AIG - Earnings call transcript Q2 2021 | American International Group, Inc.

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Operator

Ladies and gentlemen, good day and welcome to AIG’s Second Quarter 2021 Financial Results Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Quentin McMillan. Please go ahead.

Quentin McMillan

Thank you, Nora. business forward-looking including comments separation COVID-XX AIG’s Life Retirement contain performance, to of on may conditions and priorities, market strategic pursuit business, AIG. call statements effects related including company its and Today’s the and of mix of a based These are are of current expectations. or events future statements management’s performance guarantees and not on Actual work performance and materially. events may differ report first differ on quarter recent with cause could factors the that our other include XXXX XX-K results XX-Q, Form to annual report and filings XXXX the in Factors on SEC. Form our described made AIG disclaims statements, otherwise. is update information, not whether under obligation forward-looking or any events obligation new and any of future any expressly as result a to

most to financial included of of the may is at The call over available financial remarks in will CEO our refer Peter some that, earnings President website our turn Additionally, are and www.aig.com. of non-GAAP which GAAP With and all AIG. comparable I Zaffino, earnings release, on presentation, figures to measures. the supplement reconciliation such to measures now

Peter Zaffino

thank morning joining for Good us. you and

to of a financial for last this in will review will have the Insurance Life today's detail. I General quarter. XX and topics an over significant cover many Retirement consolidated more of lot made days. morning as the with remarks Then, I start AIG's progress on outstanding We overview we initiatives second results results for

on AIG AIG. the Following that, and making I will on XXX we're provide an separation progress Retirement of update operational Life from the

quarter and step towards as Life on lastly, update I will what the report we same represents capital outstanding provide reduction, significant in in additional I that which on of will our priorities AIG the provide of a results, major with quarter. Retirement. to details strategy announced growth. strategic an our to in questions. take details in Mark forward AIG organic with for past. will remain will the provide I where shareholders then had on and near Blackstone and IPO management And an form return Starting partnership term repurchases, had Next, the Debt the our the consolidated capital the milestone pleased of share July, investment second I'm outlined a

the and had General coming into our year significant We and in momentum half the exceptional with in significant of sustained improvement first have strong through we delivered growth topline XXXX combined performance Insurance ratios. the

pivot marketplace continued in market volatility reducing [ph] and and underwriting as optimization, fall the conditions where the within growth portfolio favorable we accelerated and Our second segments growing on to to are demonstrating risk focus quarter in leadership prioritize through discipline appetite. our and

on very equity return Retirement also saw good segment in a by Life and business improved Retirement's the adjusted year-over-year of primarily business investment results delivered pretax our XX.X%. income Life performance. XX% increased We driven common and adjusted

We continued XXXX the billion AIG $X with of transformation of run a achieve advance end across track the deliver $.XX release, savings by to per the our and XXX to to quarter. share company remaining to prior way cost against year income second was diluted adjusted after-tax the you billion $X.X a in the in press on compared quarter in as $X.XX saw our

year-over-year XX% nearing improving the across XX% and the trend approximately attractive business both billion renewal excluding Re were completion. to including Growth results, efforts and increased of XX%. financial continuing reflecting increase increases Casualty, strong premiums Lines, more rate increased Property, excluding adjusted or the compared began in was year and accelerating in Excess Insurance. premiums growth overall Global returns, and foreign remediation growth was XX% risk our heaviest with Commercial start America Financial our AIG quarter with XX% second written prior in first to premiums than Global increased quarter in exchange, strong Personal. very net General the $X.X net I'll written written exchange, premiums Lexington. to from and in exchange. that excluding North Turning retentions strong Growth foreign in Net written foreign Commercial areas net as XXXX Retail XX% Commercial quarter,

period. This New focus operating year Lexington XX% wholesale, noting wholesale business new over we quarter excluding distribution premiums momentum surplus net Shifting we significant from on exchange, business fully has to basis renewal and and the led Lines the Pacific, that the retentions quarter specialty, and grew by global the for driven increased of Lloyd's and financial particularly strongest its had future. lines Marine repositioned international business model Asia primarily Talbot, UK, and it prior lines. across Financial XX% Syndicate. to Lexington excess foreign written continue commercial, points EMEA, and XXX foreseeable Energy which improved our expect worth by since same will It's and

Energy, and basis Commercial with Talbot XXX executing period. over by business our prior been that the retentions the Financial renewal we've in by risk growth from New across led increased to points against achieving line XX% and Marine, we're year three the is same It's Lines, important years. increased past that emphasize period over the appetite

focus including on to aggregation. respect an continue We deploy to prudently new risk business limits, with with intense

the largely Syndicate the quarter's of driven growth last second XXXX Insurance, Global as sessions quarter Personal in written With was associated exceptional unusually second with to in reflective Commercial is business, discussed our and addition creation the quarter. that premiums in the by to new respect In call, net XXXX of reinsurance creating growth billion was strong we $X retention, which of the in high being on syndicate.

improvements was XX%. which Commercial increases in Casualty were XX%, Excess XX% Energy XX%. where the America Lexington rate with XX% of Global were with rates the rate in almost the and was Lines the strongest America. which up up and North global in driven with most XX% Turning which Across up were which increases increases up continued momentum XX%. Commercial also Commercial was to was Cyber, notable North rate which rate increases which were portfolio, rate Property XX% up XX%, Wholesale Casualty up Financial was by overall XX%, increases Property largest International was Re, Lexington

