- Net income attributable to AIG common shareholders was $648 million, or $0.72 per diluted common share, for the third quarter of 2019, compared to a net loss attributable to AIG common shareholders of $1.3 billion, or $1.41 per common share, in the prior-year quarter.
- Adjusted after-tax income attributable to AIG common shareholders* was $505 million, or $0.56 per diluted common share, for the third quarter of 2019, compared to an adjusted after-tax loss attributable to AIG common shareholders of $301 million, or $0.34 per common share, in the prior-year quarter.
- General Insurance posted a combined ratio of 103.7 and an accident year combined ratio, as adjusted*, of 95.9, improved compared to 124.4 and 99.4, respectively, in the prior-year quarter, driven by lower catastrophe losses, continued underwriting actions, reinsurance and expense discipline.
- Life and Retirement reported adjusted pre-tax income of $646 million compared to $713 million in the prior-year quarter, which included a charge for the annual actuarial assumption update in each quarter.
- Total consolidated net investment income was $3.4 billion in the third quarter of 2019, essentially flat to the prior-year quarter, reflecting higher interest and dividends and other investment income partially offset by lower alternative investment returns.
- Net pre-tax catastrophe losses of $511 million ($404 million after-tax or $0.45 per diluted share) compared to $1.6 billion ($1.3 billion after-tax or $1.45 per share) in the prior-year quarter.
- Net favorable prior year loss reserve development, net of reinsurance, of $4 million compared to net unfavorable prior year loss reserve development, net of reinsurance, of $170 million in the prior-year quarter.
- Annual actuarial assumption update charge of $173 million compared to $103 million in the prior-year quarter.
NEW YORK–(BUSINESS WIRE)–American International Group, Inc. (NYSE: AIG) today reported net income attributable to AIG common shareholders of $648 million, or $0.72 per diluted common share, for the third quarter of 2019, compared to a net loss attributable to AIG common shareholders of $1.3 billion, or $1.41 per common share, in the prior-year quarter. The improvement was primarily due to pre-tax net realized capital gains of $929 million compared to pre-tax net realized capital losses of $511 million in the prior-year quarter and a reduction in pre-tax net catastrophe losses of $1.1 billion compared to the prior-year quarter. Adjusted after-tax income attributable to AIG common shareholders was $505 million, or $0.56 per diluted common share, for the third quarter of 2019, compared to an adjusted after-tax loss attributable to AIG common shareholders of $301 million, or $0.34 per common share, in the prior-year quarter. The improvement was primarily due to lower catastrophe losses compared to the prior-year quarter.
Brian Duperreault, AIG’s President and Chief Executive Officer, said: “Our results this quarter reflect the significant, ongoing work across the company to lay a foundation for long-term, sustainable and profitable growth. Results are in line with our expectations, particularly in General Insurance, which demonstrated a significant improvement over the prior-year quarter driven by our focus on underwriting excellence, expense discipline and enhanced reinsurance strategy. Life and Retirement continued to produce solid results despite ongoing headwinds from the sustained low interest rate environment. This business remains on track to deliver double-digit returns for the full year.
“As we approach 2020, we remain confident we will deliver underwriting profitability for the full year 2019 and deliver double-digit ROCE by the end of 2021. We still have much work ahead of us, but we are well on our way to positioning AIG as a leading global insurance company,” Mr. Duperreault added.
