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AIG Reports Q1 2022 Results

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Topics: Financial Results

Significant progress on Life and Retirement separation from AIG, with key steps taken toward the establishment of a standalone capital structure, public filing of the S-1 registration statement, Corebridge Financial, Inc. (Corebridge) brand debut and strong independent additions to the Corebridge Board of Directors...

  • Announced asset management relationship with BlackRock to manage up to $150 billion of liquid assets for AIG and Corebridge
  • General Insurance combined ratio of 92.9% improved by 5.9 points from the prior year quarter
  • General Insurance adjusted* accident year combined ratio of 89.5% improved by 2.9 points from the prior year quarter
  • Net income per diluted common share was $5.15 compared to $4.41 in the prior year quarter
  • Adjusted after-tax income* (AATI) per diluted common share increased 24% to $1.30 from $1.05 in the prior year quarter, driven by a $373 million increase in General Insurance underwriting income
  • Repurchased $1.4 billion of AIG common stock in the first quarter of 2022
  • AIG Board of Directors increased the share repurchase authorization to $6.5 billion
  • $9.1 billion of AIG Parent liquidity at March 31, 2022

FIRST QUARTER NOTEWORTHY ITEMS

  • General Insurance adjusted pre-tax income (APTI) of $1.2 billion reflects a $373 million increase in underwriting income from the prior year quarter as a result of strong combined ratio improvement, including significantly lower catastrophe losses (CATs), higher earned premiums along with continued rate improvement, focused risk selection and improved terms and conditions.
  • Life and Retirement APTI of $724 million reflects lower net investment income due in large part to lower yield enhancements, partially offset by slightly lower mortality compared to the prior year quarter; Life and Retirement return on adjusted segment common equity* (Adjusted ROCE) for the first quarter was 10.0% on an annualized basis; premiums and deposits* increased 13.5%, primarily driven by higher interest rates.
  • Return on common equity (ROCE) and Adjusted ROCE* were 28.1% and 7.6%, respectively, on an annualized basis for the first 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 & Chief Executive Officer Peter Zaffino said: “In the first quarter of 2022, AIG delivered excellent results, while simultaneously advancing a number of strategic, operational and financial priorities. I am very pleased with the progress we achieved, including meaningful improvement in underwriting profitability in General Insurance, continued solid performance from Life and Retirement, significant progress on the separation of Life and Retirement from AIG, along with accelerated capital management actions.

“General Insurance continues to generate top line growth while driving sustainable underwriting improvement and expense discipline in both the combined ratio and the adjusted accident year combined ratio, which improved 590 and 290 basis points, respectively, year over year to 92.9% and 89.5%. We are compounding margin improvement over a multi-year period having improved the combined ratio and adjusted accident year combined ratio by 860 and 600 basis points over the prior two years.

“Commercial net premiums written grew 8% on a constant dollar basis with 10% foreign exchange adjusted growth in International and 6% in North America. Growth across Global Commercial Lines benefitted from over $1 billion of new business for the fourth consecutive quarter, strong retention of 86% globally and 9% rate increases (10% excluding workers’ compensation), which continue to exceed loss cost trends.

“Life and Retirement’s diversified business withstood significant market volatility and reported an adjusted segment return on common equity of 10.0%. Premiums and deposits increased 13.5%, driven by strong fixed annuity sales that benefitted from the added origination capabilities from our strategic partnership with Blackstone.

“Additionally, we made significant progress since the beginning of the year to prepare the Life and Retirement business to be a standalone, public company. We publicly filed an S-1 registration statement with the U.S. Securities and Exchange Commission, we executed a $6.5 billion senior notes offering by Life and Retirement helping to establish the target standalone capital structure and we announced an arrangement with BlackRock relating to the management of up to an aggregate of $150 billion of liquid assets for AIG and Life and Retirement.

“Given our strong balance sheet and liquidity, the AIG Board of Directors increased the share repurchase authorization to $6.5 billion of AIG Common Stock, inclusive of any remaining amounts under the prior authorization. In the first quarter, we returned $1.7 billion to shareholders through $1.4 billion of AIG common stock repurchases and $265 million of dividends, and we ended the quarter with $9.1 billion of parent liquidity.

“We also announced a commitment to achieve net zero greenhouse gas emissions across our global underwriting and investment portfolios by 2050, or sooner. We believe our ESG commitments are an important step forward for AIG, the clients we serve and the global communities where we live and work.

“I am extremely proud of the outstanding work from our global colleagues and the value we continue to deliver for our clients, distribution partners, shareholders and other stakeholders as we continue our journey to be a top performing company.”

 

Full Release here

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