SECOND 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 second quarter ended June 30, 2021.
AIG President and CEO Peter Zaffino said: “We had another outstanding quarter with our businesses performing extremely well while we continue to make significant progress on strategic priorities and position AIG for sustainable profitable growth over the long-term. General Insurance delivered excellent results, Life and Retirement was once again a meaningful contributor, and we accelerated work on AIG 200 and the separation of Life and Retirement from AIG.
“This exceptional performance is the direct result of the hard work and dedication of AIG colleagues around the world who pursue excellence in everything we do and strive to create value for clients, distribution partners, shareholders, and our other stakeholders.
“In General Insurance, net premiums written grew by an impressive 24%, driven by improved retention, outstanding levels of new business, and continued improvement in rate. We also reported another quarter of strong underwriting profitability, with a combined ratio of 92.5 inclusive of catastrophe losses, and 91.1, as adjusted, a 380-basis point improvement from the adjusted combined ratio in the second quarter of 2020.
“In Life and Retirement, adjusted pre-tax income increased 26% to $1.1 billion driven by investment returns and improving market conditions.
“In July, we announced a strategic partnership with Blackstone whereby Blackstone will purchase a 9.9% equity stake in Life and Retirement for $2.2 billion in cash and manage certain specified Life and Retirement general account assets. This investment represents 1.1x of target pro forma adjusted book value and validates Life and Retirement’s industry leading position. In addition, a long-term perpetual vehicle affiliated with Blackstone will purchase certain of our Affordable Housing assets for $5.1 billion in cash.
“These transactions, together with our strong liquidity position at June 30 of $7.2 billion, will generate significant additional capital for AIG to deploy towards our near term capital management priorities, which are de-levering, returning capital to shareholders, and investing in organic growth.
“Given our strong balance sheet and liquidity, the AIG Board of Directors increased our current share buyback authorization to $6 billion, inclusive of the approximately $900 million that was remaining under the prior authorization. In the second half of 2021, we expect to repurchase at least $2 billion in common stock and reduce debt outstanding by $2.5 billion.
“We have incredible momentum as we head into the second half of the year and I am confident that we will continue to execute on our transformation and growth strategy. I am immensely proud of what our team has achieved and the progress we are making on our journey to become a top performing company.”
For the second quarter of 2021, net income attributable to AIG common shareholders was $91 million, or $0.11 per diluted common share, compared to a net loss of $7.9 billion, or $9.15 per common share, in the prior year quarter. The increase was primarily due to the recognition of an $8.4 billion loss from the sale and deconsolidation of Fortitude on June 2, 2020; lower net realized losses; higher net investment income; significantly lower catastrophe losses, net of reinsurance (CATs); and overall strong General Insurance underwriting results. These pre-tax increases were partially offset by $1.9 billion higher income tax expense with $1.7 billion attributable to the tax benefit on the deconsolidation of Fortitude in 2020.
AATI was $1.3 billion, or $1.52 per diluted common share, for the second quarter of 2021 compared to $561 million, or $0.64 per diluted common share, in the prior year quarter. The increase was primarily due to significantly lower CATs and overall strong General Insurance underwriting results.
Total consolidated net investment income for the second quarter of 2021 was $3.7 billion, up 9% from $3.4 billion in the prior year quarter primarily due to strong private equity returns, partially offset by lower gains on fair value option bonds. Total net investment income on an APTI basis* was $3.2 billion, a decrease of $16 million compared to the prior year quarter, which included $378 million related to two months of investment income on Fortitude assets prior to the sale's close. Excluding this amount, second quarter 2021 total net investment income on an APTI basis increased 13%, or $362 million, reflecting higher private equity returns.
Book value per common share was $76.73 as of June 30, 2021, an increase of 0.4% from December 31, 2020 and 6.0% from March 31, 2021, primarily due to changes in accumulated other comprehensive income. Adjusted book value per common share was $60.07, an increase of 5.4% from December 31, 2020 and 2.4% from March 31, 2021 reflecting growth in retained earnings from net income in excess of dividends and share repurchases. Adjusted tangible book value per share was $54.24, an increase of 6.0% from December 31, 2020 and 2.6% from March 31, 2021.
As of June 30, 2021, AIG Parent liquidity was approximately $7.2 billion. AIG repurchased approximately 5 million shares of AIG common stock during the second quarter for an aggregate purchase price of $230 million, completing our prior commitment to repurchase $500 million in the first half of 2021. On August 3, 2021, AIG’s Board of Directors increased the Company’s share repurchase authorization to $6.0 billion, inclusive of the approximately $0.9 billion that remained under the prior share repurchase authorization. Additionally, in second quarter of 2021 AIG repurchased, through cash tender offers, and canceled, approximately $254 million aggregate principal amount of certain notes and debentures issued or guaranteed by AIG for an aggregate purchase price of approximately $359 million. AIG’s total debt and preferred stock to total capital leverage at June 30, 2021 was 27.0%.
Today, the AIG Board of Directors declared a quarterly cash dividend of $0.32 per share on AIG Common Stock (NYSE: AIG), par value $2.50 per share. The dividend is payable on September 30, 2021 to stockholders of record at the close of business on September 16, 2021.
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 $0.365625 per depositary share. The dividend is payable on September 15, 2021 to holders of record at the close of business on August 31, 2021.
