- Successfully completed the initial public offering (IPO) of
Corebridge Financial, Inc. (NYSE: CRBG) (Corebridge) common stock,
representing 12.4% of the common stock of Corebridge
- General Insurance combined ratio of 97.3% improved by 2.4
points from the prior year quarter, despite the impact from
Hurricane Ian and other natural catastrophes in the
quarter
- General Insurance adjusted accident year combined ratio* of
88.4% improved by 2.1 points from the prior year quarter, led by
Global Commercial with 5.9 points of improvement to 83.0%
- Life and Retirement posted another quarter of strong sales
with premiums and deposits of $8.9 billion, up from $7.2 billion in
the prior year quarter with positive year on year growth in each of
the four operating segments
- Net income per diluted common share was $3.50 and adjusted
after-tax income* (AATI) per diluted common share was $0.66
compared to $0.97 in the prior year quarter, primarily due to lower
alternative investment income, offset by a $148 million increase in
General Insurance underwriting income
- Repurchased $1.3 billion of AIG common stock in the third
quarter
- Announced the redemption and repurchase of approximately
$1.8 billion of aggregate principal amount of debt, which has
closed
THIRD QUARTER NOTEWORTHY ITEMS
- General Insurance adjusted pre-tax income (APTI) of $750
million decreased $61 million from prior year quarter due to $228
million of lower alternative investment income partially offset by
improvement in underwriting results with 2.4 points of combined
ratio improvement, benefiting from continued underwriting
discipline and a reinsurance program, which together decreased
volatility and mitigated catastrophe losses (CATs), as well as a
lower expense ratio.
- Life and Retirement APTI of $589 million reflects lower net
investment income (NII) due to lower alternative investment returns
and call and tender income, partially offset by higher base
portfolio income and an improvement in mortality compared to prior
year quarter. Life and Retirement return on adjusted segment common
equity* (Adjusted ROCE) for the third quarter was 7.5% on an
annualized basis.
- Net income attributable to AIG common shareholders was $2.7
billion, or $3.50 per diluted common share, for the third quarter
of 2022 compared to $1.7 billion or $1.92 per diluted common share,
in the prior year quarter.
- Adjusted after-tax income attributable to AIG common
shareholders was $509 million, or $0.66 per diluted common share,
compared to $837 million, or $0.97 per diluted common share, in the
prior year quarter, due to lower net investment income, primarily
alternative investment income.
- Return on common equity (ROCE) and Adjusted ROCE* were 25.9%
and 3.7%, respectively, on an annualized basis for the third
quarter of 2022. Adjusted ROCE was impacted by lower net investment
income and catastrophe losses.
* Refers to financial measure not calculated in accordance with
generally accepted accounting principles (non-GAAP); definitions of
non-GAAP measures and reconciliations to their closest GAAP
measures can be found in this news release under the heading
Comment on Regulation G and Non-GAAP Financial Measures.
American International Group, Inc. (NYSE: AIG) today reported
financial results for the third quarter ended September 30,
2022.
AIG Chairman & Chief Executive Officer Peter Zaffino said:
“AIG had another very strong quarter of financial performance,
driven by our successful execution of strategic priorities, and
highlighted by the initial public offering of Corebridge, another
major accomplishment by our team, as well as continued profitable
underwriting results and decreased volatility in General Insurance.
These results are even more impressive when viewed against the
backdrop of a challenging macro-economic environment and one of the
largest insured-loss hurricanes in U.S. history.
“The Corebridge IPO was completed in mid-September and I am very
pleased with the successful outcome, which represented a critical
milestone for AIG and Corebridge that enables both companies to
continue to drive growth and value as market leaders in their
respective industries.
“General Insurance once again delivered outstanding improvement
and absolute financial performance building on our momentum over
the last few years. The 210-basis point improvement in the accident
year combined ratio, ex-CATs* to 88.4%, marked the 17th consecutive
quarter of improvement. North America Commercial overall rate
increased 9%, excluding Workers’ Compensation, in the third quarter
and continued to exceed loss cost trends. I am extremely pleased
with the overall underwriting profit in the quarter, particularly
given $600 million of catastrophe losses, or 9.8 points of the
combined ratio, of which approximately $450 million is attributable
to Hurricane Ian. The strong performance in General Insurance
demonstrates the benefits of the high-quality work we have done to
transform our global portfolio and implement a best-in-class
reinsurance program, which together have dramatically reduced
volatility.
“Life and Retirement delivered another solid quarter with
premiums and deposits of $8.9 billion, a 23% increase from the
prior year quarter with growth in each of the four business
segments. Sales in Individual Retirement grew by 16% to $3.8
billion, including a doubling of sales in fixed annuities and a
record sales quarter in index annuities. Additionally, base net
investment income from the fixed income portfolio started to see
meaningful benefits from the higher interest rate environment.
“In the third quarter, we continued to progress and solidify our
excellent partnerships with Blackstone, Inc. ("Blackstone") and
BlackRock, Inc. ("BlackRock"). We have transferred $50 billion of
Corebridge AUM to Blackstone and completed $100 billion of asset
transfer to BlackRock with $37 billion moving from AIG and $63
billion moving from Corebridge.
“We also continued our disciplined and balanced approach to
capital management. We returned $1.5 billion to shareholders
through $1.3 billion of AIG common stock repurchases and $247
million of dividends. Corebridge issued hybrid debt of $1 billion
and drew down $1.5 billion of the delayed draw term loan.
Subsequent to the close of the quarter, AIG redeemed or repurchased
approximately $1.8 billion in aggregate principal amount of debt.
Additionally, shortly after the IPO, Corebridge declared its first
quarterly dividend of $148 million as part of its $600 million
annual dividend commitment, which has already been paid.
“I am extremely proud of all that has been accomplished by our
dedicated colleagues at AIG and Corebridge. We remain
well-positioned to continue to drive excellence, deliver improving
returns and create long-term value to our shareholders and other
stakeholders.”
For the third quarter of 2022, pre-tax income from continuing
operations was $3.8 billion, up from $2.2 billion from the prior
year quarter. Third quarter of 2022 net income attributable to AIG
common shareholders was $2.7 billion, or $3.50 per diluted common
share, compared to net income of $1.7 billion, or $1.92 per diluted
common share, in the prior year quarter. The pre-tax income
increase was primarily due to an increase in net realized gains on
derivative activities and higher underwriting income in General
Insurance, reflecting the continued earn-in of positive rate change
and strength of renewal retentions and new business production,
favorable business mix changes, as well as increased favorable
prior year development, partially offset by lower alternative
investment income. The pre-tax income increase was partially offset
by income attributable to noncontrolling interest associated with
Blackstone’s 9.9% ownership interest and the additional 12.4% of
public floating interest in Corebridge following the IPO.
