Earnings call transcript Q2 2023

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Operator

Good day, and welcome to AIG's Second 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, 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 provide AIG's the materially. or details could differ cause on events filings to these SEC important with results actual factors to management's required as estimates should obligation or securities forward-looking statements is under laws, opinions Except any AIG if applicable no by update circumstances or change.

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

applicable Finally in release general note, presented dollar and described on That related to remarks where for they constant is earnings insurance also lag the net are premiums International. in adjusted elimination are related as return our a and and documents. today's basis

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

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

Peter Zaffino

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

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

delivered performance. strong I am AIG another quarter exceptional with pleased financial very report to that

while strengthening the on conditions. made multiple priorities initiatives outcomes that we very We demonstrated to during complex quality deliver AIG our strategic again addition, market significant on ability our difficult In executing for high future. progress are

common AIG XXXX. share, with the adjusted $X.X start year-over-year increase or representing from diluted and to result the was a income best financial billion, since quarter. for $X.XX Adjusted like after-tax per XX% highlights would quarterly I second EPS

Net business, ex-CATs Underwriting premiums basis improvement million. in best approximately grew XX%, accident General year-over-year ratio combined led a XX%, XX%. was the grew $XXX XX result our quarter AIG Commercial in point year income was Insurance The and since written by for the adjusted which XXXX.

was result loss of against terrific $XXX a CAT for Our challenging quarter catastrophe a ratio CAT X.X%, losses, the of backdrop or industry. very the million

very over premiums income year-over-year, million, good The Adjusted Life $XX the were pre-tax record $XXX results second reported a and was increase. was Consolidated XX% deposits XX% second of year-over-year. In billion, and sales And year-over-year. a XX% income Retirement quarter. billion income by increase business an in up quarter, fixed was General annuity investment the $XXX index APTI on million, a basis XX% $X.X investment supported net products. increase net Insurance, in

AIG million of that common $XXX and through second reflects repurchases a which increase quarterly returned $XXX to our a we million quarter last stock call. million on common shareholders dividends, $XXX the our announced dividend XX.X% of in in stock

the to outlined. release, the with shareholders, approved to buyback management of which share press our $X.X we capital AIG an in As have strategy authorization to consistent you commitment Board our our saw capital returning reflects previously Directors to billion, increase

Lastly, our liquidity. parent balance and billion sheet with remains in the $X.X very we ended strong quarter

topics. will the more provide following During on remarks of my I five information remainder the this morning,

in reposition second First, we the quarter AIG. strategic took significant actions the to

we and Services, Re Client to as I with During the of worth will the took an the net Crop and ultra-high respect serving of Select Private that launch divestitures Risk on Corebridge. MGA and details review, the additional markets provide actions Validus high

results General financial discuss for will I Second, Insurance.

I lastly, an of give overview update I ROCE and provide guidance plus will path Retirement. deconsolidation will XX% for Third, our Life Fourth, of respect to management. Corebridge. the post results will an on reconfirm a to our And I with capital

we executed $X.XX $XXX Re in start Re. common RenaissanceRe the will AlphaCat we million strategic for Turning on. with and to and I billion announced actions to in cash divestiture the approximately Validus In RenRe stock. of Validus May,

expect Kevin management in fourth to important with approval. pleased believe We is quarter, regulatory will the relationship the we have have We're subject a transaction strong RenRe a owner to value to be very team. and an a close this We company reputation and very to RenRe his Re. as we terrific Validus RenRe with partner of the acquirer. excellent us,

Talbot to significant premium and for growth with divestiture. businesses, business we but specialty XXXX, part Since Validus including Validus some RenRe time remain our not not diversification at the highlights and AIG. provide on the to me in limited the We also attractive which which acquired leading re-underwriting let of sale with just reinsurance, transformed rationale AIG by Western Now were will World, provided improved the to Re XXXX, portfolio, profitability. and

changed to business dramatically of the achieve we addition, exposures. diversity decreased businesses, and a the and zone property, peak improved portfolio among balance attractive geographic In more specialty mix casualty

our is mix our nature the For in this overall portfolio streamlines substantially AIG's additional capital and business of further of and volatility, will I Re, PMLs. disproportionately accelerates and global Due divestiture management the capital simplifies our moment, assumed as a to AIG, reinsurance which represents contributes strategy. model, capital-intensive business volatility Validus to this the a and reduces structure our and liquidity explain portfolio, key journey milestone on of it generate efficiencies

quality a massive improve exposures and were discussed results, few past the to we written, manage better the reduce casualty zone reduction and peak in across our balance use business. volatility overall As over have and the strategically core of global years, through underwriting objectives limits the growth portfolio overall geographic property reinsurance of AIG's substantially and turnaround

business, this A its by is very reinsurance of made has treaty have you when a turnaround volatility. magnitude nature harder which,

into significantly Validus Re's for PMLs all and post-closing combined account to companies both will aggregate the a We rigorous basis. of approximate February and took using exposure, occurrence exercise as version the and AIG have categories RMS completed AIG's on analysis exposure for X, an XXXX This enterprise-wide modeling output XX reduce.

