Fourth Quarter 2023:
- Net income per diluted share was $0.12 and adjusted
after-tax income* (AATI) per diluted share was $1.79
- General Insurance net premiums written (NPW) increased 3%
year-over-year, or 7% on a comparable basis*†
- General Insurance combined ratio improved 80 basis points
from the prior year quarter to 89.1%; General Insurance accident
year combined ratio, as adjusted* (AYCR) improved 50 basis points
from the prior year quarter to 87.9%
- General Insurance adjusted pre-tax income (APTI) of $1.4
billion increased $225 million, or 19% from the prior year
quarter
- Life and Retirement APTI was $957 million, up 12% from the
prior year quarter
- Returned $1.3 billion to shareholders through $1.0 billion
of common stock repurchases and $256 million of dividends
- Repurchased $1.6 billion senior unsecured notes during the
quarter
Full Year 2023:
- Net income per diluted share was $4.98 and AATI per diluted
share was $6.79
- General Insurance NPW increased 5% year-over-year, or 7% on
a comparable basis†
- General Insurance underwriting income was up 15% to $2.3
billion, driven by Global Commercial Lines, which increased 25%
year-over-year
- General Insurance combined ratio improved 130 basis points
from the prior year to 90.6%; AYCR improved 100 basis points from
the prior year to 87.7%
- Life and Retirement full year 2023 APTI was $3.8 billion, up
15% from the prior year
- Returned $4.0 billion to shareholders in 2023 through $3.0
billion of common stock repurchases and $1.0 billion of dividends,
in addition to a net financial debt reduction of $1.4 billion, and
ended the year with AIG parent liquidity of $7.6 billion
- Return on common equity (ROCE) was 8.6% and adjusted ROCE*
was 9.0%; adjusted ROCE was 12.5% for General Insurance and 11.5%
for Life and Retirement
- 2023 was a remarkable year of strategic progress for AIG,
including the divestiture of Validus Re, which closed in the fourth
quarter, the sale of Crop Risk Services, and the successful
execution of three secondary offerings of Corebridge Financial
(Corebridge) common stock, which reduced AIG’s ownership to 52.2%
at year end
* 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. † Net
premiums written on a comparable basis reflects year-over-year
comparison on a constant dollar basis adjusted for the
International lag elimination, the sale of Crop Risk Services (CRS)
and the sale of Validus Re. Refer to page 18 for more detail.
American International Group, Inc. (NYSE: AIG) today reported
financial results for the fourth quarter and full year ended
December 31, 2023.
AIG Chairman & Chief Executive Officer Peter Zaffino said:
“In 2023, AIG delivered outstanding financial results, highlighted
by excellent underwriting performance and the successful execution
of multiple complex initiatives, while delivering exceptional value
for our clients and stakeholders. Our substantial progress reflects
the dedication and teamwork of our AIG colleagues around the world,
who have delivered on our objectives. The full year adjusted
after-tax income per diluted share increased 33% from the prior
year to $6.79. We have further repositioned AIG for the future with
the divestitures of Validus Re and Crop Risk Services, and we enter
2024 with significant momentum.
“General Insurance delivered $2.3 billion of underwriting income
in 2023, a 15% increase year-over-year. Our unwavering commitment
to underwriting excellence and ability to manage volatility remain
fundamental to the sustainability of AIG’s underwriting income
growth. The full-year 2023 combined ratio of 90.6% represents an
improvement of 130 basis points year-over-year. Accident year
combined ratio, as adjusted, of 87.7% represents an improvement of
100 basis points year-over-year. 2023 margins and underwriting
income were the best results achieved in recent history. The
quality of the underwriting portfolio once again enabled
exceptional success at January 1 in renewing our reinsurance
placements.
“For the full-year 2023, General Insurance net premiums written
increased 5% year-over-year, or 7% on a comparable basis†, driven
by 5% growth in Commercial Lines led by 17% growth in Lexington and
10% in Global Specialty. For the fourth quarter, North America
Commercial Lines pricing, which includes rate and exposure,
increased 7% and remains ahead of loss cost trend. Global
Commercial pricing increased 6% and was in-line with loss cost
trend.
“Life & Retirement continued to deliver strong financial
results, benefiting from continued spread expansion and strong
sales with total premiums and deposits exceeding $40 billion for
the full year. Base net investment income continued to see
favorable outcomes from the higher interest rate environment and,
for the full-year 2023, Individual and Group Retirement produced a
46 basis point expansion in base spread year-over-year.
“With three successful secondary offerings in 2023, we reduced
AIG’s ownership in Corebridge to approximately 52% at year end. We
expect to deconsolidate Corebridge in 2024, which will bring
greater visibility into our business, capital structure and
operations.
“AIG’s strong performance and strategic actions in 2023
supported our sustained and balanced capital management strategy.
We maintained financial flexibility while reducing financial debt
by $1.4 billion and returning approximately $4 billion to AIG
shareholders through $3 billion of common stock repurchases and $1
billion of dividends, including a 12.5% increase in the common
stock dividend in the second quarter of 2023.
“We have significant momentum as we enter 2024, and excellent
underwriting, operations, claims service, and talent are what will
drive AIG’s continued growth. As we continue to navigate an
increasingly complex global risk environment, we will remain agile
and disciplined while delivering sustainable and differentiated
value to our customers, partners and stakeholders.”
For full year 2023, net income attributable to AIG common
shareholders was $3.6 billion, or $4.98 per diluted common share,
compared to $10.2 billion, or $12.94 per diluted common share, in
the prior year. The decline was primarily driven by net realized
losses largely related to Fortitude Re funds withheld embedded
derivative at Life and Retirement (L&R) compared to gains in
the prior year, as well as derivative activity.
AATI was $4.9 billion, or $6.79 per diluted common share, for
the full year of 2023 compared to $4.0 billion, or $5.12 per
diluted common share, in the prior year. The increase in AATI was
due to higher underwriting income and net investment income in
General Insurance. While L&R APTI rose 15% in 2023,
Corebridge’s earnings included in AATI decreased 20% due to the
reduction in AIG ownership from 77.7% at the beginning of the year
to 52.2% at December 31, 2023.
For the fourth quarter of 2023, net income attributable to AIG
common shareholders was $86 million, or $0.12 per diluted common
share, compared to $545 million, or $0.72 per diluted common share,
in the prior year quarter. The decline was primarily driven by
higher net realized losses on Fortitude Re funds withheld embedded
derivative.
AATI was $1.3 billion, or $1.79 per diluted common share, for
the fourth quarter of 2023 compared to $1.1 billion, or $1.39 per
diluted common share, in the prior year quarter. The increase in
AATI was driven by higher net investment income in General
Insurance. Corebridge’s earnings included in AATI decreased about
25% due to the reduction in AIG ownership.
Total net investment income for the fourth quarter of 2023 was
$3.9 billion, an increase of 21% from $3.3 billion in the prior
year quarter, primarily driven by higher income from fixed maturity
securities and loans due to higher reinvestment rates, partially
offset by lower returns on alternative investments. Total net
investment income on an APTI basis* was $3.5 billion, an increase
of $499 million from the prior year quarter, reflecting the same
trends.
Book value per common share was $65.14 as of December 31, 2023,
an increase of 16% from September 30, 2023 and an increase of 18%
from December 31, 2022, both primarily driven by a decrease in
accumulated other comprehensive loss (AOCL) and the impact of share
repurchases. Adjusted book value per common share* was $76.65, a
decrease of 2% from September 30, 2023, primarily driven by the
impact of Corebridge secondary offerings, and an increase of 1%
from December 31, 2022, reflecting net impact of income, dividends,
share repurchases and Corebridge secondary offerings.
