15%
Retail: 59%
Institutional: 41%
Group Retirement
24%
Fixed Annuities
30%
Life Insurance
and A&H
16%
Retail: 73%
Institutional: 27%
Premiums and Deposits
Six Months 2014 -
$14.5 billion
Life Insurance
and A&H
12%
Fixed Annuities
14%
Retirement
Income Solutions
33%
Retail Mutual Funds &
Brokerage Services
14%
Group Retirement
23%
Group Benefits
2%
Retail: 66%
Institutional: 34%
Premiums and Deposits
First Six Months 2013 -
$12.3 billion
Life Insurance
and A&H
14%
Fixed Annuities
6%
Retirement
Income Solutions
30%
Group Retirement
28%
Group Benefits
3%
Retail Mutual Funds &
Brokerage Services
16%
2%
3%
16%
15%
Institutional
Markets
Institutional
Markets
Institutional
Markets
Institutional
Markets |
 22
AIG Life and Retirement –
Assets Under Management
Year-over-year
growth
in
AUM
reflects
strong
retail
investment
product
net
flows,
higher
separate
account balances and increased institutional assets.
June
30,
2013
-
$293.7
billion
June
30,
2014
-
$332.8
billion
Life
Insurance
and A&H
12%
Fixed
Annuities
24%
Retirement
Income
Solutions
12%
Retail
Mutual
Funds
3%
Group
Retirement
30%
Institutional
Markets
18%
Group
Benefits
1%
Life
Insurance
and A&H
11%
Fixed
Annuities
21%
Retirement
Income
Solutions
14%
Retail
Mutual
Funds
4%
Group
Retirement
29%
Institutional
Markets
20%
Group
Benefits
1% |
 23
AIG
Life
and
Retirement
–
Broad
Multichannel
Distribution
Network
2013 Sales By Distribution Channel
Affiliated: 33%
Non-affiliated: 67%
Affiliated: 43%
Non-affiliated: 57%
2012 Sales By Distribution Channel
VALIC Financial Advisors
AIG Financial Network
Advisor Group
AIG Direct
Affiliated
Broker-Dealers
Banks
Independent Marketing Organizations
Benefit Brokers
Non-affiliated
B-Ds
34%
Banks
19%
IMOs
10%
Advisor Group
3%
AIG Financial Network
3%
AIG Direct & Other
1%
VALIC FAs
26%
Benefit Brokers
3%
B-Ds
29%
Banks
13%
IMOs
11%
Advisor Group
2%
AIG Financial Network
5%
AIG Direct & Other
3%
VALIC FAs
33%
Benefit
Brokers
4% |
    24
AIG
Life
and
Retirement
–
Individual
Variable
Annuities
Unique Opportunity for AIG
*
Source: LIMRA VA Sales report. VA industry sales data reported herein
excludes Employer Plan sales and internal exchange sales
Industry Retail Variable Annuity Sales*
Total: $27.6 bn
De-Risked Benefits
(2)
Early Benefits
Revised Benefits
(3)
1)
Excludes $4.1 billion of AUM at VALIC with GMWB guarantees.
2)
De-Risked Benefits: Features on contracts issued since 2010 (VIX
indexing/volatility control fund in 2012). 3)
Pre-2010 Partially De-Risked Benefits: Due to actual policyholder election
of extension offers to-date. Account Value by GMWB Guarantee
at 6/30/14
(1)
A strategic growth opportunity for AIG.
Company
% change
from
($ in millions)
Rank
Sales
Q1 2013
Rank
Sales
Rank
Sales
Jackson National
1
6,382
40%
1
5,470
1
4,562
Lincoln Financial Group
2
2,997
1%
2
3,469
4
2,961
Prudential Financial
3
2,254
(45%)
3
2,359
2
4,110
AIG
4
2,003
46%
4
2,289
7
1,373
AEGON/Transamerica
5
1,975
26%
5
2,242
6
1,568
AXA Equitable
6
1,752
2%
6
1,928
5
1,720
Nationwide
7
1,423
28%
7
1,557
10
1,114
MetLife
8
1,296
(59%)
8
1,425
3
3,176
Ameriprise
9
1,167
(1%)
9
1,242
9
1,182
Pacific Life
10
1,034
(17%)
10
1,043
8
1,241
Other
6,408
15%
6,791
5,550
Total
28,689
0%
29,816
28,557
Q1 2014
Q4 2013
Q1 2013
75%
19%
6%
Individual variable annuities represented 16% of AIG Life and Retirement’s
total reserves at June 30, 2014. AIG has continually improved its industry
ranking since 2009; remaining growth opportunity in VA due to market share of only 7.0%.
