Key PointsConsumers can expect insurance premiums to continue to rise in 2024, creating an opportunity for investors.  Progressive Corporation benefits from the necessity to have auto insurance in a rising rate environment.  American International Group is enacting strong underwriting discipline to increase the company's loss reserves. Chubb caters to higher-income consumers, which may protect its balance sheet. 5 stocks we like better than American International GroupThe rate of inflation is expected to co ...

Third Quarter 2023 Financial Results Presentation November 2, 2023 Copyright ® 2023 by American International Group, Inc. All rights reserved. No part of this document may be reproduced, republished or reposted without the permission of AIG. Group Performance Strategy Segment Performance GI L&R Other Investments Capital Operating EPS* Increased 92% from the Prior Year Quarter with Co ...

Financial Data and Key Metrics Changes - Adjusted after-tax income was $1.2 billion or $1.61 per diluted common share, representing a 92% increase year-over-year [8][38] - Consolidated net investment income on an adjusted pre-tax income basis was $3.3 billion, a 29% increase year-over-year [8] - General Insurance underwriting income improved over 250% from the prior year quarter to $611 million [8] Business Line Data and Key Metrics Changes - In General Insurance, net premiums written grew 9% year-over-year to $6.5 billion [14] - Life and Retirement's adjusted pre-tax income was $971 million, up 24% year-over-year, with premiums and deposits growing 4% to $9.2 billion [9][46] - The accident year combined ratio for General Insurance, excluding catastrophes, improved by 210 basis points to 86.3% [8][23] Market Data and Key Metrics Changes - North America commercial net premiums written increased 5% in the third quarter [14] - International Commercial net premiums written grew 7%, primarily driven by property, which was up 13% [18] - Personal Insurance net premiums written increased 16% year-over-year, primarily driven by North America [22] Company Strategy and Development Direction - The company is focused on simplifying its portfolio and reducing volatility through strategic divestitures, including the sale of Validus Re [11][36] - AIG aims for a 10% plus return on common equity (ROCE) post deconsolidation of Corebridge [34][50] - The company is committed to maintaining a balanced capital management strategy, focusing on share repurchases and debt reduction [33][50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underwriting results and the strategic repositioning of the company [35][36] - The company is well-positioned to take advantage of opportunities in the current marketplace despite challenges from social inflation [32][66] - Management highlighted the importance of maintaining strong underwriting standards and risk management practices [27][41] Other Important Information - AIG returned over $1 billion to shareholders through stock repurchases and dividends during the quarter [11] - The company expects continued improvement in financial performance from its Personal Insurance segment [23] - Corebridge Financial is on track for operational separation, with significant returns to shareholders since its IPO [10][39] Q&A Session Summary Question: What is the process for ensuring that the adverse development in international commercial doesn't reflect social inflation problems? - Management explained that the DVR process involves a deep dive into reserves annually, with adjustments made quarterly based on actual versus expected analysis [54][56] Question: Can you provide insight into the underlying underwriting results and path to profitability in North America Personal? - Management acknowledged that the segment is in transition and expects significant benefits from premium earnings in the coming quarters [58][59] Question: How is the company managing through the cycle in financial lines given the current market conditions? - Management indicated a cautious approach to the large account public company D&O business, focusing on maintaining margins and reducing limits in excess layers [61][66]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 —————————— FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-8787 American International Group, Inc. (Exact name of registrant as specified in its charter) Delaware 13-2592361 (State or o ...

Summary of AIG 2023 Keefe, Bruyette & Woods Insurance Conference Company Overview - **Company**: American International Group, Inc. (NYSE:AIG) - **Date**: September 6, 2023 - **Participants**: - Peter Zaffino - CEO - Sabra Purtill - CFO - Meyer Shields - KBW Key Highlights and Accomplishments - **2022 Performance**: - Achieved an accident year combined ratio of 88.7%, with $2 billion in underwriting income, a $1 billion increase from the previous year [2][3] - Completed AIG 200 initiative, resulting in $1 billion in run rate savings, six months ahead of schedule [3] - IPO of Corebridge Financial, the largest U.S. IPO of 2022, despite challenging market conditions [3] - Returned over $6 billion in capital through share repurchases and dividends, and reduced net debt by over $700 million [3] - **2023 Performance (First Half)**: - Achieved a 10% growth in written premiums on an FX and lag adjusted basis, driven by a 12% growth in the commercial business [4] - Reduced gross limits in general insurance commercial business by over $1.4 trillion since 2018, with 70% from the property portfolio [4] Strategic Transactions - **Validus Re Sale**: - Announced sale for $3 billion, expected to close in Q4 2023, aimed at reducing volatility in PMLs and generating additional liquidity [5][6] - **Crop Risk Services Sale**: - Sold to American Financial Group for approximately $240 million [6] - **Corebridge Health Care Sale**: - Entered into an agreement to sell to AXA for EUR 650 million, expected to close in Q4 2023 [7] Market Conditions and Risk Management - **Catastrophe Activity**: - First half of 2023 saw insured losses exceeding $50 billion, with significant contributions from secondary perils [8] - Notable events included wildfires in Canada and hurricanes in the U.S. [8] - **Reinsurance Strategy**: - Maintained attachment points and utilized a strong reinsurance program to control volatility [16][17] Financial Management and Capital Strategy - **Capital Management**: - Increased quarterly common stock dividend by 12.5% and authorized $7.5 billion in share buybacks [9] - Targeting a share count of $600 million to $650 million, with leverage expected to remain in the low 20s [9][10] - **Liquidity Position**: - Reported strong parent liquidity of $4.3 billion at the end of Q2 2023 [10] Future Focus and Growth Strategy - **Sustainable ROCE**: - AIG aims for a sustainable return on capital employed (ROCE) of over 10% through strategic portfolio shifts [10] - **High Net Worth Market**: - Plans to grow in the ultra-high net worth space through a new managing general agency (MGA) in partnership with Stone Point Capital [26][27] - **International Growth**: - Focus on expanding in Japan, leveraging digital capabilities and existing distribution networks [40][41] Additional Insights - **Operational Improvements**: - AIG 200 initiative has enhanced core capabilities, including IT and underwriting systems [64][65] - **Market Dynamics**: - The reinsurance market is experiencing increased demand and pricing pressures due to recent catastrophe activities [15][17] - **Divestiture Strategy**: - AIG is focused on divesting non-core assets to streamline operations and enhance focus on core insurance business [34][35] This summary encapsulates the key points discussed during the conference, highlighting AIG's strategic initiatives, financial performance, and future growth plans.

