10-QPeriod: Q1 FY2018

AMERICAN INTERNATIONAL GROUP, INC. Quarterly Report for Q1 Ended Mar 31, 2018

Filed May 3, 2018For Securities:AIG

Summary

American International Group, Inc. (AIG) reported a net income attributable to AIG of $938 million, or $1.01 per diluted share, for the first quarter of 2018. This represents a decrease from the $1,185 million, or $1.18 per diluted share, reported in the first quarter of 2017. The decline was primarily driven by lower net investment income, higher losses and loss adjustment expenses in the General Insurance segment (partially offset by favorable prior year loss reserve development), and reduced adjusted pre-tax income from the Legacy Portfolio. These factors were partially offset by lower general operating and other expenses, gains on sale of divested businesses compared to losses in the prior year, and reduced net realized capital losses. Total revenues for the quarter were $11.71 billion, down from $12.63 billion in the prior year. The company's balance sheet remained substantial, with total assets of $499.14 billion and total shareholders' equity of $63.36 billion at the end of the quarter. AIG continued its capital return program, repurchasing approximately $298 million of common stock and paying a dividend of $0.32 per share. The company also raised capital through new debt issuances totaling $2.5 billion to fund general corporate purposes and the acquisition of Validus Holdings, Ltd.

Financial Highlights

35 data points
Beta

Revenue

$11.71B

Net Income

$938.00M

8.0% Net Margin

EPS (Diluted)

$1.01

Total Assets

$499.14B

Cash & Equivalents

$2.10B

Free Cash Flow

-$938.00M

Financial Statements
Beta
Revenue$11.71B
SG&A Expenses$2.27B
Operating Income$939.00M
Interest Expense$277.00M
Net Income$938.00M
EPS (Basic)$1.03
EPS (Diluted)$1.01
Shares Outstanding (Basic)907.95M
Shares Outstanding (Diluted)925.27M

Key Highlights

  • 1Net income attributable to AIG decreased by 21% to $938 million in Q1 2018, compared to $1,185 million in Q1 2017.
  • 2Diluted EPS decreased to $1.01 in Q1 2018 from $1.18 in Q1 2017.
  • 3Total revenues decreased by 7% to $11.71 billion in Q1 2018, primarily due to lower net investment income and premiums.
  • 4General Insurance segment's adjusted pre-tax income declined significantly by 52% to $510 million, impacted by higher catastrophe losses and current accident year loss ratios.
  • 5Life and Retirement segment's adjusted pre-tax income remained relatively stable at $892 million, with mixed performance across its sub-segments.
  • 6AIG repurchased $298 million of its common stock and paid a $0.32 per share dividend in Q1 2018.
  • 7The company issued new debt totaling $2.5 billion, primarily to fund the acquisition of Validus Holdings, Ltd.

Frequently Asked Questions

AIG reported a net income attributable to AIG of $938 million, or $1.01 per diluted share, for the first quarter of 2018. This is a decrease from $1,185 million, or $1.18 per diluted share, in the first quarter of 2017.

The decrease in net income was primarily driven by lower net investment income, higher losses and loss adjustment expenses in the General Insurance segment, and reduced adjusted pre-tax income from the Legacy Portfolio. These were partially offset by lower operating expenses, gains on divested businesses, and reduced net realized capital losses.

The General Insurance segment experienced a significant decline in adjusted pre-tax income, falling by 52% to $510 million. This was largely due to higher catastrophe losses and increased current accident year loss ratios, partly mitigated by favorable prior year loss reserve development.

Yes, AIG announced an agreement to purchase Validus Holdings, Ltd. for $5.6 billion, expected to close mid-2018. The company also continued its capital return program by repurchasing $298 million of common stock and paying a dividend of $0.32 per share. Additionally, AIG issued $2.5 billion in new debt to fund corporate purposes and the Validus acquisition.