[February 08, 2018] |
|
AIG Reports Fourth Quarter 2017 Results
American International Group, Inc. (NYSE:AIG) today reported a net loss
of $6.7 billion, or $7.33 per share, for the fourth quarter of 2017,
compared to a net loss of $3.0 billion, or $2.96 per share, in the
prior-year quarter. The fourth quarter of 2017 net loss included a
charge of $6.7 billion related to the enactment of the Tax Cuts and Jobs
Act (the Tax Act). Adjusted after-tax income was $526 million, or $0.57
per diluted share, for the fourth quarter of 2017, compared to an
adjusted after-tax loss of $2.8 billion, or $2.72 per share, in the
prior-year quarter.
"The fourth quarter was another important step forward in positioning
AIG for the future. Since I joined the company in May, we've added to
our talent base, assessed and initiated underwriting actions, and
established a new operating structure. 2017 represents a starting point
from which we expect to build and 2018 will be a year of execution. Our
actions to diversify our business and pursue profitable growth were
further reflected in our January announcement of the acquisition of
Validus," said Brian Duperreault, President and Chief Executive Officer.
"Our fourth quarter and full year 2017 results were significantly
impacted by catastrophe losses. Despite full year record catastrophe
losses of $4.2 billion, we delivered approximately $1.5 billion in
pre-tax income and over $3.0 billion in adjusted pre-tax income.
Importantly, our fourth quarter reserve review resulted in modest net
adverse development and our General Insurance North America Commercial
business showed notable improvement and reserve stability. Personal
Insurance and Life and Retirement operations continued to deliver solid
performance and benefit from their diversified offerings."
FOURTH QUARTER AND FULL YEAR 2017 HIGHLIGHTS
General Insurance Results - Fourth quarter adjusted pre-tax
income of $13 million included $762 million of catastrophe losses, of
which $572 million related to the wildfires in California. North America
adjusted pre-tax income of $412 million was offset by an International
adjusted pre-tax loss of $399 million. The fourth quarter reflected
modest net prior year adverse loss reserve development of 1.4 points,
driven by International Commercial lines. The fourth quarter and full
year of 2017 loss ratios were 78.3 and 83.2, respectively. The accident
year loss ratio, as adjusted was 65.2, a 2.3 point improvement compared
to the prior year quarter. For the full year, the accident year loss
ratio, as adjusted was 63.0, a 1.1 point increase from a year ago.
Life and Retirement Results - Fourth quarter adjusted pre-tax
income of $782 million included a charge of approximately $90 million
for adjustments, primarily within Individual Retirement and Group
Retirement, due to the ongoing modernization of actuarial systems and
related model refinements. The fourth quarter of 2017 reflected higher
fee income for Individual Retirement and Group Retirement due to
historically high assets under administration driven by equity market
performance and higher base net investment spread in Variable and Index
Annuities, as well as Group Retirement. Full year base net investment
spread for Fixed Annuities remained essentially flat with the prior year
despite the impact of spread compression from reinvesting at lower rates.
Legacy - Fourth quarter adjusted pre-tax income of $411 million,
compared to $1.1 billion in the prior year quarter, included higher than
expected investment returns. The fourth quarter of 2016 included a
pre-tax gain of $1.1 billion from the sale of commercial real estate in
South Korea offset by unfavorable prior year loss reserve development.
AIG recently formed a Bermuda-domiciled legal entity named DSA
Reinsurance Company, Ltd. (DSA Re) to act as AIG's main run-off
reinsurer. DSA Re's primary purpose is to reinsure AIG's Legacy Life and
Retirement and Legacy General Insurance run-off lines. DSA Re will allow
AIG to derive operational efficiencies by consolidating its legacy books
in one legal entity and under one management team, while continuing to
honor all policyholder commitments and client relationships. The amount
expected to be reinsured upon receipt of all regulatory approvals
represents approximately $37 billion or over 80% of Legacy total
insurance reserves and will be backed with approximately $40 billion of
invested assets managed by AIG Investments.
Since its establishment, Legacy has returned $10.0 billion of capital to
AIG Parent, surpassing its original goal of $9.0 billion. Total book
value impairments and losses on sales from Legacy investments that were
sold from September 1, 2015 through December 31, 2017 totaled $1.0
billion.
Capital and Liquidity - In the fourth quarter of 2017, AIG Parent
received approximately $290 million in dividends in the form of cash and
fixed maturity securities from its Life and Retirement companies, as
well as $2.0 billion associated with Legacy asset monetizations,
including net proceeds of $1.1 billion from the sale of AIG's remaining
life settlements contracts. AIG Parent reimbursed $1.2 billion in the
quarter to its insurance companies as a result of adjustments made to
tax sharing payments during the year. At the end of 2017, Parent
liquidity stood at $7.3 billion.
Validus Holdings Ltd. - On January 21, 2018 AIG entered into an
agreement to acquire Validus Holdings Ltd., a leading provider of
reinsurance, primary insurance and asset management services, for $5.6
billion in cash. This transaction will strengthen AIG's global General
Insurance business by expanding its current product portfolio through
additional distribution channels and advancing the tools available for
underwriting. The transaction is expected to close in mid-2018 and is
subject to obtaining the relevant regulatory approvals and other
customary closing conditions.