few a me Let an output Re model sale of post-closing for AIG the Validus occurrence examples the basis. on provide of

all reduce were PMLs For PMLs period. Worldwide XX% at XX% hurricane at the and reduced by at will return one perils, in XX% return XXX by net by the PMLs the America in worldwide in period at by the one America one in return hurricane will the reduce period. North XX% at one will North period. in XXX period. XXX return by reduce XX% one earthquake XXX PMLs XXX return

period XX% one XX% period. in in at decrease one PMLs in XX% by EMEA, And all by the XXX period. XX% reduce one and PMLs reduce at Japan by XXX XXX for in Japan earthquake the will XXX return typhoon at the PMLs one return return at will will the return period.

for that In additional is is if of Re closing, remained appealing addition strategic our to substantially tangible will below Validus Validus what at the The the equity repositioning components Re made there AIG upon $X.X that billion business were RenRe AIG. the sale required required to of which several would AIG. portfolio, deliver have

in improved since value the AIG's million which purchase the XXXX. $XXX business of the reflects above Re, receive of portfolio quality Validus book the will of We

being in which also the will entities We to a RenRe, transferred excess receive, $XXX expect dividend, estimate be capital to legal we million. through pre-closing approximately

benefit through from Re dividends following internal million reduction a to based loan risk intercompany to capital requirements closing. billion settled $X will expect be a the Validus AIG AIG and we $XXX from in addition, In

the closing. transaction, reserve part of changes of XX% portfolio delivered As retain AIG at will future in the

the the portfolio releases receive as the reserve adverse of to closing an future purchase likely matures prior potential future to benefit reserve will cover minimize We will we and exposure. development

second cash. Financial for of Crop quarter, we Risk the Risk the million in acquisition XXXX. announced and sale closed Crop In Services was of to also Validus $XXX in Services American Group the part

for start the AIG's Over earned crop to the longer season, crop booked the this on the have enter will from we remainder results. year. of XXXX, AIG impact benefit will financial continue business as no of But since an business XXXX premium

for that's and referred as the structure and MGA primary complex. in agents environment significant more as on on and focused officially which is want loss Next, is peril challenges to The PCS and as secondary in been to and to deficient. provide of markets for We ideal Select believe through The zones worth brokers PCS. coming formation values I cost it and exposure alternatives becoming detail peak in we have flexibility Private increased include PCS an modeling MGA, total net providers capital has CAT high clients, more new more is concentration quarters. an Client insured add creates MGA now inflation, and foundational the has ultra-high expect the pressure, increased launched

its pleased balance Stone our the and plan we've with progress continue we to made this will we're on we is through MGA enter accelerate to XXXX. the we financial AIG XXXX which the Overall, assuming remainder to with positioned as on designed we've and Point the structure. the business framework, MGA's MGA well And performance year. of because Capital are be the will improve in risk established support risk sheet,

Moving to paid million $XXX and stock billion. well-diversified were million $XXX received a secondary was its to with approximately Corebridge. holders, special of Blackstone. ordinary of $XXX The dividend believe included offering Corebridge stable shareholder common a gross In in net June, proceeds a offering new these repurchase and completed from mix a we and we owners from base and for June, results Corebridge. AIG Corebridge completed strong the by to long-term the dividend market. well Also of million more addition $X.X And in which the in AIG of million. proceeds AIG's of announced common stock actions $XXX quarterly

demonstrate our deconsolidation XX%. end our to of the separation. quarter, These At actions Corebridge second full was in stake approximately commitment ownership eventually and the

on with that aligned our shareholders. Corebridge with explore of of our we call, best are all noted we last remaining options continue respect interest to ownership the As to

is Laya we to previously in announced taking business process The proceeding Corebridge is Corebridge. strategic for very are of well. Turning Healthcare, that in actions other private the Ireland medical insurance part sale

and be from the from to the for used We positive shareholders. a Corebridge will proceeds to announce expect a expect special divestiture outcome near largely this process that dividend this in term

the management core retained for Corebridge. The that Additionally, the dispositions of Laya its of U.K. products streamline team United and portfolio U.K. business is will Retirement Life and to focus advisers alternatives allow we recently Life part in analyze States. Life the solutions on the to and strategic and Corebridge of disposition

billion, of which Commercial, Global XX%. grew grew premiums Personal XX%, Net $X.X Global an quarter written Global written. $XX.X had Turning premiums Global to General Commercial, represents of of increase of Insurance. both XX%. which gross XX% and in were strong grew another net premiums driven X%. This decreased Gross written X%. by written an while was premiums XX% growth Personal and increase were We gross growth billion,

America major grew North we as and premiums follows: premiums In strong written in were and Property, Retail North America by which in XX%; XX%, net which wholesale of Lexington, drivers casualty. over and property very excluding a XX% XX%. Commercial, growth Re, saw Commercial Validus net which grew growth Re, grew led written Validus XX%; The was

new retention a increases. I well Casualty over in rate in would XX% growth, activity an year-over-year Submission like XX%. was supported important to strong of new strong grew by Property up up to count business, continues it and strong retention given business, XX% grew details XX%, its strategy. was submission over driven as as be year-over-year. provide about few additional AIG's Lexington's part very by

the was America was to net which portfolio. reflected up its points in-force was digits, XX% In which Global of XX% in renewal premiums written up points of which driven up International basis International property, North which Global to the X%, XX%; XX%; was quarter. retention Specialty, second Talbot, purchasing had reinsurance additional very was up Commercial, primarily basis XXX by mid-single impact strong up in grew and Commercial XXX XX%. and

impact retention exposure renewal the of rate and calculate we changes. reminder, a As to prior

growth Commercial, $X.X million, new And increase $XXX across new Property by business an Financial strong over we had was new quarter. This of the America growth, produced approximately over property, to second offset business driven saw business Global billion excluding XX% of business, Validus Lines, of North over Re, approximately Lexington by XX% XX%. business year-over-year. XX%. in which new where growth continue contracted new see which by was Retail Commercial, excellent

new new business by and Financial which new which was property, growth by Talbot over Commercial where over XX%, year-over-year business increased This $XXX business by offset which new International led grew was grew X%. XXX% contracted by Lines business, million, XX%.