This AIG benefits XXXX. of the to year limits to and and year focus transformed combined and year growth to XXX comprised ratio excellence, Insurance, combined XX been points improvement year loss We year threat of the associated reported reduce XXX best the points is the second at continue Ransomware, the consecutive improvement basis was XX.X% XX.X% ex-Cats the conditions years. Commercial risk in portfolio. selection, prior quarter improvement quarter. in Personal the Cyber of accident continue basis nature rising improvement of second terms the expense powerful combined tighter obtaining conditions, XXX ex-Cat point This accident basis XXX points and to from as and increasing improvement ratio ratio a terms core we have improvement ex-Cats in with the areas improvement systemic XX year-over-year. address basis risk ex-Cat XXXX accident point quarter an loss adequacy was point Underwriting of basis as and achievement a and of from carefully and Last XXX rate trends, for in Cyber The In result generally. contribute Cyber ratio XXX tighter and the Global improving the of premium and Insurance ratio of over improved quarter General Commercial of profitability. accident coming XXth has our XX.X%, an of are

that down or our In a were continue treaties respect buy property where second several reinsurance comment for Now in in able experiencing market across our just quick our in we we and instance layers every terms pricing second improved the took to were layers Cat conditions reflect to the program zone Insurance, of underlying in With we and exposures. and specific purchased nearly and per Notably on point through portfolio. very to our the market conditions North with improved we rate quarter at America opportunity further General variety terms attachment placements in placed. increases. to were XX quarter, a Cat enhance our tighter our particular, reinsurance is a reduce to evolve in peak the on occurrence equivalent program active significantly reinsurance

sub on execution the momentum Based Insurance, that confident will General remain in on I'm XXXX. combined our we XXX developed, we seen the the that year our terrific significant a accident and there ratio of I've we XX achieve progress optimistic get in optimizing Lastly, the of sooner. AIG ongoing end portfolio, by we'll efforts the ex-Cat underwriting,

the expectations. on year of we half AIG we our As will into second and ratio execution, through XXX further get and move provide comment further separation combined the

limit net AIG's by accounts. Net balanced more business or upwards limit, from business. approximately at multiple Re, Now firms limits and XXXX, underwriting which and acquisition than compared prior let reduced the of Further, XX% Global in all to to following. coordination annual portfolio. volatility depending XX% specific with single than improvements Validus than XXXX demonstrating our second than premiums increased across less Cat Florida all more quarter consumer by U.S. across the of $XXX risk-adjusted XX% Validus X% Re's across of include Florida total of Reinsurance reduction. AIG in focus Re's In ratios U.S. returns improving across business saw were XX% of more mid loss Florida, lines Since to the property in Increases affected in overall and period. reduced AIG In year represent on we Highlights Validus [indiscernible]. oversees discipline written on we rate results quarter geography net Re's June Property continued Re sectors. of me the Writings range million were Re second Validus written. premiums with the [ph] digits lines now turn

regional the and firms diversification. in Our as nationwide on focus international remains as well U.S.

retrocessional the of net than second worldwide June. aggregate lines. In less XXXX Building one [ph] further warrant XXXX, XX% Re's addition, protections of in protection, on premiums AIG and our came quarter in Validus retrocessional written property on from secured of purchase Re through

wind peak we for season. more substantially in U.S wind, have portfolio Asia purchased hike despite competition. the California and earthquakes we enhanced Overall, XXXX zone Specifically, for coverage our

AIG very pleased evolved. are has how Re with We

support signings. exceptionally market strong intermediary well in retention as resulted renewal significant have and relationships have as which strong We client

the opportunistically across the talent upgraded In conditions. of respond and more prepared the We sets to assess board to business this is addition, believe much have leaders. skill our we've market broadened and

very Retirement, business annuity again delivered offering. of and results. Life products advantage up across take annuity entire sales enabled annuity and the to broad rebound to Turning significantly us Life this significant and total sales Retirement’s retail once strong with our position channels across leadership

quarter first XXXX sales Group resulted and enrollments XXXX retirement annuity strong participant positive were retirement year-over-year. second compared in quarter Our levels quarter. plan XX% individual the increased during deposits to new flows higher net

As well in demonstrated our quarters, is regularly environments. positioned recent to uncertain quality portfolio investment high navigate

hedging annuity as of to periods variable protection program downside prolonged perform providing expected, during Our has volatility. continued

Finally, the Blackstone's from product significant Blackstone positions strategic partnership and business the its with to Retirement distribution benefit expand offerings relationships, and enhance will its capabilities. Life further

me build ten have $XXX savings, run already operational in strong execution operational $X programs statement. let the multiyear or with our Now contracted of a with to for global across the income months AIG AIG company AIG path execution and the which continuing billion AIG XX urgency, turn long culture sense deep to XXX, is date recognized has into and position transformation been $XXX we We're excellence. foundations to to all effort executed to cost rate a of XXX of in the instill million continues mode. XXX into our clear term. with million

considerable with quarter to progress of in the with speed the on business separation we execution a second Life minimal made and Turning disruption. focus Retirement

to been the and as Retirement XXX. work that’s not done day Our without our the colleagues are partnership foundational and our preparing and become company one streams AIG been speed investments which Office for aligning of and have standalone Separation for Retirement unit This multiple has Management includes identified a part requirements The have close. possible work Blackstone with work to would with Life Life underway. moved

