American International (AIG) 5 May 202020 Q1 Earnings call transcript

Ladies and gentlemen, good day, and welcome to AIG's First Quarter 2020 Financial Results Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Ms. Sabra Purtill, Head of Investor Relations. Please go ahead, ma'am.

you. Thank thank joining and today. all you morning us for Good

financial quarter cover results release, Our will on be and the will today. www.aig.com, first website financial were XXXX at our presentation filed news call today XX-Q The AIG's financial and posted afternoon. announced results later supplement yesterday

Financial CEO Duperreault, Retirement; Kevin Insurance; Hogan, Life and Our Brian Zaffino; and General CEO; speakers today COO of President Mark Officer. Lyons, Chief and Peter are of AIG and CEO,

after their Q&A We will for have remarks. time

on may market effects call statements mix differ that in Factors on events company on future statements performance, strategic to our results determined any current not include with of obligation cause based disclaims Today's those could SEC, obligation inclusive made future XXXX as and which and statement, a described any are of information, These under management's contain and Annual to relating otherwise. may be whether conditions, filings of performance expectations. events forward-looking differ priorities, AIG, Report of other AIG result forward-looking AIG. and recent expressly performance to or is the this on time. are new guarantees materially. business of cannot effects or and Form the not any XX-K update the events COVID-XX at fully including COVID-XX Actual

non-GAAP The results figures of which reconciliation financial to measures. available of such the financial and refer in provided our is GAAP are will our most all website. to remarks comparable some news Additionally, material, on other measures release

to the turn now I'll over Brian. call

last months few extraordinary an we been It's everyone. morning, spoke. Good since

this has to adjust afterwards creating healthy, witness life that the last and new that to everyone be want you've it like of crisis I been is that say long start, a heartbreaking you time about are globe. been even It's uncertainty will will to I and harder. all and time the This unfolds COVID-XX your and what makes the normal us. tough across able as for how families to we hope for Before it

experienced. my industry has I've nothing crisis, a CAT future. which lot ever the will the in continue seen world believe insurance like is health be foreseeable in became witnessed career have single threat economic a XX-plus industry. the to us economy, and any this largest But the humanitarian COVID-XX quickly loss of ramifications will has We to significant global the for and year

to on and The lives each how crisis of the we examples shown to threat. the see Having has come more globe, people a and we have common we've said the and that over fortunate number workers a emerged. who differences. the others. other are than do colleagues of to together for common in this us positive ways, self of We've has relatively the many empathy enemy. to And heartwarming lines, other tested is strength In fight essential risking front that, all small AIG providers the COVID-XX. helping had sharing not healthcare immune been resources responders, it's that help their been compassion some first to

them, and families who go particularly hearts to the sadly passed Our a out away. of few to

continue, leading the reassess take stress, important and role this AIG play clients risk companies of individuals a an helping companies times risk couple manage The partners in industry through last by of over demonstrated unprecedented helping during and has will other and Insurance role we leadership time. and manage industry appetite. years

I you want to call, us. the to thank topic for of joining Turning this

working Our so are different in we team locations is remotely, morning. this

will our be Mark, Q&A. and Chief Officer, to from In hear you'll and Investment remarks, addition Dachille, my for Kevin available Peter, Doug

we usual topics want want sufficient to time COVID-XX, We your and to answer we there sure addition make because lengthen our to questions. will today's cover is to call in

remains be financial strong strong began, at position -- want before this I and financial that to crisis position a remains the offset in was a in clear AIG very today.

further liquidity our capital. We on have and been to laser-focused will and be actions strengthen continue to

Our to de-risk XXXX stronger more balance will us perspective, I protect crisis. wisdom, from focus work greater done and the with AIG ongoing our we gratitude. this foundational since as and had fundamentals we have and on well prudently unified of AIG Because late navigate believe and emerge this sheet served COVID-XX work,

as AIG shown incredible what character clients times. operating especially through assess reveals help working across is Crisis most we their do to to on our need focus do and leaders character keep which seamlessly, they adjust complex best, what colleagues strength and have our conditions, manage difficult we AIG of new to helping risks,

be team, and leadership our citizen. their a in to many communications open and catastrophes knowledge protect work as has serve policymakers, generally Executive lines navigated experience and through global global regulators applying colleagues, they're clients, and our an of good particular, we hard Our keep with our

a resiliency to our for shown grant months. aggregate to the costs. in globally, workforce mid-March, million have Our to colleague mind tremendous Executive $XX colleagues off we equates the has each In unanticipated top team. issued $XXX over been few global Helping last help our with which

personal have needed other focused communities and are on equipment. contributed where We much masks, also we and work. helping gowns, protective we live To-date, gloves,

from working, shelters donated local remote to and dairy As and charitable other unused products perishables and cafeterias pantries organizations. we our move we produce, to

be relief Foundation. will primary contribution. the Foundation's We recently future for reinstated the foreseeable million across the COVID-XX The making on focus AIG inaugural globe. be efforts an $X We'll

our adjusted income to of per results, $X.XX common quarter Turning share. common we and operating reported income net of first $X.XX per after-tax share

successful the which we to the are we XXXX, had significant and into ensure do quarter negatively that lose year. that strategies through portfolio. is important momentum from results our operating net It benefited COVID-XX, impacted were our to this our in by hedging delivered taking positively business note investment strong we not as of decisive our moved income results continued core Although actions first we

quarter impact is a prudent through not approach evolves. analyzing we while a very as While ongoing event COVID-XX each AIG. and thorough This catastrophe unique this thoughtful be to very will took continue easy, we to we across yet robust move and

