AIG Aktie
AIG-Aktie
WKN: A0X88Z
ISIN: US0268747849
Land: USA
Branche: Finanzen
Sektor: Versicherung
aktueller Kurs:
72,95 EUR
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AIG Reports First Quarter 2020 Results

Montag, 04.05.20 22:21
News-Schriftzug auf schwarzem Hintergrund.
Bildquelle: pixabay

NEW YORK –

American International Group, Inc. (NYSE: AIG) today reported net income attributable to AIG common shareholders of $1.7 billion, or $1.98 per diluted common share, for the first quarter of 2020, compared to $654 million, or $0.75 per diluted common share, in the prior year quarter. The improvement was primarily due to $3.5 billion of pre-tax net realized capital gains largely related to mark-to-market gains from variable annuity and interest rate hedges and the impact of our non-economic non-performance risk adjustment, per GAAP, on the fair value of our liabilities compared to $446 million of pre-tax net realized capital losses in the prior year quarter.

Adjusted after-tax income attributable to AIG common shareholders was $99 million, or $0.11 per diluted common share, for the first quarter of 2020, compared to $1.4 billion, or $1.58 per diluted common share, in the prior year quarter. The decrease was primarily due to lower net investment income driven by declines in equity markets and losses on FVO bonds from widening spreads in credit markets, and the impact of COVID-19.

Brian Duperreault, AIG’s Chief Executive Officer, said: “In the face of COVID-19, an unprecedented global catastrophe, our colleagues have shown great resilience and remain focused on what we do best, which is helping our clients manage risk, especially in difficult times.

“It has been heartbreaking to watch this humanitarian crisis unfold over the last few months. At the same time, the courage, compassion and empathy that have emerged, particularly from first responders, health care providers and others on the front lines, has been heartwarming. AIG is committed to assisting with relief efforts across the globe and will be making an inaugural $5 million contribution to our recently reinstated AIG Foundation for this purpose.

“AIG was in a strong financial position before this crisis began and remains in a strong financial position today. While we believe COVID-19 will be the single largest CAT loss the industry has ever seen, the significant body of work our team has undertaken since late 2017 has served us well as we navigate through this evolving situation. AIG is well-positioned to emerge as a global insurer of choice with significant financial flexibility.

“In the first quarter of 2020, our core businesses delivered strong results building on the momentum we had coming into the year. In General Insurance, the adjusted accident year combined ratio continued to improve, and Life and Retirement delivered solid results despite unfavorable capital markets and continued low interest rates.

“The COVID-19 crisis has created significant uncertainty, and it will take time to understand its broader ramifications. In light of this, AIG is withdrawing previously issued guidance, including that relating to Adjusted Return on Common Equity. However, we do expect to see continued improvement in General Insurance, particularly in the adjusted combined ratio, and, in Life and Retirement, we do not believe that the impact of COVID-19 will result in a material reduction of our long-term return profile.

“While the new normal COVID-19 will create for each of us is still unknown, I am confident that AIG will continue to move forward on its journey to become a top performing company and leading insurance franchise.”

FINANCIAL SUMMARY

 

 

Three Months Ended

March 31,

($ in millions, except per common share amounts)

2020

2019

 

Net income attributable to AIG common shareholders

$

1,742

 

$

654

 

 

Net income per diluted share attributable to AIG common shareholders

$

1.98

 

$

0.75

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - diluted

 

878.9

 

 

877.5

 

 

 

 

 

 

 

 

Adjusted pre-tax income (loss):

 

 

 

 

 

General Insurance

$

501

 

$

1,268

 

 

Life and Retirement

 

574

 

 

924

 

 

Other Operations

 

(535

)

 

(457

)

 

Legacy

 

(368

)

 

112

 

 

Total

$

172

 

$

1,847

 

 

 

 

 

 

 

 

Adjusted after-tax income attributable to AIG common shareholders

$

99

 

$

1,388

 

 

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

$

0.11

 

$

1.58

 

 

 

 

 

 

 

 

Return on common equity

 

11.2

 

%

4.5

 

%

Return on tangible common equity*

 

12.2

 

%

4.9

 

%

Adjusted return on common equity

 

0.8

 

%

11.6

 

