01—Abstract
Summary
Summary of the 10-Q filed November 7, 2024. Cited figures are marked; the original filing is the authoritative source.
American International Group, Inc. (AIG) reported a net income attributable to common shareholders of $459 milliona, or $0.71 per diluted share, for the third quarter of 2024.
This represents a significant decrease compared to the $2.02 billionb, or $2.81 per diluted share, reported in the same period of the prior year. The decline is largely attributed to a substantial reduction in income from discontinued operations, primarily due to the deconsolidation of Corebridge in the prior year, which positively impacted that period's results. On a continuing operations basis, AIG's income from continuing operations was $481 million, or $0.74 per diluted share, down from $701 million, or $0.97 per diluted share, in Q3 2023.
This decrease was driven by lower underwriting income in the General Insurance segment, particularly in North America, impacted by prior year loss reserve development and the sale of AIG Re. However, net investment income saw a notable increase of 14% to $973 millionc, driven by higher dividends from Corebridge, improved equity security valuations, and favorable interest rate environments impacting fair-valued securities. The company also continued its share repurchase program, repurchasing approximately $4.8 billion of common stock year-to-date.
02—Key points
Key Highlights
- Net income attributable to common shareholders decreased to $459 million ($0.71/diluted share) from $2.02 billion ($2.81/diluted share) in the prior year quarter, largely due to a significant decrease in income from discontinued operations.
- Income from continuing operations declined to $481 million ($0.74/diluted share) from $701 million ($0.97/diluted share) in the prior year quarter.
- Net investment income increased by 14% to $973 million, driven by dividends from Corebridge, improved equity security valuations, and favorable impact from higher interest rates on fair-valued securities.
- General Insurance underwriting income decreased by 28% in the quarter, primarily due to unfavorable prior year loss reserve development and the sale of AIG Re.
- The company repurchased approximately 65 million shares of common stock for $4.8 billion during the first nine months of 2024, and announced a new $10 billion share repurchase authorization.
- AIG's total assets decreased significantly to $169.5 billion from $539.3 billion at year-end 2023, primarily due to the deconsolidation of Corebridge and asset sales.
- Total AIG shareholders' equity remained relatively stable at $45.0 billion, but book value per share increased to $71.46 from $65.14 at year-end 2023.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed November 7, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $6.75B$7.27B | −7.1% |
| SG&A Expenses | $1.35B$1.31B | +2.7% |
| Interest Expense | $112.00M$138.00M | −18.8% |
| Net Income | $459.00M$2.03B | −77.4% |
| EPS (Basic) | $0.72$2.83 | −74.6% |
| EPS (Diluted) | $0.71$2.81 | −74.7% |
| Shares Outstanding (Basic) | 641.62M712.60M | −10.0% |
| Shares Outstanding (Diluted) | 647.37M718.73M | −9.9% |
05—Questions
Frequently Asked Questions
What drove the significant decrease in net income attributable to common shareholders?
The substantial decrease in net income attributable to common shareholders from $2.02 billion in Q3 2023 to $459 million in Q3 2024 was primarily driven by a significant reduction in income from discontinued operations. This was mainly due to the deconsolidation of Corebridge in Q2 2024, which had a positive impact on the prior year's results but no longer contributes to current income.
How did the General Insurance segment perform, and what factors impacted underwriting income?
The General Insurance segment's underwriting income decreased by 28% in the quarter. This was primarily due to unfavorable prior year loss reserve development, particularly in U.S. Excess Casualty due to a large mass tort claim settlement, and the impact of the sale of AIG Re. While portfolio growth and favorable development in other areas partially offset these factors, the overall underwriting results were negatively impacted.
What is the outlook for share repurchases and dividends?
AIG has demonstrated a commitment to returning capital to shareholders. The company repurchased approximately $4.8 billion of common stock in the first nine months of 2024 and has an authorized $10 billion repurchase program. Additionally, the Board of Directors declared a cash dividend of $0.40 per share, payable in December 2024, indicating a continued focus on shareholder returns, though future actions will depend on market conditions and strategic priorities.
How has the deconsolidation of Corebridge affected AIG's financial statements?
The deconsolidation of Corebridge in the second quarter of 2024 significantly impacted AIG's financial statements. It led to a substantial decrease in total assets and revenues compared to the prior year, as Corebridge's results are now reflected as discontinued operations. While this change reduced reported income in the current quarter due to the absence of Corebridge's prior year contribution, it also simplified AIG's operational structure and financial reporting.
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