FOR IMMEDIATE RELEASE

Press Release

Contacts:
Liz Werner (Investors): 212-770-7074; elizabeth.werner@aig.com
Daniel O’Donnell (Media): 212-770-3141; daniel.odonnell@aig.com
Claire Talcott (Media): 212-458-6343; claire.talcott@aig.com

AIG
175 Water Street
New York, NY 10038
www.aig.com

AIG REPORTS SECOND QUARTER 2019 RESULTS









Net income attributable to AIG common shareholders was $1.1 billion, or $1.24 perdiluted common share, for the second quarter of 2019, compared to net income
attributable to AIG common shareholders of $937 million, or $1.02 per diluted
common share, in the prior-year quarter.
Adjusted after-tax income attributable to AIG common shareholders was $1.3 billion,
or $1.43 per diluted common share, for the second quarter of 2019, compared toadjusted after-tax income attributable to AIG common shareholders of $961 million, or$1.05 per diluted common share, in the prior-year quarter.
General Insurance delivered a second consecutive quarter of underwriting
profitability, achieving a combined ratio of 97.8 and an accident year combined ratio,
as adjusted, of 96.1, driven by continued underwriting, reinsurance and expense
discipline.
Life and Retirement posted a 17.3% adjusted return on common equity (ROCE),
reflecting strong private equity returns, investment gains resulting from lower interest
rates and solid in force profitability.
Total consolidated net investment income was $3.7 billion in the second quarter of
2019, compared to $3.1 billion in the prior-year quarter, reflecting favorable market
performance and noteworthy income within the private equity portfolio.

NEW YORK, August 7, 2019 - American International Group, Inc. (NYSE: AIG) today
reported net income attributable to AIG common shareholders of $1.1 billion, or $1.24 perdiluted common share, for the second quarter of 2019, compared to net income attributable to
AIG common shareholders of $937 million, or $1.02 per diluted common share, in the prioryear quarter. Adjusted after-tax income attributable to AIG common shareholders was $1.3
billion, or $1.43 per diluted common share, for the second quarter of 2019, compared toadjusted after-tax income attributable to AIG common shareholders of $961 million, or $1.05
per diluted common share, in the prior-year quarter.
Brian Duperreault, AIG’s President and Chief Executive Officer, said: “Our strong second
quarter performance demonstrated continued positive momentum throughout the first half of2019. The additional progress on our path to long-term sustainable and profitable growthreflected in this quarter’s results was driven by the foundational changes we implemented
across AIG last year. General Insurance achieved its second consecutive quarter ofunderwriting profitability resulting from underwriting and expense discipline, and reinsurance
actions, and remains on track to deliver an underwriting profit for the full year. Life andRetirement delivered another quarter of solid in force profitability and double-digit adjusted
ROCE, and Life and Retirement expects to deliver full year adjusted ROCE in the low- to
1

FOR IMMEDIATE RELEASE

mid-teens range, as we stated previously.”“Looking ahead, we remain diligently focused on executing against our strategy to reposition
AIG as the leading insurance company in the world, and we continue to expect to achieve
double-digit ROCE for consolidated AIG by year-end 2021,” Mr. Duperreault added.
SECOND QUARTER FINANCIAL SUMMARY*

Three Months Ended
June 30,($ in millions, except per common share amounts)
Net income attributable to AIG common shareholders
Net income per diluted share attributable to AIG common shareholders
Adjusted after-tax income attributable to AIG common shareholders
Adjusted after-tax income per diluted share attributable to AIG common shareholders

$
$
$
$

Return on common equity
Adjusted return on common equity
Adjusted return on attributed common equity - CoreBook value per common share
Book value per common share, excluding accumulated other comprehensive income
Adjusted book value per common share

2019
1,102
1.24
1,272
1.43

$
$
$
$

2018
937
1.02
961
1.05

7.1 %
10.4 %
11.6 %
$

73.63
67.90
56.89

6.0 %
7.6 %
8.2 %
$

68.65
68.40
57.34

*Refer to the Comments on Regulation G and the tables that follow for a discussion of non-GAAP financial measures and thereconciliations of the non-GAAP financial measures to GAAP measures.

SECOND QUARTER 2019 HIGHLIGHTS
All comparisons are against the second quarter of 2018, unless otherwise indicated.

General Insurance – Second quarter adjusted pre-tax income of $980 million included
underwriting income of $147 million and net investment income of $833 million. Results
reflected the second consecutive quarter of underwriting profitability, with a combined ratio of
97.8 inclusive of 2.6 points of catastrophe losses net of reinstatement premiums and (0.9)
points of net favorable loss reserve development. The accident year combined ratio, as
adjusted, was 96.1, comprised of a 61.3 accident year loss ratio, as adjusted, down 410 basis
points from the prior-year quarter, and an expense ratio of 34.8, down 80 basis points from theprior-year quarter. The decrease in accident year loss ratio, as adjusted, reflected the change inbusiness mix including the acquisitions of Validus and Glatfelter, improved new business andrenewal terms and reduced volatility due to the increased use of reinsurance. The second
quarter expense ratio of 34.8 primarily reflected improvement in the General operating expense(GOE) ratio as a result of continued expense discipline. Catastrophe-related losses, net ofreinsurance, of $174 million pre-tax were primarily due to North American weather events.
Life and Retirement – Second quarter adjusted pre-tax income of $1.0 billion reflected strong
private equity returns including income of $138 million from an initial public offering of aholding in the private equity portfolio and favorable market performance impacts which
benefited net investment income and Deferred Acquisition Costs (DAC) amortization.
2

