American International Group, Inc. New · NYSE:AIG

American International Group, Inc. New — American International Group — Investor Day (September 2014)

53 slides from American International Group, Inc. New's investor day presentation, Sep 17, 2014

  1. Slide 1: 2014 Tokyo Investor Day Presentation

    American International Group, Inc. AIG Property Casualty – Consumer 2014 Tokyo Investor Day Presentation Presented by: Kevin Hogan, Chief Executive Officer, Global Consumer Insurance Robert Noddin, Country Manager, Japan Timothy Schiltz , Head of Consumer, Japan Naomi Matsuoka, Chief Transformation

  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: Kevin Hogan, CEO Global Consumer Insurance

    Kevin Hogan Chief Executive Officer Global Consumer Insurance AIG Property Casualty 3

  4. Slide 4: Agenda

    Agenda One AIG Global Consumer Insurance  Unique Franchise  Data Driven Pricing  Focused Growth 4

  5. Slide 5: We are One AIG

    We are One AIG We have transformed our management approach, emphasizing collaboration among our businesses, making ourselves One AIG. Our 2014 priorities—intense focus on customers; strong growth and profitability in our operating businesses; operational efficiency; and our people—will help us reali

  6. Slide 6: AIG Global Consumer Insurance Strategy

    AIG Global Consumer Insurance Strategy Distinguish ourselves in the markets and products we choose. Be the provider of choice among our target segments and channels. Unique Franchise Data Driven Pricing Focused Growth Bringing together our Life Deep customer insight and Target growth in select and P

  7. Slide 7: Global Consumer Insurance Market Opportunities

    Global Consumer Insurance Market Opportunities $780 BN Global Consumer PC Market AIG’s Share of the AIG’s Share of Global Consumer the Global Life PC Market: Market: 1.7% .002% $2.3 TN Global Consumer Life Market Source: Internal AIG data and McKinsey & Co. 2013 data. Note: Property Casualty (PC). 7

  8. Slide 8: Building on History and Strength

    AIG Global Consumer Insurance – Building on History and Strength Property Casualty Consumer U.S. Life Insurance and A&H  A Global Franchise – Consumer represented  Selectively Targeting International Markets 75% of Non-U.S. Property Casualty NPW in 1H – Our U.S. Life and A&H business represents 20

  9. Slide 9: A Unique Franchise

    AIG Global Consumer Insurance – A Unique Franchise A Market Leader and Innovator Distribution Breadth and Customer Focus  A leading global travel, medical and security  Extensive experience in sponsored and assistance services provider – AIG Travel direct marketing; long term distribution Guard® p

  10. Slide 10: Property Casualty Portfolio

    AIG Global Consumer Insurance – Property Casualty Portfolio Underwriting results continue to improve, partially offset by lower net investment income. ($ in millions) 2012 2013 1H2014 Net premiums written $14,150 $13,552 $6,745 Net premiums earned 13,952 13,229 6,425 Underwriting income (loss) (159)

  11. Slide 11: Premiums and Deposits

    AIG Global Consumer Insurance – Premiums and Deposits AIG Global Consumer Insurance diversification provides significant opportunity for growth and expanding profitability. First Half 2014 Pro Forma Premiums and Deposits of $8.4 BN, up 3% YoY in Original Currency By Product Line By Region EMEA U.S.

  12. Slide 12: Property Casualty Portfolio

    AIG Global Consumer Insurance – Property Casualty Portfolio The short tail nature of AIG Global Consumer’s property casualty portfolios enhance earnings stability and contribute to AIG’s valued business diversification. AIG Global Consumer Insurance - Property Casualty Portfolio $6.7 BN Net Premiums

  13. Slide 13: U.S. Life and A&H Portfolio

    AIG Global Consumer Insurance – U.S. Life and A&H Portfolio Well-diversified sales by product type and distribution channels. $123 MN in New Business Annualized Life and A&H Distribution Sales in First Half 2014 AIG AIG Insured Term Life Financial Partners Solutions Brokerage AIG Direct 38% Network

