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AIG Reports Third Quarter 2013 Net Income Attributable To AIG Of $2.2 Billion And Diluted Earnings Per Share Of $1.46

Capital and Liquidity

  • Shareholders’ equity totaled $98.8 billion at September 30, 2013
  • Issued $1 billion of senior debt in each of August 2013 and October 2013; redeemed $500 million of debt and repurchased approximately 4 million common shares for an aggregate purchase price of approximately $192 million in the third quarter of 2013
  • Cash dividends to AIG Parent from AIG Property Casualty and AIG Life and Retirement subsidiaries totaled $1.9 billion in the third quarter of 2013
  • AIG Parent liquidity sources amounted to approximately $16.9 billion at September 30, 2013, including $12.7 billion of cash, short-term investments, and unencumbered fixed maturity securities
   

AFTER-TAX OPERATING INCOME

 
Three Months Ended
September 30,
(in millions)     2013     2012     Change
Pre-tax operating income            
Insurance Operations:
AIG Property Casualty $ 1,044 $ 786 33

 %

AIG Life and Retirement 1,144 826 38
Mortgage Guaranty (reported in Other Operations)         43         3    

NM

Total Insurance Operations         2,231         1,615     38
Direct Investment book 110 428 (74)
Global Capital Markets 29 190 (85)
Change in fair value of AIA (including realized gains in 2012) - 527

(100)

Change in fair value of ML III - 330 (100)
Interest expense (334) (416) (20)
Corporate expenses (282) (166) 70
Other         (45)         14     NM
Pre-tax operating income         1,709         2,522     (32)
Income tax expense         (307)         (896)     (66)
Other noncontrolling interest         19         (5)     NM
After-tax operating income attributable to AIG     $   1,421     $   1,621     (12)

 %

 

All operating segment comparisons that follow are to the third quarter of 2012 unless otherwise noted.

 

   

AIG PROPERTY CASUALTY

 
Three Months Ended
September 30,
($ in millions)     2013     2012     Change
Net premiums written $   8,660     $   8,712     (1) %
Net premiums earned 8,427 8,752 (4)
Underwriting loss (135) (441) 69
Net investment income         1,179         1,227     (4)
Pre-tax operating income     $   1,044     $   786     33 %
Underwriting ratios:
Loss ratio 67.3 71.4 (4.1)

 pts

Acquisition ratio 19.7 19.5 0.2
General operating expense ratio         14.6         14.1     0.5
Combined ratio         101.6         105.0     (3.4)
Accident year loss ratio, as adjusted         63.7         66.5     (2.8)
Accident year combined ratio, as adjusted         98.0         100.1     (2.1)

 pts

 

AIG Property Casualty’s pre-tax operating income grew 33 percent to $1.0 billion due to improved underwriting results that were partially offset by a decline in net investment income from lower returns on alternative investments and mutual funds. The third quarter 2013 accident year combined ratio, as adjusted, which excludes catastrophe losses and prior-year development, improved 2.1 points to 98.0, reflecting a continued shift to higher value business, enhanced risk selection, and improved pricing. As part of AIG’s continued focus on capital management, AIG Property Casualty distributed $716 million in cash dividends to AIG Parent during the third quarter of 2013.

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