|
THIRD QUARTER FINANCIAL SUMMARY* |
||||||||||
|
|
Three Months Ended September 30, |
|||||||||
|
($ in millions, except per common share amounts) |
2019 |
2018 |
||||||||
|
Net income (loss) attributable to AIG common shareholders |
$ |
|
648 |
|
$ |
|
(1,259 |
) |
||
|
Net income (loss) per diluted share attributable to AIG common shareholders (a) |
$ |
|
0.72 |
|
$ |
|
(1.41 |
) |
||
|
|
|
|
|
|
||||||
|
Weighted average common shares outstanding – diluted (a) |
|
895.8 |
|
|
895.2 |
|
||||
|
|
|
|
|
|
||||||
|
Adjusted pre-tax income (loss): |
|
|
|
|
||||||
|
General Insurance |
$ |
|
507 |
|
$ |
|
(825 |
) |
||
|
Life and Retirement |
|
646 |
|
|
713 |
|
||||
|
Other Operations |
|
(500 |
) |
|
(388 |
) |
||||
|
Legacy |
|
93 |
|
|
84 |
|
||||
|
Total |
$ |
|
746 |
|
$ |
|
(416 |
) |
||
|
|
|
|
|
|
||||||
|
Adjusted after-tax income (loss) attributable to AIG common shareholders |
$ |
|
505 |
|
$ |
|
(301 |
) |
||
|
Adjusted after-tax income (loss) per diluted share attributable to AIG common shareholders (a) |
$ |
|
0.56 |
|
$ |
|
(0.34 |
) |
||
|
|
|
|
|
|
||||||
|
Return on common equity |
|
4.0 |
|
% |
(8.4 |
) |
% |
|||
|
Adjusted return on common equity* |
|
4.1 |
|
% |
(2.4 |
) |
% |
|||
|
Adjusted return on attributed common equity – Core* |
|
4.4 |
|
% |
(3.6 |
) |
% |
|||
|
|
|
|
|
|
||||||
|
Common shares outstanding |
|
869.9 |
|
|
884.6 |
|
||||
|
Book value per common share |
$ |
|
74.85 |
|
$ |
|
66.23 |
|
||
|
Book value per common share, excluding accumulated other comprehensive income* |
|
68.40 |
|
|
66.83 |
|
||||
|
Adjusted book value per common share* |
|
57.60 |
|
|
55.58 |
|
||||
|
(a) For periods reporting a loss, basic average common shares outstanding are used to calculate net income (loss) per diluted share |
||||||||||
All comparisons are against the third quarter of 2018, unless otherwise indicated. Refer to the AIG Third Quarter 2019 Financial Supplement, which is posted on AIG’s website in the Investors section, for further information.
THIRD QUARTER 2019 HIGHLIGHTS
General Insurance – Third quarter adjusted pre-tax income of $507 million was comprised of net investment income of $756 million and an underwriting loss of $249 million. The underwriting loss was driven by net pre-tax catastrophe losses of $497 million, including $254 million for Typhoon Faxai and $135 million for Hurricane Dorian, and resulted in a combined ratio of 103.7 inclusive of 7.5 points of catastrophe losses net of reinstatement premiums. Net favorable prior year loss reserve development totaled $3 million. The accident year combined ratio, as adjusted, was 95.9, comprised of a 61.5 accident year loss ratio, as adjusted*, an improvement of 210 basis points from the prior-year quarter, and an expense ratio of 34.4, an improvement of 140 basis points from the prior-year quarter. The decrease in accident year loss ratio, as adjusted, was due to the favorable impact from our underwriting actions, changes in business mix, strong results from Glatfelter, improved loss performance across a number of lines, and changes in reinsurance. The reduction in the third quarter expense ratio primarily reflected improvement in the General operating expense (GOE) ratio as a result of continued expense discipline.
Life and Retirement – Third quarter adjusted pre-tax income of $646 million included the impact of the annual actuarial assumption update, which was a charge of $143 million in the third quarter of 2019 compared to $98 million in the prior-year quarter and elevated mortality in Life Insurance. Net flows while negative, improved resulting from higher Fixed and Index Annuities new business, as well as lower Group Retirement surrenders and withdrawals. Life and Retirement’s Adjusted return on common equity (Adjusted ROCE)* for the third quarter of 2019 was 10.1% or approximately 12.5% excluding the impact of the annual actuarial assumption update.
Net Investment Income – Third quarter net investment income increased 0.4% to $3.4 billion with an 8% increase in interest, dividends and other investment income, slightly offset by lower alternative investment income, which declined to $115 million compared to $329 million in the prior-year quarter. Annualized yield for alternative investment income was 5% and 13% for the third quarter and nine months ended September 30, 2019, respectively, slightly below AIG’s 8% annualized assumption for the quarter but higher for the nine months ended September 30, 2019.