our parties to discussed in believe additional value from last up IPO of the I business credible well public a that of calls, IPO noted October. we separate interested also purchasing of for stake an as following and the stakeholders on as position business received Group. company. in continued creation several Life Retirement out since entire maximize for last I will As value our XX.X% base And intention and Management we prior to Retirement, AIG our Life as was our a on have call announcement Investment an from minority increase our case we to announced

shareholders term to selling entire transactions those pursue Investment because which We significant the we ultimately determined Backstone. also was proposals of ahead that IPO, long of Management not not didn’t parties Life decided we original find to the the would for to this Group One of entered way for a partnership transactions some and contemplated in process. interest in reengaged was proposed Retirement. believe of the the strategic optimize would June, and Retirement reinsurance an into Life discussions we could with at outcome of the goals Blackstone that led mid-July. the us separation we partner the determine the further if beneficial in In our mutually to stage announcement of These

sense of towards an work the Retirement IPO business. Life of urgency continued We a to with

XXXX the approvals of event conditions. previously this a We year likely Blackstone, as likely by an Following viewed the the IPO quarter market IPO and as earliest to first occur, will the would equity with first fourth quarter the regulatory more quarter the XXXX subject of be required X.X% investment outcome.

timeline our essentially with the transaction. Blackstone unchanged So, announced is even

on when utilize we development more our a flexibility IPO Blackstone, sell an to sale compelling accelerate down Housing a beyond will as made are Affordable We tax credits partnership expect to This compared gain us occurs. fully as separation factors company the as considered independent other the structures we Life with last as foreign provides coupled operational and now in of to better positioned our and separation more with result, result announcement established believe it with XX.X%, XXXX. facilitated our we be that Retirement comprehensively since October. to Additionally,

Now Blackstone AIG provide the detail milestone on partnership, a and meaningful for momentum let of Retirement. additional me the which for represents Life provides IPO significant and

at view is key a the the several Life history XX-year discussions investment the their and firm indicated our its as over Blackstone's for was time the CEO single Blackstone belief throughout, position. partnership made Life of very the and Board the I As great Retirement's September. insurance last it place Life strategic strategic occur and directly in and single we Retirement has that Retirement's leadership it's Blackstone involved of corporate in negotiations. He Gray, This by commitment year has in initiatives is largest AIG to a of in priority client. in largest the highlights which John this and a for on the Directors equity IPO value a Life of been is culmination some took we of now Blackstone mentioned, Blackstone's partner the of business leading substantial of is beneficial Retirement represents and firm Furthermore, that closing entity and for will strength investment, making the of Blackstone and the the investment, investment business. has expect validation President Blackstone. join market and

a the majority of business, our to combined IPO. investments adjusted of just times that financing target AIG, thinking about book stake a well and an terms Life as standalone recap in of to from cornerstone entity of how value businesses. business the holding acquire AIG's Life in is to book we're $XX.X value Retirement units, Retirement price some for X.X paid future Blackstone and be company transactions, be Life X.X% for AIG of and billion. undertaken, $X.X a cash a to purchase The the the as the all multiple prior will book for to forma equity billion equivalent transaction. capital reflects me the Retirement value adjusted our amounts The of and the as Let pro structures arrangements

whereby with billion will to Separately or ratings aligned debt view will be structure entity optimal year stack debt and look also we $XX.X we of agreements $XX both each each consistent ratio for asset with will Life to the company. growing period. down as Managed raising billion with into this the new will pay capital will over at such with that what and to IPO The as company's peer debt, the AIG IPO debt Blackstone, we six classes the entity, and be Blackstone at the As manage amount Account SMAs entity, at specific Retirement of ratios. used debt-to-total enter permanent its and leverage be peers a AIG,

the transaction, Lastly, sold as end I to by to which to alluded close we earlier, housing Blackstone $X.X Income certain all an assets expected Real cash Estate affordable for in XXXX. billion year Trust is

additional parent billion in Turning back Capital we the remainder billion from by transactions of $X.X Through of proceeds common year, end and of to the buy plan The billion stock. $X year at $X.X of pay Management, net second with we resulted XXXX. debt AIG of to liquidity the least $X.X ended AIG quarter to down this billion Blackstone liquidity.

press buyback with additional and authorized As our to capital which $X demonstrate has we these announced commitment our return authorization left release to stock delever brings total on Board authorization the prior our $X actions approximately in remaining Together, billion. billion shareholders. the management to share AIG repurchases, our capital together

In be in General continue extremely with addition, conditions to overall of us continue particularly position ample favorable. the to Insurance, leaves strength where to capital in invest market growth, our capacity

it the to more to turn quarter. Mark provide detail over I'll Now on

Mark Lyons

you, Thank Peter good and morning everyone.

on between The income XX.X% billion for quarter of XXXX, General AIG return an income reported second We billion. for $X.X XX.X% For and net or of billion adjusted income being income treatment tangible pre-tax investment AIG, AIG and equity gains adjusted Retirement. APTI of and and quarter. produced and with return $XX the a equity realized associated accounting the the for Life On and common XX.X% net Fortitude, annualized was the XX.X% adjusted adjusted losses. after tax for income of of after-tax $X.X common $X.X annualized difference of Insurance, principle adjusted million reported GAAP on of basis, GAAP

