Le Lézard
Classified in: Business, Covid-19 virus
Subjects: EARNINGS, Conference Call, Webcast

AIG Reports Second Quarter 2022 Results


American International Group, Inc. (NYSE: AIG) today reported financial results for the second quarter ended June 30, 2022.

AIG Chairman & Chief Executive Officer Peter Zaffino said: "AIG had another excellent quarter. General Insurance reported outstanding results and Life and Retirement again delivered a solid performance considering the significant market headwinds in the second quarter.

"Due to the high degree of equity market volatility in May and June, we decided to defer the launch of the Corebridge Financial initial public offering (IPO). Deferring the IPO provided us with an opportunity to further accelerate progress on numerous separation initiatives and to solidify the capital structure of this business as a standalone company. Completing the IPO is a significant priority for us and we remain ready to execute, subject to regulatory approvals and market conditions.

"General Insurance's culture of underwriting excellence continues to be evidenced in our financial results. Meaningful top-line growth, strong renewal retention and new business, intentional improvements in business mix, rate above loss cost trends, coupled with a disciplined and focused approach to minimizing volatility, led to impressive profitability improvement.

"The combined ratio of 87.4% represents AIG's first sub-90 quarter in over fifteen years and improved 510 basis points year-over-year. Consistent with our strategy to manage volatility, catastrophe losses were very modest in the quarter coming in at $121 million, or 1.8 points of the combined ratio. The adjusted accident year combined ratio of 88.5% improved for the 16th consecutive quarter ? totaling 1,250 basis points of improvement over this period and 2,080 basis points of improvement in Global Commercial Lines. Overall, I am very pleased with our overall performance and the momentum we have heading into the second half of 2022.

"Life and Retirement experienced another solid quarter of sales growth in fixed annuities supported by Blackstone's origination capabilities. Additionally, Life and Retirement is starting to see a positive impact in its base portfolio net investment income from higher interest rates and credit spreads.

"During the second quarter, we began to transfer certain assets under management to BlackRock in accordance with our recently announced asset management arrangement. We expect the majority of the remainder of the approximately $150 billion of assets under management to be transferred by the end of 2022.

"Lastly, certain capital management priorities were accelerated in the second quarter, including issuing $6.5 billion of Corebridge Financial debt and subsequently redeeming or repurchasing $7.6 billion in aggregate principal debt of AIG. In addition, we returned $2.0 billion to shareholders through $1.7 billion of AIG common stock repurchases and $256 million of dividends.

"Thanks to the outstanding efforts and hard work of our global colleagues, AIG continues to drive excellence across the company that will create long-term value for all our stakeholders."

For the second quarter of 2022, pre-tax income from continuing operations was $4.3 billion, up from $147 million from the prior year quarter. Second quarter of 2022 net income attributable to AIG common shareholders was $3.0 billion, or $3.78 per diluted common share, compared to net income of $91 million, or $0.11 per diluted common share, in the prior year quarter. The pre-tax income increase was primarily due to an increase in net realized gains on the Fortitude Re funds withheld embedded derivative, and overall strong General Insurance underwriting results, including higher premiums earned, margin expansion, and higher favorable PYD, partially offset by lower alternative investment income. The pre-tax income increase was partially offset by income attributable to noncontrolling interest associated with Blackstone's 9.9% interest in the Life and Retirement business, mitigated by the use of proceeds received in the transaction through debt reduction and share repurchase activities.

AATI was $979 million, or $1.19 per diluted common share, for the second quarter of 2022 compared to $1.3 billion, or $1.52 per diluted common share, in the prior year quarter. The decrease in AATI was primarily due to lower alternative investment income, offset in part by a $336 million pre-tax increase in General Insurance underwriting results.

Total consolidated NII for the second quarter of 2022 was $2.6 billion, down 29% from $3.7 billion in the prior year quarter, primarily due to lower alternative investment income, lower call and tender income and lower returns from fair value option equity securities. Total NII on an APTI basis* was $2.5 billion, a decrease of $678 million compared to the prior year quarter.

Book value per common share was $58.16 as of June 30, 2022, a decrease of 16% from March 31, 2022 and 27% from December 31, 2021, reflecting a reduction in accumulated other comprehensive income (AOCI) as a result of higher market interest rates. Adjusted book value per common share* was $72.23, an increase of 2% from March 31, 2022 and 5% from December 31, 2021 reflecting growth in retained earnings from net income in excess of dividends and share repurchases. Adjusted tangible book value per common share was $66.06, an increase of 2% from March 31, 2022 and 5% from December 31, 2021.

For the second quarter of 2022, AIG repurchased approximately $1.7 billion of common stock or approximately 30 million shares and paid $256 million of common and preferred dividends, resulting in AIG Parent liquidity of $5.6 billion as of June 30, 2022. AIG's ratio of total debt and preferred stock to total capital at June 30, 2022 was 31.1%, up from 27.8% at March 31, 2022, principally due to the impact of higher interest rates on of AOCI.

Today, the AIG Board of Directors declared a quarterly cash dividend of $0.32 per share on AIG common stock (NYSE: AIG). The dividend is payable on September 30, 2022 to stockholders of record at the close of business on September 16, 2022.

The AIG Board of Directors also declared a quarterly cash dividend of $365.625 per share on AIG Series A 5.85% Non-Cumulative Perpetual Preferred Stock, with a liquidation preference of $25,000 per share, which is represented by depositary shares (NYSE: AIG PRA), each representing a 1/1,000th interest in a share of preferred stock. Holders of depositary shares will receive $0.365625 per depositary share. The dividend is payable on September 15, 2022 to holders of record at the close of business on August 31, 2022.

FINANCIAL SUMMARY

 

 

Three Months Ended
June 30,

 

 

 

 

($ in millions, except per common share amounts)

 

2021

 

 

2022

 

Net income attributable to AIG common shareholders

$

91

 

$

3,028

 

Net income per diluted share attributable

 

 

 

 

 

 

to AIG common shareholders

$

0.11

 

$

3.78

 

 

 

 

 

 

 

 

Adjusted pre-tax income (loss)

$

1,708

 

$

1,359

 

General Insurance

 

1,194

 

 

1,257

 

Life and Retirement

 

1,124

 

 

563

 

Other Operations

 

(610)

 

 

(461)

 

 

 

 

 

 

 

 

Net investment income

$

3,675

 

$

2,604

 

Net investment income, APTI basis

 

3,182

 

 

2,504

 

 

 

 

 

 

 

 

Adjusted after-tax income attributable to AIG common

 

 

 

 

 

 

shareholders

$

1,331

 

$

979

 

Adjusted after-tax income per diluted share attributable

 

 

 

 

 

 

to AIG common shareholders*

$

1.52

 

$

1.19

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

 

 

 

 

- diluted(in millions)

 

872.9

 

 

800.7

 

 

 

 

 

 

 

 

Return on common equity

 

0.6

%

 

24.1

%

Adjusted return on common equity

 

10.5

%

 

7.0

%

 

 

 

 

 

 

 

Book value per common share

$

76.73

 

$

58.16

 

Adjusted book value per common share

$

60.07

 

$

72.23

 

 

 

 

 

 

 

 

Common shares outstanding (in millions)

 

854.9

 

 

771.3

 

* For the three-month period ended June 30, 2022, an option for Blackstone to exchange all or a portion of its ownership interest in Corebridge for AIG common shares was dilutive for the calculation of AATI per common share. The dilutive impact was an additional 42,572,031 shares for the period.

