10-QPeriod: Q2 FY2023

AMERICAN INTERNATIONAL GROUP, INC. Quarterly Report for Q2 Ended Jun 30, 2023

Filed August 2, 2023For Securities:AIG

Summary

American International Group, Inc. (AIG) reported its financial results for the second quarter of 2023. The company demonstrated a mixed performance, with a notable increase in net investment income, driven by higher interest rates and strategic deployment of assets. However, the General Insurance segment experienced a decrease in underwriting income due to higher catastrophe losses and lower favorable prior year reserve development, partially offset by premium growth and improved accident year loss ratios. Life and Retirement segment showed improved adjusted pre-tax income, driven by higher net investment spread income and a robust fixed annuity market, although variable annuity net outflows increased due to market volatility and higher surrender rates. The company also continued its strategic divestitures, completing the sale of Crop Risk Services and announcing the sale of Validus Re. AIG's financial position remains solid, with a significant increase in total assets and shareholders' equity, supported by ongoing capital management actions including share repurchases and dividends.

Financial Highlights

33 data points
Beta

Revenue

$7.44B

Net Income

$1.49B

20.1% Net Margin

EPS (Diluted)

$2.03

Total Assets

$537.14B

Cash & Equivalents

$1.53B

Free Cash Flow

$614.00M

Financial Statements
Beta
Revenue$7.44B
SG&A Expenses$1.49B
Interest Expense$129.00M
Net Income$1.49B
EPS (Basic)$2.05
EPS (Diluted)$2.03
Shares Outstanding (Basic)725.75M
Shares Outstanding (Diluted)730.55M

Key Highlights

  • 1Net income attributable to AIG common shareholders decreased by 46% to $1.485 billion for the three months ended June 30, 2023, compared to $2.746 billion in the prior year period, primarily due to lower net realized gains.
  • 2Net investment income increased by 37% to $3.571 billion for the three months ended June 30, 2023, compared to $2.604 billion in the prior year period, driven by higher yields and strategic asset deployment.
  • 3General Insurance underwriting income decreased by 26% to $594 million for the three months ended June 30, 2023, due to higher catastrophe losses and lower favorable prior year reserve development.
  • 4Life and Retirement segment's adjusted pre-tax income increased by 33% to $991 million for the three months ended June 30, 2023, driven by strong performance in Individual Retirement and Institutional Markets.
  • 5AIG completed the sale of Crop Risk Services on July 3, 2023, and announced the definitive agreement to sell Validus Re, reinforcing its strategy to simplify its business model.
  • 6Total AIG shareholders' equity increased to $42.454 billion as of June 30, 2023, from $40.970 billion as of December 31, 2022.
  • 7The company declared a cash dividend of $0.36 per share on AIG Common Stock and repurchased approximately 10.3 million shares of AIG Common Stock during the quarter.

Frequently Asked Questions

AIG reported a net income attributable to common shareholders of $1.485 billion ($2.03 per diluted share) for the three months ended June 30, 2023. While net income decreased compared to the prior year period, largely due to lower net realized gains, the company saw a significant increase in net investment income driven by higher interest rates and improved performance in the Life and Retirement segment.

The General Insurance segment's underwriting income decreased by 26% year-over-year to $594 million for the quarter. This was primarily due to higher catastrophe losses and reduced favorable prior year reserve development. However, premium growth and improved accident year loss ratios, driven by better underwriting discipline and a more favorable business mix, provided some offset.

The Life and Retirement segment showed improved performance, with adjusted pre-tax income increasing by 33% to $991 million. This was driven by strong net investment income and robust sales in fixed and fixed index annuities, particularly within the Individual Retirement and Institutional Markets. However, higher surrender rates in a rising interest rate environment present an ongoing challenge.

Yes, AIG completed the sale of Crop Risk Services on July 3, 2023, and has entered into a definitive agreement to sell Validus Re, including AlphaCat Managers and Talbot Treaty reinsurance business. These divestitures are part of AIG's strategy to simplify its business model and reduce volatility.

AIG continues to actively manage its capital. The company's total shareholders' equity increased to $42.454 billion. AIG declared a quarterly cash dividend of $0.36 per share on common stock and repurchased approximately 10.3 million shares of common stock during the quarter, demonstrating a commitment to returning capital to shareholders.