Disciplined pricing and de-risked benefits: VIX indexing of rider fees,
volatility control funds, mandatory 20% asset allocation to fixed accounts. |
 25
AIG Life and Retirement –
Index Annuities
Evolving Market
Source: LIMRA Indexed Deferred Annuity Sales Report
AIG Strategic Advantages To Developing Index Annuities
Quarterly Index Annuity Industry Sales
($ in billions)
Provides
an
opportunity
to
diversify
Retirement
Income
Solutions
offerings.
Broader
distribution
through
independent
marketing
organizations
(the
product
does
not
require
a
securities
license)
Ability
to
leverage
AIG
L&R’s
strengths
of
low-cost
administration
and
multi-channel
distribution,
combined
with
leading-edge
product
innovation
and
dynamic
hedging
capability
Increased
sales
through
advisors
looking
for
less
complex
guaranteed
lifetime
income
products
Potential
for
higher
fixed
sales
in
lower
interest
rate
periods
Ability
to
further
diversify
our
base
of
fee
and
spread
income
Enhanced
sales
of
“lower-risk”
lifetime
income
solutions
that
require
simpler
hedging
Approximately 2/3 of index annuity sales include a Guaranteed
Living Benefit (GLB)
2013 industry sales of $39 billion reflect a CAGR of 11% over
10 years
Regulatory changes, improved industry practices, and product
design changes have changed the landscape
In past years, many leading carriers avoided the index
annuity market due to issues centered around suitability,
sales practices, and proposed treatment as “securities”
|
 26
AIG Life and Retirement –
Investment Composition & Ratings
Note: As of June 30, 2014.
1)
Includes intercompany invested assets that are eliminated in consolidation.
2)
NAIC ratings exclude $1.0 billion of fixed maturity securities for which no NAIC
Designation is available because they are not held in legal entities within AIG
Life and Retirement that require a statutory filing. A significant portion of
instruments with below investment grade credit ratings from rating agencies are
comprised of non-agency RMBS, most of which are rated higher when using the
NAIC’s cash flow based evaluation approach comparing book value to
expected recoveries.
Cash
&
Invested
Assets
-
$203.5
billion
(1)
By NAIC Ratings
(2)
Bond Portfolio –
$165.2 billion
By Agency Credit Rating
States,
municipalities, and
political
subdivisions
2%
U.S. Governments
1%
Non-U.S.
governments
2%
Corporate debt
54%
RMBS
12%
CMBS
5%
CDO/ABS
5%
Alternatives &
Other
6%
Loans
10%
Cash and short-
term investments
3%
AAA
12%
AA
10%
A
23%
BBB
41%
BB
3%
B
2%
<B
8%
Not Rated
1%
NAIC 1
54%
NAIC 2
40%
NAIC 3
3%
NAIC 4
2%
NAIC 5 & 6
1% |
 Mortgage Guaranty
(United Guaranty Corporation) |
 28
United Guaranty –
Financial Highlights
Full Year
Six
Months
($ in millions)
2011
2012
2013
2014
Net premiums written
$801
$858
$1,048
$480
Net investment income
132
146
132
68
Pre-tax operating income (loss)
($97)
$9
$205
286
Combined ratio
128.9
119.2
90.9
50.4
Period-end:
Cash & invested assets
(1)
$4,081
$4,222
$3,934
$4,098
Shareholders’
equity
2,425
2,311
2,282
2,529
Shareholders’
equity, excluding AOCI
$2,332
$2,193
$2,268
$2,460
1)
Includes intercompany invested assets that are eliminated in consolidation.
|
 29
United Guaranty –
A Market Leader
Risk based pricing driving profitable new business.
UGC’s risk-based pricing plan, Performance Premium, utilizes over a dozen
variables to evaluate loan risk and price the mortgage insurance
policy. United Guaranty continues to insure a high volume of mortgages with
excellent credit quality despite the decline in mortgage originations.
Vintage
Year
(2)
Average
FICO Score
LTV Ratio
2010
760
90
2011
757
91
2012
758
91
2013
753
91
1Q14
751
92
2Q14
750
92
New
Insurance
Written
(1)
($ in billions)
1)
Represents principal amount of loans insured.