Forecasting the impact difficult. economy, outlook. we last the global we is are our call, the – our of the adjusted this, future provided quarters we on across including COVID-XX of on guidance equity earnings continued In uncertainty withdrawing and in common return light

expertise, begins stabilize. said I we Having an in capabilities ex-CATs with do improvement for our Insurance, combined global General believe COVID-XX demand be strong XXXX, to even in that, capital ratio to see continued position, and expect will our when and the coupled that greater

volatile impact of COVID-XX will be believe result not the return markets, of Retirement, and Life to in continue long-term that do while In there we material will profile. reduction effects a short-term of our

diversified or our With resilient the end of sheet on recapture XX% income loss April, by to class investment for a sector, XX is securities. making liabilities it mark-to-market fixed and asset available our well-matched respect a in to is and tightened sale to for resulting credit downturn. $X.X industry portfolio, balance reflected Furthermore, through it March spreads billion our

company, a its ahead, we crisis am emerging very forward of top-performing and significant the a choice leading of on work journey company insurance from flexibility. doing, confident in also AIG AIG to as financial with insurer not successfully a stronger, will ongoing a become and global I capital move franchise. result Looking are this XXX better but AIG particularly as part will only as

I Peter. With it to will that, turn over

excluding markets you and the us. a Good analyze COVID-XX term how overview our we've morning, the impact insurance through last the COVID-XX to and first Thank our earnings since on everyone, you, including of General announced we XXX Re, and generally, Syndicate potential progress that on impact the call. longer Insurance, Today, Brian. XXXX and XXst, the review March joining thank brief results following plan of recently COVID-XX, for GI of and reinsurance launch for I made near AIG Validus of topics: quarter

of insurance reinsurance specific territories. is impacted any As COVID-XX and has other industries the region, In catastrophes event remains hurricanes over the this wildfires, it on XXX Brian near confined and economy global said, earthquakes, already geographic to and not countries and and to impact and contrast unclear. like long-term

as is traditional the not this case typically In addition, is duration limited CATs. with

insurance we to COVID-XX profound uncertainty. nature that And climate of are the There's of playbook. we no risk say fair global the in to prudent and unprecedented something encountered. and make result, of it's thoughtful called upon manages never While a all industry have a as is kinds, impact decisions

also Before largest with $XX to they earthquake significant record Katrina the to with $XX billion $XX Hurricane With Sandy ranges. Irma respect COVID-XX, in approximately with COVID, on starting billion Hurricane industry with the catastrophes have then estimates, but losses, early were we're Superstorm see billion and Tohoku loss, $XX billion losses. in losses,

insurance the believe we ultimate in While CAT of result it's loss, the individual loss, has to too size the early gauge will ever seen. largest COVID-XX the industry

limits co-insurance and impact available, conditions, forward, insurance of aspects Going certain of and underwriting will limits absolute to deployed of lines COVID-related name all losses to business, from terms a just few. coverage structure

respect was reinsurance unlike up headwind ILS And this. will capacity be contract. which future and for capacity. trapped traditional a retro therefore, name modeled. market parallel to on believe COVID we're in therefore, collateral, With We a already not catastrophes, market, will capital, restricting lock main, the it be will basis, And, the there go-forward the seeing will

market. allowed take AIG, position of XXXX, a position work late to financial which in has company's in significantly leadership General Insurance, started the At in our the body has improved and us

a tolerance. decisions predictable on provide the areas preserve and and and us rate disciplined addition of focus program excellence, the leadership with rebalancing has our with coupled our capital and such the Validus strategic served aligned in strengthening risk adequacy, our revamped underwriting Our us capabilities, and of improved reinsurance portfolio, very more outcomes as enabled of well to and comprehensive underwriting

insurer solve with for strengthen issues and time. management through that as to we have turn is risk our issues, distribution on to probably AIG risk and risk challenging partnerships this the well-positioned be continued clients advice to

Insurance. General to Turning

I'd address estimate like Before loss first the we COVID-XX. reviewing for quarter to our booked results,

and we noted, our potential of a exposure amount of Brian lines multiple spent As geographies. business time considerable across analyzing

and the from first in initially the contingency. United Continental quarter, that we U.S., States, from the from emerged in saw claims travel case, the Given and Asia, and predominantly each U.K. COVID-XX outside in Europe later

there in total which includes quarter and you significant in evolve from CAT far our We million, how ultimately this that uncertainty covered in this at first to extent will as will was notwithstanding, estimate, event earnings our estimated even saw As $XXX insurance. losses. release, the ongoing the COVID-XX those clear impacts loss our reached is IBNR. is It this which impact stage, to result net

Having we up to the first upon it think quarter. did for come the said loss with us was that, incumbent estimate

this to Let through estimate. take the we you me undertook arrive process at

a did professionals portfolio. several claims, policy as of team the across expertise a finance, the AIG multi-disciplinary of with activity top-down well in Over account and review level bottom-up experience first of team at significant and more underwriting, together every as past review a industry reinsurance. generally our weeks, in actuarial we pulled and This quarter

million. being million reduced by important which structure have the to reinsurance detail was that and is activity On our on saw want travel, basis, loss in quarter accident travel to scale in based a note related on $XX our claim expected after and will applying approximately significant we sliding more health of $XX XXXX commission expenses this global in aspect provide point we result during our An losses, first estimates. to estimate. a Due estimate I recoveries, acquisition

