American International Group, Inc. New · NYSE:AIG
American International Group, Inc. New — American International Group — Q2 2013 Earnings Presentation
21 slides from American International Group, Inc. New's earnings presentation, Aug 2, 2013
Slide 1: Second Quarter 2013 Results Conference Call Presentation
American International Group, Inc. Second Quarter 2013 Results Conference Call Presentation August 2, 2013
Slide 2: Cautionary Statement Regarding Projections and Other Information About Future Events
Cautionary Statement Regarding Projections and Other Information About Future Events This document and the remarks made within this presentation may include, and officers and representatives of American International Group, Inc. (AIG) may from time to time make, projections, goals, assumptions and s
Slide 3: Second Quarter 2013 Key Themes
Second Quarter 2013 Key Themes Highlights: Noteworthy Items Declared cash dividend of $0.10/share; share repurchase authorization of $1 billion, both in Aug. 2013 Capital Management Reduced debt by $931 million through calls and tenders & Liquidity $1.3 billion of dividends and loan repayments
Slide 4: Financial Highlights
Financial Highlights Net income in 2Q13 includes a deferred tax valuation allowance release of $752 million and litigation settlement income of $257 million, net of tax. Second Quarter Inc. ($ in millions, except per share amounts) 2012 2013 (Dec.) Revenues $16,221 $17,315 7% Net income attributable
Slide 5: After-tax Operating Income
After-tax Operating Income Improved insurance operating results and strong investment returns drive results. Second Quarter ($ in millions, except per share amounts) 2012 2013 Insurance operations AIG Property Casualty $936 $1,085 AIG Life and Retirement 933 1,151 Mortgage Guaranty (reported in Othe
Slide 6: Strong Capital Position
Strong Capital Position Outstanding borrowings reflect $2.9 billion notional amount of hybrid calls and tenders year-to-date. Capital Structure Book Value Per Share ($ in billions, except per share data) $70.0 $66.38 $66.02 $124.1 $0.7 $119.2 $0.7 $8.51 $4.77 $16.1 $60.0 $14.6 Non-redeemable $9.4 no
Slide 7: Financial Flexibility – A Source of Strength
Financial Flexibility – A Source of Strength Parent Cash, Short-Term Investments & Insurance Company Distributions Unencumbered Securities ($ in millions) ($ in billions) $12.6 $1,600 $1,342 $1,349 $1,337 $11.0 $1,200 $2.9 $440 $545 Unencumbered Fixed Maturity $800 Securities $902 Cash & Short-term
Slide 8: AIG Property Casualty – Financial Results
AIG Property Casualty – Financial Results Operating results demonstrate continued execution of strategic initiatives. ($ in millions) 2Q12 2Q13 Global Combined Ratios Calendar Year Accident Year, Net premiums written $9,095 $9,263 as adjusted(1) 120 102.4 102.6 98.3 96.5 Net premiums earned 8,820 8,
Slide 9: Commercial Insurance – Underwriting Results
Commercial Insurance – Underwriting Results Commercial results reflect business mix shift, enhanced risk selection, and price increases. Net Premiums Written ($ in millions) Commercial Insurance continued to focus on growing higher value, profitable lines of business and geographies. $5,876 $6,000
Slide 10: Consumer Insurance – Underwriting Results
Consumer Insurance – Underwriting Results Consumer continues to implement global growth strategies across multiple distribution channels. Net Premiums Written Consumer NPW grew 4.7% from 2Q12 excluding foreign ($ in millions) exchange and the excess of loss reinsurance change and declined 3.9% on
Slide 11: AIG Property Casualty – Investments
AIG Property Casualty – Investments Returns driven by strong alternative investment income and gains on fair value option securities. Net investment income: Second Quarter ($ in millions) 2012 2013 Inc./(Dec.) Interest and dividends $ 991 $ 939 (5%) Alternative investments 110 240 118% Other, net(1)
Slide 12: Mortgage Guaranty – Improving Trends
Mortgage Guaranty – Improving Trends Operating income of $73 million included a positive contribution from commutations, settlements and related reserve releases totaling $49 million. New Insurance Written (NIW)(1) Primary Delinquency (DQ) Ratio (%)(2) ($ in billions) 11% Growth in New insurance wri
Slide 13: AIG Life and Retirement – Financial Results
AIG Life and Retirement – Financial Results Results reflect strong sales, active spread management and higher investment income. ($ in millions) 2Q12 2Q13 Premiums and deposits $5,434 $6,765 Premiums 632 649 Strong 2Q13 operating results were driven by robust sales of variable annuities, solid gro
Slide 14: AIG Life and Retirement – Retail & Institutional Results
AIG Life and Retirement – Retail & Institutional Results Retail Operating Income* Institutional Operating Income* ($ in millions) ($ in millions) $700 $670 $600 $130 $481 $535 $525 $450 $50 $398 $172 $343 $123 $350 $251 $300 $175 $150 $265 $295 $224 $196 $0 $0 2Q12 2Q13 2Q12 2Q13 Life Insurance and
Slide 15: AIG Life and Retirement – Investments
AIG Life and Retirement – Investments Net investment income: Second Quarter ($ in millions) 2012 2013 Inc./(Dec.) Interest and dividends $ 2,361 $ 2,319 (2%) Alternative investments 170 436 156% Call and tender income 20 54 170% (1) Other, net (30) (172) N/M Net investment income $ 2,521 $ 2,637 5%
Slide 16: AIG Life and Retirement – Base Yields and Spreads
AIG Life and Retirement – Base Yields and Spreads Base Yields(1) 5.70% 5.50% 5.50% 5.38% 5.33% 5.30% 5.35% 5.30% 5.31% 5.25% 5.12% 5.12% 5.10% 5.10% 5.23% 5.14% 4.90% 5.01% 4.95% 4.85% 4.70% 2Q12 3Q12 4Q12 1Q13 2Q13 Cost of Funds(2) 3.40% 3.27% 3.26% 3.26% 3.10% 3.06% 3.20% 3.00% 3.15% 3.14% 3.13% 2
Slide 17: Q&A
AIG Q&A
Slide 18: Appendix
AIG Appendix
Slide 19: Direct Investment Book and Global Capital Markets
Direct Investment Book and Global Capital Markets Direct Investment Book (1) Global Capital Markets (1) ($ in billions) Assets $25.7 $8.6 Liabilities 21.8 3.8 Net Asset Value $3.9 $4.8 Legacy Matched AIG Hedging & Legacy AIGFP Stable Value Go Forward Assets & Liabilities Market Derivatives(2) CDS Po
Slide 20: Direct Investment Book Long-Term Debt Maturities
Direct Investment Book Long-Term Debt Maturities ($ in billions) $25 90% 80% 80% $19.4 $20 $18.4 70% $1.2 $1.1 $16.2 60% $1.1 $14.4 57% $15 $5.8 $5.6 $0.8 $12.6 50% $5.0 $0.6 $4.5 40% $3.5 $10 $3.5 35% $8.3 $4.1 $3.5 $0.5 30% $3.5 26% $8.9 $3.5 $8.2 $3.9 20% $5 $3.8 $6.6 16% $0.3 $5.6 10% 0% $4.4 $3
Slide 21: AIG – Bring on tomorrow
AIG Bring on tomorrow
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