AIG's Performance and Growth Prospects - AIG currently carries a Zacks Rank 3 (Hold) and has gained 5.7% in the past year [2] - The Zacks Consensus Estimate for 2025 earnings is $6.50 per share, indicating 32.2% growth from 2024, with revenues estimated at $27.8 billion, a 3.1% rise from 2024 [4] - AIG's bottom line surpassed earnings estimates in three of the trailing four quarters, with an average surprise of 2.88% [5] AIG's Business Strengths - Revenues benefit from rate increases, new business generation, and strong retention rates in Commercial and Personal lines, driving the General Insurance segment [6] - The investment portfolio generates improved returns from alternative investments, equity, and fixed maturity securities, with plans to pursue buyouts in international markets to strengthen the personal business stream [7] - The company has undertaken divestitures to focus on core insurance business, including selling a 20% stake to Nippon Life Insurance and its global individual personal travel insurance business to Zurich Insurance Group [8] Cost Management and Technological Advancements - AIG has reduced expenses through business mix shifts, stringent cost management, and an improved premium base, enhancing operational efficiency and margins [9] - The company selected Amazon Web Services as its preferred public cloud provider to support digital transformation and enable large-scale technological advancements [9] Financial Position and Capital Deployment - AIG boasts strong liquidity with a solid cash balance and reducing debt levels, enabling prudent capital deployment via share buybacks and dividend payments [10] - The leverage ratio has improved, with total debt to total capital at 18.2%, below the industry average of 31.4% [10] Insurance Industry Comparison - CNO Financial Group, Primerica, and Cincinnati Financial are better-ranked stocks in the insurance space, with Zacks Ranks of 1 (Strong Buy) and 2 (Buy) respectively [12] - CNO Financial's earnings surpassed estimates in three of the last four quarters, with an average surprise of 24.51%, and its 2025 earnings estimate indicates a 0.6% rise [13] - Primerica's earnings beat estimates in two of the trailing four quarters, with an average surprise of 4.89%, and its 2025 earnings estimate indicates a 6% rise [14] - Cincinnati Financial's earnings outpaced estimates in three of the trailing four quarters, with an average surprise of 12.54%, and its 2025 earnings estimate indicates a 15.3% rise [15] - Shares of CNO Financial, Primerica, and Cincinnati Financial have gained 37.8%, 30.6%, and 32.5% respectively in the past year [16]

Financial Performance - AIG's stock gained around 7% over the last 12 months, underperforming the S&P 500 which rose over 25% and its peer Travelers which gained 25% [1] - Q3 2024 adjusted earnings rose 18% to $1.23 per share, driven by strong underwriting and higher investment returns [1] - Net premiums in Global Commercial business increased 6% YoY, with a strong retention rate of 88% and $1.1 billion in new business [1] - Net investment income rose 14% to $973 million in the last quarter [1] Business Strategy - AIG has been focusing more on property and casualty insurance after spinning off its life insurance and retirement business [2] - Property and casualty insurance offers higher margins and more flexibility in adjusting premiums compared to life insurance [2] - The company repurchased $1.5 billion of common shares in Q3 2024, with total capital returns to shareholders reaching $6 billion in the first nine months of 2024 [2] Market Outlook - AIG's stock has increased in value each year from 2021 to 2024, with returns of 54%, 14%, 10%, and 10% respectively [2] - The recent U.S. presidential election could benefit insurers through potential regulatory relief and tax cuts [2] - AIG's stock is valued at about $90 per share, 24% above the current market price [2]

