FOURTH QUARTER NOTEWORTHY ITEMS
* 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)-- American International Group, Inc. (NYSE: AIG) today reported financial results for the fourth quarter and full year ended December 31, 2021.
AIG Chairman & CEO Peter Zaffino said: “In the fourth quarter and full year 2021, AIG delivered outstanding financial results with General Insurance continuing to produce improved underwriting profitability through excellent top line growth and vastly reduced volatility due to gross limit reductions and the strategic use of reinsurance, and Life and Retirement again making a meaningful contribution to our overall results. We ended the year with parent liquidity of $10.7 billion.
“The quality of these outcomes is due to our global colleagues’ hard work, dedication and commitment to excellence in everything we do.
“General Insurance succeeded in producing more consistent underwriting results while achieving 13% net premiums written growth for the full year with 18% growth in Commercial Lines. The business reported an underwriting profit for full year 2021 and for every quarter of the year, due to disciplined execution and volatility reduction in an environment of ever-increasing natural catastrophe risk. The accident year combined ratio, as adjusted, in the fourth quarter was 89.8%. For the full year, the accident year combined ratio, as adjusted, was 91.0%, driven by Global Commercial, which was 89.1%.
“Life and Retirement delivered another solid quarter due to its diversified business, increased annuity sales and the favorable impact of equity markets on both the investment portfolio and fee income. APTI increased 10.8% in the full year and return on adjusted segment common equity remained strong at 14.2%.
“Since announcing our intent to separate Life and Retirement from AIG, we have made significant progress in preparing the business to be an independent, standalone company, including closing on the sale of a 9.9% equity stake to Blackstone in November 2021.
“Over the course of 2021, we reduced debt and preferred stock leverage by 380 basis points to 24.6% by repurchasing $4 billion of debt, and we returned $3.7 billion to shareholders through common stock repurchases and dividends.
“AIG entered 2022 better, stronger, and well positioned to continue to deliver value to all stakeholders as we continue our journey to be a top performing company.”
For the full year of 2021, pre-tax income from continuing operations was $12.1 billion compared to a pre-tax loss from continuing operations of $7.3 billion in the prior year. Full year 2021 net income attributable to AIG common shareholders was $9.4 billion, or $10.82 per diluted common share, compared to a net loss of $6.0 billion, or $6.88 per common share, in the prior year. The increase was primarily due to overall strong General Insurance underwriting results, including lower CATs, higher net investment income, particularly within the alternative investments portfolio, net realized gains in the current year compared to net realized losses in the prior year and gains on divestitures in the current year compared to losses in the prior year. These pre-tax increases were partially offset by higher income tax expense primarily due to higher income from operations.
AATI was $4.4 billion, or $5.12 per diluted common share, for the full year of 2021 compared to $2.2 billion, or $2.52 per diluted common share, in the prior year. The increase was primarily due to higher net investment income and strong General Insurance underwriting results.
For the fourth quarter of 2021, pre-tax income from continuing operations was $5.0 billion compared to a pre-tax loss from continuing operations of $558 million in the prior year quarter. Fourth quarter of 2021 net income attributable to AIG common shareholders was $3.7 billion, or $4.38 per diluted common share, compared to a net loss of $60 million, or $0.07 per common share, in the prior year quarter. The increase was primarily due to overall strong General Insurance underwriting results, including lower CATs, net realized gains in the current year compared to net realized losses in the prior year and gains on divestitures in the current year. These pre-tax increases were partially offset by higher income tax expense primarily due to higher income from operations.
AATI was $1.3 billion, or $1.58 per diluted common share, for the fourth quarter of 2021 compared to $827 million, or $0.94 per diluted common share, in the prior year quarter. The increase was primarily due to strong General Insurance underwriting results.
Total consolidated net investment income for the fourth quarter of 2021 was $3.6 billion, down 10% from $4.0 billion in the prior year quarter primarily due to lower returns from fair value option equity and fixed income securities, partially offset by strong income on alternative investments principally from private equity. Total net investment income on an APTI basis* was $3.3 billion, an increase of $65 million compared to the prior year quarter reflecting higher private equity income.
Book value per common share was $79.97 as of December 31, 2021, an increase of 5% from December 31, 2020 and 4% from September 30, 2021. Adjusted book value per common share was $68.83, an increase of 21% from December 31, 2020 and 11% from September 30, 2021 reflecting growth in retained earnings from net income in excess of dividends and share repurchases. Adjusted tangible book value per share was $62.82, an increase of 23% from December 31, 2020 and 12% from September 30, 2021.
As of December 31, 2021, AIG parent liquidity was $10.7 billion, up $5.4 billion from September 30, 2021 primarily driven by the receipt of cash proceeds from the Blackstone transactions, partially offset by share repurchases, dividends, and debt repurchases and redemptions. AIG repurchased approximately 17 million shares of AIG common stock during the fourth quarter for an aggregate purchase price of $1 billion. Additionally, $1 billion was used towards debt reduction via tender offers, private transactions, and make-whole redemptions. AIG’s total debt and preferred stock to total capital leverage at December 31, 2021 was 24.6%, down from 26.1% at September 30, 2021.
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 March 31, 2022 to stockholders of record at the close of business on March 17, 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 $0.365625 per depositary share. The dividend is payable on March 15, 2022 to holders of record at the close of business on February 28, 2022.