AUM origination though, to like mostly Blackstone sourcing add securities. and is alternatives fixed where record and incorporates credit private public Peter's leader remarks has This on billion annual products and on the XX of four starting points well uplift specific points of for as asset not billion the to as of structured specialty XX fee initial a structure for the SMA. to $XX new $X.X The demonstrated AUM basis basis move yield increasing quarters Before arrangement and I later, comprised is to the classes, from Therefore, income the basis points the in initially world points of a basis delivering AUM. General I'd of Insurance Blackstone fee rise year towards should track of six runoff Blackstone XX assets. term XX initial share reinvestment the by end for contract

unique and liability is of it's We enhanced impact asset related expect the origination believe that the this nature credit the over to part precede maintains individual Eleanor benefits uplift. asset liquidity of this management, [ph] of structures. at its somewhat investment SMA fair our differentiated overall and For will arrangement fees allocation recognition and of asset classes portfolio, and of control yield profile that

Life on the together believe enhance net of performance with these the overall asset of uplift. and optimizing on the has combination should AUM yield investment portfolio. opportunities drive whole overall efficiencies efficiencies, well to the and the on opportunity the Retirement are as We growth addition, maximizing part Blackstone not SMA In assets and management performance the of focus SMA, across improving by that as classes focusing

subject cannot note want as OCI subsequent book the to a I GAAP this with OCI sell be on sale that of well in estimated downs, market the at GAAP inclusion with transaction, to due periods purchase loss value, and fluctuations, impact future Blackstone IPO the to equity a as fully X.X% that is Blackstone, leaving time. anticipated by given is Before

portion level. Affordable to price, of to RBC entity held value, and in provides expected end after strong gain the back that billion to As billion an on purchase which $X transaction year already light note retirement to close historically the parent respect translates XXXX. $X.X with is Housing, regulated approximately further $X minority This to billion cash an by book sale, approximate benefit will tax and strengthen a

quarter $XX $X increased billion, this with million, equity underlying This Insurance, $XXX income of of underwriting million quarter changes Prior International, primarily quarter. along million development income $XXX over year-over-year, in net prior to reflect driven in year favorable and $XX to lower million unfavorable America, General to million, income, quarter losses both even change compared million Moving second operations. in of the the $X.X pre-tax quarter. year million in was was of increased this private adjusted the prior million and of $XXX North development of primarily net pre-tax were compared $XX development favorable $X favorable net up $XXX billion investment returns marginal included by which significantly in reflecting development Catastrophe of pre-tax year

this As environment. the was executed adverse though, cover Insurance amortization net how to amounted which usual, from context the market has to important property within strength favorable General this and there It's quarter. million casualty the development recent $XX put of in and

distribution As E&S and the or materially since Risk Peter three broader his and and Lexington have has properly reinsurance correction segments a have selection implemented, and and been complementary major reduced, been were nearly appetite as programs set massively up had turns embraced certain been risk platform. book mentioned clear in has has sharpened XXXX. lines exited, evolving remarks, at been

to Commercial, in of accomplished actions with demonstrable compared ex-CAT trends has North basis the point quarter. ratio as underperforming International year International Commercial ex-CAT up XXXX. in earlier, written American segment the segment well. North General America improve the half XX% in combined both shows through with as enumerated as to simultaneously of of Global improvement net first Commercial and ratios year quarter. XXX while segment underlying excess accident achieving Commercial improvement and Commercial improvement improvement had prior Commercial points a the All the profitability the the cost continued XXX the shown this Insurance to basis The this net significant the materially why loss form terms year of shown over conditions. prior worldwide of This foundation better is material rates was These combined improvement and totality of noteworthy and accident actions margin level has premiums year from stemming made Global historically

Commercial becoming a coverages. book is frequency Global the specialty book increasingly Additionally, of severity comprised global low high

large scope, General a while global commercial mere selection is growth, instead company in although achieving but mitigating risk are Insurance not index factors result, the a important and of where volatility. underwriting business market, As and in profitable mix an

driven on Turning premium to XX% sources first dollar the during segment, timing would end aided the given but in we spending, by and was Insurance, the by comparisons travel XXXX improve Personal increase. the in activity Syndicate premiums grew comparison. written North COVID-XX by second the as our also Line America on consumer constant noted not approximately within XXXX Global quarter the earnings travel of pre-pandemic and of This for Syndicate a of call, the back net XXXX. net basis, business rebound written quarter initial second our the a year-over-year reflected insurance yet second quarter quarter or of XXXX warranty levels. impacts, saw from XX% Elsewhere increased Personal personal being premiums the to

well increases resulting terms anticipate for and and more We per global for profitable mix. is throughout volatile underwriting favorable between taken net America North six quarter, Insurance less and actions rate XXXX margin above AIG's trend, into in $XXX improved strong lost from to a continue involving next and outlook market the conditions expansion million written Our Personal premiums XXXX, months earned $XXX and conditions

don't rate of Given the material balance dynamics the foresee down specific we market choose year. levels throughout to of any the the play, slowing where cheap we in

needs accelerated in annualized comment consumer is of a on to X.X%, indicates of both March. since which and economic Now index, price inflation inflation. I'd bit terms producer about on rate and index Based headline X.X% about like one the an to to think inflation, social price the which

but services of become trucks about Some casualty hospital about as any costs being energy function components placements, XX%, Costs inflationary indications given tame services are demonstrate although headline direct used services, involving indices whose across will impact most about property up mix such the would and commodities insurer than write, insurance physician stretches up near XX% is and workers the of up cars with on and auto construction much materials, are in of [indiscernible] labor, term. play up related being medical inflation the impact recently, and they a that the care have indicate X% the products and services [ph] compensation worrisome, more higher and coverages program. CAT within and an and and impact X.X%. claim they These where excess

however inflation Social is culture. driven litigious of a by phenomenon, highly much more a centric U.S.