Core Viewpoint - The Zacks Multiline Insurance industry is benefiting from product diversification, improved pricing, prudent underwriting, and accelerated digitalization, which are expected to enhance revenue generation and retention ratios for key players like AIG, Prudential, The Hartford, Radian, and CNO [1][4]. Industry Overview - The Zacks Multiline Insurance industry includes companies that provide bundled insurance coverage for various needs, improving customer retention and offering lower premium payments compared to individual policies [3]. - The industry is characterized by diversified product portfolios, which help lower concentration risk and drive demand for protection products, particularly in life insurance [4]. Trends Shaping the Industry - Increased awareness and demand for protection products are expected to boost sales and premiums, with a focus on customized offerings [4]. - The transition to green energy and the rise of cyber insurance due to increased AI adoption present growth opportunities [4]. - The industry is anticipated to see continued consolidation as companies seek to diversify operations and expand market share, particularly in insurance technology [5]. Technological Adoption - The industry is experiencing significant digitalization, utilizing technologies such as blockchain, AI, and advanced analytics to enhance operations and reduce costs [6]. - Real-time data usage is improving premium calculations and risk management, while also streamlining underwriting and claims processing [6]. Market Performance - The Zacks Multiline Insurance industry ranks 63, placing it in the top 25% of 251 Zacks industries, indicating positive earnings outlooks and potential for outperformance [7][8]. - The industry has collectively gained 25.9% over the past year, outperforming the Finance sector's 22.7% increase but slightly underperforming the S&P 500's 26% rise [9]. Current Valuation - The industry is currently trading at a price-to-book (P/B) ratio of 2.44X, significantly lower than the S&P 500's 8.76X and the Finance sector's 3.71X [11]. - Historical P/B ratios for the industry have ranged from a low of 0.69X to a high of 2.74X over the past five years [12]. Company Highlights - **Radian Group**: Positioned for growth with a strong mortgage insurance portfolio and a Zacks Rank 2, with a consensus estimate indicating a 3.1% increase in 2024 earnings [17][18]. - **CNO Financial Group**: A Zacks Rank 2 company with a projected 20.7% increase in 2024 earnings, supported by a strong product portfolio [20][21]. - **American International Group (AIG)**: A Zacks Rank 3 insurer focusing on strategic derisking and acquisitions, with a consensus estimate for a 30.4% increase in 2025 earnings [24][25]. - **Prudential Financial**: A Zacks Rank 3 company with solid growth prospects driven by asset-based businesses and a projected 14.9% increase in 2024 earnings [27][28]. - **Hartford Financial**: A Zacks Rank 3 insurer expected to grow due to improved mortgage insurance quality, with a consensus estimate for a 13.5% increase in 2024 earnings [31][32].