FINANCIAL SUMMARY
| Three Months Ended December 31, |
| Twelve Months Ended December 31, | ||||||||||
($ in millions, except per common share amounts) |
| 2020 |
|
| 2021 |
|
|
| 2020 |
|
| 2021 |
|
Net income (loss) attributable to AIG common shareholders | $ | (60 | ) | $ | 3,739 |
|
| $ | (5,973 | ) | $ | 9,359 |
|
Net income (loss) per diluted share attributable to |
|
|
|
|
| ||||||||
AIG common shareholders (a) | $ | (0.07 | ) | $ | 4.38 |
|
| $ | (6.88 | ) | $ | 10.82 |
|
|
|
|
|
|
| ||||||||
Adjusted pre-tax income (loss) | $ | 1,116 |
| $ | 1,830 |
|
| $ | 3,003 |
| $ | 5,920 |
|
General Insurance |
| 809 |
|
| 1,509 |
|
|
| 1,901 |
|
| 4,359 |
|
Life and Retirement |
| 1,027 |
|
| 969 |
|
|
| 3,531 |
|
| 3,911 |
|
Other Operations |
| (720 | ) |
| (648 | ) |
|
| (2,429 | ) |
| (2,350 | ) |
|
|
|
|
|
| ||||||||
Net investment income | $ | 3,957 |
| $ | 3,565 |
|
| $ | 13,631 |
| $ | 14,612 |
|
Net investment income, APTI basis |
| 3,226 |
|
| 3,291 |
|
|
| 12,321 |
|
| 12,940 |
|
|
|
|
|
|
| ||||||||
Adjusted after-tax income attributable to AIG common |
|
|
|
|
| ||||||||
shareholders | $ | 827 |
| $ | 1,339 |
|
| $ | 2,201 |
| $ | 4,430 |
|
Adjusted after-tax income per diluted share attributable |
|
|
|
|
| ||||||||
to AIG common shareholders (a) | $ | 0.94 |
| $ | 1.58 |
|
| $ | 2.52 |
| $ | 5.12 |
|
|
|
|
|
|
| ||||||||
Weighted average common shares outstanding |
|
|
|
|
| ||||||||
- diluted (in millions) (a) |
| 868.4 |
|
| 872.0 |
|
|
| 869.3 |
|
| 864.9 |
|
|
|
|
|
|
| ||||||||
Return on common equity |
| (0.4 | )% |
| 23.0 | % |
|
| (9.4 | )% |
| 14.5 | % |
Adjusted return on common equity |
| 6.7 | % |
| 9.9 | % |
|
| 4.4 | % |
| 8.6 | % |
|
|
|
|
|
| ||||||||
Book value per common share | $ | 76.46 |
| $ | 79.97 |
|
| $ | 76.46 |
| $ | 79.97 |
|
Adjusted book value per common share | $ | 57.01 |
| $ | 68.83 |
|
| $ | 57.01 |
| $ | 68.83 |
|
|
|
|
|
|
| ||||||||
Common shares outstanding (in millions) |
| 861.6 |
|
| 818.7 |
|
|
| 861.6 |
|
| 818.7 |
|
(a) For periods reporting a loss, basic average common shares outstanding are used to calculate net income (loss) per diluted share attributable to AIG common shareholders. Diluted shares represent basic shares for the three- and twelve-month periods ended December 31, 2020 because we reported a net loss attributable to AIG common shareholders from continuing operations in those periods. For the three-month period ended December 31, 2021, an option for Blackstone Inc. to exchange all or a portion of its ownership interest in SAFG Retirement Services, Inc. for AIG common shares was anti-dilutive and therefore excluded from the calculation of adjusted after-tax income per diluted share attributable to AIG common shareholders. |
The comparisons on the following pages are against the fourth quarter of 2020, unless otherwise indicated. Refer to the AIG Fourth Quarter 2021 Financial Supplement, which is posted on AIG's website in the Investors section, for further information.
GENERAL INSURANCE
| Three Months Ended December 31, |
|
| |||||||
($ in millions) |
| 2020 |
|
| 2021 |
| Change |
| ||
Gross premiums written | $ | 7,135 |
| $ | 8,013 |
| 12 |
| % | |
|
|
|
|
| ||||||
Net premiums written | $ | 5,565 |
| $ | 5,961 |
| 7 |
| % | |
North America |
| 2,361 |
|
| 2,642 |
| 12 |
|
| |
North America Commercial Lines |
| 1,992 |
|
| 2,208 |
| 11 |
|
| |
North America Personal Insurance |
| 369 |
|
| 434 |
| 18 |
|
| |
International |
| 3,204 |
|
| 3,319 |
| 4 |
|
| |
International Commercial Lines |
| 1,662 |
|
| 1,915 |
| 15 |
|
| |
International Personal Insurance |
| 1,542 |
|
| 1,404 |
| (9 | ) |
| |
|
|
|
|
| ||||||
Underwriting income (loss) | $ | (171 | ) | $ | 499 |
| NM |
| % | |
North America |
| (389 | ) |
| 152 |
| NM |
|
| |
North America Commercial Lines |
| (285 | ) |
| 135 |
| NM |
|
| |
North America Personal Insurance |
| (104 | ) |
| 17 |
| NM |
|
| |
International |
| 218 |
|
| 347 |
| 59 |
|
| |
International Commercial Lines |
| 138 |
|
| 239 |
| 73 |
|
| |
International Personal Insurance |
| 80 |
|
| 108 |
| 35 |
|
| |
|
|
|
|
| ||||||
Net investment income, APTI basis | $ | 980 |
| $ | 1,010 |
| 3 |
| % | |
Adjusted pre-tax income | $ | 809 |
| $ | 1,509 |
| 87 |
| % | |
Return on adjusted segment common equity |
| 7.6 | % |
| 16.1 | % | 8.5 |
| pts | |
|
|
|
|
| ||||||
Underwriting ratios: |
|
|
|
| ||||||
North America Combined Ratio (CR) |
| 114.9 |
|
| 95.0 |
| (19.9 | ) | pts | |
North America Commercial Lines CR |
| 112.4 |
|
| 94.8 |
| (17.6 | ) |
| |
North America Personal Insurance CR |
| 133.2 |
|
| 96.0 |
| (37.2 | ) |
| |
International CR |
| 93.6 |
|
| 90.1 |
| (3.5 | ) |
| |
International Commercial Lines CR |
| 92.1 |
|
| 88.1 |
| (4.0 | ) |
| |
International Personal Insurance CR |
| 95.0 |
|
| 93.0 |
| (2.0 | ) |
| |
General Insurance (GI) CR |
| 102.8 |
|
| 92.4 |
| (10.4 | ) |
| |
|
|
|
|
| ||||||
GI Loss ratio |
| 70.2 |
|
| 61.8 |
| (8.4 | ) | pts | |
Less: impact on loss ratio |
|
|
|
| ||||||
Catastrophe losses and reinstatement premiums |
| (9.0 | ) |