FINANCIAL SUMMARY
| Three Months Ended June 30, | |||||
($ in millions, except per common share amounts) | 2021 | 2020 | ||||
Net income (loss) attributable to AIG common shareholders | $ | 91 | $ | (7,936) |
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Net income (loss) per diluted share attributable to |
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AIG common shareholders (a) | $ | 0.11 | $ | (9.15) |
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Adjusted pre-tax income (loss) | $ | 1,708 | $ | 791 |
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General Insurance |
| 1,194 |
| 175 |
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Life and Retirement |
| 1,124 |
| 895 |
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Other Operations |
| (610) |
| (279) |
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Net investment income | $ | 3,675 | $ | 3,366 |
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Net investment income, APTI basis |
| 3,182 |
| 3,198 |
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Adjusted after-tax income attributable to AIG common |
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shareholders | $ | 1,331 | $ | 561 |
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Adjusted after-tax income per diluted share attributable |
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to AIG common shareholders | $ | 1.52 | $ | 0.64 |
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Weighted average common shares outstanding - diluted (in millions) (a) |
| 872.9 |
| 867.0 |
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Return on common equity |
| 0.6 | % | NM |
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Adjusted return on common equity |
| 10.5 | % | 4.5 | % | |
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Book value per common share | $ | 76.73 | $ | 71.68 |
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Adjusted book value per common share | $ | 60.07 | $ | 55.90 |
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Common shares outstanding (in millions) |
| 854.9 |
| 861.4 |
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(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-month period ended June 30, 2020 because we reported a net loss attributable to AIG common shareholders from continuing operations in that period. |
All comparisons are against the second quarter of 2020, unless otherwise indicated. Refer to the AIG Second Quarter 2021 Financial Supplement, which is posted on AIG's website in the Investors section, for further information.
GENERAL INSURANCE
| Three Months Ended June 30, |
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($ in millions) | 2021 | 2020 | Change | |||||
Gross premiums written | $ | 9,503 |
| $ | 8,474 |
| 12 | % |
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Net premiums written | $ | 6,860 |
| $ | 5,549 |
| 24 | % |
North America |
| 3,156 |
|
| 2,153 |
| 47 |
|
North America Commercial Lines |
| 2,655 |
|
| 2,303 |
| 15 |
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North America Personal Insurance |
| 501 |
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| (150) |
| NM |
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International |
| 3,704 |
|
| 3,396 |
| 9 |
|
International Commercial Lines |
| 2,062 |
|
| 1,769 |
| 17 |
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International Personal Insurance |
| 1,642 |
|
| 1,627 |
| 1 |
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Underwriting income (loss) | $ | 463 |
| $ | (343) |
| NM | % |
North America |
| 169 |
|
| (439) |
| NM |
|
North America Commercial Lines |
| 162 |
|
| (405) |
| NM |
|
North America Personal Insurance |
| 7 |
|
| (34) |
| NM |
|
International |
| 294 |
|
| 96 |
| 206 |
|
International Commercial Lines |
| 218 |
|
| 7 |
| NM |
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International Personal Insurance |
| 76 |
|
| 89 |
| (15) |
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Net investment income, APTI basis | $ | 731 |
| $ | 518 |
| 41 | % |
Adjusted pre-tax income | $ | 1,194 |
| $ | 175 |
| NM | % |
Return on adjusted segment common equity |
| 12.3 | % |
| 0.3 | % | 12.0 | pts |
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Underwriting ratios: |
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North America Combined Ratio (CR) |
| 93.7 |
|
| 117.8 |
| (24.1) | pts |
North America Commercial Lines CR |
| 93.0 |
|
| 119.4 |
| (26.4) |
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North America Personal Insurance CR |
| 98.1 |
|
| 108.7 |
| (10.6) |
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International CR |
| 91.8 |
|
| 97.1 |
| (5.3) |
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International Commercial Lines CR |
| 88.7 |
|
| 99.5 |
| (10.8) |
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International Personal Insurance CR |
| 95.2 |
|
| 94.3 |
| 0.9 |
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General Insurance (GI) CR |
| 92.5 |
|
| 106.0 |
| (13.5) |
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GI Loss ratio |
| 61.3 |
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| 72.6 |
| (11.3) | pts |
Less: impact on loss ratio |
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Catastrophe losses and reinstatement premiums |
| (2.1) |
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| (11.9) |
| 9.8 |
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Prior year development |
| 0.7 |
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| 0.8 |
| (0.1) |
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GI Accident year loss ratio, as adjusted | 59.9 |
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| 61.5 |
| (1.6) |
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GI Expense ratio | 31.2 |
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| 33.4 |
| (2.2) |
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GI Accident year combined ratio, as adjusted (AYCR, as adjusted) | 91.1 |
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| 94.9 |
| (3.8) |
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Accident year combined ratio, as adjusted (AYCR, as adjusted): |
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North America AYCR, as adjusted | 92.4 |
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| 98.6 |
| (6.2) | pts | |
North America Commercial Lines AYCR, as adjusted | 91.2 |
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| 97.4 |
| (6.2) |
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North America Personal Insurance AYCR, as adjusted | 100.1 |
|
| 104.8 |
| (4.7) |
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International AYCR | 90.2 |
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| 92.1 |
| (1.9) |
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International Commercial Lines AYCR, as adjusted | 86.9 |
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| 90.6 |