AATI was $509 million, or $0.66 per diluted common share, for
the third quarter of 2022 compared to $837 million, or $0.97 per
diluted common share, in the prior year quarter. The decrease in
AATI was primarily due to lower alternative investment income, and
yield enhancement income, partially offset by a $148 million
pre-tax increase in General Insurance underwriting results and
improvement in core investment portfolio income across the
business.
Total consolidated net investment income for the third quarter
of 2022 was $2.7 billion, down 28% from $3.7 billion in the prior
year quarter, primarily due to lower alternative investment income,
lower call and tender income and lower returns from fair value
option equity securities. Interest and dividends income improved
$59 million in the third quarter with yield across the fixed
maturity and loan portfolios up 17 basis points sequentially. Total
net investment income on an APTI basis* was $2.5 billion, a
decrease of $741 million compared to the prior year quarter.
Book value per common share was $51.58 as of September 30, 2022,
a decrease of 11% from June 30, 2022 and 36% from December 31,
2021, reflecting a reduction in accumulated other comprehensive
income (AOCI) as a result of higher interest rates. Adjusted book
value per common share* was $73.28, an increase of 1% from June 30,
2022 and 6% from December 31, 2021, reflecting growth in retained
earnings from net income in excess of dividends and share
repurchases. Adjusted tangible book value per common share* was
$67.04, an increase of 1% from June 30, 2022 and 7% from December
31, 2021.
For the third quarter of 2022, AIG repurchased approximately
$1.3 billion of common stock or approximately 24 million shares and
paid $247 million of common and preferred dividends, resulting in
AIG Parent liquidity of $6.5 billion as of September 30, 2022.
AIG’s ratio of total debt and preferred stock to total capital at
September 30, 2022 was 36.5%, up from 31.1% at June 30, 2022,
primarily due to the impact of higher interest rates on AOCI.
The AIG Board of Directors declared a quarterly cash dividend of
$0.32 per share on AIG common stock (NYSE: AIG). The dividend is
payable on December 29, 2022 to stockholders of record at the close
of business on December 15, 2022.
The AIG Board of Directors also declared a quarterly cash
dividend of $365.625 per share on AIG Series A 5.85% Non-Cumulative
Perpetual Preferred Stock, with a liquidation preference of $25,000
per share, which is represented by depositary shares (NYSE: AIG
PRA), each representing a 1/1,000th interest in a share of
preferred stock. Holders of depositary shares will receive
$0.365625 per depositary share. The dividend is payable on December
15, 2022 to holders of record at the close of business on November
30, 2022.
FINANCIAL SUMMARY
Three Months Ended
September 30, 2022
($ in millions, except per common share
amounts)
2021
2022
Net income attributable to AIG common
shareholders
$
1,660
$
2,702
Net income per diluted share attributable
to AIG common shareholders
$
1.92
$
3.50
Adjusted pre-tax income (loss)
$
1,126
$
725
General Insurance
811
750
Life and Retirement
877
589
Other Operations
(562
)
(614
)
Net investment income
$
3,715
$
2,668
Net investment income, APTI basis
3,276
2,535
Adjusted after-tax income attributable to
AIG common shareholders
$
837
$
509
Adjusted after-tax income per diluted
share attributable to AIG common shareholders
$
0.97
$
0.66
Weighted average common shares outstanding
- diluted (in millions)
864.0
771.1
Return on common equity
10.2
%
25.9
%
Adjusted return on common equity
6.5
%
3.7
%
Book value per common share
$
77.03
$
51.58
Adjusted book value per common share
$
61.80
$
73.28
Common shares outstanding (in
millions)
835.8
747.2
GENERAL INSURANCE
Three Months Ended September
30,
($ in millions)
2021
2022
Change
Gross premiums written
$
9,305
$
9,238
(1
)
%
Net premiums written
$
6,590
$
6,403
(3.0
)
%
North America
3,005
3,138
4
North America Commercial Lines
2,576
2,757
7
North America Personal Insurance
429
381
(11
)
International
3,585
3,265
(9
)
International Commercial Lines
2,071
1,992
(4
)
International Personal Insurance
1,514
1,273
(16
)
Underwriting income (loss)
$
20
$
168
NM
%
North America
(166
)
(439
)
(164
)
North America Commercial Lines
(503
)
(374
)
26
North America Personal Insurance
337
(65
)
NM
International
186
607
226
International Commercial Lines
(94
)
469
NM
International Personal Insurance
280
138
(51
)
Net investment income, APTI basis
$
791
$
582
(26
)
%
Adjusted pre-tax income
$
811
$
750
(8
)
%
Return on adjusted segment common
equity
7.9
%
6.7
%
(1.2
)
pts
Underwriting ratios:
North America Combined Ratio (CR)
105.7
114.0
8.3
pts
North America Commercial Lines CR
120.0
113.6
(6.4
)
North America Personal Insurance CR
14.9
116.4
101.5
International CR
94.7
81.4
(13.3
)
International Commercial Lines CR
104.8
75.4
(29.4
)
International Personal Insurance CR
82.2
89.8
7.6
General Insurance (GI) CR
99.7
97.3
(2.4
)
GI Loss ratio
68.4
67.5
(0.9
)
pts
Less: impact on loss ratio
Catastrophe losses and reinstatement
premiums
(9.7
)
(9.8
)
(0.1
)
Prior year development, net of reinsurance
and prior year premiums
0.5
0.9
0.4
GI Accident year loss ratio, as
adjusted
59.2
58.6
(0.6
)
GI Expense ratio
31.3
29.8
(1.5
)
GI Accident year combined ratio, as
adjusted
90.5
88.4
(2.1
)
Accident year
combined ratio, as adjusted (AYCR):
North America AYCR
91.5
88.2
(3.3
)
pts
North America Commercial Lines AYCR
90.5
84.6
(5.9
)
North America Personal Insurance AYCR
98.4
112.8
14.4
International AYCR
89.6
88.6
(1.0
)
International Commercial Lines AYCR
86.8
80.4
(6.4
)
International Personal Insurance AYCR
93.0
99.9
6.9
General Insurance
- Net premiums written in the third quarter of 2022 decreased 3%
from the prior year quarter, but increased 3% on a constant dollar
basis to $6.4 billion driven by strong North America Commercial
Lines growth of 7% and International Commercial Lines decrease of
4% or growth of 5% on a constant dollar basis, reflecting continued
positive rate change, higher renewal retentions and strong new
business production. North America Personal Insurance net premiums
written decreased 11% primarily due to a decline in Warranty and
ongoing underwriting actions in our High-Net-Worth portfolio,
offset by growth in Travel. International Personal Insurance net
premiums written decreased 16%, or 2% on a constant dollar basis,
primarily due to lower production in Warranty, partially offset by
growth in Accident & Health (A&H) and Travel.