|
|
FOURTH QUARTER FINANCIAL SUMMARY*
|
|
|
|
|
|
Three Months Ended December 31,
|
($ in millions, except per share amounts)
|
|
|
2017
|
|
2016
|
Net income (loss)
|
|
|
$
|
(6,660
|
)
|
|
$
|
(3,041
|
)
|
Net income (loss) per diluted share (a)
|
|
|
$
|
(7.33
|
)
|
|
$
|
(2.96
|
)
|
Adjusted after-tax income (loss)
|
|
|
$
|
526
|
|
|
$
|
(2,787
|
)
|
Adjusted after-tax income (loss) per diluted share (a)
|
|
|
$
|
0.57
|
|
|
$
|
(2.72
|
)
|
|
|
|
|
|
|
Return on equity
|
|
|
|
(38.7
|
)%
|
|
|
(14.7
|
)%
|
Adjusted return on equity
|
|
|
|
4.2
|
%
|
|
|
(18.2
|
)%
|
Adjusted return on attributed equity - Core
|
|
|
|
2.6
|
%
|
|
|
(22.9
|
)%
|
|
|
|
|
|
|
Book value per common share
|
|
|
$
|
72.49
|
|
|
$
|
76.66
|
|
Book value per common share, excluding accumulated other
comprehensive income
|
|
|
$
|
66.41
|
|
|
$
|
73.41
|
|
*Refer to the Comments on Regulation G and the tables that follow
for a discussion of non-GAAP financial measures and the reconciliations
of the non-GAAP financial measures to GAAP measures.
|
|
|
(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 fourth quarter of 2016, unless otherwise
indicated. Refer to the AIG Fourth Quarter 2017 Financial Supplement,
which is posted on AIG's website in the Investor Information section,
for further information.
|
GENERAL INSURANCE
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
($ in millions)
|
|
|
2017
|
|
2016
|
|
Change
|
Total General Insurance
|
|
|
|
|
|
|
|
|
|
|
Net premiums written
|
|
|
$
|
5,892
|
|
$
|
6,512
|
|
(10)
|
%
|
Underwriting income (loss)
|
|
|
$
|
(846)
|
|
$
|
(5,852)
|
|
86
|
|
Adjusted pre-tax income (loss)
|
|
|
$
|
13
|
|
$
|
(4,847)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting ratios:
|
|
|
|
|
|
|
|
|
|
|
Loss ratio
|
|
|
|
78.3
|
|
|
146.7
|
|
(68.4)
|
pts
|
Impact on loss ratio:
|
|
|
|
|
|
|
|
|
|
|
Catastrophe losses and reinstatement premiums
|
|
|
|
(11.7)
|
|
|
(5.4)
|
|
(6.3)
|
|
Prior year development
|
|
|
|
(1.4)
|
|
|
(73.8)
|
|
72.4
|
|
Accident year loss ratio, as adjusted
|
|
|
|
65.2
|
|
|
67.5
|
|
(2.3)
|
|
Expense ratio
|
|
|
|
35.0
|
|
|
35.8
|
|
(0.8)
|
|
Combined ratio
|
|
|
|
113.3
|
|
|
182.5
|
|
(69.2)
|
|
Accident year combined ratio, as adjusted
|
|
|
|
100.2
|
|
|
103.3
|
|
(3.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Insurance - North America
|
|
|
|
|
|
Three Months Ended December 31,
|
($ in millions)
|
|
|
2017
|
|
2016
|
|
Change
|
North America
|
|
|
|
|
|
|
|
|
|
|
Net premiums written
|
|
|
$
|
2,583
|
|
$
|
3,008
|
|
(14)
|
%
|
Commercial Lines
|
|
|
|
1,808
|
|
|
2,236
|
|
(19)
|
|
Personal Insurance
|
|
|
|
775
|
|
|
772
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting income (loss)
|
|
|
$
|
(316)
|
|
$
|
(5,288)
|
|
94
|
|
Commercial Lines
|
|
|
|
16
|
|
|
(5,294)
|
|
NM
|
|
Personal Insurance
|
|
|
|
(332)
|
|
|
6
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted pre-tax income (loss)
|
|
|
$
|
412
|
|
$
|
(4,406)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting ratios:
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
|
|
|
|
|
|
|
|
Loss ratio
|
|
|
|
83.0
|
|
|
237.6
|
|
(154.6)
|
pts
|
Impact on loss ratio:
|
|
|
|
|
|
|
|
|
|
|
Catastrophe losses and reinstatement premiums
|
|
|
|
(24.5)
|
|
|
(7.6)
|
|
(16.9)
|
|
Prior year development
|
|
|
|
3.3
|
|
|
(152.8)
|
|
156.1
|
|
Accident year loss ratio, as adjusted
|
|
|
|
61.8
|
|
|
77.2
|
|
(15.4)
|
|
Expense ratio
|
|
|
|
28.5
|
|
|
27.5
|
|
1.0
|
|
Combined ratio
|
|
|
|
111.5
|
|
|
265.1
|
|
(153.6)
|
|
Accident year combined ratio, as adjusted
|
|
|
|
90.3
|
|
|
104.7
|
|
(14.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
North America Commercial Lines
|
|
|
|
|
|
|
|
|
|
|
Loss ratio
|
|
|
|
73.9
|
|
|
294.8
|
|
(220.9)
|
pts
|
Impact on loss ratio:
|
|
|
|
|
|
|
|
|
|
|
Catastrophe losses and reinstatement premiums
|
|
|
|
(12.0)
|
|
|
(8.2)
|
|
(3.8)
|
|
Prior year development
|
|
|
|
4.9
|
|
|
(202.3)
|
|
207.2
|
|
Accident year loss ratio, as adjusted
|
|
|
|
66.8
|
|
|
84.3
|
|
(17.5)
|
|
Expense ratio
|
|
|
|
25.3
|
|
|
23.9
|
|
1.4
|
|
Combined ratio
|
|
|
|
99.2
|
|
|
318.7
|
|
(219.5)
|
|
Accident year combined ratio, as adjusted
|
|
|
|
92.1
|
|
|
108.2
|
|
(16.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
North America Personal Insurance
|
|
|
|
|
|
|
|
|
|
|
Loss ratio
|
|
|
|
108.0
|
|
|
60.5
|
|
47.5
|
pts
|
Impact on loss ratio:
|
|
|
|
|
|
|
|
|
|
|
Catastrophe losses and reinstatement premiums
|
|
|
|
(58.6)
|
|
|
(5.5)
|
|
(53.1)
|
|
Prior year development
|
|
|
|
(1.1)
|
|
|
-
|
|
(1.1)
|
|
Accident year loss ratio, as adjusted
|
|
|
|
48.3
|
|
|
55.0
|
|
(6.7)
|
|
Expense ratio
|
|
|
|
37.5
|
|
|
38.7
|
|
(1.2)
|
|
Combined ratio
|
|
|
|
145.5
|
|
|
99.2
|
|
46.3
|
|
Accident year combined ratio, as adjusted
|
|
|
|
85.8
|
|
|
93.7
|
|
(7.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Net premiums written decreased by 14%, primarily due to continued
execution of our strategic portfolio actions in North America
Commercial Lines Casualty and Property lines of business.