selection, dynamics, last these on a this noted on market down. continuing price terms in I business putting our we and Financial line we while not to the to of by pricing. Despite view continue call, of increased due see following pressure certain conditions on As taking disciplined headwinds remain risk aspects competition long-term on Lines and

above cost was which XX% increase driven rate North America, Rate was was North to X%. compensation the you increased loss and driven property, second XX% In were was exposure the Re, Talbot, rate Validus Global XX%; America was rate. in wholesale was Specialty, Lexington X% you up which by increase which in increases which was up up in The property which International, was if X% and Commercial, if and exclude plus workers' energy, global Rate In XX% XX% quarter each compensation Moving with rate remains XX% excluding by which up trend. exclude XX%. Commercial, increased X%. up International wholesale, which up driven exposure Property, the by was Retail or increase and and XX%. up over in exposure was XX% X%, workers' case XX%;

with growth net are and over Insurance. fact in increased sessions Turning MGA, AIG's of net reflected in in for of PCG decreases officially and now transitioning that will Client become PCG quarter Overall, XXXX. primarily in premiums was markets balance we there had financial in several high quota ultra-high offset strong business driven of to With XX% Select. XX%, the AIG lower result premiums net PCS improved components second growing Personal as results Private the launched by PCG, written warranty. Personal to over Personal that America an performance travel worth in Note North premiums by North written share XX%. that written America net the

the fourth outlined we quarters. and in written last significantly written that premiums grow First, high net increasing as of few in the expectations evolved the over the ultra-high XX% worth business we current our prior expect over our calls, with net years, and such remainder model the net to over we for year showing premiums third

earned in that growth Second, that the and quarter growth lag premium first a earned saw second And the quarter. the of third continue third XX% operating and will additional premium expect in XXXX the dissipated the premium our to leverage, we we will and ratio earned reduce which saw quarter. we in premium fourth in The and provide will earned growth fourth GOE accelerate quarter. in

expect growing expect more year our which and months. XX our pricing PCG to ultra-high these net positive was Third, growth non-admitted The to to worth through in prior migrating personal an ratios improve high key AIG be our of for a Japan. impact written And loss & has will very net earn the Personal, International to the our in our Accident transition driven stranded and year policy costs Overall, and had in accident with combination market, year-over-year. premiums accident continues the loss the In for by and MGA. business of improved business costs half into Japan. worth focus over This XXXX of on quarters. ultra-high increased from in and eliminate admitted high second XXXX. business and in next already business we ratio business the property Fourth, net modest X% should the travel and we PCG's Health

Shifting to combined ratios.

ex-CATs combined improvement ratio noted accident the year-over-year. XX.X%, accident ex-CATs I a year-over-year. the point was XX.X%, second XX Personal basis ratio profitability. North XX.X%, year point accident an prior XXX Commercial, year basis decrease increase a reported year second ratio continues year And ex-CATs year be Global a largely As XXX quarter was premium. year quarter the the to America Global which ex-CATs was ratio Commercial earlier, from XX%, accident of year-over-year. improvement Commercial XX level a due basis In basis quarter point quarter combined combined a earned was ex-CATs outstanding XX.X%, combined improvement ratio of combined accident to in point International second a The

conditions reinsurance treaties to purchased and before our major in and at Now renewals We around I'd mid-year context Retirement. some to recent reinsurance market X. January the like Life provide reinsurance moving

as approximately a the placed. of all renewals, core overall have specialty purchasing predominantly were classes, XX% in and reinsurance successfully core quarter However, number of second they we in occurs our mid-year

for the a decided ahead for and wind trading In exhibited Client purchase X. renewals to more orderly to Re the Private loss protection low we season. Validus market reinsurance excess during stable mid-year addition, placement Group additional of more of retrocessional Overall, conditions compared behavior amidst January

row coverage number with buyers for in calls, up January Overall, secondary increases Reinsure activity increases. has to perils, first insured shortfalls at the industry due driven Florida. of Zealand fourth loss XX% basis. perils. In appetite a second region. majority X. rate XX% year-over-year year of adjusted of price substantial in already XX% on increases making in and in in already from touched billion inflation experienced of resulting losses, purchases for I a the by to enabling catastrophe increased highest previous by This the saw higher mid-year cat half to International driven increased $XX from increase the make XXXX, Through more secondary property somewhat, XXXX the were pricing an which experienced discrete over was of the of losses New U.S. on the year the XX% renewals, to Australia

difficulty have we challenging of insured losses spend. the maintained in our environment, A managing the the peril net risk and reinsurance continue to market peak world. the largest Against positions one strengthened conservative appetite United market highlighting our a the overall managing while and continue majority of occur volatility to States, backdrop this the lowest in in of insurance in reinsurance rating

reinsurance of all our principal maintain our of each our we relationships key through Additionally, partners. renewals, with

invest business as Re, will that part coupled in ownership our continue RenRe to price purchase our reinsurer less Validus are consideration to us assumed of $XXX reinsurance allow with of vehicles risk we exiting sale ability RenRe's through partnering from receive we a with up to capital the participate partner million of world-class to requirements. the benefit common and While stock with the capital will and