counter strong to including action General programs. umbrellas favor that has also in a positions by inflation changing correlations business Insurance regard toward pre-emptive meaningful lead name has and initiatives, further the higher minimizing risk Social AIG's few. to insurance social inflation inequality change and of taken income sentiments Being away from in within though, a is

attaching X.X For times is portfolio corporate accounts example, points respectively a U.S. from times and approximately for This increased national since XXXX. attachment our overall exit casualty average benefit. have key distance and increased significantly X.X

a for inflation reasonable the a altogether, X% to view near total of rate U.S. Taken towards is X% arguably medium to term.

quarter rate excess together of margin Our increases, our second trend. with of rest pricing cost loss provide continued of this for year, the view the in

prior during XXX,XXX favorable rebounding Group by four population being to approved while business compared being approximately mutual stronger million, over the by COVID-XX about of deposits deposits be seen positive favorable year compared when transfer Within both Life pricing surrender prior, when quarter risk with XX provision the for rates for pension to through approximately per investment million U.S. also premiums flows continues fund reflect second lower impact were returns equity one estimate the an markets the retirement last year $XXX opportunities, in Retirement, compared and with We prior million up pension drove returns were and over the large principally both related the flat, our year, GIC net that compared excluding reinsurance relative population quarters. Life and exclusive risk XX annuities and by the to annuity continues XXXX, the rate $XXX consistent strong to to and experiencing the to direct to institutional on very billion, Retirement, favorable is Mortality, period. which prior quarters higher U.K. than of retail the the the of reflect relatively transactions Individual insurance lag premiums turning COVID-XX we be alternative death. led for sequentially. flow $X.X variable mortality markets was Now in premiums the assumptions higher net the dropped executed flows year-over-year sequentially index private quarter, equity also both has exposure and and remained surrender to lap net were the with however, has and quarter issuance pipeline business and higher transfer higher year-over-year life to The quarter and up sequentially. several and The with

new management X annual new pricing our within changed, money were spread business for as spread product disciplined expected our manage to not due current within our low the the targets from spread earlier quarter credit guidance. and Further, point impacts approach. generally interest environment, and annual our to rate to continue margins actively investments We tighter compression range second the at remained base a returns, for active has and provided XX

the fund sale on of closed operation. we XX retail June our post Lastly, mutual

which inclusive reflect this from are was last at has adjustments negative elimination the now net contributed other and the other retail will adjusted returns mutual then over $XX $XXX operations. years, cease entries, two flows and loss million, are in you The which pre-tax fund to the offsetting of principally investment million Moving subsidiaries, eliminated consolidation As drag from aware, operations.

adjusted was the XXXX, million. two eliminations, afforded $XX second consolidations $XXX Before that than of million, $XXX pre-tax million results worse Re months to a quarter loss the quarter of but included

incentive is our two was in second quarter. by investments, we over driven began quarter After in on legacy virtually approval program second reserves, period. and reflect the addition, increased of year-over-year. investment Fortitude quarter a accrual In net exposures, of we to again, XXXX, flat the applying we an that program to strong prior the quarter incentive XXXX during month third our million increased Shifting by the of mostly these performance year-to-date, loss adjusting adjusting income year $XX adjustments, from also APTI XXXX, XXXX overall whereas for investment net net but billion actually second the $X.X favorable the income basis comparison Blackboard

investment for net XXXX fund quarter, and was annualized private at equity $XXX strong than for income. an dividend quarter's rate with interest results quarter reflecting return year, income returns and return and the hedge rate the prior along stable million higher annualized the XX% This

common at driven share Turning per one was June to value value the share from $XX.XX year ago, up one sheet, year XX operating adjusted $XX.XX $XX.XX value book strong X% ago. from primarily and book balance for share common by ago, up X.X% share adjusted tangible per X.X% from with year common was up performance per a book

was parent AIG liquidity As billion. at quarter Peter $X.X noted end,

U.S. purchase the $XXX million. tax to settlement pre-payment aggregate million emanating certain price $XXX a agreements, tenders an well completed from connection made debt period, we with of quarter pre-XXXX Treasury in second as as for the the During

leverage at from points XXX of XX, down June from debt ago. basis XXXX XXX June end down one Our points year was even and XX XX%, basis the

operating primary capitalized. subsidiaries and well remain Our profitable

quarter General between and and capital for target estimate and be XXX% estimated we For between fleet be both above pool Retirement Life XXX%, and the to to our XXX%, Insurance, ranges. XXX% is risk-based ratio U.S. the second

remaining that to be portion natural Lastly, expiration. through at of future tax, AIG the NOL available taxable their want [ph] and/or to will or tax purposes operating reiterate income offset for loss still NOL time Insurance General net the of I as respect de-consolidating DTA AIG to

it billion, back to that XX DTA that, ability I is of up Company turn utilize remaining the totals to $X.X FDC of Life over billion portion and June income. any to With taxable up the offset tax to available XX% Peter. against income see we'll NOLs $XX deconsolidation to of what Insurance As of will is now Upon or [ph].

