Company Announcements

AIG Reports First Quarter 2022 Results

  • Significant progress on Life and Retirement separation from AIG, with key steps taken toward the establishment of a standalone capital structure, public filing of the S-1 registration statement, Corebridge Financial, Inc. (Corebridge) brand debut and strong independent additions to the Corebridge Board of Directors
  • Announced asset management relationship with BlackRock to manage up to $150 billion of liquid assets for AIG and Corebridge
  • General Insurance combined ratio of 92.9% improved by 5.9 points from the prior year quarter
  • General Insurance adjusted* accident year combined ratio of 89.5% improved by 2.9 points from the prior year quarter
  • Net income per diluted common share was $5.15 compared to $4.41 in the prior year quarter
  • Adjusted after-tax income* (AATI) per diluted common share increased 24% to $1.30 from $1.05 in the prior year quarter, driven by a $373 million increase in General Insurance underwriting income
  • Repurchased $1.4 billion of AIG common stock in the first quarter of 2022
  • AIG Board of Directors increased the share repurchase authorization to $6.5 billion
  • $9.1 billion of AIG Parent liquidity at March 31, 2022

FIRST QUARTER NOTEWORTHY ITEMS

  • General Insurance adjusted pre-tax income (APTI) of $1.2 billion reflects a $373 million increase in underwriting income from the prior year quarter as a result of strong combined ratio improvement, including significantly lower catastrophe losses (CATs), higher earned premiums along with continued rate improvement, focused risk selection and improved terms and conditions.
  • Life and Retirement APTI of $724 million reflects lower net investment income due in large part to lower yield enhancements, partially offset by slightly lower mortality compared to the prior year quarter; Life and Retirement return on adjusted segment common equity* (Adjusted ROCE) for the first quarter was 10.0% on an annualized basis; premiums and deposits* increased 13.5%, primarily driven by higher interest rates.
  • Return on common equity (ROCE) and Adjusted ROCE* were 28.1% and 7.6%, respectively, on an annualized basis for the first quarter of 2021.

* 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.

NEW YORK--(BUSINESS WIRE)--May 3, 2022-- American International Group, Inc. (NYSE: AIG) today reported financial results for the first quarter ended March 31, 2022.

AIG Chairman & Chief Executive Officer Peter Zaffino said: “In the first quarter of 2022, AIG delivered excellent results, while simultaneously advancing a number of strategic, operational and financial priorities. I am very pleased with the progress we achieved, including meaningful improvement in underwriting profitability in General Insurance, continued solid performance from Life and Retirement, significant progress on the separation of Life and Retirement from AIG, along with accelerated capital management actions.

“General Insurance continues to generate top line growth while driving sustainable underwriting improvement and expense discipline in both the combined ratio and the adjusted accident year combined ratio, which improved 590 and 290 basis points, respectively, year over year to 92.9% and 89.5%. We are compounding margin improvement over a multi-year period having improved the combined ratio and adjusted accident year combined ratio by 860 and 600 basis points over the prior two years.

“Commercial net premiums written grew 8% on a constant dollar basis with 10% foreign exchange adjusted growth in International and 6% in North America. Growth across Global Commercial Lines benefitted from over $1 billion of new business for the fourth consecutive quarter, strong retention of 86% globally and 9% rate increases (10% excluding workers’ compensation), which continue to exceed loss cost trends.

“Life and Retirement’s diversified business withstood significant market volatility and reported an adjusted segment return on common equity of 10.0%. Premiums and deposits increased 13.5%, driven by strong fixed annuity sales that benefitted from the added origination capabilities from our strategic partnership with Blackstone.

“Additionally, we made significant progress since the beginning of the year to prepare the Life and Retirement business to be a standalone, public company. We publicly filed an S-1 registration statement with the U.S. Securities and Exchange Commission, we executed a $6.5 billion senior notes offering by Life and Retirement helping to establish the target standalone capital structure and we announced an arrangement with BlackRock relating to the management of up to an aggregate of $150 billion of liquid assets for AIG and Life and Retirement.

“Given our strong balance sheet and liquidity, the AIG Board of Directors increased the share repurchase authorization to $6.5 billion of AIG Common Stock, inclusive of any remaining amounts under the prior authorization. In the first quarter, we returned $1.7 billion to shareholders through $1.4 billion of AIG common stock repurchases and $265 million of dividends, and we ended the quarter with $9.1 billion of parent liquidity.

“We also announced a commitment to achieve net zero greenhouse gas emissions across our global underwriting and investment portfolios by 2050, or sooner. We believe our ESG commitments are an important step forward for AIG, the clients we serve and the global communities where we live and work.

“I am extremely proud of the outstanding work from our global colleagues and the value we continue to deliver for our clients, distribution partners, shareholders and other stakeholders as we continue our journey to be a top performing company.”

For the first quarter of 2022, pre-tax income from continuing operations was $5.8 billion compared to pre-tax income from continuing operations of $4.7 billion in the prior year quarter. First quarter of 2022 net income attributable to AIG common shareholders was $4.3 billion, or $5.15 per diluted common share, compared to net income of $3.9 billion, or $4.41 per diluted common share, in the prior year quarter. The pre-tax income increase was primarily due to an increase in net realized gains, including a $936 million increase in net realized gains on Fortitude Re funds withheld embedded derivative, and overall strong General Insurance underwriting results, including higher premiums and lower CATs, partially offset by lower net investment income across the portfolio. The pre-tax increase was partially offset by a higher proportion of income attributable to noncontrolling interest as a result of the sale to Blackstone of a 9.9% interest in Corebridge and higher income tax expense primarily due to higher income from operations.

AATI was $1.1 billion, or $1.30 per diluted common share, for the first quarter of 2022 compared to $923 million, or $1.05 per diluted common share, in the prior year quarter. The increase was primarily due to strong General Insurance underwriting results, partially offset by lower net investment income across the portfolio.

Total consolidated net investment income for the first quarter of 2022 was $3.2 billion, down 11% from $3.7 billion in the prior year quarter, primarily due to lower call and tender income, lower returns from fair value option equity and fixed maturity securities and lower income from hedge funds, partially offset by higher returns on other alternative investments principally from private equity. Total net investment income on an APTI basis* was $3.0 billion, a decrease of $193 million compared to the prior year quarter, reflecting lower call and tender income, lower returns from fair value option fixed maturity securities partially offset by higher returns on alternative investments principally from private equity.

Book value per common share was $69.30 as of March 31, 2022, a decrease of 13% from December 31, 2021 and 4% from March 31, 2021, reflecting a reduction in accumulated other comprehensive income (AOCI). Adjusted book value per common share* was $70.72, an increase of 3% from December 31, 2021 and 20% from March 31, 2022 reflecting growth in retained earnings from net income in excess of dividends and share repurchases. Adjusted tangible book value per common share was $64.65, an increase of 3% from December 31, 2021 and 22% from March 31, 2021.

For the first quarter of 2022, AIG repurchased approximately $1.4 billion of common stock or approximately 23 million shares of AIG common stock and paid $265 million of common and preferred dividends, resulting in AIG Parent liquidity of $9.1 billion as of March 31, 2022, down $1.6 billion from December 31, 2021. On May 3, 2022, the Board of Directors authorized share repurchases of $6.5 billion of AIG Common Stock, inclusive of the approximately $1.5 billion of expected remaining authorization upon expiration of AIG’s current Exchange Act 10b5-1 repurchase plan on May 20, 2022. AIG’s total debt and preferred stock to total capital leverage at March 31, 2022 was 27.8%, up from 24.6% at December 31, 2021, principally due to the reduction of AOCI.