-
The reduction in the North America loss ratio was driven by the fourth
quarter 2016 reserve additions. The 15.4 point improvement in the
accident year loss ratio, as adjusted primarily reflects the impact of
adjustments to the loss estimates that were made in the fourth quarter
of 2016, as well as pricing and underwriting actions, and recoveries
from reinsurance on severe losses.
-
Adjusted pre-tax income of $412 million included $682 million of
catastrophe-related losses, which were primarily related to the
California wildfires and largely impacted Personal Insurance.
Favorable loss reserve development of $97 million was primarily due to
improvement in North America Commercial Lines.
|
|
General Insurance - International
|
|
|
|
|
|
Three Months Ended December 31,
|
($ in millions)
|
|
|
2017
|
|
2016
|
|
Change
|
International
|
|
|
|
|
|
|
|
|
|
|
Net premiums written
|
|
|
$
|
3,309
|
|
$
|
3,504
|
|
(6)
|
%
|
Commercial Lines
|
|
|
|
1,422
|
|
|
1,466
|
|
(3)
|
|
Personal Insurance
|
|
|
|
1,887
|
|
|
2,038
|
|
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting income (loss)
|
|
|
$
|
(530)
|
|
$
|
(564)
|
|
6
|
|
Commercial Lines
|
|
|
|
(603)
|
|
|
(647)
|
|
7
|
|
Personal Insurance
|
|
|
|
73
|
|
|
83
|
|
(12)
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted pre-tax loss
|
|
|
$
|
(399)
|
|
$
|
(441)
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting ratios:
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
|
|
|
|
|
Loss ratio
|
|
|
|
74.7
|
|
|
71.9
|
|
2.8
|
pts
|
Impact on loss ratio:
|
|
|
|
|
|
|
|
|
|
|
Catastrophe losses and reinstatement premiums
|
|
|
|
(2.2)
|
|
|
(3.5)
|
|
1.3
|
|
Prior year development
|
|
|
|
(4.8)
|
|
|
(8.9)
|
|
4.1
|
|
Accident year loss ratio, as adjusted
|
|
|
|
67.7
|
|
|
59.5
|
|
8.2
|
|
Expense ratio
|
|
|
|
39.8
|
|
|
42.5
|
|
(2.7)
|
|
Combined ratio
|
|
|
|
114.5
|
|
|
114.4
|
|
0.1
|
|
Accident year combined ratio, as adjusted
|
|
|
|
107.5
|
|
|
102.0
|
|
5.5
|
|
|
|
|
|
|
|
|
|
|
|
|
International Commercial Lines
|
|
|
|
|
|
|
|
|
|
|
Loss ratio
|
|
|
|
98.0
|
|
|
97.9
|
|
0.1
|
pts
|
Impact on loss ratio:
|
|
|
|
|
|
|
|
|
|
|
Catastrophe losses and reinstatement premiums
|
|
|
|
(2.7)
|
|
|
(7.7)
|
|
5.0
|
|
Prior year development
|
|
|
|
(11.4)
|
|
|
(20.0)
|
|
8.6
|
|
Accident year loss ratio, as adjusted
|
|
|
|
83.9
|
|
|
70.2
|
|
13.7
|
|
Expense ratio
|
|
|
|
37.7
|
|
|
38.2
|
|
(0.5)
|
|
Combined ratio
|
|
|
|
135.7
|
|
|
136.1
|
|
(0.4)
|
|
Accident year combined ratio, as adjusted
|
|
|
|
121.6
|
|
|
108.4
|
|
13.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
($ in millions)
|
|
|
2017
|
|
|
2016
|
|
Change
|
International Personal Insurance
|
|
|
|
|
|
|
|
|
|
|
Loss ratio
|
|
|
|
54.6
|
|
|
49.8
|
|
4.8
|
pts
|
Impact on loss ratio:
|
|
|
|
|
|
|
|
|
|
|
Catastrophe losses and reinstatement premiums
|
|
|
|
(1.8)
|
|
|
(0.1)
|
|
(1.7)
|
|
Prior year development
|
|
|
|
0.8
|
|
|
0.7
|
|
0.1
|
|
Accident year loss ratio, as adjusted
|
|
|
|
53.6
|
|
|
50.4
|
|
3.2
|
|
Expense ratio
|
|
|
|
41.7
|
|
|
46.3
|
|
(4.6)
|
|
Combined ratio
|
|
|
|
96.3
|
|
|
96.1
|
|
0.2
|
|
Accident year combined ratio, as adjusted
|
|
|
|
95.3
|
|
|
96.7
|
|
(1.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Net premiums written decreased 6% on a reported basis primarily driven
by divestitures and risk selection strategy in Europe in International
Commercial Lines and strategic country exits for Personal Insurance.
-
The loss ratio increased 2.8 points to 74.7 in the fourth quarter of
2017. The accident year loss ratio, as adjusted increased 8.2 points
to 67.7 primarily due to continued remediation efforts of
International Commercial Lines in Europe.