The comparisons on the following pages are against the first quarter of 2021, unless otherwise indicated. Refer to the AIG Second Quarter 2022 Financial Supplement, which is posted on AIG's website in the Investors section, for further information.

GENERAL INSURANCE

 

 

Three Months Ended June 30,

 

 

 

($ in millions)

 

2021

 

 

2022

 

Change

 

Gross premiums written

$

9,503

 

$

9,581

 

1

%

 

 

 

 

 

 

 

 

 

Net premiums written

$

6,860

 

$

6,866

 

?

%

North America

 

3,156

 

 

3,401

 

8

 

North America Commercial Lines

 

2,655

 

 

2,918

 

10

 

North America Personal Insurance

 

501

 

 

483

 

(4)

 

International

 

3,704

 

 

3,465

 

(6)

 

International Commercial Lines

 

2,062

 

 

2,037

 

(1)

 

International Personal Insurance

 

1,642

 

 

1,428

 

(13)

 

 

 

 

 

 

 

 

 

 

Underwriting income (loss)

$

463

 

$

799

 

73

%

North America

 

169

 

 

406

 

140

 

North America Commercial Lines

 

162

 

 

416

 

157

 

North America Personal Insurance

 

7

 

 

(10)

 

NM

 

International

 

294

 

 

393

 

34

 

International Commercial Lines

 

218

 

 

349

 

60

 

International Personal Insurance

 

76

 

 

44

 

(42)

 

 

 

 

 

 

 

 

 

 

Net investment income, APTI basis

$

731

 

$

458

 

(37)

%

Adjusted pre-tax income

$

1,194

 

$

1,257

 

5

%

Return on adjusted segment common equity

 

12.3

%

 

12.0

%

(0.3)

pts

 

 

 

 

 

 

 

 

 

Underwriting ratios:

 

 

 

 

 

 

 

 

North America Combined Ratio (CR)

 

93.7

 

 

86.3

 

(7.4)

pts

North America Commercial Lines CR

 

93.0

 

 

83.6

 

(9.4)

 

North America Personal Insurance CR

 

98.1

 

 

102.3

 

4.2

 

International CR

 

91.8

 

 

88.5

 

(3.3)

 

International Commercial Lines CR

 

88.7

 

 

82.4

 

(6.3)

 

International Personal Insurance CR

 

95.2

 

 

96.9

 

1.7

 

General Insurance (GI) CR

 

92.5

 

 

87.4

 

(5.1)

 

 

 

 

 

 

 

 

 

 

GI Loss ratio

 

61.3

 

 

56.2

 

(5.1)

pts

Less: impact on loss ratio

 

 

 

 

 

 

 

 

Catastrophe losses and reinstatement premiums

 

(2.1)

 

 

(1.8)

 

0.3

 

Prior year development, net of reinsurance and prior year premiums

 

0.7

 

 

2.9

 

2.2

 

GI Accident year loss ratio, as adjusted

 

59.9

 

 

57.3

 

(2.6)

 

GI Expense ratio

 

31.2

 

 

31.2

 

?

 

GI Accident year combined ratio, as adjusted

 

91.1

 

 

88.5

 

(2.6)

 

 

 

 

 

 

 

 

 

 

Accident year combined ratio, as adjusted (AYCR):

 

 

 

 

 

 

 

 

North America AYCR

 

92.4

 

 

89.9

 

(2.5)

pts

North America Commercial Lines AYCR

 

91.2

 

 

88.2

 

(3.0)

 

North America Personal Insurance AYCR

 

100.1

 

 

99.7

 

(0.4)

 

International AYCR

 

90.2

 

 

87.2

 

(3.0)

 

International Commercial Lines AYCR

 

86.9

 

 

81.4

 

(5.5)

 

International Personal Insurance AYCR

 

94.0

 

 

95.2

 

1.2

 

General Insurance

LIFE AND RETIREMENT

 

 

Three Months Ended

 

 

 

 

 

June 30,

 

 

 

($ in millions, except as indicated)

 

2021

 

2022

 

Change

 

Adjusted pre-tax income

$

1,124

$

563

 

(50)

%

Individual Retirement

 

617

 

204

 

(67)

 

Group Retirement

 

347

 

164

 

(53)

 

Life Insurance

 

20

 

117

 

485

 

Institutional Markets

 

140

 

78

 

(44)

 

 

 

 

 

 

 

 

 

Premiums and fees

$

2,417

$

1,862

 

(23)

%

Individual Retirement

 

273

 

267

 

(2)

 

Group Retirement

 

134

 

119

 

(11)

 

Life Insurance

 

887

 

931

 

5

 

Institutional Markets

 

1,123

 

545

 

(51)

 

 

 

 

 

 

 

 

 

Premiums and deposits

$

9,035

$

7,099

 

(21)

%

Individual Retirement

 

3,978

 

3,620

 

(9)

 

Group Retirement

 

2,255

 

1,772

 

(21)

 

Life Insurance

 

1,161

 

1,157

 

?

 

Institutional Markets

 

1,641

 

550

 

(66)

 

 

 

 

 

 

 

 

 

Net flows

$

(306)

$

80

 

NM

%

Individual Retirement*

 

(77)

 

628

 

NM

 

Group Retirement

 

(229)

 

(548)

 

(139)

 

 

 

 

 

 

 

 

 

Net investment income, APTI basis

$

2,376

$

1,989

 

(16)

%

Return on adjusted segment common equity

 

16.4

%

7.6

%

(8.8)

pts

*2021 includes $0.6 billion of net outflows from Retail Mutual Funds that were transferred or liquidated in the third quarter of 2021.

Life and Retirement

OTHER OPERATIONS

 

 

Three Months Ended

 

 

 

 

 

 

June 30,

 

 

 

 

($ in millions)

 

2021

 

 

2022

 

Change

 

Corporate and Other

$

(617)

 

$

(494)

 

20

%

Asset Management

 

101

 

 

163

 

61

 

Adjusted pre-tax loss before consolidation and eliminations

 

(516)

 

 

(331)

 

36

 

Consolidation and eliminations

 

(94)

 

 

(130)

 

(38)

 

Adjusted pre-tax loss

$

(610)

 

$

(461)

 

24

%

Other Operations

LIFE AND RETIREMENT SEPARATION
On October 26, 2020, AIG announced its intention to separate its Life and Retirement business from AIG.