| (2.9 | ) | 6.1 |
|
| |
Prior year development, net of reinsurance and prior year |
|
|
|
| ||||||
premiums |
| (0.9 | ) |
| 0.3 |
| 1.2 |
|
| |
GI Accident year loss ratio, as adjusted |
| 60.3 |
|
| 59.2 |
| (1.1 | ) |
| |
GI Expense ratio |
| 32.6 |
|
| 30.6 |
| (2.0 | ) |
| |
GI Accident year combined ratio, as adjusted (AYCR) |
| 92.9 |
|
| 89.8 |
| (3.1 | ) |
| |
|
|
|
|
| ||||||
Accident year combined ratio, as adjusted (AYCR): |
|
|
|
| ||||||
North America AYCR |
| 94.7 |
|
| 89.7 |
| (5.0 | ) | pts | |
North America Commercial Lines AYCR |
| 93.6 |
|
| 88.9 |
| (4.7 | ) |
| |
North America Personal Insurance AYCR |
| 102.6 |
|
| 94.9 |
| (7.7 | ) |
| |
International AYCR |
| 91.7 |
|
| 89.9 |
| (1.8 | ) |
| |
International Commercial Lines AYCR |
| 89.2 |
|
| 86.7 |
| (2.5 | ) |
| |
International Personal Insurance AYCR |
| 94.1 |
|
| 94.1 |
| - |
|
| |
|
|
|
|
|
General Insurance
LIFE AND RETIREMENT
| Three Months Ended |
|
| ||||||
| December 31, |
|
| ||||||
($ in millions, except as indicated) |
| 2020 |
|
| 2021 |
| Change |
| |
Adjusted pre-tax income (loss) | $ | 1,027 |
| $ | 969 |
| (6 | ) | % |
Individual Retirement |
| 552 |
|
| 498 |
| (10 | ) |
|
Group Retirement |
| 318 |
|
| 314 |
| (1 | ) |
|
Life Insurance |
| 30 |
|
| (8 | ) | NM |
|
|
Institutional Markets |
| 127 |
|
| 165 |
| 30 |
|
|
|
|
|
|
| |||||
Premiums and fees | $ | 1,714 |
| $ | 3,524 |
| 106 |
| % |
Individual Retirement |
| 265 |
|
| 312 |
| 18 |
|
|
Group Retirement |
| 124 |
|
| 140 |
| 13 |
|
|
Life Insurance |
| 861 |
|
| 875 |
| 2 |
|
|
Institutional Markets |
| 464 |
|
| 2,197 |
| 373 |
|
|
|
|
|
|
| |||||
Premiums and deposits | $ | 7,400 |
| $ | 8,609 |
| 16 |
| % |
Individual Retirement |
| 2,758 |
|
| 3,308 |
| 20 |
|
|
Group Retirement |
| 2,199 |
|
| 1,862 |
| (15 | ) |
|
Life Insurance |
| 1,156 |
|
| 1,206 |
| 4 |
|
|
Institutional Markets |
| 1,287 |
|
| 2,233 |
| 74 |
|
|
|
|
|
|
| |||||
Net flows | $ | (1,031 | ) | $ | (1,106 | ) | (7 | ) | % |
Individual Retirement* |
| (878 | ) |
| (34 | ) | 96 |
|
|
Group Retirement |
| (153 | ) |
| (1,072 | ) | NM |
|
|
|
|
|
|
| |||||
Net investment income, APTI basis | $ | 2,384 |
| $ | 2,357 |
| (1 | ) | % |
Return on adjusted segment common equity |
| 16.0 | % |
| 13.7 | % | (2.3 | ) | pts |
* Includes Retail Mutual Funds and in 2021, excludes $7.0 billion of funds (i) transferred as part of the Touchstone sale or (ii) liquidated. |
Life and Retirement
OTHER OPERATIONS
| Three Months Ended |
|
| |||||||
| December 31, |
|
| |||||||
($ in millions) |
| 2020 |
|
|
| 2021 |
|
| Change | |
Corporate and Other | $ | (519 | ) |
| $ | (577 | ) |
| (11 | )% |
Asset Management |
| 91 |
|
|
| 399 |
|
| 338 |
|
Adjusted pre-tax loss before consolidation and eliminations |
| (428 | ) |
|
| (178 | ) |
| 58 |
|
Consolidation and eliminations |
| (292 | ) |
|
| (470 | ) |
| (61 | ) |
Adjusted pre-tax loss | $ | (720 | ) |
| $ | (648 | ) |
| 10 | % |
Other Operations
LIFE AND RETIREMENT SEPARATION
CONFERENCE CALL
AIG will host a conference call tomorrow, Thursday, February 17, 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 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. 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,” “see,” “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, the effect of catastrophes, such as the COVID-19 pandemic, and macroeconomic 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:
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 other 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 Fourth Quarter 2021 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:
|
|
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:
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:
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 80 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 December 31, | ||||||||||||||||||||||||||||||
| 2020 |
| 2021 | ||||||||||||||||||||||||||||
|
|
|
| Noncontrolling |
|
|
|
|
|
| Noncontrolling |
|
| ||||||||||||||||||
| Pre-tax |
| Tax Effect | Interests(d) |
| After-tax |
| Pre-tax |
| Tax Effect | Interests(d) |
| After-tax | ||||||||||||||||||
Pre-tax income (loss)/net income (loss), including noncontrolling |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
interests | $ | (558 | ) |
| $ | (542 | ) | $ | - |
|
| $ | (16 | ) |
| $ | 5,048 |
|
| $ | 942 |
| $ | - |
|
| $ | 4,106 |
| ||
Noncontrolling interests |
| - |
|
|
| - |
|
| (37 | ) |
|
| (37 | ) |
|
| - |
|
|
| - |
|
| (360 | ) |
|
| (360 | ) | ||
Pre-tax income (loss)/net income (loss) attributable to AIG |
| (558 | ) |
|
| (542 | ) |
| (37 | ) |
|
| (53 | ) |
|
| 5,048 |
|
|
| 942 |
|
| (360 | ) |
|
| 3,746 |
| ||
Dividends on preferred stock |
|
|
|
|
|
| 7 |
|
|
|
|
|
|
|
| 7 |
| ||||||||||||||
Net income (loss) attributable to AIG common shareholders |
|
|
|
|
|
| (60 | ) |
|
|
|
|
|
|
| 3,739 |
| ||||||||||||||
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
Changes in uncertain tax positions and other tax adjustments(a) |
| - |
|
|
| 336 |
|
| - |
|
|
| (336 | ) |
|
