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AMERICAN INTERNATIONAL GROUP, INC. Annual Report, Year Ended Dec 31, 2020

Filing Date
Filed February 19, 2021
Period End
December 31, 2020
Security
AIG
In the record · 2016–202610-K1210-Q328-K214

AIG filed 12 annual reports (10-K), 32 quarterly reports (10-Q) and 214 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Jun ’17Jun ’17
  2. Material agreement8-K · Dec ’19Dec ’19
  3. Leadership change8-K · Jan ’23Jan ’23
  4. Leadership change8-K · Sep ’26Sep ’26

01—Abstract

Summary

Summary of the 10-K filed February 19, 2021. Cited figures are marked; the original filing is the authoritative source.

American International Group, Inc. (AIG) reported a net loss attributable to common shareholders of $5.97 billiona for the year ended December 31, 2020, a significant shift from a net income of $3.33 billion in 2019.

This decline was primarily driven by higher catastrophe losses in General Insurance, impacted by COVID-19 and other events, as well as unfavorable impacts from COVID-19 mortality in Life and Retirement. Lower investment returns due to yield compression and widening credit spreads also contributed to the loss. The company announced its intention to separate its Life and Retirement business in October 2020, a strategic move aimed at maximizing shareholder value by establishing two market-leading companies.

Despite the net loss, AIG highlighted continued underwriting discipline and expense management as key drivers for ongoing improvement. The company maintained strong capitalization with $66.36 billionb in shareholders' equity as of December 31, 2020, and had $15.0 billion in liquidity sources, demonstrating financial flexibility. The General Insurance segment experienced an underwriting loss of $1.02 billion in 2020, compared to an underwriting income of $89 million in 2019, with North America's underwriting loss increasing significantly due to higher catastrophe losses.

The Life and Retirement segment reported adjusted pre-tax income of $3.53 billionc, largely stable compared to the prior year, showcasing resilience in its diverse product portfolio. The company's priorities for 2021 include the separation of the Life and Retirement business, focusing on business mix and targeted growth, underwriting excellence, and optimizing risk management.

02—Key points

Key Highlights

  1. Reported a net loss of $5.97 billion for 2020, a significant decline from a net income of $3.33 billion in 2019, primarily due to higher catastrophe losses and lower investment returns.
  2. Announced its intention to separate its Life and Retirement business, aiming to create two stronger, market-leading companies.
  3. General Insurance segment incurred an underwriting loss of $1.02 billion in 2020, a reversal from an underwriting income in 2019, with North America's underwriting loss widening.
  4. Life and Retirement segment showed resilience, with adjusted pre-tax income remaining stable at $3.53 billion in 2020 compared to $3.55 billion in 2019.
  5. Maintained strong financial footing with $66.36 billion in shareholders' equity and $15.0 billion in AIG Parent liquidity sources as of December 31, 2020.
  6. Prioritized underwriting excellence, disciplined pricing, and strategic reinsurance optimization as key initiatives for the General Insurance segment.
  7. Navigated the impacts of COVID-19 by managing claim activities and assessing adverse impacts on new and renewal business, particularly within the Travel line of business.

03—One dollar

04—Financials

Financial Highlights

Figures from 10-KFY2020filed February 19, 2021
Revenue$43.74BNet Income-$5.94B-13.6% Net MarginEPS (Diluted)$-6.88Total Assets$586.48BCash & Equivalents$2.83BFree Cash Flow$1.04B

Financial Statements

FY2020 against FY2019

Line itemFY2020FY2019Change
Revenue$43.74B$49.75B−12.1%
SG&A Expenses$8.40B$8.54B−1.7%
Operating Income-$5.98B$3.28B−282.3%
Interest Expense$1.46B$1.42B+2.8%
Net Income-$5.94B$3.35B−277.5%
EPS (Basic)$-6.88$3.79−281.5%
EPS (Diluted)$-6.88$3.74−284.0%
Shares Outstanding (Basic)869.31M876.75M−0.8%
Shares Outstanding (Diluted)869.31M889.51M−2.3%

05—Questions

Frequently Asked Questions

  1. What was AIG's overall financial performance in 2020?

    In 2020, AIG reported a net loss attributable to common shareholders of $5.97 billion, a substantial decrease from the net income of $3.33 billion reported in 2019. This was primarily due to higher catastrophe losses, including COVID-19 impacts, and lower investment returns.

  2. What is AIG's strategic direction for its Life and Retirement business?

    AIG announced its intention to separate its Life and Retirement business from the company. This strategic move is aimed at maximizing shareholder value by establishing two strong, market-leading companies. The separation process is ongoing and subject to various conditions and approvals.

  3. How did the General Insurance segment perform in 2020?

    The General Insurance segment experienced an underwriting loss of $1.02 billion in 2020, a reversal from the underwriting income of $89 million in 2019. This was largely driven by higher catastrophe losses, particularly in North America, impacted by COVID-19, wildfires, civil unrest, and other events.

  4. Did AIG's liquidity and capital position change significantly in 2020?

    AIG maintained a strong financial position, with shareholders' equity of $66.36 billion as of December 31, 2020. AIG Parent had $15.0 billion in liquidity sources, including cash, short-term investments, and a committed revolving credit facility, indicating continued financial flexibility.

06—Continue

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