10-QPeriod: Q1 FY2003

AMERICAN INTERNATIONAL GROUP, INC. Quarterly Report for Q1 Ended Mar 31, 2003

Filed May 14, 2003For Securities:AIG

Summary

AMERICAN INTERNATIONAL GROUP, INC. (AIG) reported its first quarter 2003 results, showing a slight decrease in net income to $1.95 billion ($0.74 diluted EPS) from $1.98 billion ($0.75 diluted EPS) in the prior year quarter. Despite a 17.3% increase in total revenues to $18.9 billion, driven by strong premium growth in general and life insurance, net income was impacted by significant realized capital losses of $632 million, compared to $232 million in the first quarter of 2002. Excluding these realized capital losses, net income increased by 11.1%, indicating underlying operational strength across its diversified business segments. The General Insurance segment demonstrated robust growth, with operating income up 22.6% (excluding realized capital gains/losses). Life Insurance also showed resilience, with operating income up 13.6% excluding capital items. Financial Services continued its positive trajectory with an 11.9% increase in operating income. The company maintained a strong capital position with total capital funds of $62.3 billion and total borrowings of $74.4 billion.

Key Highlights

  • 1Total revenues increased by 17.3% to $18.9 billion, primarily driven by growth in general and life insurance premiums.
  • 2Net income slightly decreased by 1.4% to $1.95 billion, primarily due to higher realized capital losses.
  • 3Excluding realized capital losses, net income increased by 11.1% to $2.37 billion, highlighting underlying operational strength.
  • 4General Insurance segment operating income grew 22.6% (excluding realized capital losses), driven by strong underwriting profit.
  • 5Life Insurance operating income increased 13.6% (excluding realized capital losses), showcasing stable performance.
  • 6Financial Services segment operating income saw an 11.9% increase, reflecting continued growth across its operations.
  • 7The company maintained a strong capital position with $62.3 billion in total capital funds as of March 31, 2003.

Frequently Asked Questions

AIG reported a net income of $1.95 billion, or $0.74 per diluted share, for the first quarter of 2003. This compares to a net income of $1.98 billion, or $0.75 per diluted share, for the same period in 2002.

Total revenues increased by 17.3% to $18.9 billion. This growth was primarily driven by an increase in net premiums earned from AIG's global general and life insurance operations.

AIG incurred significant realized capital losses of $632 million in the first quarter of 2003, a substantial increase from $232 million in the prior year period. These losses negatively impacted net income. However, excluding these realized capital losses, AIG's net income showed an increase of 11.1%, indicating underlying operational strength.

The General Insurance segment showed a 22.6% increase in operating income (excluding realized capital losses), driven by strong underwriting profit. The Life Insurance segment reported a 13.6% increase in operating income (excluding realized capital losses), and the Financial Services segment saw an 11.9% increase in operating income, demonstrating consistent performance across its diverse operations.