On November 2, 2021, AIG and Blackstone Inc. (Blackstone) completed the acquisition by Blackstone of a 9.9 percent equity stake in Corebridge Financial, Inc., formerly known as SAFG Retirement Services, Inc. (Corebridge), which is the holding company for AIG's Life and Retirement business. Pursuant to the definitive agreement, Blackstone will be required to hold its ownership interest in Corebridge following the completion of the separation of the Life and Retirement business, subject to exceptions permitting Blackstone to sell 25%, 67% and 75% of its shares after the first, second and third anniversaries, respectively, of the initial public offering of Corebridge (the IPO), with the transfer restrictions terminating in full on the fifth anniversary of the IPO. In the event that the IPO of Corebridge is not completed prior to November 2, 2023, Blackstone will have the right to require AIG to undertake the IPO, and in the event that the IPO has not been completed prior to November 2, 2024, Blackstone will have the right to exchange all or a portion of its ownership interest in Corebridge for shares of AIG's common stock on the terms set forth in the definitive agreement. On November 1, 2021, Corebridge declared a dividend payable to AIG Parent in the amount of $8.3 billion. In connection with such dividend, Corebridge issued a promissory note to AIG Parent in the amount of $8.3 billion, which is required to be paid to AIG Parent prior to the IPO of Corebridge. On April 5, 2022, Corebridge issued senior unsecured notes in the aggregate principal amount of $6.5 billion, the proceeds of which were used to repay a portion of the $8.3 billion promissory note previously issued by Corebridge to AIG. While we currently believe the IPO is the next step in the separation of the Life and Retirement business from AIG, no assurance can be given regarding the form that future separation transactions may take or the specific terms or timing thereof, or that a separation will in fact occur. Any separation transaction will be subject to the satisfaction of various conditions and approvals, including approval by the AIG Board of Directors, receipt of insurance and other required regulatory approvals, and satisfaction of any applicable requirements of the Securities and Exchange Commission.

Additionally, on March 28, 2022, AIG announced that it plans to rebrand SAFG Retirement Services, Inc., the parent company of its Life and Retirement business, as Corebridge Financial, Inc. when it becomes a public company. Also on this date, AIG and BlackRock entered into a binding letter of intent pursuant to which BlackRock will manage certain liquid fixed income and private placement assets representing up to $60 billion of assets on behalf of AIG and up to $90 billion of assets on behalf of AIG's Life and Retirement business; AIG and AIG's Life and Retirement business will gain access to BlackRock's world-class asset management capabilities as well as its investment management technology, Aladdin.

CONFERENCE CALL
AIG will host a conference call tomorrow, Tuesday, August 9, 2022 at 8:30 a.m. ET to review these results. The call is open to the public and can be accessed via a live listen-only webcast in the Investors section of http://www.aig.com/. A replay will be available after the call at the same location.

Additional supplementary financial data is available in the Investors section at www.aig.com.

Certain statements in this press release and other publicly available documents may include, and officers and representatives of AIG may from time to time make and discuss, statements which, to the extent they are not statements of historical or present fact, may constitute "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are intended to provide management's current expectations or plans for AIG's future operating and financial performance, based on assumptions currently believed to be valid or accurate. Forward-looking statements are often preceded by, followed by or include words such as "will," "believe," "anticipate," "expect," "expectations," "intend," "plan," "strategy," "prospects," "project," "anticipate," "should," "guidance," "outlook," "confident," "focused on achieving," "view," "target," "goal," "estimate" and other words of similar meaning in connection with a discussion of future operating or financial performance. These statements, may include, among other things, projections, goals and assumptions that relate to future actions, prospective services or products, future performance or results of current and anticipated services or products, sales efforts, expense reduction efforts, the outcome of contingencies such as legal proceedings, anticipated organizational, business or regulatory changes, such as the separation of the Life and Retirement business from AIG, the effect of catastrophes and macroeconomic and/or geopolitical events, anticipated dispositions, monetization and/or acquisitions of businesses or assets, or successful integration of acquired businesses, management succession and retention plans, exposure to risk, trends in operations and financial results, and other statements that are not historical facts.

All forward-looking statements involve risks, uncertainties and other factors that may cause AIG's actual results and financial condition to differ, possibly materially, from the results and financial condition expressed or implied in the forward-looking statements. Factors that could cause AIG's actual results to differ, possibly materially, from those in the specific projections, goals, assumptions and statements include, without limitation:

The forward-looking statements speak only as of the date of this press release, or in the case of any document incorporated by reference, the date of that document. AIG is not under any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Additional information as to factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements is disclosed from time to time in our filings with the SEC.

COMMENT ON REGULATION G AND NON-GAAP FINANCIAL MEASURES

Throughout this press release, including the financial highlights, AIG presents its financial condition and results of operations in the way it believes will be most meaningful and representative of its business results. Some of the measurements AIG uses are "Non-GAAP financial measures" under Securities and Exchange Commission rules and regulations. GAAP is the acronym for generally accepted accounting principles in the United States. The non-GAAP financial measures AIG presents are listed below and may not be comparable to similarly-named measures reported by other companies. The reconciliations of such measures to the most comparable GAAP measures in accordance with Regulation G are included within the relevant tables attached to this news release or in the Second Quarter 2022 Financial Supplement available in the Investors section of AIG's website, www.aig.com.

AIG uses the following operating performance measures because AIG believes they enhance the understanding of the underlying profitability of continuing operations and trends of AIG's business segments. AIG believes they also allow for more meaningful comparisons with AIG's insurance competitors. When AIG uses these measures, reconciliations to the most comparable GAAP measure are provided on a consolidated basis.

Book Value per Common Share, Excluding Accumulated Other Comprehensive Income (Loss) (AOCI) adjusted for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets and Deferred Tax Assets (DTA) (Adjusted Book Value per Common Share) is used to show the amount of AIG's net worth on a per-common share basis after eliminating items that can fluctuate significantly from period to period including changes in fair value of AIG's available for sale securities portfolio, foreign currency translation adjustments and U.S. tax attribute deferred tax assets. This measure also eliminates the asymmetrical impact resulting from changes in fair value of AIG's available for sale securities portfolio wherein there is largely no offsetting impact for certain related insurance liabilities. In addition, AIG adjusts for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets held by AIG in support of Fortitude Re's reinsurance obligations to AIG post deconsolidation of Fortitude Re (Fortitude Re funds withheld assets) since these fair value movements are economically transferred to Fortitude Re. AIG excludes deferred tax assets representing U.S. tax attributes related to net operating loss carryforwards and foreign tax credits as they have not yet been utilized. Amounts for interim periods are estimates based on projections of full-year attribute utilization. As net operating loss carryforwards and foreign tax credits are utilized, the portion of the DTA utilized is included in these book value per common share metrics. Adjusted Book Value per Common Share is derived by dividing Total AIG common shareholders' equity, excluding AOCI adjusted for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets, and DTA (Adjusted Common Shareholders' Equity), by total common shares outstanding.

