American International (AIG) 8-K Regulation FD Disclosure

American

International

Group,

Inc.

Investor

Presentation

March 3, 2014

Exhibit 99.1

2

Cautionary

Statement

Regarding

Forward-Looking

Information

This

document

and

the

remarks

made

within

this

presentation

may

include,

and

officers

and

representatives

of

American

International

Group,

Inc.

(AIG)

may

from

time

to

time

make,

projections,

goals,

assumptions

and

statements

that

may

constitute

“forward-looking

statements”

within

the

meaning

of

the

Private

Securities

Litigation

Reform

Act

of

1995.

These

projections,

goals,

assumptions

and

statements

are

not

historical

facts

but

instead

represent

only

AIG’s

belief

regarding

future

events,

many

of

which,

by

their

nature,

are

inherently

uncertain

and

outside

AIG’s

control.

These

projections,

goals,

assumptions

and

statements

include

statements

preceded

by,

followed

by

or

including

words

such

as

“believe,”

“anticipate,”

“expect,”

“intend,”

“plan,”

“view,”

“target”

or

“estimate”.

It

is

possible

that

AIG’s

actual

results

and

financial

condition

will

differ,

possibly

materially,

from

the

results

and

financial

condition

indicated

in

these

projections,

goals,

assumptions

and

statements.

Factors

that

could

cause

AIG’s

actual

results

to

differ,

possibly

materially,

from

those

in

the

specific

projections,

goals,

assumptions

and

statements

include:

changes

in

market

conditions;

the

occurrence

of

catastrophic

events,

both

natural

and

man-made;

significant

legal

proceedings;

the

timing

and

applicable

requirements

of

any

new

regulatory

framework

to

which

AIG

is

subject

as

a

savings

and

loan

holding

company,

as

a

systemically

important

financial

institution,

and

as

a

global

systemically

important

insurer;

concentrations

in

AIG’s

investment

portfolios;

actions

by

credit

rating

agencies;

judgments

concerning

casualty

insurance

underwriting

and

insurance

liabilities;

judgments

concerning

the

recognition

of

deferred

tax

assets;

and

such

other

factors

discussed

in

Part

I,

Item

1A.

Risk

Factors

and

Part

II,

Item

7.

Management’s

Discussion

and

Analysis

of

Financial

Condition

and

Results

of

Operations

in

AIG’s

Annual

Report

on

Form

10-K

for

the

fiscal

year

ended

December

31,

2013.

AIG

is

not

under

any

obligation

(and

expressly

disclaims

any

obligation)

to

update

or

alter

any

projections,

goals,

assumptions

or

other

statements,

whether

written

or

oral,

that

may

be

made

from

time

to

time,

whether

as

a

result

of

new

information,

future

events

or

otherwise.

This

document

and

the

remarks

made

orally

may

also

contain

certain

non-GAAP

financial

measures.

The

reconciliation

of

such

measures

to

the

most

comparable

GAAP

measures

in

accordance

with

Regulation

G

is

included

in

the

Fourth

Quarter

2013

Financial

Supplement

available

in

the

Investor

section

of

AIG's

corporate

website,

www.aig.com,

as

well

as

in

the

appendix

of

this

presentation.

IRS

Circular

230

Disclosure:

To

ensure

compliance

with

requirements

imposed

by

the

IRS,

we

inform

you

that

(i)

any

U.S.

tax

advice

contained

in

this

communication

(including

any

attachments)

is

not

intended

or

written

to

be

used,

and

cannot

be

used,

for

the

purpose

of

avoiding

penalties

under

the

Internal

Revenue

Code;

(ii)

any

such

tax

advice

is

written

in

connection

with

the

promotion

or

marketing

of

the

matters

addressed;

and

(iii)

if

you

are

not

the

original

addressee

of

this

communication,

you

should

seek

advice

based

on

your

particular

circumstances

from

an

independent

advisor.

3

AIG –

An Established Global Insurance Franchise

Core

Insurance

Businesses

Strategies

Key Accomplishments

AIG Property

Casualty

Grow high value lines and optimize business mix

Full year 2013 NPW growth of 3.8%, excluding FX,

compared to full year 2012

Optimizing Casualty lines business

Execute on technical

underwriting, improved claims

management, and analytics

2013 Accident year loss ratio, as adjusted,

improvement of 5.4 pts since beginning of 2011

Capitalize on global footprint; presence in over 90 countries

HSBC agreement / PICC joint venture

12.9% of 2013 NPW from growth economies

(1)

AIG Life and

Retirement

Maintain balanced portfolio of products and leverage scale

advantage

Diversified sources of net flows and earnings

Optimize spread management through new business pricing and

active crediting rate management

Profitability enhanced through ongoing spread

management actions

Expand distribution network and increase penetration of multiple

products through each distribution partner

Approximately $0.8 bn –

$1.4 bn in quarterly pre-tax

operating income since 4Q11

Mortgage

Guaranty

Selectively underwrite based on multivariate model to achieve

higher risk adjusted returns

Earnings reflect new business; 59% of net premiums

earned in 4Q13 were from business written after 2008

Actively manage legacy book

Delinquency ratio of 5.9% at 4Q13, lowest since 4Q07

A platform for delivering sustainable profitable growth.

1)

Growth economies are those within Central Europe, Middle East, Africa, Latin America and Asia Pacific, excluding Japan.

