Earnings call transcript Q1 2023

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Operator

Good day, and welcome to AIG's First Quarter 2023 Financial Results Conference Call. This conference is being recorded.

Now at this time, I would like to turn the conference over to Quentin McMillan. Please go ahead.

Quentin McMillan

Thanks very much, Michelle, and good morning. forward-looking are include and to may uncertainties. remarks statements, subject which risks Today's not performance of are statements guarantees These are future management's expectations. based current or on and events that provided AIG's the events details could materially. cause on to filings differ actual SEC important with or results factors update estimates required to or change. applicable opinions no by if statements as laws, AIG should forward-looking Except under circumstances is securities obligation any or management's

financial figures measures. the Additionally, included The website of available today's to remarks release, to GAAP may on such earnings of earnings most our non-GAAP comparable and presentation, is refer in measures our supplement which aig.com. reconciliation financial at all are

will Financial. well as is Financial. results thereto, until and from financial those AIG's today's reported with on on as AIG's as Corebridge the deconsolidation Financial will include and its which GAAP to Life and Corebridge basis of respect Other segments we financial to metrics, continue of Tuesday, how Finally, May differ the host results expect by report X. Operations segment earnings Retirement same remarks call U.S. quarters, AIG's key prior Corebridge

With that, like the Zaffino. turn over our I'd Chairman Peter CEO, to to and call now

Peter Zaffino

for financial you thank to and first us quarter morning, Good our results. review joining

portion financial the Following Hogan will Q&A quarter, take available call. my and be detail questions. David provide remarks, of Sabra and will the more for Kevin the in then we McElroy will

the start you release, As excellent reported to year. press saw in our an we

uncertainty. complexity even market the volatile to the continue insurance We meaningful ongoing economic AIG and important progress make in general conditions in achieve across face of and milestones, industry,

the for quarter strong and creation. operational long-term financial and our are to continue results which priorities, strategic AIG We drove execute value positioning on very first in diligently

highlights from first Here are quarter. some the

XXXX, our saw quarter of increase return Sabra construction reduce these her was income In investment investment volatility. We continue income the Net characteristics investment was as began X% expect detail provide steps will to credit a first year-over-year. share, throughout net Adjusted quality, year. well to on and and per the a to improve of $X.X proactive to benefits or remarks. consolidated common billion. basis in we the take $X.X in on income $X.XX that portfolio representing additional as diluted after-tax actions billion the

AIG's Net discussed $XXX for underwriting Underwriting a approximately XX% a business. result. on premiums growth XX% General in quarter written that was on elimination which dollar our by Insurance we was call. constant first last and million, International is grew increase strongest our basis lag the adjusted driven This Commercial income year-over-year,

XX.X%, results, fixed combined accident ratio, point premiums year-over-year, catastrophes, by Retirement the The first reported and from excluding year. with products. very was and fixed in index sales record year improvement annuity XX% $XX.X of good annuity billion supported in deposits an prior quarter, a and XX increase basis Life

an annuity time, support Net began were partnership access no on of beneficial progress products. Corebridge limited had has the been in $X.X an the Since to billion. gross and where which approximately classes XXXX. and has particularly A. very of average and growth, credit flows asset that Blackstone late which into in to we partnership, in This business rating with invested certain in to helping substantial yield General Account Corebridge the behalf is X.X% past, made average expand allowed their for approximately strategic from advancing Blackstone billion Individual Corebridge, $XX have has Retirement of fixed

had very parent of through Overall, $XXX first in strong repurchases shareholders momentum billion. common we $XXX The We liquidity quarter in what the I'm and coming And we stock million the we $X.X the quarter. returned million $XXX first quarter into dividends. approximately with strong XXXX continues. accomplished first of million ended to pleased of with

of the approved dividend Board AIG stock the night, be the will last quarter, dividend increase in an strategy increase the $X.XX many AIG. XX.X%. disciplined, milestone first to AIG meaningful our future confidence earnings and significant second a Starting quarterly another is power this capital share, years. common AIG's announced in our for balanced This management per commitment and to in of we As reflects

Corebridge Since the achieving $XXX dividends $X last Corebridge billion totaling milestones. a has authorized public important Board shareholders, year, to And paid share September program. in its repurchase is yesterday, Corebridge also IPO approximately of X million.

Corebridge the launch markets a financial During equity stock, the proceed quarter, to we not issues volatile were first in sector. of chose but common secondary to when prepared offering became to due

a and the disciplined be regulatory to best for case and in ownership of other aligned and to executing conditions our approvals. We interest our market down that which are We remains to committed in of subject offering, interest in ownership Corebridge with terms prepared secondary reducing remain continue options explore will selling our base shareholders. Corebridge,

provide largest the are actions; of model her following work X and review quarter few update our Life topics: lastly, doing information on first remarks; initiatives, second, on to the the I this path high-level of MGA on of Stone partnership General the including Point relating strategic on second and on will for Capital, will information management capital I more to I to sale will in of a Retirement, provider; progress will including more business of on which ROCE, AIG. Ireland's my During part last announcement provide Private remainder Sabra give results results fourth, I a the state and our our of first, with intent detail Crop XX%-plus Services, announcement Laya an Healthcare, Services health the third, a more Client sell update insurance Risk the and the future week will provide morning, remarks Insurance; I on provide Corebridge will we review a Tuesday an I'll our for overview is

Turning to General Insurance.