%

Adjusted return on tangible common equity*

 

0.9

 

%

13.1

 

%

Adjusted return on attributed common equity - Core*

 

3.4

 

%

13.4

 

%

 

 

 

 

 

 

Common shares outstanding

 

861.3

 

 

869.7

 

 

Book value per common share

$

69.30

 

$

69.33

 

 

Tangible book value per common share*

 

63.33

 

 

63.10

 

 

Book value per common share, excluding accumulated other comprehensive income*

 

70.45

 

 

66.89

 

 

Adjusted book value per common share

 

60.55

 

 

55.47

 

 

Adjusted tangible book value per common share*

 

54.58

 

 

49.24

 

 

 

 

 

 

 

 

General Insurance Combined ratio

 

101.5

 

 

97.4

 

 

General Insurance Accident year combined ratio, as adjusted

 

95.5

 

 

96.1

 

 

 

 

 

 

 

 

Adjusted return on attributed common equity - Life and Retirement*

 

8.4

 

%

15.0

 

%

 

All comparisons are against the first quarter of 2019, unless otherwise indicated. Refer to the AIG First Quarter 2020 Financial Supplement, which is posted on AIG's website in the Investors section, for further information.

FIRST QUARTER 2020 HIGHLIGHTS

General Insurance – First quarter adjusted pre-tax income of $501 million was comprised of an underwriting loss of $87 million and net investment income of $588 million. The underwriting loss included the impact of $272 million of estimated COVID-19 related losses, without which General Insurance would have reported an underwriting profit. Favorable net prior year loss reserve development, net of reinsurance, totaled $60 million, and was primarily due to $53 million of amortization from the Adverse Development Cover (ADC). CATs, net of reinsurance, totaled $419 million, including $272 million related to COVID-19. AIG is continually reassessing its exposures in light of unfolding developments in the U.S. and globally and evaluating coverage under its reinsurance arrangements.

The General Insurance combined ratio was 101.5, including 6.9 points of CATs, of which 4.5 points related to COVID-19 losses. The accident year combined ratio, as adjusted, was 95.5, comprised of a 60.8 accident year loss ratio, as adjusted*, an improvement of 1.0 point from the prior year quarter, and an expense ratio of 34.7. The improvement in accident year loss ratio, as adjusted, reflected the underwriting and reinsurance actions taken to improve business mix and loss performance, and improved rate adequacy. General Insurance also reduced general operating expenses (GOE) by 8% to $776 million.

Life and Retirement – First quarter adjusted pre-tax income was $574 million compared to $924 million in the prior year quarter. The decrease reflected unfavorable impacts from equity markets which primarily resulted in higher Variable Annuity reserves and accelerated deferred acquisition cost (DAC) and sales inducement (SI) amortization. In addition, widening credit spreads resulted in a decrease in net investment income from lower returns on FVO bonds and the Retirement businesses continued to see spread compression given the low interest rate environment. Net flows were unfavorable compared to the prior year quarter primarily due to lower Fixed Annuity sales and higher Retail Mutual Fund surrenders, partially offset by higher Variable Annuity sales and lower surrenders in Group Retirement. Life and Retirement’s Adjusted ROCE for the first quarter of 2020 was 8.4%.

Net Investment Income – First quarter net investment income was $2.5 billion compared to $3.9 billion in the prior year quarter. Net investment income on an adjusted pre-tax income basis decreased approximately $1.0 billion to $2.7 billion. The decrease reflected lower alternative investment income compared to the prior year quarter and other investment losses in the first quarter of 2020 compared to other investment income in the prior year quarter, primarily driven by FVO securities.

AIG significantly expanded its disclosures in the financial supplement to provide greater detail on its investment portfolio, including information on its separate General Insurance, Life and Retirement and Legacy portfolios. As a global multi-line insurer, AIG's consolidated portfolio does not readily compare to property and casualty or life insurance peers. The detail should enable additional analysis of the separate portfolios to similar peers.