FOR IMMEDIATE RELEASE

Attractive new business margins and solid growth in premiums and deposits in Individual
Retirement and Life Insurance over the last year also benefited the results for the quarter.
Although negative, net flows improved, resulting from higher Fixed and Index Annuities new
business, as well as lower Group Retirement surrenders and withdrawals.
Net Investment Income – Second quarter net investment income from our insurance companies,
including the Legacy insurance portfolios, increased 19.4% from the prior-year quarter to $3.7
billion. The second quarter reflected strong performance in the equity markets and tightening
spreads in the credit markets and included income of $142 million from an initial public
offering of a holding in the private equity portfolio.
Legacy – Second quarter adjusted pre-tax income of $119 million declined from $134 million
in the prior-year quarter resulting from lower Legacy Life and Retirement earnings due to anincrease in structured settlements reserves and lower premiums.
Liquidity and Capital – As of June 30, 2019, AIG Parent liquidity stood at approximately $6.0
billion. In the second quarter, AIG Parent received approximately $1.4 billion of distributions
from the insurance subsidiaries in the form of cash, fixed maturity securities and loan
repayments including tax sharing payments.
Book Value per Common Share – As of June 30, 2019, book value per common share was$73.63 compared to $65.04 at December 31, 2018. Book value per common share excluding
accumulated other comprehensive income and deferred tax assets (Adjusted book value percommon share) increased 3.5% to $56.89 compared to the prior-year end.
GENERAL INSURANCE

Three Months Ended June 30,($ in millions)
Total General Insurance
Gross premiums written
Net premiums written
Underwriting income (loss)
Adjusted pre-tax income
Underwriting ratios:
Loss ratio
Less: impact on loss ratio
Catastrophe losses and reinstatement premiums
Prior year development
Adjustments for ceded premium under reinsurance
contracts and otherAccident year loss ratio, as adjusted
Expense ratio
Combined ratio
Accident year combined ratio, as adjusted

3

2019
$
$
$
$

2018

8,654
6,581
147
980

$
$
$
$

Change

8,653
6,977
(89)
568

- %
(6)
NM
73

63.0

65.7

(2.7) pts

(2.6)
0.9

(2.3)
0.8

(0.3)
0.1

61.3
34.8
97.8
96.1

1.2
65.4
35.6
101.3
101.0

(1.2)
(4.1)
(0.8)
(3.5)
(4.9)

FOR IMMEDIATE RELEASE

General Insurance - North America

Three Months Ended June 30,($ in millions)North America
Net premiums written
Commercial Lines
Personal Insurance

2019
$

2018

3,307
2,364
943

Change

$

3,236
2,321
915

2 %
2
3

Underwriting income (loss)
Commercial Lines
Personal Insurance

$

(5) $
(36)
31

(127)
(91)
(36)

96
60
NM

Adjusted pre-tax income

$

718

407

76

69.2

73.1

(3.9) pts

(5.0)
1.7

(3.7)
1.6

(1.3)
0.1

65.9
30.9
100.1
96.8

3.0
74.0
31.3
104.4
105.3

(3.0)
(8.1)
(0.4)
(4.3)
(8.5)

74.8

78.1

(3.3) pts

(5.4)
3.1

(4.6)
4.2

(0.8)
(1.1)

72.5
26.7
101.5
99.2

4.5
82.2
26.3
104.4
108.5

(4.5)
(9.7)
0.4
(2.9)
(9.3)

53.0

60.6

(7.6) pts

(3.9)
(2.4)
46.7
43.4
96.4
90.1

(1.4)
(5.0)
54.2
43.7
104.3
97.9

(2.5)
2.6
(7.5)
(0.3)
(7.9)
(7.8)

Underwriting ratios:
North America
Loss ratio
Less: impact on loss ratio
Catastrophe losses and reinstatement premiums
Prior year development
Adjustments for ceded premium under reinsurance
contracts and otherAccident year loss ratio, as adjusted
Expense ratio
Combined ratio
Accident year combined ratio, as adjusted
North America Commercial Lines
Loss ratio
Less: impact on loss ratio
Catastrophe losses and reinstatement premiums
Prior year development
Adjustments for ceded premium under reinsurance
contracts and otherAccident year loss ratio, as adjusted
Expense ratio
Combined ratio
Accident year combined ratio, as adjusted
North America Personal Insurance
Loss ratio
Less: impact on loss ratio
Catastrophe losses and reinstatement premiums
Prior year development
Accident year loss ratio, as adjusted
Expense ratio
Combined ratio
Accident year combined ratio, as adjusted

4$

FOR IMMEDIATE RELEASEAll comparisons are against the second quarter of 2018, unless otherwise indicated. Refer to the AIG Second
Quarter 2019 Financial Supplement, which is posted on AIG's website in the Investors section, for further
information.

General Insurance North America – Commentary

Adjusted pre-tax income was $718 million compared to adjusted pre-tax income of$407 million in the prior-year quarter.

Net premiums written increased by 2.2% to $3.3 billion, largely due to the inclusion of
the Validus and Glatfelter acquisitions, partially offset by underwriting actions tostrengthen the portfolio while maintaining pricing discipline, and higher cededpremiums due to changes in 2019 reinsurance programs.



The North America combined ratio of 100.1 included 5.0 points of catastrophe losses
net of reinstatement premiums and (1.7) points of net favorable prior year loss reserve
development. The accident year combined ratio, as adjusted, was 96.8, comprised of a65.9 accident year loss ratio, as adjusted, and a 30.9 expense ratio. The lower accident
year loss ratio, as adjusted was primarily driven by a change in business mix including
the Validus and Glatfelter acquisitions, improved new business and renewal terms,
lower net severity of losses in North America Personal Insurance and changes in 2019reinsurance programs which have reduced volatility. The pre-tax underwriting loss of$5 million includes $170 million of catastrophe losses, net of reinsurance, of which$137 million related to North America Commercial Lines and $33 million related to
Personal Insurance. Net favorable prior year loss reserve development of $61 million
was primarily driven by net favorable prior year loss reserve development in North
America Commercial Lines partially offset by net adverse prior year loss reserve
development in North America Personal Insurance.