numbers and for both premiums and refer When elimination. lag have quarter the gross gross on strong me and provide Let we all more net adjusted exchange first written. detail to impact our starting of been written, premiums foreign with in results, the growth net

XX% Gross $X XX%. premiums by of driven Net primarily growth written Global billion, billion, grew Commercial, X%. Commercial Global decreasing This Global was of were and growing Personal an which with increase X%. an Global grew while Personal written were $XX increase premiums XX%, X%,

our America year-over-year X Commercial, a treaty Glatfelter. Solutions we Property last in growth exceptional I our and we in In very which strong and due North to saw detail over Lexington, Casualty, in with achieved written over Re, January led of call. by Captive on XX%, growth which grew which XX% double-digit results growth placements, discussed the Wholesale Validus to XX% premiums net had due

moment, increasing Lexington key and compounded of quarters, business double-digit share, drivers increasing its improved a highlight business XXX% financial from the growth in over now achieved has achievements for relevance through over first rate portfolio a marketplace after of quarter on would retention, first since Strong excellent Lexington's of the market totaled I increases limits new have growth been performance. Lexington's cumulative has its consistently has the been continues Focusing quarter rate drive deployed. to like the last and couple for from consecutive XXXX. and quarter not its increases impressive seen Lexington to the tremendous performance, few The quarter. years. and rate XX

This $XXX last volatility portfolio. went to average limits Lexington $X million over Lexington's million. substantially Additionally, few in deployed has the years, size a in of Property the reduced from primary policy

and in together wholesale us prudent particularly to Our market. to in focus with distribution, thoughtful strategy, serve E&S growth our well, continues the shift

and on items renewal premiums significant U.S. were a meaningfully I season and first on International We've few written Specialty particularly of to quarter. strong Re. in our last improve Re, in it's more think the on Property, Property, were quality Marine portfolio. Rate I the from provided to provide very also the Casualty Net detail balanced worth Validus want color and continue strong Energy, we X/X Validus call, and and improvements Lines. the on expanding

April up With cat respect across the and property International were X reduced portfolio, within And were to slightly, written gross rates Japan net risk-adjusted and premiums limits XX%. deployed approximately increased. Property, renewals

rate returns. of The risk-adjusted and Re U.S. do additional conditions. cycle, beyond current our Validus terms has we for the will exposure, General focus a approach quarter Florida, expect improved terrific which the had As a focuses growth deployed. rest and portfolio significant deploy Insurance, a deployment on on aggregate not maintain Like we with June business the first limits profitable increases although been to X prudent the strategy our limits do on we to at year. well allocated We anticipate through renewal completely to wind consider positioned is re-underwritten continue and

to due slowdown net net pricing competition Lines, to and impressive despite to see in as Shifting in premiums was this first written result M&A transactional Financial as the growth back continued continue headwinds overall pressure where putting we business. contracted well other the written quarter, X% in our XX% on premiums increased

a To Financial very business, the X% of represents greater than markets book excess this company North this prudently. little lead manage We continue in contrast, very D&O account flat Lines in are D&O will few high overall of large over remained primary perspective, we rate America have In saw where rates public year-over-year. XX%. our put relatively declines and one public to this

data, have ourselves experience, underwriting D&O us marketplace. leading in domain capabilities to allow expertise claims the that differentiate We and best-in-class knowledge deep and

pricing public remain line the with During of is what we this in price see the excess placement. traditionally most new portion past taking long-term are down competitors year, we on a D&O commoditized This into continued of disciplined market. business. dynamics, driving these to Despite limited a of and is view experience the high

and the down. balance on have We our we geographic portfolio, follow scale and will significant not market

written America was Commercial. retention up which to XXX had and Global up due was Specialty, Global XXX Commercial XX%; primarily up XX%; of up XX%. XX%. points to Turning basis over to over XX% Casualty, points strong Property, was basis was and XX%, to which X%, up International grew in in-force very International portfolio, was North renewal its premiums over which Net

And As continue a to see Commercial, strong calculate first exposure to impact the business, Global billion was in $X reminder, the and we rate changes. across over retention prior of quarter. which new we renewal

North Validus International million, in driven business and of or quarter rates exposure X% led over was rate business over business increased which Commercial, $XXX respect you business by America saw new was over X% new by million, excluding new driven by With the increased workers' XX%, Commercial, $XXX the achieved growth Re, Lexington, X%. Specialty, and over excellent new North Commercial to first by exclude in Energy America Re, which if increase Validus Marine. excluding XX%. compensation, of its

Commercial, which was Wholesale Property North driven was with America XX%. rate up Lexington XX% up In by wholesale,

Property International strongest exposure plus Specialty The International up X%. exposure significantly and X%, was increases above at also was Retail exclude portfolio its at by in Lexington rate Talbot XX%; workers' Wholesale, North loss For XX% remains were Property XX% at Rate rate you and Property cost Rate was XX%, in quarterly in this increase. the Commercial at X% X%. International increase XX% compensation International. if America, at driven in trend

Turning to Personal Insurance.