Financial Performance - AIG reported an After-Tax Income per Diluted Share (GAAP) of $203, a decrease of 41% compared to 2Q22[4] - Adjusted After-Tax Income (AATI) was $13 billion, a 15% increase compared to $11 billion in 2Q22[4] - The General Insurance combined ratio was 909%, a 35 percentage point increase compared to 2Q22[4] - AIG returned $822 million to shareholders through $554 million of common stock repurchases and $268 million of common and preferred stock dividends in 2Q23[4] Strategic Initiatives - AIG announced the sale of Validus Reinsurance, Ltd to RenaissanceRe, expected to close in 4Q23[4] - AIG raised $12 billion through a secondary offering of 7475 million Corebridge shares at $1625 per share, reducing AIG's ownership to 653%[4] - AIG closed the sale of its Crop Risk Services business to American Financial Group, Inc[4] - AIG formed Private Client Select, a Managing General Agency partnership with Stone Point Capital LLC for the U S High-Net-Worth Personal Insurance Book[5] General Insurance - General Insurance net premiums written (NPW) increased by 10% to $7537 million in 2Q23 from $6866 million in 2Q22[20] - Commercial Lines NPW increased by 14% to $5633 million in 2Q23 from $4955 million in 2Q22[21]

Financial Data and Key Metrics Changes - Adjusted after-tax income was $1.3 billion, or $1.75 per diluted common share, representing a 26% increase year-over-year, marking the best quarterly adjusted EPS result since 2007 [7] - Net premiums written in General Insurance grew 11%, with underwriting income approximately $600 million and an adjusted accident year combined ratio ex-CATs of 88%, a 50 basis point improvement year-over-year [7][33] - Adjusted pre-tax income for Life and Retirement was $991 million, up 33% year-over-year, with premiums and deposits exceeding $10 billion, a 42% increase year-over-year [8] Business Line Data and Key Metrics Changes - General Insurance gross premiums written were $10.4 billion, an increase of 11%, with Global Commercial growing 15% and Global Personal decreasing 1% [24] - Life and Retirement segment saw adjusted pre-tax income of $991 million, with a strong performance in Fixed Index Annuities contributing to a 42% increase in premiums and deposits [8][37] - North America Commercial net premiums written grew 18%, with Retail Property growing over 50% and Lexington growing 18% [24][60] Market Data and Key Metrics Changes - In North America, the accident year combined ratio ex-CATs was 85.1%, a 310 basis point improvement year-over-year [33] - International Commercial net premiums written grew 6%, primarily driven by property, which was up 34% [25] - The overall market exhibited more orderly behavior during mid-year renewals, with mid-year property cat pricing increasing 25% to 35% year-over-year in the U.S. [35] Company Strategy and Development Direction - The company is focused on strategic actions such as the divestiture of Validus Re and Crop Risk Services to streamline its business model and reduce volatility [11][18] - The launch of Private Client Select as an MGA aims to serve high and ultra-high net worth markets, addressing foundational challenges in these segments [19][20] - The company is committed to achieving a 10% plus ROCE post-deconsolidation of Corebridge, with a focus on improving underwriting profitability and reducing expenses [39][54] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver high-quality outcomes despite challenging market conditions, highlighting strong financial performance and strategic progress [6][7] - The company anticipates continued growth in net premiums written, particularly in the high and ultra-high net worth markets, with expectations of over 75% growth in the latter half of the year [31] - Management noted that the reinsurance environment has improved, allowing for better risk management and reduced volatility [36] Other Important Information - The company returned $822 million to shareholders in Q2 2023 through stock repurchases and dividends, reflecting a commitment to capital management [9][38] - The balance sheet remains strong, with $4.3 billion in parent liquidity and a focus on maintaining well-capitalized subsidiaries [53] - The company is exploring strategic alternatives for the disposition of its U.K. Life business as part of its ongoing efforts to streamline operations [23] Q&A Session Summary Question: Focus on North American Commercial business growth - Management highlighted strong growth across various segments, with Lexington and Retail Property showing significant increases, while Financial Lines faced headwinds [58][60] Question: Future CAT load expectations - Management indicated that CAT loads will decrease due to strategic actions taken, including the divestiture of Validus Re, which will reduce overall exposure [62][65] Question: Changes in rate increases and loss trends - Management confirmed that rate increases are outpacing loss cost inflation, with a disciplined approach to underwriting and capital deployment [68][70] Question: Specialty casualty submissions in Lexington - Management reported record submission counts in Lexington, indicating strong growth potential in the specialty casualty market [72][73] Question: Pro forma margin profile for North America Commercial - Management provided insights into the margin profile, noting that Validus Re's impact on combined ratios was positive, but its acquisition ratio was higher than normal [75][76]

Financial Position - Total assets increased to $537,138 million as of June 30, 2023, compared to $522,228 million at the end of 2022, reflecting a growth of approximately 2.0%[9] - Total liabilities rose to $490,647 million, up from $478,774 million at the end of 2022, indicating an increase of about 2.4%[9] - AIG shareholders' equity increased to $42,454 million, compared to $40,970 million at the end of 2022, representing a growth of approximately 3.6%[9] - The company reported a liability for unpaid losses and loss adjustment expenses of $70,284 million, down from $75,167 million at the end of 2022, a decrease of about 6.0%[9] - Common stock issued remained stable at 1,906,671,492 shares for both 2023 and 2022, with total common stock valued at $4,766 million[9] - Retained earnings increased to $35,916 million as of June 30, 2023, compared to $34,893 million at the end of 2022, reflecting an increase of approximately 2.9%[9] - The company’s total investments amounted to $306,758 million, a slight decrease from $309,150 million at the end of 2022, representing a decline of about 0.1%[9] - Cash and cash equivalents rose to $2,283 million, up from $2,043 million at the end of 2022, reflecting an increase of about 11.7%[9] - The company reported a total of 89,718 million in separate account assets at fair value, an increase from 84,853 million at the end of 2022, representing a growth of approximately 5.0%[9] Revenue and Income - Total revenues for Q2 2023 were $13,218 million, a decrease of 3.3% from $13,663 million in Q2 2022[11] - Net income attributable to AIG for Q2 2023 was $1,493 million, down 45.7% from $2,754 million in Q2 2022[11] - Net investment income for Q2 2023 was $3,571 million, an increase of 37.1% compared to $2,604 million in Q2 2022[11] - Policyholder benefits and losses incurred for Q2 2023 were $6,858 million, an increase of 37.5% from $4,984 million in Q2 2022[11] - Basic income per common share attributable to AIG common shareholders for Q2 2023 was $2.05, down from $3.47 in Q2 2022[11] - Total