In the fourth quarter of 2023, AIG repurchased $1.0 billion of
common stock, or approximately 16 million shares, paid $256 million
of common and preferred dividends and repurchased $1.6 billion
aggregate principal amount of debt. AIG parent liquidity was $7.6
billion as of December 31, 2023, up $4.0 billion from September 30,
2023, which includes insurance subsidiary dividends and proceeds
from Corebridge secondary offerings and the sale of Validus Re.
Total debt and preferred stock to total capital ratio at December
31, 2023 was 28.5%, down from 33.7% at September 30, 2023,
primarily driven by a decrease in AOCL. Excluding AOCL adjusted for
cumulative unrealized gains and losses related to Fortitude Re
funds withheld assets, total debt and preferred stock to total
capital ratio* was 24.3% at December 31, 2023, down from 25.9% at
September 30, 2023.
On February 13, 2024, the AIG Board of Directors declared a
quarterly cash dividend on AIG common stock of $0.36 per share. The
dividend is payable on March 28, 2024 to stockholders of record at
the close of business on March 14, 2024.
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 (Series A 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, 2024 to holders of record at the close of
business on February 29, 2024.
On January 31, 2024, AIG announced that it will redeem all of
the 20,000 outstanding shares of Series A Preferred Stock and all
20,000,000 of the corresponding depositary shares on March 15,
2024. The redemption price per share of Series A Preferred Stock
will be $25,000 (equivalent to $25.00 per depositary share).
FINANCIAL SUMMARY
Three Months Ended
December 31,
Twelve Months Ended
December 31,
($ in millions, except per common share
amounts)
2022
2023
2022
2023
Net income attributable to AIG common
shareholders
$
545
$
86
$
10,198
$
3,614
Net income per diluted share attributable
to AIG common shareholders
$
0.72
$
0.12
$
12.94
$
4.98
Adjusted pre-tax income (loss)
$
1,613
$
1,995
$
5,800
$
7,401
General Insurance
1,212
1,437
4,430
5,371
Life and Retirement
852
957
3,317
3,805
Other Operations
(451
)
(399
)
(1,947
)
(1,775
)
Net investment income
$
3,258
$
3,932
$
11,767
$
14,592
Net investment income, APTI basis
2,960
3,459
10,997
13,094
Adjusted after-tax income attributable to
AIG common shareholders
$
1,053
$
1,270
$
4,036
$
4,921
Adjusted after-tax income per diluted
share attributable to AIG common shareholders
$
1.39
$
1.79
$
5.12
$
6.79
Weighted average common shares outstanding
- diluted (in millions)
754.9
708.0
787.9
725.2
Return on common equity
5.5
%
0.8
%
20.7
%
8.6
%
Adjusted return on common equity
7.5
%
9.4
%
7.1
%
9.0
%
Book value per common share
$
55.15
$
65.14
$
55.15
$
65.14
Adjusted book value per common share
$
75.90
$
76.65
$
75.90
$
76.65
Common shares outstanding (in
millions)
734.1
688.8
734.1
688.8
GENERAL INSURANCE
Three Months Ended December
31,
($ in millions)
2022
2023
Change
Gross premiums written
$
7,594
$
7,631
—
%
Net premiums written
$
5,610
$
5,755
3
%
North America
2,674
2,660
(1
)
North America Commercial Lines
2,272
2,111
(7
)
North America Personal Insurance
402
549
37
International
2,936
3,095
5
International Commercial Lines
1,763
1,911
8
International Personal Insurance
1,173
1,184
1
Underwriting income (loss)
$
635
$
642
1
%
North America
425
321
(24
)
North America Commercial Lines
435
329
(24
)
North America Personal Insurance
(10
)
(8
)
20
International
210
321
53
International Commercial Lines
196
292
49
International Personal Insurance
14
29
107
Net investment income, APTI basis
$
577
$
795
38
%
Adjusted pre-tax income
$
1,212
$
1,437
19
%
Return on adjusted segment common
equity
10.8
%
13.5
%
2.7
pts
Underwriting ratios:
North America Combined Ratio (CR)
86.6
87.9
1.3
pts
North America Commercial Lines CR
84.4
85.1
0.7
North America Personal Insurance CR
102.5
101.8
(0.7
)
International CR
93.2
90.1
(3.1
)
International Commercial Lines CR
89.4
85.5
(3.9
)
International Personal Insurance CR
98.9
97.7
(1.2
)
General Insurance (GI) CR
89.9
89.1
(0.8
)
GI Loss ratio
58.5
56.5
(2.0
)
pts
Less: impact on loss ratio
Catastrophe losses and reinstatement
premiums
(3.8
)
(2.1
)
1.7
Prior year development, net of reinsurance
and prior year premiums
2.3
0.9
(1.4
)
GI Accident year loss ratio, as
adjusted
57.0
55.3
(1.7
)
GI Expense ratio
31.4
32.6
1.2
GI Accident year combined ratio, as
adjusted
88.4
87.9
(0.5
)
Accident year combined ratio, as adjusted
(AYCR):
North America AYCR
88.2
88.5
0.3
pts
North America Commercial Lines AYCR
85.9
84.3
(1.6
)
North America Personal Insurance AYCR
105.3
109.4
4.1
International AYCR
88.6
87.4
(1.2
)
International Commercial Lines AYCR
81.6
80.3
(1.3
)
International Personal Insurance AYCR
98.9
99.1
0.2
General Insurance
- On November 1, 2023, AIG closed the sale of Validus Re. As a
result of this sale, only one month of activity of Validus Re was
included in General Insurance fourth quarter 2023 results, compared
to a full quarter in 2022.
- General Insurance APTI of $1.4 billion increased $225 million
from the prior year quarter, driven by higher net investment
income, improved accident year losses and lower catastrophe-related
charges, partially offset by lower favorable prior year development
(PYD) and higher general operating expenses (GOE).
- Fourth quarter 2023 NPW of $5.8 billion increased 3% from the
prior year quarter, or 7% on a comparable basis†, driven by 5%
growth in Commercial Lines and 9% growth in Personal Insurance.
North America Commercial Lines NPW declined 7% from the prior year
quarter on a reported basis, but grew 5% on a comparable basis†,
reflecting continued positive rate changes, higher renewal
retentions and strong new business production in Lexington, Retail
Property and Casualty, partially offset by a decline in Financial
Lines premiums reflecting our continued underwriting discipline.
International Commercial Lines delivered 8% NPW growth from the
prior year quarter, or 6% on a comparable basis†, attributable to
continued rate increases, strong renewal retention, and robust new
business production in Property and Global Specialty, partially
offset by a decrease in Financial Lines. Global Personal Insurance
NPW increased 10% from the prior year quarter, or 9% on a
comparable basis†, primarily driven by Private Client Select
resulting from changes in our reinsurance program, partially offset
by a decrease in Travel.
- Fourth quarter 2023 underwriting income increased $7 million
from the prior year quarter to $642 million, and included $122
million of total catastrophe-related charges, representing 2.1 loss
ratio points, of which $54 million was in North America and $68
million in International. Fourth quarter 2023 underwriting also
included favorable PYD, net of reinsurance, of $69 million compared
to favorable PYD, net of reinsurance, of $151 million in the prior
year quarter. The amortization of the adverse development cover
totaled $41 million in the fourth quarter 2023, flat with the
fourth quarter 2022.