announcement reflect remarks. our First managing of this Stone business, our quarter partnership of of on Capital. continued agency MGA given provide the my especially in information with creation results more Point in I PCG, repositioning general the will later a

impact policy North transition XX%, of business net PCG half the and the and pricing our migrating to will positive The of loss increased by driven on very recognition through along X, we writing business written as an XXXX with quota MGA, improved of more non-admitting and combination America business the in the cessions in PCG's at accident January as lower XXXX. into an second to portfolio. has or market ratios. admitted share This Personal premiums earn improved in a

less premiums in and PCG's in wildfire selection a periods specifically, on on due to first These to peak X we reduced net dynamics end and in all required X,XXX XX%, return ongoing reinsurance reductions aggregate XXXX, with from improvements impacted XX%. reduction of loss while PMLs the on of at return XX reinsurance realized result periods in same peril by in further average of Entering return quarter. in zones. reduced our by More all excess written in program upper all to as periods the respect those X average risk

enable year. XXXX third-party to Syndicate ultra-high XXXX continues support the to providers to PCG's high worth for a act mechanism net capital accident business and as

loss for expectations full the be written in year, than meaningfully higher expect improve saw premiums ratio first general also ratio growth to acquisition the PCG terms the or In and we the at quarter, to net we operating to expense of for improve. and

by grew issues the to International cost premiums Accident all making in and premiums Turning that impacted & largely a cat net quarter, Property reinsurance had allocation were Health driven comparisons quarter. Warranty difficult. declined, Travel Net some year-over-year first flat timing refinement written methodology, further Personal. while our written in the Personal first of

Personal XXXX We through we remainder for see will expect as to strengthen results of in the to International growth and the continue move believe year.

ratios. combined to Shifting

was As was year-over-year. earlier, first improvement quarter catastrophes, XX.X%, I a catastrophes, accident quarter XX the In income. underwriting Global ratio, combined XX.X%, the in Commercial, year-over-year reported improvement excluding basis XXX year an increase point noted XX% combined basis ratio, point a excluding and first we year accident

improvement from North point basis ratio, to Personal PCG in accident which ratio, gross Commercial premium essentially The first flat increase at the quarter of a deliberate America combined International excluding XX.X%, year reduction a basis an in year The catastrophes, a Commercial reported from due decrease was XX.X%, year-over-year. year North largely prior outstanding accident XXX point a year combined earned Global was result. ratio, accident excluding our America. catastrophes, is combined in in XXX exposure quarter, excluding XX.X%, catastrophes,

me cat let comment Now the quarter catastrophe in or on $XXX was of million catastrophes. loss losses. ratio X.X% The

Our in Zealand, storms $XXX New X the period losses. million was for catastrophe from accounted of largest loss in which

the total loss million, of we International, North have aggregate year. the net from In America, Japan, approximately million in our activities includes Re. aggregate for and cat remaining, million $XX deductible first each $XXX were the Validus annual Looking of catastrophe-related the losses have at eroded retention $XX plus approximately for quarter rest excluding which

call, we severity. structured provides program X the renewal with manage this to last described ability reinsurance at the in January our we year's volatility As us and

the strong rest to ahead Insurance. to see top expect Looking of we General XXXX, very growth line in

on strong for The first $XXX pretax the and return first Life XX.X%. was to million segment and performance adjusted quarter, the equity Retirement. delivered Turning income Adjusted business in quarter. was

products related results income. benefited from spread quarter in spread-based First continued and growth

retirement earlier, increasing sheet by $X.X with interest strong despite liquidity. driven As of Account. The premiums Corebridge new billion position General grew business, in significantly balance I mentioned in to growth surrenders related strong of to deposits remains capital contributed individual and quarter, first the which, rates, parent the and

documentation market. Turning executed definitive launch Client with week, strategic Private Last that to the we Point the MGA net initiatives. of a our Services, will serve high Stone for an worth Capital ultra-high and

clients, this will and management to structure excited of are forward the stakeholders. of about the journey are brokers support We Stone the PCS other and prospects We continuing this look confident operating team ongoing for with Point value new deliver for Capital. PCS and the

MGA the the through approvals, expected capital to additional XXXX. regulatory half of and launch the of second to formally we expect on to bring Subject quarter is third in year, providers this

composition of review value stakeholders. the part is long-term our our other businesses assess shareholders our ongoing of it to As portfolio and with best our create we strategy aligned process, regularly to positioned and ensure of for

to $XXX or to of of sell CRS, CRS to acquired will spring in AIG write As definitive documentation Financial ends season, we XX. for you for Tuesday, a the of XXXX million. Risk our crop part Holdings part as Crop We Group acquisition on review, American this our XXXX. broader announcement June saw as business executed which Validus in continue Services,

will Group act We quarter, in the fronting million as approximately during million of American premiums transitional Starting which the of written quarter. partner expect AIG period. for $XXX XXXX, in for first $XXX booked third net XX% a Financial to a

and million a XXXX, the earn the which part combined $XXX and for high-quality Financial attractive found CRS to have about team. business we'll a For management remainder million the believe $XXX in retain over of of we business, year. we well-run partner larger Group, from employees and earned premiums, million is a full CRS year expect $XXX In to benefit high-quality will of led a being its American by platform. of

stand-alone review as continually for product position a footprint Corebridge future also of geographic company. business We fully and the portfolio we as this the

to the decided strategic and believe of the and and Healthcare, sale Life private a potential review focus After medical products we business portfolio a product Retirement will and insurance solutions. Corebridge We to the in help it on Laya to comprehensive streamline allow offering, this of health Ireland. alternatives evaluate

to capital Turning management.