Life and Turning to Retirement.

a results basis As of a XX% parent year-over-year sales. by very good year-over-year. the ended billion, a sheet ratio I segment $XX the Index XX.X%, billion improvement $X.X leverage driven business million and the income grew produced quarter. adjusted Corebridge equity Annuity pre-tax on Premiums of balance and in noted XX%. liquidity and XXX earlier, to record $XXX quarter representing was return second with deposits strong was Fixed with point Adjusted financial

second we good the time make continue the so complete will Over separation already XX% been that quarter, the focus a in believe be agreements year. by approximately exited. to we of date, it this executing can at A eventually place substantially operational which standalone fully key transition of put against the against IT separation, progress To Corebridge has company. the the IPO service end been of have be

turning management. capital Now to

second in amount noted brings of to second in we and additional shareholders And the the of As dividends. approximately since repurchased I shareholders $XXX common July earlier, over the returned million quarter the through million $X.X capital we total stock billion. returned repurchases common quarter, of beginning stock to to $XXX the we've

across subsidiaries million post to we our on In deconsolidation committed to to XXs XXX count having addition, XXX and a maintaining Corebridge. profitable in share we portfolio. low continue global the focus to ratio remain of between million And leverage well-capitalized a growth enable

enter the expect as Validus of closing The Re largely share the beginning we be of and quarter repurchases, we fourth have which will accelerate in we following the XXXX. will sale used to liquidity for additional

sale from debt. We use Validus outstanding reduce the some Re also of proceeds to plan to the of

delivering Lastly, a respect deconsolidation post we of plus to XX% highly Corebridge. remain ROCE, ROCE to with committed

components to all continued make we to on progress path commitment. this on quarter, second the meaningful During deliver of our four

across a continued important. The these of Corebridge; separation on a operational balanced improve are reminder, sustained management. underwriting expenses As of business and sequencing simpler, across and and very capital has leaner model profitability; deconsolidation with organization; executing lower been each component AIG the

of restructuring now are and the the to divestitures, behind accelerate already underwriting us further with along and to largely We addition XXX the Corebridge GI investment I've work in able which group AIG this outlined. separation operational turnaround,

I insurance we're with structure moving and leading As a call, global to company. our defined stated a on from last company better being historical away parent conglomerate AIG's leaner

million not than details cost more a a million $XXX our continue in our provide remarks. We faster be on could XX% Sabra we've year. saw accomplished cost what of the will AIG with of expect $XXX reductions with plus in with savings ROCE half pleased of to her AIG to first in substantially with approximately earn-in progress across we XXX. achieve the and path to Overall, more approximately I

on continues solid momentum strong for very to foundation Our a future. the build and have we

Sabra. Now the over call to I'll turn

Sabra Purtill

income Thank underwriting review you, quarter net results, more to adjusted Peter. of and This provide ROCE. XX% drivers sheet path update a on morning, I detail the and will balance our provide a performance, second investment including plus

second Starting results. quarter with

XX% As of noted, an $X.XX, Peter year, after-tax ROCE $X.X adjusted diluted EPS. was reflecting adjusted billion, up XX% after-tax annualized of per repurchases up income impact or year last last income X.X%. the on share from share from was Adjusted

Second and investment margins and balanced and trends: expense and General Retirement and with strong higher strong and increased management yields quarter in in spreads Corporate continued reduction recent Life were income Other. sales investment results and consistent net capital base in Insurance, underwriting

yields. loan was XX money points this points Insurance, maturities and In XX above yield increased points on over year and Turning income yield average rates sales and also basis last in and basis up new X% the basis XX% sequentially. The the to about significantly, portfolios maturities. on X.XX%, XXX rose sequentially investment consolidated yield basis, improved and APTI are On net investment driving a from up segment. higher income. year on Reinvestment basis the last General an each fixed

continued X.X%. $XXX the although been XX Alternative long-term also and investment de-risking XX property values they pressure totaling respectively. Commercial quarter, of improved with estate portfolios real to downward and which below in this cap returns higher improved impacts return continue performance downgrades loan than remain In to loans upgrades basis on strong valuations lower-rated on of the Life Credit and mortgage fixed investment annualized from yield points funds. rates, outlook and points, Retirement, basis for million commercial maturity has face our returns assets. an more equity

are well generally are the However, debt up across ratios holding and service including portfolio, coverage office. strong

included Turning $XXX that Net CAT prior industry million to rose million, $XX from at high million very the investment million excluding by first occurred $XXX current year. a from $XX mostly Peter losses of given quarter solid America. for up up General result, and of $XX income $XXX U.S. Insurance. Total level and quarter billion, losses, $X.X as million. events, year, was tornado underwriting million noted, losses including income a accident catastrophe North was were catastrophe This were particularly APTI the catastrophe in end. the

North while totaled largely Typhoon $XX million, America million, were from International $XXX CAT losses Mawar.