| (3.7) |
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International Personal Insurance AYCR, as adjusted | 94.0 |
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| 93.5 |
| 0.5 |
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General Insurance
LIFE AND RETIREMENT
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| Three Months Ended |
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| June 30, |
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($ in millions, except as indicated) |
| 2021 | 2020 |
| Change | |||
Adjusted pre-tax income (loss) | $ | 1,124 |
| $ | 895 |
| 26 | % |
Individual Retirement |
| 617 |
|
| 549 |
| 12 |
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Group Retirement |
| 347 |
|
| 214 |
| 62 |
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Life Insurance |
| 20 |
|
| 2 |
| NM |
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Institutional Markets |
| 140 |
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| 130 |
| 8 |
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Premiums & fees | $ | 2,417 |
| $ | 2,350 |
| 3 | % |
Individual Retirement |
| 273 |
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| 243 |
| 12 |
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Group Retirement |
| 134 |
|
| 103 |
| 30 |
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Life Insurance |
| 887 |
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| 868 |
| 2 |
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Institutional Markets |
| 1,123 |
|
| 1,136 |
| (1) |
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Premiums and deposits | $ | 9,035 |
| $ | 5,718 |
| 58 | % |
Individual Retirement |
| 3,978 |
|
| 1,794 |
| 122 |
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Group Retirement |
| 2,255 |
|
| 1,670 |
| 35 |
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Life Insurance |
| 1,161 |
|
| 1,119 |
| 4 |
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Institutional Markets |
| 1,641 |
|
| 1,135 |
| 45 |
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Net flows | $ | (306) |
| $ | (1,744) |
| 82 | % |
Individual Retirement* |
| (77) |
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| (1,501) |
| 95 |
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Group Retirement |
| (229) |
|
| (243) |
| 6 |
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Net investment income, APTI basis | $ | 2,376 |
| $ | 2,099 |
| 13 | % |
Return on adjusted segment common equity |
| 16.4 | % | 13.5 | % | 2.9 | pts | |
* Includes Retail Mutual Funds |
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Life and Retirement
OTHER OPERATIONS
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| Three Months Ended |
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| June 30, |
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($ in millions) |
| 2021 | 2020 |
| Change | ||||||
Corporate and Other | $ | (617 | ) |
| $ | (248 | ) |
| (149 | ) | % |
Asset Management |
| 101 |
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| (84 | ) |
| NM |
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Adjusted pre-tax loss before consolidation and eliminations |
| (516 | ) |
|
| (332 | ) |
| (55 | ) |
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Consolidation and eliminations |
| (94 | ) |
|
| 53 |
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| NM |
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Adjusted pre-tax loss | $ | (610 | ) |
| $ | (279 | ) |
| (119 | ) | % |
Other Operations
LIFE AND RETIREMENT SEPARATION
CONFERENCE CALL
AIG will host a conference call tomorrow, Friday, August 6, 2021 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 constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These projections, goals, assumptions and statements are not historical facts but instead represent only a belief regarding future events, many of which, by their nature, are inherently uncertain and outside AIG’s control. These projections, goals, assumptions and statements include statements preceded by, followed by or including words such as “will,” “believe,” “anticipate,” “expect,” “intend,” “plan,” “focused on achieving,” “view,” “target,” “goal” or “estimate.” These projections, goals, assumptions and statements may relate to future actions, prospective services or products, future performance or results of current and anticipated services or products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, anticipated organizational, business or regulatory changes, the effect of catastrophes, such as the COVID-19 crisis, 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.
It is possible that AIG’s actual results and financial condition will differ, possibly materially, from the results and financial condition indicated in these projections, goals, assumptions and statements. Factors that could cause AIG’s actual results to differ, possibly materially, from those in the specific projections, goals, assumptions and statements include:
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.
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 2020 Financial Supplement available in the Investors section of AIG’s website, www.aig.com.
Book Value per Common Share, Excluding Accumulated Other Comprehensive Income (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.
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.
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:
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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, and the following tax items from net income attributable to AIG:
and by excluding the net realized gains (losses) and other charges from noncontrolling interests.
See page 15 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: both the accident year loss and accident year combined ratios, as adjusted, exclude catastrophe losses 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 having a net impact on AIG in excess of $10 million each 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) | Catastrophe losses (CATs) and reinstatement premiums = [Loss and loss adjustment expenses incurred – (CATs)] ÷ [NPE +/(-) CYRIPs] – Loss ratio |
g) | Accident year loss ratio, as adjusted (AYLR) = [Loss and loss adjustment expenses incurred – CATs – PYD] ÷ [NPE +/(-) Reinstatement premiums related to catastrophes (CYRIPs) +/(-) RIPs related to prior year catastrophes (PYRIPs) + (Additional) returned premium related to PYD on loss sensitive business ((AP)RP) + Adjustment for ceded premiums under reinsurance contracts related to prior accident years] |
h) | Accident year combined ratio, as adjusted = AYLR + Expense ratio |
i) | Prior year development net of (additional) return premium related to PYD on loss sensitive business = [Loss and loss adjustment expenses incurred – CATs – PYD] ÷ [NPE +/(-) CYRIPs +/(-) PYRIPs + (AP)RP] – Loss ratio – CAT 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.