| - |
|
|
| 97 |
|
| - |
|
|
| (97 | ) | ||
Deferred income tax valuation allowance (releases) charges(b) |
| - |
|
|
| 157 |
|
| - |
|
|
| (157 | ) |
|
| - |
|
|
| (12 | ) |
| - |
|
|
| 12 |
| ||
Changes in fair value of securities used to hedge guaranteed living benefits |
| (17 | ) |
|
| (4 | ) |
| - |
|
|
| (13 | ) |
|
| - |
|
|
| (1 | ) |
| - |
|
|
| 1 |
| ||
Changes in benefit reserves and DAC, VOBA and |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
DSI related to net realized gains (losses) |
| (217 | ) |
|
| (46 | ) |
| - |
|
|
| (171 | ) |
|
| (22 | ) |
|
| (4 | ) |
| - |
|
|
| (18 | ) | ||
Changes in the fair value of equity securities |
| (216 | ) |
|
| (45 | ) |
| - |
|
|
| (171 | ) |
|
| 201 |
|
|
| 44 |
|
| - |
|
|
| 157 |
| ||
(Gain) loss on extinguishment of debt |
| (3 | ) |
|
| (1 | ) |
| - |
|
|
| (2 | ) |
|
| 240 |
|
|
| 51 |
|
| - |
|
|
| 189 |
| ||
Net investment income on Fortitude Re funds withheld assets |
| (479 | ) |
|
| (101 | ) |
| - |
|
|
| (378 | ) |
|
| (483 | ) |
|
| (102 | ) |
| - |
|
|
| (381 | ) | ||
Net realized gains on Fortitude Re funds withheld assets |
| (335 | ) |
|
| (71 | ) |
| - |
|
|
| (264 | ) |
|
| (467 | ) |
|
| (98 | ) |
| - |
|
|
| (369 | ) | ||
Net realized losses on Fortitude Re funds withheld |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
embedded derivative |
| 1,152 |
|
|
| 242 |
|
| - |
|
|
| 910 |
|
|
| 720 |
|
|
| 150 |
|
| - |
|
|
| 570 |
| ||
Net realized (gains) losses(c) |
| 1,472 |
|
|
| 331 |
|
| - |
|
|
| 1,141 |
|
|
| (403 | ) |
|
| (81 | ) |
| - |
|
|
| (322 | ) | ||
Loss from discontinued operations |
| - |
|
|
| - |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
| - |
|
|
| - |
| ||
Net gain on divestitures |
| (127 | ) |
|
| (106 | ) |
| - |
|
|
| (21 | ) |
|
| (2,936 | ) |
|
| (627 | ) |
| - |
|
|
| (2,309 | ) | ||
Non-operating litigation reserves and settlements |
| (16 | ) |
|
| (3 | ) |
| - |
|
|
| (13 | ) |
|
| - |
|
|
| 1 |
|
| - |
|
|
| (1 | ) | ||
Unfavorable (favorable) prior year development and related |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
amortization changes ceded under retroactive reinsurance agreements |
| (150 | ) |
|
| (31 | ) |
| - |
|
|
| (119 | ) |
|
| 13 |
|
|
| 2 |
|
| - |
|
|
| 11 |
| ||
Net loss reserve discount (benefit) charge |
| 475 |
|
|
| 100 |
|
| - |
|
|
| 375 |
|
|
| (255 | ) |
|
| (53 | ) |
| - |
|
|
| (202 | ) | ||
Pension expense related to lump sum payments to former employees |
| - |
|
|
| - |
|
| - |
|
|
| - |
|
|
| 7 |
|
|
| 1 |
|
| - |
|
|
| 6 |
| ||
Integration and transaction costs associated with acquiring or |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
divesting businesses |
| 5 |
|
|
| 1 |
|
| - |
|
|
| 4 |
|
|
| 28 |
|
|
| 6 |
|
| - |
|
|
| 22 |
| ||
Restructuring and other costs |
| 111 |
|
|
| 23 |
|
| - |
|
|
| 88 |
|
|
| 129 |
|
|
| 27 |
|
| - |
|
|
| 102 |
| ||
Non-recurring costs related to regulatory or accounting changes |
| 19 |
|
|
| 4 |
|
| - |
|
|
| 15 |
|
|
| 10 |
|
|
| 3 |
|
| - |
|
|
| 7 |
| ||
Noncontrolling interests(d) |
| - |
|
|
| - |
|
| (1 | ) |
|
| (1 | ) |
|
| - |
|
|
| - |
|
| 222 |
|
|
| 222 |
| ||
Adjusted pre-tax income/Adjusted after-tax income attributable |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
to AIG common shareholders | $ | 1,116 |
|
| $ | 244 |
| $ | (38 | ) |
| $ | 827 |
|
| $ | 1,830 |
|
| $ | 346 |
| $ | (138 | ) |
| $ | 1,339 |
|
American International Group, Inc. | |||||||||||||||||||||||||||||||
Selected Financial Data and Non-GAAP Reconciliation (continued) | |||||||||||||||||||||||||||||||
($ in millions, except per common share data) | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
Reconciliations of Adjusted Pre-tax and After-tax Income (continued) | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
| Twelve Months Ended December 31, | ||||||||||||||||||||||||||||||
| 2020 |
| 2021 | ||||||||||||||||||||||||||||
|
|
|
| Noncontrolling |
|
|
|
|
|
| Noncontrolling |
|
| ||||||||||||||||||
| Pre-tax |
| Tax Effect | Interests(d) |
| After-tax |
| Pre-tax |
| Tax Effect | Interests(d) |
| After-tax | ||||||||||||||||||
Pre-tax income (loss)/net income (loss), including noncontrolling |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
interests | $ | (7,293 | ) |
| $ | (1,460 | ) | $ | - |
|
| $ | (5,829 | ) |
| $ | 12,099 |
|
| $ | 2,176 |
| $ | - |
|
| $ | 9,923 |
| ||
Noncontrolling interests |
| - |
|
|
| - |
|
| (115 | ) |
|
| (115 | ) |
|
| - |
|
|
| - |
|
| (535 | ) |
|
| (535 | ) | ||
Pre-tax income (loss)/net income (loss) attributable to AIG |
| (7,293 | ) |
|
| (1,460 | ) |
| (115 | ) |
|
| (5,944 | ) |
|
| 12,099 |
|
|
| 2,176 |
|
| (535 | ) |
|
| 9,388 |
| ||
Dividends on preferred stock |
|
|
|
|
|
| 29 |
|
|
|
|
|
|
|
| 29 |
| ||||||||||||||
Net income (loss) attributable to AIG common shareholders |
|
|
|
|
|
| (5,973 | ) |
|
|
|
|
|
|
| 9,359 |
| ||||||||||||||
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
Changes in uncertain tax positions and other tax adjustments(a) |
| - |
|
|
| 132 |
|
| - |
|
|
