AIG Reports Second Quarter 2020 Results
August 3, 2020
Impacts from COVID-19 Remain Manageable
Continued Improvement in General Insurance Accident Year Underwriting Profitability, Adjusted for Catastrophe Losses (CATs)
Sale of Fortitude Group Holdings LLC (Fortitude) De-risks Balance Sheet and Sharpens Focus on Core Businesses; Transaction
Accounting Reflected in GAAP Results
Strong Financial and Capital Flexibility; $10.7 billion in Parent Liquidity at June 30, 2020; $71.68 of Book Value per Common Share, anincrease of 3.4% from March 31, 2020

General Insurance reported $674 million of pre-tax CATs, net of reinsurance, or 11.9 combined ratio points, which included$458 million of estimated COVID-19 losses, $126 million of civil unrest related losses and $90 million of natural CATs
resulting in a General Insurance combined ratio of 106.0, in the second quarter of 2020.
The General Insurance accident year combined ratio, as adjusted*, was 94.9, a 120 bps improvement from the prior year
quarter, driven by improved Commercial Lines performance and continued expense discipline.
Life and Retirement reported adjusted pre-tax income (APTI) of $881 million, a decrease of $168 million compared to theprior year quarter driven by private equity losses, continued spread compression and elevated mortality related to
COVID-19. Adjusted return on attributed common equity (Adjusted ROCE) – Life and Retirement* for the second quarter
was 13.2%.
On June 2, 2020, AIG completed the sale of a 76.6% stake in Fortitude for $2.2 billion of proceeds, significantly improving
AIG’s risk profile and reducing exposure to long-tail runoff liabilities and related interest rate risk.
Net loss attributable to AIG common shareholders was $7.9 billion, or $9.15 per common share, for the second quarter of
2020, compared to income of $1.1 billion, or $1.24 per diluted common share in the prior year quarter. The loss wasprimarily driven by a $6.7 billion after-tax loss from the sale and deconsolidation of Fortitude and $1.8 billion of after-tax
net realized capital losses primarily related to mark-to-market losses from variable annuity and interest rate hedges
including the impact of AIG’s non-economic non-performance risk adjustment, per GAAP, on the fair value of AIG’s
associated liabilities. The after-tax reduction to total AIG shareholders’ equity resulting from the sale and deconsolidation of
Fortitude was $4.3 billion, or $2.5 billion on an Adjusted common shareholders’ equity* basis.
Adjusted after-tax income attributable to AIG common shareholders (AATI)* was $571 million, or $0.66 per diluted commonshare, for the second quarter of 2020, compared to $1.3 billion, or $1.43 per diluted common share in the prior year
quarter. The decrease was primarily due to higher CATs and lower net investment income including private equity losses
which are generally recorded on a one-quarter lag.
* Refers to financial measure not calculated in accordance with generally accepted accounting principles (non-GAAP); definitions of non-GAAP
measures and reconciliations to their closest GAAP measures can be found in this news release under the heading Comment on Regulation G and
Non-GAAP Financial Measures.
NEW YORK--(BUSINESS WIRE)--Aug. 3, 2020-- American International Group, Inc. (NYSE: AIG) today reported financial results for the quarter
ended June 30, 2020.
Brian Duperreault, AIG’s Chief Executive Officer, said: “We are effectively navigating the current complex environment due to the strong foundation webuilt over the last three years. While unprecedented and on-going, COVID-19 remains an earnings, not a capital, event for AIG. We also increased ourfinancial flexibility ending the second quarter with over $10 billion in liquidity.
“Our core businesses performed well in the second quarter. In General Insurance, the underlying underwriting profitability improvement was driven by
our focus on portfolio remediation and expense discipline. Life and Retirement benefited from its diversification and agility, and continues to meet clientneeds despite an uncertain economic environment.
“We also executed two important transactions in the second quarter that significantly enhanced our risk profile and helped to position our corebusinesses for growth. The sale of our majority stake in Fortitude Holdings de-risks our balance sheet and reduces our exposure to long-tail runoff
liabilities and interest rate risk. Our Personal Insurance high net worth portfolio benefited from the formation of Syndicate 2019 and new quota sharereinsurance agreements, which will enable us to unlock the strategic value and growth opportunities of this business through a new, innovative capitalmodel.
“I am proud of the many ways we are managing through this challenging period in time. Our colleagues continue to show strength and resiliency as we
remain focused on supporting our clients, each other and our communities. I remain confident that AIG is well-positioned for the future as we makeprogress toward becoming a top-performing company and leading insurance franchise.”
FINANCIAL SUMMARY

Three Months Ended
June 30,($ in millions, except per common share amounts)

2020

2019

Net income (loss) attributable to AIG common shareholders$ (7,936)$ 1,102

Net income (loss) per diluted share attributable to AIG common shareholders (a)$ (9.15)$ 1.24

867.0

888.3

Weighted average common shares outstanding - diluted (a)Adjusted pre-tax income (loss):
General Insurance

$ 175

$ 980

Life and Retirement

881

1,049

Other Operations

(510)

(471)

Legacy

257

119

Total

$ 803

$ 1,677

Adjusted after-tax income attributable to AIG common shareholders$ 571$ 1,272

Adjusted after-tax income per diluted share attributable to AIG common shareholders $ 0.66

$ 1.43Return on common equity

NM

7.1

%

Return on tangible common equity*

NM

7.8

%

Adjusted return on common equity*

4.6% 10.4%

Adjusted return on tangible common equity*

5.1% 11.7%

Adjusted return on attributed common equity - Core*3.5% 11.6%

Common shares outstanding

861.4

869.9

Book value per common share$ 71.68$ 73.63

65.94

67.47

Tangible book value per common share*

Book value per common share, excluding AOCI adjusted for the cumulative unrealized
gains and losses related to Fortitude Re’s Funds Withheld Assets*