Today, the AIG Board of Directors declared a quarterly cash dividend of $0.32 per share on AIG common stock (NYSE: AIG). The dividend is payable on June 30, 2022 to stockholders of record at the close of business on June 16, 2022.

The AIG Board of Directors also declared a quarterly cash dividend of $365.625 per share on AIG Series A 5.85% Non-Cumulative Perpetual Preferred Stock, with a liquidation preference of $25,000 per share, which is represented by depositary shares (NYSE: AIG PRA), each representing a 1/1,000th interest in a share of preferred stock. Holders of depositary shares will receive $0.365625 per depositary share. The dividend is payable on June 15, 2022 to holders of record at the close of business on May 31, 2022.

FINANCIAL SUMMARY

 

Three Months Ended

March 31,

 

($ in millions, except per common share amounts)

 

2021

 

2022

 

 

Net income attributable to AIG common shareholders

$

3,869

$

4,253

 

 

Net income per diluted share attributable to

 

 

 

 

 

 

AIG common shareholders

$

4.41

$

5.15

 

 

 

 

 

 

 

 

 

Adjusted pre-tax income (loss)

$

1,256

$

1,514

 

 

General Insurance

 

845

 

1,211

 

 

Life and Retirement

 

941

 

724

 

 

Other Operations

 

(530)

 

(421)

 

 

 

 

 

 

 

 

 

Net investment income

$

3,657

$

3,237

 

 

Net investment income, APTI basis

 

3,191

 

2,998

 

 

 

 

 

 

 

 

 

Adjusted after-tax income attributable to AIG common

 

 

 

 

 

 

shareholders

$

923

$

1,074

 

 

Adjusted after-tax income per diluted share attributable

 

 

 

 

 

 

to AIG common shareholders

$

1.05

$

1.30

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

 

 

 

 

- diluted (in millions)

 

876.3

 

826.0

 

 

 

 

 

 

 

 

 

Return on common equity

 

24.2

%

28.1

%

 

Adjusted return on common equity

 

7.4

%

7.6

%

 

 

 

 

 

 

 

 

Book value per common share

$

72.37

$

69.30

 

 

Adjusted book value per common share

$

58.69

$

70.72

 

 

 

 

 

 

 

 

 

Common shares outstanding (in millions)

 

859.4

 

800.2

 

 

The comparisons on the following pages are against the first quarter of 2021, unless otherwise indicated. Refer to the AIG First Quarter 2022 Financial Supplement, which is posted on AIG's website in the Investors section, for further information.

GENERAL INSURANCE

 

Three Months Ended March 31,

 

 

($ in millions)

 

2021

 

 

2022

 

Change

 

Gross premiums written

$

10,731

 

$

11,512

 

7

%

 

 

 

 

 

 

 

 

 

Net premiums written

$

6,479

 

$

6,633

 

2

%

North America

 

2,930

 

 

3,151

 

8

 

North America Commercial Lines

 

2,787

 

 

2,952

 

6

 

North America Personal Insurance

 

143

 

 

199

 

39

 

International

 

3,549

 

 

3,482

 

(2)

 

International Commercial Lines

 

1,982

 

 

2,085

 

5

 

International Personal Insurance

 

1,567

 

 

1,397

 

(11)

 

 

 

 

 

 

 

 

 

 

Underwriting income (loss)

$

73

 

$

446

 

NM

%

North America

 

(202)

 

 

256

 

NM

 

North America Commercial Lines

 

(136)

 

 

267

 

NM

 

North America Personal Insurance

 

(66)

 

 

(11)

 

83

 

International

 

275

 

 

190

 

(31)

 

International Commercial Lines

 

186

 

 

125

 

(33)

 

International Personal Insurance

 

89

 

 

65

 

(27)

 

 

 

 

 

 

 

 

 

 

Net investment income, APTI basis

$

772

 

$

765

 

(1)

%

Adjusted pre-tax income

$

845

 

$

1,211

 

43

%

Return on adjusted segment common equity

 

8.5

%

 

12.3

%

3.8

pts

 

 

 

 

 

 

 

 

 

Underwriting ratios:

 

 

 

 

 

 

 

 

North America Combined Ratio (CR)

 

108.4

 

 

90.8

 

(17.6)

pts

North America Commercial Lines CR

 

106.7

 

 

88.8

 

(17.9)

 

North America Personal Insurance CR

 

118.8

 

 

102.6

 

(16.2)

 

International CR

 

92.2

 

 

94.5

 

2.3

 

International Commercial Lines CR

 

90.0

 

 

93.6

 

3.6

 

International Personal Insurance CR

 

94.6

 

 

95.7

 

1.1

 

General Insurance (GI) CR

 

98.8

 

 

92.9

 

(5.9)

 

 

 

 

 

 

 

 

 

 

GI Loss ratio

 

65.6

 

 

60.9

 

(4.7)

pts

Less: impact on loss ratio

 

 

 

 

 

 

 

 

Catastrophe losses and reinstatement premiums

 

(7.3)

 

 

(4.5)

 

2.8

 

Prior year development, net of reinsurance and prior year

premiums

 

0.9

 

 

1.1

 

0.2

 

GI Accident year loss ratio, as adjusted

 

59.2

 

 

57.5

 

(1.7)

 

GI Expense ratio

 

33.2

 

 

32.0

 

(1.2)

 

GI Accident year combined ratio, as adjusted (AYCR)

 

92.4

 

 

89.5

 

(2.9)

 

 

 

 

 

 

 

 

 

 

Accident year combined ratio, as adjusted (AYCR):

 

 

 

 

 

 

 

 

North America AYCR

 

95.6

 

 

90.6

 

(5.0)

pts

North America Commercial Lines AYCR

 

93.9

 

 

88.1

 

(5.8)

 

North America Personal Insurance AYCR

 

105.9

 

 

105.2

 

(0.7)

 

International AYCR

 

90.2

 

 

88.6

 

(1.6)

 

International Commercial Lines AYCR

 

86.8

 

 

83.5

 

(3.3)

 

International Personal Insurance AYCR

 

94.0

 

 

95.2

 

1.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General Insurance

  • Net premiums written in the first quarter of 2022 increased 2% from the prior year quarter (5% on a constant dollar basis) to $6.6 billion driven by strong North America Commercial Lines and International Commercial Lines growth of 6% and 5% (6% and 10% on a constant dollar basis), respectively, reflecting continued positive rate change, higher renewal retentions and strong new business production. Additionally, North America Personal Insurance net premiums written growth of 39% reflects growth particularly within our Travel business, driven by more robust demand in travel. International Personal Insurance net premiums written decreased 11% (down 5% on a constant dollar basis) compared to the prior year quarter, primarily due to lower production in Warranty, partially offset by growth in Travel and Personal Accident & Health due to a rebound in travel activity.
  • First quarter 2022 APTI increased by $366 million to $1.2 billion from the prior year quarter due to significantly improved underwriting results. Underwriting income was $446 million in the first quarter of 2021, compared to $73 million in the prior year quarter. The underwriting income included $274 million of CATs, predominantly from Australian floods, compared to $422 million in the prior year quarter. First quarter 2022 also included favorable net prior year loss reserve development, net of reinsurance (PYD) of $93 million compared to favorable PYD of $56 million in the prior year quarter.
  • General Insurance generated strong underwriting results, with a combined ratio of 92.9, a 5.9 point improvement from 98.8 in the prior year quarter. The loss ratio improved by 4.7 points, driven by strong underwriting results including significantly lower CATs, and the expense ratio improved 1.2 points, resulting from continued general expense discipline. The General Insurance accident year combined ratio, as adjusted, was 89.5, an improvement of 2.9 points from the prior year quarter and was comprised of a 57.5 accident year loss ratio, as adjusted*, and an expense ratio of 32.0. The General Insurance accident year loss ratio, as adjusted, improved by 1.7 points from the prior year quarter, reflecting 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 6% with continued rate increases. The accident year combined ratio, as adjusted, for North America Commercial Lines improved 5.8 points to 88.1, and for International Commercial Lines improved 3.3 points to 83.5 compared to the prior year quarter.
  • Personal Insurance underwriting results improved, although the accident year combined ratio deteriorated slightly, largely reflecting mix shifts in the business as well as lower premiums in the period. The North America Personal Insurance accident year combined ratio, as adjusted, improved 0.7 points to 105.2 compared to the prior year quarter, reflecting changes in business mix and a rebound in travel premiums. The International Personal Insurance accident year combined ratio, as adjusted, deteriorated by 1.2 points to 95.2 from the prior year quarter.