Book Value per Common Share, Excluding Goodwill, Value of Business Acquired (VOBA), Value of Distribution Channel Acquired (VODA), Other Intangible Assets, AOCI adjusted for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets, and Deferred Tax Assets (DTA) (Adjusted Tangible Book Value per Common Share) is used to provide more accurate measure of the realizable value of shareholder on a per-common share basis. Adjusted Tangible Book Value per Common Share is derived by dividing Total AIG common shareholders' equity, excluding intangible assets, AOCI adjusted for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets, and DTA (Adjusted Tangible Common Shareholders' Equity), by total common shares outstanding.

AIG Return on Common Equity ? Adjusted After-tax Income Excluding AOCI adjusted for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets and DTA (Adjusted Return on Common Equity) is used to show the rate of return on common shareholders' equity. AIG believes this measure is useful to investors because it eliminates items that can fluctuate significantly from period to period, including changes in fair value of AIG's available for sale securities portfolio, foreign currency translation adjustments and U.S. tax attribute deferred tax assets. This measure also eliminates the asymmetrical impact resulting from changes in fair value of AIG's available for sale securities portfolio wherein there is largely no offsetting impact for certain related insurance liabilities. In addition, AIG adjusts for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets since these fair value movements are economically transferred to Fortitude Re. AIG excludes deferred tax assets representing U.S. tax attributes related to net operating loss carryforwards and foreign tax credits as they have not yet been utilized. Amounts for interim periods are estimates based on projections of full-year attribute utilization. As net operating loss carryforwards and foreign tax credits are utilized, the portion of the DTA utilized is included in Adjusted Return on Common Equity. Adjusted Return on Common Equity is derived by dividing actual or annualized adjusted after-tax income attributable to AIG common shareholders by average Adjusted Common Shareholders' Equity.

General Insurance and Life and Retirement Adjusted Segment Common Equity is based on segment equity adjusted for the attribution of debt and preferred stock (Segment Common Equity) and is consistent with AIG's Adjusted Common Shareholders' Equity definition.

General Insurance and Life and Retirement Return on Adjusted Segment Common Equity ? Adjusted After-tax Income (Return on Adjusted Segment Common Equity) is used to show the rate of return on Adjusted Segment Common Equity. Return on Adjusted Segment Common Equity is derived by dividing actual or annualized Adjusted After-tax Income by Average Adjusted Segment Common Equity.

Adjusted After-tax Income Attributable to General Insurance and Life and Retirement is derived by subtracting attributed interest expense, income tax expense and attributed dividends on preferred stock from APTI. Attributed debt and the related interest expense and dividends on preferred stock are calculated based on AIG's internal allocation model. Tax expense or benefit is calculated based on an internal attribution methodology that considers among other things the taxing jurisdiction in which the segments conduct business, as well as the deductibility of expenses in those jurisdictions.

Adjusted Revenues exclude Net realized gains (losses), income from non-operating litigation settlements (included in Other income for GAAP purposes) and changes in fair value of securities used to hedge guaranteed living benefits (included in Net investment income for GAAP purposes). Adjusted revenues is a GAAP measure for AIG's segments.

Adjusted Pre-tax Income (APTI) is derived by excluding the items set forth below from income from continuing operations before income tax. This definition is consistent across AIG's segments. These items generally fall into one or more of the following broad categories: legacy matters having no relevance to AIG's current businesses or operating performance; adjustments to enhance transparency to the underlying economics of transactions; and measures that AIG believes to be common to the industry. APTI is a GAAP measure for AIG's segments. Excluded items include the following:

  • changes in fair value of securities used to hedge guaranteed living benefits;
  • changes in benefit reserves and deferred policy acquisition costs (DAC), value of business acquired (VOBA), and deferred sales inducements (DSI) related to net realized gains and losses;
  • changes in the fair value of equity securities;
  • net investment income on Fortitude Re funds withheld assets;
  • following deconsolidation of Fortitude Re, net realized gains and losses on Fortitude Re funds withheld assets;
  • loss (gain) on extinguishment of debt;
  • all net realized gains and losses except earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-qualifying (economic) hedging or for asset replication. Earned income on such economic hedges is reclassified from net realized gains and losses to specific APTI line items based on the economic risk being hedged (e.g. net investment income and interest credited to policyholder account balances);
  • income or loss from discontinued operations;
  • net loss reserve discount benefit (charge);
  • pension expense related to lump sum payments to former employees;
  • net gain or loss on divestitures;
  • non-operating litigation reserves and settlements;
  • restructuring and other costs related to initiatives designed to reduce operating expenses, improve efficiency and simplify AIG's organization;
  • the portion of favorable or unfavorable prior year reserve development for which AIG has ceded the risk under retroactive reinsurance agreements and related changes in amortization of the deferred gain;
  • integration and transaction costs associated with acquiring or divesting businesses;
  • losses from the impairment of goodwill; and
  • non-recurring costs associated with the implementation of non-ordinary course legal or regulatory changes or changes to accounting principles.

Adjusted After-tax Income attributable to AIG common shareholders (AATI) is derived by excluding the tax effected APTI adjustments described above, dividends on preferred stock, noncontrolling interest on net realized gains (losses), other non-operating expenses and the following tax items from net income attributable to AIG:

See page 16 for the reconciliation of Net income attributable to AIG to Adjusted After-tax Income Attributable to AIG.

Ratios: AIG, along with most property and casualty insurance companies, uses the loss ratio, the expense ratio and the combined ratio as measures of underwriting performance. These ratios are relative measurements that describe, for every $100 of net premiums earned, the amount of losses and loss adjustment expenses (which for General Insurance excludes net loss reserve discount), and the amount of other underwriting expenses that would be incurred. A combined ratio of less than 100 indicates underwriting income and a combined ratio of over 100 indicates an underwriting loss. AIG's ratios are calculated using the relevant segment information calculated under GAAP, and thus may not be comparable to similar ratios calculated for regulatory reporting purposes. The underwriting environment varies across countries and products, as does the degree of litigation activity, all of which affect such ratios. In addition, investment returns, local taxes, cost of capital, regulation, product type and competition can have an effect on pricing and consequently on profitability as reflected in underwriting income and associated ratios.

Accident year loss and Accident year combined ratios, as adjusted (Accident year loss ratio, ex-CAT and Accident year combined ratio, ex-CAT): both the accident year loss and accident year combined ratios, as adjusted, exclude catastrophe losses (CATs) and related reinstatement premiums, prior year development, net of premium adjustments, and the impact of reserve discounting. Natural catastrophe losses are generally weather or seismic events, in each case, having a net impact on AIG in excess of $10 million and man-made catastrophe losses, such as terrorism and civil disorders that exceed the $10 million threshold. AIG believes that as adjusted ratios are meaningful measures of AIG's underwriting results on an ongoing basis as they exclude catastrophes and the impact of reserve discounting which are outside of management's control. AIG also excludes prior year development to provide transparency related to current accident year results.