4

AIG –

Building on Capital Strength

*

*

*

Active Capital Management

*

*

*

25% increase in quarterly dividend to

$0.125/sh. in Feb. 2014

2013 non-DIB debt calls and tenders of $5.3

billion (face amount)

$597 million of shares repurchased in 2013;

$1.4 billion aggregate share repurchase

authorization

Since May 2011, deployed approximately

$19 billion through share repurchases,

dividends and liability management

*

Robust Statutory Capital

*

2013 RBC ratios

(1)

:

–

AIG PC U.S.: 416% (ACL)

–

AIG L&R: 568% (CAL)

2013

total

adjusted

statutory

capital

(1)

:

–

AIG PC U.S.: $22.0 billion

–

AIG L&R: $22.6 billion

Growth in BVPS

December 31, 2013 BVPS (ex. AOCI) of

$64.28 –

up 11% from 12/31/12

*

*

Strong Liquidity

& Cash Flows

*

*

2013 distributions from insurance

subsidiaries of $8.9 billion

Additional tax sharing payments to

AIG Parent

$13.1 billion of total AIG Parent liquidity

Monetization of

Deferred Tax Assets

Net DTA of $21.2 billion at Dec. 31, 2013

Note:

Data

as

of

December

31,

2013

unless

otherwise

noted.

1)

The

inclusion

of

RBC

measures

and

total

adjusted

statutory

capital

is

intended

solely

for

the

information

of

investors

and

is

not

intended

for

the

purpose

of

ranking

any

insurance

company

or

for

use

in

connection

with

any

marketing,

advertising

or

promotional

activities.

ACL

is

defined

as

Authorized

Control

Level

and

CAL

is

defined

as

Company

Action

Level.

Total

adjusted

statutory

capital

and

RBC

ratio

for

AIG

Life

and

Retirement

excludes

holding

company,

AGC

Life

Insurance

Company.

2)

Other

includes

AIG

Parent

(including

the

deferred

tax

asset

valuation

allowance),

Global

Capital

Markets,

Direct

Investment

book,

AIG

Life

Holdings,

Inc.

(a

non-operating

holding

company)

and

assets

and

liabilities

held

for

sale,

net

of

consolidation

and

eliminations.

Mortgage

Guaranty

$2.3 bn

AIG Shareholders’

Equity -

$100.5 bn at December 31, 2013

AIG Property Casualty

*

*

*

*

*

*

*

*

*

6

42,000 employees who serve clients worldwide

51% of premiums written outside of U.S. and Canada in 2013

Average claims paid each business day of over $100 million in 2013

#1

commercial

insurance

organization

in

U.S./Canada,

with

established

and

growing

position

in

Latin

America

(2)

#1

U.S.-based

property

casualty

insurance

organization

in

Europe,

with

established

and

growing

positions

in

the

Middle

East

and

Africa

(2)

#1 foreign property

casualty insurer in Japan

and China

(2)

Asia Pacific

2013 NPW: $9.7 bn

28% of total NPW

AIG Property Casualty –

A Truly Global Franchise

AIG Property Casualty is a diversified global P&C market leader with 2013 NPW of over $34 billion.

1)

EMEA region consists of Europe, Middle East and Africa.

2)

As measured by full year 2012 net premiums written.

Americas

2013 NPW: $17.9 bn

52% of total NPW

EMEA

(1)

2013 NPW: $6.8 bn

20% of total NPW

7

AIG Property Casualty –

Financial Highlights

Full Year

($ in billions)

2011

2012

2013

Net premiums written

$34.8

$34.4

$34.4

Net investment income

4.3

4.8

5.3

Pre-tax operating income

$1.1

$1.8

$4.8

Accident year loss ratio, as adjusted

68.7

65.2

63.8

Expense ratio

30.4

34.6

34.6

Accident year combined ratio, as adjusted

99.1

99.8

98.4

Cash & invested assets

(1)

$126.3

$130.8

$123.1

Shareholders’

equity

47.3

48.9

46.3

Shareholders’

equity, excluding AOCI

$44.3

$43.7

$43.1

Note:

Revision

to

Prior

Periods

–

In

fourth

quarter

2013,

to

reduce

investment

concentration,

AIG

transferred

the

holdings

of

the

investments

in

life

settlements

from

AIG

Property

Casualty

operations

to

AIG’s

Other

Operations.

All

prior

periods

have

been

revised

to

conform

to

the

current

period

presentation.

1)Includes

intercompany

invested

assets

that

are

eliminated

in

consolidation.

8

AIG

Property

Casualty

–

Business

Overview

A

broad

product

platform.

Global –

Unique ability to serve multinational clients

Innovative –

Often first to market in new products and services, such as CyberEdge

Capital

Strength

–

U.S.

total

adjusted

statutory

capital

(1)

of

$22.0

billion

at

year-end

2013

Commercial

Insurance

Full

Year

2013

NPW

–

$20.8

bn

Consumer

Insurance

Full

Year

2013

NPW

–

$13.6

bn

1)

The inclusion of total adjusted statutory capital is intended solely for the information of investors and is not intended for the purpose of ranking any

insurance company or for use in connection with any marketing, advertising or promotional activities.

9

AIG Property Casualty –

Strategic Focus

Strategic levers driving shareholder value creation.