-
Adjusted pre-tax loss of $399 million was largely due to the
strengthening of reserves and loss estimates in International
Commercial Lines.
|
|
LIFE AND RETIREMENT
|
|
|
|
|
|
|
Three Months Ended December 31,
|
($ in millions)
|
|
|
|
2017
|
|
|
2016
|
|
Change
|
Life and Retirement
|
|
|
|
|
|
|
|
|
|
|
Premiums & Fees
|
|
|
$
|
2,123
|
|
$
|
1,186
|
|
79
|
%
|
Net Investment Income
|
|
|
|
2,003
|
|
|
1,983
|
|
1
|
|
Adjusted Revenue
|
|
|
|
4,382
|
|
|
3,388
|
|
29
|
|
Benefits, losses and expenses
|
|
|
|
3,600
|
|
|
2,522
|
|
43
|
|
Adjusted pre-tax income
|
|
|
|
782
|
|
|
866
|
|
(10)
|
|
|
|
|
|
|
|
|
|
|
|
|
Individual Retirement
|
|
|
|
|
|
|
|
|
|
|
Premiums & Fees
|
|
|
$
|
210
|
|
$
|
215
|
|
(2)
|
%
|
Net Investment Income
|
|
|
|
1,030
|
|
|
1,010
|
|
2
|
|
Adjusted Revenue
|
|
|
|
1,415
|
|
|
1,376
|
|
3
|
|
Benefits, losses and expenses
|
|
|
|
941
|
|
|
834
|
|
13
|
|
Adjusted pre-tax income
|
|
|
|
474
|
|
|
542
|
|
(13)
|
|
Net flows
|
|
|
|
(422)
|
|
|
(321)
|
|
(31)
|
|
|
|
|
|
|
|
|
|
|
|
|
Group Retirement
|
|
|
|
|
|
|
|
|
|
|
Premiums & Fees
|
|
|
$
|
120
|
|
$
|
104
|
|
15
|
%
|
Net Investment Income
|
|
|
|
550
|
|
|
558
|
|
(1)
|
|
Adjusted Revenue
|
|
|
|
732
|
|
|
716
|
|
2
|
|
Benefits, losses and expenses
|
|
|
|
486
|
|
|
455
|
|
7
|
|
Adjusted pre-tax income
|
|
|
|
246
|
|
|
261
|
|
(6)
|
|
Net flows
|
|
|
|
(453)
|
|
|
(533)
|
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
($ in millions)
|
|
|
|
2017
|
|
|
2016
|
|
Change
|
Life Insurance
|
|
|
|
|
|
|
|
|
|
|
Premiums & Fees
|
|
|
$
|
732
|
|
$
|
679
|
|
8
|
%
|
Net Investment Income
|
|
|
|
263
|
|
|
263
|
|
-
|
|
Adjusted Revenue
|
|
|
|
1,013
|
|
|
956
|
|
6
|
|
Benefits, losses and expenses
|
|
|
|
1,011
|
|
|
966
|
|
5
|
|
Adjusted pre-tax income (loss)
|
|
|
|
2
|
|
|
(10)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
Institutional Markets
|
|
|
|
|
|
|
|
|
|
|
Premiums & Fees
|
|
|
$
|
1,061
|
|
$
|
188
|
|
464
|
%
|
Net Investment Income
|
|
|
|
160
|
|
|
152
|
|
5
|
|
Adjusted Revenue
|
|
|
|
1,222
|
|
|
340
|
|
259
|
|
Benefits, losses and expenses
|
|
|
|
1,162
|
|
|
267
|
|
335
|
|
Adjusted pre-tax income
|
|
|
|
60
|
|
|
73
|
|
(18)
|
|
|
|
|
|
|
|
|
|
|
|
|
-
In Individual Retirement, premiums and policy fees remained constant
and were partially offset by an increase in reserve adjustments.
Spreads continued to see compression from lower reinvestment rates.
Base net investment spreads benefited from unexpected accretion income
for Fixed Annuities and growth in Index Annuities. Overall net flows
continued to be negative reflecting the regulatory uncertainties and
disruption in the industry, partially offset by inflows to Index
Annuities.
-
In Group Retirement, higher reserve adjustments for Index and Variable
Annuities and lower alternative investment income from lower average
assets were partially offset by higher fee income and base net
investment spread. Spreads continued to see compression from the
current investment environment. Base net investment spread benefitted
from unexpected accretion income and a cumulative update to cost of
funds. Group Retirement negative net flows improved slightly due to
lower individual surrenders.
-
In Life Insurance, strong growth in premiums, and premiums and
deposits, in universal life and term life and were partially offset by
elevated mortality.
-
In Institutional Markets, strong growth in pension risk transfer
contributed to higher assets under management and an increase in net
investment spread.
CONFERENCE CALL
AIG will host a conference call tomorrow, Friday, February 9, 2018 at
8:00 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 Investor Relations
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 Investor
Relations 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, projections, goals, assumptions and statements that may constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These projections, goals,
assumptions and statements are not historical facts but instead
represent only AIG's belief regarding future events, many of which, by
their nature, are inherently uncertain and outside AIG's control. These
projections, goals, assumptions and statements include statements
preceded by, followed by or including words such as "will," "believe,"
"anticipate," "expect," "intend," "plan," "focused on achieving,"
"view," "target," "goal" or "estimate." These projections, goals,
assumptions and statements may address, among other things, AIG's:
-
exposures to subprime mortgages, monoline insurers, the residential
and commercial real estate markets, state and municipal bond issuers,
sovereign bond issuers, the energy sector and currency exchange rates;
-
exposure to European governments and European financial institutions;
-
strategy for risk management;
-
actual and anticipated sales, monetizations and/or acquisitions of
businesses or assets, including AIG's ability to successfully
consummate the purchase of Validus Holdings, Ltd.;
-
restructuring of business operations, including anticipated
restructuring charges and annual cost savings;
-
generation of deployable capital;
-
strategies to increase return on equity and earnings per share;
-
strategies to grow net investment income, efficiently manage capital,
grow book value per common share, and reduce expenses;
-
anticipated organizational, business and regulatory changes;
-
strategies for customer retention, growth, product development, market
position, financial results and reserves;
-
management of the impact that innovation and technology changes may
have on customer preferences, the frequency or severity of losses
and/or the way AIG distributes and underwrites its products;
-
segments' revenues and combined ratios; and
-
management succession and retention plans.