Underwriting ratios are computed as follows:

  1. Loss ratio = Loss and loss adjustment expenses incurred ÷ Net premiums earned (NPE)
  2. Acquisition ratio = Total acquisition expenses ÷ NPE
  3. General operating expense ratio = General operating expenses ÷ NPE
  4. Expense ratio = Acquisition ratio + General operating expense ratio
  5. Combined ratio = Loss ratio + Expense ratio
  6. CATs and reinstatement premiums = [Loss and loss adjustment expenses incurred ? (CATs)] ÷ [NPE +/(-) Reinstatement premiums related to catastrophes] ? Loss ratio
  7. Accident year loss ratio, as adjusted (AYLR ex-CAT) = [Loss and loss adjustment expenses incurred ? CATs ? PYD] ÷ [NPE +/(-) Reinstatement premiums related to catastrophes +/(-) Prior year premiums + Adjustment for ceded premium under reinsurance contracts related to prior accident years]
  8. Accident year combined ratio, as adjusted (AYCR ex-CAT) = AYLR ex-CAT + Expense ratio
  9. Prior year development net of reinsurance and prior year premiums = [Loss and loss adjustment expenses incurred ? CATs ? PYD] ÷ [NPE +/(-) Reinstatement premiums related to catastrophes +/(-) Prior year premiums] ? Loss ratio ? CATs and reinstatement premiums ratio.

Premiums and deposits: includes direct and assumed amounts received and earned on traditional life insurance policies, group benefit policies and life?contingent payout annuities, as well as deposits received on universal life, investment?type annuity contracts, Federal Home Loan Bank (FHLB) funding agreements and mutual funds. We believe the measure of premiums and deposits is useful in understanding customer demand for our products, evolving product trends and our sales performance period over period.

Results from discontinued operations are excluded from all of these measures.

American International Group, Inc. (AIG) is a leading global insurance organization. AIG member companies provide a wide range of property casualty insurance, life insurance, retirement solutions and other financial services to customers in approximately 70 countries and jurisdictions. These diverse offerings include products and services that help businesses and individuals protect their assets, manage risks and provide for retirement security. AIG common stock is listed on the New York Stock Exchange.

Additional information about AIG can be found at www.aig.com | YouTube: www.youtube.com/aig | Twitter: @AIGinsurance www.twitter.com/AIGinsurance | LinkedIn: www.linkedin.com/company/aig. These references with additional information about AIG have been provided as a convenience, and the information contained on such websites is not incorporated by reference into this press release.

AIG is the marketing name for the worldwide property-casualty, life and retirement and general insurance operations of American International Group, Inc. For additional information, please visit our website at www.aig.com. All products and services are written or provided by subsidiaries or affiliates of American International Group, Inc. Products or services may not be available in all countries and jurisdictions, and coverage is subject to underwriting requirements and actual policy language. Non-insurance products and services may be provided by independent third parties. Certain property-casualty coverages may be provided by a surplus lines insurer. Surplus lines insurers do not generally participate in state guaranty funds, and insureds are therefore not protected by such funds.

American International Group, Inc.

Selected Financial Data and Non-GAAP Reconciliation

($ in millions, except per common share data)

Reconciliations of Adjusted Pre-tax and After-tax Income

 

Three Months Ended June 30,

 

2021

 

2022

 

 

 

 

Total Tax

 

Non-

 

 

 

 

 

 

Total Tax

Non-

 

 

 

 

 

 

(Benefit)

 

controlling

 

 

 

 

 

 

(Benefits)

 

controlling

 

After

 

 

Pre-tax

 

Charge

 

Interests(d)

 

Tax

 

 

Pre-tax

 

Charge

 

Interests(d)

 

Tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax income/net income, including noncontrolling interests

$

147

$

(3)

$

?

$

150

 

$

4,321

$

928

$

?

$

3,392

Noncontrolling interests

 

 

 

 

 

(51)

 

(51)

 

 

 

 

 

 

(356)

 

(356)

Pre-tax income/net income attributable to AIG

 

147

 

(3)

 

(51)

 

99

 

 

4,321

 

928

 

(356)

 

3,036

Dividends on preferred stock

 

 

 

 

 

 

 

8

 

 

 

 

 

 

 

 

8

Net income attributable to AIG common shareholders

 

 

 

 

 

 

 

91

 

 

 

 

 

 

 

 

3,028

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Changes in uncertain tax positions and other tax adjustments(a)

 

 

 

(35)

 

?

 

35

 

 

 

 

(3)

 

?

 

3

Deferred income tax valuation allowance releases(b)

 

 

 

25

 

?

 

(25)

 

 

 

 

17

 

?

 

(17)

Changes in fair value of securities used to hedge guaranteed living benefits

 

(13)

 

(2)

 

?

 

(11)

 

 

(10)

 

(2)

 

?

 

(8)

Changes in benefit reserves and DAC, VOBA and DSI related to net realized gains (losses)

 

(120)

 

(25)

 

?

 

(95)

 

 

128

 

27

 

?

 

101

Changes in the fair value of equity securities

 

13

 

3

 

?

 

10

 

 

30

 

6

 

?

 

24

Loss on extinguishment of debt

 

106

 

23

 

?

 

83

 

 

299

 

63

 

?

 

236

Net investment income on Fortitude Re funds withheld assets

 

(507)

 

(107)

 

?

 

(400)

 

 

(188)

 

(40)

 

?

 

(148)

Net realized (gains) losses on Fortitude Re funds withheld assets

 

(173)

 

(37)

 

?

 

(136)

 

 

86

 

19

 

?

 

67

Net realized (gains) losses on Fortitude Re funds withheld embedded derivative

 

2,056

 

431

 

?

 

1,625

 

 

(2,776)

 

(583)

 

?

 

(2,193)

Net realized (gains) losses(c)

 

59

 

17

 

?

 

42

 

 

(620)

 

(154)

 

?

 

(466)

Loss from discontinued operations

 

 

 

 

 

 

 

?

 

 

 

 

 

 

 

 

1

Net loss on divestitures

 

1

 

?

 

?

 

1

 

 

1

 

1

 

?

 

?

Non-operating litigation reserves and settlements

 

?

 

?

 

?

 

?

 

 

(4)

 

(1)

 

?

 

(3)

Favorable prior year development and related amortization changes ceded under retroactive reinsurance agreements

 

(65)

 

(14)

 

?

 

(51)

 

 

(144)

 

(30)

 

?

 

(114)

Net loss reserve discount charge

 

22

 

5

 

?

 

17

 

 

14

 

4

 

?

 

10

Integration and transaction costs associated with acquiring or divesting businesses

 

35

 

7

 

?

 

28

 

 

38

 

8

 

?