| (132 | ) |
|
| - |
|
|
| 998 |
|
| - |
|
|
| (998 | ) | ||
Deferred income tax valuation allowance (releases) charges(b) |
| - |
|
|
| 65 |
|
| - |
|
|
| (65 | ) |
|
| - |
|
|
| (718 | ) |
| - |
|
|
| 718 |
| ||
Changes in fair value of securities used to hedge guaranteed living benefits |
| (41 | ) |
|
| (9 | ) |
| - |
|
|
| (32 | ) |
|
| (61 | ) |
|
| (13 | ) |
| - |
|
|
| (48 | ) | ||
Changes in benefit reserves and DAC, VOBA and |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
DSI related to net realized gains (losses) |
| (12 | ) |
|
| (3 | ) |
| - |
|
|
| (9 | ) |
|
| 52 |
|
|
| 11 |
|
| - |
|
|
| 41 |
| ||
Changes in the fair value of equity securities |
| (200 | ) |
|
| (42 | ) |
| - |
|
|
| (158 | ) |
|
| 237 |
|
|
| 49 |
|
| - |
|
|
| 188 |
| ||
Loss on extinguishment of debt |
| 12 |
|
|
| 2 |
|
| - |
|
|
| 10 |
|
|
| 389 |
|
|
| 82 |
|
| - |
|
|
| 307 |
| ||
Net investment income on Fortitude Re funds withheld assets |
| (1,053 | ) |
|
| (221 | ) |
| - |
|
|
| (832 | ) |
|
| (1,971 | ) |
|
| (414 | ) |
| - |
|
|
| (1,557 | ) | ||
Net realized gains on Fortitude Re funds withheld assets |
| (463 | ) |
|
| (98 | ) |
| - |
|
|
| (365 | ) |
|
| (1,003 | ) |
|
| (211 | ) |
| - |
|
|
| (792 | ) | ||
Net realized (gains) losses on Fortitude Re funds withheld |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
embedded derivative |
| 2,645 |
|
|
| 555 |
|
| - |
|
|
| 2,090 |
|
|
| 603 |
|
|
| 126 |
|
| - |
|
|
| 477 |
| ||
Net realized (gains) losses(c) |
| 97 |
|
|
| 22 |
|
| - |
|
|
| 75 |
|
|
| (1,623 | ) |
|
| (341 | ) |
| - |
|
|
| (1,282 | ) | ||
Income from discontinued operations |
| - |
|
|
| - |
|
| - |
|
|
| (4 | ) |
|
| - |
|
|
| - |
|
| - |
|
|
| - |
| ||
Net (gain) loss on divestitures |
| 8,525 |
|
|
| 1,610 |
|
| - |
|
|
| 6,915 |
|
|
| (3,044 | ) |
|
| (650 | ) |
| - |
|
|
| (2,394 | ) | ||
Non-operating litigation reserves and settlements |
| (21 | ) |
|
| (4 | ) |
| - |
|
|
| (17 | ) |
|
| 3 |
|
|
| 1 |
|
| - |
|
|
| 2 |
| ||
Favorable prior year development and related |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
amortization changes ceded under retroactive reinsurance agreements |
| (221 | ) |
|
| (46 | ) |
| - |
|
|
| (175 | ) |
|
| (186 | ) |
|
| (39 | ) |
| - |
|
|
| (147 | ) | ||
Net loss reserve discount (benefit) charge |
| 516 |
|
|
| 109 |
|
| - |
|
|
| 407 |
|
|
| (193 | ) |
|
| (40 | ) |
| - |
|
|
| (153 | ) | ||
Pension expense related to lump sum payments to former employees |
| - |
|
|
| - |
|
| - |
|
|
| - |
|
|
| 34 |
|
|
| 7 |
|
| - |
|
|
| 27 |
| ||
Integration and transaction costs associated with acquiring or |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
divesting businesses |
| 12 |
|
|
| 3 |
|
| - |
|
|
| 9 |
|
|
| 83 |
|
|
| 18 |
|
| - |
|
|
| 65 |
| ||
Restructuring and other costs |
| 435 |
|
|
| 91 |
|
| - |
|
|
| 344 |
|
|
| 433 |
|
|
| 91 |
|
| - |
|
|
| 342 |
| ||
Non-recurring costs related to regulatory or accounting changes |
| 65 |
|
|
| 14 |
|
| - |
|
|
| 51 |
|
|
| 68 |
|
|
| 15 |
|
| - |
|
|
| 53 |
| ||
Noncontrolling interests(d) |
| - |
|
|
| - |
|
| 62 |
|
|
| 62 |
|
|
| - |
|
|
| - |
|
| 222 |
|
|
| 222 |
| ||
Adjusted pre-tax income/Adjusted after-tax income attributable |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
to AIG common shareholders | $ | 3,003 |
|
| $ | 720 |
| $ | (53 | ) |
| $ | 2,201 |
|
| $ | 5,920 |
|
| $ | 1,148 |
| $ | (313 | ) |
| $ | 4,430 |
|
(a) The three months ended December 31, 2020 as well as twelve months ended December 31, 2021 and 2020 include the completion of audit activity by the Internal Revenue Service. Twelve months ended December 31, 2020 includes the write-down of net operating loss deferred tax assets in certain foreign jurisdictions, which is offset by valuation allowance release. | |||||||||||||||||||||||
(b) The three months ended December 31, 2020 as well as twelve months ended December 31, 2021 and 2020 include valuation allowance established against a portion of certain tax attribute carryforwards of AIG's U.S. federal consolidated income tax group, as well as valuation allowance changes 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 year ended December 31, 2021, noncontrolling interests include realized non-operating gains on consolidated investment entities. Prior to June 2, 2020, noncontrolling interests was primarily due to the 19.9 percent investment in Fortitude Group Holdings, LLC (Fortitude Holdings) by an affiliate of The Carlyle Group L.P. (Carlyle), which occurred in the fourth quarter of 2018. Carlyle was allocated 19.9 percent of Fortitude Holdings’ standalone financial results through the June 2, 2020 closing date of the sale of a majority of the interests in Fortitude Holdings. Fortitude Holdings’ results were mostly eliminated in AIG’s consolidated income from continuing operations given that its results arose from intercompany transactions. Noncontrolling interests was calculated based on the standalone financial results of Fortitude Holdings. The most significant component of Fortitude Holdings’ standalone results was the change in fair value of the embedded derivatives which changes with movements in interest rates and credit spreads, and which was recorded in net realized gains and losses of Fortitude Holdings. In accordance with AIG's adjusted after-tax income definition, realized gains and losses are excluded from noncontrolling interests. Subsequent to the Majority Interest Fortitude Sale, AIG owns 3.5 percent of Fortitude Holdings and no longer consolidates Fortitude Holdings in its financial statements as of such date. The minority interest in Fortitude Holdings is carried at cost within AIG’s Other invested assets, which was $100 million as of December 31, 2021. |