2)
Domestic First-lien only.
$18.8
$37.5
$49.9
$18.9
2011
2012
2013
Six Months
2014
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0 |
 30
United Guaranty –
Shrinking Legacy In-Force
New business generated after 2008 represents 73% of primary domestic RIF at June
30, 2014, the highest among peers active
before
2009
(1)
.
Primary delinquency rate has returned to pre-crisis level due to a combination
of strong growth of new business and proactive management of delinquent book
through UGC’s Letter Campaign. Note: Data presented above is for
Domestic First Lien operations. 1)
Peers
include
Mortgage
Guaranty
Insurance
Company
(MGIC),
Radian
Guaranty,
Incorporated
and
Genworth
Mortgage
Insurance
Company.
Primary Delinquency Rate
Primary
Risk-in-force
(RIF)
–
$38.9
billion
As of June 30, 2014 (by vintage year)
2005 and
prior
8%
2006
5%
2007
9%
2008
5%
2009
2%
2010
3%
2011
7%
2012
20%
2013
30%
2014
11%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
3/31/08
6/30/09
9/30/10
12/31/11
3/31/13
6/30/14 |
 31
United Guaranty –
Financial Strength
Among
peers
active
before
2009
(2)
,
UGC
has
the
lowest
default
rate
and
highest
portion
of
RIF
from
loans
originated
after
2008.
UGC’s primary statutory insurance subsidiary, United Guaranty Residential
Insurance Company (UGRIC), maintains an S&P rating
of
A-
and
Moody's
rating
of
Baa1
with
stable
outlooks
(3)
.
UGC operating earnings reflect increasing contribution from new business.
Capitalization and Risk
Source: Statutory filing data.
1)
Risk-to-capital estimates for all companies, including United Guaranty,
are preliminary estimates for March 31, 2014. 2)
Essent was not active before 2009.
3)
As of the date of this presentation.
At March 31, 2014
At March 31, 2014
Default
Rate (%)
Post 2008
RIF (%)
Risk-to-
Capital
(1)
Peers active before 2009:
United Guaranty
5.3
71
18.4
Genworth
7.4
47
18.7
MGIC
9.7
44
15.3
Radian
6.3
62
19.2
Peers active after 2009:
Essent
0.1
100
16.1
Asset Composition
Cash & Bonds to Total Admitted Assets
89%
43%
46%
79%
95%
0%
20%
40%
60%
80%
100%
UGRIC
Genworth
Radian
MGIC
Essent |
 Capital Strength |
 33
Capital Position and Ratings
Book Value Per Share
Capital Structure
$68.62
1)
Includes AIG Notes, Bonds, Loans and Mortgages Payable, and AIG Life Holdings,
Inc. (AIGLH) Notes and Bonds Payable and junior subordinated debt.
2)
As of the date of this presentation, all ratings have stable outlooks.
3)
Ratings only reflect those of the core insurance companies.
(1)
($ in billions)
$122.3
Leverage Ratios:
Dec. 31,
2013
June 30,
2014
Financial Debt + Hybrids /
Capitalization
17.3%
16.4%
Financial Debt / Capitalization
12.8%
12.1%
$75.71
$129.8
$66.38
S&P
Moody’s
Fitch
AM Best
AIG –
Senior
Debt
A-
Baa1
BBB+
NR
AIG PC
(3)
–
FSR
A+
A1
A
A
AIG L&R
(3)
–
FSR
A+
A2
A+
A
Credit
Ratings
(2)
$100.5
$108.2
$5.5
$5.6
$15.7
$15.7
$0.6
$0.4
Dec. 31, 2013
June 30, 2014
Non-redeemable
noncontrolling
interests
Financial Debt
Hybrids
Common Equity
$57.87
$64.28
$67.65
$8.51
$4.34
$8.06
$0.00
$20.00
$40.00
$60.00
$80.00
Dec. 31, 2012
Dec. 31, 2013
June 30, 2014
BVPS, ex AOCI
AOCI |
 34
Financial Flexibility –
A Source of Strength
AIG Parent Cash, Short-Term Investments &
Unencumbered Fixed Maturity Securities
Insurance Company Cash Distributions*
($ in millions)
($ in billions)
Cash
distributions
in
2014
are
expected
to
be
$5
–
$6
billion.