Business

Mix

Underwriting

Excellence

Claims

Service

Operational

Effectiveness

Capital

Management

Balance growth with

profitability and risk

Growth in Risk

Adjusted Profitability

(RAP), accretive

products and

geographies

Achieve scale in key

markets over a

reasonable period of

time

Rationalize/price for

capital intensive

product lines

Globalize

standards for

underwriting and

pricing

Enhance

underwriters’

analytical

capabilities

Balance between

art and science

intertwined with

finer segmentation

Global Claims

Initiative leading to

claims cost savings

and enhanced client

service

Improved claims

practices in medical

and anti-fraud

driven by data

analytics

Build advanced

claims IT

architecture

Simplify and

standardize legacy

operating models

Reduce overhead

with cost

optimization and

shared services

Use RAP as a key

performance

indicator

Leverage capital

maintenance

agreements with

AIG

Increase

underwriting

leverage

10

AIG Property Casualty –

Strong Brands and Customer Loyalty

AIG Property Casualty continues to be recognized for excellence.

Confirmit

2013 Achievement in Customer

Excellence

Reader’s Digest

2013 Trusted Brand Award for

Auto Insurance

World Travel Fair

2013 Best Quality Service, Travel Insurance

Company (3

rd

Consecutive Year)

Business Insurance

2013 Innovation Awards

Motordata Research Consortium

2013 Insurer of the Year -

Best Automotive

Claims

Management

Service

(2

nd

Consecutive

Year)

Nanfang Daily

2013

Most

Trustworthy

Financial

Brand

(2

nd

Consecutive Year)

Global Finance

2013 Best in Insurance Awards

British Insurance Award

2013 Underwriter of the Year

Indonesia Insurance Awards

2013 Corporate Social Responsibility,

Human Capital, Information Technology,

and Marketing Awards

Willis Survey

#1 Performing U.S. Carrier after

Storm Sandy

PropertyCasualty360

2013 Best Overall Commercial

Insurance Provider

Risk & Försäkring

2013 Insurance Company of the Year

Australian Business Award

2013 Service Excellence

UK Insurance Claims Award

2013 Innovation of the Year

Reaction Magazine

2013 Best Global Insurance

Company Overall

Celent Model Insurer Award

2011 -

2013

Australia and New Zealand

Institute of Insurance & Finance

(ANZIIF)

2013

Innovation

of

the

Year

–

CyberEdge

U.S. Captive Review

Innovation in Fronting Award -

2013

The Tempkin Group

Customer Experience Excellence

Award -

2013

AIG Clients as a Percentage of Each Category

99%

As of

11/1/13

91%

As of

11/1/13

40%

As of

6/1/13

11

AIG Property Casualty –

Product Diversification

Commercial Insurance

Consumer Insurance

Casualty

General Liability

Commercial Auto

Workers’

Compensation

Excess Casualty

Crisis Management

Property

Global Property including high

deductible

Industrial, Energy and Commercial

Property

Specialty

Aerospace

Environmental

Political Risk

Trade Credit

Marine

Surety

Financial Lines

D&O, E&O

Cyber Security

Fidelity

Employment Practices

Kidnap and Ransom

Accident and

Health

Personal Accident

Supplemental Medical

Travel

Life

Personal Lines

Automobile

Homeowners

Extended Warranty

Specialty (e.g., identity theft, credit

card protection)

Private Client Group

12

AIG

Property

Casualty

–

Growth

Economies

Growth economies are those within Central Europe, Middle East, Africa, Latin

America and Asia Pacific, excluding Japan

The largest foreign property and casualty insurer in China

(1)

Strategic investments in PICC for P&C and Life & Retirement products

10 year Bancassurance agreement with HSBC in Turkey

1) As measured by full year 2012 net premiums written.

13

AIG Property Casualty –

Investment Composition & Ratings

1)

Includes intercompany invested assets that are eliminated in consolidation.

Total Cash & Invested Assets -

$123.1 billion

(1)

Bond

Portfolio

-

$99.0

billion

(1)

-

by

Agency

Credit

Rating

(As of December 31, 2013)

AIG Life and Retirement

*

*

*

*

*

*

*

*

*

*

15

AIG

Life

and

Retirement

–

Operating

from

a

Position

of

Strength

Market Leader

Long standing leading market positions

Scale advantage in key product lines

Product Diversity

& Capacity for

Growth

Comprehensive portfolio of life insurance, A&H, annuity, group retirement,

group benefits, institutional products and mutual funds

Year-end 2013 RBC ratio

(1)

at 568% (CAL) supports sales growth

Multi-channel

Distribution

Distribution organization leverages broad product portfolio across all channels

Over 300,000 financial professionals

Capital and

Expense

Efficiencies

Simplified legal structure enhances capital efficiencies, expense savings and

ease of doing business –

10 insurance legal entities consolidated to 3

Total

adjusted

statutory

capital

(1)

of

$22.6

billion

at

year-end

2013

1)

The

inclusion

of

RBC

measures

and

total

adjusted

statutory

capital

is

intended

solely

for

the

information

of

investors

and

is

not

intended

for

the

purpose

of

ranking

any

insurance

company

or

for

use

in

connection

with

any

marketing,

advertising

or

promotional

activities.

CAL

is

defined

as

Company

Action

Level.

Total

adjusted

statutory

capital

and

RBC

ratio

excludes

holding

company,

AGC

Life

Insurance

Company.

16

AIG

Life

and

Retirement

–

Financial

Highlights

Full Year

($ in billions)

2011

2012

2013

Premiums and deposits

$24.4

$21.0

$28.8

Net investment income

9.9

10.7

10.9

Pre-tax operating income

3.3

4.2

5.1

Cash & invested assets

(1)

194.2

205.3

196.9

Assets under management

256.9

290.4

318.0

Shareholders’

equity

34.2

40.0

38.7

Shareholders’

equity, excluding AOCI

29.5

31.6

34.9

Net flows

2.9

(1.3)

4.6

1)

Includes intercompany invested assets that are eliminated in consolidation.