The decrease in the expense ratio reflected a lower GOE ratio resulting from ongoing
expense reduction initiatives, partially offset by a higher acquisition ratio due tochanges in business mix.

 Net investment income was $723 million compared to $534 million in the prior-year
quarter. The increase in net investment income was primarily driven by higher income
from fixed income securities and strong alternative investment returns.

5FOR IMMEDIATE RELEASE

General Insurance - International
Three Months Ended June 30,($ in millions)International
Net premiums written
Commercial Lines
Personal Insurance

2019

2018

Change

$

3,274
1,516
1,758

$

3,741
1,590
2,151

Underwriting income (loss)
Commercial Lines
Personal Insurance

$

152
51
101

$

38
(76)
114

300
NM
(11)

Adjusted pre-tax income

$

262

$

161

63

56.9

59.9

(3.0) pts

(0.1)
0.1
56.9
38.6
95.5
95.5

(1.2)
0.2
58.9
39.1
99.0
98.0

1.1
(0.1)
(2.0)
(0.5)
(3.5)
(2.5)

61.5

68.2

(6.7) pts

(0.3)
0.4
61.6
35.3
96.8
96.9

(1.6)
0.5
67.1
36.3
104.5
103.4

1.3
(0.1)
(5.5)
(1.0)
(7.7)
(6.5)

52.9

52.9

(0.1)
52.8
41.6
94.5
94.4

(0.8)
52.1
41.4
94.3
93.5

Underwriting ratios:
International
Loss ratio
Less: impact on loss ratio
Catastrophe losses and reinstatement premiums
Prior year development
Accident year loss ratio, as adjusted
Expense ratio
Combined ratio
Accident year combined ratio, as adjusted
International Commercial Lines
Loss ratio
Less: impact on loss ratio
Catastrophe losses and reinstatement premiums
Prior year development
Accident year loss ratio, as adjusted
Expense ratio
Combined ratio
Accident year combined ratio, as adjusted
International Personal Insurance
Loss ratio
Less: impact on loss ratio
Catastrophe losses and reinstatement premiums
Prior year development
Accident year loss ratio, as adjusted
Expense ratio
Combined ratio
Accident year combined ratio, as adjusted(12) %
(5)
(18)

- pts
0.8
(0.1)
0.7
0.2
0.2
0.9

All comparisons are against the second quarter of 2018, unless otherwise indicated. Refer to the AIG Second
Quarter 2019 Financial Supplement, which is posted on AIG's website in the Investors section, for further
information.

6

FOR IMMEDIATE RELEASE

General Insurance International – Commentary

Adjusted pre-tax income was $262 million compared to adjusted pre-tax income of $161
million in the prior-year quarter.

Net premiums written decreased 12.5% on a reported basis and 8.2% on a constantdollar basis. The decrease in net premiums written was due to underwriting actions
taken to strengthen the portfolio and to maintain pricing discipline, partially offset by
the Validus acquisition.

The International combined ratio was 95.5. The accident year combined ratio, as
adjusted, of 95.5 was comprised of a 56.9 accident year loss ratio, as adjusted, and a
38.6 expense ratio. The lower accident year loss ratio, as adjusted, was primarily driven
by a change in business mix and lower net severity of losses in Commercial Property.
Pre-tax underwriting income of $152 million included $4 million of catastrophe losses,
net of reinsurance, and net favorable prior year loss reserve development of $5 million.



The slight decrease in the expense ratio was primarily due to a reduction in the GOE
ratio, as a result of ongoing expense reduction initiatives, partially offset by a higher
acquisition ratio mainly due to changes in business mix.

Net investment income was $110 million for the quarter compared to $123 million in
the prior-year quarter. The decrease in net investment income was largely the result of
lower income from fixed income securities.

LIFE AND RETIREMENT

Three Months Ended June 30,($ in millions)Life and Retirement
Premiums & Fees
Net Investment Income
Adjusted Revenue
Benefits, losses and expenses
Adjusted pre-tax income
Premiums and deposits
Individual Retirement
Premiums & Fees
Net Investment Income
Adjusted Revenue
Benefits, losses and expenses
Adjusted pre-tax income
Premiums and deposits
Net flows

7

2019

2018

Change

$

1,333
2,270
3,828
2,779
1,049
7,212

$

1,221
1,995
3,465
2,503
962
7,399

9 %
14
10
11
9
(3)

$

221 $
1,094
1,466
878
588
3,865
(306)

218
975
1,366
904
462
3,422
(1,049)

1 %
12
7
(3)
27
13
71

FOR IMMEDIATE RELEASE

Three Months Ended June 30,($ in millions)Group Retirement
Premiums & Fees
Net Investment Income
Adjusted Revenue
Benefits, losses and expenses
Adjusted pre-tax income
Premiums and deposits
Net flows
Life Insurance
Premiums & Fees
Net Investment Income
Adjusted Revenue
Benefits, losses and expenses
Adjusted pre-tax income
Premiums and deposits
Institutional Markets
Premiums & Fees
Net Investment Income
Adjusted Revenue
Benefits, losses and expenses
Adjusted pre-tax income
Premiums and deposits

2019

2018

Change

$

111 $
618
790
497
293
2,047
(174)

127
542
730
480
250
2,345
(459)

(13) %
14
8
4
17
(13)
62

$

806 $
335
1,154
1,068
86
1,032

795
282
1,092
917
175
980

1 %
19
6
16
(51)
5

$

195 $
223
418
336
82
268

81
196
277
202
75
652

141 %
14
51
66
9
(59)

All comparisons are against the second quarter of 2018, unless otherwise indicated. Refer to the AIG Second
Quarter 2019 Financial Supplement, which is posted on AIG's website in the Investors section, for further
information.