Tax sharing payments from insurance businesses amounted to $781 million
year-to-date; subject to reimbursement in future periods. AIG Parent
cash, short-term investments and unencumbered fixed maturity securities of $14.1 billion includes $4.4 billion allocated
toward
future
maturities
of
liabilities
and
contingent
liquidity
stress
needs
of
the
Direct
Investment
book
and
Global
Capital
Markets
as
of June 30, 2014.
$13.1
$14.1
$3,240
$8,581
$4,349
* AIG Property Casualty cash distributions in 2014, 2013 and 2012 exclude $178
million, $222 million and $1.0 billion, respectively of non-cash dividends.
AIG Life and Retirement cash distributions in 2014 exclude $642 million of
non-cash dividends. $1,496
$4,148
$701
$2,853
$4,433
$2,539
90
FY
FY
Six Months
2014
AIG
Property
Casualty
AIG Life and Retirement
UGC
$10.2
$10.6
$3.0
$3.5
Dec. 31,
2013
June 30,
2014
Unencumbered
Fixed Maturity
Securities
Cash & Short-term
Investments
2013
2012 |
 Other Sources of Value |
 36
Direct Investment Book and Global Capital Markets
Direct Investment Book
(1)
Global Capital Markets
(1)
Assets
$19.8
$6.7
Liabilities
15.2
3.2
Net Asset Value
$4.6
$3.5
Legacy
Matched
Assets & Liabilities
Market Derivatives
(2)
Legacy
AIGFP Stable
Value Go Forward
CDS Portfolio
Wraps
Hedging Platform
Third-Party
Derivatives
Notional ($
billion)
--
$63
Multi-
Sector
Corporate
Arbitrage
$8
$36
$3
$12
Weighted
Average Life
(Years)
--
7.7
4.9
1.7
4.3
8.1
Strategy
Assets managed with the goal
of ensuring that liabilities can
be met as they come due,
even under stress scenarios
Primarily hedges of
DIB assets and
liabilities
Bulk of risk related
to interest rates,
foreign exchange
and equities has
been hedged
Remaining credit
risk viewed as
attractive risk-
reward
In July 2014,
terminated
Corporate Arbitrage
CDSs with a
notional amount of
$8.8 billion
Since 3Q 2012,
notional value of
$10 billion has
been novated to
AIG Life and
Retirement
In July 2014, $3
billion of additional
notional was
novated to L&R
reducing the total
notional to $5 billion
Note: As of June 30, 2014.
($ in billions)
AIG Hedging &
“Clearing house”
for
operating company
hedging and risk
management needs
The DIB consists of a portfolio of assets and liabilities held directly by AIG
Parent in the MIP and certain non-derivative assets and liabilities of
AIGFP. The DIB and GCM are included in Other Operations in AIG’s Consolidated
Balance Sheet. The overall hedging activity for the assets and liabilities
of the DIB is executed by GCM. The value of hedges related to the non-derivative assets
and liabilities of AIGFP in the DIB is included within the assets, liabilities and
operating results of GCM and is not included within the DIB assets,
liabilities or operating results.
1)
2) |
 37
Direct Investment Book Long-Term Debt
1)
On
July
31,
2014,
AIG
redeemed
approximately
$2.0
billion
of
additional
DIB
notes
due
in
2016
and
2017,
all
using
cash
allocated
to
the
DIB.