 

30

Restructuring and other costs

 

126

 

26

 

?

 

100

 

 

175

 

37

 

?

 

138

Non-recurring costs related to regulatory or accounting changes

 

21

 

4

 

?

 

17

 

 

9

 

2

 

?

 

7

Noncontrolling interests(d)

 

 

 

 

 

?

 

?

 

 

 

 

 

 

283

 

283

Adjusted pre-tax income/Adjusted after-tax income attributable to AIG common shareholders

$

1,708

$

318

$

(51)

$

1,331

 

$

1,359

$

299

$

(73)

$

979

Reconciliations of Adjusted Pre-tax and After-tax Income

 

Six Months Ended June 30,

 

2021

 

2022

 

 

 

 

Total Tax

 

Non-

 

 

 

 

 

 

Total Tax

 

Non-

 

 

 

 

 

 

(Benefit)

 

controlling

 

After

 

 

 

 

(Benefit)

 

controlling

 

After

 

 

Pre-tax

 

Charge

 

Interests(d)

 

Tax

 

 

Pre-tax

 

Charge

 

Interests(d)

 

Tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax income/net income, including noncontrolling interests

$

4,875

$

795

$

?

$

4,080

 

$

10,156

$

2107

$

?

$

8,048

Noncontrolling interests

 

 

 

 

 

(105)

 

(105)

 

 

 

 

 

 

(752)

 

(752)

Pre-tax income/net income attributable to AIG

 

4,875

 

795

 

(105)

 

3,975

 

 

10,156

 

2,107

 

(752)

 

7,296

Dividends on preferred stock

 

 

 

 

 

 

 

15

 

 

 

 

 

 

 

 

15

Net income attributable to AIG common shareholders

 

 

 

 

 

 

 

3,960

 

 

 

 

 

 

 

 

7,281

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Changes in uncertain tax positions and other tax adjustments(a)

 

 

 

866

 

?

 

(866)

 

 

 

 

88

 

?

 

(88)

Deferred income tax valuation allowance (releases) charges(b)

 

 

 

(661)

 

?

 

661

 

 

 

 

23

 

?

 

(23)

Changes in fair value of securities used to hedge guaranteed living benefits

 

(35)

 

(7)

 

?

 

(28)

 

 

(23)

 

(5)

 

?

 

(18)

Changes in benefit reserves and DAC, VOBA and DSI related to net realized gains (losses)

 

83

 

18

 

?

 

65

 

 

401

 

84

 

?

 

317

Changes in the fair value of equity securities

 

(9)

 

(2)

 

?

 

(7)

 

 

57

 

12

 

?

 

45

Loss on extinguishment of debt

 

98

 

21

 

?

 

77

 

 

299

 

63

 

?

 

236

Net investment income on Fortitude Re funds withheld assets

 

(993)

 

(209)

 

?

 

(784)

 

 

(479)

 

(101)

 

?

 

(378)

Net realized (gains) losses on Fortitude Re funds withheld assets

 

(346)

 

(73)

 

?

 

(273)

 

 

226

 

48

 

?

 

178

Net realized gains on Fortitude Re funds withheld embedded derivative

 

(326)

 

(68)

 

?

 

(258)

 

 

(6,094)

 

(1,280)

 

?

 

(4,814)

Net realized gains(c)

 

(568)

 

(128)

 

?

 

(440)

 

 

(1,808)

 

(435)

 

?

 

(1,373)

Loss from discontinued operations

 

 

 

 

 

 

 

?

 

 

 

 

 

 

 

 

1

Net gain on divestitures

 

(6)

 

(1)

 

?

 

(5)

 

 

(39)

 

(8)

 

?

 

(31)

Non-operating litigation reserves and settlements

 

?

 

?

 

?

 

?

 

 

(38)

 

(8)

 

?

 

(30)

Favorable prior year development and related amortization changes ceded under retroactive reinsurance agreements

 

(84)

 

(18)

 

?

 

(66)

 

 

(144)

 

(30)

 

?

 

(114)

Net loss reserve discount benefit

 

(10)

 

(2)

 

?

 

(8)

 

 

(6)

 

(1)

 

?

 

(5)

Integration and transaction costs associated with acquiring or divesting businesses

 

44

 

9

 

?

 

35

 

 

84

 

18

 

?

 

66

Restructuring and other costs

 

200

 

42

 

?

 

158

 

 

268

 

56

 

?

 

212

Non-recurring costs related to regulatory or accounting changes

 

41

 

8

 

?

 

33

 

 

13

 

3

 

?

 

10

Noncontrolling interests(d)

 

 

 

 

 

?

 

?

 

 

 

 

 

 

581

 

581

Adjusted pre-tax income/Adjusted after-tax income attributable to AIG common shareholders

$

2,964

$

590

$

(105)

$

2,254

 

$

2,873

$

634

$

(171)

$

2,053

(a) Six months ended June 30, 2021 includes the completion of audit activity by the Internal Revenue Service.
(b) Six months ended June 30, 2021 includes an increase in the valuation allowance against a portion of certain tax attribute carryforwards of AIG's U.S. federal consolidated income tax group, as well as net valuation allowance release in certain foreign jurisdictions.
(c) Includes all net realized gains and losses except earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-qualifying (economic) hedging or for asset replication and net realized gains and losses on Fortitude Re funds withheld assets.
(d) For the three and six months ended June 30, 2022, noncontrolling interests include Blackstone's 9.9 percent equity stake in Corebridge.

Summary of Key Financial Metrics

 

 

 

Three Months Ended June 30,

 

 

 

Six Months Ended June 30,

 

Earnings per common share:

 

2021

 

2022

% Inc. (Dec.)

 

 

 

2021

 

2022

% Inc. (Dec.)

 

Basic

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

$

0.11

$

3.83

NM

%

 

$

4.58

$

9.06

97.8

%

Income from discontinued operations

 

?

 

?

NM

 

 

 

?

 

?

NM

 

Net income attributable to AIG common shareholders

$

0.11

$

3.83

NM

 

 

$

4.58

$

9.06

97.8

 

Diluted

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

0.11

$

3.78

NM

 

 

 

4.53

$

8.95

97.6

 

Income from discontinued operations

 

?

 

?

NM

 

 

 

?

 

?

NM

 

Net income attributable to AIG common shareholders

$

0.11

$

3.78

NM

 

 

$

4.53

$

8.95

97.6

 

Adjusted after-tax income attributable to AIG common shareholders per diluted share (a)

$

1.52

$

1.19

(21.7)

%

 

$

2.58

$

2.50

(3.1)

%

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

862.9

 

790.9

 

 

 

 

865.5

 

803.5

 

 

Diluted

 

872.9

 

800.7

 

 

 

 

874.6

 

813.3

 

 

(a) For the three- and six-month periods ended June 30, 2022, an option for Blackstone to exchange all or a portion of its ownership interest in Corebridge for AIG common shares was dilutive for the calculation of Adjusted after-tax income per common share attributable to AIG common shareholders. The dilutive impact was an additional 42,572,031 shares for both periods.