17

AIG

Life

and

Retirement

–

Diversified

Business

Mix

Full Year 2013

Premiums

and

Deposits

-

$28.8

billion

Retail: 69%

Institutional: 31%

Full Year 2013

Pre-tax

Operating

Income

-

$5.1

billion

Retail: 62%

Institutional: 38%

18

AIG

Life

and

Retirement

–

Assets

Under

Management

Assets

Under

Management

–

$318.0

billion

at

December

31,

2013

Year-over-year

growth

in

AUM

reflects

strong

retail

investment

product

net

flows,

higher

separate

account

balances

and

greater

institutional

assets.

19

AIG

Life

and

Retirement

–

Leading

Market

Positions

* Based on LIMRA rankings for respective periods.

Rank*

Metric

9M’13

FY’12

2

6

Total Annuity Sales

1

2

Fixed-Rate Deferred Annuity Sales

4

5

Structured Settlement Annuity Sales

5

7

Variable Annuity Sales

8

6

Term Life Sales

9

18

Universal Life Sales

2

2

K-12 403(b) Assets

3

3

Total 403(b) Assets

Market Positions

Excellence in Service, Marketing and Technology

Market Tools

2013 Achievement in

Customer Excellence

(ACE award for 7

th

Consecutive Year)

DALBAR

2013 Annuity Service

Excellence Award

(7

th

Consecutive Year)

2013 #1 Ranking for

Annuity Client Quarterly

Statements

(13

th

Consecutive Year)

PlanSponsor Magazine

Earned 17 Best-in-Class

Awards for Participant and

Plan Sponsor Services in

2013

International MarCom

Awards

2012 and 2013 Platinum

and Gold Awards

(42 in total)

Insurance & Financial

Communications

Association

2012 and 2013 Best in

Show and Awards of

Excellence (15 in total)

InformationWeek 500

2012 and 2013 Top

Technology Innovators

Best’s Review

2012 and 2013 Innovators

Showcase

20

AIG

Life

and

Retirement

–

Broad

Multichannel

Distribution

Network

Affiliated: 33%

Non-affiliated: 67%

B-Ds

34%

Banks

19%

IMOs

10%

2013 Sales by Channel

Diversified Distribution Network

AIG Financial Network

Advisor Group

VALIC Financial Advisors

AIG Direct

Banks

Advisor Group

3%

AIG Financial Network

3%

AIG Direct & Other

1%

VALIC FAs

26%

Broker-Dealers

Independent Marketing Organizations

Benefit Brokers

3%

Benefit Brokers

21

AIG

Life

and

Retirement

–

Variable

Annuities

Changing competitive environment offers a unique opportunity.

Commentary

From 2009 through 2012, industry consolidation accelerated as certain variable annuity carriers exited the market.

In 2013, four of the top six carriers have increased their sales

while two carriers have scaled back.

Certain competitors scaled back on their product offerings in 2013, exemplified by their decreased market share for nine months 2013.

AIG L&R has significantly grown its market share thereby improving its industry ranking from #15 in 2009 to #4 for nine months 2013.

AIG L&R believes there is significant remaining growth opportunity in VA due to its market share of only 8.4%.

AIG L&R is further positioned for growth because of its manageable risk profile, characterized by only $23.8 billion in total individual VA contracts with

Guaranteed Minimum Withdrawal Benefits at December 31, 2013, 71%

of which contain benefits with strong de-risking features such as VIX indexing

of rider fees, volatility control funds and required minimum allocations to fixed accounts.

1)

Source:

Morningstar

VA

Sales

report.

VA

non-captive

industry

sales

data

excludes

captive

agent

&

direct

response

distribution

and

a

pro

rata

elimination

of

internal

sales.

Rankings

use

most

current

data

from

Morningstar,

Inc.

and

can

reflect

updated

numbers

from

prior

periods.

Variable

Annuity

“Non-Captive”

Industry

Sales

(1)

($

millions)

Nine Months 2013

FY 2012

FY 2011

FY 2010

FY 2009

Rank

Sales

Share

Rank

Sales

Share

Rank

Sales

Share

Rank

Sales

Share

Rank

Sales

Share

Jackson National

1

15,469

22.1%

1

19,724

21.0%

3

17,494

17.0%

2

14,654

16.3%

3

10,002

12.4%

Lincoln Financial Group

2

10,678

15.3%

4

10,419

11.1%

4

9,323

9.0%

4

8,948

9.9%

4

7,928

9.8%

Prudential Financial

3

7,642

10.9%

2

17,853

19.0%

2

18,199

17.6%

1

19,845

22.1%

1

14,635

18.1%

AIG L&R

4

5,901

8.4%

6

4,561

4.9%

9

3,212

3.1%

11

2,072

2.3%

15

891

1.1%

AEGON/Transamerica

5

5,714

8.2%

5

4,832

5.1%

6

4,901

4.7%

6

3,462

3.8%

10

3,000

3.7%

MetLife

6

5,277

7.6%

3

11,818

12.6%

1

21,715

21.0%

3

12,890

14.3%

2

10,535

13.1%

TOTAL

69,879

93,832

103,201

89,950

80,687

22

AIG

Life

and

Retirement

–

Investment

Composition

&

Ratings

1)

Includes intercompany invested assets that are eliminated in consolidation.

