AIG Reports Fourth Quarter and Full Year 2020 Results
American International Group (NYSE: AIG) reported significant financial losses for the fourth quarter and full year of 2020, with a net loss of $6 billion, or $6.88 per share. This was primarily driven by a $6.7 billion after-tax loss linked to the sale of Fortitude Group. Adjusted after-tax income dropped to $2.2 billion from $4.1 billion the previous year. Despite these losses, the company improved its risk profile and liquidity, with $10.5 billion in liquidity as of year-end. A quarterly dividend of $0.32 per share has been declared, payable on March 30, 2021.
- Increased liquidity to $10.5 billion from $7.6 billion year-over-year.
- Improved General Insurance accident year combined ratio by 1.9 points compared to 2019.
- Quarterly dividend of $0.32 per share declared.
- Net loss attributable to common shareholders was $6 billion for the year.
- Significant fourth quarter net loss of $60 million compared to $922 million net income in the prior year.
- Adjusted pre-tax income dropped significantly from $5.47 billion to $3 billion for the year.
American International Group, Inc. (NYSE: AIG) today reported financial results for the fourth quarter and full year ended December 31, 2020.
For the full year of 2020, net loss attributable to AIG common shareholders was
AATI was
For the fourth quarter of 2020, net loss attributable to AIG common shareholders was
AATI was
Total consolidated net investment income for the fourth quarter of 2020 was
Brian Duperreault, AIG’s Chief Executive Officer, said: “AIG’s fourth quarter and full year 2020 operating results demonstrate the continued progress we are making to position AIG for long-term, sustainable and profitable growth. We are effectively managing the impacts of COVID-19 and natural catastrophes and remain well capitalized in this environment of unprecedented uncertainty.
“The General Insurance business continues to improve, with a 1.9 point improvement in the accident year combined ratio, as adjusted, compared to 2019 and 5.6 point improvement in the accident year combined ratio, as adjusted, compared to 2018. Life and Retirement delivered strong returns and remains well positioned to meet the ever-growing needs for protection, retirement savings and lifetime income solutions.
“As I transition into my role as Executive Chairman, I want to thank our global colleagues who have shown unyielding resilience, dedication and perseverance in their efforts to serve our clients, distribution partners, communities and other stakeholders – even as their own lives and work situations have been severely disrupted by the COVID-19 crisis. This strength of human spirit is at the core of AIG and visible in all that we do. I look forward to supporting Peter Zaffino as he becomes the next Chief Executive Officer of AIG and, along with our world-class team, continues AIG’s journey to become a top performing company and leading insurance franchise.”
Book value per common share was
As of December 31, 2020, AIG Parent liquidity stood at approximately
Today, the Board of Directors declared a quarterly cash dividend of
The Board of Directors also declared a quarterly cash dividend of
FINANCIAL SUMMARY
|
Three Months Ended December 31, |
|
|
Twelve Months Ended December 31, |
||||||||||
($ in millions, except per common share amounts) |
|
2020 |
|
|
2019 |
|
|
|
|
2020 |
|
|
2019 |
|
Net income (loss) attributable to AIG common shareholders |
$ |
(60 |
) |
$ |
922 |
|
|
|
$ |
(5,973 |
) |
$ |
3,326 |
|
Net income (loss) per diluted share attributable to AIG common shareholders (a) |
$ |
(0.07 |
) |
$ |
1.03 |
|
|
|
$ |
(6.88 |
) |
$ |
3.74 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted pre-tax income (loss) |
$ |
1,116 |
|
$ |
1,211 |
|
|
|
$ |
3,003 |
|
$ |
5,470 |
|
General Insurance |
|
809 |
|
|
778 |
|
|
|
|
1,901 |
|
|
3,533 |
|
Life and Retirement |
|
1,027 |
|
|
858 |
|
|
|
|
3,531 |
|
|
3,553 |
|
Other Operations |
|
(720 |
) |
|
(425 |
) |
|
|
|
(2,429 |
) |
|
(1,616 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||
Net investment income |
$ |
3,957 |
|
$ |
3,587 |
|
|
|
$ |
13,631 |
|
$ |
14,619 |
|
Net investment income, APTI basis |
|
3,226 |
|
|
3,462 |
|
|
|
|
12,321 |
|
|
14,390 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted after-tax income attributable to AIG common shareholders |
$ |
827 |
|
$ |
923 |
|
|
|
$ |
2,201 |
|
$ |
4,078 |
|
Adjusted after-tax income per diluted share attributable to AIG common shareholders |
$ |
0.94 |
|
$ |
1.03 |
|
|
|
$ |
2.52 |
|
$ |
4.58 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding - diluted (a) |
|
868.4 |
|
|
896.4 |
|
|
|
|
869.3 |
|
|
889.5 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Return on common equity |
|
(0.4 |
)% |
|
5.7 |
% |
|
|
|
(9.4 |
)% |
|
5.3 |
% |
Adjusted return on common equity |
|
6.7 |
% |
|
7.3 |
% |
|
|
|
4.4 |
% |
|
8.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
||||
Book value per common share |
$ |
76.46 |
|
$ |
74.93 |
|
|
|
$ |
76.46 |
|
$ |
74.93 |
|
Adjusted book value per common share |
$ |
57.01 |
|
$ |
58.89 |
|
|
|
$ |
57.01 |
|
$ |
58.89 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common shares outstanding |
|
861.6 |
|
|
870.0 |
|
|
|
|
861.6 |
|
|
870.0 |
|
(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- and twelve-month periods ended December 31, 2020 because we reported a net loss attributable to AIG common shareholders from continuing operations in those periods. |
||||||||||||||
All comparisons are against the fourth quarter of 2019, unless otherwise indicated. Refer to the AIG Fourth Quarter 2020 Financial Supplement, which is posted on AIG's website in the Investors section, for further information.