benefits, losses, and expenses for Q2 2023 were $11,351 million, an increase of 16.5% from $9,738 million in Q2 2022[11] - Comprehensive income attributable to AIG for Q2 2023 was $13 million, a significant recovery from a loss of $8,865 million in Q2 2022[13] - AIG reported a net income attributable to AIG or noncontrolling interests of $1,604 million for the six months ended June 30, 2023, compared to $3,079 million for the same period in 2022, reflecting a decrease of approximately 47.9%[18] - Net income for the six months ended June 30, 2023, was $1,604 million, a decrease of 79% compared to $7,639 million in 2022[21] Cash Flow and Investments - Net cash provided by operating activities increased to $1,111 million from $598 million year-over-year[21] - Total cash and restricted cash at the end of the period was $2,352 million, down from $2,728 million in the previous year[23] - Policyholder contract deposits rose to $15,920 million, compared to $12,491 million in the same period last year[21] - Net cash used in investing activities was $(641) million, a decrease from $2,534 million in 2022[21] - The company reported net losses on sales of securities available for sale and other assets of $786 million, compared to $749 million in 2022[21] - Interest paid during the period increased to $636 million from $574 million in the prior year[23] - The company experienced a net change in short-term investments of $743 million, down from $3,787 million in the prior year[21] - Total adjustments to reconcile net income to net cash provided by operating activities were $(493) million, compared to $(7,042) million in 2022[21] Shareholder Equity and Dividends - AIG's common stock dividends for the second quarter were $0.36 per share, totaling $260 million, compared to $0.32 per share and $248 million in the same quarter of the previous year, representing a 9.7% increase in dividends paid[16] - AIG's total shareholders' equity decreased from $58,666 million at the end of June 30, 2022, to $46,491 million at the end of June 30, 2023, reflecting a decline of approximately 20.7%[19] - The total equity at the end of the period was $46,491 million, an increase from $47,225 million at the end of June 30, 2022, indicating a decrease of about 1.6% year-over-year[18] - AIG's retained earnings at the end of the period were $35,916 million, compared to $32,092 million at the end of June 30, 2022, indicating an increase of approximately 12.5%[18] - The balance of preferred stock remained constant at $485 million throughout the reporting period[19] - AIG's additional paid-in capital was $4,766 million, consistent with the previous year, indicating stability in this area[18] Other Comprehensive Income - Other comprehensive loss for the second quarter was $1,738 million, compared to a loss of $12,617 million in the same quarter of the previous year, showing a significant improvement[16] - AIG's total comprehensive income for the six months ended June 30, 2023, was $2,175 million, compared to a total comprehensive loss of $12,617 million for the same period in 2022, marking a significant turnaround[18] - The company reported a change in the fair value of market risk benefits, net of $(262) million for Q2 2023, compared to $(45) million in Q2 2022[11] - The company experienced a change in unrealized depreciation of fixed maturity securities of $84 million in Q2 2023, compared to $36 million in Q2 2022[13]

Financial Data and Key Metrics Changes - Adjusted after-tax income was $1.2 billion or $1.63 per diluted common share, representing a 9% increase year-over-year [6][37] - Net investment income on a consolidated basis was $3.1 billion, with a focus on improving credit quality and reducing volatility [6][38] - Book value per common share was $58.87 at quarter end, up 7% from year-end [43] Business Line Data and Key Metrics Changes - Net premiums written in General Insurance grew 10% on a constant dollar basis, driven by the Commercial business [6][11] - Life and Retirement reported premiums and deposits of $10.4 billion in the first quarter, a 44% increase year-over-year [7][25] - The accident year combined ratio, excluding catastrophes, was 88.7%, an 80 basis point improvement from the prior year [22] Market Data and Key Metrics Changes - North America Commercial saw a strong growth of 15% in net premiums written, driven by Validus Re [12] - International Commercial net premiums written grew 6%, primarily due to Property, which was up over 40% [17] - Global Personal reported a first quarter accident year combined ratio, excluding catastrophes, of 98.6%, a 120 basis point increase from the prior year [23] Company Strategy and Development Direction - The company is focused on long-term value creation and has made significant progress in strategic and operational priorities [5] - AIG plans to reduce its ownership interest in Corebridge and explore options aligned with shareholder interests [9] - The company is transitioning to a simpler, leaner business model, aiming for a 10%-plus return on common equity (ROCE) [30][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's future earnings power and commitment to disciplined capital management [8][34] - The company anticipates strong top-line growth in General Insurance for the remainder of 2023 [24] - Management highlighted the importance of maintaining appropriate capital levels in subsidiaries to support profitable growth [68] Other Important Information - AIG returned approximately $840 million to shareholders in the first quarter through stock repurchases and dividends [8] - The company approved a 12.5% increase in its common stock quarterly dividend, starting in the second quarter [8][34] - Corebridge has made substantial progress since its IPO, paying $450 million in dividends to public shareholders [9] Q&A Session Summary Question: Growth and Net-to-Gross Ratio - Management explained that the net-to-gross ratio remained unchanged due to portfolio composition and strategic reinsurance partnerships [50][52] Question: Implications of North American Personal Lines Changes - Management clarified that changes in North American Personal Lines do not significantly impact the International Personal segment due to their distinct business models [54][56] Question: Expense Ratio Expectations with MGA - Management indicated that as the MGA gains speed, the expense ratio is expected to fall over time, leading to improved profitability [57][60] Question: Catastrophe Load Stabilization - Management confirmed that the catastrophe load has stabilized, and they are focused on maintaining a balanced portfolio with reduced risk [61][64] Question: Excess Capital and Liquidity Management - Management emphasized a disciplined approach to capital management, maintaining strong liquidity while evaluating opportunities for share repurchases [66][70]