  14. Slide 14: U.S. Life and A&H Portfolio

    AIG Global Consumer Insurance – U.S. Life and A&H Portfolio Solid financial performance in First Half 2014, supported by strong reserves ($ in millions) 2012 2013 1H2014 Premiums and deposits $3,381 $3,375 $1,677 Premiums 1,423 1,347 677 Policy fees 1,324 1,344 685 Net investment income 2,069 2,057

  15. Slide 15: Unique Franchise – Americas

    Unique Franchise – Americas An established market leader with First Half 2014 NPW of $8.8 BN. Consumer Highlights AIG Property Casualty Segments  Private Client Group – Market leading franchise focused on high net worth Commercial Consumer segment; policyholders include 40% of NPW – $6.9 BN NPW – $

  16. Slide 16: Unique Franchise – Asia Pacific

    Unique Franchise – Asia Pacific Large, diversified portfolio with First Half 2014 NPW of $4.6 BN. AIG Property Casualty Segments Consumer Highlights  Recognized for Customer Commercial Consumer Service Excellence NPW – $1.0 BN NPW – $3.6 BN o 1st in JD Power Customer Satisfaction with Auto Insuranc

  17. Slide 17: Unique Franchise – EMEA

    Unique Franchise – EMEA Large, diversified portfolio with First Half 2014 NPW of $4.1 BN. AIG Property Casualty Segments Consumer Highlights  Diverse Product Mix – Diverse Commercial Consumer mix of Consumer businesses sold NPW – $3.0 BN NPW – $1.1 BN through a variety of distribution channels  Ba

  18. Slide 18: Data Driven Strategy

    Data Driven Strategy  Proven Underwriting Tools  Accident Year Loss Ratio, As Adjusted, Impact  Targeted Underwriting Actions 18

  19. Slide 19: Leveraging Proven Underwriting Tools and Techniques From Across AIG

    Data Driven Strategy – Leveraging Proven Underwriting Tools and Techniques From Across AIG A broad range of enhanced analytical and underwriting tools and techniques has been and will continue to be introduced across the Consumer property casualty portfolio. Warranty Personal Personal Tool / Techniq

  20. Slide 20: Data Driven Strategy – Impacting Results

    Data Driven Strategy – Impacting Results Consumer Insurance AY loss ratio has remained very stable over the past 11 quarters with improvement in the first half 2014. Consumer Insurance AY Loss Ratio, As Adjusted 80 75 70 Fuji Auto U.S. U.S. Travel and 65 winter-related Warranty EMEA A&H losses claim

  21. Slide 21: Focused Growth

    Focused Growth  Market Maturity Model  Select Product and Geographic Expansion 21

  22. Slide 22: Consumer Market Maturity Model

    Focused Growth – Consumer Market Maturity Model Advanced Stage Market Early Stage Market Product Personal Travel or Auto & Retirement PLUS+ Life Health Accident Warranty Home Services Channel Sponsor DM including Career Micro Broad Market/ Public Financial Banks & Broker / Partners Agency, Insurance

  23. Slide 23: Select Product and Geographic Expansion

    Focused Growth – Select Product and Geographic Expansion Advanced Stage Market Early Stage Market Developing Emerging Mature  Focus on simplest and  Commit to building Auto  Choice to enter Life lowest-cost products and/or Personal Property (potentially including Health (e.g., Travel, Warranty) b

  24. Slide 24: Q&A

    AIG Q&A

  25. Slide 25: Robert Noddin, Country Manager, Japan

    Robert Noddin Country Manager, Japan AIG Property Casualty 25

  26. Slide 26: Agenda – AIG Japan

    Agenda AIG Japan  History  Operating Companies  Japanese PC Market Overview  Business and Product Mix  Unique Positioning and Focus 26