     

LIFE AND RETIREMENT

 

Three Months Ended

 

 

 

March 31,

 

 

($ in millions, except as indicated)

 

2021

 

 

2022

 

Change

 

Adjusted pre-tax income (loss)

$

941

 

$

724

 

(23)

%

Individual Retirement

 

532

 

 

384

 

(28)

 

Group Retirement

 

307

 

 

225

 

(27)

 

Life Insurance

 

(40)

 

 

(9)

 

78

 

Institutional Markets

 

142

 

 

124

 

(13)

 

 

 

 

 

 

 

 

 

 

Premiums and fees

$

1,383

 

$

1,603

 

16

%

Individual Retirement

 

257

 

 

279

 

9

 

Group Retirement

 

128

 

 

132

 

3

 

Life Insurance

 

912

 

 

907

 

(1)

 

Institutional Markets

 

86

 

 

285

 

231

 

 

 

 

 

 

 

 

 

 

Premiums and deposits

$

6,402

 

$

7,265

 

13

%

Individual Retirement

 

3,373

 

 

3,881

 

15

 

Group Retirement

 

1,818

 

 

1,888

 

4

 

Life Insurance

 

1,131

 

 

1,169

 

3

 

Institutional Markets

 

80

 

 

327

 

309

 

 

 

 

 

 

 

 

 

 

Net flows

$

(1,467)

 

$

55

 

NM

%

Individual Retirement*

 

(574)

 

 

874

 

NM

 

Group Retirement

 

(893)

 

 

(819)

 

8

 

 

 

 

 

 

 

 

 

 

Net investment income, APTI basis

$

2,353

 

$

2,129

 

(10)

%

Return on adjusted segment common equity

 

14.2

%

 

10.0

%

(4.2)

pts

* In 2021 includes $0.6 billion of net outflows from Retail Mutual Funds that were, (i) transferred or liquidated in the third quarter of 2021.

Life and Retirement

  • Life and Retirement reported APTI of $724 million for the first quarter of 2022, down 23% from $941 million in the prior year quarter, primarily due to lower yield enhancements across all segments, as well as the sale of the affordable housing portfolio. The decline in equity markets drove higher deferred policy acquisition costs amortization and lower fee income predominantly in our Individual Retirement and Group Retirement businesses. The adverse mortality in Life Insurance is in line with our previously disclosed estimate of exposure sensitivity of $65 million to $75 million per 100,000 population deaths remains consistent based on the reported first quarter COVID-related deaths in the United States.
  • Premiums and deposits for the first quarter of 2022 were $7.3 billion, up $0.9 billion versus the prior year quarter, primarily driven by improved fixed annuity sales. Net flows improved in the first quarter of 2022 compared to the same period in the prior year.

OTHER OPERATIONS

 

Three Months Ended

 

 

 

 

March 31,

 

 

 

($ in millions)

 

2021

 

 

 

2022

 

 

Change

 

Corporate and Other

$

(552

)

 

$

(547

)

 

1

%

Asset Management

 

198

 

 

 

259

 

 

31

 

Adjusted pre-tax loss before consolidation and eliminations

 

(354

)

 

 

(288

)

 

19

 

Consolidation and eliminations

 

(176

)

 

 

(133

)

 

24

 

Adjusted pre-tax loss

$

(530

)

 

$

(421

)

 

21

%

Other Operations

  • First quarter adjusted pre-tax loss (APTL) was $421 million, including $133million of reductions from consolidation and eliminations, compared to APTL of $530 million, including $176 million of reductions from consolidation and eliminations, in the prior year quarter. The improvement in consolidation and eliminations APTL reflects the elimination of the General Insurance and Life and Retirement segment net investment income on their investment in consolidated investment entities.
  • Before consolidation and eliminations, the improvement in APTL reflects higher net investment income, primarily from gains from property sales in the global real estate portfolio, and lower corporate interest expense resulting from debt repayment activity.

LIFE AND RETIREMENT SEPARATION

  • On October 26, 2020, AIG announced its intention to separate its Life and Retirement business from AIG.
  • On November 2, 2021, AIG and Blackstone Inc. (Blackstone) completed the acquisition by Blackstone of a 9.9 percent equity stake in SAFG Retirement Services, Inc. (SAFG), which is the holding company for AIG’s Life and Retirement business, for $2.2 billion in an all cash transaction, subject to adjustment if the final pro forma adjusted book value is greater or lesser than the target pro forma adjusted book value. This resulted in a $629 million decrease to AIG’s shareholders’ equity in the fourth quarter of 2021. As part of the separation, most of AIG’s investment operations were transferred to SAFG or its subsidiaries as of December 31, 2021, and AIG entered into a long-term asset management relationship with Blackstone to manage an initial $50 billion of Life and Retirement’s existing investment portfolio beginning in the fourth quarter of 2021, with that amount increasing by increments of $8.5 billion per year for the five years beginning in the fourth quarter of 2022, for an aggregate of $92.5 billion. On November 1, 2021, SAFG declared a dividend payable to AIG Parent in the amount of $8.3 billion. In connection with such dividend, SAFG issued a promissory note to AIG Parent in the amount of $8.3 billion, which is required to be paid to AIG Parent prior to the initial public offering (IPO) of SAFG. On April 5, 2022, SAFG issued $6.5 billion aggregate principal amount of senior unsecured notes, the proceeds of which were used to repay a portion of the $8.3 billion promissory note previously issued by SAFG to AIG. While we currently believe the IPO is the next step in the separation of the Life and Retirement business from AIG, no assurance can be given regarding the form that future separation transactions may take or the specific terms or timing thereof, or that a separation will in fact occur. Any separation transaction will be subject to the satisfaction of various conditions and approvals, including approval by the AIG Board of Directors, receipt of insurance and other required regulatory approvals, and satisfaction of any applicable requirements of the Securities and Exchange Commission (SEC).
  • Additionally, 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 for $4.9 billion, in an all cash transaction, resulting in a pre-tax gain of $3.0 billion. 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 announced that it plans to rebrand SAFG as Corebridge Financial, Inc. when it becomes a public company. Also on this date, AIG and BlackRock entered into a binding letter of intent pursuant to which BlackRock will manage certain liquid fixed income and private placement assets representing up to $60 billion of assets on behalf of AIG and up to $90 billion of assets on behalf of AIG’s Life and Retirement business; AIG and AIG’s Life and Retirement business will gain access to BlackRock’s world-class asset management capabilities as well as its investment management technology, Aladdin.

CONFERENCE CALL

AIG will host a conference call tomorrow, Wednesday, May 4, 2022 at 8:30 a.m. ET to review these results. The call is open to the public and can be accessed via a live listen-only webcast in the Investors section of http://www.aig.com/. A replay will be available after the call at the same location.