65.93

67.90

Adjusted book value per common share

55.90

56.89

Adjusted tangible book value per common share*

50.16

50.72

General Insurance Combined ratio

106.0

97.8

General Insurance Accident year combined ratio, as adjusted

94.9

96.1

Adjusted return on attributed common equity - Life and Retirement

13.2% 17.3%(a) For periods reporting a loss, basic average common shares outstanding are used to calculate net income (loss) per diluted share attributable to
AIG common shareholders. Diluted shares represent basic shares for the three-month period ended June 30, 2020 because we reported a net loss
attributable to AIG common shareholders from continuing operations in that period.
All comparisons are against the second quarter of 2019, unless otherwise indicated. Refer to the AIG Second Quarter 2020 Financial Supplement,
which is posted on AIG's website in the Investors section, for further information.
SECOND QUARTER 2020 HIGHLIGHTS
General Insurance – Second quarter APTI of $175 million was comprised of an underwriting loss of $343 million and net investment income of $518
million. The underwriting loss included $674 million of CATs, net of reinsurance, reflecting $458 million of estimated COVID-19 losses, $126 million ofcivil unrest related losses and $90 million of natural CATs compared to $174 million of CATs, net of reinsurance, in the prior year quarter. Favorable net
prior year loss reserve development, net of reinsurance, totaled $74 million, and was primarily due to $53 million of amortization from the Adverse
Development Cover (ADC).
The General Insurance combined ratio was 106.0, including 11.9 points of CATs and reinstatement premiums, of which 8.2 points related to COVID-19
losses. Commercial Lines in both North America and International continued to show strong improvement due to underwriting and reinsurance actions
taken to improve business mix, loss performance, and rate adequacy. The accident year combined ratio, as adjusted, was 94.9, comprised of a 61.5
accident year loss ratio, as adjusted* and an expense ratio of 33.4. The accident year combined ratio, as adjusted, reflected a change in Personal
Insurance business mix driven by a series of new quota share reinsurance agreements including participation by our newly formed Syndicate 2019, a
Lloyd’s Syndicate managed by Talbot, to reinsure risks related to AIG’s Private Client Group and the impact of COVID-19 on the Travel business.
General Insurance general operating expenses (GOE) decreased by 9% to $766 million compared to the prior year quarter.
Life and Retirement – Second quarter APTI was $881 million compared to $1.0 billion in the prior year quarter. The decrease reflected private equity
losses, continued spread compression and elevated mortality due to COVID-19, partially offset by higher other yield enhancements investment income
and lower deferred policy acquisition costs (DAC) amortization and Variable Annuities reserves resulting from higher equity markets in the second
quarter. Net flows were negative for the quarter and unfavorable to the prior year driven by lower Fixed and Index Annuity sales. Adjusted ROCE – Lifeand Retirement for the second quarter of 2020 was 13.2%.
Other Operations – Second quarter adjusted pre-tax loss (APTL) was $510 million compared to $471 million in the prior year quarter. The increase in
pre-tax loss was primarily due to lower net investment income on consolidated investments and increased interest expense related to $4.1 billion ofnotes issued by AIG Parent during the quarter.
Legacy – Fortitude – On June 2, 2020, AIG completed the sale of a 76.6% ownership interest in Fortitude for approximately $2.2 billion, resulting in
The Carlyle Group, Inc. (Carlyle) and T&D United Capital Co., Ltd owning 96.5% of Fortitude and AIG retaining a 3.5% ownership interest. AIG
established Fortitude Reinsurance Ltd. (Fortitude Re), a wholly owned subsidiary of Fortitude, in 2018 in connection with a series of affiliatedreinsurance transactions related to AIG’s Legacy Portfolio and has accounted for Fortitude as part of AIG’s Legacy segment. As of June 30, 2020,
approximately $30.5 billion of reserves from AIG’s Legacy Life and Retirement Run-Off Lines and approximately $4.1 billion of reserves from AIG’s
Legacy General Insurance Run-Off Lines, related to business written by multiple wholly-owned AIG subsidiaries, had been ceded to Fortitude Re
under these reinsurance transactions. Fortitude Re reinsures the majority of AIG’s Legacy portfolio making it one of AIG’s largest reinsurance
counterparties. As these reinsurance transactions are structured as modified coinsurance and loss portfolio transfers with funds withheld, AIG
continues to reflect the invested assets supporting Fortitude Re’s obligations in AIG’s financial statements. As a result of the sale, AIG updated its
Non-GAAP measures this quarter to adjust for the modified coinsurance and funds withheld assets, as the associated investment income is owed toFortitude under the reinsurance agreements.
Resulting from the sale of the majority interest in and deconsolidation of Fortitude, AIG recorded an after-tax reduction to total AIG shareholders’equity of $4.3 billion. The corresponding reduction to Adjusted common shareholders’ equity which excludes accumulated other comprehensive
income (AOCI), adjusted for the cumulative unrealized gains and losses related to Fortitude Re’s funds withheld assets, and deferred tax assets(DTA), was $2.5 billion. The impact to AIG shareholders’ equity is primarily due to a $6.7 billion after-tax loss partially offset by a $2.4 billion increase in
AOCI due to the release of shadow adjustments primarily related to future policy benefits. The $6.7 billion after-tax loss is comprised of (i) a $2.7 billion

loss related to the write-off of prepaid insurance assets and DAC upon deconsolidation of Fortitude and (ii) $4.0 billion related to the loss on the saleprimarily as a result of increases in Fortitude’s GAAP equity principally related to mark-to-market movements since December 31, 2018. The
transaction did not negatively impact the statutory capital of AIG’s insurance subsidiaries.
Legacy Portfolio Results – Second quarter APTI was $257 million compared to APTI of $119 million in the prior year quarter; through the date ofclosing of the Fortitude transaction, both of these amounts are reduced in AATI for AIG due to Carlyle’s 19.9% minority interest in Fortitude. Thechange was primarily due to an increase in net investment income. In addition, the current quarter includes two months of Fortitude APTI compared tothree months in the prior year quarter.
Net Investment Income – Total consolidated net investment income was $3.4 billion in the second quarter of 2020 compared to $3.7 billion in the prioryear quarter. Net investment income on an APTI basis* decreased approximately $537 million to $3.2 billion in the second quarter of 2020. The
decrease reflected private equity losses of $276 million compared to private equity income of $238 million in the prior year quarter which included alarge IPO gain from a private equity holding. As the Fortitude sale closed on June 2, 2020, net investment income on an APTI basis included $378
million related to two months of investment income on Fortitude assets compared to $498 million in the prior year quarter.
Liquidity and Capital – As of June 30, 2020, AIG Parent liquidity stood at approximately $10.7 billion. In May, AIG Parent issued three tranches ofsenior notes in an aggregate principal amount of $4.1 billion. In June, AIG Parent repaid the $1.3 billion that it had borrowed in March 2020 under its$4.5 billion committed, revolving syndicated credit facility.
Also, in June 2020, AIG Parent made a prepayment of approximately $548 million to the U.S. Treasury in connection with proposed tax settlementagreements that were previously announced and related to the disallowance of foreign tax credits associated with cross border financing transactions.
AIG currently expects to make, as early as the fourth quarter of 2020, additional payments on this settlement of approximately $1.2 billion dependent
upon the final calculation of accrued interest.
Book Value per Common Share – As of June 30, 2020, book value per common share was $71.68 compared to $73.63 at June 30, 2019, primarily
driven by a net loss attributable to the sale and deconsolidation of Fortitude, partially offset by net unrealized capital gains. Adjusted book value percommon share, which excludes AOCI, adjusted for the cumulative unrealized gains and losses related to Fortitude Re’s funds withheld assets, and
DTA, decreased to $55.90 compared to $56.89 at June 30, 2019.
Adjusted tangible book value per common share, which is Adjusted book value per common share excluding Goodwill, Value of Business Acquired,
Value of Distribution Channel Acquired and Other Intangible Assets was $50.16 compared to $50.72 at June 30, 2019.
GENERAL INSURANCE
Three Months Ended June 30,($ in millions)

