10-Q/APeriod: Q1 FY2003

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

Filed July 18, 2003For Securities:AIG

Summary

This filing is an amendment to AMERICAN INTERNATIONAL GROUP, INC.'s (AIG) Form 10-Q for the quarter ended March 31, 2003. The primary purpose of the amendment is to remove non-GAAP measures, specifically excluding realized capital gains (losses) and references to "Life Premium Income" that were presented as non-GAAP. The report details AIG's financial performance, with total revenues of $18.9 billion for the first quarter of 2003, a 17.3% increase compared to the same period in 2002. Net income slightly decreased by 1.4% to $1.95 billion. The General Insurance segment showed strong operating income growth, while Life Insurance operating income saw a decrease, largely due to realized capital losses. Financial Services operating income increased, benefiting from growth across its main operations. The company maintained a strong capital position with total capital funds of $62.26 billion and total borrowings of $74.37 billion.

Key Highlights

  • 1Total revenues increased by 17.3% to $18.9 billion for Q1 2003, compared to $16.1 billion in Q1 2002, driven by growth in general insurance operations.
  • 2Net income slightly decreased by 1.4% to $1.95 billion for Q1 2003, compared to $1.98 billion in Q1 2002.
  • 3General Insurance operating income increased by 22.6% to $1.14 billion, attributed to strong underwriting profit and rate increases in the commercial P&C market.
  • 4Life Insurance operating income decreased by 9.9% to $1.19 billion, impacted by significant realized capital losses of $345 million in Q1 2003 compared to $29 million in Q1 2002.
  • 5Financial Services operating income rose by 11.9% to $530 million, reflecting continued growth in its principal operations, particularly International Lease Finance Corporation (ILFC).
  • 6AIG maintained a robust balance sheet with total capital funds of $62.26 billion and total borrowings of $74.37 billion as of March 31, 2003.
  • 7The company is actively managing its market risk through various hedging strategies and robust risk management frameworks across its diverse business segments.

Frequently Asked Questions

This amended 10-Q was filed solely to remove non-GAAP measures, specifically excluding realized capital gains (losses) and references to 'Life Premium Income' that were previously presented as non-GAAP.

The General Insurance segment showed strong performance with operating income increasing by 22.6% to $1.14 billion. However, the Life Insurance segment's operating income decreased by 9.9% to $1.19 billion, significantly impacted by realized capital losses.

AIG demonstrated a strong financial position. Total revenues grew, and while net income saw a slight decrease, it remained robust at $1.95 billion. The company maintained substantial capital funds of $62.26 billion, indicating a solid capital base.

AIG anticipates continued premium rate strengthening in General Insurance, which should positively impact cash flow. In Life Insurance, continued growth is expected, particularly in overseas markets. Financial Services, especially ILFC and consumer finance, is expected to grow despite airline industry stress. The company also noted that the outbreak of SARS had a slight impact on operations, primarily in certain Asian markets, but expected only a slight overall impact on operating income.