GENERAL INSURANCE
|
Three Months Ended December 31, |
|
|||||||
($ in millions) |
|
2020 |
|
|
2019 |
|
|
Change |
|
Gross premiums written |
$ |
7,135 |
|
$ |
7,306 |
|
|
(2 |
)% |
|
|
|
|
|
|
|
|||
Net premiums written |
$ |
5,565 |
|
$ |
5,830 |
|
|
(5 |
)% |
North America |
|
2,361 |
|
|
2,639 |
|
|
(11 |
) |
North America Commercial Lines |
|
1,992 |
|
|
1,815 |
|
|
10 |
|
North America Personal Insurance |
|
369 |
|
|
824 |
|
|
(55 |
) |
International |
|
3,204 |
|
|
3,191 |
|
|
- |
|
International Commercial Lines |
|
1,662 |
|
|
1,554 |
|
|
7 |
|
International Personal Insurance |
|
1,542 |
|
|
1,637 |
|
|
(6 |
) |
|
|
|
|
|
|
|
|||
Underwriting income (loss) |
$ |
(171 |
) |
$ |
12 |
|
|
NM |
% |
North America |
|
(389 |
) |
|
(96 |
) |
|
(305 |
) |
North America Commercial Lines |
|
(285 |
) |
|
(188 |
) |
|
(52 |
) |
North America Personal Insurance |
|
(104 |
) |
|
92 |
|
|
NM |
|
International |
|
218 |
|
|
108 |
|
|
102 |
|
International Commercial Lines |
|
138 |
|
|
52 |
|
|
165 |
|
International Personal Insurance |
|
80 |
|
|
56 |
|
|
43 |
|
|
|
|
|
|
|
|
|||
Net investment income, APTI basis |
$ |
980 |
|
$ |
766 |
|
|
28 |
% |
Adjusted pre-tax income |
$ |
809 |
|
$ |
778 |
|
|
4 |
% |
Return on adjusted segment common equity |
|
7.5 |
% |
7.2 |
% |
0.3 |
pts |
||
|
|
|
|
|
|
|
|||
Underwriting ratios: |
|
|
|
|
|
|
|||
North America Combined Ratio (CR) |
|
114.9 |
|
|
103.2 |
|
|
11.7 |
pts |
North America Commercial Lines CR |
|
112.4 |
|
|
108.8 |
|
|
3.6 |
|
North America Personal Insurance CR |
|
133.2 |
|
|
88.6 |
|
|
44.6 |
|
International CR |
|
93.6 |
|
|
96.9 |
|
|
(3.3 |
) |
International Commercial Lines CR |
|
92.1 |
|
|
96.9 |
|
|
(4.8 |
) |
International Personal Insurance CR |
|
95.0 |
|
|
96.8 |
|
|
(1.8 |
) |
General Insurance (GI) CR |
|
102.8 |
|
|
99.8 |
|
|
3.0 |
|
|
|
|
|
|
|
|
|||
GI Loss ratio |
|
70.2 |
|
|
65.6 |
|
|
4.6 |
pts |
Less: impact on loss ratio |
|
|
|
|
|
|
|||
Catastrophe losses and reinstatement premiums |
|
(9.0 |
) |
|
(6.5 |
) |
|
(2.5 |
) |
Prior year development |
|
(0.9 |
) |
|
2.2 |
|
|
(3.1 |
) |
Adjustments for ceded premium under reinsurance |
|
|
|
|
|
|
|||
contracts and other |
|
- |
|
|
0.3 |
|
|
(0.3 |
) |
GI Accident year loss ratio, as adjusted |
|
60.3 |
|
|
61.6 |
|
|
(1.3 |
) |
GI Expense ratio |
|
32.6 |
|
|
34.2 |
|
|
(1.6 |
) |
GI Accident year combined ratio, as adjusted (AYCR) |
|
92.9 |
|
|
95.8 |
|
|
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FAQ
What were AIG's financial results for the fourth quarter of 2020?
AIG reported a net loss of $60 million, or $0.07 per share, for Q4 2020, compared to net income of $922 million, or $1.03 per share, in Q4 2019.
How much was AIG's net loss for the full year 2020?
AIG's net loss for the full year 2020 was $6 billion, or $6.88 per share, compared to net income of $3.3 billion, or $3.74 per share, in the prior year.
What dividend did AIG declare on its common stock?
AIG declared a quarterly cash dividend of $0.32 per share on its common stock, payable on March 30, 2021.
What factors contributed to AIG's financial losses in 2020?
The losses were primarily driven by a $6.7 billion after-tax loss from the sale of Fortitude Group and higher catastrophe losses, including COVID-19 related claims.
What was AIG's liquidity position at the end of December 2020?
As of December 31, 2020, AIG's liquidity stood at approximately $10.5 billion.
American International Group, Inc.
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