Life and Retirement – Commentary8

Individual Retirement adjusted pre-tax income primarily reflected strong private equity
returns, stronger market performance which favorably impacted net investment income
and amortization of DAC. This was partially offset by lower fee income and advisory
fees primarily driven by lower average Variable Annuity assets under administration.
The prior-year quarter included unfavorable actuarial adjustments to Variable
Annuities of $47 million. Total net flows excluding Retail Mutual Funds were positiveand reflected stronger Fixed and Index Annuities sales.

Group Retirement adjusted pre-tax income reflected strong private equity returns. Net
flows remain negative but improved primarily due to lower surrenders, partially offset
by decreased deposits as the prior-year quarter included the acquisition of two largeplans.



Life Insurance adjusted pre-tax income declined. The prior-year quarter included
favorable actuarial adjustments of $98 million. The second quarter of 2019 adjusted
pre-tax income decreased as higher net investment income on a growing asset base,strong private equity returns and the impact from lower interest rates driving higher

FOR IMMEDIATE RELEASE

yield enhancements was offset by an allowance for reinsurance recoveries. Mortality
was within pricing expectations.


Institutional Markets adjusted pre-tax income increased due to higher net investment
income on a growing asset base, strong private equity returns and favorable mortality.

CONFERENCE CALL
AIG will host a conference call tomorrow, Thursday, August 8, 2019 at 8:00 a.m. ET to review
these results. The call is open to the public and can be accessed via a live listen-only webcast in theInvestors section of www.aig.com. A replay will be available after the call at the same location.
###

Additional supplementary financial data is available in the Investors section at www.aig.com.
The conference call (including the conference call presentation material), the earnings release andthe financial supplement may include, and officers and representatives of AIG may from time totime make and discuss, projections, goals, assumptions and statements that may constitute“forward-looking statements” within the meaning of the Private Securities Litigation Reform Act
of 1995. These projections, goals, assumptions and statements are not historical facts but instead
represent only a belief regarding future events, many of which, by their nature, are inherently
uncertain and outside AIG’s control. These projections, goals, assumptions and statements include
statements preceded by, followed by or including words such as “will,” “believe,” “anticipate,”“expect,” “intend,” “plan,” “focused on achieving,” “view,” “target,” “goal” or “estimate.” These
projections, goals, assumptions and statements may relate to future actions, prospective services or
products, future performance or results of current and anticipated services or products, sales efforts,
expenses, the outcome of contingencies such as legal proceedings, anticipated organizational,
business or regulatory changes, anticipated sales, monetization and/or acquisitions of businesses orassets, or successful integration of acquired businesses, management succession and retention
plans, exposure to risk, trends in operations and financial results.
It is possible that AIG’s actual results and financial condition will differ, possibly materially, fromthe results and financial condition indicated in these projections, goals, assumptions and statements.
Factors that could cause AIG’s actual results to differ, possibly materially, from those in thespecific projections, goals, assumptions and statements include:





9

changes in market and industry conditions;the occurrence of catastrophic events, both natural and man-made;AIG’s ability to successfully reorganize its businesses and execute on our initiatives toimprove our underwriting capabilities and reinsurance programs, as well as improve
profitability, without negatively impacting client relationships or its competitive position;
AIG’s ability to successfully dispose of, monetize and/or acquire businesses or assets or
successfully integrate acquired businesses;
actions by credit rating agencies;

FOR IMMEDIATE RELEASE














changes in judgments concerning insurance underwriting and insurance liabilities;changes in judgments concerning potential cost saving opportunities;
the impact of potential information technology, cybersecurity or data security breaches,
including as a result of cyber-attacks or security vulnerabilities;
disruptions in the availability of AIG’s electronic data systems or those of third parties;
the effectiveness of our strategies to recruit and retain key personnel and our ability to
implement effective succession plans;
negative impacts on customers, business partners and other stakeholders;
AIG’s ability to successfully manage Legacy portfolios;
concentrations in AIG’s investment portfolios;
the requirements, which may change from time to time, of the global regulatory
framework to which AIG is subject;significant legal, regulatory or governmental proceedings;
changes in judgments concerning the recognition of deferred tax assets and goodwill
impairment; andsuch other factors discussed in Part I, Item 2. Management's Discussion and Analysis ofFinancial Condition and Results of Operations (MD&A) in AIG’s Quarterly Report on
Form 10-Q for the quarterly period ended June 30, 2019 (which will be filed with the
Securities and Exchange Commission), Part I, Item 2. MD&A in AIG’s Quarterly Reporton Form 10-Q for the quarterly period ended March 31, 2019, and Part II, Item 7.
MD&A and Part I, Item 1A. Risk Factors in AIG’s Annual Report on Form 10-K for theyear ended December 31, 2018.

AIG is not under any obligation (and expressly disclaims any obligation) to update or alter any
projections, goals, assumptions or other statements, whether written or oral, that may be made fromtime to time, whether as a result of new information, future events or otherwise.