Other Operations – Third quarter adjusted pre-tax loss of $500 million increased from $388 million in the prior-year quarter primarily due to increased corporate GOE and higher interest expense in part due to consolidated non-recourse debt and Global Real Estate investments.
Legacy Results – Third quarter adjusted pre-tax income of $93 million increased 11% primarily due to lower catastrophe losses in Legacy General Insurance of $14 million compared to $57 million in the prior-year quarter, partially offset by lower Legacy Life and Retirement earnings due to lower net investment income and the charge for the annual actuarial assumption update of $30 million compared to $5 million in the prior-year quarter.
Book Value per Common Share – As of September 30, 2019, book value per common share was $74.85 compared to $65.04 at December 31, 2018 principally due to an increase in accumulated other comprehensive income (AOCI) as a result of the impact of lower interest rates on the fair value of fixed maturities. Book value per common share excluding AOCI and DTA (Adjusted book value per common share) increased 5% to $57.60 compared to the prior-year end due to growth in retained earnings from $2.4 billion of net income attributable to AIG in the nine months ended September 30, 2019.
Return on Common Equity (ROCE) – ROCE for the third quarter and the nine months ended September 30, 2019 was 4.0% and 5.2%, respectively, an improvement from (8.4)% and 1.3%, in the prior-year quarter and the nine months ended September 30, 2018, respectively, due to higher net income attributable to AIG common shareholders. Adjusted ROCE for the third quarter and nine months ended September 30, 2019 was 4.1% and 8.6%, respectively, an improvement from (2.4)% and 4.3%, in the prior-year quarter and prior-year nine-month period, respectively, due to higher adjusted after-tax income attributable to AIG common shareholders.
Liquidity and Capital – As of September 30, 2019, AIG Parent liquidity stood at approximately $7.2 billion. In the third quarter, AIG Parent received approximately $1.6 billion of distributions from the insurance subsidiaries in the form of cash, fixed maturity securities and loan repayments including tax sharing payments.
|
GENERAL INSURANCE |
||||||||||||
|
|
Three Months Ended September 30, |
|||||||||||
|
($ in millions) |
2019 |
2018 |
|
Change |
||||||||
|
Total General Insurance |
|
|
|
|
|
|
|
|||||
|
Gross premiums written |
$ |
|
8,583 |
|
$ |
|
8,668 |
|
|
(1 |
) |
% |
|
Net premiums written |
$ |
|
6,648 |
|
$ |
|
6,835 |
|
|
(3 |
) |
|
|
Underwriting loss |
$ |
|
(249 |
) |
$ |
|
(1,726 |
) |
|
86 |
|
|
|
Adjusted pre-tax income (loss) |
$ |
|
507 |
|
$ |
|
(825 |
) |
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Underwriting ratios: |