It is possible that AIG's actual results and financial condition will
differ, possibly materially, from the results and financial condition
indicated in these projections, goals, assumptions and statements.
Factors that could cause AIG's actual results to differ, possibly
materially, from those in the specific projections, goals, assumptions
and statements include:
-
changes in market conditions;
-
negative impacts on customers, business partners and other
stakeholders;
-
the occurrence of catastrophic events, both natural and man-made;
-
significant legal, regulatory or governmental proceedings;
-
the timing and applicable requirements of any regulatory framework to
which AIG is subject, including as a global systemically important
insurer;
-
concentrations in AIG's investment portfolios;
-
actions by credit rating agencies;
-
judgments concerning casualty insurance underwriting and insurance
liabilities;
-
AIG's ability to successfully manage Legacy portfolios;
-
AIG's ability to successfully reduce costs and expenses and make
business and organizational changes without negatively impacting
client relationships or its competitive position;
-
AIG's ability to successfully dispose of, monetize and/or acquire
businesses or assets including AIG's ability to successfully
consummate the purchase of Validus Holdings, Ltd.;
-
judgments concerning the recognition of deferred tax assets;
-
judgments concerning estimated restructuring charges and estimated
cost savings; and
-
such other factors discussed in Part I, Item 2. Management's
Discussion and Analysis of Financial Condition and Results of
Operations (MD&A) in AIG's Quarterly Reports on Form 10-Q for the
quarterly periods ended September 30, 2017, June 30, 2017 and March
31, 2017, Part II, Item 7. MD&A and Part I, Item 1A. Risk Factors in
AIG's Annual Report on Form 10-K for the year ended December 31, 2016
and Part II, Item 7. MD&A and Part I, Item 1A. Risk Factors in AIG's
Annual Report on Form 10-K for the year ended December 31, 2017 (which
will be filed with the SEC).
AIG is not under any obligation (and expressly disclaims any obligation)
to update or alter any projections, goals, assumptions, or other
statements, whether written or oral, that may be made from time to time,
whether as a result of new information, future events or otherwise.
COMMENT ON REGULATION G
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 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 or in the Fourth Quarter 2017 Financial
Supplement available in the Investor Information section of AIG's
website, www.aig.com.
Book Value per Common Share, Excluding Accumulated Other
Comprehensive Income (AOCI) and Book Value per Common Share, Excluding
AOCI and Deferred Tax Assets (DTA) (Adjusted Book Value per Common
Share) are used to show the amount of AIG's net worth on a per-share
basis. AIG believes these measures are useful to investors because they
eliminate 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. These measures also eliminate 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. 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.
Book value per common share, excluding AOCI, is derived by dividing
Total AIG Shareholders' equity, excluding AOCI, by total common shares
outstanding. Adjusted Book Value per Common Share is derived by dividing
Total AIG shareholders' equity, excluding AOCI and DTA (Adjusted
Shareholders' Equity), by total common shares outstanding.
AIG Return on Equity - Adjusted After-tax Income Excluding AOCI and
DTA (Adjusted Return on Equity) is used to show the rate of return
on 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.
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
Equity. Adjusted Return on Equity is derived by dividing actual or
annualized adjusted after-tax income attributable to AIG by average
Adjusted Shareholders' Equity.
Core Adjusted Attributed Equity is an attribution of total AIG
Adjusted Shareholders' Equity to these segments based on AIG's internal
capital model, which incorporates the segments' respective risk
profiles. Adjusted attributed equity represents AIG's best estimates
based on current facts and circumstances and will change over time.
Core Return on Equity - Adjusted After-tax Income (Adjusted
Return on Attributed Equity) is used to show the rate of return on
Adjusted Attributed Equity. Adjusted Return on Attributed Equity is
derived by dividing actual or annualized Adjusted After-tax Income by
Average Adjusted Attributed Equity.
Adjusted After-tax Income Attributable to Core is derived by
subtracting attributed interest expense and income tax expense from
adjusted pre-tax income. Attributed debt and the related interest
expense is calculated based on AIG's internal capital 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 capital 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
operating segments.
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.
Adjusted Pre-tax Income (APTI) is derived by excluding the
following items 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 operating
segments.
|
|
|
|
-
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 sales
inducement assets (SIA) related to net realized capital gains
and losses;
-
loss (gain) on extinguishment of debt;
-
net realized capital gains and losses;
-
non-qualifying derivative hedging activities, excluding net
realized capital gains and losses;
-
income or loss from discontinued operations;
-
pension expense related to a one-time lump sum payment to former
employees;
|
|
|
-
income and loss from divested businesses;
-
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; and
-
net loss reserve discount benefit (charge).
|
|
|
|
|
Adjusted After-tax Income Attributable to AIG (AATI) is derived
by excluding the tax effected APTI adjustments described above and the
following tax items from net income attributable to AIG:
-
deferred income tax valuation allowance releases and charges;
-
changes in uncertain tax positions and other tax items related to
legacy matters having no relevance to AIG's current businesses or
operating performance; and
-
net tax charge related to the enactment of the Tax Cuts and Jobs Act
(Tax Act).