Financial Performance - Total revenues for Q3 2024 were $6,751 million, a decrease of 7.1% from $7,267 million in Q3 2023[6]. - Net income attributable to AIG for Q3 2024 was $459 million, compared to $2,027 million in Q3 2023, reflecting a decline of 77.3%[6]. - Basic earnings per share (EPS) for continuing operations was $0.75 in Q3 2024, down from $0.97 in Q3 2023, a decrease of 22.7%[6]. - Comprehensive income attributable to AIG for Q3 2024 was $2,302 million, compared to a loss of $1,459 million in Q3 2023[8]. - AIG reported a net loss attributable to the company of $1,518 million for the three months ended September 30, 2024, compared to a net income of $2,027 million for the same period in 2023[9]. - For the nine months ended September 30, 2024, AIG reported a net loss attributable to the company of $2,302 million, compared to a net income of $3,550 million for the same period in 2023[11]. Investment Income - Net investment income for Q3 2024 was $973 million, an increase of 13.7% from $856 million in Q3 2023[6]. - Net investment income for Q3 2024 was $773 million, compared to $756 million in Q3 2023, representing a growth of 2.3%[28]. - The company reported a net investment income of $2,281 million for the nine months ended September 30, 2024, compared to $2,227 million in the same period of 2023[30]. Expenses and Losses - Losses and loss adjustment expenses incurred in Q3 2024 were $3,773 million, slightly down from $3,876 million in Q3 2023[6]. - Total benefits, losses, and expenses for Q3 2024 were $6,102 million, a decrease of 1.1% from $6,167 million in Q3 2023[6]. - The company reported net realized losses of $167 million in Q3 2024, compared to losses of $135 million in Q3 2023[6]. - The company reported a net realized loss of $232 million for the nine months ended September 30, 2024, compared to a loss of $577 million in the same period of 2023[30]. Shareholder Equity and Dividends - Total AIG shareholders' equity at the end of the period was $45,039 million, a decrease from $46,491 million at the end of September 30, 2023[9]. - The company declared dividends on common stock of $0.40 per share, totaling $254 million for the quarter[9]. - AIG's additional paid-in capital increased to $75,310 million as of September 30, 2024, compared to $77,677 million a year earlier[9]. - AIG's retained earnings stood at $34,429 million at the end of the period, compared to $34,893 million at the end of September 30, 2023[11]. Cash Flow and Liquidity - Net cash provided by operating activities for continuing operations was $3,252 million for the nine months ended September 30, 2024, compared to $4,743 million in the same period of 2023, reflecting a decrease of approximately 31.4%[12]. - Total cash and restricted cash at the end of the period was $1,559 million, an increase from $1,451 million at the end of September 30, 2023[14]. - Cash paid for interest during the period was $581 million, a decrease from $745 million in the same period of 2023[14]. Insurance Operations - Total adjusted revenues for General Insurance in Q3 2024 were $6,720 million, a decrease of 7.7% from $7,178 million in Q3 2023[28]. - North America underwriting income was $2,638 million in Q3 2024, down from $3,079 million in Q3 2023, reflecting a decline of 14.3%[28]. - International underwriting income was $3,309 million in Q3 2024, slightly down from $3,343 million in Q3 2023, a decrease of 1.0%[28]. - Total adjusted pre-tax income for General Insurance was $1,210 million in Q3 2024, down from $1,367 million in Q3 2023, a decline of 11.5%[28]. Discontinued Operations - The company experienced a significant decline in income from discontinued operations, reporting a loss of $24 million in Q3 2024 compared to income of $2,046 million in Q3 2023[6]. - AIG's net income from discontinued operations attributable to AIG for the nine months ended September 30, 2024, was a loss of $4.1 billion, compared to a profit of $1.7 billion for the same period in 2023[39]. - AIG announced the sale of its global individual personal travel insurance and assistance business to Zurich Insurance Group for $600 million in cash, expected to close by the end of 2024[17]. Corebridge Financial - AIG entered into a stock purchase agreement to sell 20% of Corebridge for $3.8 billion, expected to close in Q1 2025[32]. - AIG recognized a loss of $4.7 billion in Q2 2024 due to the deconsolidation of Corebridge, primarily from an accumulated comprehensive loss of $7.2 billion[35]. - As of September 30, 2024, AIG held 48.6% of Corebridge's outstanding common stock after a secondary offering of 30 million shares that generated gross proceeds of $876 million[34]. - Corebridge's pre-tax income for the three months ended September 30, 2024, was a loss of $1.6 billion, while for the nine months, it was a loss of $122 million[36]. Asset Management - Total assets held for sale from discontinued operations amounted to $378.7 billion as of September 30, 2024, compared to $366.1 billion as of December 31, 2023[37]. - The total fair value of assets measured at fair value on a recurring basis as of September 30, 2024, is $84.993 billion, with $14.033 billion classified as Level 1, $67.308 billion as Level 2, and $4.169 billion as Level 3[43]. - The total gross unrealized losses on available-for-sale securities amount to $2,767 million as of September 30, 2024[67]. Derivative and Risk Management - The company uses interest rate derivatives to manage interest rate risk associated with various financial instruments, including insurance contract liabilities[109]. - The company employs foreign exchange derivatives to mitigate risks associated with non-U.S. dollar denominated debt and foreign currency transactions[109]. - The total gross derivative notional amount as of September 30, 2024, was $6,417 million, with a fair value of derivative assets at $619 million[110]. Legal and Regulatory Matters - Legal proceedings may result in significant future losses, but management does not believe these will materially affect the financial position[134]. - The company is subject to various legal proceedings that could lead to fines, penalties, or reputational damage[134].

Group 1: AIG - AIG's Board of Directors declared a quarterly cash dividend of $0.40 per share, payable on December 30, 2024, to stockholders of record as of December 16, 2024 [1] Group 2: Williams - Williams' board approved a regular dividend of $0.4750 per share, or $1.90 annualized, payable on December 30, 2024, to holders of record at the close of business on December 13, 2024 [2] - This represents a 6.1% increase from the fourth-quarter 2023 dividend of $0.4475 per share [2] - Williams has consistently paid a common stock dividend every quarter since 1974 [2] Group 3: Digital Realty - Digital Realty's board authorized a cash dividend of $1.22 per share for common stockholders of record as of December 13, 2024, to be paid on January 17, 2025 [3] Group 4: Ryman Hospitality Properties - Ryman Hospitality Properties declared a cash dividend of $1.15 per share for the fourth quarter of 2024, a 4.5% increase from the third quarter dividend of $1.10 [3] - The dividend is payable on January 15, 2025, to stockholders of record as of December 31, 2024 [3] Group 5: Sun Life Financial - Sun Life Financial announced a dividend of $0.84 per share on common shares, payable on December 31, 2024, to shareholders of record at the close of business on November 27, 2024 [4] - This represents a 3 cent increase from the amount paid in the previous quarter [4]