Total

Cash

&

Invested

Assets

-

$196.9

billion

(1)

Bond

Portfolio

-

$157.2

billion

(1)

-

by

Agency

Credit

Rating

(As of December 31, 2013)

AIG Life and Retirement –

Net Investment Spread Management

Base Yields

(1)

Cost of Funds

(2)

Base Net Investment Spreads

(1)

1)

Includes

the

investment

return

on

surplus

other

than

alternative

investment

or

yield

enhancement

activities.

2)

Excludes

the

amortization

of

sales

inducement

assets.

At

December

31,

2013,

a

total

of

73%

of

fixed

annuity

and

universal

life

account

values

are

at

contractual

minimum

guaranteed

crediting

rates

vs.

63%

at

December

31, 2012.

23

Mortgage Guaranty

(United Guaranty Corporation)

*

*

*

*

*

*

*

*

*

*

25

United

Guaranty

–

Financial

Highlights

Full Year

($ in millions)

2011

2012

2013

Net premiums written

$801

$858

$1,048

Net investment income

132

146

132

Pre-tax operating income (loss)

($97)

$9

$205

Combined ratio

128.9

119.2

90.9

Cash & invested assets

(1)

$4,081

$4,222

$3,934

Shareholders’

equity

2,425

2,311

2,282

Shareholders’

equity, excluding AOCI

$2,332

$2,193

$2,268

1)

Includes intercompany invested assets that are eliminated in consolidation.

26

United Guaranty –

A Market Leader

Risk based pricing driving profitable new business.

UGC’s risk-based pricing plan, Performance Premium, utilizes over a dozen variables to evaluate loan risk and price the

mortgage insurance policy.

Full year 2013 NIW increased 33% to $49.9 billion from the prior-year period. Growth accomplished while maintaining

consistently high quality risk in force. Domestic first-lien NIW of $49.4 billion for full year 2013 was a record.

Vintage

Year

(2)

Average

FICO Score

LTV Ratio

2010

760

90

2011

757

91

2012

758

91

2013

753

91

($ in billions)

1)

Represents principal amount of loans insured.

2)

Domestic First-lien only.

New Insurance Written

(1)

27

United Guaranty –

Shrinking Legacy In-Force

Note: Data presented above is for Domestic First Lien operations.

1)

Peers

include

Mortgage

Guaranty

Insurance

Company

(MGIC),

Radian

Guaranty,

Incorporated

and

Genworth

Mortgage

Insurance

Company.

Primary Delinquency Rate

Primary

Risk-in-force

(RIF)

–

$36.4

billion

As of December 31, 2013 (by vintage year)

New

business

generated

after

2008

represents

69%

of

primary

domestic

RIF

at

December

31,

2013,

the

highest

among

peers

active

before

2009

(1)

.

Due

to

proactive

management

of

delinquent

book

through

UGC’s

Letter

Campaign,

at

December

31,

2013,

the

portion

of

defaults

that

have

missed

12

or

more

payments

declined

to

43%

from

49%

at

the

end

of

2011,

the

lowest

among

peers

active

before

2009

(1)

.

28

United Guaranty –

Financial Strength

Capitalization and Risk

Source: Statutory filing data.

1)

Risk-to-capital

estimates

for

all

companies,

including

United

Guaranty,

are

preliminary

estimates

for

December

31,

2013.

2)

Peers’

risk

to

capital

ratios

are

those

of

their

respective

flagship

insurance

companies.

Essent

was

not

active

before

2009.

3)

As

of

the

date

of

this

presentation.

At Dec. 31, 2013

Default

Rate (%)

Post 2008

RIF (%)

Risk-to-

Capital

(1)

United Guaranty

5.9

69

17.9

Genworth

8.2

45

19.3

MGIC

10.8

42

15.8

Radian

7.3

60

19.4

Essent

0.1

100

16.6

At September 30, 2013

Asset Composition

Cash & Bonds to Total Admitted Assets

UGC

has

the

lowest

default

rate

and

highest

portion

of

RIF

from

loans

originated

after

2008

among

peers

active

before

2009

(2)

.

UGC’s

primary

statutory

insurance

subsidiaries,

United

Guaranty

Residential

Insurance

Company

(UGRIC)

and

United

Guaranty

Mortgage

Indemnity

Company,

maintain

S&P

ratings

of

A-

and

Moody's

ratings

of

Baa1,

all

with

stable

outlooks

(3)

.

UGC

operating

earnings

reflect

increasing

contribution

from

new

business.

At

September

30,

2013

UGRIC

has

over

$2.9

billion

of

assets

with

89%

in

cash

and

unaffiliated

investments.

Capital Strength

*

*

*

*

*

*

*

*

*

*

Capital Position and Ratings

Book Value Per Share

1)

Includes

AIG

Notes,

Bonds,

Loans

and

Mortgages

Payable,

and

AIGLH

Notes

and

Bonds

Payable

and

junior

subordinated

debt.

2)

All

ratings

have

stable

outlooks,

except

for

the

S&P

rating

for

AIG-Senior

Debt,

which

is

negative,

as

of

the

date

of

this

presentation.

3)

Ratings

only

reflect

those

of

the

core

insurance

companies.