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 more than 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) | ||||||||||||||||||||||||
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Reconciliations of Adjusted Pre-tax and After-tax Income | ||||||||||||||||||||||||
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| Three Months Ended June 30, | |||||||||||||||||||||||
| 2021 | 2020 | ||||||||||||||||||||||
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| Noncontrolling |
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| Noncontrolling |
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| 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 |
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interests | $ | 147 |
| $ | (3 | ) | $ | - |
| $ | 150 |
| $ | (9,661 | ) | $ | (1,896 | ) | $ | - |
| $ | (7,766 | ) |
Noncontrolling interests |
| - |
|
| - |
|
| (51 | ) |
| (51 | ) |
| - |
|
| - |
|
| (162 | ) |
| (162 | ) |
Pre-tax income (loss)/net income (loss) attributable to AIG |
| 147 |
|
| (3 | ) |
| (51 | ) |
| 99 |
|
| (9,661 | ) |
| (1,896 | ) |
| (162 | ) |
| (7,928 | ) |
Dividends on preferred stock |
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| 8 |
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| 8 |
| ||||||
Net income (loss) attributable to AIG common shareholders |
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| 91 |
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| (7,936 | ) | ||||||
Adjustments: |
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Changes in uncertain tax positions and other tax adjustments(a) |
| - |
|
| (35 | ) |
| - |
|
| 35 |
|
| - |
|
| (206 | ) |
| - |
|
| 206 |
|
Deferred income tax valuation allowance releases(b) |
| - |
|
| 25 |
|
| - |
|
| (25 | ) |
| - |
|
| 183 |
|
| - |
|
| (183 | ) |
Changes in fair value of securities used to hedge guaranteed living benefits |
| (13 | ) |
| (2 | ) |
| - |
|
| (11 | ) |
| (16 | ) |
| (4 | ) |
| - |
|
| (12 | ) |
Changes in benefit reserves and DAC, VOBA and |
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SIA related to net realized gains (losses) |
| (120 | ) |
| (25 | ) |
| - |
|
| (95 | ) |
| (255 | ) |
| (53 | ) |
| - |
|
| (202 | ) |
Changes in the fair value of equity securities |
| 13 |
|
| 3 |
|
| - |
|
| 10 |
|
| (56 | ) |
| (12 | ) |
| - |
|
| (44 | ) |
Loss on extinguishment of debt |
| 106 |
|
| 23 |
|
| - |
|
| 83 |
|
| - |
|
| - |
|
| - |
|
| - |
|
Net investment income on Fortitude Re funds withheld assets |
| (507 | ) |
| (107 | ) |
| - |
|
| (400 | ) |
| (116 | ) |
| (24 | ) |
| - |
|
| (92 | ) |
Net realized gains on Fortitude Re funds withheld assets |
| (173 | ) |
| (37 | ) |
| - |
|
| (136 | ) |
| (96 | ) |
| (20 | ) |
| - |
|
| (76 | ) |
Net realized losses on Fortitude Re funds withheld |
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embedded derivative |
| 2,056 |
|
| 431 |
|
| - |
|
| 1,625 |
|
| 837 |
|
| 176 |
|
| - |
|
| 661 |
|
Net realized losses(c) |
| 59 |
|
| 17 |
|
| - |
|
| 42 |
|
| 1,607 |
|
| 367 |
|
| - |
|
| 1,240 |
|
Loss from discontinued operations |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 1 |
|
Loss from divested businesses |
| 1 |
|
| - |
|
| - |
|
| 1 |
|
| 8,412 |
|
| 1,657 |
|
| - |
|
| 6,755 |
|
Non-operating litigation reserves and settlements |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
Favorable prior year development and related |
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amortization changes ceded under retroactive reinsurance agreements |
| (65 | ) |
| (14 | ) |
| - |
|
| (51 | ) |
| (33 | ) |
| (7 | ) |
| - |
|
| (26 | ) |
Net loss reserve discount charge |
| 22 |
|
| 5 |
|
| - |
|
| 17 |
|
| 16 |
|
| 3 |
|
| - |
|
| 13 |
|
Integration and transaction costs associated with acquiring or |
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divesting businesses |
| 35 |
|
| 7 |
|
| - |
|
| 28 |
|
| 4 |
|
| 1 |
|
| - |
|
| 3 |
|
Restructuring and other costs |
| 126 |
|
| 26 |
|
| - |
|
| 100 |
|
| 134 |
|
| 28 |
|
| - |
|
| 106 |
|
Non-recurring costs related to regulatory or accounting changes |
| 21 |
|
| 4 |
|
| - |
|
| 17 |
|
| 14 |
|
| 3 |
|
| - |
|
| 11 |
|
Noncontrolling interests primarily related to net realized |
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gains (losses) of Fortitude Holdings' standalone results(d) |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 136 |
|
| 136 |
|
Adjusted pre-tax income/Adjusted after-tax income attributable |
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to AIG common shareholders | $ | 1,708 |
| $ | 318 |
| $ | (51 | ) | $ | 1,331 |
| $ | 791 |
| $ | 196 |
| $ | (26 | ) | $ | 561 |
|
American International Group, Inc. | ||||||||||||||||||||||||
Selected Financial Data and Non-GAAP Reconciliation (continued) | ||||||||||||||||||||||||
($ in millions, except per common share data) | ||||||||||||||||||||||||
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Reconciliations of Adjusted Pre-tax and After-tax Income (continued) | ||||||||||||||||||||||||
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| Six Months Ended June 30, | |||||||||||||||||||||||
| 2021 | 2020 | ||||||||||||||||||||||
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| Noncontrolling |