$5.7
$3.6
$3.5
$3.0
$0.4
$2.2
$2.2
$2.2
$2.2
$2.1
$0.2
$4.7
$4.5
$3.9
$3.7
$3.5
$2.8
$1.1
$1.0
$0.8
$0.6
$0.5
$0.3
$13.6
$11.3
$10.4
$9.5
$6.5
$3.3
$0
$5
$10
$15
as of 6/30/2014
2014
2015
2016
2017
2018
MIP notes payable
Series AIGFP matched notes and bonds payable
GIAs, at fair value
Notes and bonds payable, at fair value
($ in billions)
(1) |
 38
Deferred Tax Asset Overview
AIG continues to have substantial deferred tax assets that are available to offset
future tax obligations. 1)
Foreign tax credits triggered in 2013 have increased the amount of
carryover. 2)
Change during the period is primarily attributable to available for sale
investment securities. As of 12/31/12
As of 12/31/13
($ in billions)
Type
Gross
Attributes
Deferred
Tax Asset
Gross
Attributes
Deferred
Tax Asset
Utilization/Expiration
Net Operating Loss
Carryforwards
Non-Life
& Life
$39.5
$13.8
$35.8
$12.5
Utilize against AIG PC, ILFC, UGC,
AIG Parent and 35% of AIG L&R
income
2028–2031 Expiration
Capital Loss
Carryforwards
Valuation Allowance
Life
$16.6
$5.8
($5.1)
$1.4
$0.5
($0.5)
Utilize against capital gains from AIG
L&R
2014 Expiration
Foreign
Tax Credits
General
$4.7
$5.3
(1)
Utilize against 65% of AIG L&R
income
2016–2023 Expiration
Subtotal –
U.S. Tax
Attributes
19.2
17.8
Other
Deferred Tax
Assets/(Liabilities)
(2.5)
3.4
(2)
Net Deferred Tax
Assets
$16.7
$21.2 |
 Appendix |
 40
Glossary of Non-GAAP Financial Measures
AIG
AIG
–
After-tax
operating
income
(loss)
attributable
to
AIG
is
derived
by
excluding
the
following
items
from
net
income
(loss)
attributable
to
AIG:
income
(loss)
from discontinued operations, income (loss) from divested businesses, including
gain on the sale of ILFC and certain post-acquisition costs incurred by AerCap in
connection
with
its
acquisition
of
ILFC
and
related
tax
effects,
legacy
tax
adjustments
primarily
related
to
certain
changes
in
uncertain
tax
positions
and
other
tax
adjustments,
legal
reserves
(settlements)
related
to
“legacy
crisis
matters,”
deferred
income
tax
valuation
allowance
(releases)
charges,
changes
in
fair
value
of
AIG
Life and Retirement fixed maturity securities designated to hedge living benefit
liabilities (net of interest expense), changes in benefit reserves and DAC, VOBA, and
sales
inducement
assets
(SIA)
related
to
net
realized
capital
gains
(losses),
AIG
Property
Casualty
other
(income)
expense
-
net,
(gain)
loss
on
extinguishment
of
debt,
net
realized
capital
(gains)
losses,
and
non-qualifying
derivative
hedging
activities,
excluding
net
realized
capital
(gains)
losses.
“Legacy
crisis
matters”
include
favorable
and
unfavorable
settlements
related
to
events
leading
up
to
and
resulting
from
our
September
2008
liquidity
crisis
and
legal
fees
incurred
by
AIG
as
the
plaintiff in connection with such legal matters.
Book
Value
Per
Common
Share
Excluding
Accumulated
Other
Comprehensive
Income
(Loss)
(AOCI)
is
derived
by
dividing
Total
AIG
shareholders’
equity,
excluding AOCI, by Total common shares outstanding.
AIG Property Casualty
Pre-tax operating income (loss)
includes both underwriting income (loss) and net investment income, but excludes
net realized capital (gains) losses, other (income) expense -
net, and legal settlements related to legacy crisis matters. Underwriting income
(loss) is derived by reducing net premiums earned by claims and claims
adjustment expenses incurred, acquisition expenses and general operating
expenses. Accident year loss and combined ratios, as adjusted:
both the accident year loss and combined ratios, as adjusted, exclude catastrophe
losses and related reinstatement premiums, prior year development, net of
premium adjustments, and the impact of reserve discounting. Catastrophe losses are generally weather or
seismic events having a net impact on AIG Property Casualty in excess of $10
million each. AIG Life and Retirement
Pre-tax operating income (loss)
is derived by excluding the following items from pre-tax income (loss): legal
settlements related to legacy crisis matters, changes in fair values of
fixed maturity securities designated to hedge living benefit liabilities (net of interest expense), net realized capital (gains) losses, and changes in benefit
reserves and DAC, VOBA, and SIA related to net realized capital gains
(losses). Premiums and deposits
includes direct and assumed amounts received on traditional life insurance
policies, group benefit policies and deposits on life-contingent payout
annuities, as well as deposits received on universal life, investment-type annuity contracts and mutual funds.