|
|
|
|
|
|
|
|||||
|
Loss ratio |
|
69.3 |
|
|
88.6 |
|
|
(19.3 |
) |
pts |
||
|
Less: impact on loss ratio |
|
|
|
|
|
|
|
|||||
|
Catastrophe losses and reinstatement premiums |
|
(7.5 |
) |
|
(22.0 |
) |
|
14.5 |
|
|
||
|
Prior year development |
|
– |
|
|
(2.7 |
) |
|
2.7 |
|
|
||
|
Adjustments for ceded premium under reinsurance |
|
|
|
|
|
|
|
|||||
|
contracts and other |
|
(0.3 |
) |
|
(0.3 |
) |
|
0.0 |
|
|
||
|
Accident year loss ratio, as adjusted |
|
61.5 |
|
|
63.6 |
|
|
(2.1 |
) |
|
||
|
Expense ratio |
|
34.4 |
|
|
35.8 |
|
|
(1.4 |
) |
|
||
|
Combined ratio |
|
103.7 |
|
|
124.4 |
|
|
(20.7 |
) |
|
||
|
Accident year combined ratio, as adjusted |
|
95.9 |
|
|
99.4 |
|
|
(3.5 |
) |
|
||
|
General Insurance – North America |
||||||||||||
|
|
Three Months Ended September 30, |
|||||||||||
|
($ in millions) |
2019 |
2018 |
|
Change |
||||||||
|
North America |
|
|
|
|
|
|
|
|||||
|
Net premiums written |
$ |
|
3,404 |
|
$ |
|
3,164 |
|
|
8 |
|
% |
|
Commercial Lines |
|
2,502 |
|
|
2,229 |
|
|
12 |
|
|
||
|
Personal Insurance |
|
902 |
|
|
935 |
|
|
(4 |
) |
|
||
|
|
|
|
|
|
|
|
|
|||||
|
Underwriting loss |
$ |
|
(185 |
) |
$ |
|
(987 |
) |
|
81 |
|
|
|
Commercial Lines |
|
(123 |
) |
|
(609 |
) |
|
80 |
|
|
||
|
Personal Insurance |
|
(62 |
) |
|
(378 |
) |
|
84 |
|
|
||
|
|
|
|
|
|
|
|
|
|||||
|
Adjusted pre-tax income (loss) |
$ |
|
435 |
|
$ |
|
(160 |
) |
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Underwriting ratios: |
|
|
|
|
|
|
|
|||||
|
North America |
|
|
|
|
|
|
|
|||||
|
Loss ratio |
|
76.7 |
|
|
98.8 |
|
|
(22.1 |
) |
pts |
||
|
Less: impact on loss ratio |
|
|
|
|
|
|
|
|||||
|
Catastrophe losses and reinstatement premiums |
|
(7.1 |
) |
|
(23.7 |
) |
|
16.6 |
|
|
||
|
Prior year development |
|
0.5 |
|
|
(4.8 |
) |
|
5.3 |
|
|
||
|
Adjustments for ceded premium under reinsurance |
|
|
|
|
|
|
|
|||||
|
contracts and other |
|
(0.6 |
) |
|
(0.5 |
) |
|
(0.1 |
) |
|
||
|
Accident year loss ratio, as adjusted |
|
69.5 |
|
|
69.8 |
|
|
(0.3 |
) |
|
||
|
Expense ratio |
|
29.0 |
|
|
31.1 |
|
|
(2.1 |
) |
|
||
|
Combined ratio |
|
105.7 |
|
|
129.9 |
|
|
(24.2 |
) |
|
||
|
Accident year combined ratio, as adjusted |
|
98.5 |
|
|
100.9 |
|
|
(2.4 |
) |
|
||
|
|
|
|
|
|
|
|
|
|||||
|
North America Commercial Lines |
|
|
|
|
|
|
|
|||||
|
Loss ratio |
|
80.9 |
|
|
98.5 |
|
|
(17.6 |
) |
pts |
||
|
Less: impact on loss ratio |
|
|
|
|
|
|
|
|||||
|
Catastrophe losses and reinstatement premiums |
|
(6.4 |
) |
|
(21.6 |
) |
|
15.2 |
|
|
||
|
Prior year development |
|
1.6 |
|
|
(0.6 |
) |
|
2.2 |
|
|
||
|
Adjustments for ceded premium under reinsurance |
|
|
|
|
|
|
|
|||||
|
contracts and other |
|
(0.8 |
) |
|
(0.7 |
) |
|
(0.1 |
) |
|
||
|
Accident year loss ratio, as adjusted |