Additional supplementary financial data is available in the Investors section at www.aig.com.

Certain statements in this press release and other publicly available documents may include, and officers and representatives of AIG may from time to time make and discuss, statements which, to the extent they are not statements of historical or present fact, may constitute “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are intended to provide management’s current expectations or plans for AIG’s future operating and financial performance, based on assumptions currently believed to be valid or accurate. Forward-looking statements are often preceded by, followed by or include words such as “will,” “believe,” “anticipate,” “expect,” “expectations,” “intend,” “plan,” “strategy,” “prospects,” “project,” “anticipate,” “should,” “guidance,” “outlook,” “confident,” “focused on achieving,” “view,” “target,” “goal,” “estimate” and other words of similar meaning in connection with a discussion of future operating or financial performance. These statements, may include, among other things, projections, goals and assumptions that relate to future actions, prospective services or products, future performance or results of current and anticipated services or products, sales efforts, expense reduction efforts, the outcome of contingencies such as legal proceedings, anticipated organizational, business or regulatory changes, such as the separation of the Life and Retirement business from AIG, the effect of catastrophes and macroeconomic and/or geopolitical events, anticipated dispositions, monetization and/or acquisitions of businesses or assets, or successful integration of acquired businesses, management succession and retention plans, exposure to risk, trends in operations and financial results, and other statements that are not historical facts.

All forward-looking statements involve risks, uncertainties and other factors that may cause AIG’s actual results and financial condition to differ, possibly materially, from the results and financial condition expressed or implied in the forward-looking statements. Factors that could cause AIG’s actual results to differ, possibly materially, from those in the specific projections, goals, assumptions and statements include, without limitation:

  • AIG’s ability to continue to separate the Life and Retirement business, including through an initial public offering, and the impact separation may have on AIG, its businesses, employees, contracts and customers;
  • the effects of economic conditions in the markets in which AIG and its businesses operate in the U.S. and globally and any changes therein, including from the effects of 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;
  • the effects of sanctions related to the conflict between Russia and Ukraine and failure to comply therewith;
  • the impact of potential information technology, cybersecurity or data security breaches, including as a result of supply chain disruptions, cyber-attacks or security vulnerabilities, the likelihood of which may increase due to extended remote business operations as a result of COVID-19;
  • AIG's ability to effectively execute on the AIG 200 operational programs designed to modernize AIG's operating infrastructure and enhance user and customer experiences, and AIG’s ability to achieve anticipated cost savings from AIG 200;
  • availability of reinsurance or access to reinsurance on acceptable terms;
  • the effectiveness of strategies to recruit and retain key personnel and to implement effective succession plans;
  • concentrations in AIG’s investment portfolios, including as a result of our asset management relationships with Blackstone and BlackRock;
  • disruptions in the availability of AIG’s electronic data systems or those of third parties;
  • changes to the valuation of AIG’s investments;
  • actions by rating agencies with respect to AIG’s credit and financial strength ratings as well as those of its businesses and subsidiaries;
  • the impact of COVID-19 and its variants and responses thereto;
  • the effectiveness of AIG’s enterprise risk management policies and procedures, including with respect to business continuity and disaster recovery plans;
  • changes in judgments concerning potential cost-saving opportunities;
  • changes in judgments concerning the recognition of deferred tax assets and the impairment of goodwill;
  • AIG’s ability to effectively execute on environmental, social and governance targets and standards;
  • the requirements, which may change from time to time, of the global regulatory framework to which AIG is subject;
  • nonperformance or defaults by counterparties, including Fortitude Reinsurance Company Ltd. (Fortitude Re);
  • AIG’s ability to successfully dispose of, monetize and/or acquire businesses or assets or successfully integrate acquired businesses;
  • changes in judgments or assumptions concerning insurance underwriting and insurance liabilities;
  • changes to our sources of or access to liquidity;
  • significant legal, regulatory or governmental proceedings; 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 March 31, 2022 (which will be filed with the SEC), and Part I, Item 1A. Risk Factors and Part II, Item 7. MD&A in AIG’s Annual Report on Form 10-K for the year ended December 31, 2021.

The forward-looking statements speak only as of the date of this press release, or in the case of any document incorporated by reference, the date of that document. AIG is not under any obligation (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. Additional information as to factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements is disclosed from time to time in our filings with the SEC.

COMMENT ON REGULATION G AND NON-GAAP FINANCIAL MEASURES

Throughout this press release, including the financial highlights, AIG presents its financial condition and results of operations in the way it believes will be most meaningful and representative of its business results. Some of the measurements AIG uses are “Non-GAAP financial measures” under Securities and Exchange Commission rules and regulations. GAAP is the acronym for generally accepted accounting principles in the United States. The non-GAAP financial measures AIG presents are listed below and may not be comparable to similarly-named measures reported by other companies. The reconciliations of such measures to the most comparable GAAP measures in accordance with Regulation G are included within the relevant tables attached to this news release or in the First Quarter 2022 Financial Supplement available in the Investors section of AIG’s website, www.aig.com.

AIG uses the following operating performance measures because AIG believes they enhance the understanding of the underlying profitability of continuing operations and trends of AIG’s business segments. AIG believes they also allow for more meaningful comparisons with AIG’s insurance competitors. When AIG uses these measures, reconciliations to the most comparable GAAP measure are provided on a consolidated basis.

Book Value per Common Share, Excluding Accumulated Other Comprehensive Income (Loss) (AOCI) adjusted for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets and Deferred Tax Assets (DTA) (Adjusted Book Value per Common Share) is used to show the amount of AIG’s net worth on a per-common share basis after eliminating items that can fluctuate significantly from period to period including changes in fair value of AIG’s available for sale securities portfolio, foreign currency translation adjustments and U.S. tax attribute deferred tax assets. This measure also eliminates the asymmetrical impact resulting from changes in fair value of AIG’s available for sale securities portfolio wherein there is largely no offsetting impact for certain related insurance liabilities. In addition, AIG adjusts for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets held by AIG in support of Fortitude Re’s reinsurance obligations to AIG post deconsolidation of Fortitude Re (Fortitude Re funds withheld assets) since these fair value movements are economically transferred to Fortitude Re. AIG excludes deferred tax assets representing U.S. tax attributes related to net operating loss carryforwards and foreign tax credits as they have not yet been utilized. Amounts for interim periods are estimates based on projections of full-year attribute utilization. As net operating loss carryforwards and foreign tax credits are utilized, the portion of the DTA utilized is included in these book value per common share metrics. Adjusted Book Value per Common Share is derived by dividing Total AIG common shareholders’ equity, excluding AOCI adjusted for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets, and DTA (Adjusted Common Shareholders’ Equity), by total common shares outstanding.

Book Value per Common Share, Excluding Goodwill, Value of Business Acquired (VOBA), Value of Distribution Channel Acquired (VODA), Other Intangible Assets, AOCI adjusted for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets, and Deferred Tax Assets (DTA) (Adjusted Tangible Book Value per Common Share) is used to provide more accurate measure of the realizable value of shareholder on a per-common share basis. Adjusted Tangible Book Value per Common Share is derived by dividing Total AIG common shareholders’ equity, excluding intangible assets, AOCI adjusted for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets, and DTA (Adjusted Tangible Common Shareholders’ Equity), by total common shares outstanding.