Mortgage Guaranty (United Guaranty Corporation)
Pre-tax operating income (loss):
is derived by excluding net realized capital (gains) losses from pre-tax
income (loss). Results from discontinued operations are excluded from all of
these measures. |
 41
Non-GAAP Reconciliation –
Pre-tax Operating Income
Six Months
2011
2012
2013
2014
Income from continuing operations, before tax
2,100
2,023
5,133
2,799
Adjustments to arrive at pre-tax operating income:
Net realized capital (gains) losses
(957)
(211)
(380)
(269)
Legal settlements
-
(17)
(13)
(8)
Other (income) expense -
net
5
(2)
72
(8)
Pre-tax operating income
$
$
$
$
Six Months
2011
2012
2013
2014
Income from continuing operations, before tax
$
$
$
$
Adjustments to arrive at pre-tax operating income:
Legal settlements
-
(154)
(1,020)
(42)
Changes in fair value of securities designated to hedge
living benefit liabilities, net of interest expense
-
(37)
161
(130)
Change in benefit reserves and DAC, VOBA and SIA
related to net realized capital (gains) losses
327
1,201
1,486
11
Net realized capital (gains) losses
(6)
(630)
(2,037)
277
Pre-tax operating income
$
$
$
$
Six Months
2011
2012
2013
2014
Income from continuing operations, before tax
$
$
$
$
Adjustments to arrive at pre-tax operating income:
Net realized capital (gains) losses
(20)
(6)
(8)
(2)
Pre-tax operating income (loss)
$
$
$
$
United Guaranty
($ in millions)
AIG Property Casualty
($ in millions)
AIG Life and Retirement
($ in millions)
Full Year
Full Year
Full Year
$
$
$
$
1,148
1,793
2,514
4,812
2,956
3,780
4,160
5,095
6,505
2,481
2,597
(77)
(97)
15
9
213
205
288
286
3,277 |
 42
Non-GAAP Reconciliation –
After-tax Operating Income and
Foreign Exchange Effect on Net Premiums Written
1)
Includes the gain on sale of ILFC, which was sold on May 14, 2014.
(1)
June 30,
2011
2012
2013
2014
Net income attributable to AIG
$
20,622
$
3,438
$
9,085
$
4,682 Adjustments to arrive at After-tax operating income
attributable to AIG: (Income) loss from discontinued operations
(2,448)
(1)
(84)
17
Net
(income)
loss
from
divested
businesses
663
4,039
117
(1,411)
Uncertain tax positions and other tax adjustments
-
543
791
11
Legal reserves (settlements) related to legacy crisis matters
13
353
(460)
319
Deferred income tax valuation allowance releases
(18,307)
(1,911)
(3,237)
(140)
Amortization of FRBNY prepaid commitment fee asset
2,358
-
-
-
Changes in fair value of AIG Life and Retirement fixed maturity
securities
designated to hedge living benefit liabilities, net of interest expense
-
(24)
105
(84)
Changes in benefit reserves and DAC, VOBA and SIA related to net
realized capital gains
202
781
1,132
16
AIG Property Casualty other (income) expense –
net
-
-
47
-
Loss on extinguishment of debt
(480)
21
423
177
Net realized capital (gains) losses
(453)
(586)
(1,157)
27
Non-qualifying derivative hedging gains, excluding net realized capital gains
(84)
(18)
-
-
After-tax operating income attributable to AIG
$
2,086
$
6,635
$
6,762
$
3,614 Full Year
2013
Change in net premiums written
Increase in original currency
3.8%
Foreign exchange effect
(3.9%)
Decrease as reported in US $
(0.1%)
After-tax Operating Income Attributable to AIG
($ in millions)
Foreign exchange effect on net premiums written:
Full Year |
 43
Non-GAAP Reconciliation –
BVPS ex. AOCI and Premiums and
Deposits
June 30,
2011
2012
2013
2014