|
75.3 |
|
|
75.6 |
|
|
(0.3 |
) |
|
||
|
Expense ratio |
|
24.1 |
|
|
26.6 |
|
|
(2.5 |
) |
|
||
|
Combined ratio |
|
105.0 |
|
|
125.1 |
|
|
(20.1 |
) |
|
||
|
Accident year combined ratio, as adjusted |
|
99.4 |
|
|
102.2 |
|
|
(2.8 |
) |
|
||
|
|
|
|
|
|
|
|
|
|||||
|
North America Personal Insurance |
|
|
|
|
|
|
|
|||||
|
Loss ratio |
|
64.2 |
|
|
99.8 |
|
|
(35.6 |
) |
pts |
||
|
Less: impact on loss ratio |
|
|
|
|
|
|
|
|||||
|
Catastrophe losses and reinstatement premiums |
|
(9.0 |
) |
|
(29.7 |
) |
|
20.7 |
|
|
||
|
Prior year development |
|
(3.0 |
) |
|
(16.9 |
) |
|
13.9 |
|
|
||
|
Adjustments for ceded premium under reinsurance |
|
|
|
|
|
|
|
|||||
|
contract |
|
(0.1 |
) |
|
– |
|
|
(0.1 |
) |
|
||
|
Accident year loss ratio, as adjusted |
|
52.1 |
|
|
53.2 |
|
|
(1.1 |
) |
|
||
|
Expense ratio |
|
43.4 |
|
|
43.3 |
|
|
0.1 |
|
|
||
|
Combined ratio |
|
107.6 |
|
|
143.1 |
|
|
(35.5 |
) |
|
||
|
Accident year combined ratio, as adjusted |
|
95.5 |
|
|
96.5 |
|
|
(1.0 |
) |
|
||
General Insurance North America – Commentary
- Net premiums written increased by 8% to $3.4 billion, largely due to the acquisition of Glatfelter and growth within the Validus business, partially offset by the continued impact of pricing and underwriting actions, and higher ceded premiums due to changes in 2019 reinsurance programs.
- Pre-tax underwriting loss of $185 million included $230 million of catastrophe losses, net of reinsurance, of which $156 million were in North America Commercial Lines and $74 million in North America Personal Insurance. Net favorable prior year loss reserve development of $17 million was comprised of net favorable prior year loss reserve development of $42 million in North America Commercial Lines partially offset by net unfavorable prior year loss reserve development in North America Personal Insurance of $25 million.
- The North America combined ratio of 105.7 included 7.1 points of catastrophe losses net of reinstatement premiums and (0.5) points of net favorable prior year loss reserve development. The accident year combined ratio, as adjusted, was 98.5, comprised of a 69.5 accident year loss ratio, as adjusted, and a 29.0 expense ratio. The 0.3 points improvement in the accident year loss ratio, as adjusted, was primarily driven by an improving business mix as a result of underwriting actions and the Glatfelter acquisition, improved performance in Property and changes in 2019 reinsurance programs, partially offset by higher losses for Crop and Specialty.
- The 2.1 points decrease in the expense ratio was largely driven by 2.5 points reduction in GOE ratio resulting from continued expense discipline, partially offset by a 0.4 points increase in the acquisition ratio due to changes in business mix.
