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AIG Reports Fourth Quarter and Full Year 2021 Results

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Topics: Financial Results

General Insurance net premiums written grew 7% in the fourth quarter of 2021 compared to the prior year quarter and 13% for the full year driven by Global Commercial Lines growth of 13% in the fourth quarter and 18% for the full year...

  • General Insurance combined ratio in the fourth quarter of 2021 improved by 10.4 points from the prior year quarter to 92.4% and, on an as adjusted* basis, improved by 3.1 points to 89.8%
  • Net income per diluted common share in the fourth quarter of 2021 was $4.38, compared to a net loss per common share of $0.07 in the prior year quarter, and adjusted after-tax income* (AATI) per diluted common share was $1.58, an increase of 68% from $0.94 in the prior year quarter
  • $10.7 billion of AIG Parent liquidity at year end 2021
  • Repurchased $1 billion of AIG common stock and $1 billion used towards debt reduction in the fourth quarter of 2021; for the full year, reduced debt by $4 billion and returned $3.7 billion to shareholders through $2.6 billion of AIG common stock repurchases and $1.1 billion of dividends
  • Book value and adjusted tangible book value* per common share increased 5% and 23%, respectively, from the prior year; up 4% and 12%, respectively, from September 30, 2021

FOURTH QUARTER NOTEWORTHY ITEMS

  • General Insurance adjusted pre-tax income (APTI) of $1.5 billion reflects strong underwriting results; the combined ratio was 92.4, a 10.4 point improvement from the prior year quarter primarily due to strong underwriting results across the portfolio, including lower catastrophe (CATs) losses, net of reinsurance.
  • Life and Retirement APTI of $969 million reflects higher fee income, more than offset by lower net investment income and unfavorable mortality; Life and Retirement return on adjusted segment common equity* for the fourth quarter was 13.7%, on an annualized basis.
  • Net income attributable to AIG common shareholders was $3.7 billion, or $4.38 per diluted common share, compared to a net loss of $60 million, or $0.07 per common share, in the prior year quarter.
  • AATI was $1.3 billion, or $1.58 per diluted common share, compared to $827 million, or $0.94 per diluted common share, in the prior year quarter due to strong underwriting performance in General Insurance.
  • Total debt and preferred stock to total capital was 24.6% at December 31, 2021 down from 26.1% at September 30, 2021.
  • As of December 31, 2021, book value per common share was $79.97, an increase of 5% from December 31, 2020. Adjusted book value per common share* was $68.83, an increase of 21% from December 31, 2020. Adjusted tangible book value per share was $62.82, an increase of 23% from December 31, 2020.
  • Return on common equity (ROCE) and Adjusted ROCE* were 23.0% and 9.9%, respectively, on an annualized basis for the fourth quarter of 2021.

* 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.

 

AIG Chairman & CEO Peter Zaffino said: “In the fourth quarter and full year 2021, AIG delivered outstanding financial results with General Insurance continuing to produce improved underwriting profitability through excellent top line growth and vastly reduced volatility due to gross limit reductions and the strategic use of reinsurance, and Life and Retirement again making a meaningful contribution to our overall results. We ended the year with parent liquidity of $10.7 billion.

“The quality of these outcomes is due to our global colleagues’ hard work, dedication and commitment to excellence in everything we do.

“General Insurance succeeded in producing more consistent underwriting results while achieving 13% net premiums written growth for the full year with 18% growth in Commercial Lines. The business reported an underwriting profit for full year 2021 and for every quarter of the year, due to disciplined execution and volatility reduction in an environment of ever-increasing natural catastrophe risk. The accident year combined ratio, as adjusted, in the fourth quarter was 89.8%. For the full year, the accident year combined ratio, as adjusted, was 91.0%, driven by Global Commercial, which was 89.1%.

“Life and Retirement delivered another solid quarter due to its diversified business, increased annuity sales and the favorable impact of equity markets on both the investment portfolio and fee income. APTI increased 10.8% in the full year and return on adjusted segment common equity remained strong at 14.2%.

“Since announcing our intent to separate Life and Retirement from AIG, we have made significant progress in preparing the business to be an independent, standalone company, including closing on the sale of a 9.9% equity stake to Blackstone in November 2021.

“Over the course of 2021, we reduced debt and preferred stock leverage by 380 basis points to 24.6% by repurchasing $4 billion of debt, and we returned $3.7 billion to shareholders through common stock repurchases and dividends.

“AIG entered 2022 better, stronger, and well positioned to continue to deliver value to all stakeholders as we continue our journey to be a top performing company.”

 

Full release here

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