Total AIG shareholders’ equity
101,538
$
98,002
$
100,470
$
108,161
$
Less: AOCI
6,481
12,574
6,360
11,511
Total AIG shareholders’ equity, excluding AOCI
95,057
$
85,428
$
94,110
$
96,650
$
Total common shares outstanding
1,896,821,482
1,476,321,935
1,464,063,323
1,428,575,390
Book value per common share
53.53
$
66.38
$
68.62
$
75.71
$
Book value per common share, excluding AOCI
50.11
$
57.87
$
64.28
$
67.65
$
Six Months
2011
2012
2013
2014
Premiums and deposits
24,392
$
20,994
$
28,809
$
14,489
$
Deposits
(21,302)
(17,898)
(25,542)
(12,999)
Other
(541)
(632)
(671)
(193)
Premiums
2,549
$
2,464
$
2,596
$
1,297
$
Book Value Per Common Share - Ex. AOCI
($ in millions, except per share data)
Full Year
December 31,
AIG Life and Retirement Premiums and Deposits
($ in millions) |
 44
Non-GAAP Reconciliation –
Return On Equity
1)
Represents U.S. tax attributes related to net operating loss carryforwards and
foreign tax credits. 2014 amount is estimated. 2)
Computed as Actual or Annualized Net income (loss) attributable to AIG divided by
Average AIG Shareholders' equity. 3)
Computed as Actual or Annualized Net income (loss) attributable to AIG divided by
Average AIG Shareholders' equity, excluding AOCI. 4)
Computed as Actual or Annualized After-tax operating income divided by Average
AIG Shareholders' equity, excluding AOCI. 5)
Computed as Actual or Annualized After-tax operating income divided by Average
AIG Shareholders' equity, excluding AOCI and tax attribute DTA. Six
Months 2011
2012
2013
2014
Annualized Net income attributable to AIG
$ 20,622
$ 3,438
$ 9,085
$ 9,364
Annualized After-tax operating income attributable to AIG
2,086
6,635
6,762
7,228
Average AIG Shareholders' equity
85,639
101,873
98,850
104,155
Less: Average AOCI
8,234
9,718
8,865
8,986
Average AIG Shareholders' equity, excluding average AOCI
77,405
92,155
89,985
95,169
Less: Average tax attribute DTA
(1)
2,500
19,250
18,150
17,342
Average AIG Shareholders' equity, excluding average AOCI
& tax attribute DTA
74,905
$
72,905
$
71,835
$
77,827
$
ROE
(2)
24.1%
3.4%
9.2%
9.0%
ROE excluding AOCI
(3)
26.6%
3.7%
10.1%
9.8%
ROE - After-tax operating income, excluding AOCI
(4)
2.7%
7.2%
7.5%
7.6%
ROE - After-tax operating income, excluding AOCI & DTA
(5)
2.8%
9.1%
9.4%
9.3%
Return on equity (ROE) computations
($ in millions)
Full Year |
 45
Non-GAAP Reconciliation –
Accident Year Combined Ratio,
As Adjusted
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
Commercial Insurance
Loss ratio
80.3
72.3
70.7
78.0
100.9
64.9
72.6
71.8
77.9
69.4
67.7
Catastrophe losses and reinstatement premiums
(8.1)
(1.5)
(5.4)
(4.5)
(32.8)
(0.6)
(6.0)
(3.5)
(3.6)
(3.6)
(2.3)
Prior year development net of premium adjustments
3.9
(0.5)
0.1
(2.7)
(1.7)
1.1
(4.4)
(2.1)
(0.9)
(3.2)
0.7
Net reserve discount benefit (charge)
0.8
-
1.9
-
-
-
-
-
(6.1)
2.5
0.3
Accident year loss ratio, as adjusted
76.9
70.3
67.3
70.8
66.4
65.4
62.2
66.2
67.3
65.1
66.4
Acquisition ratio
14.9
18.0
17.2
15.6
15.5
16.3
16.3
15.8
16.1
16.2
15.4
General operating expense ratio
11.9
11.3
11.4
12.4
13.9
11.0
12.8
12.6
13.7
12.1
12.3
Expense ratio
26.8
29.3
28.6
28.0
29.4
27.3
29.1
28.4
29.8
28.3
27.7
Combined ratio
107.1
101.6
99.3
106.0
130.3
92.2
101.7
100.2
107.7
97.7
95.4
Catastrophe losses and reinstatement premiums
(8.1)
(1.5)
(5.4)
(4.5)
(32.8)
(0.6)
(6.0)
(3.5)
(3.6)
(3.6)
(2.3)