quarter execution The strategy. continued and of first of quarter marked our progress another balanced

end repurchases we mentioned In that backdrop share dividends quarter environment, addition against unstable thought of the it of I viewed at to pay repurchases debt raise the prudent and complete first prices. macroeconomic at what attractive to earlier, provided an of was $XXX a financial the additional March. million and with us This near-term debt share we to as maturity share flexibility down

Through continued on deliver equity. a the our on return remain on on ROCE. path the meaningful X laser-focused highly delivering committed commitment. we progress make to of first common Turning this XX%-plus We quarter, components to and to

a Corebridge; leaner AIG; a simpler, components and capital As reminder, operational these underwriting and and improved management. executing balanced on business profitability; model sustained separation across include of deconsolidation continued

executing Given component We in we throughout the first initiatives we long-term progress XX-day once, the measuring this number taking are while each expect of during to view XXXX. and a quarter advanced strategic increments. continue at are

earlier, were General continued quarter improvement I excellent, with in line financial growth Insurance. first discussed in results our underwriting profitability As top and

as the AIG. AIG of restructuring group. years business of we management Over been Insurance the months, a our accomplished to been and our that's focused separation future the journey establish simplified more General has to over last us AIG's investment very on has positioned the forward This turnaround, the and few model. work state on our and important XXX, Sequencing and IPO work Corebridge last accelerated few move

state us from structure for model result conglomerate the away moving operated future in our decades. Evolving in will AIG business

will which we model, expect AIG approximately company, to leaner the million $XXX X.X% operations. lead In across to X% redefined infrastructure decentralized reduce of significantly structure today expense a in $XXX our premiums, be and which to state, parent is roughly particularly overlap million. to eliminate business future will a We

primary will and performance as oversight and key and agencies, stakeholders, finance, parent as AIG AIG execution compliance colleagues; human key policymakers including design and X management, risk objectives: and initiatives. well corporate including regulatory of have including and matters, company culture, business rating management; investment development, legal, community, M&A communications regulators, with the and roles public capital governance; strategy,

As cost earn-in we reductions in a substantially and that $XXX model, we of business XXX. savings achieving progress we $XXX quicker our cost approximately million future at with million achieved parent AIG achieve AIG anticipate of to with around state

the other operations, begin largely currently savings where is are reductions in which earn operating be expense for. As to seen accounted will through, general expenses

to With on respect current of timing separation the you thinking our Corebridge, I took through secondary and offerings.

on Lastly, management. capital

deconsolidation growth. We million profitable debt-to-capital to continue common of of XXX track stock capital shares of million to and subsidiaries lower on XX% and maintain in reduce achieve to at the a leverage our to support We Corebridge. appropriate be XXX range to remain between post levels AIG our XX% outstanding end

increased repurchases $XXX As And second the noted second in we I stock quarter, quarter. yields. we're expect progress we Apart earlier, in the the our making higher path starting stock XX%-plus XX.X%, components ROCE, to stock from also quarter we dividend the first in of from million to in by of AIG a repurchased to tailwinds addition our common of reinvestment our common these on have year. date, this

long-term achieve We strategy that us benefits are deliver our and our will targets continued of and our initiatives our on profitable growth stakeholders. confident to that allow all capital strategic progress ROCE management

to call the over will I turn Sabra. now

Sabra Purtill

I morning, Mortgage give on results X accounting first Commercial Loans. This cover Peter. you, provide overview more and of changes, will Thank an quarter details

Insurance comparisons but lag significantly, International quarter. on for in are lag premium did not impacts financial The X-month supplement XXXX. to earnings Page premiums General did segment affect the Details written it the the First, last elimination the reporting financial eliminated XX. on was in impact

XXXX consistent Second, of increase billion X-Ks effect Yesterday, the total and standard in of cumulative for certain to $X.X that our impact $X.X is an restated commonly were to guidance. shareholders' long-duration The we with results equity. This for filed previous products, Corebridge. was an provide year increase adopted at change financial accounting equity billion called LDTI. and year-end prior adjusted AIG

GAAP a or As a returns. statutory impact accounting reminder, insurance this only does flows and results, company not cash change economic is

Going forward, accounting volatility less run rate in market we modest standards. the mortality-driven APTI in a from and and expect change increase L&R

year AIG's $X.X Turning quarter, originally Peter from basis after-tax in on and quarter adjusted similar per was restated billion quarter XX% first a share, to the or higher Key income and the Compared diluted Corebridge the to noncontrolling up as reported. there up higher higher quarter, impact last income maturities mentioned, $X.XX GI X% trends from from last loans from from year in income. lower to was 'XX. and and interest X a were XQ the quarters underwriting fixed IPO prior investment alternative the results and

basis and were $XXX maturities XX% net fourth in last quarter, strong returns income and an the year. on over APTI loans from to alternative sequentially of billion. investment Consolidated year, down was L&R prior Similar fixed both rose while million $X.X very returns investments on income the and annualized to GI compared