American International Group, Inc. | |||||||||||||||
Selected Financial Data and Non-GAAP Reconciliation (continued) | |||||||||||||||
($ in millions, except per common share data) | |||||||||||||||
|
|
|
|
|
|
|
| ||||||||
Summary of Key Financial Metrics | |||||||||||||||
| Three Months Ended December 31, |
| Twelve Months Ended December 31, | ||||||||||||
Income (loss) per common share: |
| 2020 |
| 2021 | % Inc. (Dec.) |
|
| 2020 |
| 2021 | % Inc. (Dec.) | ||||
Basic |
|
|
|
|
|
|
| ||||||||
Income (loss) from continuing operations | $ | (0.07 | ) | $ | 4.48 | NM | % |
| $ | (6.88 | ) | $ | 10.95 | NM | % |
Income from discontinued operations |
| - |
|
| - | NM |
|
|
| - |
|
| - | NM |
|
Net income (loss) attributable to AIG common shareholders | $ | (0.07 | ) | $ | 4.48 | NM |
|
| $ | (6.88 | ) | $ | 10.95 | NM |
|
|
|
|
|
|
|
|
| ||||||||
Diluted |
|
|
|
|
|
|
| ||||||||
Income (loss) from continuing operations | $ | (0.07 | ) | $ | 4.38 | NM |
|
| $ | (6.88 | ) | $ | 10.82 | NM |
|
Income from discontinued operations |
| - |
|
| - | NM |
|
|
| - |
|
| - | NM |
|
Net income (loss) attributable to AIG common shareholders | $ | (0.07 | ) | $ | 4.38 | NM |
|
| $ | (6.88 | ) | $ | 10.82 | NM |
|
|
|
|
|
|
|
|
| ||||||||
Adjusted after-tax income attributable to AIG common |
|
|
|
|
|
|
| ||||||||
shareholders per diluted share (a) | $ | 0.94 |
| $ | 1.58 | 68.1 | % |
| $ | 2.52 |
| $ | 5.12 | 103.2 | % |
Weighted average shares outstanding: |
|
|
|
|
|
|
| ||||||||
Basic |
| 868.4 |
|
| 833.9 |
|
|
| 869.3 |
|
| 854.3 |
| ||
Diluted (a) |
| 868.4 |
|
| 872.0 |
|
|
| 869.3 |
|
| 864.9 |
|
(a) For the three-month period ended December 31, 2021, an option for Blackstone to exchange all or a portion of its ownership interest in SAFG for AIG common shares was anti-dilutive and therefore 25,215,423 shares were excluded from the calculation of adjusted after-tax income per diluted share attributable to AIG common shareholders. For the three- and twelve-month periods ended December 31, 2020, because we reported net losses attributable to AIG common shareholders, all common stock equivalents are anti-dilutive and are therefore excluded from the calculation of diluted shares and diluted per share amounts. However, because we reported adjusted after-tax income attributable to AIG common shareholders, the calculation of adjusted after-tax income per diluted share attributable to AIG common shareholders includes 8,309,281 and 5,401,957 dilutive shares for the three- and twelve-month periods ended December 31, 2020, respectively. |
Reconciliation of Book Value per Common Share | ||||||||
|
|
|
| |||||
As of period end: | December 31, 2020 | September 30, 2021 | December 31, 2021 | |||||
Total AIG shareholders' equity | $ | 66,362 | $ | 64,863 | $ | 65,956 | ||
Less: Preferred equity |
| 485 |
| 485 |
| 485 | ||
Total AIG common shareholders' equity (a) |
| 65,877 |
| 64,378 |
| 65,471 | ||
Less: Accumulated other comprehensive income (AOCI) |
| 13,511 |
| 8,606 |
| 6,687 | ||
Add: Cumulative unrealized gains and losses related to Fortitude Re |
|
|
| |||||
Funds Withheld Assets |
| 4,657 |
| 2,966 |
| 2,791 | ||
Less: Deferred tax assets (DTA)* |
| 7,907 |
| 7,083 |
| 5,221 | ||
Total adjusted AIG common shareholders' equity (b) | $ | 49,116 | $ | 51,655 | $ | 56,354 | ||
Less: Intangible assets: |
|
|
| |||||
Goodwill |
| 4,074 |
| 4,058 |
| 4,056 | ||
Value of business acquired |
| 126 |
| 117 |
| 111 | ||
Value of distribution channel acquired |
| 497 |
| 467 |
| 458 | ||
Other intangibles |
| 319 |
| 302 |
| 300 | ||
Total intangible assets |
| 5,016 |
| 4,944 |
| 4,925 | ||
Total adjusted tangible common shareholders' equity (c) | $ | 44,100 | $ | 46,711 | $ | 51,429 | ||
|
|
|
| |||||
Total common shares outstanding (d) |
| 861.6 |
| 835.8 |
| 818.7 |
| December 31, | % Inc. | September 30, | % Inc. | December 31, | |||||||||
As of period end: |
| 2020 | (Dec.) |
| 2021 | (Dec.) |
| 2021 | ||||||
Book value per common share (a÷d) | $ | 76.46 | 4.6 | % | $ | 77.03 | 3.8 | % | $ | 79.97 | ||||
Adjusted book value per common share (b÷d) |
| 57.01 | 20.7 |
|
| 61.80 | 11.4 |
|
| 68.83 | ||||
Adjusted tangible book value per common share (c÷d) |
| 51.18 | 22.7 |
|
| 55.89 | 12.4 |
|
| 62.82 |
Reconciliation of Return On Common Equity |
|
| ||||||||||
|
|
|
|
| ||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||