Prior year development net of premium adjustments
3.9
(0.5)
0.1
(2.7)
(1.7)
1.1
(4.4)
(2.1)
(0.9)
(3.2)
0.7
Net reserve discount benefit (charge)
0.8
-
1.9
-
-
-
-
-
(6.1)
2.5
0.3
Accident year combined ratio, as adjusted
103.7
99.6
95.9
98.8
95.8
92.7
91.3
94.6
97.1
93.4
94.1
Consumer Insurance
Loss ratio
59.4
58.1
59.2
58.3
67.9
57.8
58.9
58.8
60.4
61.3
55.8
Catastrophe losses and reinstatement premiums
(1.0)
(0.1)
(1.1)
(0.6)
(8.9)
(0.3)
(0.3)
(1.2)
(0.6)
(2.5)
(0.6)
Prior year development net of premium adjustments
(0.7)
0.4
1.0
-
(1.0)
1.3
1.6
0.9
0.9
0.5
0.5
Accident year loss ratio, as adjusted
57.7
58.4
59.1
57.7
58.0
58.8
60.2
58.5
60.7
59.3
55.7
Acquisition ratio
23.9
23.7
23.5
25.7
26.9
24.9
25.9
26.1
25.2
25.9
25.9
General operating expense ratio
15.5
14.9
15.0
14.8
16.4
15.7
15.3
15.0
17.7
14.7
16.3
Expense ratio
39.4
38.6
38.5
40.5
43.3
40.6
41.2
41.1
42.9
40.6
42.2
Combined ratio
98.8
96.7
97.7
98.8
111.2
98.4
100.1
99.9
103.3
101.9
98.0
Catastrophe losses and reinstatement premiums
(1.0)
(0.1)
(1.1)
(0.6)
(8.9)
(0.3)
(0.3)
(1.2)
(0.6)
(2.5)
(0.6)
Prior year development net of premium adjustments
(0.7)
0.4
1.0
-
(1.0)
1.3
1.6
0.9
0.9
0.5
0.5
Accident year combined ratio, as adjusted
97.1
97.0
97.6
98.2
101.3
99.4
101.4
99.6
103.6
99.9
97.9
Total AIG Property Casualty
Loss ratio
74.5
68.0
68.9
71.4
87.6
63.3
68.0
67.3
68.2
67.1
64.6
Catastrophe losses and reinstatement premiums
(5.3)
(0.9)
(3.7)
(2.9)
(22.9)
(0.5)
(3.7)
(2.7)
(2.4)
(3.2)
(1.6)
Prior year development net of premium adjustments
(0.1)
(0.6)
(1.5)
(2.0)
(1.4)
0.4
(2.3)
(0.8)
(3.1)
(1.9)
(0.2)
Net reserve discount benefit (charge)
0.2
(0.2)
1.1
-
-
-
(0.1)
(0.1)
3.7
1.2
(0.1)
Accident year loss ratio, as adjusted
69.3
66.3
64.8
66.5
63.3
63.2
61.9
63.7
66.4
63.2
62.7
Acquisition ratio
18.5
20.2
19.6
19.5
20.2
19.7
20.0
19.7
19.5
19.9
19.4
General operating expense ratio
14.1
13.7
13.9
14.1
17.3
14.3
14.6
14.6
16.1
14.2
14.8
Expense ratio
32.6
33.9
33.5
33.6
37.5
34.0
34.6
34.3
35.6
34.1
34.2
Combined ratio
107.1
101.9
102.4
105.0
125.1
97.3
102.6
101.6
103.8
101.2
98.8
Catastrophe losses and reinstatement premiums
(5.3)
(0.9)
(3.7)
(2.9)
(22.9)
(0.5)
(3.7)
(2.7)
(2.4)
(3.2)
(1.6)
Prior year development net of premium adjustments
(0.1)
(0.6)
(1.5)
(2.0)
(1.4)
0.4
(2.3)
(0.8)
(3.1)
(1.9)
(0.2)
Net reserve discount benefit (charge)
0.2
(0.2)
1.1
-
-
-
(0.1)
(0.1)
3.7
1.2
(0.1)
Accident year combined ratio, as adjusted
101.9
100.2
98.3
100.1
100.8
97.2
96.5
98.0
102.0
97.3
96.9
AIG Property Casualty
Accident year combined ratio, as adjusted
Quarterly |
 American International Group, Inc. (AIG) is a leading international insurance
organization serving customers in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional, and
individual
customers
through
one
of
the
most
extensive
worldwide
property-casualty
networks
of
any
insurer.
In
addition,
AIG
companies
are
leading
providers
of
life
insurance
and
retirement
services
in
the
United States. AIG common stock is listed on the New York Stock Exchange and the
Tokyo Stock Exchange. Additional information about AIG can be found at
www.aig.com | YouTube: www.youtube.com/aig | Twitter: @AIG_LatestNews | LinkedIn: http://www.linkedin.com/company/aig
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 coverage is
subject to 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. |