See page 12 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 combined ratios, as adjusted: both the
accident year loss and combined ratios, as adjusted, exclude catastrophe
losses and related reinstatement premiums, prior year development, net
of premium adjustments, and the impact of reserve discounting. Natural
and man-made catastrophe losses are generally weather or seismic events
having a net impact on AIG in excess of $10 million each and also
include certain man-made events, such as terrorism and civil disorders
that meet the $10 million threshold. AIG believes the 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 exclude prior year
development to provide transparency related to current accident year
results.
|
|
|
|
|
|
|
|
|
Underwriting ratios are computed as follows:
|
|
|
|
|
a)
|
|
Loss ratio = Loss and loss adjustment expenses incurred ÷ Net
premiums earned (NPE)
|
|
|
|
|
b)
|
|
Acquisition ratio = Total acquisition expenses ÷ NPE
|
|
|
|
|
c)
|
|
General operating expense ratio = General operating expenses ÷ NPE
|
|
|
|
|
d)
|
|
Expense ratio = Acquisition ratio + General operating expense ratio
|
|
|
|
|
e)
|
|
Combined ratio = Loss ratio + Expense ratio
|
|
|
|
|
f)
|
|
Accident year loss ratio, as adjusted (AYLR) = [Loss and loss
adjustment expenses incurred - CATs - PYD] ÷ [NPE +/(-)
Reinstatement premiums (RIPs) related to catastrophes +/(-) RIPs
related to prior year catastrophes + (Additional) returned premium
related to PYD on loss sensitive business + Adjustment for ceded
premiums under reinsurance contracts related to prior accident years]
|
|
|
|
|
g)
|
|
Accident year combined ratio = AYLR + Expense ratio
|
|
|
|
|
h)
|
|
Catastrophe losses (CATs) and reinstatement premiums = [Loss and
loss adjustment expenses incurred - (CATs)] ÷ [NPE +/(-) RIPs
related to catastrophes] - Loss ratio
|
|
|
|
|
i)
|
|
Prior year development net of (additional) return premium related to
PYD on loss sensitive business = [Loss and loss adjustment expenses
incurred - Prior year loss reserve development unfavorable
(favorable) (PYD), net of reinsurance] ÷ [NPE +/(-) RIPs related to
prior year catastrophes + (Additional) returned premium related to
PYD on loss sensitive business] - Loss ratio
|
|
|
|
|
|
|
|
Results from discontinued operations are excluded from all of these
measures.
American International Group, Inc. (AIG) is a leading global insurance
organization. Founded in 1919, today AIG member companies provide a wide
range of property casualty insurance, life insurance, retirement
products, and other financial services to customers in more than 80
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 and the Tokyo 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 coverage is subject to 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 share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliations of Adjusted Pre-tax and After-tax Income (Loss)
|
|
|
|
Three Months Ended December 31,
|
|
|
|
2017
|
|
2016
|
|
|
|
Pre-tax
|
|
Tax Effect
|
|
After-tax
|
|
Pre-tax
|
|
Tax Effect
|
|
After-tax
|
Pre-tax income (loss)/net income (loss), including noncontrolling
interests
|
|
|
$
|
875
|
|
$
|
7,544
|
|
$
|
(6,673)
|
|
$
|
(3,455)
|
|
$
|
(985)
|
|
$
|
(2,485)
|
Noncontrolling interest
|
|
|
|
-
|
|
|
-
|
|
|
13
|
|
|
-
|
|
|
-
|
|
|
(556)
|
Pre-tax income (loss)/net income (loss) attributable to AIG
|
|
|
|
875
|
|
|
7,544
|
|
|
(6,660)
|
|
|
(3,455)
|
|
|
(985)
|
|
|
(3,041)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in uncertain tax positions and other tax adjustments
|
|
|
|
-
|
|
|
(461)
|
|
|
461
|
|
|
-
|
|
|
247
|
|
|
(247)
|
Deferred income tax valuation allowance charges
|
|
|
|
-
|
|
|
(66)
|
|
|
66
|
|
|
-
|
|
|
(87)
|
|
|
87
|
Impact of Tax Act
|
|
|
|
-
|
|
|
(6,687)
|
|
|
6,687
|
|
|
-
|
|
|
-
|
|
|
-
|
Changes in fair value of securities used to hedge
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
guaranteed living benefits
|
|
|
|
(29)
|
|
|
(10)
|
|
|
(19)
|
|
|
150
|
|
|
53
|
|
|
97
|
Changes in benefit reserves and DAC, VOBA and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SIA related to net realized capital gains (losses)
|
|
|
|
(108)
|
|
|
(38)
|
|
|
(70)
|
|
|
(286)
|
|
|
(100)
|
|
|
(186)
|
Unfavorable (favorable) prior year development and related
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
amortization changes ceded under retroactive reinsurance agreements
|
|
|
|
45
|
|
|
15
|
|
|
30
|
|
|
(27)
|
|
|
(10)
|
|
|
(17)
|
(Gain) loss on extinguishment of debt
|
|
|
|
(1)
|
|
|
(1)
|
|
|
-
|
|
|
(2)
|
|
|
-
|
|
|
(2)
|
Net realized capital losses
|
|
|
|
274
|
|
|
105
|
|
|
169
|
|
|
1,115
|
|
|
344
|
|
|
771
|
Noncontrolling interest on net realized capital losses
|
|
|
|
-
|
|
|
-
|
|
|
1
|
|
|
-
|
|
|
-
|
|
|
(21)
|
Loss from discontinued operations
|
|
|
|
-
|
|
|
-
|
|
|
3
|
|
|
-
|
|
|
-
|
|
|
36
|
Income from divested businesses
|
|
|
|
(241)
|
|
|
(82)
|
|
|
(159)
|
|
|
(194)
|
|
|
(186)
|
|
|
(8)
|
Non-operating litigation reserves and settlements
|
|
|
|
(43)
|
|
|
(15)
|
|
|
(28)
|
|
|
2
|
|
|
1
|
|
|
1
|
Net loss reserve discount (benefit) charge
|
|
|
|
(96)
|
|
|
(36)
|
|
|
(60)
|
|
|
(750)
|
|
|
(263)
|
|
|
(487)
|
Pension expense related to a one-time lump sum payment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to former employees
|
|
|
|
10
|
|
|
4
|
|
|
6
|
|
|