- Third quarter 2022 APTI decreased by $61 million to $750
million from the prior year quarter due to lower alternative
investment income partially offset by improvement in underwriting
income. Underwriting income was $168 million in the third quarter
of 2022, compared to $20 million in the prior year quarter. The
underwriting income included $600 million of CATs, before
reinstatement premiums, of which approximately $450 million came
from Hurricane Ian, compared to $628 million CATs, before
reinstatement premiums in the prior year quarter. Third quarter
2022 also included favorable prior year loss reserve development,
net of reinsurance (PYD) of $72 million compared to favorable PYD
of $50 million in the prior year quarter.
- General Insurance generated strong underwriting results, with a
combined ratio of 97.3%, a 2.4 point improvement from 99.7% in the
prior year quarter. The loss ratio improved by 0.9 points, driven
by strong underwriting results including comprehensive reinsurance
programs that mitigated CAT exposure, and an improved expense
ratio, benefiting from lower acquisition expense. The General
Insurance accident year combined ratio, as adjusted*, was 88.4%, an
improvement of 2.1 points from the prior year quarter with a 0.6
point improvement in the accident year loss ratio, as adjusted* to
58.6%, and a 1.5 points improvement in the expense ratio to 29.8%.
The improvement in accident year loss ratio, as adjusted, reflected
continued improvement in commercial business mix and quality of the
portfolio.
- Commercial Lines underwriting results continued to show strong
improvement due to enhanced business mix, and net premiums written
grew 2%, or 6% on a constant dollar basis, with continued rate
increases. The accident year combined ratio, as adjusted, for North
America Commercial Lines improved 5.9 points to 84.6%, and for
International Commercial Lines improved 6.4 points to 80.4%
compared to the prior year quarter.
- Personal Insurance underwriting results deteriorated as we
reposition the business and continue to reduce exposures and
increase reinsurance cessions to mitigate volatility. The North
America Personal Insurance accident year combined ratio, as
adjusted, deteriorated 14.4 points to 112.8% compared to the prior
year quarter, due to higher reinsurance costs and lower ceding
commission for High-Net-Worth business. The International Personal
Insurance accident year combined ratio, as adjusted, deteriorated
by 6.9 points to 99.9% from the prior year quarter, due to an
increased frequency of A&H claims in Japan and Taiwan,
partially mitigated by expense discipline.
LIFE AND RETIREMENT
Three Months Ended
September 30,
($ in millions, except as indicated)
2021
2022
Change
Adjusted pre-tax income (loss)
$
877
$
589
(33
)
%
Individual Retirement
292
200
(32
)
Group Retirement
316
183
(42
)
Life Insurance
134
123
(8
)
Institutional Markets
135
83
(39
)
Premiums and fees
$
1,756
$
2,136
22
%
Individual Retirement
311
259
(17
)
Group Retirement
142
112
(21
)
Life Insurance
757
912
20
Institutional Markets
546
853
56
Premiums and deposits
$
7,234
$
8,894
23
%
Individual Retirement
3,257
3,792
16
Group Retirement
1,831
2,039
11
Life Insurance
1,152
1,166
1
Institutional Markets
994
1,897
91
Net flows
$
(919
)
$
(92
)
90
%
Individual Retirement
95
696
NM
Group Retirement
(1,014
)
(788
)
22
Net investment income, APTI basis
$
2,435
$
2,004
(18
)
%
Return on adjusted segment common
equity
12.2
%
7.5
%
(4.7
)
pts
Life and Retirement
- Life and Retirement reported APTI of $589 million for the third
quarter of 2022, down 33% from $877 million in the prior year
quarter, primarily due to macroeconomic conditions resulting in
lower net investment income and fee income, partially offset by
less adverse mortality and an improved outcome in the annual
actuarial assumption review. Capital markets volatility drove lower
alternative investment returns and lower call and tender income in
addition to lower fee income in Individual and Group Retirement.
Higher new money rates continue to provide uplift to the base
portfolio income and yield.
- Premiums and deposits were higher across all four operating
segments; Life and Retirement achieved 23% growth from the prior
year quarter largely as a result of robust index annuity deposits
and strong fixed annuity deposits combined with transactional
activity in Institutional Markets driving higher pension risk
transfer and GIC deposits.
- The mortality experience in Life Insurance is in line with the
previously disclosed estimate of exposure sensitivity of $65
million to $75 million per 100,000 population deaths based upon the
reported third quarter COVID-related deaths in the United
States.
OTHER OPERATIONS
Three Months Ended
September 30,
($ in millions)
2021
2022
Change
Corporate and Other
$
(583
)
$
(518
)
11
%
Asset Management
213
51
(76
)
Adjusted pre-tax loss before consolidation
and eliminations
(370
)
(467
)
(26
)
Consolidation and eliminations
(192
)
(147
)
23
Adjusted pre-tax loss
$
(562
)
$
(614
)
(9
)
%
Other Operations
- Before consolidation and eliminations, the adjusted pre-tax
loss reflects lower investment income particularly within
alternative investments. This was partially offset by lower
corporate interest expense primarily driven by interest savings
from debt repurchases and cash tender offers.
LIFE AND RETIREMENT SEPARATION
On September 19, 2022, AIG closed on the IPO of 80 million
shares of Corebridge common stock at a public offering price of
$21.00 per share, representing 12.4 percent of Corebridge's common
stock. Corebridge is the holding company for AIG’s Life and
Retirement business. The aggregate gross proceeds of the offering
to AIG, before deducting underwriting discounts and commissions and
other expenses payable by AIG, were approximately $1.7 billion.