The the Therefore, remaining commercial million of health quarter net travel you trade workers' $XX Validus accident should and loss as million. related think Re. to and estimate first contingency, property, credit, for compensation relates to close $XXX estimate million of $XX our

also property from interruption business estimate policies. coverage commercial our losses arising encompasses This potential in

the policies, to damage that emphasize viruses the cause otherwise, was to business to majority the I require As direct related overwhelming exclusions those of losses virus loss interruption. or contain caused a the for showing and physical that that want

be terms will related We be challenged. should they upheld confident and exclusions are these and conditions

small the coverage, with done limiting where we disease, fraction and commercial infectious offering the In supplements disease conditions coverage policies, instances, terms provided so guidelines, of certain specified to property it business and we've be physically small affirmative where under present for have underwriting shown can led of operations. regardless, suspension was the many to that and a governmental in diseases only only strict

And exposure be limited. losses. and reinsurance our line COVID-XX of business, net of on geography, program protect from our the Additionally, will help significantly portfolio will our size loss, depending

notwithstanding to to COVID-XX-related attention Lastly, been legislative to terms fair interruption and that impose property U.S. policies. various losses, note commercial in coverage efforts I retroactively insurance of want there's for amount clear a business the conditions

We are broadly these confident will constitutional be that survive successful efforts scrutiny. not or

core very profitability a we Turning I improvement. general the to general quarter, momentum in the had -- rest our had of insurance business as good continuing said first result earlier, with

combined to primarily points the in The XX XXX basis year-over-year, adjusted ratio. loss point due to XX.X% improvement a basis accident year ratio improved

increased expenses year-over-year premiums our Our net X%, reduced focus as expense although we by lower of marginally a basis, expenses. approximately reflecting on a and discipline ratio earned, on function continued general operating

grew North improved America's adjusted first the for points portfolio. North quality of XXX accident our the year basis quarter year-over-year, combined reflecting America ratio

retail in PCG lower in reflecting this Highlights the attritional and experienced lower and property in included U.S. property Lexington attritional severe quarter improvements portfolio. losses and losses,

We had quarter, lead and new and business strong in casualty. by admitted property highlighted the mid-market non-admitted

on North operating invest addition, expenses year-over-year, and expenses in In general talent. focused by while leadership continuing America team reduced remained XX% to

Japan, in to Commercial, ratio rate year-over-year. International's and accident improved actions. portfolio the was year combined and adjusted had decreased ratio U.K. loss performance due optimization We flat Asia-Pacific strong The

took in meaningful These rate to of strengthen ratio first X%. we net in we beginning rate operating expenses portfolio. terms, quarter, XXXX first continue the increases in to acceleration although, the Throughout led reduce dollar throughout higher, year-over-year actions of the last portfolio was to with premiums, decreased saw we expense across quarter year. so addition general The those and saw are the

with was Overall, double-digits, strongest the rate North strengthening with having increases. America low and Validus double-digit improvement Glatfelter rate rate excluding low

increases. America, improved increases, which digit excess achieved our which Rate Europe, respectively, for XX% D&O that North strong and financial were over East in in increases the and achieved and the which achieved increases. include areas focused international also achieved XX%, performance single U.K. casualty and our casualty, high over on Middle rate financial property, with strongest rate the international rate and XX% overall wholesale XX% lines portfolio. specifically, In increases we

we And achieve were achieved In by we increases. U.K. was portfolio specialty overall, able and our in single-digit rate rate to increases motor Middle and D&O East our of U.K. saw and over rate specialty over lines, and financial XX%. Africa XX% led portfolio. high Europe, increases XX%,

with the premium was in in written the for after written were quarter, impact was premiums of our pandemic. of first year-over-year the which down expectations. with the in had net the adjusting COVID-XX areas travel a during our approximately impacted exception line to month exchange in X.X% Net March, impact, and limited which fall-off foreign first a on line by M&A be

This as the due $X.X through our in quarter was of quarter the to of shares energy first compared the mix Net discontinued the gross business, were underwriting premiums billion impact earned $X.X casualty business. first and impact to and overall billion quota of as in XXXX. of lower reflecting decline and well earning improving the

Validus to April were written and our a terms With of rate underwriting to with to premiums XX% X of respect and up occurred continued renewals, between conditions. wind team XX% up our Re. increases were areas XX%, and XXX%. and disciplined achieved improvement and on Gross strong loss Japan business execute Turning rate impacted improvements. on as Japan better portfolio risk-adjusted for loss Rate impacted business XX% non layers to focus

written its layer portfolio lower derisking business. premiums while increased Re in Validus

premium Japan increase risk-adjusted while the wind year-over-year, Japan by XX% was at international property approximately X period. X-in-XXX at for Specifically, year XX% decreased increased XX%. The April return rate PMLs

Talbot new managed and and ultra-high supporting to PCG is strategic business. accepting called official we Yesterday, our to which Syndicate our is is now Lloyd's Syndicate announced by Moving with U.S. business. business. XXXX our renewal worth launch the and high dedicated of partnership net XXXX,

we growth. reduce us business for peak preserve strategically concentration and zone reduce of been taking of volatility, the step Syndicate pursue another model portfolio inherent to challenges important nature. reposition with capital risks, an and reposition and which to XXXX allows example innovative and our are and portfolio de-risk PCG This profitable this forward is actions is have portfolio,

many We XXXX partnered with since from broader supported were third-party a whom pleased generated insurance and investors regarded the providers, support highly Syndicate XXXX. capacity have turnaround general with and late us of

traditional reinsurance core reinsurance, an overall with and solution the XXXX costs alternative AIG. reducing for program of for In us provides addition, to PCG Syndicate thereby

