AMERICAN INTERNATIONAL GROUP, INC. Quarterly Report for Q1 Ended Mar 31, 2014

Summary

For the first quarter of 2014, American International Group, Inc. (AIG) reported a decrease in net income attributable to AIG to $1.61 billion ($1.09 per diluted share) from $2.21 billion ($1.49 per diluted share) in the first quarter of 2013. This decline was primarily driven by lower income from continuing operations, impacted by an underwriting loss in the AIG Property Casualty segment due to higher catastrophe and severe losses, adverse prior year development, and lower net investment income. AIG Life and Retirement showed growth in assets under management and an improvement in pre-tax operating income, driven by strong sales and effective spread management, though pre-tax income was impacted by net realized capital losses. AIG continued to focus on capital management, repurchasing approximately $867 million of its common stock and paying a quarterly dividend of $0.125 per share. The company also made significant progress in debt reduction, lowering its debt by $3.1 billion during the quarter. The sale of International Lease Finance Corporation (ILFC) was on track for a second-quarter 2014 closing. Key strategic priorities for 2014 included customer focus, profitable growth in core insurance businesses, enhancing investment yields, efficient capital management, and completing the ILFC divestiture. The company faced ongoing market challenges, including low interest rates and currency volatility, but was actively managing its investment portfolio and product offerings to mitigate these impacts.

Key Highlights

• 1Net income attributable to AIG decreased by 27% to $1.61 billion in Q1 2014 compared to $2.21 billion in Q1 2013.
• 2Diluted earnings per share decreased to $1.09 in Q1 2014 from $1.49 in Q1 2013.
• 3AIG Property Casualty reported a pre-tax operating income decrease of 26% to $1.16 billion, impacted by higher catastrophe losses, adverse prior year development, and lower net investment income.
• 4AIG Life and Retirement reported a 2% increase in pre-tax operating income to $1.42 billion, driven by growth in assets under management and improved spread management, despite a pre-tax income decrease due to net realized capital losses.
• 5The company repurchased approximately $867 million of AIG Common Stock and paid a dividend of $0.125 per share in Q1 2014.
• 6Total debt outstanding decreased by $2.2 billion to $39.5 billion as of March 31, 2014, primarily due to debt maturities, repayments, and repurchases.
• 7The sale of ILFC was expected to close in the second quarter of 2014, with ILFC assets and liabilities classified as held-for-sale.

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