In November 2021, AIG and Blackstone Inc. completed the
acquisition by Blackstone of a 9.9 percent equity stake in
Corebridge. Blackstone is required to hold its ownership interest
in Corebridge following the completion of the separation of the
Life and Retirement business, subject to exceptions permitting
Blackstone to sell 25%, 67% and 75% of its shares after the first,
second and third anniversaries, respectively, of Corebridge IPO
(which will be September 19, 2023, 2024 and 2025, respectively),
with the transfer restrictions terminating in full on the fifth
anniversary of the IPO (September 19, 2027). Also in November 2021,
Corebridge declared a dividend payable to AIG Parent in the amount
of $8.3 billion. In connection with such dividend, Corebridge
issued a promissory note to AIG Parent in the amount of $8.3
billion (the Intercompany Note). The Intercompany Note was repaid
to AIG Parent prior to the IPO of Corebridge with the proceeds of
(i) the issuance by Corebridge, on April 5, 2022, of senior
unsecured notes in the aggregate principal amount of $6.5 billion,
(ii) the issuance by Corebridge, on August 23, 2022, of $1.0
billion aggregate principal amount of 6.875% Fixed-to-Fixed Reset
Rate Junior Subordinated Notes due 2052, and (iii) borrowings by
Corebridge of $1.5 billion under its $1.5 billion 3-Year Delayed
Draw Term Loan Agreement.
Following the IPO, AIG owns 77.7% of the outstanding common
stock of Corebridge and continues to consolidate the assets,
liabilities, and results of operations of Corebridge in AIG’s
Condensed Consolidated Financial Statements. The portion of equity
interest of Corebridge that AIG does not own is reflected as
noncontrolling interest in AIG’s Condensed Consolidated Financial
Statements.
On December 15, 2021, AIG and Blackstone Real Estate Income
Trust (BREIT), a long-term, perpetual capital vehicle affiliated
with Blackstone, completed the acquisition by BREIT of AIG’s
interests in a U.S. affordable housing portfolio. The historical
results of the U.S. affordable housing portfolio were reported in
our Life and Retirement operating segments.
Additionally, on March 28, 2022, AIG and BlackRock entered into
a binding letter of intent, and since April 2022, certain of AIG’s
insurance company subsidiaries entered into separate investment
management agreements with BlackRock, pursuant to which BlackRock
will manage certain liquid fixed income and private placement
assets representing up to $60 billion of assets on behalf of AIG
and up to $90 billion of assets on behalf of Corebridge. In
addition, AIG and Corebridge are gaining access to BlackRock’s
world-class investment management technology, Aladdin.
CONFERENCE CALL
AIG will host a conference call tomorrow, Wednesday, November 2,
2022 at 8:30 a.m. ET to review these results. The call is open to
the public and can be accessed via a live listen-only webcast in
the Investors section of 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 catastrophes and
macroeconomic and/or geopolitical events, anticipated dispositions,
monetization and/or acquisitions of businesses or assets, or
successful integration of acquired businesses, management
succession and retention plans, exposure to risk, trends in
operations and financial results, and other statements that are not
historical facts.
All forward-looking statements involve risks, uncertainties and
other factors that may cause AIG’s actual results and financial
condition to differ, possibly materially, from the results and
financial condition expressed or implied in the forward-looking
statements. Factors that could cause AIG’s actual results to
differ, possibly materially, from those in specific projections,
goals, assumptions and statements include, without limitation:
- the effects of economic conditions in the markets in which AIG
and its businesses operate in the U.S. and globally and any changes
therein, including financial market conditions, fluctuations in
interest rates and foreign currency exchange rates and inflationary
pressures, each of which may also be affected by geopolitical
conflicts, including the conflict between Russia and Ukraine;
- the occurrence of catastrophic events, both natural and
man-made, including geopolitical conflicts, pandemics, civil unrest
and the effects of climate change;
- availability of reinsurance or access to reinsurance on
acceptable terms;
- disruptions in the availability of AIG's electronic data
systems or those of third parties, including as a result of
information technology, cybersecurity or data security breaches due
to supply chain disruptions, cyber-attacks or security
vulnerabilities, the likelihood of which may increase as a result
of continued remote business operations;
- AIG’s ability to realize expected strategic, financial,
operational or other benefits from the separation of
Corebridge;
- AIG’s ability to effectively execute on and benefit from its
ongoing restructuring programs;
- changes in judgments concerning potential cost-saving
opportunities;
- concentrations in AIG’s investment portfolios, including as a
result of our asset management relationships with Blackstone and
BlackRock;
- changes in the valuation of AIG’s investments;
- the effectiveness of AIG’s enterprise risk management policies
and procedures, including with respect to business continuity and
disaster recovery plans;
- the effectiveness of strategies to recruit and retain key
personnel and to implement effective succession plans;
- actions by rating agencies with respect to AIG’s credit and
financial strength ratings as well as those of its businesses and
subsidiaries;
- changes to sources of or access to liquidity;
- changes in judgments concerning the recognition of deferred tax
assets and the impairment of goodwill;
- changes in judgments or assumptions concerning insurance
underwriting and insurance liabilities;
- AIG’s ability to successfully dispose of, monetize and/or
acquire businesses or assets or successfully integrate acquired
businesses;
- nonperformance or defaults by counterparties, including
Fortitude Reinsurance Company Ltd. (Fortitude Re);
- requirements, which may change from time to time, of the global
regulatory framework to which AIG is subject;
- significant legal, regulatory or governmental proceedings;
- the effects of sanctions, including those related to the
conflict between Russia and Ukraine, and failure to comply
therewith;
- the impact of COVID-19 and its variants and responses
thereto;
- AIG’s ability to effectively execute on environmental, social
and governance targets and standards; and
- such other factors discussed in Part I, Item 2. Management’s
Discussion and Analysis of Financial Condition and Results of
Operations (MD&A) in AIG’s Quarterly Report on Form 10-Q for
the quarterly period ended September 30, 2022 (which will be filed
with the SEC), and Part I, Item 1A. Risk Factors and Part II, Item
7. MD&A in AIG’s Annual Report on Form 10-K for the year ended
December 31, 2021.