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| Noncontrolling |
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| 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 |
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interests | $ | 4,875 |
| $ | 795 |
| $ | - |
| $ | 4,080 |
| $ | (7,103 | ) | $ | (992 | ) | $ | - |
| $ | (6,112 | ) |
Noncontrolling interests |
| - |
|
| - |
|
| (105 | ) |
| (105 | ) |
| - |
|
| - |
|
| (67 | ) |
| (67 | ) |
Pre-tax income (loss)/net income (loss) attributable to AIG |
| 4,875 |
|
| 795 |
|
| (105 | ) |
| 3,975 |
|
| (7,103 | ) |
| (992 | ) |
| (67 | ) |
| (6,179 | ) |
Dividends on preferred stock |
|
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|
| 15 |
|
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|
|
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| 15 |
| ||||||
Net income (loss) attributable to AIG common shareholders |
|
|
|
|
|
|
| 3,960 |
|
|
|
|
|
|
|
| (6,194 | ) | ||||||
Adjustments: |
|
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|
|
|
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|
|
|
|
|
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| ||||||||
Changes in uncertain tax positions and other tax adjustments(a) |
| - |
|
| 866 |
|
| - |
|
| (866 | ) |
| - |
|
| (211 | ) |
| - |
|
| 211 |
|
Deferred income tax valuation allowance charges(b) |
| - |
|
| (661 | ) |
| - |
|
| 661 |
|
| - |
|
| (100 | ) |
| - |
|
| 100 |
|
Changes in fair value of securities used to hedge guaranteed living benefits |
| (35 | ) |
| (7 | ) |
| - |
|
| (28 | ) |
| (9 | ) |
| (2 | ) |
| - |
|
| (7 | ) |
Changes in benefit reserves and DAC, VOBA and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
SIA related to net realized gains (losses) |
| 83 |
|
| 18 |
|
| - |
|
| 65 |
|
| 283 |
|
| 60 |
|
| - |
|
| 223 |
|
Changes in the fair value of equity securities |
| (9 | ) |
| (2 | ) |
| - |
|
| (7 | ) |
| 135 |
|
| 28 |
|
| - |
|
| 107 |
|
Loss on extinguishment of debt |
| 98 |
|
| 21 |
|
| - |
|
| 77 |
|
| 17 |
|
| 4 |
|
| - |
|
| 13 |
|
Net investment income on Fortitude Re funds withheld assets |
| (993 | ) |
| (209 | ) |
| - |
|
| (784 | ) |
| (116 | ) |
| (24 | ) |
| - |
|
| (92 | ) |
Net realized gains on Fortitude Re funds withheld assets |
| (346 | ) |
| (73 | ) |
| - |
|
| (273 | ) |
| (96 | ) |
| (20 | ) |
| - |
|
| (76 | ) |
Net realized (gains) losses on Fortitude Re funds withheld |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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| ||||||||
embedded derivative |
| (326 | ) |
| (68 | ) |
| - |
|
| (258 | ) |
| 837 |
|
| 176 |
|
| - |
|
| 661 |
|
Net realized gains(c) |
| (568 | ) |
| (128 | ) |
| - |
|
| (440 | ) |
| (1,887 | ) |
| (398 | ) |
| - |
|
| (1,489 | ) |
Loss from discontinued operations |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 1 |
|
(Income) loss from divested businesses |
| (6 | ) |
| (1 | ) |
| - |
|
| (5 | ) |
| 8,628 |
|
| 1,702 |
|
| - |
|
| 6,926 |
|
Non-operating litigation reserves and settlements |
| - |
|
| - |
|
| - |
|
| - |
|
| (6 | ) |
| (1 | ) |
| - |
|
| (5 | ) |
Favorable prior year development and related |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
amortization changes ceded under retroactive reinsurance agreements |
| (84 | ) |
| (18 | ) |
| - |
|
| (66 | ) |
| (41 | ) |
| (9 | ) |
| - |
|
| (32 | ) |
Net loss reserve discount (benefit) charge |
| (10 | ) |
| (2 | ) |
| - |
|
| (8 | ) |
| 72 |
|
| 15 |
|
| - |
|
| 57 |
|
Integration and transaction costs associated with acquiring or |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
divesting businesses |
| 44 |
|
| 9 |
|
| - |
|
| 35 |
|
| 6 |
|
| 1 |
|
| - |
|
| 5 |
|
Restructuring and other costs |
| 200 |
|
| 42 |
|
| - |
|
| 158 |
|
| 224 |
|
| 47 |
|
| - |
|
| 177 |
|
Non-recurring costs related to regulatory or accounting changes |
| 41 |
|
| 8 |
|
| - |
|
| 33 |
|
| 27 |
|
| 6 |
|
| - |
|
| 21 |
|
Noncontrolling interests primarily related to net realized gains |
|
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|
|
|
|
|
|
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|
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(losses) of Fortitude Holdings' standalone results(d) |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 59 |
|
| 59 |
|
Adjusted pre-tax income/Adjusted after-tax income attributable |
|
|
|
|
|
|
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|
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to AIG common shareholders | $ | 2,964 |
| $ | 590 |
| $ | (105 | ) | $ | 2,254 |
| $ | 971 |
| $ | 282 |
| $ | (8 | ) | $ | 666 |
|
(a) Six months ended June 30, 2021 includes the recent completion of audit activity by the Internal Revenue Service. |
(b) Six months ended June 30, 2021 includes an increase in the valuation allowance against a portion of certain tax attribute carryforwards of AIG's U.S. federal consolidated income tax group, as well as net valuation allowance release in certain foreign jurisdictions. |
(c) Includes all net realized gains and losses except earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-qualifying (economic) hedging or for asset replication and net realized gains and losses on Fortitude Re funds withheld assets. |