X reinvestment GI in and $X maturity X with realized portfolio. points above maturities XQ and improvement our We over $XXX basis fixed new fixed billion points average the Part fixed sold about in X.XX%, of 'XX. rates XX basis yields basis U.S. prior million, and 'XX rose proactive maturities, quarters on last the quarter. from repositioning up XX rose The maturities. yield over resulting from but the GI for money of points the sales over in increase basis reinvested Income added loss XQ to in loans points XXX yield of about a by million X.XX%, the $XXX resulted and of year,

environment. spread this We and pickup in yield from from throughout 'XX XXXX XQ reinvestment also current rate higher repositioning on incremental rates based the expect and

income, net higher higher-earned year detail, underwriting had a but GI year billion, results segments. point $XX calendar combined to prior principally reinsurance of was premiums both APTI, I year $X.X in the GI that million. prior than to from underwriting want development, million increase income add improvement and which million due was 'XX, premiums XQ in Turning $XX X in of favorable ratio, adjusted or the at pretax $XX reserves covered XX.X%. to Peter a

quarter. results million, was $XXX down income, investment to fee income for $XXX lower due lower in to increase but to L&R Consistent first 'XX in income. market Mortality restated. a APTI million million but portfolio investment as levels XQ year Turning capital had experience was alternative compared with strong to L&R GI, compared base ago. the improved, down $XX a

Peter over and As because were billion, strong Notably, sales fixed $XX.X were crediting of the fixed L&R higher increase Individual year quarter a index premiums very at prior XX% noted, and sales deposits $X.X billion. Retirement rates. with record levels of annuity

Retirement positive annuity out-of-plan and of fixed surrenders, Group with deposits plan last $X.X year. higher sales, Individual from Account to resulted new XX%, of billion $X.X fixed net grew fixed in General in sales Strong annuity the Retirement, acquisitions. flows index billion up and

While net flows, remain account, were surrenders annuity impact they Variable the up, which negative. are separate projections. below

To to had results 'XX. APTI conclude the was million of which increase Corporate million strong operations APTL, expense entities on in and separation. $XXX million XQ earnings prior $XX for related $XX investment the Management, due consolidated a million despite from 'XX private in GOE to additional the from equity adjusted XQ lower million, quarter, year from corporate loss, decreased $XX other $XX or Asset pretax

At due to to from available-for-sale up per securities Turning long-term which principally lower maturity. pay balance a senior share with common valuations due end, year-end, to of March, at million flat to we issued value end year-end. was Book used roughly of interest AIG's on an rates. Adjusted X% portion $XX.XX notes, $XX.XX sheet. down was April higher book per was the quarter $XXX bond value of share,

Our the in new to even the due leverage ratio down in X year-end to the AOCI quarter. with from declined change XX.X%, issuance point about

Fortitude-embedded the and AOCI XX.X%. leverage was Excluding debt derivative,

XXXX, of quarter GI and in ROCE first AIG's consolidated adjusted X.X%, in XX.X% L&R. of comprised the For was XX.X%

laser-focused As XX%-plus Peter deconsolidation. ROCE post discussed, a achieving we on are

detail the Peter of on quarter. provided a lot

I'll the time particularly recent class. So cover on investments, to Loans, Commercial focus remaining my given use this asset Mortgage

insurance First, strive profile I achieve flow strong X to liabilities. in is returns that while duration, cash investment liability of of the our emphasize liquidity our to and risk-adjusted grounded We matching the portfolio needs businesses. want the

last assets the less have of volatile such improved as reducing by risk funds. the the portfolio we profile hedge or investment capital-intensive, Over several more years, liquid

With guidelines in L&R and, rates the onset rising including again, and we assets. and GI quality, of moved year, interest of mentioned up earlier tightened investment repositioning with further last non-investment-grade also COVID the sales

I'll secured coverage diversified start by senior loan that mortgages our values, well LTVs, and on high-quality debt loans averaging are to noting that by our Turning to XX% or exposures. Loan service are geography type X.Xx. Commercial properties ratios averaging Mortgage strong with and

the lead rights. us gives XX% more which our of than loans, lender are control We on important

loans The and our Mortgage Loans. the are assets, Excluding Fortitude of performing funds withheld industrial and multifamily billion are or billion of billion well. Insurance. we of about Mortgage Corebridge $XX.X were type March, Commercial $XX.X is the Industrial portfolio. at Property end XX% which General had of XX% of Both Commercial Loans largest $X.X property at at housing multifamily about apartments,

We billion focused are, assets. AIG's which however, $X.X office, on invested or is U.S. X% traditional of

debt we of shrinking COVID. with allocation Currently, further LTVs XX%. rising onset for averaging monitor to office CMX been are loans of or Valuations service by CMX and has weighted coverage rated rates. given office when average U.S. and the X.Xx Our of a cap updated and about the are high-quality for retail office, we third annually tightened valuations particularly several party, with continue underwriting standards hotels XX% years,

methodology. total mortgage in or default our portfolio and or a higher or of the X.X% against for portfolio use loan million than We X.X%, commercial office allowance against many $XXX million credit also the CMBS $XXX the is about peers have which data portfolio CECL as we

in amenities. central the the Roughly metropolitan one buildings building the of with has City, the newer concentrated loans better office in A and or markets historically in of securing areas which X/X York U.S. districts, business Class top been including majority the X country. are New The are strongest in

loan Today, next billion X we intensely loans. office $X XX focused maturities on or are in the years, about

commitments. many for or requirements already including in and additional revised other discussions extension, borrowers about are their our equity refinancing or We plans with terms

pressure, updating We loans flows debt under ahead. source the for continue look and our are we cash loans, our to performance forward quarters are to valuations on will monitor the the While in carefully. of investment primary service you

XXXX and up, our initiatives, sustained against continued results robust and wrap ROCE. results, significant quarter rising first To our progress liquidity path a to continued yields, XX%-plus on demonstrate investment progress strong portfolio financial capital and strategic