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 Securities and
Exchange Commission rules and regulations. GAAP is the acronym for
generally accepted accounting principles in the United States. The
non-GAAP financial measures AIG presents are listed below and may
not be comparable to similarly-named measures reported by other
companies. The reconciliations of such measures to the most
comparable GAAP measures in accordance with Regulation G are
included within the relevant tables attached to this news release
or in the Third Quarter 2022 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
of AIG’s available for sale securities portfolio, foreign currency
translation adjustments and U.S. tax attribute deferred tax assets.
This measure also eliminates the asymmetrical impact resulting from
changes in fair value of 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 of our available for sale securities portfolio, foreign
currency translation adjustments and U.S. tax attribute deferred
tax assets. This measure also eliminates the asymmetrical impact
resulting from changes in fair value of 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) and changes in fair value of securities
used to hedge guaranteed living benefits (included in Net
investment income for GAAP purposes). Adjusted revenues is a GAAP
measure for 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;
- changes in benefit reserves and deferred policy acquisition
costs (DAC), value of business acquired (VOBA), and deferred sales
inducements (DSI) related to net realized gains and losses;
- changes in the fair value of equity securities;
- net investment income on Fortitude Re funds withheld
assets
- following deconsolidation of Fortitude Re, net realized gains
and losses on Fortitude Re funds withheld assets;
- loss (gain) on extinguishment of debt;
- all net realized gains and losses except earned income
(periodic settlements and changes in settlement accruals) on
derivative instruments used for non-qualifying (economic) hedging
or for asset replication. Earned income on such economic hedges is
reclassified from net realized gains and losses to specific APTI
line items based on the economic risk being hedged (e.g. net
investment income and interest credited to policyholder account
balances);
- income or loss from discontinued operations;
- net loss reserve discount benefit (charge);
- pension expense related to lump sum payments to former
employees;
- net gain or loss on divestitures;
- non-operating litigation reserves and settlements;
- restructuring and other costs related to initiatives designed
to reduce operating expenses, improve efficiency and simplify 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; and
- non-recurring costs associated with the implementation of
non-ordinary course legal or regulatory changes or changes to
accounting principles.
Adjusted After-tax Income attributable to AIG common
shareholders (AATI) is derived by excluding the tax effected
APTI adjustments described above, dividends on preferred stock,
noncontrolling interest on net realized gains (losses), other
non-operating expenses and the following tax items from net income
attributable to AIG:
- deferred income tax valuation allowance releases and
charges;
- changes in uncertain tax positions and other tax items related
to legacy matters having no relevance to our current businesses or
operating performance; and
- net tax charge related to the enactment of the Tax Cuts and
Jobs Act (Tax Act).
See page 16 for the reconciliation of Net income attributable to
AIG to Adjusted After-tax Income Attributable to AIG.
Ratios: We, along with most property and casualty
insurance companies, use the loss ratio, the expense ratio and the
combined ratio as measures of underwriting performance. These
ratios are relative measurements that describe, for every $100 of
net premiums earned, the amount of losses and loss adjustment
expenses (which for General Insurance excludes net loss reserve
discount), and the amount of other underwriting expenses that would
be incurred. A combined ratio of less than 100 indicates
underwriting income and a combined ratio of over 100 indicates an
underwriting loss. Our ratios are calculated using the relevant
segment information calculated under GAAP, and thus may not be
comparable to similar ratios calculated for regulatory reporting
purposes. The underwriting environment varies across countries and
products, as does the degree of litigation activity, all of which
affect such ratios. In addition, investment returns, local taxes,
cost of capital, regulation, product type and competition can have
an effect on pricing and consequently on profitability as reflected
in underwriting income and associated ratios.
Accident year loss and Accident year combined ratios, as
adjusted (Accident year loss ratio, ex-CAT and Accident year
combined ratio, ex-CAT): both the accident year loss and
accident year combined ratios, as adjusted, exclude catastrophe
losses (CATs) and related reinstatement premiums, prior year
development, net of premium adjustments, and the impact of reserve
discounting. Natural catastrophe losses are generally weather or
seismic events, in each case, having a net impact on AIG in excess
of $10 million and man-made catastrophe losses, such as terrorism
and civil disorders that exceed the $10 million threshold. We
believe that as adjusted ratios are meaningful measures of our
underwriting results on an ongoing basis as they exclude
catastrophes and the impact of reserve discounting which are
outside of management’s control. We also exclude prior year
development to provide transparency related to current accident
year results.
Underwriting ratios are computed as
follows:
- Loss ratio = Loss and loss adjustment expenses incurred ÷ Net
premiums earned (NPE)
- Acquisition ratio = Total acquisition expenses ÷ NPE
- General operating expense ratio = General operating expenses ÷
NPE
- Expense ratio = Acquisition ratio + General operating expense
ratio
- Combined ratio = Loss ratio + Expense ratio
- CATs and reinstatement premiums = [Loss and loss adjustment
expenses incurred – (CATs)] ÷ [NPE +/(-) Reinstatement premiums
related to catastrophes] – Loss ratio
- Accident year loss ratio, as adjusted (AYLR ex-CAT) = [Loss and
loss adjustment expenses incurred – CATs – PYD] ÷ [NPE +/(-)
Reinstatement premiums related to catastrophes +/(-) Prior year
premiums + Adjustment for ceded premium under reinsurance contracts
related to prior accident years]
- Accident year combined ratio, as adjusted (AYCR ex-CAT) = AYLR
ex-CAT + Expense ratio
- Prior year development net of reinsurance and prior year
premiums = [Loss and loss adjustment expenses incurred – CATs –
PYD] ÷ [NPE +/(-) Reinstatement premiums related to catastrophes
+/(-) Prior year premiums] – Loss ratio – CATs and reinstatement
premiums ratio.
Premiums and deposits: includes direct and assumed
amounts received and earned on traditional life insurance policies,
group benefit policies and life‑contingent payout annuities, as
well as deposits received on universal life, investment‑type
annuity contracts, Federal Home Loan Bank (FHLB) funding agreements
and mutual funds. We believe the measure of premiums and deposits
is useful in understanding customer demand for our products,
evolving product trends and our sales performance period over
period.
Results from discontinued operations are excluded from all of
these measures.
# # #
American International Group, Inc. (AIG) is a leading global
insurance organization. AIG member companies provide a wide range
of property casualty insurance, life insurance, retirement
solutions, and other financial services to customers in
approximately 70 countries and jurisdictions. These diverse
offerings include products and services that help businesses and
individuals protect their assets, manage risks and provide for
retirement security. AIG common stock is listed on the New York
Stock Exchange.