|
General Insurance – International |
||||||||||||
|
|
Three Months Ended September 30, |
|||||||||||
|
($ in millions) |
2019 |
2018 |
|
Change |
||||||||
|
International |
|
|
|
|
|
|
|
|||||
|
Net premiums written |
$ |
|
3,244 |
|
$ |
|
3,671 |
|
|
(12 |
) |
% |
|
Commercial Lines |
|
1,528 |
|
|
1,810 |
|
|
(16 |
) |
|
||
|
Personal Insurance |
|
1,716 |
|
|
1,861 |
|
|
(8 |
) |
|
||
|
|
|
|
|
|
|
|
|
|||||
|
Underwriting income (loss) |
$ |
|
(64 |
) |
$ |
|
(739 |
) |
|
91 |
|
|
|
Commercial Lines |
|
(65 |
) |
|
(423 |
) |
|
85 |
|
|
||
|
Personal Insurance |
|
1 |
|
|
(316 |
) |
|
NM |
|
|
||
|
|
|
|
|
|
|
|
|
|||||
|
Adjusted pre-tax income (loss) |
$ |
|
72 |
|
$ |
|
(665 |
) |
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Underwriting ratios: |
|
|
|
|
|
|
|
|||||
|
International |
|
|
|
|
|
|
|
|||||
|
Loss ratio |
|
62.3 |
|
|
79.7 |
|
|
(17.4 |
) |
pts |
||
|
Less: impact on loss ratio |
|
|
|
|
|
|
|
|||||
|
Catastrophe losses and reinstatement premiums |
|
(8.0 |
) |
|
(20.5 |
) |
|
12.5 |
|
|
||
|
Prior year development |
|
(0.4 |
) |
|
(1.0 |
) |
|
0.6 |
|
|
||
|
Accident year loss ratio, as adjusted |
|
53.9 |
|
|
58.2 |
|
|
(4.3 |
) |
|
||
|
Expense ratio |
|
39.5 |
|
|
39.9 |
|
|
(0.4 |
) |
|
||
|
Combined ratio |
|
101.8 |
|
|
119.6 |
|
|
(17.8 |
) |
|
||
|
Accident year combined ratio, as adjusted |
|
93.4 |
|
|
98.1 |
|
|
(4.7 |
) |
|
||
|
|
|
|
|
|
|
|
|
|||||
|
International Commercial Lines |
|
|
|
|
|
|
|
|||||
|
Loss ratio |
|
67.9 |
|
|
87.6 |
|
|
(19.7 |
) |
pts |
||
|
Less: impact on loss ratio |
|
|
|
|
|
|
|
|||||
|
Catastrophe losses and reinstatement premiums |
|
(8.0 |
) |
|
(20.6 |
) |
|
12.6 |
|
|
||
|
Prior year development |
|
(2.1 |
) |
|
(3.6 |
) |
|
1.5 |
|
|
||
|
Accident year loss ratio, as adjusted |
|
57.8 |
|
|
63.4 |
|
|
(5.6 |
) |
|
||
|
Expense ratio |
|
36.2 |
|
|
35.6 |
|
|
0.6 |
|
|
||
|
Combined ratio |
|
104.1 |
|
|
123.2 |
|
|
(19.1 |
) |
|
||
|
Accident year combined ratio, as adjusted |
|
94.0 |
|
|
99.0 |
|
|
(5.0 |
) |
|
||
|
|
|
|
|
|
|
|
|
|||||
|
International Personal Insurance |
|
|
|
|
|
|
|
|||||
|
Loss ratio |
|
57.4 |
|
|
72.4 |
|
|
(15.0 |
) |
pts |
||
|
Less: impact on loss ratio |
|
|
|
|
|
|
|
|||||
|
Catastrophe losses and reinstatement premiums |
|
(8.0 |
) |
|
(20.5 |
) |
|
12.5 |
|
|
||
|
Prior year development |
|
1.1 |
|
|
1.5 |
|
|
(0.4 |
) |
|
||
|
Accident year loss ratio, as adjusted |
|
50.5 |
|
|
53.4 |
|
|
(2.9 |
) |
|
||
|
Expense ratio |
|
42.5 |
|
|
43.8 |
|
|
(1.3 |
) |
|
||
|
Combined ratio |
|
99.9 |
|
|
116.2 |
|
|
(16.3 |
) |
|
||
|
Accident year combined ratio, as adjusted |
|
93.0 |
|
|
97.2 |
|
|
(4.2 |
) |
|
||
General Insurance International – Commentary
- Net premiums written decreased 12% on a reported basis due to the continued impact of pricing and underwriting actions, change in reinsurance and the impact of foreign exchange. Net premiums written decreased 11% on a constant dollar basis.
- Pre-tax underwriting loss of $64 million included $267 million of catastrophe losses, net of reinsurance, of which $124 million related to International Commercial Lines and $143 million related to International Personal Insurance. Net unfavorable prior year loss reserve development was $14 million, with $34 million of net unfavorable prior year loss reserve development in International Commercial Lines, partially offset by $20 million of net favorable prior year loss reserve development in International Personal Insurance.