2020

2019

ChangeGross premiums written$ 8,474$ 8,654(2)

Net premiums written$ 5,549$ 6,581(16)

Underwriting income (loss)$ (343)$ 147

NM

Adjusted pre-tax income

$ 175

$ 980

(82)

72.6

63.0

9.6

Catastrophe losses and reinstatement premiums(11.9)

(2.6)

(9.3)

Prior year development

0.8

0.9

(0.1)

Accident year loss ratio, as adjusted

61.5

61.3

0.2

Expense ratio

33.4

34.8

(1.4)

Total General Insurance%

Underwriting ratios:
Loss ratio
Less: impact on loss ratioptsCombined ratio

106.0

97.8

8.2

Accident year combined ratio, as adjusted

94.9

96.1

(1.2)

General Insurance - North America
Three Months Ended June 30,($ in millions)

2020

2019

Change$ 2,347$ 3,307

Commercial Lines

2,497

2,364

6

Personal Insurance

(150)

943

NM

$ (419)$ (5)NMCommercial Lines

(385)

(36)

NM

Personal Insurance

(34)

31

NM

$ 718

(99)

87.9

69.2

18.7

Catastrophe losses and reinstatement premiums(19.6)(5.0)(14.6)

Prior year development

1.2

1.7

(0.5)

Accident year loss ratio, as adjusted

69.5

65.9

3.6

Expense ratio

27.8

30.9

(3.1)

Combined ratio

115.7

100.1

15.6

Accident year combined ratio, as adjusted

97.3

96.8

0.5

North America
Net premiums written

Underwriting income (loss)

Adjusted pre-tax income

$ 5

(29)

%

Underwriting ratios:
North America
Loss ratio
Less: impact on loss ratioptsNorth America Commercial Lines
Loss ratio

91.8

74.8

17.0

Catastrophe losses and reinstatement premiums(22.6)(5.4)(17.2)

Prior year development

1.6

3.1

(1.5)

Accident year loss ratio, as adjusted

70.8

72.5

(1.7)

Expense ratio

25.2

26.7

(1.5)

Combined ratio

117.0

101.5

15.5

Accident year combined ratio, as adjusted

96.0

99.2

(3.2)

65.6

53.0

12.6

Catastrophe losses and reinstatement premiums

(2.6)

(3.9)

1.3

Prior year development

(1.3)

(2.4)

1.1

Accident year loss ratio, as adjusted

61.7

46.7

15.0

Expense ratio

43.1

43.4

(0.3)

Combined ratio

108.7

96.4

12.3

Accident year combined ratio, as adjusted

104.8

90.1

14.7

pts

Less: impact on loss ratio

North America Personal Insurance
Loss ratioptsLess: impact on loss ratio

General Insurance North America – Commentary

Net premiums written decreased by 29% to $2.3 billion. Net premiums written in Personal Insurance decreased by $1.1
billion primarily as a result of $725 million in cessions pursuant to a series of new quota share reinsurance agreements
including participation by our newly formed Syndicate 2019, a Lloyd’s Syndicate managed by Talbot, to reinsure risks
related to AIG’s Private Client Group and the impact of COVID-19 on the Travel business. This was partially offset by 6%
growth in our Commercial business driven by improved rate and retention in our Core lines including Retail Property,
Lexington and AIG Re.
Pre-tax underwriting loss of $419 million included $519 million of CATs, net of reinsurance, of which $364 million related to
COVID-19, $81 million related to civil unrest and $74 million related to natural CATs. The North America combined ratio
was 115.7, compared to 100.1 in the prior year quarter, reflecting 19.6 points of CATs and reinstatement premiums ofwhich 13.7 points related to COVID-19. The accident year combined ratio, as adjusted, was 97.3 compared to 96.8 in theprior year quarter.
The North America Commercial Lines accident year combined ratio, as adjusted, was 96.0, a 3.2 point improvementcompared to the prior year quarter driven by improved mix of business, significant rate increases, benefits fromunderwriting actions in 2019 and improvement in the expense ratio due to changes in the business mix.
The North America Personal Insurance accident year combined ratio, as adjusted, increased 14.7 points to 104.8

compared to the prior year quarter. The increase in the accident year combined ratio, as adjusted, was in part driven by
the impact of the reduction of net premiums earned on the GOE ratio. In addition, the change in business mix resulting
from lower Travel business due to COVID-19 and the cessions under the series of new quota share reinsurance
agreements, including participation by our newly formed Syndicate 2019, resulted in a higher accident year loss ratio, as
adjusted, offset in part by a lower acquisition ratio.
Favorable net prior year loss reserve development was $39 million, with favorable net prior year loss reserve developmentof $46 million for North America Commercial Lines partially offset by unfavorable net prior year loss reserve developmentof $7 million for North America Personal Insurance. North America Commercial Lines favorable net prior loss reserve
development included $53 million of amortization from the ADC compared to $58 million in the prior year quarter.
General Insurance - International
Three Months Ended June 30,($ in millions)

2020

2019

Change$ 3,202$ 3,274(2)

Commercial Lines

1,575

1,516

4

Personal Insurance

1,627

1,758

(7)

International
Net premiums written

Underwriting income (loss)

$ 76

$ 152

(50)

Commercial Lines

(13)

51

NM

Personal Insurance

89

101

(12)

$ 170

$ 262

(35)

59.5

56.9

2.6

Catastrophe losses and reinstatement premiums

(5.4)

(0.1)

(5.3)

Prior year development

0.6

0.1

0.5

Accident year loss ratio, as adjusted

54.7

56.9

(2.2)

Expense ratio

38.1

38.6

(0.5)

Combined ratio

97.6

95.5

2.1

Adjusted pre-tax income%

Underwriting ratios:
International
Loss ratio
Less: impact on loss ratioptsAccident year combined ratio, as adjusted

92.8

95.5

(2.7)

66.3

61.5

4.8

Catastrophe losses and reinstatement premiums(11.3)(0.3)(11.0)

Prior year development

2.4

0.4

2.0

Accident year loss ratio, as adjusted

57.4

61.6

(4.2)

Expense ratio

34.5

35.3

(0.8)

Combined ratio

100.8

96.8

4.0

Accident year combined ratio, as adjusted

91.9

96.9

(5.0)

52.9

52.9

-

Catastrophe losses and reinstatement premiums

0.4

-

0.4

Prior year development

(1.2)

(0.1)

(1.1)

Accident year loss ratio, as adjusted

52.1

52.8

(0.7)

Expense ratio

41.4

41.6

(0.2)