(d) 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 $100 million as of June 30, 2021. |
American International Group, Inc. | ||||||||||||||
Selected Financial Data and Non-GAAP Reconciliation (continued) | ||||||||||||||
($ in millions, except per common share data) | ||||||||||||||
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Summary of Key Financial Metrics | ||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
Income (loss) per common share: | 2021 | 2020 | % Inc. (Dec.) | 2021 | 2020 | % Inc. (Dec.) | ||||||||
Basic |
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Income (loss) from continuing operations | $ | 0.11 | $ | (9.15 | ) | NM | % | $ | 4.58 | $ | (7.11 | ) | NM | % |
Income from discontinued operations |
| - |
| - |
| NM |
|
| - |
| - |
| NM |
|
Net income (loss) attributable to AIG common shareholders | $ | 0.11 | $ | (9.15 | ) | NM |
| $ | 4.58 | $ | (7.11 | ) | NM |
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Diluted |
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Income (loss) from continuing operations | $ | 0.11 | $ | (9.15 | ) | NM |
| $ | 4.53 | $ | (7.11 | ) | NM |
|
Income from discontinued operations |
| - |
| - |
| NM |
|
| - |
| - |
| NM |
|
Net income (loss) attributable to AIG common shareholders | $ | 0.11 | $ | (9.15 | ) | NM |
| $ | 4.53 | $ | (7.11 | ) | NM |
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Adjusted after-tax income attributable to AIG common |
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shareholders per diluted share (a) | $ | 1.52 | $ | 0.64 |
| 137.5 | % | $ | 2.58 | $ | 0.76 |
| 239.5 | % |
Weighted average shares outstanding: |
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|
|
|
|
|
|
|
|
|
|
| ||
Basic |
| 862.9 |
| 867.0 |
|
|
|
| 865.5 |
| 870.6 |
|
|
|
Diluted (a) |
| 872.9 |
| 867.0 |
|
|
|
| 874.6 |
| 870.6 |
|
|
|
(a) For the three- and six-month periods ended June 30, 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 3,226,882 dilutive shares and 3,939,732 dilutive shares for the three- and six-month periods ended June 30, 2020, respectively. |
Reconciliation of Book Value per Common Share | |||||||||||
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|
As of period end: | June 30, 2021 | March 31, 2021 | December 31, 2020 |
| June 30, 2020 | ||||||
Total AIG shareholders' equity | $ | 66,083 |
| $ | 62,679 |
| $ | 66,362 |
| $ | 62,234 |
Less: Preferred equity |
| 485 |
|
| 485 |
|
| 485 |
|
| 485 |
Total AIG common shareholders' equity (a) |
| 65,598 |
|
| 62,194 |
|
| 65,877 |
|
| 61,749 |
Less: Accumulated other comprehensive income (AOCI) |
| 10,209 |
|
| 6,466 |
|
| 13,511 |
|
| 9,169 |
Add: Cumulative unrealized gains and losses related to Fortitude Re |
|
|
|
|
|
|
|
|
|
|
|
Funds Withheld Assets |
| 3,341 |
|
| 2,246 |
|
| 4,657 |
|
| 4,215 |
Less: Deferred tax assets (DTA)* |
| 7,374 |
|
| 7,539 |
|
| 7,907 |
|
| 8,643 |
Total adjusted AIG common shareholders' equity (b) | $ | 51,356 |
| $ | 50,435 |
| $ | 49,116 |
| $ | 48,152 |
Less: Intangible assets: |
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
| 4,083 |
|
| 4,079 |
|
| 4,074 |
|
| 3,983 |
Value of business acquired |
| 121 |
|
| 123 |
|
| 126 |
|
| 121 |
Value of distribution channel acquired |
| 477 |
|
| 487 |
|
| 497 |
|
| 517 |
Other intangibles |
| 305 |
|
| 309 |
|
| 319 |
|
| 323 |
Total intangible assets |
| 4,986 |
|
| 4,998 |
|
| 5,016 |
|
| 4,944 |
Total adjusted tangible common shareholders' equity (c) | $ | 46,370 |
| $ | 45,437 |
| $ | 44,100 |
| $ | 43,208 |
|
|
|
|
|
|
|
|
|
|
|
|
Total common shares outstanding (d) |
| 854.9 |
|
| 859.4 |
|
| 861.6 |
|
| 861.4 |
| June 30, | March 31, | % Inc. | December 31, | % Inc. | June 30, | % Inc. | |||||||
As of period end: | 2021 | 2020 | (Dec.) | 2020 | (Dec.) | 2020 | (Dec.) | |||||||
Book value per common share (a÷d) | $ | 76.73 | $ | 72.37 | 6.0 | % | $ | 76.46 | 0.4 | % | $ | 71.68 | 7.0 | % |
Adjusted book value per common share (b÷d) |
| 60.07 |
| 58.69 | 2.4 |
|
| 57.01 | 5.4 |
|
| 55.90 | 7.5 |
|
Adjusted tangible book value per common share (c÷d) |
| 54.24 |
| 52.87 | 2.6 | 51.18 | 6.0 |
|
| 50.16 | 8.1 |
|
Reconciliation of Return On Common Equity | ||||||
|
|
|
|
|
| |
| Three Months Ended June 30, | |||||
| 2021 | 2020 | ||||
Actual or Annualized net income attributable to AIG common shareholders (a) | $ | 364 |
| $ | (31,744 | ) |
|
|
|
|
|
| |
Actual or Annualized adjusted after-tax income attributable to AIG common shareholders (b) | $ | 5,324 |
| $ | 2,244 |
|
|
|
|
|
|
| |
Average AIG common shareholders' equity (c) | $ | 63,896 |
| $ | 60,719 |
|
Less: Average AOCI |
| 8,338 |
|
| 4,088 |
|
Add: Average cumulative unrealized gains and losses related to Fortitude Re Funds Withheld Assets |
| 2,794 |
|
| 2,108 |
|
Less: Average DTA* |
| 7,457 |
|
| 8,589 |
|
Average adjusted common shareholders' equity (d) | $ | 50,895 |
| $ | 50,150 |
|
|
|
|
|
|
| |
ROCE (a÷c) |
| 0.6 | % |
| NM |
|
Adjusted return on common equity (b÷d) |
| 10.5 | % |
| 4.5 | % |
* Represents deferred tax assets only related to U.S. net operating loss and foreign tax credit carryforwards on a U.S. GAAP basis and excludes other balance sheet deferred tax assets and liabilities.