XXXX the significant we performance. making business improving excellent a place and that recognized put the financial is progress in is and leader PCG Our in team new operating market and management in

a We across in through increases first continue execute meaningful quarter to expect XXXX. underwriting achieving on the to disciplined strategy rate the portfolio, which continue PCG we with

us all XXX on top response, for remains XXX, our priority AIG significant COVID-XX our the to to crisis related earnings even Turning operational outlined our work more despite continued now. hands deck, I the programs AIG to make progress call. on so last management in a team foundational

As we transformational objectives; modernizing enhancing designed company. and a our on the programs core and a focusing customer dramatically. infrastructure, by underwriting identified experience call, operational robust becoming that we achieve user discussed bottom-up call, our changed world operating four unified Since exercise, to XX on change last excellence, after more

team, other a The AIG to leadership validated we program roles speed, across AIG, right level. together we job able people with to early transformational The incredible truly days have move in right take did leaders XXX were next COVID-XX. the the in that to the at the which our of

we our a within our environment, we days, processes. a tremendous work-from-home to amount learned systems colleagues As reposition and end-to-end global literally about

XXXX, operational by targets achieving overall $X.X and our end adjusting with we a programs the achieve run are of billion billion changed, have based in rate to cost sequencing recent of not savings of on of While certain learnings. $X timing the

source manner. our us requisite related in world. operate in model and to to virtual more will For achieve our we skills platforms example, AIG we post-COVID near-term in effective our now efficiencies to needed us a We flexibly shared to platforms. a greater are believe to agile enable services this to various allow about significantly in more and and data operations, the have operate ability which that a more We confirm accelerating includes work more connect can

completed transformation, and IT to design of that planned a more modernize the our effectiveness. to our efficient digital portfolio. simplify last we will months The few to simple, our the us is state organization opportunity appropriate give and efficiencies IT and our and confirmed also businesses finalized respect enhance for target With plans application virtual

our Turning IT be further standard commercial to we'll office we underwriting business. We our technology to commercial model into phase, platform. prepared where digital moved end-to-end scale and test our launching can an underwriting across testing and the new

that growth. this in still we're XXX, executing we're long-term committed stages sustainable While to profitable for more effort of and the AIG position early on strategic AIG critical even will

to I thank colleagues. our Lastly, want

purpose crisis, and and had of each our their other to dedication AIG's other clear, and is proud times colleagues During clients above support that professionalism I'm collaboration and for beyond our and they're and their doing, stakeholders. to gone help for our all grateful and to mission.

the to call the I'll that, over turn With Kevin. turn to call over

operating Thank you, environment will businesses. due results morning, results for of the on outlook, and Life each current for and Today, comments COVID-XX then briefly our discuss and good everyone. in Peter, quarter to I our first changes overall and Retirement our the

returns, back in decrease of deferred market variable equity XXXX. the higher first saw and for million was higher $XXX common quarter pre-tax reserves adjusted compared Retirement strong income the the Adjusted The main resulted million and Life recovery on quarter primarily acquisition by adjusted $XXX amortization in million. market delivered driver $XXX attributed million of to of we and with year-over-year, pre-tax cost decreased at X.X%. March the equity $XXX annuity which stress significant of market of return recorded in primarily income lower due

group compression spreads from individual continued interest $XXX the spread credit fair million and in lower returns generated value bonds lines. environment low resulted option retirement widening Also, our product rate across and of

that pleased the program related gains Lastly, to collateral. the of movements response in view our experienced in and cash I as economic generating hedge market to our exceeding stress liability the report in performed am March, expected

basis in our spread market XX sensitivity, of expect of limits context environment to compression portfolio the across whole held call the last of quarter's to points the on today, earnings see our sensitivities base generally Based eight approximately volatility, the we Recognizing annually. on first especially continue we provided up.

reinvestment from However, generate margins assets higher profitable attract wider slowing credit off spreads. risk-adjusted portfolio of opportunities business the spreads and should to benefit should the credit new as

our point the respectively as change minus market first our increase of by income We approximately or $XX to X% in sensitivities to to have sheet market adjusted $X decrease and the equity million balance estimates to returns XX-year a annually. expect XX $XX a pretax updated earnings increase plus to reflect end or or respectively in of treasury movement million by million annually million $XX would rates quarter. decrease of minus or We approximately basis plus

and sensitivities our These not sensitivity investment factors. fair income impact market It well and by movements immediate as since and exact ranges as of fact of as option are well market securities that the important linear degree also other as reserves, other value movements is items. are nor on note these to assume the impacted earnings timing

conditions that equity quarter be by to a April, benefits offset investments for to immediate quarter may there began on improve one are continue are that slightly in improve, although lower the reported but be private these should conditions in expect benefits Market back lag. to returns can reserves one second in likely

Despite both challenging well and created, XXX%, COVID-XX our capital for first strong reserve quarter as our annuity and be the sheet ratio as impacts balance currently capital the program. variable fleet our to and we between of risk-based including reform XXX% is the environment estimate hedging

sensitive ratio through did reach in be they testing Market Our COVID-XX, nature not COVID-XX the balance while our stress the will to the stress first as from severe to in risk-based flow our sheet throughout modeled year. capital impacts due scenarios. quarter

with foreseeable industry to of the we us lower position provide advantage. to due unique competitive expect our continues impacts Although leadership overall COVID-XX, from future a levels sales for

not-for-profit insurance, and markets. plan across We term permanent institutional a have markets fixed position and index and annuities, retirement life broad variable

economic approach dependent type us product allows the standing product future long pricing respect channel, of one development are to or regardless any We with which distribution our on and to not disciplined environment. maintain

conditions efforts marketing needs Over to redirect many years, we product to pricing have market change. from type ability our and another one as proven our

have diverse associated in-force not and living significant long-term for risks portfolio that pre-XXXX large benefits a with have care. does the also We

care has long-term small remaining very block Our of to been reinsured quarter business two.