other focus and conducted During on second valuation in DVRs, XX% last reviews, changes In COVID. inflation social claims we trends, quarter, during North settlements in of as year. such or our frequency compared of changes we casualty to XX% as and detailed which America and occurred severity DVRs trends the types as about reserves well reviewed including

and As and continue we book assumptions. favorable to comp reserving have in be our more noted than medical previously, casualty workers' been bodily injury our trends

accident favorable lines in where years mature. patterns wait development, conservative react quickly be many maintain is the We to COVID accident casualty but recognize more approach slowed. years to claims are Our to the situations in same approach development until and these to for trends adverse

allow development more we to revert time for years, claims taking mature, patterns. lagged as experience patterns pre-COVID that the our have those we to position conservative will factors industry claims to are For

mainly addition sensitive lines premiums and in prior gain, In prior was loss of was this ADC are $XX this completed DVRs. year of year is The also compensation to million but loss reinsurance to year that DVRs, $XX last and development, development prior to the is of by million up was year amortization year million the offset includes partially excess favorable This in In catastrophe the premium. of from losses year. compared prior favorable. $XXX favorable results lower second workers' net made $XX of in last quarter the year return attributable changes of being year, related development of by to DVR, development quarter about favorable reserve which impacts not quarter, the million prior third

reserve Our of million favorable sensitive of favorable our North favorable development $XX Agrium development loss of included development million amortization, portfolio including American North America $XX we from was do unfavorable International in This was principally than DVRs. much million that from million legacy by Lines, partially Commercial written multiyear and $XXX limits from higher policy offset a with development $XX million ADC $XX from casualty of today. Lines, resulting loss Commercial

levels at share second down we company D&O this year. U.S. ventilation we class the where achieving third to underwriting, claims underwriting, actions believe not reinsurance AIG's the the levels XX% pre-COVID, Financial are to XX% reserves, primary selection, securities of about of With quarter, strategy to returned XX% experienced from DVRs and will including our cover of end which Lines in continued the XXXX nearly the is In risk, Lines. Financial respect of have rate. appropriate public we reflects improved better of quarter loss of insurer

portfolio compounded than rate, since corporate the With XXXX, respect accounts for to the XX% Financial are increases respectively. and national in greater and Lines XX%,

addition However, experience more out we development longer-term lag favorable trends. consistent recent and with weight approach, balancing placing our more factors, conservative to in the on are

Turning to Life and Retirement.

and Index Both strong strong in and second rates. sequentially favorable and APTI Retirement Fixed remain and improvement points X Individual higher sales spread with noted, margins more in attractive continued with capital by with investment reinvestment underwriting quarter and in improved by widen fee market 'XX Group were year-over-year levels Annuities. driven margins net Peter XX% up compared year. last Base spreads to underwriting XX driven basis basis to results margins points XQ over spreads As

despite spread or continued XX% and million XQ APTI flows negative by expansion the base driven growth $XX net million. products. expansion Group Positive in by $XXX or million 'XX were Retirement Individual from about Retirement increased XX% base grew APTI account. to account general the general by account driven spread in $XXX flows general

income, returns very APTI $XX lower Insurance and enhancement markets mortality Institutional other strong with XX% APTI portfolio yield offset income base decreased Life $XX experience. results or favorable investment growth. by due to primarily partially marginally improved up million by driven and reserve XX% or delivered million

transfer reached Second transactions. pension $XXX of billion quarter with and premiums deposits million GIC activity $X.X risk billion of and $X.X

Other Turning to Operations. AIG's

million in Second that $XXX in due over expenses. including corporate quarter pre-tax portfolios $XX expenses, improvement the $XX $XX XQ million general of of XQ an million had operating sale of Corporate expenses 'XX. Corebridge million by and driven loss legacy separation to losses year adjusted 'XX improved included investment by $XXX million other of last

Corebridge and million the corporate year. separation related GOE prior from Excluding decreased expenses, $XX

Moving the balance sheet. to

our Insurance projected capitalization the capital strong capital range is parent increase the estimated in We remain repayment debt. stock and of execute Retirement General to with U.S. quarter in target. above maintaining the to XXX% pool balanced to management $X.X repurchases, share our Life We ratio risk We continue maturing XXX% ended to dividend liquidity common be subsidiaries and The support and in and AIG its committed on growth. with insurance our to billion. risk-based strategy is an XXX% of

XX, quarter share We and in June year-end. Adjusted maturity share value repaid second flat about to share, a and stock deconsolidation per X% including At June XXs per on the of was total in up XX, from debt leverage year-end. XXXX, common AOCI of was target value billion debt debt capital, continue Corebridge. $XXX low book XX.X%, common post $XX.XX from per Corebridge excluding debt. million was the $XX.XX to consolidated preferred $X.X Book

for adjusted Validus profitability. a the AIG with post accelerate on focused Life XX.X% by adjusted post are ordinary ROCE fourth near deconsolidation achieving In in generated in the to will liquidity our addition XXXX our course repurchases operations quarter and and we X.X% levers Year-to-date, General into additional intently and liquidity basis AIG a the and subsidiary to a share XX.X% deconsolidation. through adjusted Capital base ROCE rightsizing dividends management was progress plus from material ongoing a business Turning annualized in proceeds for remain goal. term, on and Retirement. Insurance, for and ROCE. making XX% consolidated We achieving our and equity ROCE in are

with share will with consistent repurchases debt target. these additional leverage reduction We our balance

