American International Group, Inc. New · NYSE:AIG

American International Group, Inc. New — American International Group — Investor Day (May 2017)

52 slides from American International Group, Inc. New's investor day presentation, May 15, 2017

1. Slide 1: Consumer Insurance Investor Day

   © Consumer Insurance Investor Day Personal Insurance | Japan May 15, 2017 1

2. Slide 2: Cautionary Statement Regarding Forward Looking Information

   Cautionary Statement Regarding Forward Looking Information 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 statements that may constit

3. Slide 3: Consumer Investor Day Agenda

   Consumer Investor Day Agenda Time Content Management Registration and 9:00 – 9:30 Breakfast Kevin Hogan, Executive Vice President & 9:30 – 9:40 Overview & Outlook Chief Executive Officer of Consumer Gaurav Garg, Chief Executive Officer of Personal 9:40 – 10:15 Personal Insurance Insurance 10:15 – 10

4. Slide 4: Overview & Outlook

   © Overview & Outlook Kevin Hogan Executive Vice President & Chief Executive Officer of Consumer

5. Slide 5: Consumer: Strong Operating Performance, Capital Efficiency and Unique Growth Opportunities

   Consumer: Strong Operating Performance, Capital Efficiency and Unique Growth Opportunities Important contributor to AIG’s results Achieving efficiency goals and returning excess of cost of capital Industry leader in target markets Solid foundation for growth Experienced executive team and deep talen

6. Slide 6: Consumer: An Important Contributor to AIG's Results

   Consumer: An Important Contributor to AIG’s Results Modular reporting enhances transparency AIG Operating Revenue[1] By Business (in millions, FY2016) 43% Commercial Insurance 49% $13,270 $11,704 Consumer Insurance Liability and Financial Lines 27% 24% Personal Insurance Property and Special Risks 1

7. Slide 7: Consumer: Achieving Efficiency Goals and Returning Excess of Cost of Capital

   Consumer: Achieving Efficiency Goals and Returning Excess of Cost of Capital Normalized Return On Attributed Equity Pre-tax Operating Income ($M) 10.9% 3,849 10.3% 10.4% 1,048 8.4% 2,929 704 FY15 FY16 1Q16 1Q17 FY15 FY16 1Q16 1Q17 General Operating Expenses ($M) Accident Year Combined Ratio, As Adju

8. Slide 8: Consumer: Industry Leaders in Target Markets

   Consumer: Industry Leaders in Target Markets Disciplined focus on value creation at the individual business level Group Retirement Premiums & Deposits: $7.6B PTOI: $0.9B Normalized ROE: 11.6% Individual Retirement Premiums & Deposits: $16.1B PTOI: $2.3B Life Insurance Normalized ROE: 11.6% Premiums

9. Slide 9: Consumer: 1Q 2017 Highlights

   Consumer: 1Q 2017 Highlights Solid foundation for future growth  Normalized ROE 12.5%, PTOI strong with solid fees and spreads  Top tier ranking across Fixed, Index and Variable Annuity product lines in challenging Individual environment – DOL uncertainty affecting industry volumes Retirement  In

10. Slide 10: Consumer: 1Q 2017 Highlights

    Consumer: 1Q 2017 Highlights Solid foundation for future growth  Normalized ROE 11.8%, PTOI slightly higher than prior year due to reduced expenses and higher net investment income Personal  Overall Combined Ratio in the quarter in line with prior year despite a severe loss Insurance in 1Q 2017 ve

11. Slide 11: Personal Insurance

    © Personal Insurance Gaurav Garg Chief Executive Officer of Personal Insurance 11

12. Slide 12: Personal Insurance: Key Messages

    Personal Insurance: Key Messages Attractive portfolio mix following strategic actions Medium-term target run-rate of 92-94 combined ratio and mid-double digit ROE Poised for growth after 2018 12

13. Slide 13: Personal Insurance: Important Contributor to Consumer Business and Property Casualty Entities

    Personal Insurance: Important Contributor to Consumer Business and Property Casualty Entities1 FY 2016 Mix of Business (dollars in millions) $11,704 $13,270 Operating Revenues2 $5,758 $8,098 $3,818 $4,018 $2,769 1. Property Casualty entities represents the aggregate net premium written of Commercial

14. Slide 14: Personal Insurance: Attractive Business with Unique Portfolio Mix

    Personal Insurance: Attractive Business with Unique Portfolio Mix 2016 Net Premiums Written Individual Group Auto: 26% Primary Markets: Personal Accident (PA): 35% Japan, Asia Primary Markets: Japan, Multinational Property: 7% Primary Markets: Warranty & Service: 10% U.S., High Net Worth: 14% Multin

15. Slide 15: Personal Insurance: Performance Turnaround Driven by Efficiency

    Personal Insurance: Performance Turnaround Driven by Efficiency Normalized Return On Attributed Equity Pre-tax Operating Income ($M) 11.9% 11.8% 210 212 10.2% 686 -3.3% 68 FY15 FY16 1Q16 1Q17 FY15 FY16 1Q16 1Q17 General Operating Expenses ($M) Accident Year Combined Ratio, as Adjusted 2,084 443 101.