($ in billions, except per share data)

Leverage Ratios:

Dec. 31,

2012

Dec. 31,

2013

Financial Debt + Hybrids /

Capitalization

20.5%

17.3%

Financial Debt / Capitalization

12.9%

12.8%

S&P

Moody’s

Fitch

AM Best

AIG –

Senior

Debt

A-

Baa1

BBB+

NR

AIG PC

(3)

–

FSR

A+

A1

A

A

AIG L&R

(3)

–

FSR

A+

A2

A+

A

Credit

Ratings

(2)

Capital Structure

30

31

Financial

Flexibility

–

A

Source

of

Strength

AIG

Parent

Cash,

Short-Term

Investments

&

Unencumbered

Securities

Insurance

Company

Distributions

($ in millions)

($ in billions)

AIG

Property

Casualty

distributions

in

2013

included

$1.8

billion

from

legal

entity

restructurings

and

an

intercompany

reinsurance

optimization.

AIG

Life

and

Retirement

distributions

in

2013

included

approximately

$800

million

from

legal

settlement

proceeds received.

At

December

31,

2013,

AIG

Parent

cash,

short-term

investments

and

unencumbered

fixed

maturity

securities

of

$13.1

billion

includes

$5.9

billion

allocated

toward

future

maturities

of

liabilities

and

contingent

liquidity

stress

needs

of

the

Direct

Investment

book

and

Global

Capital

Markets.

AIG

Parent

also

maintains

available

capacity

of

$4.4

billion

under

its

syndicated

credit

facility

plus

its

contingent

liquidity

facility.

Other Sources of Value

*

*

*

*

*

*

*

*

*

*

33

Direct Investment Book

(1)

Global Capital Markets

(1)

Assets

$23.3

$7.7

Liabilities

$20.0

$3.1

Net Asset Value

$3.3

$4.6

Legacy Matched                             AIG Hedging &

Assets & Liabilities

Market Derivatives

(2)

Legacy AIGFP                    Stable Value                       Go Forward               

CDS Portfolio

Wraps

Hedging Platform

Third-Party

Derivatives

Notional ($ bn)

--

$72

Multi-

Sector

Corporate

Arbitrage

$8

$36

$3

$12

Weighted

Average Life

(Years)

--

7.3

5.7

2.2

4.7

7.0

Strategy

Assets managed to ensure

liabilities can be met as they

come due, even under stress

scenarios

Primarily hedges of

DIB assets and

liabilities          

Bulk of risk related

to interest rates,

foreign exchange

and equities has

been hedged

Remaining credit

risk viewed as

attractive risk-

reward

Since 3Q 2012,

notional value of

$10 billion has

been novated to

AIG Life and

Retirement

Further novations

are expected to

occur over time

“Clearing house”

for

operating company

hedging and risk

management needs

Direct Investment Book and Global Capital Markets

Note: As of December 31, 2013.

1)

The

DIB

consists

of

a

portfolio

of

assets

and

liabilities

held

directly

by

AIG

Parent

in

the

Matched

Investment

Program

(MIP)

and

certain

non-derivative

assets

and

liabilities

of

AIGFP.

The

DIB

and

GCM

are

included

in

Other

Operations

in

AIG’s

Consolidated

Balance

Sheet.

2)

The

overall

hedging

activity

for

the

assets

and

liabilities

of

the

DIB

is

executed

by

GCM.

The

value

of

hedges

related

to

the

non-derivative

assets

and

liabilities

of

AIGFP

in

the

DIB

is

included

within

the

assets,

liabilities

and

operating

results

of

GCM

and

is

not

included

within

the

DIB

assets,

liabilities

or

operating

results.

($ in billions)

34

Direct Investment Book Long-Term Debt

($ in billions)

$8.0

$6.4

$5.5

$4.3

$0.4

$3.2

$2.2

$2.2

$2.2

$2.2

$0.2

$5.5

$4.9

$4.3

$4.0

$3.7

$3.1

$1.2

$1.1

$0.9

$0.7

$0.5

$0.4

$17.9

$14.6

$12.9

$11.1

$6.9

$3.7

0%

19%

28%

38%

62%

80%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

$0

$5

$10

$15

$20

$25

as of 12/31/2013

2014

2015

2016

2017

2018

MIP notes payable

Series AIGFP matched notes and bonds payable

GIAs, at fair value

Notes and bonds payable, at fair value

% Maturing

(1)

1)

In

January

2014,

AIG

reduced

DIB

debt

by

$2.2

billion

using

cash

and

short

term

investments

allocated

to

the

DIB.

Table

above

does

not

reflect

such

repurchases.

35

Deferred Tax Asset Overview

AIG

continues

to

have

substantial

deferred

tax

assets

that

are

available

to

offset

future

tax

obligations.

1)

Foreign

tax

credits

triggered

in

years

2013

have

increased

the

amount

of

carryover.

2)

Change

during

the

period

is

primarily

attributable

to

available

for

sale

investment

securities.

As of 12/31/12

As of 12/31/13

($ in billions)

Type

Gross

Attributes

Deferred

Tax Asset

Gross

Attributes

Deferred

Tax Asset

Utilization/Expiration

Net Operating Loss

Carryforwards

Non-Life

& Life

$39.5

$13.8

$35.8

$12.5

Utilize against AIG PC, ILFC, UGC,

AIG Parent and 35% of AIG L&R

income

2028–2031 Expiration

Capital Loss

Carryforwards

Valuation

Allowance

Life

$16.6

$5.8

($5.1)

$1.4

$0.5

($0.5)

Utilize against capital gains from AIG

L&R

2014 Expiration

Foreign

Tax Credits

General

$4.7

$5.3

(1)

Utilize against 65% of AIG L&R

income

2016–2023 Expiration

Subtotal –

U.S. Tax

Attributes

19.2

17.8

Other

Deferred Tax

Assets/(Liabilities)

(2.5)

3.4

(2)