Combined ratio

94.3

94.5

(0.2)

Accident year combined ratio, as adjusted

93.5

94.4

(0.9)

International Commercial Lines
Loss ratioptsLess: impact on loss ratio

International Personal Insurance
Loss ratioptsLess: impact on loss ratio

General Insurance International – Commentary

Net premiums written decreased 2% on a reported basis and 1% on a constant dollar basis. International Commercial’s net
premiums written increased by 7% on a constant dollar basis driven by strong rate improvement and higher retention
across most commercial lines. This was offset by the decline in net premiums written in Personal Insurance, in part as aresult of the impact of COVID-19 on Travel and other lines of business.
Pre-tax underwriting income of $76 million included $155 million of CATs, net of reinsurance, of which $94 million related to
COVID-19 and $45 million related to civil unrest. The International combined ratio was 97.6, compared to 95.5 in the prioryear quarter, reflecting 5.4 points of CATs and reinstatement premiums of which 3.4 points related to COVID-19. The
accident year combined ratio, as adjusted, was 92.8 compared to 95.5 in the prior year quarter, reflecting improvements inboth Commercial Lines and Personal Insurance.
The International Commercial Lines accident year combined ratio, as adjusted, was 91.9, a 5.0 point improvement driven
by premium rate increases, benefits from underwriting action, portfolio optimization and ongoing expense discipline.

The International Personal Insurance accident year combined ratio, as adjusted, improved by 0.9 points to 93.5, reflecting
lower attritional losses in Japan and Asia Pacific Personal Auto.
Favorable net prior year loss reserve development was $35 million, with $46 million of favorable net prior year loss reserve
development in International Commercial Lines, partially offset by $11 million of unfavorable net prior year loss reserve
development in International Personal Insurance.
LIFE AND RETIREMENT
Three Months Ended June 30,($ in millions)

2020

2019

Change$ 2,297$ 1,333

72

Net investment income

2,040

2,270

(10)

Adjusted revenues

4,549

3,828

19

Benefits, losses and expenses 3,668

2,779

32

Adjusted pre-tax income

881

1,049

(16)

Premiums and deposits

5,664

7,212

(21)

Life and Retirement
Premiums & fees%

Individual Retirement
Premiums & fees

$ 243

$ 221

10

Net investment income

957

1,094

(13)

Adjusted revenues

1,333

1,466

(9)

Benefits, losses and expenses 783

878

(11)

Adjusted pre-tax income

550

588

(6)

Premiums and deposits

1,794

3,865

(54)

Net flows(1,504)

(306)

(392)

%

Group Retirement
Premiums & fees

$ 103

$ 111

(7)

Net investment income

541

618

(12)

Adjusted revenues

712

790

(10)

%

Benefits, losses and expenses 498

497-

Adjusted pre-tax income

214

293

(27)

Premiums and deposits

1,670

2,047

(18)

Net flows

(243)

(174)

(40)

$ 822

$ 806

Net investment income

280

335

(16)

Adjusted revenues

1,113

1,154

(4)

Benefits, losses and expenses 1,122

1,068

5

Adjusted pre-tax income (loss) (9)86NM

Premiums and deposits

1,032

4

Life Insurance
Premiums & fees

1,071

2

%

Institutional Markets
Premiums & fees

$ 1,129

$ 195

479

Net investment income

262

223

17

Adjusted revenues

1,391

418

233

Benefits, losses and expenses 1,265

336

276

Adjusted pre-tax income

126

82

54

Premiums and deposits

1,129

268

321

%

Life and Retirement – CommentaryLife and Retirement reported APTI of $881 million compared to $1.0 billion in the prior year quarter. The decrease reflectedprivate equity losses generally reported on a one-quarter lag, continued spread compression and elevated mortality due to
COVID-19, partially offset by higher other yield enhancements investment income and lower DAC amortization and
Variable Annuities reserves resulting from higher equity markets in the second quarter of 2020.
Premiums were $1.6 billion primarily due to two large Pension Risk Transfer transactions, compared to $598 million in theprior year quarter. Premiums and deposits decreased to $5.7 billion compared to $7.2 billion in the prior year quarter
primarily due to lower Fixed Annuities, Index Annuities and Group Retirement deposits in the second quarter of 2020
driven by broad industry sales disruptions caused by COVID-19 and the lower interest rate environment, partially offset by
an increase in Institutional Markets activity. Net flows continued to be negative.
Individual Retirement reported APTI of $550 million compared to $588 million in the prior year quarter. APTI decreased
primarily due to private equity losses, lower yield enhancements investment driven by losses on securities for which the fairvalue option was elected, and lower call and tender income, partially offset by lower Variable Annuity DAC/Sales
Inducement amortization and reserves due to the higher equity markets in the second quarter of 2020. Total net flows werenegative in the quarter and unfavorable compared to the prior year period, driven by lower Fixed and Index Annuities
sales.
Group Retirement reported APTI of $214 million compared to $293 million in the prior year quarter. The decrease in APTI
was driven by private equity losses and lower gains on securities for which the fair value option was elected, partially offset
by higher other yield enhancements investment income. Net flows remained negative for the quarter and unfavorable
compared to the prior year quarter, primarily due to decreased deposits, partially offset by lower surrenders.
Life Insurance reported APTL of $9 million compared to APTI of $86 million in the prior year quarter primarily due toprivate equity losses, lower gains on bond calls and elevated mortality due to COVID-19.
Institutional Markets APTI of $126 million increased from $82 million in the prior year quarter due to higher other yieldenhancements investment income and higher base investment income driven by asset growth, partially offset by private
equity losses. Two large Pension Risk Transfer reinsurance deals were closed in the quarter.
CONFERENCE CALL
AIG will host a conference call tomorrow, Tuesday, August 4, 2020 at 8:00 a.m. ET to review these results. The call is open to the public and can beaccessed via a live listen-only webcast in the Investors 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 financial results presentation material), the earnings release and the financial supplement may include, and officers
and representatives of AIG may from time to time make and discuss, projections, goals, assumptions and statements that may constitute “forwardlooking 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 regulatorychanges, the effect of catastrophes and macroeconomic events, such as COVID-19, anticipated dispositions, monetization and/or acquisitions ofbusinesses or assets, or successful integration of acquired businesses, management succession and retention plans, exposure to risk, trends inoperations and financial results.
It is possible that AIG’s actual results and financial condition will differ, possibly materially, from the results and financial condition indicated in theseprojections, goals, assumptions and statements. Factors that could cause AIG’s actual results to differ, possibly materially, from those in the specificprojections, goals, assumptions and statements include:

the adverse impact of COVID-19, including with respect to AIG’s business, financial condition and results of operations;changes in market and industry conditions, including the significant global economic downturn, general market declines,
prolonged economic recovery and disruptions to AIG’s operations driven by COVID-19 and responses thereto, including
new or changed governmental policy and regulatory actions;the occurrence of catastrophic events, both natural and man-made, including COVID-19, pandemics, civil unrest and theeffects of climate change;
AIG’s ability to effectively execute on AIG 200 operational programs designed to achieve underwriting excellence,
modernization of AIG’s operating infrastructure, enhanced user and customer experiences and unification of AIG;
the impact of potential information technology, cybersecurity or data security breaches, including as a result of cyberattacks or security vulnerabilities, the likelihood of which may increase due to extended remote business operations as aresult of COVID-19;
disruptions in the availability of AIG’s electronic data systems or those of third parties;
the effectiveness of our risk management policies and procedures, including with respect to our business continuity anddisaster recovery plans;changes in judgments concerning potential cost-saving opportunities;
concentrations in AIG’s investment portfolios;changes to the valuation of AIG’s investments;
actions by credit rating agencies;changes in judgments concerning insurance underwriting and insurance liabilities;
the effectiveness of strategies to recruit and retain key personnel and to implement effective succession plans;
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;
AIG’s ability to successfully manage Legacy Portfolios;
AIG’s ability to successfully dispose of, monetize and/or acquire businesses or assets or successfully integrate acquired
businesses;changes in judgments concerning the recognition of deferred tax assets and the impairment of goodwill; andsuch other factors discussed in:– Part I, Item 2. MD&A and Part II, Item 1A. Risk Factors of the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2020 (which
will be filed with the Securities and Exchange Commission);

– Part I, Item 2. MD&A of the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020; and– Part I, Item 1A. Risk Factors and Part II, Item 7. MD&A of the 2019 Annual Report.
COVID-19 is adversely affecting, and is expected to continue to adversely affect, our business, financial condition and results of operations, and its
ultimate impact will depend on future developments that are uncertain and cannot be predicted, including the scope, severity and duration of the crisis
and actions taken by governmental and regulatory authorities in response thereto. Even after the crisis subsides, it is possible that the U.S. and othermajor economies will experience a prolonged recession, in which event our businesses, results of operations and financial condition could bematerially and adversely affected. Statements about the effects of COVID-19 on our business, financial condition and results of operations may
constitute forward-looking statements and are subject to the risk that the actual impacts may differ, possibly materially, from what is reflected in thoseforward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including
the scope and duration of the COVID-19 and actions taken by governmental and regulatory authorities in response to mitigate its impact.
AIG is not under any obligation (and expressly disclaims any obligation) to update or alter any projections, goals, assumptions or other statements,
whether written or oral, that may be made from time to time, whether as a result of new information, future events or otherwise.
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 and representative 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 othercompanies. The reconciliations of such measures to the most comparable GAAP measures in accordance with Regulation G are included within therelevant tables attached to this news release or in the Second Quarter 2020 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) adjusted for the cumulative unrealized gains
and losses related to Fortitude Re’s Funds Withheld Assets and Book Value per Common Share, Excluding AOCI adjusted for the
cumulative unrealized gains and losses related to Fortitude Re’s Funds Withheld Assets and Deferred Tax Assets (DTA) (Adjusted Book
Value per Common Share) are used to show the amount of AIG’s net worth on a per-common share basis after eliminating items that can fluctuatesignificantly 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 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 is largely no offsetting impact for certain related insurance liabilities. In addition, AIG adjustsfor the cumulative unrealized gains and losses related to Fortitude Re’s Funds Withheld Assets since these fair value movements are economicallytransferred to Fortitude Re. 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 common share
metrics. Book value per common share, excluding AOCI adjusted for the cumulative unrealized gains and losses related to Fortitude Re’s Funds
Withheld Assets, is derived by dividing Total AIG common shareholders’ equity, excluding AOCI adjusted for the cumulative unrealized gains andlosses related to Fortitude Re’s Funds Withheld Assets, by total common shares outstanding. Adjusted Book Value per Common Share is derived by
dividing Total AIG common shareholders’ equity, excluding AOCI adjusted for the cumulative unrealized gains and losses related to Fortitude Re’s
Funds Withheld Assets and DTA (Adjusted Common Shareholders’ Equity ), by total common shares outstanding.
Book Value per Common Share, Excluding Goodwill, Value of Business Acquired (VOBA), Value of Distribution Channel Acquired (VODA)and Other Intangible Assets (Tangible Book Value per Common Share) and Tangible Book Value per Common Share, Excluding AOCI
adjusted for the cumulative unrealized gains and losses related to Fortitude Re’s Funds Withheld Assets and Deferred Tax Assets (DTA)(Adjusted Tangible Book Value per Common Share) are used to provide more accurate measure of the realizable value of shareholder on a
per-common share basis. Tangible Book Value per Common Share is derived by dividing Total AIG common shareholders’ equity, excluding Goodwill,
VOBA, VODA and Other intangible assets, by total common shares outstanding (Tangible Book Value per Common Share). Adjusted Tangible Book
Value per Common Share is derived by dividing Total AIG common shareholders’ equity, excluding intangible assets, AOCI adjusted for the cumulative
unrealized gains and losses related to Fortitude Re’s Funds Withheld Assets, and DTA ( Adjusted Tangible Common Shareholders’ Equity ), by totalcommon shares outstanding.
AIG Return on Common Equity – Adjusted After-tax Income Excluding AOCI adjusted for the cumulative unrealized gains and losses related
to Fortitude Re’s Funds Withheld Assets 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 attribute deferred
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. In addition, AIG adjusts for the cumulative unrealized gains andlosses related to Fortitude Re’s Funds Withheld Assets since these fair value movements are economically transferred to Fortitude Re. 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 beenutilized. 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.
AIG Return on Common Equity, Excluding Goodwill, VOBA, VODA and Other Intangible assets (Return on Tangible Common Equity) and
Return on Tangible Common Equity – Adjusted After-tax Income, Excluding Goodwill, VOBA, VODA and Other Intangible assets, AOCI
adjusted for the cumulative unrealized gains and losses related to Fortitude Re’s Funds Withheld Assets, and DTA (Adjusted Return on
Tangible Common Equity) is used to provide the rate of return on tangible common shareholder’s equity, which is a more accurate measure of
realizable shareholder value. AIG excludes Goodwill, VOBA, VODA and Other intangible assets from AIG common shareholders’ equity to derive
tangible common shareholders’ equity (Tangible Common Shareholders’ Equity). Return on Tangible Common Equity is derived by dividing actual or
annualized after-tax income attributable to AIG common shareholders by average Tangible Common Shareholders’ Equity. AIG further excludes AOCI
adjusted for the cumulative unrealized gains and losses related to Fortitude Re’s Funds Withheld Assets and DTA in Adjusted Tangible Common
Equity. Adjusted Return on Tangible Common Equity is derived by dividing actual or annualized adjusted after-tax income attributable to AIG common