```markdown [Filing Information](index=1&type=section&id=Filing%20Information) [FORM 10-Q Details](index=1&type=section&id=FORM%2010-Q) This Quarterly Report on Form 10-Q for AIG covers the period ended March 31, 2023, with **723,752,512 shares** outstanding - The filing is a Quarterly Report on Form 10-Q for the period ended March 31, 2023[2](index=2&type=chunk) Registrant Name | Registrant Name | American International Group, Inc. | |---|---| | State of Incorporation | Delaware | | IRS Employer Identification No. | 13-2592361 | | Principal Executive Offices | 1271 Avenue of the Americas, New York, New York 10020 | | Telephone Number | (212) 770-7000 | | Common Stock Trading Symbol | AIG | | Common Stock Exchange | New York Stock Exchange | | Shares Outstanding (as of April 28, 2023) | 723,752,512 | | Filer Status | Large accelerated filer | [Part I – Financial Information](index=3&type=section&id=Part%20I%20%E2%80%93%20Financial%20Information) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) AIG's unaudited condensed consolidated financial statements for Q1 2023 show total assets of **$536,627 million** and a **net loss of $87 million** Condensed Consolidated Balance Sheets (in millions) | Item | March 31, 2023 | December 31, 2022 | |---|---|---| | Total Assets | $536,627 | $522,228 | | Total Liabilities | $490,321 | $478,774 | | Total Equity | $46,306 | $43,454 | Condensed Consolidated Statements of Income (Loss) (in millions) | Item | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | |---|---|---| | Total Revenues | $10,984 | $14,944 | | Total Benefits, Losses and Expenses | $11,215 | $9,230 | | Income (loss) from continuing operations before income tax expense (benefit) | $(231) | $5,714 | | Income tax expense (benefit) | $(144) | $1,154 | | Net income (loss) | $(87) | $4,560 | | Net income (loss) attributable to AIG common shareholders | $23 | $4,166 | | Basic EPS | $0.03 | $5.10 | | Diluted EPS | $0.03 | $5.04 | Condensed Consolidated Statements of Cash Flows (in millions) | Item | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | |---|---|---| | Net cash provided by operating activities | $497 | $39 | | Net cash provided by (used in) investing activities | $(1,474) | $853 | | Net cash provided by (used in) financing activities | $817 | $(577) | | Net increase (decrease) in cash and restricted cash | $(158) | $302 | | Cash and restricted cash at end of period | $2,058 | $2,729 | [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) [Condensed Consolidated Statements of Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(Loss)) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) [Condensed Consolidated Statements of Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) [Supplementary Disclosure of Condensed Consolidated Cash Flow Information](index=10&type=section&id=Supplementary%20Disclosure%20of%20Condensed%20Consolidated%20Cash%20Flow%20Information) [Note 1. Basis of Presentation](index=11&type=section&id=Note%201.%20Basis%20of%20Presentation) This note outlines the basis for AIG's unaudited financial statements, highlighting the adoption of LDTI and the Corebridge IPO - AIG adopted targeted improvements to the accounting for long-duration contracts (LDTI) on January 1, 2023, with a transition date of January 1, 2021, updating prior period financial statements[25](index=25&type=chunk) - AIG closed the IPO of Corebridge Financial, Inc. on September 19, 2022, selling **12.4%** of common stock for approximately **$1.7 billion** gross proceeds. AIG's ownership decreased to **77.3%** by March 31, 2023, but AIG continues to consolidate Corebridge's financial results[26](index=26&type=chunk) - AIG Financial Products Corp. (AIGFP) filed for Chapter 11 reorganization on December 14, 2022, leading to its deconsolidation from AIG's results and a **pre-tax loss of $114 million** for the twelve months ended December 31, 2022. This reorganization is not expected to have a material impact on AIG's consolidated balance sheets[28](index=28&type=chunk) - Critical accounting estimates include loss reserves, valuation of future policy benefit liabilities, market risk benefits (MRBs), embedded derivative liabilities, reinsurance assets, goodwill impairment, allowance for credit losses on investments, fair value measurements, and income taxes[29](index=29&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=13&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) This note details AIG's accounting policies, emphasizing the significant impact of LDTI adoption on MRBs, discount rates, and DAC amortization - The adoption of LDTI on January 1, 2023, with a transition date of January 1, 2021, led to a **net decrease of $2.2 billion** in beginning AOCI and a **net increase of $933 million** in beginning Retained Earnings[35](index=35&type=chunk) - LDTI requires MRBs to be measured at fair value, with changes in fair value (excluding own credit risk) recognized in the income statement. The discount rate for future policy benefits must be updated quarterly using upper-medium grade fixed income instrument yields, with changes recognized in OCI[35](index=35&type=chunk) - LDTI simplifies DAC amortization to a constant level basis over the expected contract term, with adjustments for unexpected terminations, and eliminates the impairment test[35](index=35&type=chunk) Impact of LDTI Adoption on Condensed Consolidated Balance Sheets (January 1, 2021, in millions) | Item | Pre-Adoption, Dec 31, 2020 | Cumulative Effect Adjustment | Updated Balances Post Adoption | |---|---|---|---| | Reinsurance assets - Fortitude Re | $34,578 | $7,666 | $42,244 | | Deferred policy acquisition costs | $9,805 | $3,150 | $12,955 | | Market risk benefit assets | — | $338 | $338 | | Future policy benefits | $56,878 | $10,486 | $67,364 | | Policyholder contract deposits | $154,470 | $(6,247) | $148,223 | | Market risk benefit liabilities | — | $8,739 | $8,739 | | Retained earnings | $15,504 | $933 | $16,437 | | Accumulated other comprehensive income (loss) | $13,511 | $(2,197) | $11,314 | Impact of LDTI Adoption on Condensed Consolidated Statements of Income (Loss) (Three Months Ended March 31, 2022, in millions) | Item | As Previously Reported | Effect of Change | Updated Balances Post Adoption | |---|---|---|---| | Premiums | $7,110 | $10 | $7,120 | | Policy fees | $764 | $(34) | $730 | | Total net realized gains (losses) | $4,419 | $(840) | $3,579 | | Policyholder benefits and losses incurred | $5,255 | $(195) | $5,060 | | Change in the fair value of market risk benefits, net | — | $(233) | $(233) | | Amortization of deferred acquisition costs | $1,437 | $(300) | $1,137 | | Net income (loss) attributable to AIG common shareholders | $4,253 | $(87) | $4,166 | [Note 3. Segment Information](index=18&type=section&id=Note%203.%20Segment%20Information) AIG reports operations across General Insurance, Life and Retirement, and Other Operations, with segment performance evaluated by adjusted revenues and pre-tax income - AIG's business is structured into three main segments: General Insurance (North America, International), Life and Retirement (Individual Retirement, Group Retirement, Life Insurance, Institutional Markets), and Other Operations[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk) - Segment performance is assessed using adjusted revenues and adjusted pre-tax income (loss), which exclude items like legacy matters, certain fair value adjustments, and non-industry-common measures[52](index=52&type=chunk) Adjusted Pre-tax Income (Loss) by Segment (Three Months Ended March 31, in millions) | Segment | 2023 | 2022 | |---|---|---| | General Insurance | | | | North America | $299 | $256 | | International | $203 | $190 | | Net investment income | $746 | $765 | | **Total General Insurance** | **$1,248** | **$1,211** | | Life and Retirement | | | | Individual Retirement | $533 | $466 | | Group Retirement | $187 | $241 | | Life Insurance | $82 | $113 | | Institutional Markets | $84 | $114 | | **Total Life and Retirement** | **$886** | **$934** | | Other Operations | $(491) | $(421) | | **Total Adjusted Pre-tax Income (Loss)** | **$1,643** | **$1,724** | [Note 4. Fair Value Measurements](index=20&type=section&id=Note%204.