Reconciliation of Book Value per Common Share

As of period end:

 

June 30, 2021

 

 

December 31, 2021

 

 

March 31, 2022

 

 

June 30, 2022

Total AIG shareholders' equity

$

66,083

 

$

65,956

 

$

55,944

 

$

45,344

Less: Preferred equity

 

485

 

 

485

 

 

485

 

 

485

Total AIG common shareholders' equity (a)

 

65,598

 

 

65,471

 

 

55,459

 

 

44,859

Less: Deferred tax assets (DTA)*

 

7,374

 

 

5,221

 

 

4,816

 

 

4,582

Less: Accumulated other comprehensive income (AOCI)

 

10,209

 

 

6,687

 

 

(5,900)

 

 

(17,656)

Add: Cumulative unrealized gains and losses related to Fortitude Re Funds withheld assets

 

3,341

 

 

2,791

 

 

48

 

 

(2,223)

Subtotal: AOCI plus cumulative unrealized gains and losses related to Fortitude Re funds withheld assets

 

6,868

 

 

3,896

 

 

(5,948)

 

 

(15,433)

Total adjusted common shareholders' equity (b)

$

51,356

 

$

56,354

 

$

56,591

 

$

55,710

Less: Intangible assets:

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

4,083

 

 

4,056

 

 

4,009

 

 

3,935

Value of business acquired

 

121

 

 

111

 

 

107

 

 

99

Value of distribution channel acquired

 

477

 

 

458

 

 

448

 

 

438

Other intangibles

 

305

 

 

300

 

 

291

 

 

289

Total intangible assets

 

4,986

 

 

4,925

 

 

4,855

 

 

4,761

Total adjusted tangible common shareholders' equity (c)

$

46,370

 

$

51,429

 

$

51,736

 

$

50,949

Total common shares outstanding (d)

 

854.9

 

 

818.7

 

 

800.2

 

 

771.3

As of period end:

 

June 30,

2021

% Inc.

(Dec.)

 

 

December 31,

2021

% Inc.

(Dec.)

 

 

March 31,

2022

% Inc.

(Dec.)

 

 

June 30,

2022

Book value per common share (a÷d)

$

76.73

(24.2)

%

$

79.97

(27.3)

%

$

69.30

(16.1)

%

$

58.16

Adjusted book value per common share (b÷d)

 

60.07

20.2

 

 

68.83

4.9

 

 

70.72

2.1

 

 

72.23

Adjusted tangible book value per common share (c÷d)

 

54.24

21.8

 

 

62.82

5.2

 

 

64.65

2.2

 

 

66.06

Reconciliation of Return On Common Equity

 

 

Three Months Ended June 30,

 

 

 

2021

 

 

2022

 

Annualized net income (loss) attributable to AIG common shareholders (a)

$

364

 

$

12,112

 

Annualized adjusted after-tax income attributable to AIG common shareholders (b)

$

5,324

 

$

3,916

 

Average AIG Common Shareholders' equity (c)

$

63,896

 

$

50,159

 

Less: Average DTA*

 

7,457

 

 

4,699

 

Less: Average AOCI

 

8,338

 

 

(11,778)

 

Add: Average cumulative unrealized gains and losses related to Fortitude Re funds withheld assets

 

2,794

 

 

(1,088)

 

Subtotal: AOCI plus cumulative unrealized gains and losses related to Fortitude Re funds withheld assets

 

5,544

 

 

(10,690)

 

Average adjusted common shareholders' equity (d)

$

50,895

 

$

56,150

 

 

 

 

 

 

 

 

ROCE (a÷c)

 

0.6

%

 

24.1

%

Adjusted return on common equity (b÷d)

 

10.5

%

 

7.0

%

* Represents deferred tax assets only related to U.S. net operating loss and foreign tax credit carryforwards on a U.S. GAAP basis and excludes other balance sheet deferred tax assets and liabilities.

Reconciliation of Net Investment Income

 

 

Three Months Ended

 

 

June 30,

 

 

2021

 

 

2022

Net Investment Income per Consolidated Statements of Operations

$

3,675

 

$

2,604

Changes in fair value of securities used to hedge guaranteed living benefits

 

(13)

 

 

(13)

Changes in the fair value of equity securities

 

13

 

 

30

Net investment income on Fortitude Re funds withheld assets

 

(507)

 

 

(188)

Net realized gains (losses) related to economic hedges and other

 

14

 

 

71

Total Net Investment Income - APTI Basis

$

3,182

 

$

2,504

Net Premiums Written - Change in Constant Dollar

 

Three Months Ended June 30, 2022

 

 

 

 

 

 

 

North

 

 

 

 

 

 

 

 

Global -

 

Global -

 

America

 

International -

 

General

 

Commercial

 

Personal

 

Commercial

 

Commercial

 

Personal

 

General Insurance

Insurance

 

Lines

 

Insurance

 

Lines

 

Lines

 

Insurance

 

Foreign exchange effect on worldwide premiums:

 

 

 

 

 

 

 

 

 

 

 

 

premiums:

 

 

 

 

 

 

 

 

 

 

 

 

Change in net premiums written

 

 

 

 

 

 

 

 

 

 

 

 

Increase (decrease) in original currency

5

%

8

%

(4)

%

10

%

5

%

(4)

%

Foreign exchange effect

(5)

 

(3)

 

(7)

 

?

 

(6)

 

(9)

 

Increase (decrease) as reported in U.S. dollars

?

%

5

%

(11)

%

10

%

(1)

%

(13)

%

Reconciliations of Accident Year Loss and Accident Year Combined Ratios, as Adjusted

 

 

 

 

 

 

 

Three Months Ended

 

June 30,

 

2018

 

2021

 

2022

Total General Insurance

 

 

 

 

 

Combined ratio

101.3

 

92.5

 

87.4

Catastrophe losses and reinstatement premiums

(2.3)

 

(2.1)

 

(1.8)

Prior year development, net of reinsurance and prior year premiums

0.8

 

0.7

 

2.9

Adjustments for ceded premium under reinsurance contracts and other

1.2

 

?

 

?