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 | |||||
| June 30, | |||||
| 2021 | 2020 | ||||
Net investment income per Consolidated Statements of Operations | $ | 3,675 |
| $ | 3,366 |
|
Changes in fair value of securities used to hedge guaranteed living benefits |
| (13 | ) |
| (14 | ) |
Changes in the fair value of equity securities |
| 13 |
|
| (56 | ) |
Net investment income on Fortitude Re funds withheld assets |
| (507 | ) |
| (116 | ) |
Net realized gains (losses) related to economic hedges and other |
| 14 |
|
| 18 |
|
Total Net investment income - APTI Basis | $ | 3,182 |
| $ | 3,198 |
|
Less: Impact of Fortitude Re prior to deconsolidation |
| - |
|
| (378 | ) |
Total Net investment income - APTI Basis, excluding the impact of Fortitude |
|
|
|
| ||
Re for all periods, including periods prior to deconsolidation | $ | 3,182 |
| $ | 2,820 |
|
Net Premiums Written - Change in Constant Dollar | ||||||||
|
|
|
| |||||
| Three Months Ended June 30, 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 | 20 | % | 10 | % | (2 | )% | ||
Foreign exchange effect | 4 |
| 7 |
| 3 |
| ||
Increase (decrease) as reported in U.S. dollars | 24 | % | 17 | % | 1 | % |
General Operating Expenses - Change in Constant Dollar | ||
|
| |
| Three Months Ended | |
General Insurance | June 30, 2021 | |
Foreign exchange effect on general operating expenses: |
| |
Change in general operating expenses |
| |
Increase (decrease) in original currency | (4 | )% |
Foreign exchange effect | 2 |
|
Increase (decrease) as reported in U.S. dollars | (2 | )% |
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 | ||||
| June 30, | ||||
| 2021 |
| 2020 | ||
Total General Insurance |
|
|
| ||
Combined ratio | 92.5 |
|
| 106.0 |
|
Catastrophe losses and reinstatement premiums | (2.1 | ) |
| (11.9 | ) |
Prior year development | 0.7 |
|
| 0.8 |
|
Accident year combined ratio, as adjusted | 91.1 |
|
| 94.9 |
|
|
|
|
| ||
North America |
|
|
| ||
Combined ratio | 93.7 |
|
| 117.8 |
|
Catastrophe losses and reinstatement premiums | (2.9 | ) |
| (20.2 | ) |
Prior year development | 1.6 |
|
| 1.0 |
|
Accident year combined ratio, as adjusted | 92.4 |
|
| 98.6 |
|
|
|
|
| ||
North America - Commercial Lines |
|
|
| ||
Combined ratio | 93.0 |
|
| 119.4 |
|
Catastrophe losses and reinstatement premiums | (2.9 | ) |
| (23.4 | ) |
Prior year development | 1.1 |
|
| 1.4 |
|
Accident year combined ratio, as adjusted | 91.2 |
|
| 97.4 |
|
|
|
|
| ||
North America - Personal Insurance |
|
|
| ||
Combined ratio | 98.1 |
|
| 108.7 |
|
Catastrophe losses and reinstatement premiums | (3.0 | ) |
| (2.6 | ) |
Prior year development | 5.0 |
|
| (1.3 | ) |
Accident year combined ratio, as adjusted | 100.1 |
|
| 104.8 |
|
|
|
|
| ||
International |
|
|
| ||
Combined ratio | 91.8 |
|
| 97.1 |
|
Catastrophe losses and reinstatement premiums | (1.5 | ) |
| (5.7 | ) |
Prior year development | (0.1 | ) |
| 0.7 |
|
Accident year combined ratio, as adjusted | 90.2 |
|
| 92.1 |
|
|
|
|
| ||
International - Commercial Lines |
|
|
| ||
Combined ratio | 88.7 |
|
| 99.5 |
|
Catastrophe losses and reinstatement premiums | (1.4 | ) |
| (11.4 | ) |
Prior year development | (0.4 | ) |
| 2.5 |
|
Accident year combined ratio, as adjusted | 86.9 |
|
| 90.6 |
|
|
|
|
| ||
International - Personal Insurance |
|
|
| ||
Loss ratio | 55.2 |
|
| 52.9 |
|
Catastrophe losses and reinstatement premiums | (1.6 | ) |
| 0.4 |
|
Prior year development | 0.4 |
|
| (1.2 | ) |
Accident year loss ratio, as adjusted | 54.0 |
|
| 52.1 |
|
|
|
|
| ||
Combined ratio | 95.2 |
|
| 94.3 |
|
Catastrophe losses and reinstatement premiums | (1.6 | ) |
| 0.4 |
|
Prior year development | 0.4 |
|
| (1.2 | ) |
Accident year combined ratio, as adjusted | 94.0 |
|
| 93.5 |
|
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 |
| ||||
| June 30, |