- The combined ratio improved 0.8 points from the prior year
quarter to 89.1%, driven by a 2.0 point decrease in the loss ratio
to 56.5%. The AYCR improved 0.5 points from the prior year quarter
to 87.9%, driven by a 1.7 point decrease in the accident year loss
ratio, as adjusted* (AYLR) to 55.3%, reflecting continued earn-in
of premium rate increases in excess of loss cost trends and
continued benefit from the business mix shift. The expense ratio
was 32.6%, a 1.2 point increase from the prior year quarter,
largely from an increase in GOE ratio.
- The North America Commercial Lines combined ratio increased 0.7
points from the prior year quarter to 85.1%, driven by lower
favorable PYD and a higher GOE ratio. The AYCR improved 1.6 points
to 84.3%, driven by a 2.7 point improvement in the AYLR to
60.3%.
- International Commercial Lines combined ratio improved 3.9
points from the prior year quarter to 85.5%, driven by lower
catastrophe losses and an improvement in the acquisition ratio,
mainly attributable to changes in the business mix and improved
commission terms. The AYCR improved 1.3 points to 80.3%, primarily
driven by the improvement in acquisition ratio.
- The North America Personal Insurance combined ratio improved
0.7 points from the prior year quarter to 101.8% and the AYCR
increased 4.1 points to 109.4%, primarily driven by an increase in
AYLR due to changes in business mix. The International Personal
Insurance combined ratio improved 1.2 points from the prior year
quarter to 97.7%, driven by a 3.9 point improvement in the loss
ratio, partially offset by a 2.7 point increase in the expense
ratio. The AYCR increased 0.2 points to 99.1% as the 2.5 point
improvement in the AYLR was offset by the higher GOE ratio.
- Net investment income on an APTI basis was $795 million, an
increase of 38% from the prior year quarter driven by higher income
from fixed maturity securities and loans.
LIFE AND RETIREMENT
Three Months Ended
December 31,
($ in millions, except as indicated)
2022
2023
Change
Adjusted pre-tax income
$
852
$
957
12
%
Individual Retirement
463
620
34
Group Retirement
172
179
4
Life Insurance
157
65
(59
)
Institutional Markets
60
93
55
Premiums and fees
$
2,861
$
3,249
14
%
Individual Retirement
241
220
(9
)
Group Retirement
99
106
7
Life Insurance
1,097
952
(13
)
Institutional Markets
1,424
1,971
38
Premiums and deposits
$
8,800
$
10,585
20
%
Individual Retirement
3,827
5,282
38
Group Retirement
2,243
2,083
(7
)
Life Insurance
1,179
1,216
3
Institutional Markets
1,551
2,004
29
Net flows
$
(744
)
$
(777
)
(4
)
%
Individual Retirement
212
772
264
Group Retirement
(956
)
(1,549
)
(62
)
Net investment income, APTI basis
$
2,225
$
2,566
15
%
Return on adjusted segment common
equity
10.0
%
11.5
%
1.5
pts
Life and Retirement
- In the fourth quarter 2023, AIG completed two secondary
offerings of Corebridge common stock, receiving proceeds of $1.7
billion and reducing AIG’s ownership to 52.2%. L&R results are
presented before the impact of non-controlling interests on AATI.
L&R’s contribution to AATI was $362 million, a decrease from
$494 million in the prior year quarter.
- L&R APTI increased $105 million from the prior year quarter
to $957 million. The increase was primarily due to higher base
portfolio spread income as a result of higher base portfolio
yields, partially offset by lower alternative investment income and
higher mortality in the Life Insurance segment. Base net investment
spreads in Individual and Group Retirement continued to widen with
a 23 basis point combined improvement year-over-year.
- Premiums grew 19% from the prior year quarter to $2.5 billion
due to higher pension risk transfer volumes. Premiums and deposits*
increased 20% to $10.6 billion. Fixed and Fixed Index Annuities
sales for the quarter were up 55% and Institutional Markets also
had strong sales, supported by $1.9 billion of pension risk
transfer transactions, partially offset by lower sales of Variable
Annuities.
- Net investment income on an APTI basis was $2.6 billion, an
increase of 15% from the prior year quarter driven by higher income
from fixed maturity securities and loans.
OTHER OPERATIONS
Three Months Ended
December 31,
($ in millions)
2022
2023
Change
Corporate and Other
$
(355
)
$
(234
)
34
%
Corebridge, Inc.
(111
)
(176
)
(59
)
Consolidation and eliminations - other
15
11
(27
)
Adjusted pre-tax loss
$
(451
)
$
(399
)
12
%
Other Operations
- Corporate and Other APTL, excluding Corebridge, improved $121
million from the prior year quarter, largely due to higher income
on parent short-term investments, lower general operating expenses
and lower AIG interest expenses driven by debt reduction in
2023.
- Corebridge Other Operations APTL deteriorated $65 million from
the prior year quarter. This was driven by the Asset Management
Group, which includes the consolidated results of Variable Interest
Entities (VIEs), recording a $97 million increase in APTL from the
prior year quarter, largely due to lower interest income and net
losses associated with VIEs compared to net gains in the prior year
quarter. Corebridge Corporate general operating expenses and
interest expenses remained relatively flat compared to the prior
year quarter.
CONFERENCE CALL
AIG will host a conference call tomorrow, Wednesday, February
14, 2024 at 8:30 a.m. ET to review these results. The call is open
to the public and can be accessed via a live, listen-only webcast
in the Investors section of www.aig.com. A replay will be available
after the call at the same location.
Additional supplementary financial data is available in the
Investors section at www.aig.com.
Certain statements in this press release and other publicly
available documents may include, and members of AIG management may
from time to time make and discuss, statements which, to the extent
they are not statements of historical or present fact, may
constitute “forward-looking statements” within the meaning of the
U.S. Private Securities Litigation Reform Act of 1995. These
forward‑looking statements are intended to provide management’s
current expectations or plans for AIG’s future operating and
financial performance, based on assumptions currently believed to
be valid and accurate. Forward-looking statements are often
preceded by, followed by or include words such as “will,”
“believe,” “anticipate,” “expect,” “expectations,” “intend,”
“plan,” “strategy,” “prospects,” “project,” “anticipate,” “should,”
“guidance,” “outlook,” “confident,” “focused on achieving,” “view,”
“target,” “goal,” “estimate” and other words of similar meaning in
connection with a discussion of future operating or financial
performance. These statements may include, among other things,
projections, goals and assumptions that relate to future actions,
prospective services or products, future performance or results of
current and anticipated services or products, sales efforts,
expense reduction efforts, the outcome of contingencies such as
legal proceedings, anticipated organizational, business or
regulatory changes, such as the separation of the Life and
Retirement business from AIG, the effect of catastrophic events,
both natural and man-made, and macroeconomic and/or geopolitical
events, anticipated dispositions, monetization and/or acquisitions
of businesses or assets, the successful integration of acquired
businesses, management succession and retention plans, exposure to
risk, trends in operations and financial results, and other
statements that are not historical facts.