Accident year combined ratio, as adjusted

101.0

 

91.1

 

88.5

 

 

 

 

 

 

North America

 

 

 

 

 

Combined ratio

 

 

93.7

 

86.3

Catastrophe losses and reinstatement premiums

 

 

(2.9)

 

(1.7)

Prior year development, net of reinsurance and prior year premiums

 

 

1.6

 

5.3

Accident year combined ratio, as adjusted

 

 

92.4

 

89.9

 

 

 

 

 

 

North America - Commercial Lines

 

 

 

 

 

Combined ratio

 

 

93.0

 

83.6

Catastrophe losses and reinstatement premiums

 

 

(2.9)

 

(1.9)

Prior year development, net of reinsurance and prior year premiums

 

 

1.1

 

6.5

Accident year combined ratio, as adjusted

 

 

91.2

 

88.2

 

 

 

 

 

 

North America - Personal Insurance

 

 

 

 

 

Combined ratio

 

 

98.1

 

102.3

Catastrophe losses and reinstatement premiums

 

 

(3.0)

 

(0.5)

Prior year development, net of reinsurance and prior year premiums

 

 

5.0

 

(2.1)

Accident year combined ratio, as adjusted

 

 

100.1

 

99.7

 

 

 

 

 

 

International

 

 

 

 

 

Combined ratio

 

 

91.8

 

88.5

Catastrophe losses and reinstatement premiums

 

 

(1.5)

 

(2.0)

Prior year development, net of reinsurance and prior year premiums

 

 

(0.1)

 

0.7

Accident year combined ratio, as adjusted

 

 

90.2

 

87.2

 

 

 

 

 

 

International - Commercial Lines

 

 

 

 

 

Combined ratio

 

 

88.7

 

82.4

Catastrophe losses and reinstatement premiums

 

 

(1.4)

 

(2.3)

Prior year development, net of reinsurance and prior year premiums

 

 

(0.4)

 

1.3

Accident year combined ratio, as adjusted

 

 

86.9

 

81.4

 

 

 

 

 

 

International - Personal Insurance

 

 

 

 

 

Loss ratio

 

 

55.2

 

56.4

Catastrophe losses and reinstatement premiums

 

 

(1.6)

 

(1.6)

Prior year development, net of reinsurance and prior year premiums

 

 

0.4

 

(0.1)

Accident year loss ratio, as adjusted

 

 

54.0

 

54.7

 

 

 

 

 

 

Combined ratio

 

 

95.2

 

96.9

Catastrophe losses and reinstatement premiums

 

 

(1.6)

 

(1.6)

Prior year development, net of reinsurance and prior year premiums

 

 

0.4

 

(0.1)

Accident year combined ratio, as adjusted

 

 

94.0

 

95.2

 

 

 

 

 

 

Global - Commercial Insurance

 

 

 

 

 

Combined ratio

104.5

 

91.1

 

83.1

Catastrophe losses and reinstatement premiums

(3.3)

 

(2.2)

 

(2.1)

Prior year development, net of reinsurance and prior year premiums

2.6

 

0.4

 

4.3

Adjustments for ceded premium under reinsurance contracts and other

2.3

 

?

 

?

Accident year combined ratio, as adjusted

106.1

 

89.3

 

85.3

Reconciliation of General Insurance Return on Adjusted Segment Common Equity

 

 

 

 

 

 

 

 

Three Months Ended

 

 

June 30,

 

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

Adjusted pre-tax income

$

1,194

 

$

1,257

 

Interest expense on attributed financial debt

 

147

 

 

149

 

Adjusted pre-tax income including attributed interest expense

 

1,047

 

 

1,108

 

Income tax expense

 

263

 

 

254

 

Adjusted after-tax income

 

784

 

 

854

 

Dividends declared on preferred stock

 

3

 

 

3

 

Adjusted after-tax income attributable to common shareholders

$

781

 

$

851

 

 

 

 

 

 

 

 

Ending adjusted segment common equity

$

25,473

 

$

30,078

 

Average adjusted segment common equity

$

25,369

 

$

28,334

 

Return on adjusted segment common equity

 

12.3

%

 

12.0

%

 

 

 

 

 

 

 

Total segment shareholder's equity

$

26,308

 

$

25,574

 

Less: Preferred equity

 

197

 

 

210

 

Total segment common equity

 

26,111

 

 

25,364

 

Less: Accumulated other comprehensive income (AOCI)

 

849

 

 

(5,214)

 

Add: Cumulative unrealized gains and losses related to Fortitude Re funds withheld assets

 

211

 

 

(500)

 

Subtotal: AOCI plus cumulative unrealized gains and losses related to Fortitude Re funds withheld assets

 

638

 

 

(4,714)

 

Total adjusted segment common equity

$

25,473

 

$

30,078

 

Reconciliations of Premiums and Deposits

 

 

 

 

 

 

 

Three Months Ended

 

June 30,

 

 

2021

 

 

2022

Individual Retirement:

 

 

 

 

 

Premiums

$

32

 

$

57

Deposits

 

3,949

 

 

3,566

Other

 

(3)

 

 

(3)

Premiums and deposits

$

3,978

 

$

3,620

 

 

 

 

 

 

Group Retirement:

 

 

 

 

 

Premiums

$

4

 

$

5

Deposits

 

2,251

 

 

1,767

Other

 

?

 

 

?

Premiums and deposits

$

2,255

 

$

1,772

 

 

 

 

 

 

Life Insurance:

 

 

 

 

 

Premiums

$

532

 

$

561

Deposits

 

409

 

 

388

Other

 

220

 

 

208

Premiums and deposits

$

1,161

 

$

1,157

 

 

 

 

 

 

Institutional Markets:

 

 

 

 

 

Premiums

$

1,077

 

$

496

Deposits

 

559

 

 

46

Other

 

5

 

 

8

Premiums and deposits

$

1,641

 

$

550

 

 

 

 

 

 

Total Life and Retirement:

 

 

 

 

 

Premiums

$

1,645

 

$

1,119

Deposits

 

7,168

 

 

5,767

Other

 

222

 

 

213

Premiums and deposits

$

9,035

 

$

7,099

Reconciliation of Life and Retirement Return on Adjusted Segment Common Equity

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

June 30,

 

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

Adjusted pre-tax income

$

1,124

 

$

563

 

Interest expense on attributed financial debt

 

74

 

 

68

 

Adjusted pre-tax income including attributed interest expense

 

1,050

 

 

495

 

Income tax expense

 

211

 

 

95

 

Adjusted after-tax income

 

839

 

 

400

 

Dividends declared on preferred stock

 

2

 

 

2

 

Adjusted after-tax income attributable to common shareholders

$

837

 

$

398

 

 

 

 

 

 

 

 

Ending adjusted segment common equity

$

20,689

 

$

20,537

 

Average adjusted segment common equity

$

20,458

 

$

20,891

 

Return on adjusted segment common equity

 

16.4

%

 

7.6

%

 

 

 

 

 

 

 

Total segment shareholder's equity

$

29,558

 

$

11,546

 

Less: Preferred equity

 

139

 

 

147

 

Total segment common equity

 

29,419

 

 

11,399

 

Less: Accumulated other comprehensive income (AOCI)

 

11,860

 

 

(10,861)

 

Add: Cumulative unrealized gains and losses related to Fortitude Re funds withheld assets

 

3,130

 

 

(1,723)

 

Subtotal: AOCI plus cumulative unrealized gains and losses related to Fortitude Re funds withheld assets

 

8,730

 

 

(9,138)

 

Total adjusted segment common equity

$

20,689

 

$

20,537

 

 

 


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