AIG Return on Common Equity – Adjusted After-tax Income Excluding AOCI adjusted for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets and DTA (Adjusted Return on Common Equity) is used to show the rate of return on common shareholders’ equity. AIG believes this measure is useful to investors because it eliminates items that can fluctuate significantly from period to period, including changes in fair value of AIG’s available for sale securities portfolio, foreign currency translation adjustments and U.S. tax attribute deferred tax assets. This measure also eliminates the asymmetrical impact resulting from changes in fair value of AIG’s available for sale securities portfolio wherein there is largely no offsetting impact for certain related insurance liabilities. In addition, AIG adjusts for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets since these fair value movements are economically transferred to Fortitude Re. AIG excludes deferred tax assets representing U.S. tax attributes related to net operating loss carryforwards and foreign tax credits as they have not yet been utilized. Amounts for interim periods are estimates based on projections of full-year attribute utilization. As net operating loss carryforwards and foreign tax credits are utilized, the portion of the DTA utilized is included in Adjusted Return on Common Equity. Adjusted Return on Common Equity is derived by dividing actual or annualized adjusted after-tax income attributable to AIG common shareholders by average Adjusted Common Shareholders’ Equity.

General Insurance and Life and Retirement Adjusted Segment Common Equity is based on segment equity adjusted for the attribution of debt and preferred stock (Segment Common Equity) and is consistent with AIG’s Adjusted Common Shareholders’ Equity definition.

General Insurance and Life and Retirement Return on Adjusted Segment Common Equity – Adjusted After-tax Income (Return on Adjusted Segment Common Equity) is used to show the rate of return on Adjusted Segment Common Equity. Return on Adjusted Segment Common Equity is derived by dividing actual or annualized Adjusted After-tax Income by Average Adjusted Segment Common Equity.

Adjusted After-tax Income Attributable to General Insurance and Life and Retirement is derived by subtracting attributed interest expense, income tax expense and attributed dividends on preferred stock from APTI. Attributed debt and the related interest expense and dividends on preferred stock are calculated based on AIG’s internal allocation model. Tax expense or benefit is calculated based on an internal attribution methodology that considers among other things the taxing jurisdiction in which the segments conduct business, as well as the deductibility of expenses in those jurisdictions.

Adjusted Revenues exclude Net realized gains (losses), income from non-operating litigation settlements (included in Other income for GAAP purposes) and changes in fair value of securities used to hedge guaranteed living benefits (included in Net investment income for GAAP purposes). Adjusted revenues is a GAAP measure for AIG’s segments.

Adjusted Pre-tax Income (APTI) is derived by excluding the items set forth below from income from continuing operations before income tax. This definition is consistent across AIG’s segments. These items generally fall into one or more of the following broad categories: legacy matters having no relevance to AIG’s current businesses or operating performance; adjustments to enhance transparency to the underlying economics of transactions; and measures that AIG believes to be common to the industry. APTI is a GAAP measure for AIG’s segments. Excluded items include the following:

  • changes in fair value of securities used to hedge guaranteed living benefits;
  • changes in benefit reserves and deferred policy acquisition costs (DAC), value of business acquired (VOBA), and deferred sales inducements (DSI) related to net realized gains and losses;
  • changes in the fair value of equity securities;
  • net investment income on Fortitude Re funds withheld assets;
  • following deconsolidation of Fortitude Re, net realized gains and losses on Fortitude Re funds withheld assets;
  • loss (gain) on extinguishment of debt;
  • all net realized gains and losses except earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-qualifying (economic) hedging or for asset replication. Earned income on such economic hedges is reclassified from net realized gains and losses to specific APTI line items based on the economic risk being hedged (e.g. net investment income and interest credited to policyholder account balances);
  • income or loss from discontinued operations;
  • net loss reserve discount benefit (charge);
  • pension expense related to lump sum payments to former employees;
  • net gain or loss on divestitures;
  • non-operating litigation reserves and settlements;
  • restructuring and other costs related to initiatives designed to reduce operating expenses, improve efficiency and simplify AIG’s organization;
  • the portion of favorable or unfavorable prior year reserve development for which AIG has ceded the risk under retroactive reinsurance agreements and related changes in amortization of the deferred gain;
  • integration and transaction costs associated with acquiring or divesting businesses;
  • losses from the impairment of goodwill; and
  • non-recurring costs associated with the implementation of non-ordinary course legal or regulatory changes or changes to accounting principles.

Adjusted After-tax Income attributable to AIG common shareholders (AATI) is derived by excluding the tax effected APTI adjustments described above, dividends on preferred stock, noncontrolling interest on net realized gains (losses) and other non-operating expenses and the following tax items from net income attributable to AIG:

  • deferred income tax valuation allowance releases and charges;
  • changes in uncertain tax positions and other tax items related to legacy matters having no relevance to AIG’s current businesses or operating performance; and
  • net tax charge related to the enactment of the Tax Cuts and Jobs Act (Tax Act).

See page 16 for the reconciliation of Net income attributable to AIG to Adjusted After-tax Income Attributable to AIG.

Ratios: AIG, along with most property and casualty insurance companies, uses the loss ratio, the expense ratio and the combined ratio as measures of underwriting performance. These ratios are relative measurements that describe, for every $100 of net premiums earned, the amount of losses and loss adjustment expenses (which for General Insurance excludes net loss reserve discount), and the amount of other underwriting expenses that would be incurred. A combined ratio of less than 100 indicates underwriting income and a combined ratio of over 100 indicates an underwriting loss. AIG’s ratios are calculated using the relevant segment information calculated under GAAP, and thus may not be comparable to similar ratios calculated for regulatory reporting purposes. The underwriting environment varies across countries and products, as does the degree of litigation activity, all of which affect such ratios. In addition, investment returns, local taxes, cost of capital, regulation, product type and competition can have an effect on pricing and consequently on profitability as reflected in underwriting income and associated ratios.

Accident year loss and Accident year combined ratios, as adjusted (Accident year loss ratio, ex-CAT and Accident year combined ratio, ex-CAT): both the accident year loss and accident year combined ratios, as adjusted, exclude catastrophe losses (CATs) and related reinstatement premiums, prior year development, net of premium adjustments, and the impact of reserve discounting. Natural catastrophe losses are generally weather or seismic events, in each case, having a net impact on AIG in excess of $10 million and man-made catastrophe losses, such as terrorism and civil disorders that exceed the $10 million threshold. AIG believes that as adjusted ratios are meaningful measures of AIG’s underwriting results on an ongoing basis as they exclude catastrophes and the impact of reserve discounting which are outside of management’s control. AIG also excludes prior year development to provide transparency related to current accident year results.

   

Underwriting ratios are computed as follows:

   

(a)

Loss ratio = Loss and loss adjustment expenses incurred ÷ Net premiums earned (NPE)
   

(b)

Acquisition ratio = Total acquisition expenses ÷ NPE
   

(c)

General operating expense ratio = General operating expenses ÷ NPE
   

(d)

Expense ratio = Acquisition ratio + General operating expense ratio
   

(e)

Combined ratio = Loss ratio + Expense ratio
   

(f)

CATs and reinstatement premiums = [Loss and loss adjustment expenses incurred – (CATs)] ÷ [NPE +/(-) Reinstatement premiums related to catastrophes] – Loss ratio
   

(g)

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]
   

(h)

Accident year combined ratio, as adjusted (AYCR ex-CAT) = AYLR ex-CAT + Expense ratio
   

(i)

Prior year development net of reinsurance and prior year premiums = [Loss and loss adjustment expenses incurred – CATs – PYD] ÷ [NPE +/(-) Reinstatement premiums related to catastrophes +/(-) Prior year premiums] – Loss ratio – CATs and reinstatement premiums ratio.