|
| 2020 |
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
Actual or Annualized net income attributable to AIG common shareholders (a) | $ | (240 | ) | $ | 14,956 |
| $ | (5,973 | ) | $ | 9,359 |
|
|
|
|
|
| ||||||||
Actual or Annualized adjusted after-tax income attributable to AIG common shareholders (b) | $ | 3,308 |
| $ | 5,356 |
| $ | 2,201 |
| $ | 4,430 |
|
|
|
|
|
| ||||||||
Average AIG common shareholders' equity (c) | $ | 64,750 |
| $ | 64,925 |
| $ | 63,225 |
| $ | 64,704 |
|
Less: Average AOCI |
| 12,245 |
|
| 7,647 |
|
| 7,529 |
|
| 9,096 |
|
Add: Average cumulative unrealized gains and losses related to Fortitude Re Funds Withheld Assets |
| 4,525 |
|
| 2,879 |
|
| 2,653 |
|
| 3,200 |
|
Less: Average DTA* |
| 8,015 |
|
| 6,152 |
|
| 8,437 |
|
| 7,025 |
|
Average adjusted common shareholders' equity (d) | $ | 49,015 |
| $ | 54,005 |
|
| 49,912 |
|
| 51,783 |
|
|
|
|
|
| ||||||||
ROCE (a÷c) |
| (0.4 | )% |
| 23.0 | % |
| (9.4 | )% |
| 14.5 | % |
Adjusted return on common equity (b÷d) |
| 6.7 | % |
| 9.9 | % |
| 4.4 | % |
| 8.6 | % |
* 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 |
| Twelve Months Ended | ||||||||||||
| December 31, |
| December 31, | ||||||||||||
|
| 2020 |
|
|
| 2021 |
|
|
| 2020 |
|
|
| 2021 |
|
Net investment income per Consolidated Statements of Operations | $ | 3,957 |
|
| $ | 3,565 |
|
| $ | 13,631 |
|
| $ | 14,612 |
|
Changes in fair value of securities used to hedge guaranteed living benefits |
| (14 | ) |
|
| (14 | ) |
|
| (56 | ) |
|
| (60 | ) |
Changes in the fair value of equity securities |
| (216 | ) |
|
| 201 |
|
|
| (200 | ) |
|
| 237 |
|
Net investment income on Fortitude Re funds withheld assets |
| (479 | ) |
|
| (483 | ) |
|
| (1,053 | ) |
|
| (1,971 | ) |
Net realized gains (losses) related to economic hedges and other |
| (22 | ) |
|
| 22 |
|
|
| (1 | ) |
|
| 122 |
|
Total Net investment income - APTI Basis | $ | 3,226 |
|
| $ | 3,291 |
|
| $ | 12,321 |
|
| $ | 12,940 |
|
Net Premiums Written - Change in Constant Dollar | ||||||||
|
|
|
|
|
| |||
| Three Months Ended December 31, 2021 | |||||||
General Insurance | General Insurance |
| International - Commercial Lines |
| International - Personal Insurance | |||
Foreign exchange effect on worldwide premiums: |
|
|
|
|
| |||
Change in net premiums written |
|
|
|
|
| |||
Increase (decrease) in original currency | 8 | % |
| 16 | % |
| (5 | )% |
Foreign exchange effect | (1 | ) |
| (1 | ) |
| (4 | ) |
Increase (decrease) as reported in U.S. dollars | 7 | % |
| 15 | % |
| (9 | )% |
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 | ||||
| December 31, | ||||
| 2020 |
| 2021 | ||
Total General Insurance |
|
|
| ||
Combined ratio | 102.8 |
|
| 92.4 |
|
Catastrophe losses and reinstatement premiums | (9.0 | ) |
| (2.9 | ) |
Prior year development, net of reinsurance and prior year premiums | (0.9 | ) |
| 0.3 |
|
Accident year combined ratio, as adjusted | 92.9 |
|
| 89.8 |
|
|
|
|
| ||
North America |
|
|
| ||
Combined ratio | 114.9 |
|
| 95.0 |
|
Catastrophe losses and reinstatement premiums | (18.0 | ) |
| (5.6 | ) |
Prior year development, net of reinsurance and prior year premiums | (2.2 | ) |
| 0.3 |
|
Accident year combined ratio, as adjusted | 94.7 |
|
| 89.7 |
|
|
|
|
| ||
North America - Commercial Lines |
|
|
| ||
Combined ratio | 112.4 |
|
| 94.8 |
|
Catastrophe losses and reinstatement premiums | (17.4 | ) |
| (5.8 | ) |
Prior year development, net of reinsurance and prior year premiums | (1.4 | ) |
| (0.1 | ) |
Accident year combined ratio, as adjusted | 93.6 |
|
| 88.9 |
|
|
|
|
| ||
North America - Personal Insurance |
|
|
| ||
Combined ratio | 133.2 |
|
| 96.0 |
|
Catastrophe losses and reinstatement premiums | (22.6 | ) |
| (4.0 | ) |
Prior year development, net of reinsurance and prior year premiums | (8.0 | ) |
| 2.9 |
|
Accident year combined ratio, as adjusted | 102.6 |
|
| 94.9 |
|
|
|
|
| ||
International |
|
|
| ||
Combined ratio | 93.6 |
|
| 90.1 |
|
Catastrophe losses and reinstatement premiums | (2.1 | ) |
| (0.6 | ) |
Prior year development, net of reinsurance and prior year premiums | 0.2 |
|
| 0.4 |
|
Accident year combined ratio, as adjusted | 91.7 |
|
| 89.9 |
|
|
|
|
| ||
International - Commercial Lines |
|
|
| ||
Combined ratio | 92.1 |
|
| 88.1 |
|
Catastrophe losses and reinstatement premiums | (4.0 | ) |
| (1.1 | ) |
Prior year development, net of reinsurance and prior year premiums | 1.1 |
|
| (0.3 | ) |
Accident year combined ratio, as adjusted | 89.2 |
|
| 86.7 |
|
|
|
|
| ||
International - Personal Insurance |
|
|
| ||
Loss ratio | 52.7 |
|
| 50.6 |
|
Catastrophe losses and reinstatement premiums | - |
|
| - |
|
Prior year development, net of reinsurance and prior year premiums | (0.9 | ) |
| 1.1 |
|
Accident year loss ratio, as adjusted | 51.8 |
|
| 51.7 |
|
|
|
|
| ||
Combined ratio | 95.0 |
|
| 93.0 |
|
Catastrophe losses and reinstatement premiums | - |
|
| - |
|
Prior year development, net of reinsurance and prior year premiums | (0.9 | ) |
| 1.1 |
|
Accident year combined ratio, as adjusted | 94.1 |