16. Slide 16: Personal Insurance: Stable Accident Year Loss Ratio and Improving Expense Ratio

    Personal Insurance: Stable Accident Year Loss Ratio and Improving Expense Ratio Accident Year Loss Ratio, As Adjusted,1 PI Accident Year Combined Ratio, and Expense Ratio (Rolling 4 Quarters)2 As Adjusted1 60% NPW, 12.4 11.6 11.5 2.7 $bn 55% AY CR, 101.1 99.5 96.2 95.6 as adjusted 92-94 50% 45.6 47.

17. Slide 17: Personal Insurance: Advanced Risk Analytics to Maximize Profitability

    Personal Insurance: Advanced Risk Analytics to Maximize Profitability Risk Accumulation Management Advanced Pricing Balancing risk, profitability, and growth by managing against Leveraging data and machine learning to refine pricing accumulation thresholds at various levels Risk Quality Score Geospa

18. Slide 18: Personal Insurance: Focusing Geographic Footprint to Optimize Earnings

    Personal Insurance: Focusing Geographic Footprint to Optimize Earnings Guiding Principles Meaningful Sustainable AIG Scalability or Niche Market Profit Pools Capabilities Position Target Footprint # of Countries Selling Personal Insurance 2010A 2016A 2017E Country and product exits represent less th

19. Slide 19: Personal Insurance: Extensive Global Network Supports Multinational Model

    Personal Insurance: Extensive Global Network Supports Multinational Model Target Footprint Multinational Network Partner Countries Wholly Owned Service Centers Global Strength Network Partner Service Languages Providers Countries1 Centers Target Footprint` 55+ 40+ 8 650,000+ In addition to target La

20. Slide 20: Personal Insurance: Diverse Client Base of Multinational Corporations, SMEs, Associations and Individuals

    Personal Insurance: Diverse Client Base of Multinational Corporations, SMEs, Associations and Individuals Personal Accident Travel $4.0B $0.9B 2016 NPW 2016 NPW 25+ 90+ countries covered through core footprint Over 25 commercial Around the clock and AIG partner network airline partners globally serv

21. Slide 21: Personal Insurance: Focused on Target Markets and Customer Segments

    Personal Insurance: Focused on Target Markets and Customer Segments Auto & Property Global Auto and Property High Net Worth $3.8B $1.6B 2016 NPW 2016 NPW US Market leader Mass market presence in Japan, Asia Insurer for Ultra High Net Worth Individuals Insure ~ 40% of US billionaires Leader for U.S.

22. Slide 22: Personal Insurance: Investing in Growth – High Net Worth

    Personal Insurance: Investing in Growth – High Net Worth Catastrophic Risks Key Metrics Catastrophic risks services Real-time Tracking US Retention Ratio Remains Strong1 100% 95% 90% 1Q15 3Q15 1Q16 3Q16 1Q17 Every Day Risks Art Collection Yacht Loss US Net Premium Written up Smart Build Management P

23. Slide 23: Personal Insurance: Investing in Growth – Select Technology Investments in Key Businesses

    Personal Insurance: Investing in Growth – Select Technology Investments in Key Businesses Internal User Community Case Enhancing the Underwriter Manager Claims Adjuster Call Center Representative experience for External User Community all users… Brokers Policyholders A more efficient and accurate pl

24. Slide 24: Personal Insurance: Investing in Growth – Mobile Capabilities

    Personal Insurance: Investing in Growth – Mobile Capabilities Safe Driving Global Travel Assistance  Apps in select  One Touch ‘Help’ Button focus markets connects travelers directly to give drivers to emergency travel feedback and assistance help improve driving habits  Country reports provide k