All forward-looking statements involve risks, uncertainties and
other factors that may cause AIG’s actual results and financial
condition to differ, possibly materially, from the results and
financial condition expressed or implied in the forward-looking
statements. Factors that could cause AIG’s actual results to
differ, possibly materially, from those in specific projections,
goals, assumptions and other forward-looking statements include,
without limitation:
- the impact of adverse developments affecting economic
conditions in the markets in which AIG and its businesses operate
in the U.S. and globally, including adverse developments related to
financial market conditions, macroeconomic trends, fluctuations in
interest rates and foreign currency exchange rates, inflationary
pressures, including social inflation, pressures on the commercial
real estate market, an economic slowdown or recession, any
potential U.S. federal government shutdown and geopolitical events
or conflicts, including the conflict between Russia and Ukraine and
the conflict in Israel and the surrounding areas;
- occurrence of catastrophic events, both natural and man-made,
including the effects of climate change, geopolitical events and
conflicts and civil unrest;
- disruptions in the availability or accessibility of AIG's or a
third party’s information technology systems, including hardware
and software, infrastructure or networks, and the inability to
safeguard the confidentiality and integrity of customer, employee
or company data due to cyberattacks, data security breaches, or
infrastructure vulnerabilities;
- AIG’s ability to successfully dispose of, monetize and/or
acquire businesses or assets or successfully integrate acquired
businesses, and the anticipated benefits thereof;
- AIG's ability to realize expected strategic, financial,
operational or other benefits from the separation of Corebridge as
well as AIG’s equity market exposure to Corebridge;
- AIG's ability to effectively implement restructuring
initiatives and potential cost-savings opportunities;
- AIG's ability to effectively implement technological
advancements, including the use of artificial intelligence (AI),
and respond to competitors' AI and other technology
initiatives;
- the effectiveness of strategies to retain and recruit key
personnel and to implement effective succession plans;
- concentrations in AIG’s investment portfolios;
- AIG’s reliance on third-party investment managers;
- changes in the valuation of AIG’s investments;
- AIG’s reliance on third parties to provide certain business and
administrative services;
- availability of adequate reinsurance or access to reinsurance
on acceptable terms;
- concentrations of AIG’s insurance, reinsurance and other risk
exposures;
- nonperformance or defaults by counterparties, including
Fortitude Reinsurance Company Ltd. (Fortitude Re);
- AIG's ability to adequately assess risk and estimate related
losses as well as the effectiveness of AIG’s enterprise risk
management policies and procedures, including with respect to
business continuity and disaster recovery plans;
- difficulty in marketing and distributing products through
current and future distribution channels;
- actions by rating agencies with respect to AIG’s credit and
financial strength ratings as well as those of its businesses and
subsidiaries;
- changes to sources of or access to liquidity;
- changes in judgments concerning the recognition of deferred tax
assets and the impairment of goodwill;
- changes in judgments or assumptions concerning insurance
underwriting and insurance liabilities;
- changes in accounting principles and financial reporting
requirements;
- the effects of sanctions, including those related to the
conflict between Russia and Ukraine, and the failure to comply with
those sanctions;
- the effects of changes in laws and regulations, including those
relating to the regulation of insurance, in the U.S. and other
countries in which AIG and its businesses operate;
- changes to tax laws in the U.S. and other countries in which
AIG and its businesses operate;
- the outcome of significant legal, regulatory or governmental
proceedings;
- AIG’s ability to effectively execute on sustainability targets
and standards;
- AIG’s ability to address evolving stakeholder expectations and
regulatory requirements with respect to environmental, social and
governance matters;
- the impact of epidemics, pandemics and other public health
crises and responses thereto; and
- such other factors discussed in Part I, Item 1A. Risk Factors
and Part II, Item 7. Management’s Discussion and Analysis of
Financial Condition and Results of Operations (MD&A) in AIG’s
Annual Report on Form 10-K for the year ended December 31, 2023
(which will be filed with the Securities and Exchange Commission
(SEC)), Part I, Item 2. MD&A in AIG’s Quarterly Report on Form
10-Q for the quarterly period ended September 30, 2023, Part I,
Item 2. MD&A of the Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 2023, Part I, Item 2. MD&A of
the Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 2023, and Part I, Item 1A. Risk Factors and Part II, Item
7. MD&A in AIG’s Annual Report on Form 10-K for the year ended
December 31, 2022.
Forward-looking statements speak only as of the date of this
press release, or in the case of any document incorporated by
reference, the date of that document. AIG is not under any
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by applicable law. Additional
information as to factors that may cause actual results to differ
materially from those expressed or implied in any forward-looking
statements is disclosed from time to time in our filings with the
SEC.
COMMENT ON REGULATION G AND NON-GAAP FINANCIAL
MEASURES
Throughout this press release, including the financial
highlights, AIG presents its financial condition and results of
operations in the way it believes will be most meaningful and
representative of its business results. Some of the measurements
AIG uses are “Non-GAAP financial measures” under SEC 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 2023 Financial Supplement available in the Investors
section of AIG’s website, www.aig.com.
Unless otherwise mentioned or unless the context indicates
otherwise, we use the terms “AIG,” “we,” “us” and “our” to refer to
American International Group, Inc., a Delaware corporation, and its
consolidated subsidiaries.
AIG uses the following operating performance measures because
AIG believes they enhance the understanding of the underlying
profitability of continuing operations and trends of AIG’s business
segments. AIG believes they also allow for more meaningful
comparisons with AIG’s insurance competitors. When AIG uses these
measures, reconciliations to the most comparable GAAP measure are
provided on a consolidated basis.
Book value per common share, excluding accumulated other
comprehensive income (loss) (AOCI) adjusted for the cumulative
unrealized gains and losses related to Fortitude Re funds withheld
assets and deferred tax assets (DTA) (Adjusted book value per
common share) is used to show the amount of our net worth on a
per-common share basis after eliminating items that can fluctuate
significantly from period to period, including changes in fair
value (1) of AIG’s available for sale securities portfolio, (2) of
market risk benefits attributable to our own credit risk and (3)
due to discount rates used to measure traditional and limited
payment long-duration insurance contracts, foreign currency
translation adjustments and U.S. tax attribute deferred tax assets.
This measure also eliminates the asymmetrical impact resulting from
changes in fair value of our available for sale securities
portfolio wherein there is largely no offsetting impact for certain
related insurance liabilities. In addition, we adjust for the
cumulative unrealized gains and losses related to Fortitude Re
funds withheld assets held by AIG in support of Fortitude Re’s
reinsurance obligations to AIG post deconsolidation of Fortitude Re
(Fortitude Re funds withheld assets) since these fair value
movements are economically transferred to Fortitude Re. We exclude
deferred tax assets representing U.S. tax attributes related to net
operating loss carryforwards and foreign tax credits as they have
not yet been utilized. Amounts for interim periods are estimates
based on projections of full-year attribute utilization. As net
operating loss carryforwards and foreign tax credits are utilized,
the portion of the DTA utilized is included in these book value per
common share metrics. Adjusted book value per common share is
derived by dividing total AIG common shareholders’ equity,
excluding AOCI adjusted for the cumulative unrealized gains and
losses related to Fortitude Re funds withheld assets, and DTA
(Adjusted common shareholders’ equity), by total common
shares outstanding.
Book Value per Common Share, Excluding Goodwill, Value of
Business Acquired (VOBA), Value of Distribution Channel Acquired
(VODA), Other Intangible Assets, AOCI adjusted for the cumulative
unrealized gains and losses related to Fortitude Re funds withheld
assets, and Deferred Tax Assets (DTA) (Adjusted Tangible Book Value
per Common Share) is used to provide more accurate measure of
the realizable value of shareholder on a per-common share basis.