Insurance to able on business NOLs for pro for program post and common to estimate holding committed excluding We achieve profile with deconsolidation, exclude share about company tax in in needs billion. a which deferred $X the $XX risk GAAP million today, of billion our This of AOCI the are AIG count inclusive of General adjusted we approximately and a equity share is asset shares profitability size, that will $X.X and ex-Corebridge. equity be forma our XXX we between million Based to achieving repurchase shareholders' billion XXX we calculation. increase base,

more Considering look and plans ROCE and we progress. confident goal. and achieve this equity level profitability, our reduce to forward you We simplify business sustainable AIG's continuing we will drive volatility predictable on adjusted our and update operational structure, to that our to are

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

Peter Zaffino

you, Thank Sabra. operator, we're And questions. for ready

Operator

with Paul Newsome Our you. question Sandler. Thank Instructions] comes Piper [Operator from first

open. is line Your

Paul Newsome

we hoping if just growth the for of a growth, -- sort was amount and whether certain I increase -- some for you we growth amount of to the a assume price quarter. the fair is sort a the Validus. the of about increases on you related normalize questions if both of I'm saw price or bit. general Commercial sort not of, Congrats American could and ex-Validus in morning. focus little Good getting North business on

know maybe that'd you of but a I it Sorry, lot kind of be detail gave if for you there, -- simplify could fantastic.

Peter Zaffino

Good morning. Thanks, Sure. Paul.

America, I I of very we business. remarks, mean, prepared XX%, balanced above unpack our up retention and our asked, North look had loss parts in the well it, new overall was tremendous was you basically about terrific with discussed business businesses Validus of rate evident many talked up, Re was cost And world. but we at across largest and North as in cyclically was other we so pleased quarter. If growth is As but not XX% It America, our it's its quarters. are

on part also a was like that growth. an premium discontinuing program that adjusted risk Lexington that growth. us had the big top didn't we of had XX% impact line But returns

would rate was And quarter, in I quarters which in the a the increases look over for terms XX growth. XX% north outlined and two Retail casualty, property was XX% Lexington growth. I was up XX% in Lexington row. so were of property, of at which

casualty Our actual high-single retail the business was in up digits.

premium America. good in written North very for a net outcome was it So

growth which we International. little expand property. America. of just something We specific is little but The But balance -- headwind had in Financial over was to Lines, bit really that down a a is in terms really strong at look good bit was North XX%, that in have a If I'll growth. I

had discretionary was syndicate net reinsurance. treaty drew XX%. the Specialty, up International digit as mid-single it growth on written a in We premium quarter. some I spends out Our Talbot

And And out On it grew largest headwinds second North International same to a that's not was over gross the XX%. business quarter in flat. as Financial America, our the experiencing basis, in want Lines I is and International. call

bit executing So overall balanced, all in more had the of But was done on. I fundamentals really well of a little and it terms the weight we're thought really growth. the

Paul Newsome

in that ongoing is my and in a and reduced on pieces about And CAT we Re. as piece But from going data or load, see an mean, North do us, a talked that showed be Validus the Re I Thank the with the you making basis, making? lot you're to you the are think from reduction forward. you question, CAT in of about ask particular also Validus kind of volatility the changes efforts you load other the tail second with America you. the clearly, call, I it wanted on to going

Peter Zaffino

AIG, shed I way, did property. across over but three to we story what over it's we Yeah. is most probably have people by And gave may years. little One Thanks, components. reduce the Paul. in really limit bit the is trillion the liked, Re Validus information a it last including gross the of several PML of re-underwriting exposure more than $X

had exposure that all PML on periods. and so an And return effect

are difficult but a we X/X, very the of net got environment reinsurance more calling and keep partners. because book. reinsurance bought not our in that reflected It think great pricing. at programs that world-class. did out, I lot We challenging we We compromise by a taking

return have low peer And we PMLs. result, in didn't overall net as a of really terms more

yes, all It the I to on RMS to out I also mean, And have got like model. going it's occurrence. Re we're company. going AIG. We drive businesses mean, exists what CAT. not of within I at tail was as periods, so different it. the Validus exposure, return We'll a But to less work but have is the we're drew again, example, aggregate that through in plenty

a that's reinsurance that at aggregates you Validus good to across to do continue have lot as as But has has that that But a of got treaty we business managed and world we CAT, I look very portfolio volatility, the through Re when business. We've a do. want to said, a reduce when harder reinsurance.

the So CAT loads are go to actual nature, of very By year the very and and estimates we're CAT we've on lose results. will going I conservative But been volatility, this think our exposure. our our with a big them that down. comfortable the increased and part

Paul Newsome

the Great. help. Thank much. Appreciate all you very

Peter Zaffino

Thanks, Paul.

Operator

you. Thank

Shields comes question next Meyer with from KBW. Our

open. is line Your

Meyer Shields

wondering exposure sequential lot from in good first between we But and morning. loss this I rate of much rate could so trends you second about us detail Thanks Great. the talk increases bit And quarter of of to about gap changes. improvement. the changes a and the gave little was if saw a quarter you Peter, and year.

Peter Zaffino

morning. Good Sure, Meyer.

We have given guidance.

