American International Group, Inc. New · NYSE:AIG
American International Group, Inc. New — American International Group — Debt Investor Presentation (2015)
22 slides from American International Group, Inc. New's debt investor presentation, Dec 3, 2015
Slide 1: Is Account Receivables Your Largest Asset?
Is Account Receivables Your Largest Asset? Unleash the Hidden Values A/R Insurance Can Deliver to Your Company Presented by Glenn Robins
Slide 2: US Companies Profile On Insuring Assets
US Companies Profile On Insuring Assets Compare Balance Sheet Assets with Most Insurance Portfolios Insured Not Insured Cash Accounts Receivables Finished Goods Work in Progress Plant & Equipment Why - For the asset Accounts Receivable they are willing to take the risk. Can A/R Insurance be an inves
Slide 3: Insure the full Sales Cycle to Protect Your Return on Investment
Insure the full Sales Cycle to Protect Your Return on Investment Accounts Receivable Travel & Accident Cargo Property Workers Compensation
Slide 4: Benefits of A/R Insurance
r “Ty BENEFITS OF A/R INSURANCE L. al
Slide 5: A/R Insurance: Leverage
A/R Insurance : Leverage Internal Case Studies 1) Improve Liquidity 2) Increase Sales Growth 3) Maintain Bad Debt Reserve Expense
Slide 6: Case 1: Achieved a 3,233% ROI on Advance Rate
Case 1: Achieved a 3,233% ROI on Advance Rate Without With A/R Insurance A/R Insurance A/R Balance $5 million $5 million Advance Rate 60% 90% Working Capital $3 million $4.5 million Premium $45k A/R Insurance increased working capital available by $1,455,000 The ROI for this benefit considered i
Slide 7: Case 2: Achieved a 567% ROI by Leveraging A/R Insurance
Case 2: Achieved a 567% ROI by Leveraging A/R Insurance Without With A/R Insurance A/R Insurance Sales $45 million $45 million Terms of Sale 60 Days 60 Days Additional Coverage $1 million New Sales $45 million $51 million 5% gross margin $2,250,000 $2,550,000 Premium $45k Premium paid is $45,000 a
Slide 8: Case 3: Capping Bad Debt Reserve at the Policy Deductible
Case 3: Capping Bad Debt Reserve at the Policy Deductible Testimonials from Existing Insureds: “ Our company auditors have been comfortable with A/R insurance allowing us not to increase our bad debt reserve (P&L expense) above the policy’s deductible. ” “ Having been with AIG Trade Credit Insurance
Slide 9: A/R Insurance: Benefits to our Insureds
A/R Insurance: Benefits to our Insureds I. Improve Liquidity II. Increase Sales - average increase in insureds’ credit exposure is 18% per year III. Reduce/Maintain the Allowance For Bad Debt IV. Cost Reduction V. Smooth and Stabilize Cash Flow – acts as a second source of repayment VI. Minimize Con
Slide 10: Premium at $0.10 Per $100 of Coverage
Premium at $0.10 Per $100 of Coverage The cost of A/R insurance is reasonable Premium Calculation: • Annual Company Revenue: $45MM (AR $5MM) • Premium Rate: 10 cents (.10%) • Premium cost: $45,000 Price is subject to additional risk factors Country risk, Industry risk, Customer risk
Slide 11: Why AIG
WHY AIG
Slide 12: AIG's West Coast Underwriting Group
AIG’s West Coast Underwriting Group Underwriting Group • West Coast team experience in A/R Insurance ranges from 6 to 18 years of service • Real Time Underwriting • AIG Global Footprint Superior Product • AIG provides a NON-CANCELABLE LIMITS policy form; indemnity is guaranteed when you need it most
Slide 13: AIG West Coast Portfolio
AIG West Coast Portfolio Over 200 policies Revenue levels range from $5 million to $100 Billion 50% of our insureds on the West Coast have maintained policies for over 10 years. Industries Covered 128 SIC Codes
Slide 14: Risk Mitigation
Risk Mitigation
Slide 15: Weighing the Cost Benefit of Self Insurance vs. A/R Insurance
Weighing the Cost Benefit of Self Insurance vs. A/R Insurance Self Insurance A/R Insurance Bad Debt Reserve to fund write offs Reduce/Maintain Bad Debt Expense Requires expense on credit information, Expanded Credit Team to include analysis and review underwriters and economists Requires expense
Slide 16: Credit Approval Process: Evaluating Customers' Risk Is Art, Not Science
Credit Approval Process: Evaluating Customers’ Risk Is Art, Not Science Your credit department analyzes key, historical documents before selling to a customer on credit • Financial statements dated within the last 12 months • Credit reports within the last 12 months • Bank and Trade references dated
Slide 17: When Bank Credit Was Unavailable, Accounts Receivable Insurance Kept Companies Afloat
When Bank Credit Was Unavailable, Accounts Receivable Insurance Kept Companies Afloat AIG Commercial and Industrial Lending $522MM Claims Paid Since 2007 $122 $110 $87 $74 $69 $61 2007 2008 2009 2010 2011 2012 Commercial and Industrial Lending AIG Paid Claims
Slide 18: AIG's Claims Paying Ability
r “Ty AIG’s Claims Paying Ability L. al
Slide 19: AIG's Claim Paying Commitment to A/R Insurance Customers
AIG’s Claim Paying Commitment to A/R Insurance Customers Received over 11 thousand claims since the inception of our A/R insurance program in 1982. Paid $1.376 billion in claims to clients. Recovered $259 million of paid claims from third parties, which was shared with policyholders.
Slide 20: A/R Insurance: Key Values
A/R Insurance: Key Values Improve Liquidity NON-CANCELABLE LIMITS Coverage Increase Sales Risk Free Extension of Credit Department Improve ROI Global Footprint To Get Started: Complete Application Sales Volume Loss History Aging List of Buyers
Slide 21: Thank You!
Thank You! Glenn Robins Assistant Vice President Trade Credit 777 South Figueroa Street Los Angeles, CA 90017 Telephone 213.689.3754 [email protected]
Slide 22: Disclaimer
Disclaimer Certain statements provided herein are based solely on the opinions of AIG and are being provided for general information purposes only. Any opinions provided on economic trends should not be relied upon for investment decisions and are solely the opinion of AIG. Certain information may b
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