Premiums and deposits: includes direct and assumed amounts received and earned on traditional life insurance policies, group benefit policies and life‑contingent payout annuities, as well as deposits received on universal life, investment‑type annuity contracts, Federal Home Loan Bank (FHLB) funding agreements and mutual funds. We believe the measure of premiums and deposits is useful in understanding customer demand for our products, evolving product trends and our sales performance period over period.

Results from discontinued operations are excluded from all of these measures.

American International Group, Inc. (AIG) is a leading global insurance organization. AIG member companies provide a wide range of property casualty insurance, life insurance, retirement solutions and other financial services to customers in approximately 70 countries and jurisdictions. These diverse offerings include products and services that help businesses and individuals protect their assets, manage risks and provide for retirement security. AIG common stock is listed on the New York Stock Exchange.

Additional information about AIG can be found at www.aig.com | YouTube: www.youtube.com/aig | Twitter: @AIGinsurance www.twitter.com/AIGinsurance | LinkedIn: www.linkedin.com/company/aig. These references with additional information about AIG have been provided as a convenience, and the information contained on such websites is not incorporated by reference into this press release.

AIG is the marketing name for the worldwide property-casualty, life and retirement and general insurance operations of American International Group, Inc. For additional information, please visit our website at www.aig.com. All products and services are written or provided by subsidiaries or affiliates of American International Group, Inc. Products or services may not be available in all countries and jurisdictions, and coverage is subject to underwriting requirements and actual policy language. Non-insurance products and services may be provided by independent third parties. Certain property-casualty coverages may be provided by a surplus lines insurer. Surplus lines insurers do not generally participate in state guaranty funds, and insureds are therefore not protected by such funds.

American International Group, Inc.

Selected Financial Data and Non-GAAP Reconciliation

($ in millions, except per common share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliations of Adjusted Pre-tax and After-tax Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

2021

 

 

 

 

 

2022

 

 

 

 

 

 

 

 

 

 

Noncontrolling

 

 

 

 

 

 

 

 

 

Noncontrolling

 

 

 

 

Pre-tax

 

Tax Effect

 

Interests(d)

 

After-tax

 

Pre-tax

 

Tax Effect

 

Interests(d)

 

After-tax

Pre-tax income/net income, including noncontrolling

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

interests

$

4,728

 

 

$

798

 

 

$

-

 

 

$

3,930

 

 

$

5,835

 

 

$

1,179

 

 

$

-

 

 

$

4,656

 

Noncontrolling interests

 

-

 

 

 

-

 

 

 

(54

)

 

 

(54

)

 

 

-

 

 

 

-

 

 

 

(396

)

 

 

(396

)

Pre-tax income/net income attributable to AIG

 

4,728

 

 

 

798

 

 

 

(54

)

 

 

3,876

 

 

 

5,835

 

 

 

1,179

 

 

 

(396

)

 

 

4,260

 

Dividends on preferred stock

 

 

 

 

 

 

 

 

 

 

7

 

 

 

 

 

 

 

 

 

 

 

 

7

 

Net income attributable to AIG common shareholders

 

 

 

 

 

 

 

 

 

 

3,869

 

 

 

 

 

 

 

 

 

 

 

 

4,253

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Changes in uncertain tax positions and other tax adjustments(a)

 

-

 

 

 

901

 

 

 

-

 

 

 

(901

)

 

 

-

 

 

 

91

 

 

 

-

 

 

 

(91

)

Deferred income tax valuation allowance (releases) charges(b)

 

-

 

 

 

(686

)

 

 

-

 

 

 

686

 

 

 

-

 

 

 

6

 

 

 

-

 

 

 

(6

)

Changes in fair value of securities used to hedge guaranteed living benefits

 

(22

)

 

 

(5

)

 

 

-

 

 

 

(17

)

 

 

(13

)

 

 

(3

)

 

 

-

 

 

 

(10

)

Changes in benefit reserves and DAC, VOBA and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DSI related to net realized gains (losses)

 

203

 

 

 

43

 

 

 

-

 

 

 

160

 

 

 

273

 

 

 

57

 

 

 

-

 

 

 

216

 

Changes in the fair value of equity securities

 

(22

)

 

 

(5

)

 

 

-

 

 

 

(17

)

 

 

27

 

 

 

6

 

 

 

-

 

 

 

21

 

Gain on extinguishment of debt

 

(8

)

 

 

(2

)

 

 

-

 

 

 

(6

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Net investment income on Fortitude Re funds withheld assets

 

(486

)

 

 

(102

)

 

 

-

 

 

 

(384

)

 

 

(291

)

 

 

(61

)

 

 

-

 

 

 

(230

)

Net realized gains on Fortitude Re funds withheld assets

 

(173

)

 

 

(36

)

 

 

-

 

 

 

(137

)

 

 

140

 

 

 

29

 

 

 

-

 

 

 

111

 

Net realized (gains) losses on Fortitude Re funds withheld

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

embedded derivative

 

(2,382

)

 

 

(499

)

 

 

-

 

 

 

(1,883

)

 

 

(3,318

)

 

 

(697

)

 

 

-

 

 

 

(2,621

)

Net realized gains(c)

 

(627

)

 

 

(145

)

 

 

-

 

 

 

(482

)

 

 

(1,188

)

 

 

(281

)

 

 

-

 

 

 

(907

)

Net gain on divestitures

 

(7

)

 

 

(1

)

 

 

-

 

 

 

(6

)

 

 

(40

)

 

 

(9

)

 

 

-

 

 

 

(31

)

Non-operating litigation reserves and settlements

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(34

)

 

 

(7

)

 

 

-

 

 

 

(27

)

Favorable prior year development and related

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

amortization changes ceded under retroactive reinsurance agreements

 

(19

)

 

 

(4

)

 

 

-

 

 

 

(15

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Net loss reserve discount benefit

 

(32

)

 

 

(7

)

 

 

-

 

 

 

(25

)

 

 

(20

)

 

 

(5

)

 

 

-

 

 

 

(15

)

Integration and transaction costs associated with acquiring or

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

divesting businesses

 

9

 

 

 

2

 

 

 

-

 

 

 

7

 

 

 

46

 

 

 

10

 

 

 

-

 

 

 

36

 

Restructuring and other costs

 

74

 

 

 

16

 

 

 

-

 

 

 

58

 

 

 

93

 

 

 

19

 

 

 

-

 

 

 

74

 

Non-recurring costs related to regulatory or accounting changes

 

20

 

 

 

4

 

 

 

-

 

 

 

16

 

 

 

4

 

 

 

1

 

 

 

-

 

 

 

3

 

Noncontrolling interests(d)

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

298

 

 

 

298

 

Adjusted pre-tax income/Adjusted after-tax income attributable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

to AIG common shareholders

$

1,256

 

 

$

272

 

 

$

(54

)

 

$

923

 

 

$

1,514

 

 

$

335

 

 

$

(98

)

 

$

1,074

 

(a) Three months ended March 31, 2021 includes the completion of audit activity by the Internal Revenue Service.

(b) Three months ended March 31, 2021 includes an increase in the valuation allowance against a portion of certain tax attribute carryforwards of AIG's U.S. federal consolidated income tax group, as well as net valuation allowance release in certain foreign jurisdictions.

(c) Includes all net realized gains and losses except earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-qualifying (economic) hedging or for asset replication and net realized gains and losses on Fortitude Re funds withheld assets.

(d) For the three months ended March 31, 2022, noncontrolling interests include Blackstone’s 9.9 percent equity stake in Corebridge.

American International Group, Inc.