147
|
|
|
51
|
|
|
96
|
Restructuring and other costs
|
|
|
|
154
|
|
|
55
|
|
|
99
|
|
|
206
|
|
|
72
|
|
|
134
|
Adjusted pre-tax income (loss)/Adjusted after-tax income (loss)
|
|
|
$
|
840
|
|
$
|
327
|
|
$
|
526
|
|
$
|
(3,094)
|
|
$
|
(863)
|
|
$
|
(2,787)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended December 31,
|
|
|
|
2017
|
|
2016
|
|
|
|
Pre-tax
|
|
Tax Effect
|
|
After-tax
|
|
Pre-tax
|
|
Tax Effect
|
|
After-tax
|
Pre-tax income (loss)/net income (loss), including noncontrolling
interests
|
|
|
$
|
1,466
|
|
$
|
7,526
|
|
$
|
(6,063)
|
|
$
|
(74)
|
|
$
|
185
|
|
$
|
(288)
|
Noncontrolling interest
|
|
|
|
-
|
|
|
-
|
|
|
(21)
|
|
|
-
|
|
|
-
|
|
|
(561)
|
Pre-tax income (loss)/net income (loss) attributable to AIG
|
|
|
|
1,466
|
|
|
7,526
|
|
|
(6,084)
|
|
|
(74)
|
|
|
185
|
|
|
(849)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in uncertain tax positions and other tax adjustments
|
|
|
|
-
|
|
|
(488)
|
|
|
488
|
|
|
-
|
|
|
63
|
|
|
(63)
|
Deferred income tax valuation allowance charges
|
|
|
|
-
|
|
|
(43)
|
|
|
43
|
|
|
-
|
|
|
(83)
|
|
|
83
|
Impact of Tax Act
|
|
|
|
-
|
|
|
(6,687)
|
|
|
6,687
|
|
|
-
|
|
|
-
|
|
|
-
|
Changes in fair value of securities used to hedge
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
guaranteed living benefits
|
|
|
|
(146)
|
|
|
(51)
|
|
|
(95)
|
|
|
(120)
|
|
|
(42)
|
|
|
(78)
|
Changes in benefit reserves and DAC, VOBA and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SIA related to net realized capital gains (losses)
|
|
|
|
(303)
|
|
|
(106)
|
|
|
(197)
|
|
|
(195)
|
|
|
(68)
|
|
|
(127)
|
Unfavorable (favorable) prior year development and related
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
amortization changes ceded under retroactive reinsurance agreements
|
|
|
|
303
|
|
|
106
|
|
|
197
|
|
|
(42)
|
|
|
(15)
|
|
|
(27)
|
(Gain) loss on extinguishment of debt
|
|
|
|
(5)
|
|
|
(2)
|
|
|
(3)
|
|
|
74
|
|
|
26
|
|
|
48
|
Net realized capital losses
|
|
|
|
1,380
|
|
|
506
|
|
|
874
|
|
|
1,944
|
|
|
561
|
|
|
1,383
|
Noncontrolling interest on net realized capital losses
|
|
|
|
-
|
|
|
-
|
|
|
7
|
|
|
-
|
|
|
-
|
|
|
(61)
|
(Income) loss from discontinued operations
|
|
|
|
-
|
|
|
-
|
|
|
(4)
|
|
|
-
|
|
|
-
|
|
|
90
|
Income from divested businesses
|
|
|
|
(68)
|
|
|
(41)
|
|
|
(27)
|
|
|
(545)
|
|
|
(309)
|
|
|
(236)
|
Non-operating litigation reserves and settlements
|
|
|
|
(129)
|
|
|
(45)
|
|
|
(84)
|
|
|
(41)
|
|
|
(14)
|
|
|
(27)
|
Net loss reserve discount (benefit) charge
|
|
|
|
187
|
|
|
65
|
|
|
122
|
|
|
(427)
|
|
|
(150)
|
|
|
(277)
|
Pension expense related to a one-time lump sum payment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to former employees
|
|
|
|
60
|
|
|
21
|
|
|
39
|
|
|
147
|
|
|
51
|
|
|
96
|
Restructuring and other costs
|
|
|
|
413
|
|
|
145
|
|
|
268
|
|
|
694
|
|
|
243
|
|
|
451
|
Adjusted pre-tax income/Adjusted after-tax income
|
|
|
$
|
3,158
|
|
$
|
906
|
|
$
|
2,231
|
|
$
|
1,415
|
|
$
|
448
|
|
$
|
406
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
American International Group, Inc.
|
Selected Financial Data and Non-GAAP Reconciliation (continued)
|
($ in millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of Key Financial Metrics
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Twelve Months Ended December 31,
|
|
|
|
|
|
|
|
|
|
% Inc.
|
|
|
|
|
|
|
|
% Inc.
|
|
|
|
2017
|
|
2016
|
|
(Dec.)
|
|
2017
|
|
2016
|
|
(Dec.)
|
Income (loss) per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
loss from continuing operations
|
|
|
$
|
(7.33)
|
|
$
|
(2.93)
|
|
(150.2)
|
%
|
|
$
|
(6.54)
|
|
$
|
(0.70)
|
|
NM
|
%
|
Loss from discontinued operations
|
|
|
|
-
|
|
|
(0.03)
|
|
NM
|
|
|
|
-
|
|
|
(0.08)
|
|
NM
|
|
Net loss attributable to AIG
|
|
|
$
|
(7.33)
|
|
$
|
(2.96)
|
|
(147.6)
|
|
|
$
|
(6.54)
|
|
$
|
(0.78)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
loss from continuing operations
|
|
|
$
|
(7.33)
|
|
$
|
(2.93)
|
|
(150.2)
|
|
|
$
|
(6.54)
|
|
$
|
(0.70)
|
|
NM
|
|
Loss from discontinued operations
|
|
|
|
-
|
|
|
(0.03)
|
|
NM
|
|
|
|
-
|
|
|
(0.08)
|
|
NM
|
|
Net loss attributable to AIG
|
|
|
$
|
(7.33)
|
|
$
|
(2.96)
|
|
(147.6)
|
|
|
$
|
(6.54)
|
|
$
|
(0.78)
|
|
NM
|
|
Adjusted after-tax income (loss) attributable to AIG per diluted
share (a)
|
|
|
$
|
0.57
|
|
$
|
(2.72)
|
|
NM
|
%
|
|
$
|
2.34
|
|
$
|
0.36
|
|
NM
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
908.1
|
|
|
1,023.9
|
|
|
|
|
|
930.6
|
|
|
1,091.1
|
|
|
|
Diluted (a)(b)
|
|
|
|
908.1
|
|
|
1,023.9
|
|
|
|
|
|
930.6
|
|
|
1,091.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on equity (c)
|
|
|
|
(38.7)
|
|
%
|
(14.7)
|
|
%
|
|
|
|
(8.4)
|
|
%
|
(1.0)
|
|
%
|
|
Adjusted return on equity (d)
|
|
|
|
4.2
|
|
%
|
(18.2)
|
|
%
|
|
|
|
4.1
|
|
%
|
0.6
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of period end:
|
|
|
December 31, 2017
|
|
December 31, 2016
|
Total AIG shareholders' equity
|
|
|
$
|
65,171
|
|
$
|
76,300
|
Accumulated other comprehensive income (AOCI)
|
|
|
|
5,465
|
|
|
3,230
|
Total AIG shareholders' equity, excluding AOCI
|
|
|
|
59,706
|
|
|
73,070
|
|
|
|
|
|
|
|
|
Deferred tax assets
|
|
|
|
10,492
|
|
|
14,770
|
Total adjusted AIG shareholders' equity
|
|
|
$
|
49,214
|
|
$
|
58,300
|
|
|
|
|
|
|
|
|
As of period end:
|
|
|
December 31, 2017
|
|
December 31, 2016
|
|
% Inc. (Dec.)
