10-QPeriod: Q2 FY2021

AMERICAN INTERNATIONAL GROUP, INC. Quarterly Report for Q2 Ended Jun 30, 2021

Filed August 6, 2021For Securities:AIG

Summary

In the second quarter of 2021, American International Group, Inc. (AIG) demonstrated a significant financial turnaround compared to the prior year period. The company reported a net income attributable to common shareholders of $91 million, a substantial improvement from a net loss of $7,936 million in the second quarter of 2020. This recovery was largely driven by a significant reduction in net realized losses, particularly from derivative activities and the absence of a large loss related to the Fortitude Sale recorded in the prior year. General Insurance saw strong performance with improved loss and expense ratios, contributing to a significant increase in adjusted pre-tax income. The company is actively progressing with its strategic separation of the Life and Retirement business, announcing a definitive agreement with Blackstone to acquire a 9.9% stake in SAFG for $2.2 billion, which is expected to close in the third quarter of 2021. Additionally, AIG announced the sale of its U.S. affordable housing portfolio to BREIT for approximately $5.1 billion, expected to close in the fourth quarter of 2021. These strategic actions indicate a continued focus on streamlining operations and enhancing shareholder value.

Financial Highlights

34 data points
Beta

Revenue

$10.68B

Net Income

$99.00M

0.9% Net Margin

EPS (Diluted)

$0.11

Total Assets

$598.25B

Cash & Equivalents

$2.76B

Free Cash Flow

$2.17B

Financial Statements
Beta
Revenue$10.68B
SG&A Expenses$2.22B
Operating Income$3.96B
Interest Expense$338.00M
Net Income$99.00M
EPS (Basic)$0.11
EPS (Diluted)$0.11
Shares Outstanding (Basic)862.93M
Shares Outstanding (Diluted)872.88M

Key Highlights

  • 1Net income attributable to AIG common shareholders improved significantly to $91 million in Q2 2021 from a net loss of $7,936 million in Q2 2020.
  • 2Total revenues increased by 14% to $10,681 million in Q2 2021 compared to $9,396 million in Q2 2020.
  • 3General Insurance reported strong underwriting income of $1,194 million in Q2 2021, a substantial increase from $175 million in Q2 2020, driven by improved loss and expense ratios.
  • 4Life and Retirement segment also showed growth, with adjusted pre-tax income increasing by 26% to $1,124 million in Q2 2021 compared to $895 million in Q2 2020.
  • 5AIG announced a definitive agreement with Blackstone to acquire a 9.9% stake in its Life and Retirement business (SAFG) for $2.2 billion, expected to close in Q3 2021.
  • 6The company repurchased approximately 13 million shares of AIG Common Stock for $592 million during the six months ended June 30, 2021.
  • 7AIG declared a common stock dividend of $0.32 per share for Q2 2021, consistent with the prior year's dividend payment.

Frequently Asked Questions

The most significant factor contributing to the improved net income was the substantial reduction in net realized losses, primarily from derivative activities and the absence of a large loss related to the Fortitude Sale that was recognized in the prior year's second quarter.

AIG is making significant progress, having announced a definitive agreement with Blackstone to acquire a 9.9% equity stake in its Life and Retirement holding company (SAFG) for $2.2 billion, with an expected closing in the third quarter of 2021. This move is part of a broader strategy to separate the Life and Retirement business.

The General Insurance segment showed strong performance in Q2 2021, with underwriting income increasing significantly due to lower catastrophe losses, improved accident year loss and expense ratios, and a favorable change in business mix. This indicates a positive outlook for the segment.

Yes, AIG continued its share repurchase program, repurchasing approximately 13 million shares of common stock for an aggregate of $592 million during the first six months of 2021. Additionally, a new authorization of $6.0 billion was approved in August 2021.