Selected Financial Data and Non-GAAP Reconciliation (continued)

($ in millions, except per common share data)

 

 

 

 

 

 

 

Summary of Key Financial Metrics

 

Three Months Ended March 31,

Earnings per common share:

 

2021

 

2022

% Inc. (Dec.)

 

Basic

 

 

 

 

 

 

Income from continuing operations

$

4.45

$

5.21

17.1

%

Income from discontinued operations

 

-

 

-

NM

 

Net income attributable to AIG common shareholders

$

4.45

$

5.21

17.1

 

 

 

 

 

 

 

 

Diluted

 

 

 

 

 

 

Income from continuing operations

$

4.41

$

5.15

16.8

 

Income from discontinued operations

 

-

 

-

NM

 

Net income attributable to AIG common shareholders

$

4.41

$

5.15

16.8

 

 

 

 

 

 

 

 

Adjusted after-tax income attributable to AIG common

 

 

 

 

 

 

shareholders per diluted share

$

1.05

$

1.30

23.8

%

Weighted average shares outstanding:

 

 

 

 

 

 

Basic

 

868.1

 

816.3

 

 

Diluted

 

876.3

 

826.0

 

 

 

Reconciliation of Book Value per Common Share

 

 

 

 

 

 

 

 

 

As of period end:

March 31, 2021

December 31, 2021

March 31, 2022

Total AIG shareholders' equity

$

62,679

 

$

65,956

 

$

55,944

 

Less: Preferred equity

 

485

 

 

485

 

 

485

 

Total AIG common shareholders' equity (a)

 

62,194

 

 

65,471

 

 

55,459

 

Less: Deferred tax assets (DTA)*

 

7,539

 

 

5,221

 

 

4,816

 

Less: Accumulated other comprehensive income (AOCI)

 

6,466

 

 

6,687

 

 

(5,900

)

Add: Cumulative unrealized gains and losses related to Fortitude Re

 

 

 

 

 

 

 

 

Funds Withheld Assets

 

2,246

 

 

2,791

 

 

48

 

Subtotal: AOCI plus cumulative unrealized gains and losses

 

 

 

 

 

 

 

 

related to Fortitude Re funds withheld assets

 

4,220

 

 

3,896

 

 

(5,948

)

Total adjusted AIG common shareholders' equity (b)

$

50,435

 

$

56,354

 

$

56,591

 

Less: Intangible assets:

 

 

 

 

 

 

 

 

Goodwill

 

4,079

 

 

4,056

 

 

4,009

 

Value of business acquired

 

123

 

 

111

 

 

107

 

Value of distribution channel acquired

 

487

 

 

458

 

 

448

 

Other intangibles

 

309

 

 

300

 

 

291

 

Total intangible assets

 

4,998

 

 

4,925

 

 

4,855

 

Total adjusted tangible common shareholders' equity (c)

$

45,437

 

$

51,429

 

$

51,736

 

 

 

 

 

 

 

 

 

 

Total common shares outstanding (d)

 

859.4

 

 

818.7

 

 

800.2

 

 

March 31,

 

% Inc.

 

December 31,

 

% Inc.

 

March 31,

As of period end:

2021

 

(Dec.)

 

2021

 

(Dec.)

 

2022

Book value per common share (a÷d)

$

72.37

 

(4.2

)

%

$

79.97

 

(13.3

)

%

$

69.30

Adjusted book value per common share (b÷d)

 

58.69

 

20.5

 

 

 

68.83

 

2.7

 

 

 

70.72

Adjusted tangible book value per common share (c÷d)

 

52.87

 

22.3

 

 

 

62.82

 

2.9

 

 

 

64.65

Reconciliation of Return On Common Equity

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

2021

 

2022

 

 

Actual or Annualized net income attributable to AIG common shareholders (a)

$

15,476

 

$

17,012

 

 

Actual or Annualized adjusted after-tax income attributable to AIG common shareholders (b)

$

3,692

 

$

4,296

 

 

Average AIG common shareholders' equity (c)

$

64,036

 

$

60,465

 

 

Less: Average DTA*

 

7,723

 

 

5,019

 

 

Less: Average AOCI

 

9,989

 

 

394

 

 

Add: Average cumulative unrealized gains and losses related to Fortitude Re funds withheld assets

 

3,452

 

 

1,420

 

 

Subtotal: AOCI plus cumulative unrealized gains and losses related to Fortitude Re funds withheld assets

 

6,537

 

 

(1,026

)

 

Average adjusted common shareholders' equity (d)

$

49,776

 

$

56,472

 

 

ROCE (a÷c)

 

24.2

%

 

28.1

 

%

Adjusted return on common equity (b÷d)

 

7.4

%

 

7.6

 

%

* Represents deferred tax assets only related to U.S. net operating loss and foreign tax credit carryforwards on a U.S. GAAP basis and excludes other balance sheet deferred tax assets and liabilities.

American International Group, Inc.

Selected Financial Data and Non-GAAP Reconciliation (continued)

($ in millions, except per common share data)

 

 

 

 

 

 

Reconciliation of Net Investment Income

 

 

 

 

 

 

 

Three Months Ended

 

March 31,

 

 

2021

 

 

 

2022

 

Net investment income per Consolidated Statements of Operations

$

3,657

 

 

$

3,237

 

Changes in fair value of securities used to hedge guaranteed living benefits

 

(19

)

 

 

(14

)

Changes in the fair value of equity securities

 

(22

)

 

 

27

 

Net investment income on Fortitude Re funds withheld assets

 

(486

)

 

 

(291

)

Net realized gains (losses) related to economic hedges and other

 

61

 

 

 

39

 

Total Net investment income - APTI Basis

$

3,191

 

 

$

2,998

 

Net Premiums Written - Change in Constant Dollar

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2022

 

 

 

Global -

 

North

America

 

International -

General Insurance

General

Insurance

 

Commercial

Lines

 

Commercial

Lines

 

Commercial

Lines

 

Personal

Insurance

Foreign exchange effect on worldwide

 

 

 

 

 

 

 

 

 

 

 

 

 

 

premiums:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in net premiums written

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (decrease) in original currency

5

%

 

8

%

 

6

%

 

10

%

 

(5)

%

Foreign exchange effect

(3)

 

 

(2)

 

 

-

 

 

(5)

 

 

(6)

 

Increase (decrease) as reported in

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. dollars

2

%

 

6

%

 

6

%

 

5

%

 

(11)

%

American International Group, Inc.

Selected Financial Data and Non-GAAP Reconciliation (continued)

($ in millions, except per common share data)

 

Reconciliations of Accident Year Loss and Accident Year Combined Ratios, as Adjusted

 

 

 

 

 

 

 

Three Months Ended

 

March 31,

 

2020

 

 

2021

 

 

2022

 

Total General Insurance

 

 

 

 

 

Combined ratio

101.5

 

 

98.8

 

 

92.9

 

Catastrophe losses and reinstatement premiums

(6.9

)

 

(7.3

)

 

(4.5

)

Prior year development, net of reinsurance and prior year premiums

0.9

 

 

0.9

 

 

1.1

 

Accident year combined ratio, as adjusted

95.5

 

 

92.4

 

 

89.5

 

 

 

 

 

 

 

North America

 

 

 

 

 

Combined ratio

 

 

108.4

 

 

90.8

 

Catastrophe losses and reinstatement premiums

 

 

(15.2

)

 

(2.1

)

Prior year development, net of reinsurance and prior year premiums

 

 

2.4

 

 

1.9

 

Accident year combined ratio, as adjusted

 

 

95.6

 

 

90.6

 

 

 

 

 

 

 

North America - Commercial Lines

 

 

 

 

 

Combined ratio

 

 