25. Slide 25: Personal Insurance: Investing in Growth – New Market Initiatives and Partnerships

    Personal Insurance: Investing in Growth – New Market Initiatives and Partnerships China: UK / Europe: T-Mall & Alipay (Alibaba Azur (High Net Worth), Travel, companies), WeChat, Digital Travel Korea: Extended Warranty Service Programs End-to-end digital Israel: Customer relationship Japan: managemen

26. Slide 26: Japan

    © Japan Robert Noddin Chief Executive Officer of Japan 26

27. Slide 27: Japan: Key Messages

    Japan: Key Messages Significant loss ratio reduction since Fuji Fire acquisition Earnings emergence from reduced marketing costs Future margin improvement driven by efficiency Medium-term target run-rate of 92-94 combined ratio and mid-double digit ROE 27

28. Slide 28: Japan: Delivering Results While Preparing for Merger

    Japan: Delivering Results While Preparing for Merger Normalized Return On Attributed Equity Pre-tax Operating Income ($M) 18.3% 256 115 10.8% 54 -5.2% 1.6% 3 FY15 FY16 1Q16 1Q17 FY15 FY16 1Q16 1Q17 General Operating Expenses ($M) Accident Year Combined Ratio, As Adjusted 827 202 101.1 778 187 94.3 9

29. Slide 29: Japan: Largest Foreign P&C Insurer in Japan with Rich History

    Japan: Largest Foreign P&C Insurer in Japan with Rich History Business simplification drives organizational focus 2016 2017 2018 1946 2011 2013 April 1 April 30 January 1 AIU Insurance Acquire AIG Japan AIU – Fuji Fire 100% stake Holdings Commences in Fuji Fire Established AHA Ceases Fuji Life Merge

30. Slide 30: Japan: Business Improvement Since Acquisition of Fuji Fire and Marine

    Japan: Business Improvement Since Acquisition of Fuji Fire and Marine Continued management actions enhance profitability  Enhanced portfolio management analytics Loss Loss Ratios (Rolling 12mth) Ratios and underwriting discipline 65% 60%  Improved pricing / producer segmentation 55%  Substantial

31. Slide 31: Japan: Distinctive Market Position Versus Top Japanese P&C Insurers

    Japan: Distinctive Market Position Versus Top 3 Japanese P&C Insurers Product Mix Market AIG 10% Accident CALI Other  Overweight in profitable Other 5% 20% 14% Accident Personal Accident line 33% CALI 11% Auto Fire 16%  Industry leading loss ratios Fire 45% 14% Auto 32% in Personal Accident, Auto

32. Slide 32: Japan: Distribution Aligned with Target Segments and Consultative Business Approach

    Japan: Distribution Aligned with Target Segments and Consultative Business Approach % of GPW Independent Full-time, professional agents Agent Employee sales agents. Career Global Serve as a feeder channel for DM Agent Broker Direct independent agent channel 13% 1% Marketing 13% Non-professional agen

33. Slide 33: Japan: Market Leader in SME with Unique Opportunities for Expansion

    Japan: Market Leader in SME with Unique Opportunities for Expansion Market  3.8 million SMEs: 99.7% of all companies, 70% of workforce1  Hojinkai (HJK)2 network (tax associations) represent over 1 million members  Big 3 P&C insurers focus on large corporations through their “Keiretsu” relationshi

34. Slide 34: Japan: SME Sub-Segment Strategy Producing Results

    Japan: SME Sub-Segment Strategy Producing Results Construction focus illustrates approach with transferability to other sub-segments Construction Sub-Segment Needs Focus Strategy  Financial protection in  Holistic assessment of segment the event of employee needs and focused product illness, accid

35. Slide 35: Japan: Recognized By Customers for Service Excellence

    Japan: Recognized By Customers for Service Excellence Amongst Insurers with agency distribution Highest Customer Satisfaction Among Auto Insurers Highest Customer Satisfaction with the Auto Insurance Purchase Experience J.D. Power 2016 Japan Auto Insurance Satisfaction Study based on responses from

36. Slide 36: Japan: Active Care – Moving from Reactive to Proactive

    Japan: Active Care – Moving from Reactive to Proactive Redesigning the “insurance” experience from the customer's perspective  Innovative use of drones to detect potential property damage of roofs and providing consulting prior to damages occurring Prevent  Customer education program on risk preve

37. Slide 37: Japan: Branding Active Care in Japan

    Japan: Branding Active Care in Japan #TackleTheRisk National TV coverage and media exposure 79 4 2 million views million views million views Rugby World Cup to be 85 million+ held in Tokyo in 2019 views globally since launch Tokyo Olympics in 2020 Note: viewing statistics as of April 26, 2017 YouTub