Additional information about AIG can be found at www.aig.com |
YouTube: www.youtube.com/aig | Twitter: @AIGinsurance
www.twitter.com/AIGinsurance | LinkedIn:
www.linkedin.com/company/aig. These references with additional
information about AIG have been provided as a convenience, and the
information contained on such websites is not incorporated by
reference into this press release.
AIG is the marketing name for the worldwide property-casualty,
life and retirement, and general insurance operations of American
International Group, Inc.. For additional information, please visit
our website at www.aig.com. All products and services are written
or provided by subsidiaries or affiliates of American International
Group, Inc.. Products or services may not be available in all
countries and jurisdictions, and coverage is subject to
underwriting requirements and actual policy language. Non-insurance
products and services may be provided by independent third parties.
Certain property-casualty coverages may be provided by a surplus
lines insurer. Surplus lines insurers do not generally participate
in state guaranty funds, and insureds are therefore not protected
by such funds.
Reconciliations of Adjusted Pre-tax and
After-tax Income
Three Months Ended September
30,
2021
2022
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
$
2,176
$
439
$
—
$
1,737
$
3,847
$
806
$
—
$
3,041
Noncontrolling interests
(70
)
(70
)
(332
)
(332
)
Pre-tax income/net income attributable
to AIG
2,176
439
(70
)
1,667
3,847
806
(332
)
2,709
Dividends on preferred stock
7
7
Net income attributable to AIG common
shareholders
1,660
2,702
Adjustments:
Changes in uncertain tax positions and
other tax adjustments(a)
35
—
(35
)
2
—
(2
)
Deferred income tax valuation allowance
charges(b)
(45
)
—
45
(8
)
—
8
Changes in fair value of securities used
to hedge guaranteed living benefits
(26
)
(5
)
—
(21
)
(6
)
(1
)
—
(5
)
Changes in benefit reserves and DAC, VOBA
and DSI related to net realized gains (losses)
(9
)
(3
)
—
(6
)
28
6
—
22
Changes in the fair value of equity
securities
45
7
—
38
(16
)
(3
)
—
(13
)
Loss on extinguishment of debt
51
10
—
41
—
—
—
—
Net investment income on Fortitude Re
funds withheld assets
(495
)
(103
)
—
(392
)
(155
)
(32
)
—
(123
)
Net realized (gains) losses on Fortitude
Re funds withheld assets
(190
)
(40
)
—
(150
)
86
17
—
69
Net realized (gains) losses on Fortitude
Re funds withheld embedded derivative
209
44
—
165
(1,757
)
(369
)
—
(1,388
)
Net realized gains(c)
(652
)
(132
)
—
(520
)
(1,449
)
(299
)
—
(1,150
)
Loss from discontinued operations
—
—
Net gain on divestitures
(102
)
(22
)
—
(80
)
(6
)
(1
)
—
(5
)
Non-operating litigation reserves and
settlements
3
—
—
3
(3
)
(1
)
—
(2
)
Favorable prior year development and
related amortization changes ceded under retroactive reinsurance
agreements
(115
)
(23
)
—
(92
)
(62
)
(13
)
—
(49
)
Net loss reserve discount charge
72
15
—
57
10
2
—
8
Pension expense related to a one-time lump
sum payment to former employees
27
6
—
21
—
—
—
—
Integration and transaction costs
associated with acquiring or divesting businesses
11
3
—
8
52
11
—
41
Restructuring and other costs
104
22
—
82
147
29
—
118
Non-recurring costs related to regulatory
or accounting changes
17
4
—
13
9
2
—
7
Noncontrolling interests(d)
—
—
271
271
Adjusted pre-tax income/Adjusted
after-tax income attributable to AIG common shareholders
$
1,126
$
212
$
(70
)
$
837
$
725
$
148
$
(61
)
$
509
Reconciliations of Adjusted Pre-tax and
After-tax Income
Nine Months Ended September
30,
2021
2022
Total Tax
Non-
Total Tax
Non-
(Benefit)
controlling
After
(Benefit)
controlling
After
Pre-tax
Charge
Interests(d)
Tax
Pre-tax
Charge
Interests(d)
Tax
Pre-tax income/net income, including
noncontrolling interests
$
7,051
$
1,234
$
—
$
5,817
$
14,003
$
2913
$
—
$
11,089
Noncontrolling interests
(175
)
(175
)
(1,084
)
(1,084
)
Pre-tax income/net income attributable
to AIG
7,051
1,234
(175
)
5,642
14,003
2,913
(1,084
)
10,005
Dividends on preferred stock
22
22
Net income attributable to AIG common
shareholders
5,620
9,983
Adjustments:
Changes in uncertain tax positions and
other tax adjustments(a)
901
—
(901
)
90
—
(90
)
Deferred income tax valuation allowance
(releases) charges(b)
(706
)
—
706
15
—
(15
)
Changes in fair value of securities used
to hedge guaranteed living benefits
(61
)
(12
)
—
(49
)
(29
)
(6
)
—
(23
)
Changes in benefit reserves and DAC, VOBA
and DSI related to net realized gains (losses)
74
15
—
59
429
90
—
339
Changes in the fair value of equity
securities
36
5
—
31
41
9
—
32
Loss on extinguishment of debt
149
31
—
118
299
63
—
236
Net investment income on Fortitude Re
funds withheld assets
(1,488
)
(312
)
—
(1,176
)
(634
)
(133
)
—
(501
)
Net realized (gains) losses on Fortitude
Re funds withheld assets
(536
)
(113
)
—
(423
)
312
65
—
247
Net realized gains on Fortitude Re funds
withheld embedded derivative
(117
)
(24
)
—
(93
)
(7,851
)
(1,649
)
—
(6,202
)
Net realized gains(c)
(1,220
)
(260
)
—
(960
)
(3,257
)
(734
)
—
(2,523
)
Loss from discontinued operations
—
1
Net gain on divestitures
(108
)
(23
)
—
(85
)
(45
)
(9
)
—
(36
)
Non-operating litigation reserves and
settlements
3
—
—
3
(41
)
(9
)
—
(32
)
Favorable prior year development and
related amortization changes ceded under retroactive reinsurance
agreements
(199
)
(41
)
—
(158
)
(206
)
(43
)
—
(163
)
Net loss reserve discount charge
62
13
—
49
4
1
—
3
Pension expense related to a one-time lump
sum payment to former employees
27
6
—
21
—
—
—
—
Integration and transaction costs
associated with acquiring or divesting businesses
55
12
—
43
136
29
—
107
Restructuring and other costs
304
64
—
240
415
85
—
330
Non-recurring costs related to regulatory
or accounting changes
58
12
—
46
22
5
—
17
Noncontrolling interests(d)
—
—
852
852
Adjusted pre-tax income/Adjusted
after-tax income attributable to AIG common shareholders
$
4,090
$
802
$
(175
)
$
3,091
$
3,598
$
782
$
(232
)
$
2,562
(a)
Nine months ended September 30, 2021 includes the completion of
audit activity by the Internal Revenue Service.