|
| 94.1 |
|
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 |
| |||||
|
|
|
|
|
|
| December 31, |
| |||||
|
|
|
|
|
|
|
| 2020 |
|
| 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Adjusted pre-tax income |
|
|
|
|
|
| $ | 809 |
| $ | 1,509 |
|
|
Interest expense on attributed financial debt |
|
|
|
|
|
|
| 145 |
|
| 150 |
|
|
Adjusted pre-tax income including attributed interest expense |
|
|
|
|
|
|
| 664 |
|
| 1,359 |
|
|
Income tax expense |
|
|
|
|
|
|
| 182 |
|
| 305 |
|
|
Adjusted after-tax income |
|
|
|
|
|
|
| 482 |
|
| 1,054 |
|
|
Dividends declared on preferred stock |
|
|
|
|
|
|
| 3 |
|
| 3 |
|
|
Adjusted after-tax income attributable to common shareholders |
|
|
|
|
|
| $ | 479 |
| $ | 1,051 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Ending adjusted segment common equity |
|
|
|
|
|
| $ | 25,044 |
| $ | 26,429 |
|
|
Average adjusted segment common equity |
|
|
|
|
|
| $ | 25,065 |
| $ | 26,157 |
|
|
Return on adjusted segment common equity |
|
|
|
|
|
|
| 7.6 | % |
| 16.1 |
| % |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Total segment shareholder’s equity |
|
|
|
|
|
| $ | 26,214 |
| $ | 26,283 |
|
|
Less: Preferred equity |
|
|
|
|
|
|
| 192 |
|
| 205 |
|
|
Total segment common equity |
|
|
|
|
|
|
| 26,022 |
|
| 26,078 |
|
|
Less: Accumulated other comprehensive income (AOCI) |
|
|
|
|
|
|
| 1,319 |
|
| (189 | ) |
|
Add: Cumulative unrealized gains and losses related to Fortitude Re funds withheld assets |
|
|
|
|
|
|
| 341 |
|
| 162 |
|
|
Total adjusted segment common equity |
|
|
|
|
|
| $ | 25,044 |
| $ | 26,429 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Reconciliation of Life and Retirement Return on Adjusted Segment Common Equity |
| ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Three Months Ended |
| Twelve Months Ended |
| |||||||||
| December 31, |
| December 31, |
| |||||||||
|
| 2020 |
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Adjusted pre-tax income | $ | 1,027 |
| $ | 969 |
| $ | 3,531 |
| $ | 3,911 |
|
|
Interest expense on attributed financial debt |
| 70 |
|
| 72 |
|
| 285 |
|
| 291 |
|
|
Adjusted pre-tax income including attributed interest expense |
| 957 |
|
| 897 |
|
| 3,246 |
|
| 3,620 |
|
|
Income tax expense |
| 185 |
|
| 181 |
|
| 640 |
|
| 724 |
|
|
Adjusted after-tax income |
| 772 |
|
| 716 |
|
| 2,606 |
|
| 2,896 |
|
|
Dividends declared on preferred stock |
| 2 |
|
| 2 |
|
| 8 |
|
| 8 |
|
|
Adjusted after-tax income attributable to common shareholders | $ | 770 |
| $ | 714 |
| $ | 2,598 |
| $ | 2,888 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Ending adjusted segment common equity | $ | 19,172 |
| $ | 20,525 |
| $ | 19,172 |
| $ | 20,525 |
|
|
Average adjusted segment common equity | $ | 19,297 |
| $ | 20,880 |
| $ | 19,128 |
| $ | 20,369 |
|
|
Return on adjusted segment common equity |
| 16.0 | % |
| 13.7 | % |
| 13.6 | % |
| 14.2 |
| % |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Total segment shareholder’s equity | $ | 29,688 |
| $ | 28,063 |
| $ | 29,688 |
| $ | 28,063 |
|
|
Less: Preferred equity |
| 128 |
|
| 138 |
|
| 128 |
|
| 138 |
|
|
Total segment common equity |
| 29,560 |
|
| 27,925 |
|
| 29,560 |
|
| 27,925 |
|
|
Less: Accumulated other comprehensive income (AOCI) |
| 14,613 |
|
| 10,029 |
|
| 14,613 |
|
| 10,029 |
|
|
Add: Cumulative unrealized gains and losses related to Fortitude Re funds withheld assets |
| 4,225 |
|
| 2,629 |
|
| 4,225 |
|
| 2,629 |
|
|
Total adjusted segment common equity | $ | 19,172 |
| $ | 20,525 |
| $ | 19,172 |
| $ | 20,525 |
|
|
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 | ||||||
| December 31, | ||||||
|
| 2020 |
|
|
| 2021 |
|
Individual Retirement: |
|
|
|
|
| ||
Premiums | $ | 37 |
|
| $ | 68 |
|
Deposits |
| 2,720 |
|
|
| 3,244 |
|
Other |
| 1 |
|
|
| (4 | ) |
Total premiums and deposits | $ | 2,758 |
|
| $ | 3,308 |
|
|
|
|
|
|
| ||
Group Retirement: |
|
|
|
|
| ||
Premiums | $ | 5 |
|
| $ | 7 |
|
Deposits |
| 2,194 |
|
|
| 1,855 |
|
Other |
| - |
|
|
| - |
|
Total premiums and deposits | $ | 2,199 |
|
| $ | 1,862 |
|
|
|
|
|
|
| ||
Life Insurance: |
|
|
|
|
| ||
Premiums | $ | 491 |
|
| $ | 518 |
|
Deposits |
| 430 |
|
|
| 426 |
|
Other |
| 235 |
|
|
| 262 |
|
Total premiums and deposits | $ | 1,156 |
|
| $ | 1,206 |
|
|
|
|
|
|
| ||
Institutional Markets: |
|
|
|
|
| ||
Premiums | $ | 417 |
|
| $ | 2,150 |
|
Deposits |
| 864 |
|
|
| 77 |
|
Other |
| 6 |
|
|
| 6 |
|
Total premiums and deposits | $ | 1,287 |
|
| $ | 2,233 |
|
|
|
|
|
|
| ||
Total Life and Retirement: |
|
|
|
|
| ||
Premiums | $ | 950 |
|
| $ | 2,743 |
|
Deposits |
| 6,208 |
|
|
| 5,602 |
|
Other |
| 242 |
|
|
| 264 |
|
Total premiums and deposits |
| 7,400 |
|
| $ | 8,609 |
|
Retail Mutual Funds |
| (139 | ) |
|
|
| |
Total premiums and deposits excluding Retail Mutual Funds | $ | 7,261 |
|
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20220216006013/en/
Quentin McMillan (Investors): quentin.mcmillan@aig.com Claire Talcott (Media): claire.talcott@aig.com
Source: American International Group, Inc.