this presence levels attractive spread capital broad deploy position opportunities arise market well capital to strong in widening us Our and environment. as potential

Now, operations I'd on few last months. touch like to the over our

As procedures sponsors, support to distribution partner and our support Peter to the our with model, a the our we're remote our quickly meeting, successfully policies, of needs plant controls of we transitioned noted, working adapted we e-signature regulators customers firms have investments of enhance have individual service taking tools. enhanced and we Also, capabilities us digital served as more customers. self our to are well many advantage made

We've address responsive period premium changes some in also hardship such Act. faced customers, very the been extending adopting our requirement the to of payments the the by for meeting financial as of grace Cares and

meetings professionals and virtual sales webinars Our and with thousands conducted management to from customers. of and such and shifted educational quickly producers have meetings our relationship face-to-face

first results. Turning financial quarter to our

As and Retirement of from with movements. individual businesses short-term mentioned, Life adjusted drivers and in pre-tax primary portal impacts market the income decline the significant retirement group our to

as maintained individual are only period. retirement, due and deposits top pricing late significantly lower the annuities widen dropped spreads Treasury discipline we results rates beginning to primarily decreased throughout quarter fail, credit with to As line our premiums fixed the to in the as

Our remain but again variable grew we sales. sales annuity index annuity strong,

net fixed Lower resulted annuities. in total flows of for individual annuities negative sales

driven by individual as due For sales premiums lower to uncertain well product acquisitions, group decreased deposits retirement, environment. reduced group and the new as

would to plan providers, year-over-year, may reduce change improved surrenders. plan acquisitions, In which group due but group fewer retention. flows new this primarily uncertainty, period to support we sponsors lower Net of expect

deposits business, increased due to and higher Life total Insurance premiums international our For premiums.

reserve be quarter first favorable Our to trends overall to mortality reflect IBNR assumptions to and the pricing fluidity strengthening modest included a continued of COVID-XX. the

to expecting some and are of mortality incremental to not manageable experience any rates overall the may context in incremental expect our balance impacts we acceleration, sheet. we impacts Although large be

to business we new remain continued activity risk arises businesses. as on capacity focused For and and to transfer have markets, institutional be institutional We opportunities the and asset well-positioned. continues participate to the have base this other pension and grow in our earnings,

our available customers, and sponsors we despite partners. challenging times, plan serve remain distribution close, these To to

in as committed are distribution their our evolve. broad our product to footprint mobilizing expertise We ways stakeholders to further serve needs and new

the retirement meeting We will protection, savings to and focus and income attractive capital opportunities continue lifetime needs to on deploy solutions. for most ever-growing

Now, Mark. I it over will turn to

Thank you, Kevin.

summary where sit. first like providing Before perspective to I'd COVID-XX quarter, I give about comments the from

this First, economic length crisis, and scope, crisis, which and unprecedented of is in health associated into quickly financial evolves depth an uncertainty impact.

simultaneously both most impacted and sides insurance thereby event marginally ongoing this balance correlated. of sheet, disruptions liabilities the underlying investment nullifying that has Additionally, assets are

As it's quarter advance forecast a alone a longer. one result, extremely year difficult full to let in

However, parent and and reiterate I crisis, augment next, our portfolio. When including billion positioned credit is as revolving our drawdown The the imperative. situation liquidity Brian liquidity us positioned a subsidiary facility. perspective with capital to current strong from took an also view to want crisis it capital as prudent to and evolving strength partial the on financially suddenly that AIG our strongly investment capital entering a both liquidity what of was come already could we was mid-March and noted, well and $X.X today, thought hold markets in not knowing causes

our near-term the significant will about of We precautionary later the as a the at impacts quarter measure these management an update on and in COVID-XX. I did provide remarks after I capital results. position review liquidity this given solely time, our uncertainty plans first

So ex-CAT as accident quarter. in XX.X% compared this share Peter XXXX earnings ratio continued combined operating per the quarter $X.XX first result of within with the adjusted Contained of General share a XXXX. per after-tax noted. Insurance to improvement the year is turning first diluted AIG $X.XX reported to of

value, lesser results including impact with impacts operations and quarter indirect COVID-XX, a on core direct related First book the reflect net and to APTI. market income impact investment on

best estimate, COVID March XX. General reflects our reserve Peter through Insurance discussed, the losses the occurring

tangible per adjusted last value first year-end. share core XX% year AIG's performance X.X% per increased tangible value XX, improvement measurement a and of The AIG's since the It's notable year. increased X.X%, nearly also the which book that share over adjusted one increased book quarter, share both since is March per value adjusted operating book in better believe ago, we

of share, both with per of which the adjusted Book first an first we first down investment this DTA, saw income down basis, AOCI significant year. changes quarter, the quarter change even was or were income, tangible billion, and book NII, flat in $X.X value quarter In AOCI XXXX. the net value and approximately year-over-year, of pre-tax in the virtually include on billion $X from the approximately

in first that the distorted to Recall included of the due quarter-over-quarter as following quarter comparison. March, the XXXX volatility downturn experienced in significant significant of this quarter gains quarter the year's a fourth XXXX COVID-XX first that resulting occurred losses in

some current our spend been published about its composition. information reports global understand environment, it's many portfolio. time peers or multi-line incorrect compared unique into in have taking generally, account I the to to global Several consolidated that our use on our want think P&C In to and investment U.S. Because assumptions I important the insurer. position or cases, as industry portfolio. our composite without global has a or Life been portfolio