38. Slide 38: Consumer: Strong Operating Performance, Capital Efficiency and Unique Growth Opportunities

    Consumer: Strong Operating Performance, Capital Efficiency and Unique Growth Opportunities Important contributor to AIG’s results Achieving efficiency goals and returning excess of cost of capital Industry leader in target markets Solid foundation for growth Experienced executive team and deep talen

39. Slide 39: Q&A and Closing Remarks

    AIG]. Q&A and Closing Remarks

40. Slide 40: Appendix

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41. Slide 41: Speaker Biographies

    AIG] Speaker Biographies

42. Slide 42: Speakers' Biographies

    Speakers’ Biographies Kevin Hogan is AIG Executive Vice President and CEO Consumer, and senior officer for Japan. In his Consumer capacity he oversees the Individual Retirement, Group Retirement, Life, and Personal Insurance modules, providing a broad range of annuities, mutual funds, life, auto, pe

43. Slide 43: Glossary of Non-GAAP Financial Measures and Non-GAAP Reconciliations

    © Glossary of Non-GAAP Financial Measures and Non-GAAP Reconciliations

44. Slide 44: Glossary of Non-GAAP Financial Measures

    Glossary of Non-GAAP Financial Measures Glossary of Non-GAAP Throughout this presentation, we present our financial condition and results of operations in the way we believe will be most meaningful and representative of our business results. Some of the measurements we use are “non-GAAP financial me

45. Slide 45: Glossary of Non-GAAP Financial Measures

    Glossary of Non-GAAP Financial Measures Glossary of Non-GAAP  After-tax Operating Income Attributable to AIG (ATOI) is derived by excluding the tax effected PTOI adjustments described above and the following tax items from net income attributable to AIG: – deferred income tax valuation allowance re

46. Slide 46: Non-GAAP Reconciliations

    Non-GAAP Reconciliations Pre-tax and After-tax Operating Income - Consolidated Pre-Tax Operating Total Revenues Income (Loss) (in millions) FY’16 1Q16 1Q17 Revenues and Pre-tax income (loss) from continuing operations $ 52,367 $ (214) $ 1,727 Adjustments to arrive at Pre-tax operating income (loss)

47. Slide 47: Non-GAAP Reconciliations

    Non-GAAP Reconciliations PTOI, ATOI and Normalized ATOI* Consumer Insurance - Individual Retirement Consumer Insurance - Group Retirement (in millions) (in millions) FY’16 1Q17 FY’16 1Q17 Pre-tax operating income $ 2,269 $ 539 Pre-tax operating income (loss) $ 931 $ 243 Interest expense on attribute

48. Slide 48: Non-GAAP Reconciliations

    Non-GAAP Reconciliations PTOI, ATOI and Normalized ATOI* Total Consumer Insurance (in millions) FY’15 FY’16 1Q16 1Q17 Pre-tax operating income (loss) $ 2,929 $ 3,849 $ 704 $ 1,048 Interest expense on attributed financial debt 236 182 56 29 Operating income (loss) before taxes: 2,693 3,667 648 1,019

49. Slide 49: Non-GAAP Reconciliations

    Non-GAAP Reconciliations Accident Year Loss Ratio, as adjusted, and Accident Year Combined Ratio, as adjusted Consumer Personal Insurance FY’14 FY’15 FY’16 1Q16 1Q17 Loss ratio 54.3 55.2 54.3 52.7 56.0 Catastrophe losses and reinstatement premiums (1.0) (1.3) (1.4) (1.1) (1.0) Prior year development

50. Slide 50: Non-GAAP Reconciliations

    Non-GAAP Reconciliations Accident Year Loss, as adjusted Personal Insurance 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 Loss ratio 55.3 57.0 57.0 57.8 59.2 53.5 53.0 51.2 Catastrophe losses and reinstatement premiums (0.2) (0.3) (1.4) (0.6) (2.7) (0.6) (0.7) (0.3) Prior year development net of premium a

51. Slide 51: Non-GAAP Reconciliations

    Non-GAAP Reconciliations Premiums (in millions) Consumer Insurance: FY’16 Premiums and deposits $ 27,151 Deposits (24,860) Other (693) Premiums $ 1,598 Consumer Insurance - Individual Retirement: Premiums and deposits $ 16,062 Deposits (15,898) Other (1) Premiums $ 163 Consumer Insurance - Individua

52. Slide 52: Consumer Insurance Investor Day

    © Consumer Insurance Investor Day Personal Insurance | Japan May 15, 2017 52

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