  27. Slide 27: AIG Japan – History

    AIG Japan – History AIG has a long history of growth in Japan supported by both organic expansion and acquisition. 1971 Established partnership with Daido 2014 Life for Hojinkai 2011 AHA begins AIG Property operations as 1960 Casualty acquires localized Japan entity American Home 1989 100% of Fuji F

  28. Slide 28: AIG Japan – Operating Companies

    AIG Japan – Operating Companies AIU Insurance Company American Home Assurance Company  Established 1960  Established 1946  JPY 83 BN in premiums2  JPY 246 BN in premiums2  Direct-to-Consumer pioneer  Strong in SME sector and that focuses on Accident & accessing individual market Health and Aut

  29. Slide 29: Japanese Property Casualty Market Overview

    AIG Japan – Japanese Property Casualty Market Overview  Japan is the 2nd largest PC insurance market in the world.  Property casualty insurance in Japan has low penetration and density compared to the leading Western markets. Japan Market Japan Property Casualty Japan Property Casualty Total Insur

  30. Slide 30: AIG Japan – Business Portfolio

    AIG Japan – Business Portfolio Total Insurance Premiums Total Insurance Premiums by Operating Company1 by Product Line1 Total JPY 736 BN American Home Assurance 11% AIG Fuji Life Accident & Insurance Health3 Auto 15% 20% 28% AIU Insurance Others Company 14% 33% Fuji Fire & Marine Insurance 40% Fire

  31. Slide 31: AIG Japan – Product Mix Comparison

    AIG Japan – Product Mix Comparison AIG Japan Product Mix1 MS & AD Product Mix1 Property Casualty JPY 625 BN; Life JPY 111 BN Property Casualty JPY 2,763 BN; Life JPY 1,247 BN Marine AIG Fuji Fire Fire 2% Life2 Marine 12% 17% business 1% Life3 Accident & 15% 31% Health4 Others 6% 14% Accident & Healt

  32. Slide 32: AIG Japan – Positioning

    AIG Japan – Positioning  There are about 4.2 MN Small and Medium Enterprises (SMEs). These SMEs account for over 99% of all companies1.  Japan’s largest corporations are heavily tied to their “keiretsu” relationship with the largest three Property Casualty insurers. As a result, AIG has focused on

  33. Slide 33: Property Casualty Distribution Channels

    AIG Japan – Property Casualty Distribution Channels AIG PC Distribution Channel Breakdown Independent Full-time, professional agents, often represent Global Agency more than one insurer (i.e. co-registered) Broker Career Agent Employees recruited specifically for sales. 1% DM Case & Career Agents se

  34. Slide 34: Focus on Small to Medium Enterprises

    AIG Japan – Focus on Small to Medium Enterprises  Product : Key coverages in a tailored combination using building blocks  Distribution : Leverage the “Career Agency” relationship and “Hojinkai” relationship  Underwriting : Improved risk selection through industry and geographic analytics  Custo

  35. Slide 35: Timothy Schiltz, Head of Consumer Insurance, Japan

    Timothy Schiltz Head of Consumer Insurance, Japan AIG Property Casualty 35

  36. Slide 36: Agenda – AIG Japan Consumer

    Agenda AIG Japan Consumer  Auto Portfolio  A&H Portfolio  AIG Fuji Life 36

  37. Slide 37: AIG Japan – Auto Improving Profitability

    AIG Japan – Auto Improving Profitability Driven by analytics, underwriting actions, and rating actions Historical Loss Ratio Performance1,2 Improvement Drivers Internal Drivers  Enhanced portfolio management analytics over ~(4 pts) disciplined underwriting actions improvement  Actuarial analytics

  38. Slide 38: AIG Japan – Auto New Business Growth

    AIG Japan – Auto New Business Growth Focused distribution strategy has led to growth in the Auto book Historical New Business Growth Improvement Drivers (starting 4Q 2013)  Improved relative price competitiveness 20%  Expanding the number of consultative agents, that 15% meet holistic needs of cus

