8-KRegulation FD

AMERICAN INTERNATIONAL GROUP, INC. 8-K Report, Regulation FD Disclosure (May 17, 2010)

Filed May 17, 2010For Securities:AIG

Summary

This Form 8-K filing by American International Group, Inc. (AIG) on May 17, 2010, primarily discloses information related to the sale of its subsidiary, AIA Group Limited (AIA), to Prudential plc. The filing includes financial data for AIA for the first quarter of 2010 and 2009, as prepared by Prudential and derived from AIA's unaudited management accounts. Investors should note that this data was prepared by Prudential using its own assumptions, not shared with AIA, and AIG explicitly disclaims responsibility for its accuracy or use in any Prudential securities offering. Key financial metrics for AIA reported include Annual Premium Equivalent (APE) sales growth of 16% for Q1 2010 over Q1 2009, and a significant increase in new business profit (pre-tax) of 32%. The report also details the valuation methodology (EEV principles) and key economic assumptions used by Prudential in assessing AIA's new business contribution. AIG also provided separate unaudited financial information for AIA as a discontinued operation for AIG's consolidated financial statements.

Key Highlights

  • 1AIG is disclosing financial information for its subsidiary AIA as part of its sale to Prudential plc for approximately $35.5 billion.
  • 2The disclosed AIA financial data for Q1 2010 and Q1 2009 was prepared by Prudential using its own assumptions and not shared with AIA.
  • 3AIA reported a 16% increase in Annual Premium Equivalent (APE) sales for Q1 2010 compared to Q1 2009, reaching $455 million.
  • 4New business profit (pre-tax) for AIA increased by 32% to $198 million in Q1 2010.
  • 5New business margins improved, with pre-tax margins rising to 44% from 38% in the comparable periods.
  • 6AIG explicitly states it disclaims responsibility for the Prudential-prepared data and its assumptions.
  • 7AIG also provided separate unaudited financial data for AIA as a discontinued operation for AIG's internal reporting.

Frequently Asked Questions

The main purpose of this 8-K filing is to provide disclosure regarding the sale of AIG's subsidiary, AIA Group Limited (AIA), to Prudential plc. It includes financial information for AIA as prepared by Prudential, which is part of the prospectus and listing documents released by Prudential.

The financial data for AIA for the quarters ended February 28, 2010 and 2009, was prepared by Prudential plc using its own assumptions, which were not shared with AIA. AIG explicitly states that it disclaims responsibility for this data, including its accuracy or its use in any offering of securities by Prudential. Therefore, investors should understand that this data reflects Prudential's perspective and may not represent AIG's own finalized view of AIA's performance.

The filing highlights AIA's Annual Premium Equivalent (APE) sales, which grew by 16% to $455 million in the first quarter of 2010. It also shows a significant increase in new business profit (pre-tax) of 32% to $198 million, and an improvement in new business margins, with the pre-tax margin rising from 38% to 44%.

Yes, in addition to the data prepared by Prudential, AIG also provided certain unaudited information on AIA's results for the fiscal quarters ended February 28, 2010 and 2009, prepared for inclusion as a discontinued operation in AIG's own unaudited consolidated financial statements. This included total revenues and pre-tax income for AIA.