Other Operations – First quarter adjusted pre-tax loss was $535 million, including $84 million of reductions from consolidation, eliminations and other adjustments, compared to $457 million in the prior year quarter. Before consolidation, eliminations and other adjustments, the increase in the pre-tax loss was primarily due to higher GOE of $66 million from higher compensation, including the issuance of a $500 grant to each employee globally, which equates to $30 million in the aggregate, to help with unanticipated costs due to COVID-19. In addition, the loss included higher technology costs, partially offset by higher net investment income associated with consolidated investment entities. At the end of March, AIG decided to place Blackboard U.S. Holdings, Inc. (Blackboard), AIG’s technology-driven subsidiary, into run-off. As a result of this decision, AIG recognized a pre-tax loss of $210 million, primarily consisting of asset impairment charges; this charge did not impact adjusted pre-tax income.

Legacy Results – First quarter adjusted pre-tax loss was $368 million compared to adjusted pre-tax income of $112 million in the prior year quarter, reflecting losses, principally mark-to-market, on FVO investment portfolios compared to gains in the prior year quarter, as well as lower Legacy Life and Retirement net investment income from alternative investments.

Included in the Legacy results is Fortitude Reinsurance Company Ltd (Fortitude Re). AIG agreed in November 2019 to sell a controlling financial interest in Fortitude Group Holdings, LLC, the holding company for Fortitude Re. The sale is expected to close in mid-2020, subject to required regulatory approvals and other customary closing conditions.

Book Value per Common Share – As of March 31, 2020, book value per common share was $69.30 compared to $74.93 at December 31, 2019, largely driven by net unrealized mark-to-market losses on available for sale fixed maturities due to the impact of wider credit spreads as of March 31, 2020. Adjusted book value per common share, which excludes AOCI and DTA, increased slightly to $60.55 compared to the prior year end as a result of $1.7 billion of net income attributable to AIG for the quarter.

Tangible book value per common share was $63.33 compared to $68.93 at December 31, 2019. Adjusted tangible book value per common share, which is Adjusted book value per common share excluding Goodwill, Value of Business Acquired (VOBA), Value of Distribution Channel Acquired (VODA) and Other Intangible Assets was $54.58 compared to $52.88 at December 31, 2019.

Liquidity and Capital – As of March 31, 2020, AIG Parent liquidity stood at approximately $7.5 billion. In March, AIG borrowed, and it currently has outstanding, $1.3 billion under its $4.5 billion committed revolving syndicated credit facility. Also, in March, AIG redeemed $350 million aggregate principal amount of its 4.35% Callable Notes Due 2045.

AIG repurchased approximately 12 million shares of AIG Common Stock during the first quarter for an aggregate purchase price of $500 million under an accelerated share repurchase agreement entered into in February. As of March 31, 2020, $1.5 billion remained under AIG’s share repurchase authorization.

Income Taxes – The first quarter effective tax rate on pre-tax income was 35.3% primarily as a result of a $274 million valuation allowance. The effective tax rate on adjusted pre-tax income was 48.8% and differs from the statutory tax rate of 21% primarily due to excess tax charges related to share based compensation payments recorded through the income statement, tax charges associated with the effect of foreign operations, state and local income taxes, and non-deductible transfer pricing charges, partially offset by tax benefits associated with tax exempt income. The effect of foreign operations was primarily related to income in foreign operations taxed at statutory tax rates higher than 21%, other foreign taxes, and foreign income subject to U.S. taxation.

GENERAL INSURANCE

 

 

Three Months Ended March 31,

 

 

 

($ in millions)

2020

2019

 

Change

 

Total General Insurance

 

 

 

 

 

 

 

Gross premiums written

$

10,086

 

$

10,195

 

 

(1

)

%

Net premiums written

$

5,921

 

$

6,033

 

 

(2

)

 

Underwriting income (loss)

$

(87

)

$

179

 

 

NM

 

 

Adjusted pre-tax income

$

501

 

$

1,268

 

 

(60

)

 

 

 

 

 

 

 

 

 

Underwriting ratios:

 

 

 

 

 

 

 

Loss ratio

 

66.8

 

 

63.1

 

 

3.7

 

pts

Less: impact on loss ratio

 

 

 

 

 

 

 

Catastrophe losses and reinstatement premiums

 

(6.9

)

 

(2.7

)

 

(4.2

)

 

Prior year development

 

0.9

 

 

1.0

 

 

Quelle: Business Wire



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