%20Fair%20Value%20Measurements) This note details AIG's fair value measurement practices, classifying assets and liabilities into a three-level hierarchy, with **$331,954 million** in assets measured at fair value - Fair value measurements are classified into Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (unobservable inputs)[56](index=56&type=chunk) - Valuation methodologies for Market Risk Benefits (MRBs) and embedded derivatives were impacted by the adoption of LDTI, requiring fair value measurement based on policyholder behavior and capital market assumptions, including a non-performance risk adjustment (NPA)[58](index=58&type=chunk)[60](index=60&type=chunk) Assets and Liabilities Measured at Fair Value on a Recurring Basis (March 31, 2023, in millions) | Item | Level 1 | Level 2 | Level 3 | Total | |---|---|---|---|---| | **Assets:** | | | | | | Bonds available for sale | $413 | $203,262 | $25,722 | $229,397 | | Other bond securities | — | $3,428 | $1,334 | $4,762 | | Equity securities | $501 | $16 | $74 | $591 | | Derivative assets | $26 | $3,845 | $920 | $616 | | Short-term investments | $2,484 | $4,382 | — | $6,866 | | Market risk benefit assets | — | — | $830 | $830 | | Separate account assets | $84,202 | $3,155 | — | $87,357 | | **Total Assets** | **$87,626** | **$218,257** | **$30,246** | **$331,954** | | **Liabilities:** | | | | | | Policyholder contract deposits | — | $45 | $6,064 | $6,109 | | Market risk benefit liabilities | — | — | $5,144 | $5,144 | | Derivative liabilities | $36 | $3,864 | $48 | $255 | | Fortitude Re funds withheld payable | — | — | $(1,863) | $(1,863) | | **Total Liabilities** | **$36** | **$3,981** | **$9,505** | **$9,829** | Gains (Losses) from Fair Value Option Election (Three Months Ended March 31, in millions) | Item | 2023 Gain (Loss) | 2022 Gain (Loss) | |---|---|---| | Other bond securities | $136 | $(319) | | Alternative investments | $77 | $398 | | Long-term debt | $(1) | $103 | | **Total gain (loss)** | **$212** | **$182** | [Note 5. Investments](index=36&type=section&id=Note%205.%20Investments) This note details AIG's investment portfolio, with **$229,397 million** in AFS bonds and a significant decrease in net realized gains due to embedded derivatives Bonds Available for Sale (March 31, 2023, in millions) | Item | Amortized Cost | Allowance for Credit Losses | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |---|---|---|---|---|---| | U.S. government and government sponsored entities | $5,995 | — | $49 | $(289) | $5,755 | | Obligations of states, municipalities and political subdivisions | $12,344 | — | $161 | $(857) | $11,648 | | Non-U.S. governments | $14,928 | $(10) | $109 | $(1,595) | $13,432 | | Corporate debt | $157,227 | $(81) | $1,542 | $(20,117) | $138,571 | | Mortgage-backed, asset-backed and collateralized | $63,685 | $(45) | $865 | $(4,514) | $59,991 | | **Total bonds available for sale** | **$254,179** | **$(136)** | **$2,726** | **$(27,372)** | **$229,397** | - At March 31, 2023, AIG held **34,040** individual fixed maturity securities in an unrealized loss position, totaling **$27,225 million** in gross unrealized losses, for which no allowance for credit loss was recorded due to non-credit factors and no intent to sell[113](index=113&type=chunk) Net Investment Income (Three Months Ended March 31, in millions) | Item | 2023 | 2022 | |---|---|---| | Net investment income - excluding Fortitude Re funds withheld assets | $3,087 | $2,946 | | Net investment income - Fortitude Re funds withheld assets | $446 | $291 | | **Total net investment income** | **$3,533** | **$3,237** | Net Realized Gains (Losses) (Three Months Ended March 31, in millions) | Item | 2023 | 2022 | |---|---|---| | Net realized gains (losses) - excluding Fortitude Re funds withheld assets and embedded derivative | $(713) | $401 | | Net realized losses on Fortitude Re funds withheld assets | $(31) | $(140) | | Net realized gains (losses) on Fortitude Re funds withheld embedded derivative | $(1,165) | $3,318 | | **Total net realized gains (losses)** | **$(1,909)** | **$3,579** | - The change in net unrealized appreciation (depreciation) of investments for fixed maturity securities was a gain of **$5,005 million** for the three months ended March 31, 2023, compared to a loss of **$(20,160) million** in the prior year, primarily due to lower interest rates[131](index=131&type=chunk) Allowance for Credit Losses on Available for Sale Fixed Maturity Securities (in millions) | Item | March 31, 2023 | December 31, 2022 | |---|---|---| | Balance, beginning of year | $186 | $98 | | Additions | $24 | $177 | | Reductions | $(69) | $(83) | | Other | $(5) | $1 | | **Balance, end of period** | **$136** | **$186** | [Note 6. Lending Activities](index=44&type=section&id=Note%206.%20Lending%20Activities) This note details AIG's lending activities, with **$50,830 million** in net mortgage and other loans receivable and an increased allowance for credit losses Mortgage and Other Loans Receivable, Net (in millions) | Item | March 31, 2023 | December 31, 2022 | |---|---|---| | Commercial mortgages | $37,779 | $37,128 | | Residential mortgages | $6,899 | $6,130 | | Life insurance policy loans | $1,747 | $1,758 | | Commercial loans, other loans and notes receivable | $5,191 | $5,305 | | Total mortgage and other loans receivable | $51,616 | $50,321 | | Allowance for credit losses | $(786) | $(716) | | **Mortgage and other loans receivable, net** | **$50,830** | **$49,605** | - Commercial mortgages have the largest geographic concentrations in New York (**19%**) and California (**11%**) as of March 31, 2023[148](index=148&type=chunk) Rollforward of Allowance for Credit Losses on Mortgage and Other Loans Receivable (Three Months Ended March 31, in millions) | Item | 2023 | 2022 | |---|---|---| | Allowance, beginning of year | $716 | $629 | | Addition to (release of) allowance for loan losses | $70 | $(8) | | **Allowance, end of period** | **$786** | **$617** | - No loans were modified to borrowers experiencing financial difficulty in Q1 2023. In Q1 2022, loans with a carrying value of **$115 million** were modified as troubled debt restructurings[161](index=161&type=chunk) [Note 7. Reinsurance](index=47&type=section&id=Note%207.%20Reinsurance) This note details AIG's reinsurance activities, including the impact of LDTI on recoverables and **$75.2 billion** in total reinsurance recoverables - Subsequent to LDTI adoption, reinsurance recoverables are recognized consistent with underlying liabilities, using updated net premium ratios and current upper-medium grade discount rates, with changes reported in OCI[165](index=165&type=chunk) - Fortitude Re reinsures the majority of AIG's run-off operations. As of March 31, 2023, approximately **$28.0 billion** of Life and Retirement Run-Off Lines and **$3.2 billion** of General Insurance Run-Off Lines reserves were ceded to Fortitude Re[169](index=169&type=chunk) Impact of Fortitude Re Funds Withheld Arrangements (Three Months Ended March 31, in millions) | Item | 2023 | 2022 | |---|---|---| | Net investment income - Fortitude Re funds withheld assets | $446 | $291 | | Net realized losses - Fortitude Re funds withheld assets | $(31) | $(140) | | Net realized gains (losses) - Fortitude Re funds withheld embedded derivative | $(1,165) | $3,318 | | **Net realized gains (losses) on Fortitude Re funds withheld assets** | **$(1,196)** | **$3,178** | | Income (loss) from continuing operations before income tax expense (benefit) | $(750) | $3,469 | | Net income (loss) | $(592) | $2,741 | | Change in unrealized appreciation (depreciation) of all other investments | $556 | $(2,638) | | **Comprehensive income (loss)** | **$(36)** | **$103** | - As of March 31, 2023, **total reinsurance recoverables were $75.2 billion**, with approximately **93%** being investment grade. Non-investment grade exposure (**7%**) primarily related to captive insurers, typically collateralized[175](index=175&type=chunk)[176](index=176&type=chunk) Rollforward of Reinsurance Recoverable Allowance (Three Months Ended March 31, in millions) | Item | 2023 | 2022 | |---|---|---| | Balance, beginning of year | $344 | $382 | | Addition to (release of) allowance for expected credit losses and disputes, net | $(13) | $9 | | Write-offs charged against the allowance | $(1) | $(2) | | Other changes | $(3) | $2 | | **Balance, end of period** | **$327** | **$391** | [Note 8. Deferred Policy Acquisition Costs](index=51&type=section&id=Note%208.