Peter Zaffino

Operator, you, Thank to Mark. question-and-answer. we'll go

Operator

take from from first We'll question Instructions] Elyse [Operator Fargo. Wells our Greenspan

your state question. open, is line Your please

Elyse Greenspan

kind sooner Hi, could that guys said when could I make into General to inflation what of X% in Insurance question was you see perhaps you XXXX? first thanks. assuming margin stable Peter, expand of remains terms and and that on, you pricing to target Good My on Mark off sub-XX are that said, of get hoping than comment, based morning. around timeframe within you X%, expected. you to

Peter Zaffino

the there's talked I that to drive in the are Elyse. past Thanks, about going many components that combined improved ratio.

and performance and just attritional script The Mark what his first underwriting less volatility. we're in in through severity of terms and that losses absolute the come covered seeing is

that We strong We're we growth the commercial now that's the In in have addition, and of the line that because that once reinsurance market in see and less continuing. needed seen need side. believe makeup portfolio. we top of

in then and some overall to all which that have that we real tailwinds overall gave statement going XXX earn on is are prepared there, numbers a we you in income to that I So have expense not just discipline. addition those clear only billion path remarks to are sight through my continue the to the starting our to have in AIG a tailwinds and

rely component, we social the believe five a seen, leaves I have guidance with couple just but us I've So no loss to be general and so to have is leadership range the does Dave have momentum, in environment. same time the specifically McElroy insurance we it quarters. four job is and rate that the and that and tremendous all a don't entire the it that and be the inflation mean, next of momentum require in optimism. give lot in on not cost momentum I'll have we and done I heavily more me on watch it, inflation, and drive one of the that to there's team the mean they real lot in a the differentiator of excellent

Elyse Greenspan

most and then amount it foreign emphasize you did Blackstone sale that Retirement impact past public bring Great, that this sounds you you tax of Life second in markets. that like the the considerations to won't the initial using my so of credit, terms now with on guys and question, and all all in

proceeds do since be $X.X the from then of organic now, there, growth. the much So a debt down of you the and how guys bring sense terms proceeds in going markets? buybacks get million public the paying you're to for could of to majority used future you're you of transactions have And

Peter Zaffino

the separation. us, really Yes, be we I thanks, Elyse. to operational tremendous of quarter mean in timing, is close said We're as Blackstone hope working a We'll in on I going terms who with hard we're partner first targeting for IPO. July. our the

six next the the to is to Life over position successful have a very working Retirement so months And primary focus. IPO

Second we to market in and itself. have prepared is, the said like think remarks environment I the my about regulatory

in really of will coordinate something that IPO, you larger lot how there's debt? terms a to, to will we further it if And an do. but you get really we that dictate than don't go gives guidance in So, to the a to in wouldn't the add market go with timing, I want continue of we're as the management progress that anything just X.X, or give the conditions making. to we Mark, with size we'll the along know in [indiscernible] capital us just year to flexibility much with, favorable do we

Mark Lyons

this, core the that emphasize think constraint. I to was removes the point Just that

sizing wanted said, a point we on but than contingent, to the have a having the is to really Peter specifics which rather and So push such do of very not sensitive now is main the over. ability market that we're constraint

Peter Zaffino

Thanks.

Next question please.

Operator

from Meyer from line Please Bank, ahead. is question your go next go Investment Shields KBW Let's open.

Meyer Shields

Great. Pardon thanks. me,

the to Blackstone that the can the the expenses fees. on are a question XX sense of you us constitute will to internal partnership, that give points what are basis First XX comparable

Peter Zaffino

base not in couple time exceptional through I making Blackstone looked on a thank to AUM that? are that will model still with so Retirement that making went case authority there we partnership its they Mark Blackstone, but grow with so Life or over records our the Retirements the so will and certainly could I'll Meyer, will to was that efficient of certain into second, was that. A variety the investments we evolve be that question, details the it, for commitment track that transfer fill and with the of partnership time. have in do they have that contained that shape we become and over you equity overall ability factors turn think We maintained at Yes, maybe this assets you of over our investment, a the the lot to on percentage a Blackstone, more it working a Life But only Mark that what classes smaller a will that with we're believe of business

Mark Lyons

Yes, of it much on intensive well are and are think Meyer, usually as always scale end more Peter the the specialty said card. a if the the of labor level rate of in assets higher you

overall graduate expectations And to our we us. of experiencing they the internal are have that so, would as within for that part is class say, completely asset own also categories you within would increasing up costs, what structures we

less going we're is value is So to there's be than going that getting we clear accounting some to cost the it. view be of worth gap, of you what but that some than know out think. But more

Meyer Shields

Mark. I Okay the have for travel, guess, the personnel understood, the the expense going of question, second North see till are second because expense suppressed guess I quarter should up ratio we distorted insurance rate ratio this of know the American the second forward? I quarter Syndicate. the is representative been and what run those probably Is

Mark Lyons

going It's available little have -- a the what may this on said being a statement ratios ratio there. loss on gains line make ratio expense side combined side the Commercial in we've of the of ratio and driven, that personal ratio first, a expense driven, past stability we let to, think you're the more in and but think that's and a I think loss that on bit and me tried should lot is more calls, got Peter I general you is position

expense to I to ratio roughly, say should continue extent we, but continue North it's you'll that see anticipate would that America actually you to So Personal. in the to improve the

Peter Zaffino

the And in one that, worth net zones. changing dramatically noted thing add, Meyer space in peak just would of I is terms Mark high is

excess the in second was more and lines, business. in non-admitted split between change as basically the continued see admitted to expect and new alternative surplus We quarter

but going to the there is than different going be So I specific that's just in watch. some less given, for that trends solving to there's we're change advantage are no take volatility. something to we've that reposition of mean the to position that guidance problems portfolio but we want market also that have business that the clients, sure make we with leading substantially

Okay, question next please?