#

#

#

COMMENT ON REGULATION G AND NON-GAAP FINANCIAL MEASURES
Throughout this press release, including the financial highlights, AIG presents its financial
condition and results of operations in the way it believes will be most meaningful andrepresentative of its business results. Some of the measurements AIG uses are “non-GAAP
financial measures” under Securities and Exchange Commission rules and regulations. GAAP is
the acronym for “generally accepted accounting principles” in the United States. The non-GAAP
financial measures AIG presents are listed below and may not be comparable to similarly-named
measures reported by other companies. The reconciliations of such measures to the mostcomparable GAAP measures in accordance with Regulation G are included within the relevant
tables attached to this news release or in the Second Quarter 2019 Financial Supplement available
in the Investors section of AIG’s website, www.aig.com.
Book Value per Common Share, Excluding Accumulated Other Comprehensive Income(AOCI) and Book Value per Common Share, Excluding AOCI and Deferred Tax Assets
10FOR IMMEDIATE RELEASE(DTA) (Adjusted Book Value per Common Share) are used to show the amount of AIG’s net
worth on a per-common share basis. AIG believes these measures are useful to investors because
they eliminate items that can fluctuate significantly from period to period, including changes in fairvalue of AIG’s available for sale securities portfolio, foreign currency translation adjustments andU.S. tax attribute deferred tax assets. These measures also eliminate the asymmetrical impact
resulting from changes in fair value of AIG’s available for sale securities portfolio wherein there islargely no offsetting impact for certain related insurance liabilities. AIG excludes deferred tax
assets representing U.S. tax attributes related to net operating loss carryforwards and foreign tax
credits as they have not yet been utilized. Amounts for interim periods are estimates based on
projections of full-year attribute utilization. As net operating loss carryforwards and foreign tax
credits are utilized, the portion of the DTA utilized is included in these book value per commonshare metrics. Book value per common share, excluding AOCI, is derived by dividing Total AIG
common shareholders’ equity, excluding AOCI, by total common shares outstanding. Adjusted
Book Value per Common Share is derived by dividing Total AIG common shareholders’ equity,
excluding AOCI and DTA (Adjusted Common Shareholders’ Equity), by total common shares
outstanding.
AIG Return on Common Equity – Adjusted After-tax Income Excluding AOCI and DTA(Adjusted Return on Common Equity) is used to show the rate of return on commonshareholders’ equity. AIG believes this measure is useful to investors because it eliminates items
that can fluctuate significantly from period to period, including changes in fair value of AIG’s
available for sale securities portfolio, foreign currency translation adjustments and U.S. tax attributedeferred tax assets. This measure also eliminates the asymmetrical impact resulting from changes
in fair value of AIG’s available for sale securities portfolio wherein there is largely no offsetting
impact for certain related insurance liabilities. AIG excludes deferred tax assets representing U.S.
tax attributes related to net operating loss carryforwards and foreign tax credits as they have not yet
been utilized. Amounts for interim periods are estimates based on projections of full-year attribute
utilization. As net operating loss carryforwards and foreign tax credits are utilized, the portion of
the DTA utilized is included in Adjusted Return on Common Equity. Adjusted Return on Common
Equity is derived by dividing actual or annualized adjusted after-tax income attributable to AIG
common shareholders by average Adjusted Common Shareholders’ Equity.
Core and Life and Retirement Adjusted Attributed Common Equity is an attribution of total
AIG Adjusted Common Shareholders’ Equity to these segments based on AIG’s internal capitalmodel, which incorporates the segments’ respective risk profiles. Adjusted attributed common
equity represents AIG’s best estimates based on current facts and circumstances and will changeover time.
Core and Life and Retirement Return on Common Equity – Adjusted After-tax Income(Adjusted Return on Attributed Common Equity) is used to show the rate of return on Adjusted
Attributed Common Equity. Adjusted Return on Attributed Common Equity is derived by dividing
actual or annualized Adjusted After-tax Income by Average Adjusted Attributed Common Equity.
Adjusted After-tax Income Attributable to Core and Life and Retirement is derived bysubtracting attributed interest expense, income tax expense and attributed dividends on preferredstock from adjusted pre-tax income. Attributed debt and the related interest expense and dividends
on preferred stock are calculated based on AIG’s internal capital model. Tax expense or benefit is11

FOR IMMEDIATE RELEASE

calculated based on an internal attribution methodology that considers among other things thetaxing jurisdiction in which the segments conduct business, as well as the deductibility of expenses
in those jurisdictions.
Adjusted Revenues exclude Net realized capital gains (losses), income from non-operating
litigation settlements (included in Other income for GAAP purposes) and changes in fair value of
securities used to hedge guaranteed living benefits (included in Net investment income for GAAP
purposes). Adjusted revenues is a GAAP measure for AIG’s operating segments.
AIG uses the following operating performance measures because AIG believes they enhance theunderstanding of the underlying profitability of continuing operations and trends of AIG’s businesssegments. AIG believes they also allow for more meaningful comparisons with AIG’s insurancecompetitors. When AIG uses these measures, reconciliations to the most comparable GAAP
measure are provided on a consolidated basis.

12

FOR IMMEDIATE RELEASE

Adjusted Pre-tax Income (APTI) is derived by excluding the items set forth below from income
from continuing operations before income tax. This definition is consistent across AIG’s segments.
These items generally fall into one or more of the following broad categories: legacy matters
having no relevance to AIG’s current businesses or operating performance; adjustments to enhancetransparency to the underlying economics of transactions; and measures that AIG believes to becommon to the industry. APTI is a GAAP measure for AIG’s segments. Excluded items include
the following:• changes in fair value of securities used tohedge guaranteed living benefits;• pension expense related to a one-timelump sum payment to former employees;• changes in benefit reserves and deferred
policy acquisition costs (DAC), value ofbusiness acquired (VOBA), and sales
inducement assets (SIA) related to net
realized capital gains and losses;• income and loss from divested businesses;• changes in the fair value of equity securities;• loss (gain) on extinguishment of debt;• all net realized capital gains and losses
except earned income (periodic settlements
and changes in settlement accruals) on
derivative instruments used for nonqualifying (economic) hedging or for asset
replication. Earned income on sucheconomic hedges is reclassified from net
realized capital gains and losses to specific
APTI line items based on the economic risk
being hedged (e.g. net investment income
and interest credited to policyholder accountbalances);• income or loss from discontinued
operations;• net loss reserve discount benefit (charge);• non-operating litigation reserves andsettlements;• restructuring and other costs related toinitiatives designed to reduce operating
expenses, improve efficiency and simplify
AIG’s organization;• the portion of favorable or unfavorable
prior year reserve development for which
AIG has ceded the risk under retroactive
reinsurance agreements and relatedchanges in amortization of the deferredgain;• integration and transaction costs
associated with acquired businesses;• losses from the impairment of goodwill;and• non-recurring external costs associatedwith the implementation of non-ordinary
course legal or regulatory changes orchanges to accounting principles.