Net Deferred Tax

Assets

$16.7

$21.2

Appendix

*

*

*

*

*

*

*

*

*

37

Glossary

of

Non-GAAP

Financial

Measures

AIG

After-tax

operating

income

(loss)

attributable

to

AIG:

is

derived

by

excluding

the

following

items

from

net

income

(loss)

attributable

to

AIG:

income

(loss)

from

discontinued

operations,

net

loss

(gain)

on

sale

of

divested

businesses

and

properties,

income

from

divested

businesses,

legacy

tax

adjustments

primarily

related

to

certain

changes

in

uncertain

tax

positions

and

other

tax

adjustments,

legal

reserves

(settlements)

related

to

‘‘legacy

crisis

matters,’’

deferred

income

tax

valuation

allowance

(releases)

charges,

changes

in

fair

value

of

AIG

Life

and

Retirement

fixed

maturity

securities

designated

to

hedge

living

benefit

liabilities

(net

of

interest

expense),

changes

in

benefit

reserves

and

deferred

policy

acquisition

costs

(DAC),

value

of

business

acquired

(VOBA),

and

sales

inducement

assets

(SIA)

related

to

net

realized

capital

(gains)

losses,

AIG

Property

Casualty

other

(income)

expense

—

net,

(gain)

loss

on

extinguishment

of

debt,

net

realized

capital

(gains)

losses,

non-qualifying

derivative

hedging

activities,

excluding

net

realized

capital

(gains)

losses,

and

bargain

purchase

gain.

‘‘Legacy

crisis

matters’’

include

favorable

and

unfavorable

settlements

related

to

events

leading

up

to

and

resulting

from

our

September

2008

liquidity

crisis

and

legal

fees

incurred

by

AIG

as

the

plaintiff

in

connection

with

such

legal

matters.

Book

Value

Per

Common

Share

Excluding

AOCI:

is

derived

by

dividing

Total

AIG

shareholders’

equity,

excluding

AOCI,

by

Total

common

shares

outstanding.

AIG Property Casualty

Pre-tax

operating

income

(loss):

includes

both

underwriting

income

(loss)

and

net

investment

income,

but

excludes

net

realized

capital

(gains)

losses,

other

(income)

expense

—

net,

legal

settlements

related

to

legacy

crisis

matters

described

above,

and

bargain

purchase

gain.

Underwriting

income

(loss)

is

derived

by

reducing

net

premiums

earned

by

claims

and

claims

adjustment

expenses

incurred,

acquisition

expenses

and

general

operating

expenses.

Accident

year

loss

and

combined

ratios,

as

adjusted:

both

the

accident

year

loss

and

combined

ratios,

as

adjusted,

exclude

catastrophe

losses

and

related

reinstatement

premiums,

prior

year

development,

net

of

premium

adjustments,

and

the

impact

of

reserve

discounting.

Catastrophe

losses

are

generally

weather

or

seismic

events

having

a

net

impact

on

AIG

Property

Casualty

in

excess

of

$10

million

each.

AIG Life and Retirement

Pre-tax

operating

income

(loss):

is

derived

by

excluding

the

following

items

from

pre-tax

income

(loss):

legal

settlements

related

to

legacy

crisis

matters

described

above,

changes

in

fair

values

of

fixed

maturity

securities

designated

to

hedge

living

benefit

liabilities

(net

of

interest

expense),

net

realized

capital

(gains)

losses,

and

changes

in

benefit

reserves

and

DAC,

VOBA,

and

SIA

related

to

net

realized

capital

(gains)

losses.

Premiums

and

deposits:

includes

direct

and

assumed

amounts

received

on

traditional

life

insurance

policies,

group

benefit

policies

and

deposits

on

life-

contingent

payout

annuities,

as

well

as

deposits

received

on

universal

life,

investment-type

annuity

contracts,

guaranteed

investment

contracts

and

mutual

funds.

Mortgage Guaranty (United Guaranty Corporation)

Pre-tax

operating

income

(loss):

is

derived

by

excluding

net

realized

capital

(gains)

losses

from

pre-tax

income

(loss).

38

AIG Consolidated Financial Highlights

Full Year

($ in millions, except per share amounts)

2011

2012

2013

Revenues

$65,105

$71,021

$68,678

Net income attributable to AIG

20,622

3,438

9,085

Diluted earnings per common share

$11.01

$2.04

$6.13

ROE, Ex. AOCI

(2)

26.6%

3.7%

10.1%

After-tax operating income attributable to AIG

$2,086

$6,635

$6,762

After-tax operating income attributable to AIG per common share

$1.16

$3.93

$4.56

ROE –

After-tax operating income

(3)

2.7%

7.2%

7.5%

Book value per common share

$53.53

$66.38

$68.62

Book value per common share -

Ex. AOCI

$50.11

$57.87

$64.28

1)

Includes

deferred

tax

asset

valuation

allowance

release

of

$18.3

billion

in

2011.

2)

Computed

as

Net

income

(loss)

attributable

to

AIG

divided

by

Average

AIG

Shareholders'

equity,

excluding

AOCI.

3)

Computed

as

After-tax

operating

income

divided

by

Average

AIG

Shareholders'

equity,

excluding

AOCI.

(1)

39

Non-GAAP

Reconciliation

–

Pre-tax

Operating

Income

1)

Includes results of ILFC.