- The International combined ratio was 101.8, down from 119.6 in the prior-year quarter due to lower catastrophe losses. The accident year combined ratio, as adjusted, of 93.4 was comprised of a 53.9 accident year loss ratio, as adjusted, and a 39.5 expense ratio, and was down 4.7 points from the prior-year quarter due to 4.3 points decrease in the accident year loss ratio, as adjusted. The lower accident year loss ratio, as adjusted, was primarily driven by a change in business mix and improved Commercial Property and Japan Personal Auto results.
- The expense ratio decreased 0.4 points primarily due to a reduction in the GOE ratio, as a result of continued expense discipline, partially offset by a 0.3 points increase in the acquisition ratio mainly due to changes in business mix.
|
LIFE AND RETIREMENT |
|||||||||||||
|
|
|
Three Months Ended September 30, |
|||||||||||
|
($ in millions) |
|
2019 |
2018 |
|
Change |
||||||||
|
Life and Retirement |
|
|
|
|
|
|
|
|
|||||
|
Premiums & Fees |
$ |
|
1,529 |
|
|
$ |
|
943 |
|
|
62 |
|
% |
|
Net Investment Income |
|
2,078 |
|
|
|
1,960 |
|
|
6 |
|
|
||
|
Adjusted Revenue |
|
3,833 |
|
|
|
3,146 |
|
|
22 |
|
|
||
|
Benefits, losses and expenses |
|
3,187 |
|
|
|
2,433 |
|
|
31 |
|
|
||
|
Adjusted pre-tax income |
|
646 |
|
|
|
713 |
|
|
(9 |
) |
|
||
|
Premiums and deposits |
|
7,461 |
|
|
|
6,779 |
|
|
10 |
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||
|
Individual Retirement |
|
|
|
|
|
|
|
|
|||||
|
Premiums & Fees |
$ |
|
242 |
|
|
$ |
|
213 |
|
|
14 |
|
% |
|
Net Investment Income |
|
1,021 |
|
|
|
956 |
|
|
7 |
|
|
||
|
Adjusted Revenue |
|
1,416 |
|
|
|
1,335 |
|
|
6 |
|
|
||
|
Benefits, losses and expenses |
|
1,029 |
|
|
|
942 |
|
|
9 |
|
|
||
|
Adjusted pre-tax income |
|
387 |
|
|
|
393 |
|
|
(2 |
) |
|
||
|
Premiums and deposits |
|
3,692 |
|
|
|
3,616 |
|
|
2 |
|
|
||
|
Net flows |
|
(330 |
) |
|
|
(545 |
) |
|
39 |
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
Three Months Ended September 30, |
|||||||||||
|
($ in millions) |
|
2019 |
2018 |
|
Change |
||||||||
|
Group Retirement |
|
|
|
|
|
|
|
|
|||||
|
Premiums & Fees |
$ |
|
116 |
|
|
$ |
|
124 |
|
|
(6 |
) |
% |
|
Net Investment Income |
|
544 |
|
|
|
531 |
|
|
2 |
|
|
||
|
Adjusted Revenue |
|
726 |
|
|
|
718 |
|
|
1 |
|
|
||
|
Benefits, losses and expenses |
|
523 |
|
|
|
476 |
|
|
10 |
|
|
||
|
Adjusted pre-tax income |
|
203 |
|
|
|
242 |
|
|
(16 |
) |
|
||
|
Premiums and deposits |
|
1,924 |
|
|
|
2,116 |
|
|
(9 |
) |
|
||
|
Net flows |
|
(788 |
) |
|
|
(986 |
) |
|
20 |
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||
|
Life Insurance |
|
|
|
|
|
|
|
|
|||||
|
Premiums & Fees |
$ |
|
742 |
|
|
$ |
|
520 |
|
|
43 |
|
% |
|
Net Investment Income |
|
289 |
|
|
|
275 |
|
|
5 |
|
|
||
|
Adjusted Revenue |
|
1,037 |
|
|
|
809 |
|
|
28 |
|
|
||
|
Benefits, losses and expenses |
|
1,044 |
|
|
|
793 |
|
|
32 |
|
|
||
|
Adjusted pre-tax income (loss) |
|
(7 |
) |
|
|
16 |
|
|
NM |
|
|
||
|
Premiums and deposits |
|
1,012 |
|
|
|
978 |
|
|
3 |
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||
|
Institutional Markets |
|
|
|
|
|
|
|
|
|||||
|
Premiums & Fees |
$ |
|
429 |
|
|
$ |
|
86 |
|
|
399 |
|
% |
|
Net Investment Income |
|
224 |
|
|
|
198 |
|
|
13 |
|
|
||
|
Adjusted Revenue |
|
654 |
|
|
|
284 |
|
|
130 |
|
|
||
|
Benefits, losses and expenses |
|
591 |
|
|
|
222 |
|
|
166 |
|
|
||
|
Adjusted pre-tax income |
|
63 |
|
|
|
62 |
|
|
2 |
|
|
||
|
Premiums and deposits |
|
833 |
|
|
|
69 |
|
|
NM |
|
|
||
Life and Retirement – Commentary