(b)
Nine months ended September 30, 2021 includes an increase in the
valuation allowance against a portion of certain tax attribute
carryforwards of AIG's U.S. federal consolidated income tax group,
as well as net valuation allowance release in certain foreign
jurisdictions.
(c)
Includes all net realized gains and losses except earned income
(periodic settlements and changes in settlement accruals) on
derivative instruments used for non-qualifying (economic) hedging
or for asset replication and net realized gains and losses on
Fortitude Re funds withheld assets.
(d)
Includes the portion of equity interest of Corebridge that AIG
does not own and realized non-operating gains on consolidated
investment entities.
Summary of Key Financial
Metrics
Three Months Ended
September 30,
Nine Months Ended
September 30,
Earnings per common share:
2021
2022
% Inc. (Dec.)
2021
2022
% Inc. (Dec.)
Basic
Income from continuing operations
$
1.95
$
3.54
81.5
%
$
6.53
$
12.64
93.6
%
Income from discontinued operations
—
—
NM
—
—
NM
Net income attributable to AIG common
shareholders
$
1.95
$
3.54
81.5
$
6.53
$
12.64
93.6
Diluted
Income from continuing operations
1.92
$
3.50
82.3
6.45
$
12.49
93.6
Income from discontinued operations
—
—
NM
—
—
NM
Net income attributable to AIG common
shareholders
$
1.92
$
3.50
82.3
$
6.45
$
12.49
93.6
Adjusted after-tax income attributable
to AIG common shareholders per diluted share
$
0.97
$
0.66
(32.0
)
%
$
3.55
$
3.21
(9.6
)
%
Weighted average shares
outstanding:
Basic
852.8
763.1
861.2
789.9
Diluted
864.0
771.1
871.0
799.1
Reconciliation of Book Value per Common
Share
As of period
end:
September 30, 2021
December 31, 2021
June 30, 2022
September 30, 2022
Total AIG shareholders' equity
$
64,863
$
65,956
$
45,344
$
39,023
Less: Preferred equity
485
485
485
485
Total AIG common shareholders' equity
(a)
64,378
65,471
44,859
38,538
Less: Deferred tax assets (DTA)*
7,083
5,221
4,582
4,556
Less: Accumulated other comprehensive
income (AOCI)
8,606
6,687
(17,656
)
(23,793
)
Add: Cumulative unrealized gains and
losses related to Fortitude Re Funds withheld assets
2,966
2,791
(2,223
)
(3,021
)
Subtotal: AOCI plus cumulative unrealized
gains and losses related to Fortitude Re funds withheld assets
5,640
3,896
(15,433
)
(20,772
)
Total adjusted common shareholders' equity
(b)
$
51,655
$
56,354
$
55,710
$
54,754
Less: Intangible assets:
Goodwill
4,058
4,056
3,935
3,860
Value of business acquired
117
111
99
91
Value of distribution channel acquired
467
458
438
428
Other intangibles
302
300
289
286
Total intangible assets
4,944
4,925
4,761
4,665
Total adjusted tangible common
shareholders' equity (c)
$
46,711
$
51,429
$
50,949
$
50,089
Total common shares outstanding
(d)
835.8
818.7
771.3
747.2
As of period
end:
September 30,
2021
% Inc.
(Dec.)
December 31,
2021
% Inc.
(Dec.)
June 30,
2022
% Inc.
(Dec.)
September 30,
2022
Book value per common share (a÷d)
$
77.03
(33.0
)
%
$
79.97
(35.5
)
%
$
58.16
(11.3
)
%
$
51.58
Adjusted book value per common share
(b÷d)
61.80
18.6
68.83
6.5
72.23
1.5
73.28
Adjusted tangible book value per common
share (c÷d)
55.89
19.9
62.82
6.7
66.06
1.5
67.04
Reconciliation of Return On Common
Equity
Three Months Ended September
30,
2021
2022
Annualized net income (loss) attributable
to AIG common shareholders (a)
$
6,640
$
10,808
Annualized adjusted after-tax income
attributable to AIG common shareholders (b)
$
3,348
$
2,036
Average AIG Common Shareholders' equity
(c)
$
64,988
$
41,699
Less: Average DTA*
7,229
4,569
Less: Average AOCI
9,408
(20,725
)
Add: Average cumulative unrealized gains
and losses related to Fortitude Re funds withheld assets
3,154
(2,622
)
Subtotal: AOCI plus cumulative unrealized
gains and losses related to Fortitude Re funds withheld assets
6,254
(18,103
)
Average adjusted common shareholders'
equity (d)
$
51,505
$
55,233
ROCE (a÷c)
10.2
%
25.9
%
Adjusted return on common equity (b÷d)
6.5
%
3.7
%
Reconciliation of Net Investment
Income
Three Months Ended
September 30,
2021
2022
Net Investment Income per Consolidated
Statements of Operations
$
3,715
$
2,668
Changes in fair value of securities used
to hedge guaranteed living benefits
(14
)
(14
)
Changes in the fair value of equity
securities
45
(16
)
Net investment income on Fortitude Re
funds withheld assets
(495
)
(155
)
Net realized gains (losses) related to
economic hedges and other
25
52
Total Net Investment Income - APTI
Basis
$
3,276
$
2,535
Net Premiums Written - Change in
Constant Dollar
Three Months Ended September
30, 2022
Global -
International -
General
Commercial
Commercial
Personal
General Insurance
Insurance
Lines
Lines
Insurance
Foreign exchange effect on worldwide
premiums:
Change in net premiums written
Increase (decrease) in original
currency
3
%
6
%
5
%
(2
)
%
Foreign exchange effect
(6
)
(4
)
(9
)
(14
)
Increase (decrease) as reported in U.S.