Adjusted After-tax Income attributable to AIG common shareholders (AATI) is derived by
excluding the tax effected APTI adjustments described above, dividends on preferred stock, and thefollowing tax items from net income attributable to AIG:••

deferred income tax valuation allowance releases and charges;changes in uncertain tax positions and other tax items related to legacy matters having no
relevance to AIG’s current businesses or operating performance; and• net tax charge related to the enactment of the Tax Cuts and Jobs Act (Tax Act);and by excluding the net realized capital gains (losses) from noncontrolling interests.
13

FOR IMMEDIATE RELEASE

See page 16 for the reconciliation of Net income attributable to AIG to Adjusted After-tax Income
Attributable to AIG.
Ratios: AIG, along with most property and casualty insurance companies, uses the loss ratio, theexpense ratio and the combined ratio as measures of underwriting performance. These ratios are
relative measurements that describe, for every $100 of net premiums earned, the amount of losses
and loss adjustment expenses (which for General Insurance excludes net loss reserve discount), andthe amount of other underwriting expenses that would be incurred. A combined ratio of less than
100 indicates underwriting income and a combined ratio of over 100 indicates an underwriting loss.
AIG’s ratios are calculated using the relevant segment information calculated under GAAP, andthus may not be comparable to similar ratios calculated for regulatory reporting purposes. The
underwriting environment varies across countries and products, as does the degree of litigation
activity, all of which affect such ratios. In addition, investment returns, local taxes, cost of capital,
regulation, product type and competition can have an effect on pricing and consequently on
profitability as reflected in underwriting income and associated ratios.
Accident year loss and combined ratios, as adjusted: both the accident year loss andcombined ratios, as adjusted, exclude catastrophe losses and related reinstatement premiums,
prior year development, net of premium adjustments, and the impact of reserve discounting.
Natural and man-made catastrophe losses are generally weather or seismic events having a net
impact on AIG in excess of $10 million each and also include certain man-made events, suchas terrorism and civil disorders that exceed the $10 million threshold. AIG believes that as
adjusted ratios are meaningful measures of AIG’s underwriting results on an ongoing basis as
they exclude catastrophes and the impact of reserve discounting which are outside ofmanagement’s control. AIG also excludes prior year development to provide transparency
related to current accident year results.
Underwriting ratios are computed as follows:a) Loss ratio = Loss and loss adjustment expenses incurred ÷ Net premiums earned (NPE)b) Acquisition ratio = Total acquisition expenses ÷ NPEc) General operating expense ratio = General operating expenses ÷ NPEd) Expense ratio = Acquisition ratio + General operating expense ratioe) Combined ratio = Loss ratio + Expense ratiof) Accident year loss ratio, as adjusted (AYLR) = [Loss and loss adjustment expenses
incurred – CATs – PYD] ÷ [NPE +/(-) Reinstatement premiums related to catastrophes(CYRIPs) +/(-) RIPs related to prior year catastrophes (PYRIPs) + (Additional)
returned premium related to PYD on loss sensitive business ((AP)RP) + Adjustment for
ceded premiums under reinsurance contracts related to prior accident years]g) Accident year combined ratio, as adjusted = AYLR + Expense ratioh) Catastrophe losses (CATs) and reinstatement premiums = [Loss and loss adjustment
expenses incurred – (CATs)] ÷ [NPE +/(-) CYRIPs] – Loss ratioi) Prior year development net of (additional) return premium related to PYD on loss
sensitive business = [Loss and loss adjustment expenses incurred – CATs – PYD] ÷[NPE +/(-) CYRIPs +/(-) PYRIPs + (AP)RP] – Loss ratio – CAT ratio
Premiums and deposits: includes direct and assumed amounts received and earned on traditional
life insurance policies, group benefit policies and life-contingent payout annuities, as well as
14

FOR IMMEDIATE RELEASE

deposits received on universal life, investment-type annuity contracts, Federal Home Loan Bank(FHLB) funding agreements and mutual funds.
Results from discontinued operations are excluded from all of these measures.
###

American International Group, Inc. (AIG) is a leading global insurance organization. Building on 100 years of experience, today AIG
member companies provide a wide range of property casualty insurance, life insurance, retirement products, and other financial services
to customers in more than 80 countries and jurisdictions. These diverse offerings include products and services that help businesses andindividuals protect their assets, manage risks and provide for retirement security. AIG common stock is listed on the New York Stock
Exchange.
Additional information about AIG can be found at www.aig.com | YouTube: www.youtube.com/aig | Twitter: @AIGinsurance
www.twitter.com/AIGinsurance | LinkedIn: www.linkedin.com/company/aig. These references with additional information about AIG havebeen provided as a convenience, and the information contained on such websites is not incorporated by reference into this press release.
AIG is the marketing name for the worldwide property-casualty, life and retirement, and general insurance operations of American
International Group, Inc. For additional information, please visit our website at www.aig.com. All products and services are written or
provided by subsidiaries or affiliates of American International Group, Inc. Products or services may not be available in all countries, andcoverage is subject to actual policy language. Non-insurance products and services may be provided by independent third parties. Certain
property-casualty coverages may be provided by a surplus lines insurer. Surplus lines insurers do not generally participate in state
guaranty funds, and insureds are therefore not protected by such funds.

