AIG Reports Fourth Quarter and Full Year 2019 Results

Brian Duperreault said: “Our financial results for the fourth quarter and for full year 2019 reflect the significant progress we made over the course of 2019 to position AIG for long-term, sustainable and profitable growth...

American International Group, Inc. (NYSE: AIG) today reported net income attributable to AIG common shareholders of $922 million, or $1.03 per diluted common share, for the fourth quarter of 2019, compared to a net loss attributable to AIG common shareholders of $622 million, or $0.70 per common share, in the prior-year quarter. The improvement was primarily due to the favorable impact of General Insurance underwriting and reinsurance actions, favorable net prior year loss reserve development of $153 million (pre-tax) compared to unfavorable net prior year loss reserve development of $365 million (pre-tax) in the prior-year quarter, a reduction in pre-tax net catastrophe losses of $385 million compared to the prior-year quarter, and an increase of $833 million (pre-tax) in net investment income compared to the prior-year quarter. Adjusted after-tax income attributable to AIG common shareholders was $919 million, or $1.03 per diluted common share, for the fourth quarter of 2019, compared to an adjusted after-tax loss attributable to AIG common shareholders of $559 million, or $0.63 per common share, in the prior-year quarter. The improvement was primarily due to the favorable impact of General Insurance underwriting and reinsurance actions, lower catastrophe losses and an increase in net investment income compared to the prior-year quarter.

For the full year of 2019, net income attributable to AIG common shareholders was $3.3 billion, or $3.74 per diluted common share, compared to a net loss attributable to AIG common shareholders of $6 million, or $0.01 per common share, in the prior year. The improvement was primarily due to a reduction in net catastrophe losses of $1.7 billion (pre-tax) compared to the prior year; the favorable impact of General Insurance underwriting and reinsurance actions; and an increase in net investment income of $2.1 billion (pre-tax) primarily reflecting asset growth, an increase in alternative returns, and the impact of lower interest rates on fair value option on fixed maturity securities compared to the prior year. Adjusted after-tax income attributable to AIG common shareholders was $4.1 billion, or $4.59 per diluted common share, for the full year of 2019, compared to $1.1 billion, or $1.17 per diluted common share, in the prior year. The improvement was primarily due to lower catastrophe losses, favorable net prior year loss reserve development compared to unfavorable net prior year loss reserve development in the prior year, and higher net investment income.

Brian Duperreault, AIG’s Chief Executive Officer, said: “Our financial results for the fourth quarter and for full year 2019 reflect the significant progress we made over the course of 2019 to position AIG for long-term, sustainable and profitable growth. For the full year 2019, after-tax income attributable to common shareholders was $4.1 billion, or $4.59 per diluted share, and Adjusted ROCE was 8.3%. The improvement in our financial performance over the course of last year was broad-based, with contributions from all of our segments, but most notable was the return to underwriting profitability in General Insurance. The full year combined ratio was 99.6% and the accident year combined ratio, as adjusted, was 96.0%. Life & Retirement also delivered solid results in the face of continued headwinds from low interest rates and tightening credit spreads. Finally, we were pleased to announce that we reached an agreement to sell a majority stake in Fortitude Re, our legacy insurance business, which is scheduled to close mid-year, subject to regulatory approvals.

“As we look to 2020, we will continue to be laser focused on executing on our strategy to position AIG as both a leading insurance franchise and a top-performing company and we remain committed to achieving a 10% Adjusted ROCE by the end of 2021. In addition to continued work as part of the turnaround of General Insurance, AIG 200 will be a top priority. AIG 200 is our multi-year, enterprise-wide transformation program focused on the long-term strategic positioning of AIG and designed to achieve operational excellence. I remain confident we are on the right path at AIG and am very proud of what our colleagues accomplished since I joined the company in 2017. We entered 2020 with great momentum and excitement about what the future holds for AIG,” Mr. Duperreault added.

FINANCIAL SUMMARY

(a) For periods reporting a loss, basic average common shares outstanding are used to calculate net income (loss) per diluted share attributable to AIG common shareholders. Diluted shares represent basic shares for the three-month period ended December 31, 2018 because we reported a net loss and an adjusted after-tax loss attributable to AIG common shareholders from continuing operations in that period.

All comparisons are against the fourth quarter of 2018, unless otherwise indicated. Refer to the AIG Fourth Quarter 2019 Financial Supplement, which is posted on AIG's website in the Investors section, for further information.

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