01—Abstract
Summary
Summary of the 10-K filed February 21, 2020. Cited figures are marked; the original filing is the authoritative source.
In 2019, American International Group, Inc. (AIG) demonstrated a significant turnaround, achieving full-year underwriting profitability in its General Insurance segment with a combined ratio of 99.6%a, an improvement from 111.4% in 2018.
The Life and Retirement segment continued to deliver solid returns, with adjusted pre-tax income rising to $3.5 billionb from $3.2 billion in the prior year. Key financial highlights include a consolidated net income attributable to AIG common shareholders of $3.3 billion, a substantial improvement from a net loss in the prior year. The company also announced an agreement to sell a controlling financial interest in Fortitude Group Holdings, LLC, the reinsurer of its legacy portfolio, anticipating closure in mid-2020, which is expected to further strengthen its financial position.
The company's strategic priorities for 2020 focus on building on its momentum through business mix optimization, targeted growth, and continued execution of efficiency initiatives under its AIG 200 program. AIG remains committed to underwriting excellence, disciplined capital management, and fostering leadership and talent within the organization.
02—Key points
Key Highlights
- Achieved calendar year underwriting profitability in General Insurance with a combined ratio of 99.6% in 2019, down from 111.4% in 2018.
- Life and Retirement segment delivered solid returns with adjusted pre-tax income of $3.5 billion in 2019, up from $3.2 billion in 2018.
- Reported a net income attributable to AIG common shareholders of $3.3 billion in 2019, a significant improvement from a net loss in 2018.
- Announced agreement to sell a controlling financial interest in Fortitude Group Holdings, LLC (reinsurer of legacy portfolio), expected to close mid-2020.
- Consolidated Net Investment Income increased to $14.6 billion in 2019 from $12.5 billion in 2018.
- AIG 200 efficiency initiatives are underway to modernize operations and enhance customer experiences.
- Shareholders' equity stood at over $65 billion, with AIG Parent liquidity sources of $12.1 billion as of December 31, 2019.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2019filed February 21, 2020Financial Statements
FY2019 against FY2018
| Line item | FY2019FY2018 | Change |
|---|---|---|
| Revenue | $49.75B$47.39B | +5.0% |
| SG&A Expenses | $8.54B$9.30B | −8.2% |
| Operating Income | $3.28B$36.00M | +9005.6% |
| Interest Expense | $1.42B$1.31B | +8.3% |
| Net Income | $3.35B-$6.00M | +55900.0% |
| EPS (Basic) | $3.79$-0.01 | +38000.0% |
| EPS (Diluted) | $3.74$-0.01 | +37500.0% |
| Shares Outstanding (Basic) | 876.75M898.41M | −2.4% |
| Shares Outstanding (Diluted) | 889.51M910.14M | −2.3% |
05—Questions
Frequently Asked Questions
What was AIG's underwriting performance in the General Insurance segment for 2019?
In 2019, AIG's General Insurance segment achieved calendar year underwriting profitability, with a combined ratio of 99.6%, marking a significant improvement from 111.4% in 2018. This was driven by underwriting actions to strengthen the portfolio and maintain pricing, reinsurance, and expense discipline.
How did the Life and Retirement segment perform in 2019?
The Life and Retirement segment continued to deliver solid returns in 2019, with adjusted pre-tax income of $3.5 billion, up from $3.2 billion in 2018. This performance was attributed to the ongoing strategy of leveraging its broad product portfolio and diverse distribution network to meet customer needs.
What significant divestiture or sale did AIG announce in 2019?
On November 25, 2019, AIG announced an agreement to sell a controlling financial interest in Fortitude Group Holdings, LLC, the reinsurer of the majority of AIG’s Legacy Portfolio. The closing of this transaction is anticipated in mid-2020, subject to regulatory approvals and customary closing conditions.
What are AIG's key strategic priorities for 2020?
AIG's 2020 priorities include optimizing its business mix and targeting growth, executing multi-year efficiency initiatives under the AIG 200 program to support underwriting excellence and modernize its operating infrastructure, focusing on underwriting excellence through disciplined risk selection, prudent capital management for long-term shareholder value creation, developing leadership and talent, and effective risk management.
06—Continue