I turn back the call that, Peter. will to With over

Operator

Instructions]. [Operator

question Meyer first with KBW. Shields Our comes from

Meyer Shields

market net-to-gross wanted based I would think, cat much thought improved of I ratio that been aspect more have through that. growth. could of And and the in I address was talk ton would But of property a current AIG retaining change. I that dynamics lines on you that is casualty premium. which you performance on detail, gross see we to helpful. the reinsured, Peter, heavily one its a hoping the have covered, of lot didn't And

Quentin McMillan

Meyer, Quentin. this is

audio a having we're think I little difficulties. technical

So we'll if moment, you in just Difficulty] one just be can bear with one us back second. for [Technical

Peter Zaffino

Can you now? hear me

Quentin McMillan

Yes.

clear, loud to your Meyer, through You're coming Peter. want and question? do you just repeat

Peter Zaffino

Quentin. the heard I questions,

Sorry, that not a good was I worked. microphone I -- had on too. a answer actually just

And on during had net composition able you the So at answer your that Meyer, look Validus to question to to to back meaningful the growth is be have gross obviously and quarter. question. had -- Re we the portfolio

you're so, portfolio at the hard year-over-year retro program fits you're to look when therefore, the underwriting. cessions And it's a having that that

supportive. reinsurance capital AIG. They've market been a with They've that going strategy deployed been had never to always always our always They've of time in we're partners. We've strategic. support the the

generated our terrific terms other we terms to combined result to think premium that so get ratios. And to in of have really on risk on that. and going much than has try I conditions anything, do also net changed were but not and not with for a us them the written, the taking appropriate appetite of And

play into assume So terms I we materially not think quarter in I lot PCG, And lot as we wouldn't And look different. year. have full of guidance let's guess looking will one I've a just discussions. said, do anything terms -- the We're risk. still I of out a of on just it to the in for given which I

Meyer Shields

But question. is implications don't I does approach for the the this have changing Okay. even know segment? good American Perfect. if International to That's And North Personal any a Lines Personal helpful.

Peter Zaffino

distinct doesn't, the in that shares Private Client prepared and I portfolio. we we gave that job they're really the are a written because the us the the repositioning and give Again, you premium team But in global that that businesses. quota is will we mean the Meyer. the and done Warranty excellent It in certainly, anymore asset. capabilities we U.S., after our need Group, unique as the has platforms one in don't grow guidance Travel remarks, across mean, believe have particular net it's I know, I really re-underwriting world. believe

We in that have substantially less cat aggregates once did. we

terms -- So a something in you if that's look be I little different that of International. think will at

While International, Insurance Personal we business. have a terrific

It's it back, by was Travel Accident Insurance, as Warranty, growing of Personal is growth. COVID. of which our affected between which as are Some in and well Japan's terms & Health, predominantly our Global rebounding International

between at we pace because net International correlation of believe that be a and a in, lot think you'll It just anomaly continue see in we're improvement. don't there's and the different of So the both America. high business. But and to of will North worth investing I

Operator

question Newsome comes Sandler. next with Piper from Our Paul

Jon Newsome

between me time? as time, the ratio that over gain I'm in if sort MGA on we correct over couple I'm I scale My wrong, is next quarter, not and necessarily questions of that speed? the is fall just we change shift of think sort business tell expense Personal that to time much how does that about the me also relationship related. of expenses micro losses a MGA Lines macro. over to does expect but And the the the and of and understanding, mean should maybe wrong, And business, around if had that

Peter Zaffino

Paul, let going start to me time happen grow ratios make to question. as over are understand sure you business? the the mean I of expense what's asking reposition to terms the and we in I

Jon Newsome

Yes, I am.

Peter Zaffino

a of see over you. we behind a of substantial that thank in very reinsurance. prepared going variety written. which We significant also bought my premium catastrophe amount remarks, the Okay, more I The retrocession is we the repositioning lot were net a forms. This year, quota we years, that business of last low said excess bought in ceded as loss had to Syndicate X for share. XXXX, We as reason are a

seen. And that so as premium large was not the you've written net

flexibility the that there's repositioning And became how in opportunities MGA, admitted option the disciplined of and we side, and we providers the form in and part business and Point have an on have one that think exist rate. Stone the and repositioned with growth an to having so rate the increases is capital then for tremendous other us with business through non-admitted that believe underwriting also

positive the business. for terms that And us in was so of very repositioning

And on the As to and share. look beyond, off need perform believe the better, profitable. as we we that much much more going to quota much is don't we to XXXX cede business

of will on So operating result, see this what an acquisition you'll is improve. expense lot a year, improved in the as particular both loss well net general calendar basis ratios and written a as the growth, ratio expenses as premium

And be want we so XXXX, in will going hit to improve. to results we We're continue but those time the overall believe combined ratio will be to not XXXX, dramatically. by improve where the

Jon Newsome

at should term? great. over talking that's of quarter. long exposures. pretty that it want. again, I'm the Do about I'm about next And big a -- load pretty we're improvement be cat just big That's of talking businesses of has mean think the looking more been load the the to a run you overall, And in thinking much picture looks picture the huge but about the stabilized, like the rate part done? portfolio making General we mean sort you from maybe little a have not this about Insurance cat cat time. this talking come, I bit years I'm I is of much