15

American International Group, Inc.
Selected Financial Data and Non-GAAP Reconciliation($ in millions, except per common share data)

Reconciliations of Adjusted Pre-tax and After-tax Income
Three Months Ended June 30,
2019
Pre-tax$
Pre-tax income/net income, including noncontrolling interests
Noncontrolling interests
Pre-tax income/net income attributable to AIG
Dividends on preferred stock
Net income attributable to AIG common shareholders
Adjustments:
Changes in uncertain tax positions and other tax adjustments
Deferred income tax valuation allowance charges
Changes in fair value of securities used to hedge
guaranteed living benefits
Changes in benefit reserves and DAC, VOBA andSIA related to net realized capital gains (losses)
Changes in the fair value of equity securities
Favorable prior year development and related amortization
changes ceded under retroactive reinsurance agreements
Loss on extinguishment of debt
Net realized capital gains(a)Loss from discontinued operations(Income) loss from divested businesses
Non-operating litigation reserves and settlements
Net loss reserve discount (benefit) charge
Integration and transaction costs associated with acquired businesses
Restructuring and other costs
Professional fees related to regulatory or accounting changes
Noncontrolling interests primarily related to net realized capitalgains (losses) of Fortitude Holdings' standalone results(b)Adjusted pre-tax income/Adjusted after-tax income attributable to AIG$
common shareholders

1,837
1,837

2018

Tax EffectNoncontrolling
Interests(b)

$

$

446
446

After-tax

Pre-tax

Tax EffectNoncontrolling
Interests

After-tax

(281)
(281)

$ 1,390
(281)
1,109
7
1,102

$ 1,252
1,252

$

$

$

321
321

6
6

931
6
937
937

-

(27)
(7)

-

27
7

-

(3)
(7)

-

3
7

(75)

(16)

-

(59)

36

8

-

28

73
22

16
5

-

57
17

(1)
-

-

-

(1)
-

(125)
15
(351)
1
212
6
60
2

(27)
4
(86)
(1)
45
1
13
-

-

(98)
11
(265)
1
1
1
167
5
47
2

(32)
5
(155)
(25)
12
(14)
200
-

(7)
1
(29)
(5)
2
(3)
43
-

-

(25)
4
(126)
(20)
10
(11)
157
-

1,677

$

366

$

249

249

-

(32)

$ 1,272$ 1,278

$

321

(2)
$

4

(2)
$

961

Six Months Ended June 30,
2019
Pre-tax$
Pre-tax income/net income, including noncontrolling interests
Noncontrolling interests
Pre-tax income/net income attributable to AIG
Dividends on preferred stock
Net income attributable to AIG common shareholders
Adjustments:
Changes in uncertain tax positions and other tax adjustments
Deferred income tax valuation allowance (releases) charges
Changes in fair value of securities used to hedge
guaranteed living benefits
Changes in benefit reserves and DAC, VOBA andSIA related to net realized capital gains (losses)
Changes in the fair value of equity securities
Unfavorable (favorable) prior year development and related
amortization changes ceded under retroactive reinsurance
agreements
Loss on extinguishment of debt
Net realized capital (gains) losses(a)Loss from discontinued operations
Income from divested businesses
Non-operating litigation reserves and settlements
Net loss reserve discount (benefit) charge
Integration and transaction costs associated with acquired businesses
Restructuring and other costs
Professional fees related to regulatory or accounting changes
Noncontrolling interests primarily related to net realized capitalgains (losses) of Fortitude Holdings' standalone results(b)Adjusted pre-tax income/Adjusted after-tax income attributable to AIG$
common shareholders

2,991
2,991

2018

Tax EffectNoncontrolling
Interests(b)

$

$

663
663

After-tax

Pre-tax

Tax EffectNoncontrolling
Interests

(564)
(564)

$ 2,327
(564)
1,763
7
1,756

$ 2,479
2,479

$

$

598
598

After-tax(5)(5)$ 1,880
(5)
1,875
1,875

-

(15)
31

-

15
(31)

-

1
(37)

-

(1)
37

(171)

(36)

-

(135)

113

24

-

89

(26)
(57)

(5)
(12)

-

(21)
(45)

30
-

6
-

-

24
-

(152)
13
123
(5)
1
685
13
107
2

(32)
3
23
(1)
144
3
23
-

-

(120)
10
100
1
(4)
1
541
10
84
2

2
9
(136)
(33)
25
(219)
224
-

2
(30)
(7)
5
(46)
48
-

-

-

496

496

-

-

(68)

$ 2,660$ 2,494

3,524

$

789

-

$

$

564

-

2
7
(106)
1
(26)
20
(173)
176
-

(1)

(1)

(6)

$ 1,924-$(a) Includes all net realized capital gains and losses except earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-qualifying (economic) hedging or for asset
replication.
(b) Noncontrolling interests is primarily due to the 19.9 percent investment in Fortitude Holdings by an affiliate of The Carlyle Group L.P. (Carlyle), which occurred in the fourth quarter of 2018. Carlyle is allocated19.9 percent of Fortitude Holdings’ standalone financial results. Fortitude Holdings’ results are mostly eliminated in AIG’s consolidated income from continuing operations given that its results arise fromintercompany transactions. Noncontrolling interests is calculated based on the standalone financial results of Fortitude Holdings. The most significant component of Fortitude Holdings’ standalone results concerns
gains related to the change in fair value of embedded derivatives, which moved materially in the quarter due to lower rates and tightening credit spreads, and which are recorded in net realized capital gains and losses ofFortitude Holdings. In accordance with AIG's adjusted after-tax income definition, realized capital gains and losses are excluded from noncontrolling interests.