above-average of get addition, risk, some portfolio which risk some terms is our In we'll has below the average portfolio and inherent not is that. Instead, believe believe of simply into we our case. in

not a led this to created took in total to In has on above basis. prior accounting the relating but confusion, specific line volatility addition, does some certain accounting years elections volatility, return impact AIG AIG which securities have

we beyond and have financial Legacy supplement, in composition. XX our General of or distribution asset and To you Insurance, complexities and expansion pages regarding there and significant find and questions the On characteristics. quality the our disclosure will comments segment we've XX industry provided into much disclosure portfolio these including address our and many credit Life Retirement through a portfolio, more received,

had XXst, securities, during is can March available some comments billion Doug XX% and for Brian investable a but our questions represents help $XXX portfolio give Officer, and As mentioned, Chief Insurance's XX% of of This portfolio. now. follow-up XX% At I'll asset about fixed General Dachille, Q&A, AIG income Investment high-level Retirement. address Life which sale portfolio

X.X% funds. roughly the in investments, or mortgage option X% in estate less XX% is loans, security in of value X% fair FVO investment, real other fixed addition, and X.X% in invested approximately in income In private X.X% about short-term in is than hedge securities is portfolio and equity,

held fixed fixed FVO the to that roughly recognize It's maturity had income in of sales than available historically are legacy. portfolio, though is securities important has higher which to XX% volatility

up Notably, Life and X.X% Retirement. and the only portfolio FVO X.X% General of Insurance's portfolio makes of

volatility RMBS investment Our be into or historical modified credit previously be statement move impaired mark-to-market or legacy mostly that election and the accounting above income were non-agency changed our within FVO net line changed on cannot income.

For volatility sale such securities, available AOCI. be for line in below would the

treatment As see is would volatility. relative puts statement where which volatility into more AOCI, income to this by NII volatility one ordinarily the accounting less a FVO with in expect result, our

manages is when Financial you look irrelevant at statement how investment is portfolio. to our when which NII, examining geography it return, our is but important total AIG's function note

approximately Over the with this totaling securities, last seen XXXX. four-plus portfolio these end has reductions XX% years, year and Doug funds, material in more in of FVO and its investment since can AIG CDOs, hedge is in drop which $XX significant de-risking billion, asset life address detail, settlement, classes a

markets The has Additionally, in a below volatility has direct and investment very the only of impact equity even our just on X.X% AIG's the the a income line. is minimal portfolio representing small that exposure, portfolio. equity

XX $X difference this which a the This quality they investment Most page still billion RBC X supplement, plus because these below is rating significant the FVO will securities and and evaluated and category, also highest basis, is the is agency grade. even strengthen fall the credit view. levels had can the between of one assets financial we and if an which valuation on NAIC levels they rated have notch, of On will NAIC you RBC designation see be important investment-grade NAIC. the subsidiary rating by because non-agency of office RMBS sustain securities view

from legacy investment-grade However, securities so the still below information, status. perspective, securities re-rated rating retains their these have agencies current with not

asset our page corporate investment $XXX $XXX on is of AAA, of debt, of to by billion grade. a XX% overall of on is such note XX, rated have million is page financial and A-rated market, nearly is supplement total, When this we superior expanded or is XX% rating. which examining XX% BBB-rated. XX And the summarized distribution that Compared the beginning AA and investment-grade

not debt is below assume of lower may investment than I which out portfolio corporate magnitude this portfolio, our viewing the of mirrors average, grade, portfolio; because is AIG's some given when average XX% investment industry wanted the the to that the Similarly, which the entire is point XX%. much case. market

and gains we This fixed to credit and $XXX million included realized losses in $XX first from respect CECL $XXX which are With million losses. impacts about credit NII, million quarter, approximately in not in of and recognized the securities stems income loans. in

Now turning to the operating segment.

attributed that Kevin loss add the point with early million hit the their X.X storm results few for a related that points augment X.X I system $XXX and ratio quarter million As total CAT $XXX the million CAT COVID-XX detail, other largest represents that or to or comments. of the of financial points in reserves March. I'd Insurance, which Nashville General ratio ratio will tornado loss was Peter events, out their $XXX to just being discuss remarks X.X and in loss

year deferred favorable million the of On the includes Excluding ADC of basis, quarter North lines. million mostly development $XX the from development, which was $XX representing amortization million catalog. first of of deadlines, Insurance international pre-ADC many million in gain. from of in million COVID-XX, favorable across underwriting product there minimal generated income, unfavorable by emanated offset $X development, General $XXX non-COVID a favorable largely which net with net of the million was Prior America, from shorter $XX $XX a

correspondingly that balance TDS We will year, risk discussed, set Peter anticipate distributed therefore, net premiums XXXX reduce. innovative and and premiums providers. for the as quarter second Lastly, concentration alter the will risk favorably will an the of and capital over of Syndicate is AIG's profile original across as expectations, increase structure XXXX in

net the net the it as subject cover the catastrophe worth Beginning today. fraction to program in a for that will million second is premiums earned premium high XXXX, were a net that expectations however, approximately result. for in reduced million exposure original project be approximately $XXX CAT will high be costs written worth since quarter year XXXX by the of from decrease $XXX and We AIG down what will net

for So income the approximately XXXX, accretive post and and underwriting thereafter. result for pre anticipate to the high underwriting net XXXX become worth same we then unit,

