10-QPeriod: Q1 FY2022

AMERICAN INTERNATIONAL GROUP, INC. Quarterly Report for Q1 Ended Mar 31, 2022

Filed May 5, 2022For Securities:AIG

Summary

American International Group, Inc. (AIG) reported its first quarter 2022 financial results, showing a net income attributable to AIG common shareholders of $4.26 billion, or $5.15 per diluted share, a significant increase compared to the prior year's $3.88 billion, or $4.41 per diluted share. This growth was primarily driven by a substantial increase in net realized gains, particularly from Fortitude Re embedded derivatives and other hedging activities, as well as improved underwriting income in the General Insurance segment, bolstered by higher premiums, reduced catastrophe losses, and favorable prior year reserve development. However, the company experienced a decline in net investment income, mainly due to a higher interest rate environment impacting returns on available-for-sale fixed maturity securities and fair value option assets. The ongoing separation of the Life and Retirement business, including strategic partnerships with Blackstone and BlackRock for asset management, continues to be a key focus. AIG also announced a significant share repurchase program and debt repurchases, demonstrating a commitment to capital return to shareholders.

Financial Highlights

33 data points
Beta

Revenue

$14.94B

Net Income

$4.17B

27.9% Net Margin

EPS (Diluted)

$5.04

Total Assets

$573.51B

Cash & Equivalents

$2.54B

Free Cash Flow

$39.00M

Financial Statements
Beta
Revenue$14.94B
SG&A Expenses$2.16B
Operating Income$4.25B
Interest Expense$263.00M
Net Income$4.17B
EPS (Basic)$5.10
EPS (Diluted)$5.04
Shares Outstanding (Basic)816.31M
Shares Outstanding (Diluted)826.01M

Key Highlights

  • 1Net income attributable to AIG common shareholders increased to $4.26 billion ($5.15/share) from $3.88 billion ($4.41/share) year-over-year.
  • 2Total revenues grew by 9% to $15.8 billion.
  • 3Net realized gains significantly increased by 36% to $4.4 billion, driven by Fortitude Re embedded derivatives and improved derivative/hedging activity.
  • 4General Insurance segment delivered strong underwriting income of $446 million, with a combined ratio of 92.9%, improving by 5.9 percentage points year-over-year.
  • 5North America General Insurance underwriting income swung from a loss of $202 million to a profit of $256 million, aided by significantly lower catastrophe losses.
  • 6International General Insurance underwriting income decreased by 31% to $190 million, impacted by higher catastrophe losses.
  • 7Life and Retirement segment's Adjusted Pre-Tax Income (APTI) decreased by 23% to $724 million, primarily due to lower net investment income and higher DAC amortization and policyholder benefits.
  • 8AIG announced plans to repurchase $6.5 billion of its common stock, following $1.4 billion in repurchases during the quarter.

Frequently Asked Questions

AIG reported a net income attributable to AIG common shareholders of $4.26 billion, or $5.15 per diluted share, for the first quarter of 2022.

The General Insurance segment showed strong performance, with underwriting income of $446 million and a combined ratio of 92.9%, improving significantly from the prior year. This improvement was driven by higher premiums, reduced catastrophe losses, and favorable prior year reserve development, particularly in the North America region.

Net investment income decreased by 11% to $3.24 billion. This was primarily due to lower returns on available-for-sale fixed maturity securities resulting from a higher interest rate environment, which led to lower call income, and declines in the fair value of fixed maturity securities where the fair value option was elected. These were partially offset by gains on other invested assets, primarily private equity funds, and income from mortgage and other loans.

AIG continues to advance the separation of its Life and Retirement business. A significant step was the sale of a 9.9% equity stake in Corebridge Financial, Inc. to Blackstone. AIG also entered into investment management agreements with BlackRock to manage a substantial portion of its investment portfolio, with plans to transfer up to $150 billion of assets.