shareholders by average Adjusted Tangible Common Shareholders’ Equity.
Core and Life and Retirement Adjusted Attributed Common Equity is an attribution of total AIG Adjusted Common Shareholders’ Equity to thesesegments based on AIG’s internal capital model, which incorporates the segments’ respective risk profiles. Adjusted attributed common equity
represents AIG’s best estimates based on current facts and circumstances and will change over time.
Core and Life and Retirement Return on Common Equity – Adjusted After-tax Income (Adjusted Return on Attributed Common Equity) isused 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 by subtracting attributed interest expense, income tax expense
and attributed dividends on preferred stock from adjusted pre-tax income. Attributed debt and the related interest expense and dividends on preferredstock are calculated based on AIG’s internal capital model. Tax expense or benefit is calculated based on an internal attribution methodology thatconsiders among other things the taxing jurisdiction in which the segments conduct business, as well as the deductibility of expenses in thosejurisdictions.
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 the understanding of the underlying profitability ofcontinuing operations and trends of AIG’s business segments. 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.
Adjusted Pre-tax Income (APTI) is derived by excluding the items set forth below from income from continuing operations before income tax. Thisdefinition 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 enhance transparency to the underlying economics of transactions;and measures that AIG believes to be common to the industry. APTI is a GAAP measure for AIG’s segments. Excluded items include the following:changes in fair value of securities used to hedge guaranteed living benefits;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;changes in the fair value of equity securities;
net investment income on Fortitude Re funds withheld assets post deconsolidation of
Fortitude Re;
following deconsolidation of Fortitude Re, net realized capital gains and losses on
Fortitude Re funds withheld assets held by AIG in support of Fortitude Re’s reinsurance
obligations to AIG (Fortitude Re funds withheld assets);
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 non-qualifying(economic) hedging or for asset replication. Earned income on such economic 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 account balances);income or loss from discontinued operations;net loss reserve discount benefit (charge);
pension expense related to a one-time lumpsum payment to former employees;
income and loss from divested businesses;
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 prioryear reserve development for which AIG has
ceded the risk under retroactive reinsurance
agreements and related changes inamortization of the deferred gain;
integration and transaction costs associatedwith acquired businesses;
losses from the impairment of goodwill; andnon-recurring costs associated with theimplementation of non-ordinary course legal
or regulatory changes or changes toaccounting principles.

Adjusted After-tax Income attributable to AIG common shareholders (AATI) is derived by excluding the tax effected APTI adjustments describedabove, dividends on preferred stock, and the following 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; andnet tax charge related to the enactment of the Tax Cuts and Jobs Act (Tax Act);and by excluding the net realized capital gains (losses) and other charges from noncontrolling interests.
See page 23 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, the expense ratio and the combined ratio as measuresof underwriting performance. These ratios are relative measurements that describe, for every $100 of net premiums earned, the amount of losses andloss adjustment expenses (which for General Insurance excludes net loss reserve discount), and the amount of other underwriting expenses thatwould 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, and thus 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 and combined ratios, as adjusted, exclude catastrophe losses
and related reinstatement premiums, prior year development, net of premium adjustments, and the impact of reserve discounting. Natural catastrophe
losses are generally weather or seismic events having a net impact on AIG in excess of $10 million each and man-made catastrophe losses, such as
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 of management’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)Catastrophe losses (CATs) and reinstatement premiums = [Loss and loss adjustment expenses incurred – (CATs)] ÷ [NPE +/(-) CYRIPs] – Loss
ratio

Accident year loss ratio, as adjusted (AYLR) = [Loss and loss adjustment expenses incurred – CATs – PYD] ÷ [NPE +/(-) Reinstatementg) 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]h) Accident year combined ratio, as adjusted = AYLR + Expense 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 andlife‑contingent payout annuities, as well as 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. AIG member companies provide a wide range of property casualty
insurance, life insurance, retirement solutions, and other financial services to customers in more than 80 countries and jurisdictions. These diverse
offerings include products and services that help businesses and individuals 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 have been
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 ofAmerican International Group, Inc. Products or services may not be available in all countries and jurisdictions, and coverage is subject to underwriting
requirements and actual policy language. Non-insurance products and services may be provided by independent third parties. Certain propertycasualty 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.
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,
2020

2019
Noncontrolling

Pre-tax

Pre-tax income (loss)/net income (loss), including
noncontrolling interests

Tax
EffectInterests(e)$ (9,661) $ (1,896) $ -Noncontrolling

After-tax Pre-tax

Tax
Effect$ (7,766) $ 1,837 $ 446

Interests(e)After-tax$ -$ 1,390

Noncontrolling interests

-

-

(162)

(162)

-

-

(281)

(281)

Pre-tax income (loss)/net income (loss) attributable
to AIG(9,661)(1,896)(162)(7,928)

1,837

446

(281)

1,109

Dividends on preferred stock

8

7

Net income (loss) attributable to AIG commonshareholders(7,936)

1,102

Adjustments:
Changes in uncertain tax positions and other tax
adjustments(a)

-

(206)

-

206

-

(27)

-

27

Deferred income tax valuation allowance (releases)
charges(b)

-

183

-

(183)

-

(7)

-

7

Changes in fair value of securities used to hedge
guaranteed living benefits

(16)

(4)

-

(12)

(75)

(16)

-

(59)

Changes in benefit reserves and DAC, VOBA and SIA
related to net realized capital gains (losses)

(255)

(53)

-

(202)

73

16

-

57

Changes in the fair value of equity securities

(56)

(12)

-

(44)

22

5

-

17

Loss on extinguishment of debt

-

-

-

-

15

4

-

11

Net investment income on Fortitude Re funds withheld
assets(c)

(116)

(24)

-

(92)

-

-

-

-

Net realized capital (gains) losses on Fortitude Re funds
withheld assets(c)

(96)

(20)

-

(76)

-

-

-

-

Net realized capital (gains) losses on Fortitude Re funds
withheld embedded derivative(c)

837

176

-

661

-

-

-

-

Net realized capital (gains) losses(d)

1,619

369

-

1,250

(351)

(86)

-

(265)

Loss from discontinued operations

-

-

-

1

-

-

-

1

Loss from divested businesses

8,412

1,657

-

6,755

1

-

-

1

Non-operating litigation reserves and settlements

-

-

-

-

-

(1)

-

1

Favorable prior year development and relateamortization changes ceded under retroactive
reinsurance agreements

(33)

(7)

-

(26)

(125)

(27)

-

(98)

Net loss reserve discount charge

16

3

-

13

212

45

-

167

Integration and transaction costs associated withacquired businesses

4

1

-

3

6

1

-

5

Restructuring and other costs

134

28

-

106

60

13

-

47

Non-recurring costs related to regulatory or accountingchanges

14

3

-

11

2

-

-

2

Noncontrolling interests primarily related to net realized
capital gains (losses) of Fortitude Holdings' standalone
results(e)