Operator

Eric [ph] from Thank you. Buss next take from We'll Autonomous question our Research.

is line open. Your your question. Please state

Unidentified Analyst

you. thank Hi,

Management of the about sounds So creative can when a though NII, dilution, assets affecting help Life turn more NII offerings. like and the also little they us this years. initial your some the you you of bit new over couple with It Agreement be next Asset how fixed indexed being expect more this talk to you to Retirement start you and even and Blackstone annuity will any for and and should competitive this could manage support business in see

Peter Zaffino

about product. it over Kevin to Hey in Mark, why and of you turn then don’t start talking terms

Mark Lyons

Kevin a Yeah, well. will thank you few think with to I Peter. have as there things you Yes, help

seven the the to So point, is secondly run years of turnover. to you've come will as on get your of to off the and it firstly have it thinking billion delayed got takes uplift AUM at $XX is through, it fees more worked way manager, the we than for this about Eric, that asset been think mostly,

it shifts points, XX come a bps. it half XX the million that to the at from that to annually, be As will in also take and to occurs, also $X.X basis will XX XX,

that you curve So that in have my kind remarks. of alluding prepared to was

yield uplift a result as net those through that made. to have that can investments function as of when going So a of you're coming be

So but is of expect aspect, original is point but close the which XX% to end that the important might delay over, you one, turned you we get AUM the have still L&R that of think is completely if sooner remember still you're why the control. lot not that away at it, to of that year and than think, really chip a you has you

of is and Kevin. liquidity take the management the discretion and asset and so offs capital off the the between trade and forth, the rating all L&R, distributions So distributions within

Kevin Hogan

of we addition ability. portfolio to have create this thank Yes, in an keep this a to their that work in change of you Blackstone also and that, we not is mind to in is ability believe more the so, in I broader our with current our originate to combination that our their subclasses, will transactions tremendous their important asset portfolio And exceeds new is capacity classes, of classes, strategy, what's they static, our to to ability the faster. of within has capabilities asset think to enhancement originate grow that strategy, range these believe the think that be origination as sheet it and a assets to will allow us and a to breadth the products, we support We attention strategies innovate will sheet. us allow do of together growing about balance balance not think

of this just overall strategy. than yield so And think the the of on the part about portfolio portfolio, rather focusing I

change an again is this enhancement think it, is a So our and about how not that's strategy, in we it. of this

Unidentified Analyst

be And other by of then public should expenses will and the of then post you. that think will elsewhere, to level can you that expenses how running new offset like we have kind will about help able these remain are ops be retirement and with think Thank savings of separation? that parent, in us through the about level the

Peter Zaffino

will for next a will the life terms number within million us is left XXX stay of in for provided I in that AIG had guidance there over around meaningful that, with, Life that there's that, earning that The said big but months. the one. savings some XX tailwinds that handle them. me be through for of let Eric, Retirements We past are $XXX retirement and achieved

services Retirement to So $XXX Retirements over think goes that about or AIG we dissipate for today retired either roughly Life company. go allocations as there have fees XXX parent transition those is service and and of Life benefits, million will still public then we'll to that

$XX of So million range plus. in that's

we company, invest to to of think to the should remaining the we've more the through that get AIG building savings So Kevin synergies for we guidance initiatives decent end and to Life beneficial, more that we'll and expense closer when separation largely in that think amount the company year, out we neutral done neutral it's with a Retirement exist towards other has within the give office. it and public work be separation the as office

Operator

you. Please from is Stefano next Thank Deutsche line Phil take our from go We'll question Bank, your ahead. open.

Phil Stefano

thank you. Yes, Good morning.

look today two and way GAAP general the commercial. loss getting at written in what are focused you rate push is to the net one When continue back given are dynamics? looking you're on for there. book to the improvement you mean versus now? clear just mostly the and you earned, is a just If need this about the How continued at thinking insurance pricing underlying growing How I the is that net versus re-adequacy, over ratios these dialing balancing we rate

Kevin Hogan

you Thank much question. very for the

his do approaching had watch I do we when little of you're position Insurance and increases. about portfolio. develop really that You have But several and McElroy do know General that's there been is Mark how to We're specific believe entire in Dave, it Dave to more you focused to business talk rate in remarks. that day every commercial runway getting But how and put comments some optimization business some the portfolio everything a to to lot terms loss of of the prepared on? margin We continue others, particularly what on and of team cost the about segments We've ones it's about than bit inflation talked we referred spend building and I something side it. that of margin optimized rate and years an need margin. lines want thinking you're the they're that different of have a absolute