- Life and Retirement reported adjusted pre-tax income of $646 million compared to $713 million in the prior-year quarter. The current quarter included a $143 million charge for the annual actuarial assumption update compared to a $98 million charge for the annual actuarial assumption update in the prior-year quarter. Excluding the impacts from the annual actuarial assumption update from both periods, adjusted pre-tax income declined 3% due to elevated mortality and lower alternative investment returns when compared to the prior-year quarter.
- Individual Retirement reported adjusted pre-tax income of $387 million compared to $393 million in the prior-year quarter. The current quarter included a charge for the annual actuarial assumption update of $63 million compared to a $52 million charge for the annual actuarial assumption update in the prior-year quarter. Adjusted pre-tax income improved, excluding the actuarial assumption update, as a result of higher base portfolio income which was largely the result of increased sales, partially offset by lower returns on alternative investments compared to the prior-year quarter. Total net flows excluding Retail Mutual Funds were positive driven by strong Index Annuities sales.
- Group Retirement reported adjusted pre-tax income of $203 million compared to $242 million in the prior-year quarter. The current quarter reflected a charge for the annual actuarial assumption update of $17 million compared to net favorable adjustments of $17 million for the annual actuarial assumption update in the prior-year quarter. Adjusted pre-tax income declined, excluding the annual actuarial assumption update, due to lower returns on alternative investments and additional investments made in the operating platform compared to the prior-year quarter, partially offset by higher income on securities for which the fair value option was elected. Net flows remain negative but favorable to the prior-year quarter primarily due to lower surrenders.
- Life Insurance reported adjusted pre-tax loss of $7 million compared to adjusted pre-tax income of $16 million in the prior-year quarter reflected elevated mortality, partially offset by higher base income driven by growth in invested assets. The current year and prior year quarters included a $63 million charge for the annual actuarial assumption update. Mortality trends remain within pricing expectations.
- Institutional Markets adjusted pre-tax income increased slightly due to higher net investment income on a growing asset base resulting from growth in Pension Risk Transfer and Guaranteed Investment Contracts (GICs).
* Refers to financial measure not calculated in accordance with generally accepted accounting principles (non-GAAP); definitions of non-GAAP measures and reconciliations to their closest GAAP measures can be found in this news release under the heading Comment on Regulation G and Non-GAAP Financial Measures.
CONFERENCE CALL
AIG will host a conference call today, Friday, November 1, 2019 at 9:00 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 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.
The conference call (including the conference call presentation material), the earnings release and the financial supplement may include, and officers and representatives of AIG may from time to time make and discuss, projections, goals, assumptions and statements that may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.
Contacts
Sabra Purtill (Investors): 212-770-7074; [email protected]
Daniel O’Donnell (Media): 212-770-3141; [email protected]
Claire Talcott (Media): 212-458-6343; [email protected]