Adjusted Tangible Book Value per Common Share is derived by
dividing Total AIG common shareholders’ equity, excluding
intangible assets, AOCI adjusted for the cumulative unrealized
gains and losses related to Fortitude Re funds withheld assets, and
DTA (Adjusted Tangible Common Shareholders’ Equity), by
total common shares outstanding.
AIG Return on Common Equity (ROCE) – Adjusted After-tax
Income Excluding AOCI adjusted for the cumulative unrealized gains
and losses related to Fortitude Re funds withheld assets and DTA
(Adjusted return on common equity) is used to show the rate of
return on common shareholders’ equity. We believe this measure is
useful to investors because it eliminates items that can fluctuate
significantly from period to period, including changes in fair
value (1) of AIG’s available for sale securities portfolio, (2) of
market risk benefits attributable to our own credit risk and (3)
due to discount rates used to measure traditional and limited
payment long-duration insurance contracts, foreign currency
translation adjustments and U.S. tax attribute deferred tax assets.
This measure also eliminates the asymmetrical impact resulting from
changes in fair value of our available for sale securities
portfolio wherein there is largely no offsetting impact for certain
related insurance liabilities. In addition, we adjust for the
cumulative unrealized gains and losses related to Fortitude Re
funds withheld assets since these fair value movements are
economically transferred to Fortitude Re. We exclude deferred tax
assets representing U.S. tax attributes related to net operating
loss carryforwards and foreign tax credits as they have not yet
been utilized. Amounts for interim periods are estimates based on
projections of full-year attribute utilization. As net operating
loss carryforwards and foreign tax credits are utilized, the
portion of the DTA utilized is included in Adjusted Return on
Common Equity. Adjusted Return on Common Equity is derived by
dividing actual or annualized adjusted after-tax income
attributable to AIG common shareholders by average Adjusted Common
Shareholders’ Equity.
General Insurance and Life and Retirement Adjusted Segment
Common Equity is based on segment equity adjusted for the
attribution of debt and preferred stock (Segment Common Equity) and
is consistent with AIG’s Adjusted Common Shareholders’ Equity
definition.
General Insurance and Life and Retirement Return on Adjusted
Segment Common Equity – Adjusted After-tax Income (Return on
adjusted segment common equity) is used to show the rate of
return on Adjusted Segment Common Equity. Return on Adjusted
Segment Common Equity is derived by dividing actual or annualized
Adjusted After-tax Income by Average Adjusted Segment Common
Equity.
Adjusted After-tax Income Attributable to General Insurance
and Life and Retirement is derived by subtracting attributed
interest expense, income tax expense and attributed dividends on
preferred stock from APTI. Attributed debt and the related interest
expense and dividends on preferred stock are calculated based on
our internal allocation model. Tax expense or benefit is calculated
based on an internal attribution methodology that considers among
other things the taxing jurisdiction in which the segments conduct
business, as well as the deductibility of expenses in those
jurisdictions.
Adjusted revenues exclude Net realized gains (losses),
income from non-operating litigation settlements (included in Other
income for GAAP purposes), changes in fair value of securities used
to hedge guaranteed living benefits (included in Net investment
income for GAAP purposes) and income from elimination of the
International reporting lag. Adjusted revenues is a GAAP measure
for our segments.
Adjusted Pre-tax Income (APTI) is derived by excluding
the items set forth below from income from continuing operations
before income tax. This definition is consistent across our
segments. These items generally fall into one or more of the
following broad categories: legacy matters having no relevance to
our current businesses or operating performance; adjustments to
enhance transparency to the underlying economics of transactions;
and measures that we believe to be common to the industry. APTI is
a GAAP measure for our segments. Excluded items include the
following:
- changes in fair value of securities used to hedge guaranteed
living benefits;
- net change in market risk benefits (MRBs);
- changes in benefit reserves related to net realized gains and
losses;
- changes in the fair value of equity securities;
- net investment income on Fortitude Re funds withheld
assets;
- following deconsolidation of Fortitude Re, net realized gains
and losses on Fortitude Re funds withheld assets;
- loss (gain) on extinguishment of debt;
- all net realized gains and losses except earned income
(periodic settlements and changes in settlement accruals) on
derivative instruments used for non-qualifying (economic) hedging
or for asset replication. Earned income on such economic hedges is
reclassified from net realized gains and losses to specific APTI
line items based on the economic risk being hedged (e.g. net
investment income and interest credited to policyholder account
balances);
- income or loss from discontinued operations;
- net loss reserve discount benefit (charge);
- pension expense related to lump sum payments to former
employees;
- net gain or loss on divestitures and other;
- non-operating litigation reserves and settlements;
- restructuring and other costs related to initiatives designed
to reduce operating expenses, improve efficiency and simplify our
organization;
- the portion of favorable or unfavorable prior year reserve
development for which we have ceded the risk under retroactive
reinsurance agreements and related changes in amortization of the
deferred gain;
- integration and transaction costs associated with acquiring or
divesting businesses;
- losses from the impairment of goodwill;
- non-recurring costs associated with the implementation of
non-ordinary course legal or regulatory changes or changes to
accounting principles; and
- income from elimination of the international reporting
lag.
Adjusted After-tax Income attributable to AIG common
shareholders (AATI) is derived by excluding the tax effected
APTI adjustments described above, dividends on preferred stock,
noncontrolling interest on net realized gains (losses), other
non-operating expenses and the following tax items from net income
attributable to AIG:
- deferred income tax valuation allowance releases and
charges;
- changes in uncertain tax positions and other tax items related
to legacy matters having no relevance to our current businesses or
operating performance; and
- net tax charge related to the enactment of the Tax Cuts and
Jobs Act.
See page 15 for the reconciliation of Net income attributable to
AIG to Adjusted After-tax Income Attributable to AIG.
Ratios: We, along with most property and casualty
insurance companies, use the loss ratio, the expense ratio and the
combined ratio as measures of underwriting performance. These
ratios are relative measurements that describe, for every $100 of
net premiums earned, the amount of losses and loss adjustment
expenses (which for General Insurance excludes net loss reserve
discount), and the amount of other underwriting expenses that would
be incurred. A combined ratio of less than 100 indicates
underwriting income and a combined ratio of over 100 indicates an
underwriting loss. Our ratios are calculated using the relevant
segment information calculated under GAAP, and thus may not be
comparable to similar ratios calculated for regulatory reporting
purposes. The underwriting environment varies across countries and
products, as does the degree of litigation activity, all of which
affect such ratios. In addition, investment returns, local taxes,
cost of capital, regulation, product type and competition can have
an effect on pricing and consequently on profitability as reflected
in underwriting income and associated ratios.
Accident year loss and Accident year combined ratios, as
adjusted (Accident year loss ratio, ex-CAT and Accident year
combined ratio, ex-CAT): both the accident year loss and
accident year combined ratios, as adjusted, exclude catastrophe
losses (CATs) and related reinstatement premiums, prior year
development, net of premium adjustments, and the impact of reserve
discounting. Natural catastrophe losses are generally weather or
seismic events, in each case, having a net impact on AIG in excess
of $10 million and man-made catastrophe losses, such as terrorism
and civil disorders that exceed the $10 million threshold. We
believe that as adjusted ratios are meaningful measures of our
underwriting results on an ongoing basis as they exclude
catastrophes and the impact of reserve discounting which are
outside of management’s control. We also exclude prior year
development to provide transparency related to current accident
year results.
