AIG reports Second Quarter 2021 Financial Results
Authored by AIG
AIG President and CEO Peter Zaffino said: “We had another outstanding quarter with our businesses performing extremely well while we continue to make significant progress on strategic priorities and position AIG for sustainable profitable growth over the long-term. General Insurance delivered excellent results, Life and Retirement was once again a meaningful contributor, and we accelerated work on AIG 200 and the separation of Life and Retirement from AIG.
- General Insurance net premiums written grew 24% with Commercial Lines and Personal Insurance growth of 16% and 45%, respectively, from the prior year quarter
- Net income per diluted share of $0.11 compared to a loss of $9.15 in the prior year quarter and adjusted after-tax income attributable to AIG common shareholders* (AATI) per diluted share of $1.52 increased from $0.64 in the prior year quarter
- On July 14, 2021 AIG entered into a strategic partnership whereby Blackstone agreed to purchase a 9.9% equity stake in AIG’s Life and
- Retirement Business for $2.2 billion in cash, manage specified Life and Retirement assets in the future, and separately purchase affordable housing assets for $5.1 billion in cash
- AIG Board of Directors increased the share repurchase authorization to $6.0 billion, including approximately $0.9 billion that remained under the prior authorization
Second Quarter Noteworthy Items
- General Insurance adjusted pre-tax income (APTI) of $1.2 billion reflects improved underwriting results and higher net investment income; the combined ratio was 92.5, a 13.5 point improvement from the prior year quarter primarily due to lower catastrophe losses, net of reinsurance and reinstatement premiums.
- The General Insurance accident year combined ratio, as adjusted*, was 91.1, a 3.8 point improvement from the prior year quarter due to improved North America and International Commercial Lines underwriting results.
- Life and Retirement APTI was $1.1 billion reflecting strong net investment income and improved market conditions; Life and Retirement return on adjusted segment common equity* for the second quarter was 16.4%, on an annualized basis.
- Net income attributable to AIG common shareholders was $91 million, or $0.11 per diluted common share, compared to a net loss of $7.9 billion, or $9.15 per common share, in the prior year quarter, which included the loss on sale of Fortitude Group Holdings LLC (Fortitude). The primary difference between
- GAAP and adjusted after-tax income is the accounting treatment of Fortitude net investment income and certain realized gains/losses.
- AATI was $1.3 billion, or $1.52 per diluted common share, compared to $561 million, or $0.64 per diluted common share, in the prior year quarter.
- As of June 30, 2021, book value per common share was $76.73, an increase of 0.4% from December 31, 2020. Adjusted book value per common share* was $60.07, an increase of 5.4% from December 31, 2020. Adjusted tangible book value per share* was $54.24, an increase of 6.0% from December 31, 2020.
- Return on common equity (ROCE) and Adjusted ROCE* were 0.6% and 10.5%, respectively, on an annualized basis for the second quarter of 2021.
- On July 14, 2021 AIG announced a strategic partnership with The Blackstone Group (Blackstone) whereby Blackstone agreed to purchase a 9.9% equity stake in AIG’s Life and Retirement business for $2.2 billion in cash, entered into a strategic asset management relationship to manage certain specified
- Life and Retirement general account assets in the future and agreed to acquire AIG’s interests in a U.S. affordable housing portfolio for approximately $5.1 billion in cash.
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In the UK, AIG Europe Limited is one of the largest insurance companies specialising in the UK business insurance market. With offices throughout the country, AIG insures many of the UK’s top businesses, thousands of mid sized and smaller companies, as well as millions of individuals.
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