| ||||
| 2021 |
| 2020 |
| ||
|
|
|
|
|
|
|
Adjusted pre-tax income | $ | 1,194 |
| $ | 175 |
|
Interest expense on attributed financial debt |
| 147 |
|
| 142 |
|
Adjusted pre-tax income including attributed interest expense |
| 1,047 |
|
| 33 |
|
Income tax expense |
| 263 |
|
| 9 |
|
Adjusted after-tax income |
| 784 |
|
| 24 |
|
Dividends declared on preferred stock |
| 3 |
|
| 3 |
|
Adjusted after-tax income attributable to common shareholders | $ | 781 |
| $ | 21 |
|
|
|
|
|
|
|
|
Ending adjusted segment common equity | $ | 25,473 |
| $ | 25,195 |
|
Average adjusted segment common equity | $ | 25,369 |
| $ | 25,065 |
|
Return on adjusted segment common equity |
| 12.3 | % |
| 0.3 | % |
|
|
|
|
|
|
|
Total segment shareholder’s equity | $ | 26,308 |
| $ | 25,403 |
|
Less: Preferred equity |
| 197 |
|
| 194 |
|
Total segment common equity |
| 26,111 |
|
| 25,209 |
|
Less: Accumulated other comprehensive income (AOCI) |
| 849 |
|
| 309 |
|
Add: Cumulative unrealized gains and losses related to Fortitude Re funds withheld assets |
| 211 |
|
| 295 |
|
Total adjusted segment common equity | $ | 25,473 |
| $ | 25,195 |
|
|
|
|
|
|
|
|
Reconciliation of Life and Retirement Return on Adjusted Segment Common Equity | ||||||
|
|
|
|
|
|
|
| Three Months Ended |
| ||||
| June 30, |
| ||||
| 2021 |
| 2020 |
| ||
|
|
|
|
|
|
|
Adjusted pre-tax income | $ | 1,124 |
| $ | 895 |
|
Interest expense on attributed financial debt |
| 74 |
|
| 68 |
|
Adjusted pre-tax income including attributed interest expense |
| 1,050 |
|
| 827 |
|
Income tax expense |
| 211 |
|
| 165 |
|
Adjusted after-tax income |
| 839 |
|
| 662 |
|
Dividends declared on preferred stock |
| 2 |
|
| 2 |
|
Adjusted after-tax income attributable to common shareholders | $ | 837 |
| $ | 660 |
|
|
|
|
|
|
|
|
Ending adjusted segment common equity | $ | 20,689 |
| $ | 19,101 |
|
Average adjusted segment common equity | $ | 20,458 |
| $ | 19,625 |
|
Return on adjusted segment common equity |
| 16.4 | % |
| 13.5 | % |
|
|
|
|
|
|
|
Total segment shareholder’s equity | $ | 29,558 |
| $ | 26,712 |
|
Less: Preferred equity |
| 139 |
|
| 127 |
|
Total segment common equity |
| 29,419 |
|
| 26,585 |
|
Less: Accumulated other comprehensive income (AOCI) |
| 11,860 |
|
| 11,332 |
|
Add: Cumulative unrealized gains and losses related to Fortitude Re funds withheld assets |
| 3,130 |
|
| 3,848 |
|
Total adjusted segment common equity | $ | 20,689 |
| $ | 19,101 |
|
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 | ||||||
| June 30, | ||||||
| 2021 |
| 2020 | ||||
Individual Retirement: |
|
|
|
|
| ||
Premiums | $ | 32 |
|
| $ | 38 |
|
Deposits |
| 3,949 |
|
|
| 1,759 |
|
Other |
| (3 | ) |
|
| (3 | ) |
Total premiums and deposits | $ | 3,978 |
|
| $ | 1,794 |
|
|
|
|
|
|
| ||
Group Retirement: |
|
|
|
|
| ||
Premiums | $ | 4 |
|
| $ | 3 |
|
Deposits |
| 2,251 |
|
|
| 1,667 |
|
Other |
| - |
|
|
| - |
|
Total premiums and deposits | $ | 2,255 |
|
| $ | 1,670 |
|
|
|
|
|
|
| ||
Life Insurance: |
|
|
|
|
| ||
Premiums | $ | 532 |
|
| $ | 491 |
|
Deposits |
| 409 |
|
|
| 421 |
|
Other |
| 220 |
|
|
| 207 |
|
Total premiums and deposits | $ | 1,161 |
|
| $ | 1,119 |
|
|
|
|
|
|
| ||
Institutional Markets: |
|
|
|
|
| ||
Premiums | $ | 1,077 |
|
| $ | 1,090 |
|
Deposits |
| 559 |
|
|
| 39 |
|
Other |
| 5 |
|
|
| 6 |
|
Total premiums and deposits | $ | 1,641 |
|
| $ | 1,135 |
|
|
|
|
|
|
| ||
Total Life and Retirement: |
|
|
|
|
| ||
Premiums | $ | 1,645 |
|
| $ | 1,622 |
|
Deposits |
| 7,168 |
|
|
| 3,886 |
|
Other |
| 222 |
|
|
| 210 |
|
Total premiums and deposits | $ | 9,035 |
|
| $ | 5,718 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20210805005948/en/
Quentin McMillan (Investors): quentin.mcmillan@aig.com Claire Talcott (Media): claire.talcott@aig.com
Source: American International Group, Inc.