|
Book value per common share (e)
|
|
|
$
|
72.49
|
|
$
|
76.66
|
|
(5.4)
|
%
|
Book value per common share, excluding AOCI (f)
|
|
|
$
|
66.41
|
|
$
|
73.41
|
|
(9.5)
|
|
Adjusted book value per common share (g)
|
|
|
$
|
54.74
|
|
$
|
58.57
|
|
(6.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total common shares outstanding
|
|
|
|
899.0
|
|
|
995.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial highlights - notes
|
|
(a) For the quarters ended December 31, 2017 and 2016, because we
reported net losses and for the quarter ended December 31, 2016,
because we reported an adjusted after-tax loss, all common stock
equivalents are anti-dilutive and are therefore excluded from the
calculation of diluted shares and diluted per share amounts, and for
the twelve months ended December 31, 2017 and 2016, because we
reported net losses, all common stock equivalents are anti-dilutive
and are therefore excluded from the calculation of diluted shares
and diluted per share amounts. We reported an adjusted after-tax
income for the three months ended December 31, 2017, and years ended
December 31, 2017 and 2016; therefore, we reported earnings per
share on diluted basis. For the three months ended December 31, 2017
and years ended December 31, 2017 and 2016, the weighted average
outstanding shares - diluted includes 20,155,385, 22,412,682 and
30,326,772 dilutive shares, respectively.
|
(b) Diluted shares in the diluted EPS calculation represent basic
shares for the three months ended December 31, 2017 and 2016 and
twelve months ended December 31, 2017 and 2016 due to the net loss
in that period.
|
(c) Computed as Annualized net income (loss) attributable to AIG
divided by average AIG shareholders' equity. Equity includes AOCI
and DTA.
|
(d) Computed as Annualized Adjusted after-tax Income attributable to
AIG divided by Adjusted Shareholders' Equity.
|
(e) Represents total AIG shareholders' equity divided by Total
common shares outstanding.
|
(f) Represents total AIG shareholders' equity, excluding AOCI,
divided by Total common shares outstanding.
|
(g) Represents Adjusted Shareholders' Equity, divided by Total
common shares outstanding.
|
|
|
American International Group, Inc.
|
Selected Financial Data and Non-GAAP Reconciliation
|
($ in millions, except per share amounts)
|
|
Reconciliations of Core Adjusted Return on Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
December 31,
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
Adjusted pre-tax income (loss)
|
|
|
$
|
429
|
|
$
|
(4,195)
|
|
Interest expense (benefit) on attributed financial debt
|
|
|
|
(31)
|
|
|
(45)
|
|
Adjusted pre-tax income (loss) including attributed interest
expenses
|
|
|
|
460
|
|
|
(4,150)
|
|
Income tax expense (benefit)
|
|
|
|
198
|
|
|
(1,265)
|
|
Adjusted after-tax income (loss)
|
|
|
|
262
|
|
|
(2,885)
|
|
|
|
|
|
|
|
|
|
|
Ending adjusted attributed equity
|
|
|
$
|
39,931
|
|
$
|
47,651
|
|
Average adjusted attributed equity
|
|
|
$
|
40,841
|
|
$
|
50,302
|
|
Adjusted return on attributed equity
|
|
|
|
2.6
|
%
|
|
(22.9)
|
%
|
|
|
|
|
|
|
|
|
|
|
Reconciliations of Accident Year Loss Ratio, as Adjusted and
Combined Ratio, as Adjusted
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended
|
|
|
|
December 31,
|
|
|
|
2017
|
|
2016
|
Total General Insurance
|
|
|
|
|
|
Loss ratio
|
|
|
83.2
|
|
84.8
|
Catastrophe losses and reinstatement premiums
|
|
|
(16.1)
|
|
(4.4)
|
Prior year development
|
|
|
(4.0)
|
|
(18.5)
|
Adjustment for ceded premium under reinsurance contract
|
|
|
(0.1)
|
|
-
|
Accident year loss ratio, as adjusted
|
|
|
63.0
|
|
61.9
|
|
|
|
|
|
|
Combined ratio
|
|
|
117.3
|
|
118.9
|
Catastrophe losses and reinstatement premiums
|
|
|
(16.1)
|
|
(4.4)
|
Prior year development
|
|
|
(4.0)
|
|
(18.5)
|
Adjustment for ceded premium under reinsurance contract
|
|
|
(0.1)
|
|
-
|
Accident year combined ratio, as adjusted
|
|
|
97.1
|
|
96.0
|
|
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20180208006390/en/
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