Turning to $XXX year. from -- in capital pension March, markets loss driven in quarter adjusted to risk add first premium was in corresponding a would quarter, volatility saw just million due a million reduction last benefited which pretax that markets we the down Legacy, and Life a bit of approximately I by April. in $XXX transfer abated, Retirement, from albeit in the NII quarter as institutional mentioned,

we recognized which definitive in of to sale Fortitude XX, or to will that loss a all set transaction. with closing the As year economic be of as last upon be XXXX, net on to December agreement signed means the subsequent up a the income the XXXX, sell gain reminder, or closing included through year-end sale

on it to course and benefited performed from early approval closing expected, has that Fortitude in towards transactions continue strategic ratios subject as capital We noteworthy a since also and unchanged regulatory midyear virtually that fact, is remain XXXX. health hedging

simplified you other of identify Next, quarter's financial moving on drivers operations, of pages and presentation I revised discussed that last to will and helps to the XX APTI. supplement, as on earnings call, key XX see a

which be provided help. also internal by difficult due the income mostly Our investment to for gross-up APTI and GOE. previous We which increased understand on this simplified part expense of volatile, disclosures other items, income and segment should and and that services, in to activity, could

GOE $X that IT $XXX and referenced, As grants million. remote totaling quarter's COVID-XX this costs for other of included of access the magnitude, Brian million operations employee million $XX

have $XXX only Excluding that, other operations been million. GOE would

first the adjusted quarters by declines price for spot from had core quarter. tax, plus versus than quarter, differences, recent items we tax higher prior grant to due of impact, date dominated $XX delivery additional XX% to date million by on value pretax compensation income Turning first a rate share-based reflecting a resulting during the

believe capital environment. At this and had capital parent XXXX in the US billion are General priority paramount uncertain RBC liquidity Insurance's Life XXX% AIG strength pool and and we and operating XXX%. at at of at liquidity that economic XXXX, resources, fleet liquidity for to for the finished and Turning year-end subsidiary $X.X ratios Retirement

to from debt aided the share stock quarter, repurchases equity repurchased our bond call $XXX During million count our of promotion and of compensation million closed first advanced. leverage dilution the and most ratio. we offset $XXX helped stemming Share

the XX, Retirement. in March my AIG that as and $X.X revolver similar billion of As remarks both as and from liquidity $X.X billion Life a draw Insurance our well strong current had liquidity, of General referenced in earlier I including

success and in Blackboard. to the hedging to our program; AIG turning XXX, that there of second items the line would first would be quarter were Before two the I below First, the like highlight:

line value. the result rate is non-performance that basis, should roughly segment equity by was the equity legacy volatile the our It variable Retirement aided highly and upon gain $X.X though a program, as during and games GAAP preserve be quarter markets. or to interest on depending and within risk were clearly and first book of hedging Life which of ebbs direct the noted annuity value this rates hedging Turning reversible for benefits adjustment, that impact, fair NPA, reflected within and billion realized a first successful

a year. market been made strategic starting but GOE that in we'll AIG with March, condition. recorded to has tech was of current million insured end second $XX this quarter, which in operations, light startup the of in at historically quarter the Secondly, of decision Blackboard's our discontinue Blackboard, the internal cease other

decision, business included APTI. this not an million $XXX after-tax with approximate Associated charge, we recorded in

response in operational in to XXXX. Pivoting to in annualized as result XXX, transformation GOE billion COVID-XX. to an plans AIG $X.X rate We we expect strategic of noted, that billion run to savings three-year Peter continue still our achieve refine year-end by this costs $X will

other perspective, well XXXX. a its impact give million provide the associated achieve, will below professional charges as spending will and recorded Let of below first make walk restructuring mostly as AIG track. on all costs quick XXX three-year and and line not which From to then These a the of will as resources aside involve services. internal I'll be to capitalized dedicated first $XXX be reporting employee-related line, straightforward that you costs, APTI, the me just from in review pre-tax the costs, quarter it

its to in immediately investment $XXX expensed processes, Capitalized annual capitalized associated cash, of on each where workflow our before based the rate systems, income through included represent investments run billion, interfaces, million impact conversions amortization $XXX integrated investments. not the expect but will portion would costs are of development, expense the mostly $X then in life which statement. of be an we principles. that accounting our by useful GOE according savings XXXX, these and annual capitalized have Instead, tax, rate, year-end and million amortized a on in Hence, total the amortization run including will is be goal of data

in Peter's company 'cash uncertain turn and means that control Overall, are leadership, years, can for reconfirm towards this and governing acknowledging timing somewhat next that key world, AIG we Under via three total the plans drive let's expect the XXX scope So change. scope and we milestone of what this a at holding tollgate cost, cost' confirm $X.X achievements. structured checkpoints billion. of

in Of eight on is to in amounts, these and page $XXX amortization will $XXX the still results this with expected of shown approximately financial GOE. be being reviewed XXXX $XXX million due XXXX, $XXX As XXXX. million in of million slide, in later COVID-XX capitalized although into million impact; XXXX

line $XXX combination will tax. result $XXX before million. charge And The in line a in $XXX XXXX, these with roughly charge below below be capitalized, to line charge a million the below finally, of about be with million Then of $XXX million. projected about will million of the XXXX, the $XXX two capitalized of a

average there. the be seven-year XXXX, between million unamortized tax; assumptions a about through on zero year bit will in million schedule about capitalized calendar at then $XX to to assets GOE project to to million into year and $XX trailing when we should amortized on be our with $XX for completion in and off depreciation in depreciation XXXX. development; in rising before per be placed $XXX be in as will current in of useful be projected from XXXX life the a service, about $XX Based XXXX, in million XXXX $XXX the million million $XX still by expect balance life, XXXX million year-end Based and included

from to charge actions. the restructuring about the and a balance quarter had XXXX, which $XX of of we million below line, first related in million AIG other $XX the Finally, XXX

forward, Going costs. restructuring XXX charges will AIG reflect primarily

$XX $XX basis, million rate expense by benefit savings, will run had to year-end plan annualized run savings, of translate which to is on GOE this rate $XXX quarter million million Relative part the which an of XXXX.

