American International Group, Inc. New · NYSE:AIG

American International Group, Inc. New — American International Group — Q1 2018 Earnings Presentation

30 slides from American International Group, Inc. New's earnings presentation, May 3, 2018

1. Slide 1: Conference Call Presentation First Quarter 2018

   © Conference Call Presentation First Quarter 2018 MAY 3, 2018

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 and discuss, projections, goals, assumptions and statements that

3. Slide 3: First Quarter 2018 Key Themes

   First Quarter 2018 Key Themes Progress towards delivering sustainable, profitable growth  1Q18 Adjusted After-Tax Income (AATI) of $963M ($1.04/share) Consolidated  Adjusted Book Value Per Share growth of 2.5% to $56.10 from YE’17; 1.3% growth excluding the impact from cumulative effect of changes

4. Slide 4: Consolidated Operating Financial Highlights

   Consolidated Operating Financial Highlights ($ in millions, except per share amounts) 1Q17 1Q18 Adjusted Pre-tax Income (Loss): General Insurance North America $828 $320 International 233 190 Total General Insurance 1,061 510 Life and Retirement Individual Retirement 539 499 Group Retirement 243 282

5. Slide 5: Noteworthy Items

   Noteworthy Items ($ in millions) 1Q17 1Q18 Revenue Items: Better than expected alternative returns1 $185 $103 Investment securities accounted for using the fair value option (excludes alternatives): - Fixed maturity securities2 carrying value as of March 31 11,807 10,913 - Fixed maturity securities2

6. Slide 6: Parent Liquidity

   Parent Liquidity Changes in Parent Liquidity ($B) $1.1 $2.5 Includes: GI Dividends - $0.3B ($1.4) $8.5 Life Dividends – $0.4B ($0.6) $7.3 Net Tax Pmts – $0.4B ($0.4) Unencumbered Securities $3.8 Unencumbered Securities $5.2 Cash & S/T Inv. Cash & $4.6 S/T Inv. $2.1 Balance at Debt Issuances Insuranc

7. Slide 7: General Insurance

   © General Insurance Peter Zaffino Chief Executive Officer of General Insurance

8. Slide 8: General Insurance

   General Insurance Adjusted Pre-Tax Income ($M) Catastrophe Losses ($M) $1,061 Noteworthy 1Q18 Losses: CA Mudslides: $171M $376 $233 U.S. Winter Storms: $122M $228 $212 $510 $27 $828 $190 $201 $320 $164 1Q17 1Q18 1Q17 1Q18 North America International Commercial Lines Personal Insurance Net Premiums W

9. Slide 9: General Insurance – North America

   General Insurance – North America ($ in millions) 1Q17 1Q18 Key Takeaways:  Net premiums written decreased by 12%, largely driven by changes in Net premiums written $2,323 $2,039 our reinsurance program and the strategic portfolio actions in U.S. Commercial Lines 1,611 1,314 Casualty and Property.

10. Slide 10: General Insurance – International

    General Insurance – International ($ in millions) 1Q17 1Q18 Key Takeaways: Net premiums written $3,974 $4,132  NPW declined 10% YoY, excluding FX and ~$300M of Commercial Lines 2,018 1,955 additional premium recognized in 1Q18 from a 2 month Personal Insurance 1,956 2,177 acceleration of Fuji’s fis

11. Slide 11: Life and Retirement

    © Life and Retirement Kevin Hogan Chief Executive Officer of Life and Retirement

12. Slide 12: Life and Retirement – Select Metrics

    Life and Retirement – Select Metrics Adjusted ROE Premiums and Deposits (P&D) ($B) $8.91 $6.9 $1.3 $0.6 $1.5 $0.9 $1.0 14.3% $2.0 $1.9 11.7% $3.4 $3.2 1Q17 1Q18 1Q17 1Q18 Individual Retirement Group Retirement Life Insurance Institutional Markets IR/GR FHLB Funding Agreement Adjusted Pre-Tax Income

13. Slide 13: Life and Retirement – Individual Retirement

    Life and Retirement – Individual Retirement Key Takeaways ($ in millions) 1Q17 1Q18  Higher AUA driven by equity market performance and positive Index Annuity net flows in 1Q18. Premiums and deposits $3,382 $4,358  Net Flows were negative for 1Q18 due to higher variable annuity Premiums 28 12 surr

14. Slide 14: Life and Retirement – Group Retirement

    Life and Retirement – Group Retirement ($ in millions) 1Q17 1Q18 Key Takeaways Premiums and deposits $2,040 $2,072  1Q18 net flows declined from prior year and continue to be Premiums 9 6 negative, primarily due to timing of group acquisitions and an increase in surrenders. Policy fees 99 112  Adj

15. Slide 15: Life and Retirement – Life Insurance

    Life and Retirement – Life Insurance ($ in millions) 1Q17 1Q18 Key Takeaways Premiums and deposits $910 $969  Strong new business sales growth, particularly Universal Life. Premiums 384 379  Platform modernization, distribution simplification, and narrowed product focus supporting growth. Policy f