Underwriting ratios are
computed as follows:
- Loss ratio = Loss and loss adjustment expenses incurred ÷ Net
premiums earned (NPE)
- Acquisition ratio = Total acquisition expenses ÷ NPE
- General operating expense ratio = General operating expenses ÷
NPE
- Expense ratio = Acquisition ratio + General operating expense
ratio
- Combined ratio = Loss ratio + Expense ratio
- CATs and reinstatement premiums ratio = [Loss and loss
adjustment expenses incurred – (CATs)] ÷ [NPE +/(-) Reinstatement
premiums related to catastrophes] – Loss ratio
- Accident year loss ratio, as adjusted (AYLR ex-CAT) = [Loss and
loss adjustment expenses incurred – CATs – PYD] ÷ [NPE +/(-)
Reinstatement premiums related to catastrophes +/(-) Prior year
premiums + Adjustment for ceded premium under reinsurance contracts
related to prior accident years]
- Accident year combined ratio, as adjusted (AYCR ex-CAT) = AYLR
ex-CAT + Expense ratio
- Prior year development net of reinsurance and prior year
premiums ratio = [Loss and loss adjustment expenses incurred – CATs
– PYD] ÷ [NPE +/(-) Reinstatement premiums related to catastrophes
+/(-) Prior year premiums] – Loss ratio – CATs and reinstatement
premiums ratio.
Premiums and deposits: includes direct and assumed
amounts received and earned on traditional life insurance policies,
group benefit policies and life‑contingent payout annuities, as
well as deposits received on universal life, investment‑type
annuity contracts, Federal Home Loan Bank 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. (NYSE: AIG) is a leading
global insurance organization. AIG provides insurance solutions
that help businesses and individuals in approximately 190 countries
and jurisdictions protect their assets and manage risks through AIG
operations and network partners.
AIG is the marketing name for the worldwide operations of
American International Group, Inc. 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,
2022
2023
Total Tax
Non-
Total Tax
Non-
(Benefit)
controlling
After
(Benefits)
controlling
After
Pre-tax
Charge
Interests(e)
Tax
Pre-tax
Charge
Interests(e)
Tax
Pre-tax income (loss)/net income
(loss), including noncontrolling interests
$
756
$
209
$
—
$
547
$
(1,346
)
$
(873
)
$
—
$
(473
)
Noncontrolling interests
5
5
566
566
Pre-tax income (loss)/net income
attributable to AIG
756
209
5
552
(1,346
)
(873
)
566
93
Dividends on preferred stock
7
7
Net income attributable to AIG common
shareholders
545
86
Adjustments:
Changes in uncertain tax positions and
other tax adjustments
(68
)
—
68
(147
)
—
147
Deferred income tax valuation allowance
releases(a)
10
—
(10
)
402
—
(402
)
Changes in fair value of securities used
to hedge guaranteed living benefits
(1
)
—
—
(1
)
4
1
—
3
Change in market risk benefit, net(b)
(245
)
(52
)
—
(193
)
486
102
—
384
Changes in benefit reserves related to net
realized gains (losses)
(3
)
(1
)
—
(2
)
1
—
—
1
Changes in the fair value of equity
securities
12
2
—
10
40
8
—
32
(Gain) loss on extinguishment of debt
4
1
—
3
(58
)
(12
)
—
(46
)
Net investment income on Fortitude Re
funds withheld assets
(309
)
(65
)
—
(244
)
(543
)
(114
)
—
(429
)
Net realized losses on Fortitude Re funds
withheld assets
174
37
—
137
(101
)
(21
)
—
(80
)
Net realized gains on Fortitude Re funds
withheld embedded derivative
370
78
—
292
2,159
454
—
1,705
Net realized losses(c)
1,228
308
—
920
1,473
316
—
1,157
Net (gain) loss on divestitures and
other
127
26
—
101
(501
)
277
—
(778
)
Non-operating litigation reserves and
settlements
—
—
—
—
1
—
—
1
Unfavorable prior year development and
related amortization changes ceded under retroactive reinsurance
agreements
46
9
—
37
50
11
—
39
Net loss reserve discount (benefit)
charge
(707
)
(149
)
—
(558
)
110
23
—
87
Pension expense related to a one-time lump
sum payment to former employees
60
13
—
47
9
2
—
7
Integration and transaction costs
associated with acquiring or divesting businesses
58
12
—
46
56
12
—
44
Restructuring and other costs
155
35
—
120
151
32
—
119
Non-recurring costs related to regulatory
or accounting changes
15
3
—
12
4
—
—
4
Net impact from elimination of
international reporting lag(d)
(127
)
(27
)
—
(100
)
—
—
—
—
Noncontrolling interests(e)
(177
)
(177
)
(811
)
(811
)
Adjusted pre-tax income/Adjusted
after-tax income attributable to AIG common shareholders
$
1,613
$
381
$
(172
)
$
1,053
$
1,995
$
473
$
(245
)
$
1,270
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,
2022
2023
Total Tax
Non-
Total Tax
Non-
(Benefit)
controlling
After
(Benefit)
controlling
After
Pre-tax
Charge
Interests(e)
Tax
Pre-tax
Charge
Interests(e)
Tax
Pre-tax income/net income, including
noncontrolling interests
$
14,299
$
3,025
$
—
$
11,273
$
3,858
$
(20
)
$
—
$
3,878
Noncontrolling interests
(1,046
)
(1,046
)
(235
)
(235
)
Pre-tax income/net income attributable
to AIG
14,299
3,025
(1,046
)
10,227
3,858
(20
)
(235
)
3,643
Dividends on preferred stock
29
29
Net income attributable to AIG common
shareholders
10,198
3,614
Adjustments:
Changes in uncertain tax positions and
other tax adjustments
22
—
(22
)
230
—
(230
)
Deferred income tax valuation allowance
releases(a)
25
—
(25
)
357
—
(357
)
Changes in fair value of securities used
to hedge guaranteed living benefits
(30
)
(6
)
—
(24
)
16
3
—
13
Change in market risk benefit, net(b)
(958
)
(202
)
—
(756
)
2
—
—
2
Changes in benefit reserves related to net
realized gains (losses)
(14
)
(3
)
—
(11
)
(6
)
(1
)
—
(5
)
Changes in the fair value of equity
securities
53
11
—
42
(94
)
(20
)
—
(74
)
(Gain) loss on extinguishment of debt
303
64
—
239
(37
)
(8
)
—
(29
)
Net investment income on Fortitude Re
funds withheld assets
(943
)
(198
)
—
(745
)
(1,544
)
(324
)
—
(1,220
)
Net realized losses on Fortitude Re funds
withheld assets
486
102
—
384
295
62
—
233
Net realized (gains) losses on Fortitude
Re funds withheld embedded derivative
(7,481
)
(1,571
)
—
(5,910
)
2,007
422
—
1,585
Net realized losses(c)
173
38
—
135
2,496
534
—
1,962
Loss from discontinued operations
1
—
Net (gain) loss on divestitures and
other
82
17
—
65
(643
)
247
—
(890
)
Non-operating litigation reserves and
settlements
(41
)
(9
)
—
(32
)
1
—
—
1
Favorable prior year development and
related amortization changes ceded under retroactive reinsurance
agreements
(160
)
(34
)
—
(126
)
(62
)
(13
)
—
(49
)
Net loss reserve discount (benefit)
charge
(703
)
(148
)
—
(555
)
195
41
—
154
Pension expense related to a one-time lump
sum payment to former employees
60
13
—
47
84
18
—
66
Integration and transaction costs
associated with acquiring or divesting businesses
194
41
—
153
252
53
—
199
Restructuring and other costs
570
120
—
450
553
116
—
437
Non-recurring costs related to regulatory
or accounting changes
37
8
—
29
40
8
—
32
Net impact from elimination of
international reporting lag(d)
(127
)
(27
)
—
(100
)
(12
)
(3
)
—
(9
)
Noncontrolling interests(e)
599
599
(514
)
(514
)
Adjusted pre-tax income/Adjusted
after-tax income attributable to AIG common shareholders
$
5,800
$
1,288
$
(447
)
$
4,036
$
7,401
$
1,702
$
(749
)
$
4,921
(a)
The quarter and year ended
December 31, 2023 include a valuation allowance release related to
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.