  39. Slide 39: AIG Japan – A&H Portfolio (excluding AIG Fuji Life)

    AIG Japan – A&H Portfolio (excluding AIG Fuji Life) Personal Accident (incl. Travel Accident) is the vast majority of the A&H portfolio. Historical Loss Ratio Performance Improvement Drivers Automated Rating Actions over ~(5 pts)  2012 Group Personal Accident rate changes by improvement occupationa

  40. Slide 40: AIG Fuji Life – Growth History

    AIG Fuji Life – Growth History Growth of policies and premium income has accelerated since AIG’s increased ownership in 2010. Gross Premium (JPY MN) 100,000 • Short Window of 75,000 Annuity Sales 50,000 25,000 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Life & Health Annuity Life and Medical

  41. Slide 41: AIG Fuji Life – Distribution Channel Diversification

    AIG Fuji Life – Distribution Channel Diversification The diversified product portfolio and access to new distribution has driven strong increases in new business acquisition. New Business Annualized New Premium by Distribution Channel FFM Life Pro Insurance Shop Others 4% 37% 34% 45% 66% 14% Apr-Sep

  42. Slide 42: Naomi Matsuoka, Chief Transformation Officer, Japan

    Naomi Matsuoka Chief Transformation Officer, Japan AIG Property Casualty 42

  43. Slide 43: Agenda – AIG Japan Transformation

    Agenda AIG Japan Transformation  Our Journey  Merger  Vision and Strategy  Key Elements 43

  44. Slide 44: AIG Japan Transformation – Our Journey

    AIG Japan Transformation – Our Journey Alignment to targeted customers customer customer Today Transformation Tomorrow Delivering AIG to the Customer 44

  45. Slide 45: AIG Japan Transformation – Merger

    AIG Japan Transformation – Merger The merger is the catalyst for transformation. ACQUIRE  1918 – FFM incorporated  2000 – Initial Investment (3.6%)  2010 – Control (54.7% ownership)  2011 – 100% ownership PREPARE  Incorporation of AIUI (2013) & AHA (2014) branches  Formation of Insurance Holdi

  46. Slide 46: AIG Japan Transformation – Vision and Strategy

    AIG Japan Transformation – Vision and Strategy Bringing value to our targeted customers VISION  Become the insurance carrier of choice for our customers and distribution partners  Lead the market in helping customers understand and manage their risks  Drive market leading profitability and value

  47. Slide 47: AIG Japan Transformation – Key Elements

    AIG Japan Transformation – Key Elements Enhance growth, balancing profit, and risk People & Culture Segmentation & Focus Performance Customer Segmentation Product Based Culture Experience Innovation Targeted Branding Leadership “Outside In” Distribution Strategy Operating Model Technology & Data Sca

  48. Slide 48: Concluding Remarks

    AIG Concluding Remarks

  49. Slide 49: Q&A

    AIG Q&A

  50. Slide 50: Non-GAAP Reconciliation

    Non-GAAP Reconciliation AIG

  51. Slide 51: Glossary of Non-GAAP Financial Measures

    Glossary of Non-GAAP Financial Measures AIG Property Casualty – Consumer Insurance Total Property Casualty pre-tax operating income (loss) includes both underwriting income (loss) and net investment income, but excludes net realized capital (gains) losses, other (income) expense - net, and legal set

  52. Slide 52: Non-GAAP Reconciliation – Accident Year Combined Ratio, As Adjusted and Premiums and Deposits

    Non-GAAP Reconciliation – Accident Year Combined Ratio, As Adjusted and Premiums and Deposits AIG Property Casualty - Consumer Insurance Quarterly Full Year First Half Accident year combined ratio, as adjusted 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 2012 2013 2014 Consumer Insurance L

  53. Slide 53: About American International Group, Inc. (AIG)

    American International Group, Inc. (AIG) is a leading international insurance organization serving customers in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional, and individual customers through one of the most extensive worldwide property-casualty networks of

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