Peter Zaffino

underwriting The job of multiple team done business the an has incredible years. AIG Property all of of across line over

reposition a where lot grow. we lot aggregates, portfolio, want a we about talk to we and talk about to that about lot we ability talked a reductions Our

the place most constantly capacity we enter we clients. valued look where risk-adjusted a where grow, we available as value our at in that XXXX from talk were we and in I terrific we think about hard returns I the where decided work. best for is to marketplace, where when And

rate, like taken how parts we've look the taken they growth, the been actually McElroy Working it has we've was certainly of Re Retail Dave Validus big aspect, are other a top of the park whether back new we've But on grown, that. every of about I in back where part then more some Lexington line at out with when of retention, in hitting marketplace. the just it's and Property. So it world, the up. team, relevant business,

is So like then we've coupled repositioned reflect the the portfolio and with it the that have portfolio today. reinsurance to

what happened if Re at Validus we saw summarize So is opportunities terrific to that X/X for grow. I

bit. those all PMLs actually X,XXX in and was wildfire. in I as Client and, from return took the So on in Lexington PMLs well. we to gave a growth PMLs our we X reduced substantially. down period book. peril Private XX period, there took took down commercial took the in little substantially the every Global Despite in particular, on up And dramatically the return we the Specialty, X that We Again, Group

reductions our business, and PMLs the first quarter and you at the overall Re Personal that down PMLs Commercial So in when had in Validus of business the overall, year-over-year. the the we look are increased

a are tremendous overall the growing, that's we're couple reinsurance critical down with outcome look risk-adjusted that net returns, you when and where return periods. PMLs our at we're think we how driving all at I how

all I that's been has So job team unbelievable an executing. The done think purposeful. of

Operator

Our Michael Citi. Ward next from question with comes

Michael Ward

you hoping the think was volatility. you your discuss excess could given about macro how capital I just

some some guess raised a and I for been given share You prudent the it the price, debt, liquidity have like, buyback could guess, higher. for sounds buybacks. I little bit

sort expect against a bit should here, that from more wondering you'll uncertainty? capital just hold of we So

Peter Zaffino

disciplined Thank let million in growth, capital as at give in first We look insurance components primary the I Sabra very comment capital Again, incredibly and in I the X/X tremendous going opportunities on terms our all sure a we capital. quarter. that little I'm at company well $XXX of year. liquidity for is us of different mean more raise. we think so and bit focus were executed to strategy, I to the it debt when subsidiaries you. gave But it have will make the the our levels us for entire appropriate the

to managing us this parent everybody complete ratios to earnings Very lower financial some on And that of And we we're also strategy on not focused leverage give capital. bit helps quarter saying, Sabra looking the our being been end Sabra? how confidence we've XX.X% talking and capital been to liquidity of be to we're flexibility. a every just at have the have dividend is and liquidity. leading about, the proven I've approach only the at management shows and dividend our increase little our but the I'll conservative have it a But time. on and at course, comment

Sabra Purtill

obviously, debt our management we the system rest. of with environment with I would that, at on base would just capitalization, ceiling the call stress the is where, procedures sheet lot this that and we what just mean a both you, Yes. I balance in of Peter. all, look we're basic there's even And our comment scenarios. comfortable very And do. I current the in first stress Thank risk and

for sit results and many, the as noted, Board we strong GI where From And capital years liquidity. X in years. because today, first have significant robust comfortable very the many underwriting the time was of of raising the dividend past turnaround we Peter over the

So is can withstand as yes, mind financial to we'll flexibility today, additional to that a that here repurchases, sheet continue our goal maintain we sit keeping times. strong balance first share turbulent evaluate our in for

Michael Ward

work just if there value and deals as wondering sort guess, Crop the towards any of improvement other I margin guess I of deal, helpful. similar was I you targeted to are unlocking Very units -- of on sort could do point simplification. could maybe where there maybe you you sort

Peter Zaffino

looking Great. looking where we at in. Thank different areas of the at you. can we we We're add, the portfolio the overall AIG the where parts compete world that of at and can structure always and improve looking

which it really think you I is very yields. commodity just I how important. And Crop because having do believe good prices works, driven think business, a know is but by anomalous we is really it's that and scale little a bit

years publish on over based on more, not up XX%, While gross is the top a those several that's significant, net we components. gone basis line past that and XX%, the if

And American, bigger of Services, being that this time. was like that part it its ultimate at a it and Crop Risk to one we for Great believe approach us that valued enterprise order in potential for prudent the achieve

the that so this and how also great It was And Risk scale Services, to business. AIG a to and it future for something with position that specific that that look potential. realize Crop to strategically specific had was to was we opportunity certain making

the really we that's like partner drove CRS. what feel good found a and very outcome I for really So

Operator

Alex Scott with Our Sachs. Goldman next comes question from

Alexander Scott

First still at the one mentioned I but some had for base considering is you that you separation were I you secondaries, know alternatives. case mentioned is on I think also the Corebridge. you

things towards? for And So wanted how kind things potentially see to you of on could could I all. if could What of a just you look shareholders? those at improve extrapolate that bit alternatives some

Peter Zaffino

beyond that I'll detail you prepared lot Yes. to remarks. on can of not Thanks, can really expand Alex. my try Because a bit more share a I is as path. it's saw there's the subject believe in as first we prepared do imagine, the but preferred to the market we're go quarter. to secondary in second But conditions quarter, We obviously, the it.