(b)
Includes realized gains and
losses on certain derivative instruments used for non-qualifying
(economic) hedging.
(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)
Effective in the quarter ended
December 31, 2022, the foreign property and casualty subsidiaries
report on a calendar year ending December 31. We determined that
the effect of not retroactively applying this change was immaterial
to our Consolidated Financial Statements for the current and prior
periods. Therefore, we reported the cumulative effect of the change
in accounting principle within the Consolidated Statements of
Income (Loss) for the year ended December 31, 2022 and did not
retrospectively apply the effects of this change to prior
periods.
(e)
Includes the portion of equity
interest of non-operating income of Corebridge and consolidated
investment entities that AIG does not own.
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,
Earnings per common share:
2022
2023
% Inc. (Dec.)
2022
2023
% Inc. (Dec.)
Basic
Income from continuing operations
$
0.73
$
0.12
(83.6
)
%
$
13.10
$
5.02
(61.7
)
%
Income from discontinued operations
—
—
NM
—
—
NM
Net income attributable to AIG common
shareholders
$
0.73
$
0.12
(83.6
)
$
13.10
$
5.02
(61.7
)
Diluted
Income from continuing operations
0.72
$
0.12
(83.3
)
$
12.94
$
4.98
(61.5
)
Income from discontinued operations
—
—
NM
—
—
NM
Net income attributable to AIG common
shareholders
$
0.72
$
0.12
(83.3
)
$
12.94
$
4.98
(61.5
)
Adjusted after-tax income attributable
to AIG common shareholders per diluted share
$
1.39
$
1.79
28.8
%
$
5.12
$
6.79
32.6
%
Weighted average shares
outstanding:
Basic
745.2
701.5
778.6
719.5
Diluted
754.9
708.0
787.9
725.2
Reconciliation of Book Value per Common
Share
As of period
end:
December 31,
2022
September 30,
2023
December 31,
2023
Total AIG shareholders' equity
$
40,970
$
39,984
$
45,351
Less: Preferred equity
485
485
485
Total AIG common shareholders' equity
(a)
40,485
39,499
44,866
Less: Deferred tax assets (DTA)*
4,518
3,974
4,313
Less: Accumulated other comprehensive
income (AOCI)
(22,616
)
(22,529
)
(14,037
)
Add: Cumulative unrealized gains and
losses related to Fortitude Re Funds withheld assets
(2,862
)
(2,973
)
(1,791
)
Subtotal: AOCI plus cumulative unrealized
gains and losses related to Fortitude Re funds withheld assets
(19,754
)
(19,556
)
(12,246
)
Total adjusted common shareholders' equity
(b)
$
55,721
$
55,081
$
52,799
Less: Intangible assets:
Goodwill
3,927
3,498
3,539
Value of business acquired
92
16
15
Value of distribution channel acquired
418
149
145
Other intangibles
286
249
249
Total intangible assets
4,723
3,912
3,948
Total adjusted tangible common
shareholders' equity (c)
$
50,998
$
51,169
$
48,851
Total common shares outstanding
(d)
734.1
704.6
688.8
As of period
end:
December 31,
2022
% Inc.
(Dec.)
September 30,
2023
% Inc.
(Dec.)
December 31,
2023
Book value per common share (a÷d)
$
55.15
18.1
%
$
56.06
16.2
%
$
65.14
Adjusted book value per common share
(b÷d)
75.90
1.0
78.17
(1.9
)
76.65
Adjusted tangible book value per common
share (c÷d)
69.47
2.1
72.62
(2.3
)
70.92
American International Group,
Inc.
Selected Financial Data and
Non-GAAP Reconciliation (continued)
($ in millions, except per
common share data)
Reconciliation of Return on Common
Equity
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2022
2023
2022
2023
Actual or annualized net income (loss)
attributable to AIG common shareholders (a)
$
2,180
$
344
$
10,198
$
3,614
Actual or annualized adjusted after-tax
income attributable to AIG common shareholders (b)
$
4,212
$
5,080
$
4,036
$
4,921
Average AIG Common Shareholders' equity
(c)
$
39,953
$
42,183
$
49,338
$
41,930
Less: Average DTA*
4,536
4,144
4,796
4,322
Less: Average AOCI
(23,369
)
(18,283
)
(13,468
)
(19,499
)
Add: Average cumulative unrealized gains
and losses related to Fortitude Re funds withheld assets
(2,942
)
(2,382
)
(1,053
)
(2,475
)
Subtotal: AOCI plus cumulative unrealized
gains and losses related to Fortitude Re funds withheld assets
(20,427
)
(15,901
)
(12,415
)
(17,024
)
Average adjusted common shareholders'
equity (d)
$
55,844
$
53,940
$
56,957
$
54,632
ROCE (a÷c)
5.5
%
0.8
%
20.7
%
8.6
%
Adjusted return on common equity (b÷d)
7.5
%
9.4
%
7.1
%
9.0
%
* 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.
Reconciliation of Net Investment
Income
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2022
2023
2022
2023
Net Investment Income per Consolidated
Statements of Operations
$
3,258
$
3,932
$
11,767
$
14,592
Changes in fair value of securities used
to hedge guaranteed living benefits
(14
)
(15
)
(55
)
(55
)
Changes in the fair value of equity
securities
12
40
53
(94
)
Net investment income on Fortitude Re
funds withheld assets
(309
)
(543
)
(943
)
(1,544
)
Net realized gains (losses) related to
economic hedges and other
54
45
216
196
Net impact from elimination of
International reporting lag
(41
)
—
(41
)
(1
)
Total Net Investment Income - APTI
Basis
$
2,960
$
3,459
$
10,997
$
13,094
Reconciliation of Net Premiums Written
- Comparable Basis
Three Months Ended December
31, 2023
Twelve Months Ended December
31, 2023
North
Global -
Global -
America -
International -
Global -
General
Commercial
Personal
Commercial
Commercial
General
Commercial
Global
Insurance
Lines
Insurance
Lines
Lines
Insurance
Lines
Lexington
Specialty
Change in net premiums written
Increase (decrease) as reported in U.S.