X.X. the in which an index. is company ours, start like at with you me loss inflation, And a mean, can let I imagine cost So it's still

each rate And that and making I'm last we across adjustments. with in based above the we've meaningful of driving at the minor each really modifications or line is pleased more showing on the so business did done just year quarter, the cost, world. inflation, back as discipline half company on look we of loss

environment very the rate strong. was the second So quarter in

quarters, I the on And in America International The and headwind X%. Financial guidance comp, X%; gave lines big not the the the was have last this each specialty XX we rate excluding has noting I excess that And prepared again, the it's rate drivers International same our And rate Retail for America mentioned remarks a Financial the for question Lines. experiencing worth at over again I Property, a prior footprint. been of in North you is in surplus work that increase North when positive quarter back Lines. and businesses, very look issues.

I risk play But attention, our industry, a side, the ours continue at lot those for but first inflation, high-single of domestic. cost the you quarter, at CAT International businesses case, through cost can't look that to a absent the different to it's cost look the capital, digit portfolio of X/X. at in like in before, for costs the And we year into to going as a mentioned also of season. increases increase quarter. reinsurance our of reinsurance maybe in like course was even properties loss over versus So cost are need the or but single a on anything Europe’s getting adjusted industry happening

is more we comfortable market capital. this back I'm So expensive half continue the think a market. where in on and that deploy a we in. that driving But I year. of the will as very we're basis, margin are to very It's capital get cost the The prudent and of to written we disciplined is we're be going that

Meyer Shields

in very helpful. that me that prepared Okay. in that also said remarks Lexington. you submissions That's One seeing your was in you're a casualty uptick thing surprised huge

expected in we going property think dig side. you a can bit little deeper I what's was I casualty. the if into hoping specialty on

Peter Zaffino

just is at and for our been but about Lexington. has of value Lexington one distribution all asking on leads all it's profitable And business. line, wholesale lines McElroy, and we submission we've our Levinson, businesses. had activity for Dave the Well, -- top look been story. a partners count growth at brokers very Lou When Yeah. driving this who across most record drove We great we submission strong Lexington, of

to growth opportunity its deploy Yes, the the have going we been good. own. very aggregate. yes, on property, we're there Yes, when is so And performance has

and we're been But the across for focused the asking opportunities on we driving have business. very portfolio,

additional looks we're at as underwriters getting side. And staffed underwriting is casualty excellence, so of the terms on multiple property to like volume of have we one then think the the and top of substantial. of the lines And respected in being business. on and I take in largest And activity submission up one order that wholesale

I So as very executed team that as did, pleased to expect and it continue. I the was that well

Meyer Shields

Thank much. Great. so you

Peter Zaffino

you. Thank

Operator

Thank you.

question with next Our Jefferies. comes Yaron from Kinar

Your line is open.

Yaron Kinar

Good you. morning. Thank

Could to on North First maybe a back the I offer forma us you business? like margin Validus. for profile even ex Validus Paul's pro core the sale, guess, going question (ph) ex question, Commercial, America

Peter Zaffino

it accretive second you question, good property, continue dynamics quarter to in business business. highlight, mean, I to a ratio. some on detail, the but on of I'm normal want very I a a was at in Re. and little forget, slightly you. than happy provide overall to market Do over today. than a time? business to up below have by CAT XXX is don't again, combined question it and Lexington little The basis follow It's more our quarter a a looking acquisition back When period ratio specialty, over the in I morning. loss going to I Because Good with based longer points our higher the But ones its that Validus accretive look our ratio at was a

years, the that last highly in going dilutive. XXX. were it's the really to publish half four first ratio a well we year But wouldn't to year impression the So Obviously, first the it's year. I last able if I is below go the to done combined of have be back three

been ratios I this business, we us. terms the impact looking a perform But of business And the it of first of terms will it's think year. so business at positive index, a the lot in materially -- have the of better. the And combined in in have overall, contributor of don't we to half

Yaron Kinar

And on a reported clarification, as just a your that is or underlying? Got commentary basis maybe it.

Peter Zaffino

a to combined out. ratio on it it break is don't the looking at low we But XXXX, But XXXX of I through first in XXXX XXX. year fully mean, terms Both. below from was

Yaron Kinar

a Corebridge maybe And offer XX%, then starting can given Got we're deconsolidation? you to see the precise it. secondary threshold and of second my us below a for line question, and sight to

Peter Zaffino

we're if can't I you precise, terms you offer give I what in of some that's can but thinking No. guidance okay.

Yaron Kinar

Sure.

Peter Zaffino

Yeah.

market So conditions. and we do to the something subject before expect would case year-end, base hopefully secondary is our to

we time want is over have to prepared. I we what think be that proven

so on we just conditions ended for it based delaying market prepared on prepared secondary. up the And IPO, the

year-end. we before to be go so prepared And will

Corebridge well is as very its a in performance, business its doing company. think I operation public

able dividend. of have once detail then executing well made in they're we Friday, be to on repurchases it deconsolidate. the as company ready execute getting but They're Kevin well management enormous to with as progress now on we very And a outline it on standalone Again, ordinary public will share capital plan. management

we pace, going continue so want be sell where certainly And to to the to it's just and but to business conditions reasonable a is. subject down market at

Yaron Kinar

was I below Is we precise second apologize. really see the would be I interested the Peter, not on percentage deconsolidation. to the on focused I XX? drop timing. it what was more

Peter Zaffino

structure, it Board go Board Board structure, modify XX%. below the we’d on have if current structure, be to on we below XX. the would but Depending But

Yaron Kinar

you. Thank

Peter Zaffino

you. Thank

Operator

Thank you.

comes question with Alex from next Our Sachs. Goldman Scott

line is Your open.