over has objective stake which changed, reduce ownership for AIG time. Corebridge to its Our not in is

prudent, deep IPO, so the sure different the and first has getting company an since in commence of upon recognize for trading we options variety path Corebridge public looking I that And a value was to were announced to quarter. discount the terrific an be going at independent shareholders that positioned will a doing at a job of we've driving we're think themselves make provide stock a it's value Corebridge. done and that to

Healthcare. announced the I we of much don't we're Laya to one mean what going alternatives, go was beyond on I this, think

Corebridge. sticking as making prepared updates we're But are quarter. in getting very month done you weeks we're second the secondary the And to about hopefully give core the business sure the just and we'll over so next progresses. the of excited And and

Alexander Scott

Got it. on Follow-up corporate I expenses. had is

and you X% just the to X.X% was expect first I gave out mean guys I And investment it mentioned where sort think also that mean mean, guidance what I question. expenses kind think do I a that that that? I should that Corporate is of be I wanted overall GOE, will at that how that, around premiums. go level, to about of sure operating to mechanics. costs? in understood time make I think corporate explicit more could through the I The about think I And of some I technical for reflected RemainCo Corporate just up then leading shake a in you when bit Corporate?

Peter Zaffino

Yes.

to me XXXX savings AIG start try expense as through detail could as on So provide and XXX we earn to the XXX Certainly, with on XXXX. much let more we we in savings. have AIG because still

of that through quarter XXXX. fourth in the and through earned of second mostly XX% over So will be

the to will Life We Corebridge. begun -- approximately Retirement. to of $XXX have and million AIG expenses move separate upon deconsolidation, Corporate And but

So that's need you variable to another consider. that

structure with present we a growth opportunities how not business synonymous in have that also And supports our of of We partners for with cutting, in that model themselves it that's we and we're state maximize we're working $XXX future and through through face to AIG AIG. worked going distribution sure $XXX to terms designing them remaining all to fit but future model to the the that. expense have the to expenses. parent model, the market, be making be our want sure will a and make guidance that we're million what clients lean business to our as is gave then that each we how of million We off

we're complete you Insurance a this making my certain repositioning know of it be And making support some that business We've all in guidance. capital is in important. has covered done this of we the initiatives we've that we'll to and separation; out making substantial, implemented, that's savings performing then state secondary; and on prepared needs given we're has XXX, we our preparing remarks; of been and to We've the work. businesses, operational Corebridge future sure order. capital in Sequencing advancing sure AIG working General model that which achieve. them, market; variety to different are that the the structure; but grow do working get We that it the to the

Some the of into to that's going business. go

so the then in execute other our the we've to components. model. million guidance we're separation, be sight has at clear able $XXX confident that get in And order able other leaner business on along. time, terms have right we line further the things to we've the addition these in given of meaning And the But the highly target we'll expenses. commitment operating that to absorb when to of to got to rationalized is more on execute and be get we'll And in

Operator

question Meredith comes next from with Brian UBS. Our

Brian Meredith

Peter, numbers. from would you quarter have to growth detail looked it, If growth. And we on I'm crop in strong growth those the on the the what And at gave like? down us look are what a X, little Commercial of the just premium a Lines. first reason tailwind is, very obviously, big trying here. growth was the asking basis? what crop, just call lot There's, is Re dumb it a let's year-over-year Validus the obviously Re very Commercial Validus I'm Lines from bit

of make to that sure extrapolating for year. not want just remainder I'm the I So the

Peter Zaffino

a It's to amount retro. first But lot growth. It's all not a Certainly, the meaningful Brian. of we Validus contributed Thanks, bought look, the quarter. property.

in being different to of it. bit terms line a is not able straight quarter each So

Crop single-digit had Risk low Services growth.

I offset written. not in premium of our in I growth bit Lines. very would and But the the was a the had strong, in new our how business, net Specialty think by and third And We terms first opportunity Property, and the little that put said, Financial at you all at contributor Lexington, over there retention is the businesses look So going as that a sort And business of the all second, more X/X. what's mean, we start I to is a in have not the are in though quarters in have feel pipeline, boxes because how Europe that here we're are year. we with guidance different, is bit mix the growth to the have and we future, of strong feel heavy throughout businesses very like little client confident we I happening Even business, seeing businesses fourth. at want that are the to. different less. checking growing the see I what's But I rate looking thing I grow, those in

the that the think I in first you saw year. growth rest but a quarter, similar I growth the mix so And expect business, obviously, throughout there's the would to of see of

Brian Meredith

actually Okay. And Commercial Very question, more second companies Property improve are the markets? up just seeing dynamics in helpful. same things There's the in further some to or of quarter. Property talking the other markets kind available. about Commercial the continuing Are even second how are business curious, firming you then here

Peter Zaffino

look of it to the as than second again, second Yes. the to quarter, rest quarter. in quarter, in I and Thanks, on Brian. firm but it's we we that. continue the Yes, Property getting views up are seeing early the stronger first was we're April. And mean, seeing

we that something have that's capital sure and clients, to making So be we're on deploy. driving a lot we're of to value focused trying

actively be trading in we So to second the expect quarter.

you, Okay. Well, thank everybody.

hiccup X-minute Sorry great you I for and greatly the microphone, you. on wish in, everybody dialing day. a but the appreciate Thank

Operator

does conclude Thank the program. This you.

a have great Everyone, disconnect. now day. may You

American International (AIG) 5 May 232023 Q1 Earnings call transcript