16. Slide 16: Life and Retirement – Institutional Markets

    Life and Retirement – Institutional Markets ($ in millions) 1Q17 1Q18 Premiums and deposits $573 $1,463 Key Takeaways Premiums 415 49  Large increase in premiums and deposits driven by FHLB Funding Agreements in 1Q18. Policy fees 44 41  Growth of in force business reflects execution of opportunist

17. Slide 17: Q&A and Closing Remarks

    AIG]. Q&A and Closing Remarks

18. Slide 18: Appendix

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19. Slide 19: Strong Capital Position

    Strong Capital Position Capital Structure ($B) Capital Return ($M) $87.9 $87.0 FY’17 1Q18 $0.8 $1.6 Share repurchases $6,275 $298 $21.3 $22.0 Warrant repurchases 3 2 Hybrids Dividends declared 1,172 289 $5.5 $0.5 $0.6 $2.2 Financial Debt1 Total $7,450 $589 $10.5 $10.2 NCI AOCI Risk Based Capital Rat

20. Slide 20: Glossary of Non-GAAP Financial Measures and Non-GAAP Reconciliations

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

21. Slide 21: 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

22. Slide 22: Glossary of Non-GAAP Financial Measures

    Glossary of Non-GAAP Financial Measures Glossary of Non-GAAP We use the following operating performance measures because we believe they enhance the understanding of the underlying profitability of continuing operations and trends of our business segments. We believe they also allow for more meaning

23. Slide 23: Glossary of Non-GAAP Financial Measures

    Glossary of Non-GAAP Financial Measures Glossary of Non-GAAP  Accident year loss and combined ratios, as adjusted: both the accident year loss and combined ratios, as adjusted, exclude catastrophe losses and related reinstatement premiums, prior year development, net of premium adjustments, and the

24. Slide 24: Non-GAAP Reconciliations

    Non-GAAP Reconciliations Adjusted Pre-tax and After-tax Income - Consolidated (in millions) Quarterly 1Q17 1Q18 Pre-tax income from continuing operations $ 1,727 $ 1,227 Adjustments to arrive at Adjusted pre-tax income Changes in fair value of securities used to hedge guaranteed living benefits (11)

25. Slide 25: Non-GAAP Reconciliations

    Non-GAAP Reconciliations Book Value Per Share and Return on Equity (in millions, except per share data) Book Value Per Share 4Q17 1Q18 Total AIG shareholders' equity (a) $ 65,171 $ 62,792 Less: Accumulated other comprehensive income (AOCI) 5,465 2,220 Total AIG shareholders' equity, excluding AOCI (

26. Slide 26: Non-GAAP Reconciliations

    Non-GAAP Reconciliations Return on Equity General Insurance Life and Retirement (in millions) Quarterly (in millions) Quarterly 1Q17 1Q18 1Q17 1Q18 Adjusted pre-tax income $ 1,061 $ 510 Adjusted pre-tax income $ 898 $ 892 Interest expense on attributed financial debt 128 124 Interest expense on attr

27. Slide 27: Non-GAAP Reconciliations

    Non-GAAP Reconciliations Accident Year Loss Ratio, as adjusted, and Accident Year Combined Ratio, as adjusted General Insurance General Insurance - North America Quarterly Quarterly 1Q17 1Q18 FY'17 1Q17 1Q18 Loss ratio 65.3 67.2 83.2 Loss ratio 73.3 80.0 Catastrophe losses and reinstatement premiums

28. Slide 28: Non-GAAP Reconciliations

    Non-GAAP Reconciliations Accident Year Loss Ratio, as adjusted, and Accident Year Combined Ratio, as adjusted General Insurance - International General Insurance - International - Quarterly Commercial Lines Quarterly 1Q17 1Q18 1Q17 1Q18 Loss ratio 58.6 58.5 Loss ratio 63.7 64.5 Catastrophe losses an

29. Slide 29: Non-GAAP Reconciliations

    Non-GAAP Reconciliations Net Premiums Written – Change in Constant Dollar, excluding Fuji Merger Impact Quarterly Percentage Change in 1Q17 1Q18 U.S. dollars Original Currency General Insurance - International New Premiums Written $ 3,974 $ 4,132 4 % (3) % Less: Fuji merger impact $ (300) n/a n/a (7

30. Slide 30: Non-GAAP Reconciliations

    Non-GAAP Reconciliations Premiums to Premiums and Deposits* (in millions) Quarterly Individual Retirement: 1Q17 1Q18 Premiums $ 28 $ 12 Deposits 3,357 4,347 Other (3) (1) Premiums and deposits $ 3,382 $ 4,358 Individual Retirement (Fixed Annuities): Premiums $ 29 $ 13 Deposits 892 786 Other (4) (2)

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