%20Deferred%20Policy%20Acquisition%20Costs) This note details AIG's DAC and DSI accounting, highlighting LDTI's impact on amortization, with total DAC at **$13,304 million** - Post-LDTI adoption, DAC for all long-duration contracts (except certain investment contracts) is amortized on a constant level basis over the expected term, with prospective adjustments for changes in future assumptions. DAC is no longer subject to recoverability testing[184](index=184&type=chunk) Rollforward of Deferred Policy Acquisition Costs (Three Months Ended March 31, in millions) | Item | 2023 | 2022 | |---|---|---| | Balance, beginning of year | $12,857 | $13,001 | | Capitalization | $1,689 | $1,402 | | Amortization expense | $(1,293) | $(1,137) | | Other, including foreign exchange | $51 | $(47) | | **Balance, end of period** | **$13,304** | **$13,219** | - Deferred Sales Inducements (DSI) are deferred and amortized on a constant level basis over the contract life, consistent with DAC, following LDTI adoption[191](index=191&type=chunk) Rollforward of Deferred Sales Inducements (Three Months Ended March 31, in millions) | Item | 2023 | 2022 | |---|---|---| | Balance, beginning of year | $558 | $619 | | Capitalization | $2 | $2 | | Amortization expense | $(17) | $(17) | | **Balance, end of period** | **$543** | **$604** | [Note 9. Variable Interest Entities](index=54&type=section&id=Note%209.%20Variable%20Interest%20Entities) This note details AIG's involvement with VIEs, consolidating those where it is the primary beneficiary, with **$9,037 million** in consolidated VIE assets - AIG consolidates VIEs where it is the primary beneficiary, defined by having both the power to direct significant activities and the obligation to absorb losses or right to receive benefits[196](index=196&type=chunk) Consolidated VIEs: Total Assets and Liabilities (in millions) | Item | March 31, 2023 | December 31, 2022 | |---|---|---| | Total Assets | $9,037 | $11,241 | | Total Liabilities | $3,883 | $5,826 | - During Q1 2023, the sale of AIG Credit Management, LLC led to the deconsolidation of certain investment entities, decreasing assets by **$2.1 billion** and liabilities by **$1.9 billion**, resulting in a **$5 million** pre-tax loss[200](index=200&type=chunk) Unconsolidated VIEs: Total Assets and Maximum Exposure to Loss (in millions) | Item | March 31, 2023 | December 31, 2022 | |---|---|---| | Total VIE Assets | $502,728 | $505,521 | | Maximum Exposure to Loss (Total) | $14,015 | $14,077 | | - On-Balance Sheet | $9,372 | $9,392 | | - Off-Balance Sheet | $4,643 | $4,685 | [Note 10. Derivatives and Hedge Accounting](index=56&type=section&id=Note%2010.%20Derivatives%20and%20Hedge%20Accounting) This note details AIG's derivative use for risk management, with **$117,066 million** in gross notional amount and a **$(1,610) million** loss from non-hedging derivatives - AIG uses various derivatives (interest rate, foreign exchange, equity, credit, commodity) for financial risk management and investment operations[205](index=205&type=chunk) Notional Amounts and Fair Value of Derivatives (March 31, 2023, in millions) | Derivative Type | Gross Notional Amount | Assets Fair Value | Liabilities Fair Value | |---|---|---|---| | **Derivatives designated as hedging instruments:** | | | | | Interest rate contracts | $671 | $388 | $44 | | Foreign exchange contracts | $4,500 | $573 | $230 | | **Derivatives not designated as hedging instruments:** | | | | | Interest rate contracts | $25,756 | $2,014 | $3,001 | | Foreign exchange contracts | $10,505 | $1,079 | $573 | | Equity contracts | $27,092 | $683 | $60 | | Commodity contracts | $80 | $7 | — | | Credit contracts | $1,810 | $33 | $40 | | Other contracts | $46,652 | $14 | — | | **Total derivatives, gross** | **$117,066** | **$4,791** | **$3,948** | | Counterparty netting | | $(2,382) | $(2,382) | | Cash collateral | | $(1,793) | $(1,311) | | **Total derivatives on Condensed Consolidated Balance Sheets** | | **$616** | **$255** | - Collateral posted by AIG for derivative transactions was **$2.5 billion** at March 31, 2023, and collateral received was **$2.2 billion**[209](index=209&type=chunk) Gains (Losses) from Derivatives Not Designated as Hedging Instruments (Three Months Ended March 31, in millions) | Item | 2023 | 2022 | |---|---|---| | Interest rate contracts | $95 | $(613) | | Foreign exchange contracts | $(101) | $236 | | Equity contracts | $(78) | $(204) | | Commodity contracts | $7 | $(4) | | Credit contracts | $(1) | $(1) | | Other contracts | $16 | $18 | | Embedded derivatives | $(1,548) | $3,979 | | **Total** | **$(1,610)** | **$3,411** | - A downgrade of AIG's long-term senior debt ratings to BBB or BBB– by S&P and/or Baa2 or Baa3 by Moody's could trigger additional collateral calls and early termination rights, totaling up to approximately **$6 million**[219](index=219&type=chunk) [Note 11. Insurance Liabilities](index=59&type=section&id=Note%2011.%20Insurance%20Liabilities) This note details AIG's insurance liabilities, including **$75,793 million** in loss reserves and **$157,896 million** in policyholder contract deposits, impacted by LDTI adoption Rollforward of Loss Reserves (Three Months Ended March 31, in millions) | Item | 2023 | 2022 | |---|---|---| | Liability for unpaid loss and loss adjustment expenses, beginning of year | $75,167 | $79,026 | | Reinsurance recoverable, beginning of year | $(32,102) | $(35,213) | | Net Liability for unpaid loss and loss adjustment expenses, beginning of year | $43,065 | $43,813 | | Total losses and loss adjustment expenses incurred | $3,791 | $3,793 | | Total losses and loss adjustment expenses paid | $(3,838) | $(3,765) | | Total other changes | $409 | $21 | | **Total Liability for unpaid loss and loss adjustment expenses, end of year** | **$75,793** | **$78,183** | - AIG recognized **$27 million** in favorable prior year loss reserve development (excluding discount and amortization of deferred gain) for the three months ended March 31, 2023, primarily from U.S. Workers Compensation and Other product lines[226](index=226&type=chunk) - Post-LDTI adoption, future policy benefits for traditional and limited pay long-duration products use a net premiums ratios (NPR) methodology, with periodic retrospective revisions. The discount rate is updated quarterly, with changes reflected in Other Comprehensive Income (OCI)[237](index=237&type=chunk) Policyholder Contract Deposits Account Balances (March 31, 2023, in millions) | Segment | Account Balance, End of Period | |---|---| | Individual Retirement | $91,070 | | Group Retirement | $42,903 | | Life Insurance | $10,220 | | Institutional Markets | $12,294 | | Other | $3,516 | | **Total Policyholder Contract Deposits Account Balance** | **$160,003** | - The weighted average crediting rate for policyholder contract deposits was **2.52%** at March 31, 2023[267](index=267&type=chunk) Policyholder Contract Deposits Account Balance by Guaranteed Minimum Crediting Rates (March 31, 2023, in millions) | Range of Guaranteed Minimum Credited Rate | At Guaranteed Minimum | 1-50 Basis Points Above Minimum | More than 50 Points Above Guarantee | Total | |---|---|---|---|---| | **Individual Retirement** | | | | | | <=1% | $7,776 | $2,562 | $23,263 | $33,601 | | >1% - 2% | $3,994 | $24 | $2,163 | $6,181 | | >2% - 3% | $9,155 | $1 | $390 | $9,546 | | >3% - 4% | $7,359 | $40 | $6 | $7,405 | | >4% - 5% | $452 | — | $4 | $456 | | >5% | $32 | — | $4 | $36 | | **Total Individual Retirement** | **$28,768** | **$2,627** | **$25,830** | **$57,225** | | **Group Retirement** | | | | | | <=1% | $2,063 | $2,713 | $6,049 | $10,825 | | >1% - 2% | $5,005 | $908 | $353 | $6,266 | | >2% - 3% | $13,561 | $40 | — | $13,601 | | >3% - 4% | $658 | — | — | $658 | | >4% - 5% | $6,821 | — | — | $6,821 | | >5% | $153 | — | — | $153 | | **Total Group Retirement** | **$28,261** | **$3,661** | **$6,402** | **$38,324** | | **Life Insurance** | | | | | | >1% - 2% | — | $131 | $349 | $480 | | >2% - 3% | $28 | $862 | $1,079 | $1,969 | | >3% - 4% | $1,417 | $118 | $198 | $1,733 | | >4% - 5% | $2,946 | — | — | $2,946 | | >5% | $222 | — | — | $222 | | **Total Life Insurance** | **$4,613** | **$1,111** | **$1,626** | **$7,350** | | **Total All Segments** | **$61,642** | **$7,399** | **$33,858** | **$102,899** | [Note 12. Market Risk Benefits](index=72&type=section&id=Note%2012.%20Market%20Risk%20Benefits) This note defines MRBs as contract features protecting policyholders from capital market risk, with net MRB liabilities of **$4,314 million** as of March 31, 2023 - MRBs are contract features that provide protection to policyholders from other-than-nominal capital market risk and expose AIG to such risk, measured at fair value[279](index=279&type=chunk) - LDTI adoption reclassified certain contract guarantees (e.g., GMWBs, GMDBs) as MRBs, impacting Retained Earnings and AOCI. The fair value changes attributable to AIG's own credit risk are recognized in OCI[282](index=282&type=chunk) Balances of and Changes in Market Risk Benefits (Three Months Ended March 31, 2023, in millions) | Item | Individual Retirement | Group Retirement | Total | |---|---|---|---| | Balance, beginning of year | $3,738 | $296 | $4,034 | | Issuances | $191 | $9 | $200 | | Attributed fees | $235 | $17 | $252 | | Effect of changes in interest rates | $478 | $46 | $524 | | Effect of changes in equity markets | $(391) | $(36) | $(427) | | Effect of changes in our own credit risk | $339 | $32 | $371 | | **Balance, end of period** | **$4,084** | **$319** | **$4,403** | | Less: Reinsured MRB, end of period | $(89) | — | $(89) | | **Net Liability Balance after reinsurance recoverable** | **$3,995** | **$319** | **$4,314** | Net Amount at Risk for Annuity Guarantees (Three Months Ended March 31, 2023, in millions) | Item | Individual Retirement | Group Retirement | Total | |---|---|---|---| | GMDB only | $1,307 | $266 | $1,573 | | GMWB only | $63 | $5 | $68 | | Combined | $1,726 | $31 | $1,757 | [Note 13. Separate Account Assets and Liabilities](index=76&type=section&id=Note%2013.%20Separate%20Account%20Assets%20and%20Liabilities) This note describes AIG's separate account assets and liabilities, totaling **$87,357 million**, where investment income and risk accrue to contract holders - Separate account assets and liabilities are legally segregated, with investment income and risk accruing directly to contract holders for variable contracts[294](index=294&type=chunk) Separate Account Assets and Liabilities (in millions) | Item | March 31, 2023 | December 31, 2022 | |---|---|---| | Total Separate Account Assets | $87,357 | $84,853 | | Total Separate Account Liabilities | $87,357 | $84,853 | Balances and Changes in Separate Account Liabilities (Three Months Ended March 31, in millions) | Item | 2023 | 2022 | |---|---|---| | Balance, beginning of year | $84,853 | $109,111 | | Premiums and deposits | $846 | $1,238 | | Policy charges | $(490) | $(486) | | Surrenders and withdrawals | $(1,923) | $(1,656) | | Benefit payments | $(400) | $(406) | | Investment performance | $4,469 | $(6,870) | | Net transfers from (to) general account | $1 | $(82) | | Other charges | $1 | $1 | | **Balance, end of period** | **$87,357** | **$100,850** | [Note 14. Contingencies, Commitments and Guarantees](index=77&type=section&id=Note%2014.%20Contingencies,%20Commitments%20and%20Guarantees) This note addresses AIG's contingent liabilities, legal proceedings, and **$4.8 billion** in commitments to various investment funds - AIG and its subsidiaries are subject to regulatory and government investigations, litigation, and other disputes, with potential for significant jury awards, settlements, or penalties[302](index=302&type=chunk) - Management accrues for probable losses where amounts can be reasonably estimated and does not believe current matters are likely to have a material adverse effect on financial position, beyond what is already accrued[302](index=302&type=chunk) - Other commitments include **$4.8 billion** to invest in limited partnerships, private equity funds, hedge funds, and real estate as of March 31, 2023[305](index=305&type=chunk) - AIG Parent guarantees payment obligations of AIGFP and AIG Markets, Inc. A **$112 million** guarantee related to AIGFP was recognized upon its deconsolidation[306](index=306&type=chunk) - AIG is subject to financial guarantees and indemnity arrangements from business dispositions, but the likelihood of material payouts is considered remote[307](index=307&type=chunk)[308](index=308&type=chunk) [Note 15. Equity](index=79&type=section&id=Note%2015.%20Equity) This note details AIG's equity structure, including **727.6 million** common shares outstanding, dividends, and **$0.6 billion** in share repurchases in Q1 2023 Common Stock Outstanding Rollforward (Three Months Ended March 31, 2023, in millions) | Item | Common Stock Issued | Treasury Stock | Common Stock Outstanding | |---|---|---|---| | Shares, beginning of year | 1,906.7 | (1,172.6) | 734.1 | | Shares issued | — | 4.6 | 4.6 | | Shares repurchased | — | (11.1) | (11.1) | | **Shares, end of period** | **1,906.7** | **(1,179.1)** | **727.6** | - On May 4, 2023, AIG's Board declared a cash dividend of **$0.36** per common share (a **12.5%** increase) and **$365.625** per Series A Preferred Stock share[316](index=316&type=chunk)[569](index=569&type=chunk) - AIG repurchased approximately **11 million** common shares for **$0.6 billion** in Q1 2023. As of March 31, 2023, approximately **$3.2 billion** remained under the share repurchase authorization[314](index=314&type=chunk)[570](index=570&type=chunk) Rollforward of Accumulated Other Comprehensive Income (Loss) (in millions, net of tax) | Item | Dec 31, 2022 | Change in Q1 2023 | March 31, 2023 | |---|---|---|---| | Unrealized Appreciation (Depreciation) of Fixed Maturity Securities | $(136) | $6 | $(134) | | Unrealized Appreciation (Depreciation) of All Other Investments | $(20,675) | $4,252 | $(17,129) | | Change in Fair Value of Market Risk Benefits Related to Our Own Credit Risk | $(284) | $75 | $(226) | | Change in discount used to measure traditional and limited payment long-duration insurance contracts | $2,459 | $(420) | $2,150 | | Foreign Currency Translation Adjustments | $(3,056) | $(28) | $(3,094) | | Retirement Plan Liabilities Adjustment | $(924) | $28 | $(896) | | **Total** | **$(22,616)** | **$3,913** | **$(19,329)** | [Note 16. Earnings Per Common Share (EPS)](index=82&type=section&id=Note%2016.