Financial Data and Key Metrics - Adjusted after-tax income was $798 million, or $1.23 per diluted share, representing a 31% increase in earnings per share year-over-year [10] - Underwriting income for the quarter was $437 million, including total catastrophe-related charges of $417 million [10] - Consolidated net investment income on an adjusted pre-tax income basis was $897 million, a 19% increase year-over-year [11] - Core operating ROE was 9.2% with core operating equity of $34.5 billion as of September 30, 2024 [11] - Debt-to-total-capital ratio was 17.9%, including AOCI and parent liquidity of $4.2 billion [12] Business Line Performance - Gross premiums written for General Insurance were $8.6 billion, a 3% increase from the prior year [13] - Net premiums written for General Insurance were $6.4 billion, a 6% increase [13] - Global Commercial net premiums written grew 7% year-over-year, driven by $1.1 billion of new business [14] - North America Commercial net premiums written grew 11% year-over-year [16] - International Commercial net premiums written grew 3% year-over-year, with specialty lines growing 10% [21] Market Performance - North America Commercial retention was 90% in admitted lines and 78% in Lexington [17] - International retention remained strong at 89%, with energy and property at 92% and casualty at 91% [22] - North America Commercial new business growth was 22% year-over-year, led by Lexington with 24% growth [18] Strategy and Industry Competition - The company has transformed its underwriting and reinsurance strategy, reducing CAT losses by 80% compared to 2012 [32] - AIG Next program is expected to deliver $500 million in savings by 2025, impacting both General Insurance and other operations [36] - The company is leveraging GenAI to improve underwriting processes, with data accuracy rates improving from 75% to 90% [40] Management Commentary on Operating Environment and Future Outlook - The company expects to deliver a 10% core operating ROE for the full-year 2025 [49] - Management highlighted the increasing frequency and severity of natural catastrophes, with industry losses expected to exceed $125 billion in 2024 [24][29] - The company is well-positioned to manage volatility through underwriting and reinsurance strategies, maintaining low net retention among global competitors [33] Other Important Information - The company returned $1.8 billion to shareholders in Q3 through stock repurchases and dividends [11] - AIG Next has enabled the company to invest in core capabilities and strategic innovation initiatives, particularly in underwriting, claims, and AI [38] - The company expects to fully realize $500 million in savings from AIG Next by 2025 [36] Q&A Session Summary Question: Reserves and Financial Lines - The company discussed favorable development in shorter tail lines and noted that older accident years in financial lines are emerging better than expected but are not yet booked [71][72] - Adverse development in U.K. and Europe casualty and financial lines was partially offset by favorable development in U.S. and international portfolios [74] Question: Property Reinsurance Program - The company does not expect material changes in its reinsurance structures and will maintain low attachment points on severity and aggregate protections [77][78] Question: Market Conditions and Growth Opportunities - The company sees strong growth opportunities in North America Commercial, particularly in casualty and E&S lines, with new business growth of 22% year-over-year [80][81] - Lexington continues to show strong performance, with 78% retention and 24% new business growth [85] Question: ROE Aspirations and Capital Management - The company aims to achieve a 10% core operating ROE in 2025 and is exploring opportunities to improve margins, grow premiums, and manage capital effectively [88][89] - The company has flexibility to increase leverage for potential M&A opportunities [104] Question: General Insurance GOE Ratio - The company is absorbing $50 million of expenses into General Insurance, with improvements expected to show more significantly in Q4 and 2025 [99][100] Question: Personal Lines in North America - The company is transitioning its North America personal lines business to an MGA structure, with expectations for improved combined ratios in 2025 [107][108] Question: North America Commercial Loss Ratio - The company expects the loss ratio to stabilize, with growth opportunities in casualty and property lines [115][116] Question: International Growth Opportunities - The company sees strong growth in international specialty lines, particularly in energy and marine, with 25% new business growth in marine and 18% growth in Talbot specialty lines [119][120]