dollars
2.6
%
(0.3
) %
10.0
%
(7.1
) %
8.4
%
4.7
%
4.4
%
17.1
%
8.9
%
Foreign exchange effect
(0.5
)
(0.9
)
0.5
—
(1.9
)
1.5
0.6
(0.1
)
0.3
Lag elimination impact
(0.9
)
(0.6
)
(1.5
)
—
(1.6
)
0.4
0.6
—
0.3
Validus Re
3.5
4.7
—
7.9
0.8
(1.8
)
(2.6
)
—
—
Crop Risk Services
1.8
2.5
—
4.3
—
1.8
2.4
—
—
Increase (decrease) on comparable
basis
6.5
%
5.4
%
9.0
%
5.1
%
5.7
%
6.6
%
5.4
%
17.0
%
9.5
%
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
Twelve Months Ended
December 31,
December 31,
2022
2023
2022
2023
Total General Insurance
Combined ratio
89.9
89.1
91.9
90.6
Catastrophe losses and reinstatement
premiums
(3.8
)
(2.1
)
(5.0
)
(4.3
)
Prior year development, net of reinsurance
and prior year premiums
2.3
0.9
1.8
1.4
Accident year combined ratio, as
adjusted
88.4
87.9
88.7
87.7
North America
Combined ratio
86.6
87.9
Catastrophe losses and reinstatement
premiums
(4.2
)
(2.0
)
Prior year development, net of reinsurance
and prior year premiums
5.8
2.6
Accident year combined ratio, as
adjusted
88.2
88.5
North America - Commercial
Lines
Loss ratio
61.5
61.1
Catastrophe losses and reinstatement
premiums
(4.4
)
(1.7
)
Prior year development, net of reinsurance
and prior year premiums
5.9
0.9
Accident year loss ratio, as adjusted
63.0
60.3
Combined ratio
84.4
85.1
Catastrophe losses and reinstatement
premiums
(4.4
)
(1.7
)
Prior year development, net of reinsurance
and prior year premiums
5.9
0.9
Accident year combined ratio, as
adjusted
85.9
84.3
North America - Personal
Insurance
Combined ratio
102.5
101.8
Catastrophe losses and reinstatement
premiums
(2.8
)
(3.7
)
Prior year development, net of reinsurance
and prior year premiums
5.6
11.3
Accident year combined ratio, as
adjusted
105.3
109.4
International
Combined ratio
93.2
90.1
Catastrophe losses and reinstatement
premiums
(3.5
)
(2.2
)
Prior year development, net of reinsurance
and prior year premiums
(1.1
)
(0.5
)
Accident year combined ratio, as
adjusted
88.6
87.4
International - Commercial
Lines
Combined ratio
89.4
85.5
Catastrophe losses and reinstatement
premiums
(5.2
)
(3.0
)
Prior year development, net of reinsurance
and prior year premiums
(2.6
)
(2.2
)
Accident year combined ratio, as
adjusted
81.6
80.3
International - Personal
Insurance
Loss ratio
54.8
50.9
Catastrophe losses and reinstatement
premiums
(1.0
)
(0.6
)
Prior year development, net of reinsurance
and prior year premiums
1.0
2.0
Accident year loss ratio, as adjusted
54.8
52.3
Combined ratio
98.9
97.7
Catastrophe losses and reinstatement
premiums
(1.0
)
(0.6
)
Prior year development, net of reinsurance
and prior year premiums
1.0
2.0
Accident year combined ratio, as
adjusted
98.9
99.1
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
Twelve Months Ended
December 31,
December 31,
2022
2023
2022
2023
Adjusted pre-tax income
$
1,212
$
1,437
$
4,430
$
5,371
Interest expense on attributed financial
debt
131
117
560
506
Adjusted pre-tax income including
attributed interest expense
1,081
1,320
3,870
4,865
Income tax expense
291
331
920
1,146
Adjusted after-tax income
790
989
2,950
3,719
Dividends declared on preferred stock
3
3
12
12
Adjusted after-tax income attributable
to common shareholders
$
787
$
986
$
2,938
$
3,707
Ending adjusted segment common
equity
$
30,328
$
28,067
$
30,328
$
28,067
Average adjusted segment common
equity
$
29,246
$
29,319
$
28,336
$
29,732
Return on adjusted segment common
equity
10.8
%
13.5
%
10.4
%
12.5
%
Total segment shareholder’s equity
$
24,310
$
24,290
$
24,310
$
24,290
Less: Preferred equity
212
184
212
184
Total segment common equity
24,098
24,106
24,098
24,106
Less: Accumulated other comprehensive
income (AOCI)
(6,912
)
(4,534
)
(6,912
)
(4,534
)
Add: Cumulative unrealized gains and
losses related to Fortitude Re funds withheld assets
(682
)
(573
)
(682
)
(573
)
Subtotal: AOCI plus cumulative unrealized
gains and losses related to Fortitude Re funds withheld assets
(6,230
)
(3,961
)
(6,230
)
(3,961
)
Total adjusted segment common equity
$
30,328
$
28,067
$
30,328
$
28,067
Reconciliation of Life and Retirement
Return on Adjusted Segment Common Equity
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2022
2023
2022
2023
Adjusted pre-tax income
$
852
$
957
$
3,317
$
3,805
Interest expense on attributed financial
debt
110
114
345
459
Adjusted pre-tax income including
attributed interest expense
742
843
2,972
3,346
Income tax expense
161
155
610
651
Adjusted after-tax income
581
688
2,362
2,695
Dividends declared on preferred stock
2
2
8
8
Adjusted after-tax income attributable
to common shareholders
$
579
$
686
$
2,354
$
2,687
Ending adjusted segment common
equity
$
23,179
$
23,208
$
23,179
$
23,208
Average adjusted segment common
equity
$
23,115
$
23,912
$
22,611
$
23,443
Return on adjusted segment common
equity
10.0
%
11.5
%
10.4
%
11.5
%
Total segment shareholder’s equity
$
8,606
$
11,019
$
8,606
$
11,019
Less: Preferred equity
164
158
164
158
Total segment common equity
8,442
10,861
8,442
10,861
Less: Accumulated other comprehensive
income (AOCI)
(16,917
)
(13,565
)
(16,917
)
(13,565
)
Add: Cumulative unrealized gains and
losses related to Fortitude Re funds withheld assets
(2,180
)
(1,218
)
(2,180
)
(1,218
)
Subtotal: AOCI plus cumulative unrealized
gains and losses related to Fortitude Re funds withheld assets
(14,737
)
(12,347
)
(14,737
)
(12,347
)
Total adjusted segment common equity
$
23,179
$
23,208
$
23,179
$
23,208
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,
2022
2023
Individual
Retirement:
Premiums
$
63
$
40
Deposits
3,764
5,245
Other
—
(3
)
Premiums and deposits
$
3,827
$
5,282
Group
Retirement:
Premiums
$
3
$
4
Deposits
2,240
2,079
Other
—
—
Premiums and deposits
$
2,243
$
2,083
Life
Insurance:
Premiums
$
701
$
581
Deposits
410
408
Other
68
227
Premiums and deposits
$
1,179
$
1,216
Institutional
Markets:
Premiums
$
1,375
$
1,921
Deposits
169
75
Other
7
8
Premiums and deposits
$
1,551
$
2,004
Total Life and
Retirement:
Premiums
$
2,142
$
2,546
Deposits
6,583
7,807
Other
75
232
Premiums and deposits
$
8,800
$
10,585
Total Debt and Preferred Stock
Leverage
Three Months Ended
Three Months Ended
September 30, 2023
December 31, 2023
Hybrid - debt securities / Total
capital
3.1
%
2.8
%
Financial debt and debt held for sale /
Total capital
29.8
25.0
Total debt / Total capital
32.9
27.8
Preferred stock / Total capital
0.8
0.7
Total debt and preferred stock / Total
capital (incl. AOCI)
33.7
28.5
AOCI Impact
(7.8
)
(4.2
)
Total debt and preferred stock / Total
capital (ex. AOCI)
25.9
%
24.3
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240213876539/en/
Quentin McMillan (Investors): quentin.mcmillan@aig.com
Claire Talcott (Media): claire.talcott@aig.com
www.aig.com
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