%20Earnings%20Per%20Common%20Share%20(EPS)) This note presents AIG's basic and diluted EPS, both **$0.03** for Q1 2023, a significant decrease from the prior year due to lower net income Computation of Basic and Diluted EPS (Three Months Ended March 31, in millions, except per common share data) | Item | 2023 | 2022 | |---|---|---| | Net income (loss) attributable to AIG common shareholders | $23 | $4,166 | | Weighted average common shares outstanding - basic | 738,661,428 | 816,314,273 | | Dilutive common shares | 5,437,758 | 9,698,337 | | Weighted average common shares outstanding - diluted | 744,099,186 | 826,012,610 | | **Basic EPS** | **$0.03** | **$5.10** | | **Diluted EPS** | **$0.03** | **$5.04** | - Potential dilutive common shares excluded from diluted EPS were **4.5 million** in Q1 2023 and **39.9 million** in Q1 2022 due to their anti-dilutive effect[324](index=324&type=chunk) [Note 17. Income Taxes](index=83&type=section&id=Note%2017.%20Income%20Taxes) This note outlines AIG's income tax policies, including the **15%** CAMT under the IRA and a **$880 million** valuation allowance as of March 31, 2023 - AIG is subject to the **15%** Corporate Alternative Minimum Tax (CAMT) under the Inflation Reduction Act (IRA) of 2022 for 2023[327](index=327&type=chunk) - Following the Corebridge IPO, Corebridge and its subsidiaries are tax deconsolidated from the AIG consolidated U.S. federal income tax group[328](index=328&type=chunk) - The **effective tax rate on loss from continuing operations was 62.3%** for Q1 2023, compared to **20.2%** on income for Q1 2022, primarily due to tax-exempt income, share-based compensation benefits, and prior year adjustments, partially offset by foreign operations and valuation allowance changes[332](index=332&type=chunk) - A **valuation allowance of $880 million** was deemed necessary as of March 31, 2023, with **$713 million** for AIG's U.S. federal consolidated income tax group and **$167 million** for Corebridge[333](index=333&type=chunk) - AIG released **$131 million** and **$234 million** of valuation allowance associated with unrealized tax capital losses in U.S. Life Insurance and non-life insurance companies' available-for-sale securities portfolios, respectively, in Q1 2023[335](index=335&type=chunk) - Unrecognized tax benefits, excluding interest and penalties, were **$1.3 billion** at March 31, 2023, with **$1.2 billion** favorably affecting the effective tax rate if recognized[337](index=337&type=chunk) [Part II – Other Information](index=86&type=section&id=Part%20II%20%E2%80%93%20Other%20Information) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=86&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides a comprehensive analysis of AIG's financial condition and results for Q1 2023, highlighting the impact of LDTI and market conditions [Cautionary Statement Regarding Forward-Looking Information and Factors That May Affect Future Results](index=86&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Information%20and%20Factors%20That%20May%20Affect%20Future%20Results) [Use of Non-GAAP Measures](index=89&type=section&id=Use%20of%20Non-GAAP%20Measures) [Critical Accounting Estimates](index=91&type=section&id=Critical%20Accounting%20Estimates) [Executive Summary](index=94&type=section&id=Executive%20Summary) [Consolidated Results of Operations](index=99&type=section&id=Consolidated%20Results%20of%20Operations) [Business Segment Operations](index=103&type=section&id=Business%20Segment%20Operations) [Investments](index=123&type=section&id=Investments) [Insurance Reserves](index=132&type=section&id=Insurance%20Reserves) [Liquidity and Capital Resources](index=138&type=section&id=Liquidity%20and%20Capital%20Resources) [Enterprise Risk Management](index=140&type=section&id=Enterprise%20Risk%20Management) [Glossary](index=141&type=section&id=Glossary) [Acronyms](index=143&type=section&id=Acronyms) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=150&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Market risk disclosures are incorporated by reference from the Enterprise Risk Management section of the MD&A - Market risk disclosures are incorporated by reference from the Enterprise Risk Management section of the MD&A[582](index=582&type=chunk) [ITEM 4. Controls and Procedures](index=150&type=section&id=ITEM%204.%20Controls%20and%20Procedures) AIG's disclosure controls were effective as of March 31, 2023, with internal control changes due to LDTI adoption - AIG's disclosure controls and procedures were effective as of March 31, 2023[583](index=583&type=chunk) - Changes in internal control over financial reporting occurred in Q1 2023 due to the adoption of the LDTI standard, which required updates to processes, systems, and controls for long-duration contracts[584](index=584&type=chunk) [ITEM 1. Legal Proceedings](index=151&type=section&id=ITEM%201.%20Legal%20Proceedings) Legal proceedings information is incorporated by reference from Note 14 to the Condensed Consolidated Financial Statements - Legal proceedings information is incorporated by reference from Note 14 to the Condensed Consolidated Financial Statements[585](index=585&type=chunk) [ITEM 1A. Risk Factors](index=151&type=section&id=ITEM%201A.%20Risk%20Factors) Readers should refer to the 2022 Annual Report for a comprehensive discussion of risk factors - Readers should refer to Part I, Item 1A. Risk Factors in the 2022 Annual Report for a comprehensive discussion of risk factors[586](index=586&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=151&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details AIG's common stock repurchases, totaling **11.16 million shares** for **$603 million** in Q1 2023 Common Stock Repurchases (Three Months Ended March 31, 2023) | Period | Total Number of Shares Repurchased | Average Price Paid per Share | Dollar Value May Yet Be Purchased Under the Plans (in millions) | |---|---|---|---| | January 1-31 | — | — | $3,794 | | February 1-28 | 2,756,691 | $60.46 | $3,628 | | March 1-31 | 8,405,903 | $51.93 | $3,191 | | **Total** | **11,162,594** | **$54.04** | **$3,191** | - As of March 31, 2023, approximately **$3.2 billion** remained under the share repurchase authorization. An additional **4 million** shares were repurchased for **$200 million** between April 1 and April 28, 2023[588](index=588&type=chunk) [ITEM 6. Exhibits](index=152&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including indentures, settlement agreements, and certifications - Exhibits include a Forty-Second Supplemental Indenture (March 27, 2023), a Settlement Agreement and Release (January 29, 2023), Rule 13a-14(a)/15d-14(a) Certifications, Section 1350 Certifications, and Interactive Data Files in iXBRL format[590](index=590&type=chunk) [Signatures](index=153&type=section&id=Signatures) The report was duly signed by Sabra Purtill (Interim CFO) and Kathleen Carbone (Chief Accounting Officer) on May 5, 2023 - The report was signed by Sabra Purtill (Interim CFO) and Kathleen Carbone (Chief Accounting Officer) on May 5, 2023[593](index=593&type=chunk) ```