106.7

 

 

88.8

 

Catastrophe losses and reinstatement premiums

 

 

(15.4

)

 

(2.4

)

Prior year development, net of reinsurance and prior year premiums

 

 

2.6

 

 

1.7

 

Accident year combined ratio, as adjusted

 

 

93.9

 

 

88.1

 

 

 

 

 

 

 

North America - Personal Insurance

 

 

 

 

 

Combined ratio

 

 

118.8

 

 

102.6

 

Catastrophe losses and reinstatement premiums

 

 

(14.5

)

 

(0.7

)

Prior year development, net of reinsurance and prior year premiums

 

 

1.6

 

 

3.3

 

Accident year combined ratio, as adjusted

 

 

105.9

 

 

105.2

 

 

 

 

 

 

 

International

 

 

 

 

 

Combined ratio

 

 

92.2

 

 

94.5

 

Catastrophe losses and reinstatement premiums

 

 

(1.9

)

 

(6.4

)

Prior year development, net of reinsurance and prior year premiums

 

 

(0.1

)

 

0.5

 

Accident year combined ratio, as adjusted

 

 

90.2

 

 

88.6

 

 

 

 

 

 

 

International - Commercial Lines

 

 

 

 

 

Combined ratio

 

 

90.0

 

 

93.6

 

Catastrophe losses and reinstatement premiums

 

 

(3.2

)

 

(9.9

)

Prior year development, net of reinsurance and prior year premiums

 

 

-

 

 

(0.2

)

Accident year combined ratio, as adjusted

 

 

86.8

 

 

83.5

 

 

 

 

 

 

 

International - Personal Insurance

 

 

 

 

 

Loss ratio

 

 

54.7

 

 

55.0

 

Catastrophe losses and reinstatement premiums

 

 

(0.4

)

 

(1.8

)

Prior year development, net of reinsurance and prior year premiums

 

 

(0.2

)

 

1.3

 

Accident year loss ratio, as adjusted

 

 

54.1

 

 

54.5

 

 

 

 

 

 

 

Combined ratio

 

 

94.6

 

 

95.7

 

Catastrophe losses and reinstatement premiums

 

 

(0.4

)

 

(1.8

)

Prior year development, net of reinsurance and prior year premiums

 

 

(0.2

)

 

1.3

 

Accident year combined ratio, as adjusted

 

 

94.0

 

 

95.2

 

American International Group, Inc.

Selected Financial Data and Non-GAAP Reconciliation (continued)

($ in millions, except per common share data)

 

Reconciliation of General Insurance Return on Adjusted Segment Common Equity

 

 

 

 

 

 

 

 

Three Months Ended

 

 

March 31,

 

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

 

Adjusted pre-tax income

$

845

 

$

1,211

 

 

Interest expense on attributed financial debt

 

145

 

 

148

 

 

Adjusted pre-tax income including attributed interest expense

 

700

 

 

1,063

 

 

Income tax expense

 

161

 

 

246

 

 

Adjusted after-tax income

 

539

 

 

817

 

 

Dividends declared on preferred stock

 

3

 

 

3

 

 

Adjusted after-tax income attributable to common shareholders

$

536

 

$

814

 

 

 

 

 

 

 

 

 

Ending adjusted segment common equity

$

25,265

 

$

26,590

 

 

Average adjusted segment common equity

$

25,155

 

$

26,510

 

 

Return on adjusted segment common equity

 

8.5

%

 

12.3

 

%

 

 

 

 

 

 

 

Total segment shareholder’s equity

$

26,039

 

$

24,525

 

 

Less: Preferred equity

 

196

 

 

206

 

 

Total segment common equity

 

25,843

 

 

24,319

 

 

Less: Accumulated other comprehensive income (AOCI)

 

728

 

 

(2,478

)

 

Add: Cumulative unrealized gains and losses related to Fortitude Re funds withheld assets

 

150

 

 

(207

)

 

Subtotal: AOCI plus cumulative unrealized gains and losses related to Fortitude Re funds withheld assets

 

578

 

 

(2,271

)

 

Total adjusted segment common equity

$

25,265

 

$

26,590

 

 

 

 

 

 

 

 

 

Reconciliation of Life and Retirement Return on Adjusted Segment Common Equity

 

 

 

 

 

 

 

 

Three Months Ended

 

 

March 31,

 

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

 

Adjusted pre-tax income

$

941

 

$

724

 

 

Interest expense on attributed financial debt

 

70

 

 

73

 

 

Adjusted pre-tax income including attributed interest expense

 

871

 

 

651

 

 

Income tax expense

 

172

 

 

129

 

 

Adjusted after-tax income

 

699

 

 

522

 

 

Dividends declared on preferred stock

 

2

 

 

2

 

 

Adjusted after-tax income attributable to common shareholders

$

697

 

$

520

 

 

 

 

 

 

 

 

 

Ending adjusted segment common equity

$

20,226

 

$

21,245

 

 

Average adjusted segment common equity

$

19,699

 

$

20,885

 

 

Return on adjusted segment common equity

 

14.2

%

 

10.0

 

%

 

 

 

 

 

 

 

Total segment shareholder’s equity

$

26,568

 

$

20,446

 

 

Less: Preferred equity

 

136

 

 

143

 

 

Total segment common equity

 

26,432

 

 

20,303

 

 

Less: Accumulated other comprehensive income (AOCI)

 

8,366

 

 

(687

)

 

Add: Cumulative unrealized gains and losses related to Fortitude Re funds withheld assets

 

2,160

 

 

255

 

 

Subtotal: AOCI plus cumulative unrealized gains and losses related to Fortitude Re funds withheld assets

 

6,206

 

 

(942

)

 

Total adjusted segment common equity

$

20,226

 

$

21,245

 

 

American International Group, Inc.

Selected Financial Data and Non-GAAP Reconciliation (continued)

($ in millions, except per common share data)

 

 

 

 

 

 

Reconciliations of Premiums and Deposits

 

 

 

 

 

 

 

Three Months Ended

 

March 31,

 

 

2021

 

 

 

2022

 

Individual Retirement:

 

 

 

 

 

Premiums

$

25

 

 

$

55

 

Deposits

 

3,349

 

 

 

3,830

 

Other

 

(1

)

 

 

(4

)

Total premiums and deposits

$

3,373

 

 

$

3,881

 

 

 

 

 

 

 

Group Retirement:

 

 

 

 

 

Premiums

$

4

 

 

$

8

 

Deposits

 

1,814

 

 

 

1,880

 

Other

 

-

 

 

 

-

 

Total premiums and deposits

$

1,818

 

 

$

1,888

 

 

 

 

 

 

 

Life Insurance:

 

 

 

 

 

Premiums

$

532

 

 

$

539

 

Deposits

 

397

 

 

 

397

 

Other

 

202

 

 

 

233

 

Total premiums and deposits

$

1,131

 

 

$

1,169

 

 

 

 

 

 

 

Institutional Markets:

 

 

 

 

 

Premiums

$

39

 

 

$

238

 

Deposits

 

34

 

 

 

82

 

Other

 

7

 

 

 

7

 

Total premiums and deposits

$

80

 

 

$

327

 

 

 

 

 

 

 

Total Life and Retirement:

 

 

 

 

 

Premiums

$

600

 

 

$

840

 

Deposits

 

5,594

 

 

 

6,189

 

Other

 

208

 

 

 

236

 

Total premiums and deposits

 

6,402

 

 

$

7,265

 

 

Quentin McMillan (Investors): quentin.mcmillan@aig.com
Claire Talcott (Media): claire.talcott@aig.com

Source: American International Group, Inc.