(1)

(1)

Income (loss) from continuing operations, before tax

$

2,023

$                       3,780

$                       15

$                 3,504

$

9,322

Adjustments to arrive at pre-tax operating income:

Net (income) loss from divested businesses

-

-

-

2

2

Legal reserves (settlements), net of related expenses

(17)

(154)

-

715

544

Changes in fair value of securities designated to hedge

living benefit liabilities, net of interest expense

-

(37)

-

-

(37)

Change in benefit reserves and DAC, VOBA and SIA

related to net realized capital gains (losses)

-

1,201

-

-

1,201

AIG Property Casualty other (income) expense, net

(2)

-

-

2

-

Loss on extinguishment of debt

-

-

-

9

9

Net realized capital (gains) losses

(211)

(630)

(6)

(82)

(929)

Non-qualifying derivative hedging (gains) losses

-

-

-

(30)

(30)

Pre-tax operating income

$

1,793

$

4,160

$

9

$

4,120

$

10,082

Income (loss) from continuing operations, before tax

$

5,133

$

6,505

$

213

$

(2,483)

$

9,368

Adjustments to arrive at pre-tax operating income:

Net (income) loss from divested businesses

-

-

-

177

177

Legal reserves (settlements), net of related expenses

(13)

(1,020)

-

325

(708)

Changes in fair value of securities designated to hedge

living benefit liabilities, net of interest expense

-

161

-

-

161

Change in benefit reserves and DAC, VOBA and SIA

related to net realized capital gains (losses)

-

1,486

-

98

1,584

AIG Property Casualty other (income) expense, net

72

-

-

-

72

Loss on extinguishment of debt

-

-

-

651

651

Net realized capital (gains) loss

(380)

(2,037)

(8)

681

(1,744)

Pre-tax operating income (loss)

$

4,812

$

5,095

$

205

$

(551)

$

9,561

Full Year 2012

($ in millions)

AIG

Property Casualty

($ in millions)

AIG

Property Casualty

AIG

Life and Retirement

AIG

Life and Retirement

Mortgage

Guaranty

Other

Operations

Total

Total

Mortgage

Guaranty

Full Year 2013

Other

Operations

40

Non-GAAP

Reconciliation

–

Full

Year

Pre-tax

Operating

Income

41

2012

2013

Net income attributable to AIG

$                 3,438

$                 9,085

Adjustments to arrive at After-tax operating income attributable to AIG:

(Income) loss from discontinued operations

                          (1)

                        (84)

Net (income) loss from divested businesses

                     4,039

                        117

Uncertain tax positions and other tax adjustments

                        543

                        791

Legal reserves (settlements) related to legacy crisis matters

                        353

                       (460)

Deferred income tax valuation allowance releases

                    (1,911)

                    (3,237)

Changes in fair value of AIG Life and Retirement fixed maturity securities

   designated to hedge living benefit liabilities, net of interest expense

                        (24)

                        105

Changes in benefit reserves and DAC, VOBA and SIA related to net

   realized capital gains

                        781

                     1,132

AIG Property Casualty other (income) expense – net

                          -  

                         47

Loss on extinguishment of debt

                         21

                        423

Net realized capital (gains) losses

                       (586)

                    (1,157)

Non-qualifying derivative hedging gains, excluding net realized capital gains

                        (18)

                          -  

After-tax operating income attributable to AIG

$                 6,635

$                 6,762

Full Year

2013

Change in net premiums written

Increase in original currency

3.8%

Foreign exchange effect

(3.9%)

Decrease as reported in US $

(0.1%)

After-tax Operating Income Attributable to AIG

($ in millions)

Full Year

Foreign exchange effect on net premiums written:

Non-GAAP Reconciliation

1)

Includes results of ILFC.

(1)

42

Non-GAAP Reconciliation –

BVPS ex. AOCI, Premiums &

Deposits, Accident Year Combined Ratio, As Adjusted

2012

2013

Total AIG shareholders’ equity

98,002

$             

100,470

$             

Less: AOCI

(12,574)

(6,360)

Total AIG shareholders’ equity, excluding AOCI

85,428

$             

94,110

$               

Total common shares outstanding

1,476,321,935

1,464,063,323

Book value per common share

66.38

$              

68.62

$                 

Book value per common share, excluding AOCI

57.87

$              

64.28

$                 

2011

2012

2013

Premiums and deposits

24,392

$             

20,994

$                

28,809

$                

Deposits

(21,302)

(17,898)

(25,542)

Other

(541)

(632)

(671)

Premiums

2,549

$              

2,464

$                  

2,596

$                  

2011

2012

2013

Loss ratio

78.3

73.9

66.7

Catastrophe losses and reinstatement premiums

(9.2)

(7.5)

(2.3)

Prior year development net of premium adjustments

(0.3)

(1.4)

(1.5)

Net reserve discount benefit (charge)

(0.1)

0.2

0.9

Accident year loss ratio, as adjusted

68.7

65.2

63.8

Acquisition ratio

18.1

19.9

19.7

General operating expense ratio

12.3

14.7

14.9

Expense ratio

30.4

34.6

34.6

Combined ratio

108.7

108.5

101.3

Catastrophe losses and reinstatement premiums

(9.2)

(7.5)

(2.3)

Prior year development net of premium adjustments

(0.3)

(1.4)

(1.5)

Net reserve discount benefit (charge)

(0.1)

0.2

0.9

Accident year combined ratio, as adjusted

99.1

99.8

98.4

December 31,

AIG Property Casualty

Accident Year Combined Ratio, As Adjusted

AIG Life and Retirement Premiums and Deposits

($ in millions)

Book Value Per Common Share - Ex. AOCI

($ in millions, except per share data)

Full Year

Full Year

*

*

*

*

*

*

*

*

*