Core Insights - American International Group, Inc. (AIG) reported third-quarter 2024 adjusted earnings per share of $1.23, exceeding the Zacks Consensus Estimate by 8.9% and showing an 18.3% year-over-year improvement [1] - Adjusted operating revenues were $6.84 billion, a decline of 5.9% year over year, but still beating the consensus mark by 3.3% [1][2] Financial Performance - Premiums for the quarter totaled $5.9 billion, down 9.1% year over year, yet surpassing the Zacks Consensus Estimate by 3.9% [3] - Total net investment income increased by 13.7% year over year to $973 million, driven by higher income from fixed maturity securities and dividends from Corebridge Financial, Inc. [3] - Total benefits, losses, and expenses decreased by 1.1% year over year to $6.1 billion, attributed to lower policyholder benefits and losses [4] Segment Analysis - In the General Insurance segment, net premiums written were $6.38 billion, a 1% decline year over year, but a 6% increase on a comparable basis [5] - Underwriting income fell by 28% on a reported basis to $437 million, impacted by increased catastrophe charges [6] Investment and Capital Management - AIG repurchased shares worth $1.5 billion and distributed dividends totaling $254 million [10] - The company ended the quarter with a cash balance of $1.47 billion, down from $1.54 billion at the end of 2023 [8] Financial Position - Total assets decreased to $169.45 billion from $539.31 billion at the end of 2023 [8] - Total equity fell to $45.1 billion from $51.3 billion at the end of 2023, with adjusted book value per share declining by 9.1% year over year to $73.90 [9]

Third Quarter 2024 Financial Results Presentation November 5, 2024 Copyright ® 2024 by American International Group, Inc. All rights reserved. No part of this document may be reproduced, republished or reposted without the permission of AIG. Q3 2024 Earnings Key Themes 2 • Excellent financial and operational results supported by continued Adjusted EPS* growth • North America Commercial delivered double-digit NPW growth(1) supported by strong new business growth and retention • Initial benefits from AIG Next ...

Core Insights - American International Group (AIG) reported a revenue of $6.84 billion for the quarter ended September 2024, reflecting a decline of 39.8% year-over-year, while EPS was $1.23 compared to $1.61 in the same quarter last year [1] - The reported revenue exceeded the Zacks Consensus Estimate of $6.62 billion by 3.29%, and the EPS also surpassed the consensus estimate of $1.13 by 8.85% [1] Financial Performance Metrics - Expense Ratio for Total General Insurance was 31.9%, slightly above the average estimate of 31.6% [3] - Combined Ratio for Total General Insurance was reported at 92.6%, better than the estimated 93.9% [3] - Loss Ratio for Total General Insurance stood at 60.7%, compared to the average estimate of 62.3% [3] - Combined Ratio for Total General Insurance - International was 87.9%, outperforming the estimated 91.1% [3] - Net premiums earned in General Insurance - International were $3.309 billion, slightly below the estimate of $3.319 billion [3] - Net premiums earned in General Insurance - North America were $2.638 billion, exceeding the estimate of $2.445 billion [3] - General Insurance - Net premiums earned totaled $5.95 billion, surpassing the average estimate of $5.80 billion, but represented a year-over-year decline of 7.4% [3] - General Insurance - Net investment income was $773 million, above the estimate of $743.94 million, reflecting a year-over-year increase of 2.3% [3] - General Insurance - Net premiums written were $6.38 billion, below the estimate of $6.51 billion, indicating a year-over-year decline of 1.3% [3] - Adjusted Revenue - Other Operations - Net investment income was $125 million, exceeding the estimate of $122.68 million, with a significant year-over-year increase of 267.7% [3] - Adjusted Revenue - Total Other Operations was $123 million, below the estimate of $152.34 million, but showed a year-over-year increase of 119.6% [3] - Revenue - Net investment income was $973 million, surpassing the estimate of $875.18 million, but represented a substantial year-over-year decline of 72.6% [3] Stock Performance - AIG shares have returned -0.4% over the past month, in contrast to the Zacks S&P 500 composite's +0.4% change [4] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [4]

Core Viewpoint - American International Group (AIG) reported quarterly earnings of $1.23 per share, exceeding the Zacks Consensus Estimate of $1.13 per share, but down from $1.61 per share a year ago, indicating an earnings surprise of 8.85% [1][2] Financial Performance - AIG's revenues for the quarter ended September 2024 were $6.84 billion, surpassing the Zacks Consensus Estimate by 3.29%, compared to $11.36 billion in revenues from the same quarter last year [2] - Over the last four quarters, AIG has exceeded consensus EPS estimates three times and has topped consensus revenue estimates three times as well [2] Stock Performance - AIG shares have increased approximately 11.8% since the beginning of the year, while the S&P 500 has gained 20.1% [3] - The current Zacks Rank for AIG is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is $1.45 on revenues of $6.92 billion, and for the current fiscal year, it is $4.99 on revenues of $26.93 billion [7] - The outlook for the insurance industry, particularly the Zacks Insurance - Multi line sector, is currently in the top 36% of over 250 Zacks industries, suggesting a favorable environment for AIG [8]