dollars
(3
)
%
2
%
(4
)
%
(16
)
%
Reconciliations of Accident Year Loss
and Accident Year Combined Ratios, as Adjusted
Three Months Ended
September 30, 2022
2021
2022
Total General
Insurance
Combined ratio
99.7
97.3
Catastrophe losses and reinstatement
premiums
(9.7
)
(9.8
)
Prior year development, net of reinsurance
and prior year premiums
0.5
0.9
Accident year combined ratio, as
adjusted
90.5
88.4
North
America
Combined ratio
105.7
114.0
Catastrophe losses and reinstatement
premiums
(15.2
)
(17.2
)
Prior year development, net of reinsurance
and prior year premiums
1.0
(8.6
)
Accident year combined ratio, as
adjusted
91.5
88.2
North America -
Commercial Lines
Combined ratio
120.0
113.6
Catastrophe losses and reinstatement
premiums
(15.2
)
(18.1
)
Prior year development, net of reinsurance
and prior year premiums
(14.3
)
(10.9
)
Accident year combined ratio, as
adjusted
90.5
84.6
North America -
Personal Insurance
Combined ratio
14.9
116.4
Catastrophe losses and reinstatement
premiums
(15.2
)
(11.4
)
Prior year development, net of reinsurance
and prior year premiums
98.7
7.8
Accident year combined ratio, as
adjusted
98.4
112.8
International
Combined ratio
94.7
81.4
Catastrophe losses and reinstatement
premiums
(5.1
)
(3.0
)
Prior year development, net of reinsurance
and prior year premiums
—
10.2
Accident year combined ratio, as
adjusted
89.6
88.6
International -
Commercial Lines
Combined ratio
104.8
75.4
Catastrophe losses and reinstatement
premiums
(7.1
)
(2.7
)
Prior year development, net of reinsurance
and prior year premiums
(10.9
)
7.7
Accident year combined ratio, as
adjusted
86.8
80.4
International -
Personal Insurance
Loss ratio
41.1
50.0
Catastrophe losses and reinstatement
premiums
(2.6
)
(3.3
)
Prior year development, net of reinsurance
and prior year premiums
13.4
13.4
Accident year loss ratio, as adjusted
51.9
60.1
Combined ratio
82.2
89.8
Catastrophe losses and reinstatement
premiums
(2.6
)
(3.3
)
Prior year development, net of reinsurance
and prior year premiums
13.4
13.4
Accident year combined ratio, as
adjusted
93.0
99.9
Global -
Commercial Insurance
Combined ratio
113.4
98.0
Catastrophe losses and reinstatement
premiums
(11.7
)
(11.7
)
Prior year development, net of reinsurance
and prior year premiums
(12.8
)
(3.3
)
Accident year combined ratio, as
adjusted
88.9
83.0
Reconciliation of General Insurance
Return on Adjusted Segment Common Equity
Three Months Ended
September 30, 2022
2021
2022
Adjusted pre-tax income
$
811
$
750
Interest expense on attributed financial
debt
149
132
Adjusted pre-tax income including
attributed interest expense
662
618
Income tax expense
153
129
Adjusted after-tax income
509
489
Dividends declared on preferred stock
3
3
Adjusted after-tax income attributable
to common shareholders
$
506
$
486
Ending adjusted segment common
equity
$
25,884
$
28,150
Average adjusted segment common
equity
$
25,679
$
29,114
Return on adjusted segment common
equity
7.9
%
6.7
%
Total segment shareholder’s equity
$
26,381
$
21,593
Less: Preferred equity
201
209
Total segment common equity
26,180
21,384
Less: Accumulated other comprehensive
income (AOCI)
492
(7,494
)
Add: Cumulative unrealized gains and
losses related to Fortitude Re funds withheld assets
196
(728
)
Subtotal: AOCI plus cumulative unrealized
gains and losses related to Fortitude Re funds withheld assets
296
(6,766
)
Total adjusted segment common equity
$
25,884
$
28,150
Reconciliation of Life and Retirement
Return on Adjusted Segment Common Equity
Three Months Ended
September 30, 2022
2021
2022
Adjusted pre-tax income
$
877
$
589
Interest expense on attributed financial
debt
75
93
Adjusted pre-tax income including
attributed interest expense
802
496
Income tax expense
160
100
Adjusted after-tax income
642
396
Dividends declared on preferred stock
2
2
Adjusted after-tax income attributable
to common shareholders
$
640
$
394
Ending adjusted segment common
equity
$
21,235
$
21,519
Average adjusted segment common
equity
$
20,962
$
21,028
Return on adjusted segment common
equity
12.2
%
7.5
%
Total segment shareholder’s equity
$
29,131
$
6,477
Less: Preferred equity
143
155
Total segment common equity
28,988
6,322
Less: Accumulated other comprehensive
income (AOCI)
10,577
(17,490
)
Add: Cumulative unrealized gains and
losses related to Fortitude Re funds withheld assets
2,824
(2,293
)
Subtotal: AOCI plus cumulative unrealized
gains and losses related to Fortitude Re funds withheld assets
7,753
(15,197
)
Total adjusted segment common equity
$
21,235
$
21,519
Reconciliations of Premiums and
Deposits
Three Months Ended
September 30, 2022
2021
2022
Individual
Retirement:
Premiums
$
66
$
56
Deposits
3,190
3,740
Other
1
(4
)
Premiums and deposits
$
3,257
$
3,792
Group
Retirement:
Premiums
$
7
$
3
Deposits
1,824
2,036
Other
—
—
Premiums and deposits
$
1,831
$
2,039
Life
Insurance:
Premiums
$
469
$
541
Deposits
403
405
Other
280
220
Premiums and deposits
$
1,152
$
1,166
Institutional
Markets:
Premiums
$
499
$
804
Deposits
488
1,085
Other
7
8
Premiums and deposits
$
994
$
1,897
Total Life and
Retirement:
Premiums
$
1,041
$
1,404
Deposits
5,905
7,266
Other
288
224
Premiums and deposits
$
7,234
$
8,894
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221101005955/en/
Quentin McMillan (Investors): quentin.mcmillan@aig.com
Dana Ripley (Media): dana.ripley@aig.com
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