-

-

136

136

-

-

249

249

$ (26)$ 571

Adjusted pre-tax income/Adjusted after-tax income$ 803
attributable to AIG common shareholders$ 198$ 1,677 $ 366$ (32)$ 1,272

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

Reconciliations of Adjusted Pre-tax and After-tax Income (continued)

Six Months Ended June 30,
2020

2019
Noncontrolling

Pre-tax

Pre-tax income (loss)/net income (loss), including
noncontrolling interests

Tax
Effect$ (7,103) $ (992)

Noncontrolling
Tax
EffectInterests(e)After-tax Pre-tax$$ (6,112) $ 2,991 $ 663-

Interests(e)After-tax$ -$ 2,327

Noncontrolling interests

-

-

(67)

(67)

-

-

(564)

(564)

Pre-tax income (loss)/net income (loss) attributable
to AIG(7,103)

(992)

(67)

(6,179)

2,991

663

(564)

1,763

Dividends on preferred stock

15

7

Net income (loss) attributable to AIG commonshareholders(6,194)

1,756

Adjustments:
Changes in uncertain tax positions and other tax
adjustments(a)

-

(211)

-

211

-

(15)

-

15

Deferred income tax valuation allowance (releases)
charges(b)

-

(100)

-

100

-

31

-

(31)

(9)

(2)

-

(7)

(171)

(36)

-

(135)

SIA related to net realized capital gains (losses)

283

60

-

223

(26)

(5)

-

(21)

Changes in the fair value of equity securities

135

28

-

107

(57)

(12)

-

(45)

Loss on extinguishment of debt

17

4

-

13

13

3

-

10

Net investment income on Fortitude Re funds withheld
assets(c)

(116)

(24)

-

(92)

-

-

-

-

Net realized capital (gains) losses on Fortitude Re funds
withheld assets(c)

(96)

(20)

-

(76)

-

-

-

-

Net realized capital (gains) losses on Fortitude Re funds
withheld embedded derivative(c)

837

176

-

661

-

-

-

-

Net realized capital (gains) losses(d)(1,883)(398)-(1,485)

123

23

-

100

Loss from discontinued operations

-

-

-

1

-

-

-

1

(Income) loss from divested businesses

8,628

1,702

-

6,926

(5)

(1)

-

(4)

Non-operating litigation reserves and settlements

(6)

(1)

-

(5)

1

-

-

1

Favorable prior year development and related
amortization changes ceded under retroactive
reinsurance agreements

(41)

(9)

-

(32)

(152)

(32)

-

(120)

Net loss reserve discount charge

72

15

-

57

685

144

-

541

Integration and transaction costs associated withacquired businesses

6

1

-

5

13

3

-

10

Restructuring and other costs

224

47

-

177

107

23

-

84

Non-recurring costs related to regulatory or accountingchanges

27

6

-

21

2

-

-

2

Changes in fair value of securities used to hedge
guaranteed living benefits
Changes in benefit reserves and DAC, VOBA andNoncontrolling interests primarily related to net realized
capitalgains (losses) of Fortitude Holdings' standalone
results(e)Adjusted pre-tax income/Adjusted after-tax income
attributable to AIG common shareholders

-

-

$ 975

$ 282

$

59

59

(8)

$ 670

-

-

496

$ 3,524 $ 789

496$ (68)$ 2,660(a) Includes the write-down of net operating loss deferred tax assets in certain foreign jurisdictions, which is offset by valuation allowance release.
(b) Six months ended June 30, 2020 includes valuation allowance established against a portion of foreign tax credit and net operating loss
carryforwards of AIG’s U.S. federal consolidated income tax group, as well as net valuation allowance release in certain foreign jurisdictions.
(c) Represents activity subsequent to the deconsolidation of Fortitude Re on June 2, 2020.
(d) 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 and net realized gains and losses on Fortitude Re funds withheld
assets.
(e) Noncontrolling interests was primarily due to the 19.9 percent investment in Fortitude Group Holdings, LLC (Fortitude Holdings) by an affiliate of
The Carlyle Group L.P. (Carlyle), which occurred in the fourth quarter of 2018. Carlyle was allocated 19.9 percent of Fortitude Holdings’ standalone
financial results through the June 2, 2020 closing date of the Majority Interest Fortitude Sale. Fortitude Holdings’ results were mostly eliminated in
AIG’s consolidated income from continuing operations given that its results arose from intercompany transactions. Noncontrolling interests wascalculated based on the standalone financial results of Fortitude Holdings. The most significant component of Fortitude Holdings’ standalone results
was the change in fair value of the embedded derivatives which changes with movements in interest rates and credit spreads, and which wasrecorded in net realized capital gains and losses of Fortitude Holdings. In accordance with AIG's adjusted after-tax income definition, realized capitalgains and losses are excluded from noncontrolling interests. Subsequent to the Majority Interest Fortitude Sale, AIG’s owns 3.5 percent of Fortitude
Holdings and no longer consolidates Fortitude Holdings in its financial statements as of such date. The minority interest in Fortitude is carried at costwithin AIG’s consolidated investments, which was $100 million as of June 30, 2020.

Summary of Key Financial Metrics
Three Months Ended June 30, Six Months Ended June 30,

Income (loss) per common share:

2020

2019

% Inc.
(Dec.)2020

NM% $ (7.11) $ 2.00

2019

% Inc.
(Dec.)

Basic
Income (loss) from continuing operations
Income from discontinued operations
Net income (loss) attributable to AIG common shareholders$ (9.15) $ 1.26
-

-

NM

-

-

NM
NM

$ (9.15) $ 1.26

NM

$ (7.11) $ 2.00

NM

$ (9.15) $ 1.24

NM

$ (7.11) $ 1.99

NM

DilutedIncome (loss) from continuing operations
Income from discontinued operations
Net income (loss) attributable to AIG common shareholders--$ (9.15) $ 1.24

NM
NM

-

-

$ (7.11) $ 1.99

NM
NM

%

Adjusted after-tax income attributable to AIG common shareholders per
diluted share (a)$ 0.66$ 1.43

Basic

867.0

Diluted (a)867.0(53.8)% $ 0.77$ 3.01

876.4

870.6

875.9

888.3

870.6

882.9

(74.4)%

Weighted average shares outstanding:(a) For the three- and six-month periods ended June 30, 2020, because we reported net losses attributable to AIG common shareholders, all common
stock equivalents are anti-dilutive and are therefore excluded from the calculation of diluted shares and diluted per share amounts. However, because
we reported adjusted after-tax income attributable to AIG common shareholders, the calculation of adjusted after-tax income per diluted share
attributable to AIG common shareholders includes 3,226,882 dilutive shares and 3,939,732 dilutive shares for the three- and six-month periods ended
June 30, 2020, respectively.
American International Group, Inc.
Selected Financial Data and Non-GAAP Reconciliation (continued)($ in millions, except per common share data)