Alexander Scott

morning. Good Hi.

how go First of things deploying one a you'll proceeds mean, the most I capital right the actions outside separation one about from forecast is of now lot and just including sort to think the taking, from the I on challenging the I deployment. is had model of Corebridge. the of you're

count share you'd thoughts. any kind interested range. just if relates could there's or where go in the count updated of from thoughts to was have know I the the guidance guys I here? So past, you it as provide given Any

Peter Zaffino

terms what good the a coming outlined in. Sabra have is still up liquidity job we and of that the outlining very did of count. liquidity that think in base I XXXs share our in low case. the ended will be we've We

market that focused the year, four the on increased so a We growth want have is favorable. on very focus making we in have we this in drive and of to way subsidiaries sure continue to that. and capital we to very components our We dividend rigorous a think

we much on both from XXX when share in the low-XXs, share active retire the we're still guidance indicated, you because is and will focus Sabra in need I XXX other We'll that the impact debt of repurchase to RenRe. I million to on the the to continue in be give and cleanup shares. main repurchases, going some and that to on more leverage do quarter. the liquidity correlated And on be to couldn't Our focused share we'll and highly debt. really to than getting third really you repurchase million be that close market on And

Alexander Scott

the sort I same in vein. of That guess a Got makes sense. it. follow-up

growth, think guys, you like average you're organic least of much at those actions? that leverage, to volatility the it how still In listen have at of terms is, I sort of metrics. about then and and comments I to making better the when the think, and below underwriting fact whether able we of deployment, PML you it's General in so much Do Insurance the be strategic other kind capacity some businesses in surplus, the Lexington fund have to greater and without proceeds from look this using premiums to the

Peter Zaffino

it's big want been that a do focus Sabra, to We do bit? you us. and little expand on a for

Sabra Purtill

XXX%. I ratios XXX% my as in just risk well capital of mentioned above the to in of to note, is range the would XXX% which range I Yes. in pool our prepared Thanks. our U.S. target are comments XXX%, based that

have capacity today ample Insurance the growth. support So General we within businesses to

Alexander Scott

Got Thank it. you.

Peter Zaffino

more Great. Thank question. one you. We’ll take

Operator

you. Thank

with from Michael comes Our next question Zaremski BMO.

is open. Your line

Michael Zaremski

on other in optimization -- line or the the My what kind of post pending business. morning. is side, of that Validus what you're through actions? need portfolio pieces exist there are there and additional the portfolio mostly sale you on other question the crop about the remaining Good Great. still Hey. personal -- are we Are the of did doing the major

Peter Zaffino

major we're I the of most think through actions.

of we that Personal we on We have ultra-high taking for very we'll we And is of distribution terms of half focus such and worth can one scale time a certainly, investment. needs it. a terrific there we're business, and well, into big digital us net products. agents 'XX and focus as the the have more that back business have go we more to actions has the on and in scale, the -- more of a spent see that And been Insurance we a wide 'XX. lot then improving Japan terrific it's that to performs

months XX and we'll And So XX with on been see that workflow past over in interfacing digital customers. we've some investment months. through to working the digital Japan

see performance I improved there. would So to expect

And mostly to to And investment. then in But Health be Accident -- I would going growth but which very we It's improvement not to more business, advantageous. strategic also overseas there. more and & that's well the it's profitability in performs our investments of portfolio have see don't to position expect just order Global major. International, making more more

So those had throughout of we to are the active focus. areas another Re, not going certainly to But we a drive very continue but one expect after those, portfolio. would be try Validus of and quarter improvement will the to

Michael Zaremski

that ratio. such you of most the ratio been about If over to chopped that ratio getting there in But expenses gears, could We're loss thinking continue you've or on improve and is term, land a the double-digit maybe follow-up whatnot my done is reserves And AIG's components guidance ROE of sustainably switching term, combined inclusive about wood's loss Great. clear still overall and longer say kind loss the you be guess, the of thinking -- other great job improving is I when kind Okay. thinking time? to of longer we're ratio should still we you down. there's expenses. expenses long-term coming have as

Peter Zaffino

and in we've getting that in an And and part we're that evidence the 'XX know in it the model. of was expense to show That's way. job an you're We outlier 'XX XXXX. the in we're big right we future the of more it No, we'll quarters as where to the start doing mean, thinking and of a more portfolio on I coming I into what today. of think that operating incredible done go is ratio. terms in existence

Insurance. in of management I of around it. we and expense in improvement And part on And think But did we're that be to there's do big first the is having as will discipline of combined that's opportunity focused this ratio Personal AIG. when expenses repeat our a huge be favorable operating of the part its future heavily all to ROCE, getting across ratio mention balance that at model, more that in I not for answer, improvement loss of scale on ratio terms going look the and team. we focus focus a an to but

Michael Zaremski

Thank you.

Peter Zaffino

thank today. us to a you day. for want great I Thanks. Okay. everybody joining hope I have

Operator

does you participating you conclude for in This a Thank Everyone, now conference. have great the may today's disconnect. day. program and

American International (AIG) 1 Aug 232023 Q2 Earnings call transcript