David McElroy

increase thank the you is of make and Peter don't in calibrated to doing Kelvin one rate things you off you're it's portfolio. you story all other the want thank the Yes sure

years So, attachment of lot managing what risk and we've conditions done in exposures over that. of and a the is last account three selection and terms point

ultimately probably again. selected end your rate you fall you in with increasing if number adversely define you and singular up book, So a love

gotten that use examples, might York So still I like, actually to context I lose. will New have it's Law, and have increase I in a always you and chasing York, Labor on contract XX% in put rate New I'm

getting auto, increases we've Okay, industry, still for commercial a solved it's problem. commercial auto haven't and for we been that the eight of like bit years rate and little

So increase a upper need aggressively positive. What account we've rate false have it, sort understanding of that we complexity a to can at large looking it technical done that of and the book, with reflect more book. book, and a of middle be more realizing rate market we

going sustainable that's the year. think this we into part latter of So

it Okay, inflation's, at pricing observed would quarter a cost this account, and is what be Is to same is, bit. we last Yes characteristics. the accommodate account I've the loss can in we the moderated? time more expected think and we're what the there's little

but more plus to and basically a reflecting swell the of of plus outlier off Okay, that my dispersion same when XX% loss rate XX a would terms of at exposure. but we XX plus still accounts of don't over up, the have XX, to XX plus I to in type it's X And are look moderated have say trends. cost I of that we what charts, XX, aggregating in

might the and careful are the The you to but even period multiyear re-underwriting XX%, of first with XX% to and compounding other or excess an starting are plus panacea. XX% or time look to at phase primary our programs, that numbers our we book influence do plus And in in half piece of a and a -- compounding plus in and the casualty I of and of we at exist market. when we these because -- XXXX. look reflect you we a not D&O okay, the have XXXX It’s be it that late clients, are in over want

and that got investment done new quarter. lot I lose. if business. a for of good that I say had -- I it’s The thing still we've baseline probably is mean, you’re XX%, write we was the progress will last If But to businesses trying with I'd a E&O I banking the

it priced of also calls and this was rate/price couple cited think an elevated remember on being I structure. now with is

new three now quality produce the same an this to moving much and ago years So offensive as of is of what business the the had to multinational XX% can from it or And that’s ago a with in complexity formed the was years success our point, building XX% business. of while. two business of pace, AIG actually a remediation has when for piece is claims we strongest lot capturing up very off new reputation quarter that we've in

our consistent view that So but and to sort technical the that, of important out. closed lay off rate it's that of increases all

that you we're So, on, understand on -- with not business. lens a looking this aspects at all the really of we're

So, with Thank [indiscernible] you. I'll that

Phil Stefano

Look Yes, thanks guys. quicker That's very maybe one. a thorough.

Operator

We will from take our Barclays. next Benguigui Please from ahead. go Tracy question

Peter Zaffino

Let’s yes thank then, you. and take question one last

Operator

Please go-ahead Tracy.

Tracy Dolin-Benguigui

Blackstone that size? Thank minimum a that a just or equity an there considering you. thing is IPO IPO a IPO pricing contingency also is I Is for proceeds timing see the and or our stake the contingency minority transaction.

Peter Zaffino

really that. the that brought be to really the up that cornerstone and things tying X.X getting but quarter on a and than there that IPO. bigger public setup has are predicated and strategic versus eventual No, those Tracy. the the market And organization sure done to what to to look the Retirement always within on company Life at, that focused is all do making do that investor table are partnership starts a really we considerations is the set we to to Thanks, we'll first accelerate want is again the regulatory the ones

of have the consumption, As Mark the a lot flexibility foreign more because mentioned credits. we tax

outline think the will what happen get to to start we the we of And closer we XXXX will end year. likely so as

Tracy Dolin-Benguigui

IPO I recourse, be didn’t there happen should were didn’t if referring yes if considering. also you just so Okay, else that something X-K know fine to some was some I that there in I the was print

Peter Zaffino

No.

Tracy Dolin-Benguigui

margin Okay anyone a trade you perfect. expansion, doing are for you where both. but at could are spot Look growth

Peter Zaffino

Yes.

Tracy Dolin-Benguigui

guess your place have visibility is And the only I don’t specs. lost I where

or activity relative how specs contextualize your So have you last you can current to maybe loss and X-year been year tracking average?

Peter Zaffino

to cover do that? want Mark, you

Mark Lyons

couple things. of Sure, hi Tracy. guess a I

are viewing, are on basis. margin there. being really First conservative substantial actually We a we in a quarter-over-quarter improvement showing think although year-over-year we're off, or we

calls, past over has three channels change of we which lot this. there think fundamental years, So a of as the get I've the said, some including last I on been in

one think we So got we correctly. XXXX. of bats those Nobody a

accident risk last So of you associated bit years. wind little up margin with several having each a the of

and about I displaying that trajectory of things that's coming associated it's feel it. good feel the with an booking where and overall we we're from, the without hope risk and helpful. So, not margin improvement having and appropriate

Peter Zaffino

and for Mark wanted I us thanks Yes, thank joining everyone today. to

we what presented the thank in environments. call, work been the the our colleagues Before I to the they've that last over have for accomplished end considering want remote challenges six especially around months, world

do of multiple Have on significant delivering on initiative have focused our talented, that a day. quality value proud hard We I unique. working base the remain great think very a all in ensuring simultaneously we complex colleague I'm to which stakeholders. of makes that's everything executing very and us team very who

Operator

That participation. concludes your today's for everyone conference call. you Thank

now may You disconnect.

American International (AIG) 6 Aug 212021 Q2 Earnings call transcript