16

American International Group, Inc.
Selected Financial Data and Non-GAAP Reconciliation (continued)($ in millions, except per common share data)

Summary of Key Financial Metrics
Three Months Ended June 30,% Inc.
2019
2018(Dec.)
Earnings per common share:
Basic
Income from continuing operations
Income from discontinued operations

$

1.26
1.26

$

$

$

1.24
1.24

$

1.43

Net income attributable to AIG common shareholders$

DilutedIncome from continuing operations
Income from discontinued operations$

Net income attributable to AIG common shareholders
Adjusted after-tax income attributable to AIG commonshareholders per diluted share

876.4
888.3

Return on common equity (a)Adjusted return on common equity (b)7.1 %
10.4 %

As of period end:
Total AIG shareholders' equity
Preferred equity$

Total AIG common shareholders' equity
Accumulated other comprehensive income (AOCI)
Total AIG common shareholders' equity, excluding AOCI

June 30, 2019
64,539485
64,054
4,991
59,063

Deferred tax assets (c)As of period end:
Book value per common share (d)Book value per common share, excluding AOCI (e)Adjusted book value per common share (f)Total common shares outstanding

9,577
49,486$

Total adjusted AIG common shareholders' equity

$
$
$

$

$

June 30,
2019
73.63
67.90
56.89

March 31,
2019
$
69.33
$
66.89
$
55.47

869.9

869.7

1.04
1.04

21.2 %
NM
21.2

$

21.6
NM
21.6

$

$

1.02
1.02

$

1.05

36.2 %$

Weighted average shares outstanding:
Basic
DilutedSix Months Ended June 30,% Inc.
2019
2018(Dec.)

903.2
916.6

9,926
48,248% Inc.
(Dec.)
6.2 %
1.5
2.6

$

$

$

1.99
1.99

$

3.01

$

2.07
2.07

(3.4) %
NM
(3.4)

$

2.04
2.04

(2.5)
NM
(2.5)

$

2.09

44.0 %

$

875.9
882.9

6.0 %
7.6 %

March 31, 201960,787
485
60,302
2,128
58,174

2.00
2.00

905.6
920.9

5.8 %
11.0 %$$

December 31,
2018
$
65.04
$
66.67
$
54.95
866.6

December 31, 2018
56,361
56,361(1,413)
57,774
10,15347,621% Inc.
(Dec.)
13.2 %
1.8
3.5

$
$
$

5.9 %
7.7 %

$

$
June 30,
2018
68.65
68.40
57.34

June 30, 2018
61,186
61,186
230
60,956
9,853
51,103% Inc.
(Dec.)
7.3 %
(0.7)
(0.8)

891.2

Financial highlights - notes(a) Computed as Annualized net income (loss) attributable to AIG common shareholders divided by average AIG common shareholders' equity. Equity includes AOCI andDTA.
(b) Computed as Annualized Adjusted after-tax income attributable to AIG common shareholders divided by Adjusted Common Shareholders' Equity.
(c) Represents deferred tax assets only related to U.S. net operating loss and foreign tax credit carryforwards on a U.S. GAAP basis and excludes other balance sheet
deferred tax assets and liabilities.
(d) Represents total AIG common shareholders' equity divided by Total common shares outstanding.
(e) Represents total AIG common shareholders' equity, excluding AOCI, divided by Total common shares outstanding.
(f) Represents Adjusted Common Shareholders' Equity, divided by Total common shares outstanding.

17

American International Group, Inc.
Selected Financial Data and Non-GAAP Reconciliation($ in millions, except per common share amounts)
Reconciliations of Life and Retirement Adjusted Return on Common Equity
Three Months Ended
June 30,
2019
2018
Adjusted pre-tax income
Interest expense on attributed financial debt

$

1,049
44
1,005
201
804
3
801

$

962
30
932
186
746
746

$
$

18,82018,55017.3 %$$

19,972
19,95215.0 %

Adjusted pre-tax income including attributed interest expenses
Income tax expense
Adjusted after-tax income
Dividends declared on preferred stock
Adjusted after-tax income attributable to common shareholders
Ending adjusted attributed common equity
Average adjusted attributed common equity
Adjusted return on attributed common equity

Reconciliations of Core Adjusted Return on Common Equity
Three Months Ended
June 30,
2019
2018
Adjusted pre-tax income
Interest expense on attributed financial debt

$

1,558
1,558
340
1,218
7
1,211

$

1,144
1,144
294
850
850

$
$

42,694
41,746
11.6 %$$

41,836
41,4748.2 %Adjusted pre-tax income including attributed interest expenses
Income tax expense
Adjusted after-tax income
Dividends declared on preferred stock
Adjusted after-tax income attributable to common shareholders
Ending adjusted attributed common equity
Average adjusted attributed common equity
Adjusted return on attributed common equity

Net Premiums Written - Change in Constant Dollar
Three Months Ended
June 30, 2019

General Insurance - International
Foreign exchange effect on worldwide premiums:
Change in net premiums written
Increase (decrease) in original currency
Foreign exchange effect
Increase (decrease) as reported in U.S. dollars(8.2) %
(4.3)
(12.5) %Reconciliation of Net Investment Income

Net investment income per Consolidated Statements of Operations
Changes in fair value of securities used to hedge guaranteed living benefits
Changes in the fair value of equity securities
Net realized capital gains related to economic hedges and otherTotal Net investment income - APTI Basis18

Three Months Ended
June 30,
2019
2018
$
3,745
$
3,065
(84)
36
22
52
28
$
3,735
$
3,129

$

$

Six Months Ended
June 30,
2019
2018
7,624
$
6,326
(189)
113
(57)
75
38
7,453
$
6,477

American International Group, Inc.
Selected Financial Data and Non-GAAP Reconciliation (continued)($ in millions, except per common share amounts)
Reconciliations of Premiums and Deposits
Three Months Ended
June 30,20192018
Individual Retirement:
Premiums
Deposits
Other
Total premiums and deposits
Group Retirement:
Premiums
Deposits
Other
Total premiums and depositsLife Insurance:
Premiums
Deposits
Other
Total premiums and deposits
Institutional Markets:
Premiums
Deposits
Other
Total premiums and deposits
Total Life and Retirement:
Premiums
Deposits
Other
Total premiums and deposits

19

$

$
$

$
$

$
$

$
$

$

16
3,852
(3)
3,865

$

5
2,042
2,047

$

425
413
194
1,032

$

152
108
8
268

$

598
6,415
199
7,212

$

$

$

$

$

$

16
3,408
(2)
3,422
15
2,330
2,345
418
410
152
980
41
565
46
652
490
6,713
196
7,399