Reconciliation of Book Value per Common Share

As of period end:

June 30, 2020 March 31, 2020 June 30, 2019

Total AIG shareholders' equity$ 62,234$ 60,173$ 64,539

Less: Preferred equity

485

485

485

Total AIG common shareholders' equity (a)61,74959,68864,054

Less: Accumulated other comprehensive income (AOCI)

9,169

(994)

4,991

4,215

-

-

unrealized gains and losses related to Fortitude Re’s Funds Withheld Assets (b)56,79560,68259,063

Less: Deferred tax assets (DTA)*

8,643

8,535

9,577

$ 48,152$ 52,147$ 49,486

3,983

3,989

4,104

Add: Cumulative unrealized gains and losses related to Fortitude Re’s Funds
Withheld Assets
Total AIG common shareholders' equity, excluding AOCI adjusted for the cumulative

Total adjusted AIG common shareholders' equity (c)Less: Intangible assets:
GoodwillValue of business acquired

121

297

369

Value of distribution channel acquired

517

526

555

Other intangibles

323

329

337

Total intangible assets

4,944

5,141

5,365

Total AIG common shareholders' equity less intangible assets (d)56,80554,547

58,689$ 43,208$ 47,006$ 44,121

861.4

861.3

869.9

Total adjusted tangible common shareholders' equity (e)Total common shares outstanding (f)June 30, March 31, % Inc.

June 30, % Inc.

As of period end:

2020

2020

(Dec.)

2019(Dec.)

Book value per common share (a÷f)$ 71.68$ 69.30

3.4% $ 73.63(2.6) %

Book value per common share, excluding AOCI adjusted for the
cumulative unrealized gains and losses related to Fortitude Re’s Funds Withheld Assets (b÷f)

65.93

70.45

(6.4)

67.90

(2.9)

Adjusted book value per common share (c÷f)

55.90

60.55

(7.7)

56.89

(1.7)

Tangible book value per common share (d÷f)

65.94

63.33

4.1

67.47

(2.3)

Adjusted tangible book value per common share (e÷f)

50.16

54.58

(8.1)

50.72

(1.1)

Reconciliation of Return On Common Equity

Three Months Ended
June 30, 2020

June 30, 2019

Actual or Annualized net income attributable to AIG common shareholders (g)$ (31,744)$ 4,408

Actual or Annualized adjusted after-tax income attributable to AIG common shareholders (h)$ 2,284$ 5,088

Average AIG common shareholders' equity (i)$ 60,719$ 62,178

5,043

5,397

$ 55,676$ 56,781

Less: Average intangible assets
Average AIG tangible common shareholders' equity (j)Average AIG common shareholders' equity$ 60,719$ 62,178

Less: Average AOCI

4,088

3,560

Add: Average cumulative unrealized gains and losses related to Fortitude Re’s Funds Withheld Assets

2,108

-

Less: Average DTA*

8,589

9,752

Average adjusted common shareholders' equity (k)50,15048,866

Less: Average intangible assets

5,043

5,397

$ 45,107$ 43,469

ROCE (g÷i)

NM

7.1

%

Adjusted return on common equity (h÷k)

4.6

10.4

%

Return on tangible common equity (g÷j)

NM

7.8

%

Adjusted return on tangible common equity (h÷m)

5.1

11.7

%

Average adjusted tangible common shareholders' equity (m)%%* 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 otherbalance sheet deferred tax assets and liabilities.

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

Reconciliations of Life and Retirement Adjusted Return on Common Equity

Three Months Ended
June 30,

Adjusted pre-tax income
Interest expense on attributed financial debt

2020

2019

$ 881

$ 1,049

71

44

Adjusted pre-tax income including attributed interest expense

810

1,005

Income tax expense

160

201

Adjusted after-tax income

650

804

Dividends declared on preferred stock33

Adjusted after-tax income attributable to common shareholders $ 647$ 801

Ending adjusted attributed common equity$ 19,506$ 18,820

Average adjusted attributed common equity$ 19,584$ 18,550

Adjusted return on attributed common equity

13.2

%

17.3

%

Reconciliations of Core Adjusted Return on Common Equity

Three Months Ended
June 30,
2020

2019

$ 546

$ 1,558

Interest expense on attributed financial debt--

Adjusted pre-tax income including attributed interest expense

546

1,558

Income tax expense

143

340

Adjusted after-tax income

403

1,218

Dividends declared on preferred stock

7

7

Adjusted pre-tax income

Adjusted after-tax income attributable to common shareholders $ 396$ 1,211Ending adjusted attributed common equity$ 46,133$ 42,694

Average adjusted attributed common equity$ 45,219$ 41,746

Adjusted return on attributed common equity

3.5

%

11.6

%

Net Premiums Written - Change in Constant Dollar

Three Months Ended June 30, 2020
General Insurance

International International - Commercial

Foreign exchange effect on worldwide premiums:
Change in net premiums written
Increase (decrease) in original currency(0.9)%

6.7%

Foreign exchange effect

(1.3)

(2.8)

Increase (decrease) as reported in U.S. dollars(2.2)%

3.9%

Reconciliation of Net Investment Income

Three Months Ended
June 30,
2020

2019

Net investment income per Consolidated Statements of Operations$ 3,366$ 3,745

Changes in fair value of securities used to hedge guaranteed living benefits

(14)

(84)

Changes in the fair value of equity securities

(56)

22

Net investment income on Fortitude Re funds withheld assets

(116)

-

Net realized capital gains related to economic hedges and other18

52$ 3,198$ 3,735

Total Net investment income - APTI Basis
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,
2020

2019

Individual Retirement:
Premiums

$ 38

$ 16

Deposits

1,759

3,852

Other

(3)

(3)

$ 1,794$ 3,865$ 3$ 5

Total premiums and deposits

Group Retirement:
Premiums
Deposits

1,667

2,042

Other

-

-

$ 1,670$ 2,047

Premiums

$ 447

$ 425

Deposits

420

413

Other

204

194

$ 1,071$ 1,032

Premiums$ 1,089$ 152

Deposits

33

108

Other

7

8

$ 1,129$ 268

Total premiums and depositsLife Insurance:

Total premiums and deposits

Institutional Markets:

Total premiums and deposits

Total Life and Retirement:

Premiums$ 1,577

Deposits

3,879

6,415

Other

208

199

$ 5,664$ 7,212

Total premiums and deposits$ 598

View source version on businesswire.com: https://www.businesswire.com/news/home/20200803005725/en/
Sabra Purtill (Investors): sabra.purtill@aig.com
Shelley Singh (Investors): shelley.singh@aig.com
Claire Talcott (Media): claire.talcott@aig.com
Source: American International Group, Inc.