the but ahead, share due as do significant fronts we capital of debt shifting to do this additional or we repurchases in Now and the impact many on foreseeable to uncertainty reassess future, plan to will management light for looking reduction COVID-XX, not actions COVID-XX stabilize.

our given since to March, debt markets capital and the plan. However, in we stability and reevaluating are improved access capital

While is reducing a below strong maintaining our goal, debt is priority term, leverage operating liquidity. near and to term XX% in the or capitalization, minimum financial flexibility

additional to debt upcoming As volatility we options considering economic are well near-term a in of XXXX as maturities generate in term. medium liquidity result, ongoing light as in and the

year-end, attractive. coupons Although are widened spreads since have all-in

footprint is depth than the significant our year, market operating global taking was COVID-XX, of created into until capital we prudent to it the to uncertainty think regulatory by evaluate well original our around debt opportunities capital near which different later account and Given in as term in COVID-XX. the rather as the prior global plan regimes, waiting and recession duration

and certainly from two while and initiatives. impacted changed strength fast world. this some reflecting first In entered in pricing, and caused plans. strong GI AIG months quarter back, investment operating our us the of first benefited COVID-XX has crisis of everyday momentum the everyone's recalibrate from in March, incredibly dramatically position return Lastly, and spread to it a us

strong has portfolio more greater resilient with and management across is than risk organization. been and the ever leadership it AIG

storm weather the able with in to look term. and are being in to in hopefully, engage ability again to forward near you confident We person, this our

to I back that, it turn will Brian. With

Mark. Thanks, portion. the for Abby, think Q&A I we're ready

get started and us move first. us please let So

Thank question from Fargo. Wells will you. take Elyse [Operator Fargo. Instructions] with Wells Greenspan our And we first

you of those the losses in trying reserves see sub-units. small contain prepared that your fraction policies remarks, My within just morning. policies have could small you diseases your a COVID that get you think up and Good do you Thanks. losses first for sense where I'm a infectious question, commercial set have of policies in your mentioned to those first quarter? coverage property guys

take I Peter. Peter, Okay. Elyse, that, think please? question you would a for that's

Brian. at you and warnings. more clients portfolio, detail. me bit I let and of look of top-down our bottom-up nature that it we the do scope segmentation, have a that our very terms you first just the but some process in as in property global through have we size we Yeah. policy Sure, did our Yes, manuscript go Elyse, when commercial the of thoroughly outlined Hi, give little did the quarter,

clear opening damage the business policies there's commercial As the in loss and standard in require majority exclusions remarks, said industry. fairly of standard my operations. also These viruses, the impact the direct insurance or do contain that it's that property policies physical for overwhelming I

these to covered. is As policies, COVID not

So point that's one.

in write affirmative do communicable in requirement But result by coverage it's those for in we only a pursuant, coverage caused are There be disease also where limited on And in would the instances government closure often diseases. presence that there and specified only physical have very strict there's itself. for we an even that cases, event a supplemented guidelines a diseases. that underwriting basis, of

context of X% than So just again, XXX% sub-limits in clear. well total it's about of some our commercial what talking policy. less is aggregate limits of that give to you to I'm our in terms property our And fairly

basis, on and have really property a risk And we basis. aggregates have portion we to reduced per we prepared frequency attachment also note I attach just exposure. small So would reinsurance, in per volatility occurrence regional, a severity points have that on basis of mentioned low global comprehensive overall on that's the remarks, it's my I whether it's very a property a that

detail. I the So long answer, the for sorry get to but important think into it's

Thank you, Peter.

Next question

Evercore. from We will Gallagher our next question Tom with take

Mark, with time sense any Good leverage the the you sense you plan that higher rating reaction think their higher your now? being, mentioned current to the I agencies on Have for environment. morning. given makes the which gotten debt on for running from

is that cost billion investment there? transferred expect to The impairment that But then the billion XQ, alternative on of one Appreciate legacy. all with string the in of Would related like question sorry investments, real And or to invested $XX accounting on then it is resale? of be just Fortitude buffer $X.X And question, then most a $X.X should billion of we the portfolio. the follow-up assets, you the disclosure historical looks there. with of some kind that expect just any in estate here. there for there be other

Mark, the Listen, debt. have talk to then portfolio wanted Tom. question. on don't going the you Okay, over why take we investment Doug to And I'm to about ask

So Mark, why don't first? you go

that to Thank agencies. you, Brian, and well. to yes, I will we've the regards do as With rating debt, spoken

with conversation on to strong had as investment future, supportive talk discussions we with course, turn the them conversations And we With In will be and to the fact, about very questions. I may of in with it and as fact, a we them. good Doug matter of contemplate, well. them this that, in drawdown, were in revolver to involve over

of the basically which financial Thank and legacy would in to there's also the you billion the detail. goes our part which And financials, refer supplement, I XX you, the robust which sale of through page in be know, as we are pretty Mark addition, segment Fortitude. in approximately $XX morning. and that in you Well, good held are segment assets to assets, going to related of that disclosed

of of financial that part we’ll the that legacy. The that will some fair will value real be also will some There legacy estate bonds be were there portions are old be be in be option retaining investment products investments that part direct we'll retained that retaining, book.

not will the transaction. be of sale part those So

will know acceleration part of you in estate, only the and over a the of with real But as material experienced to amount you know, month respect as respect sale the situation. Fortitude. With of of emergence $XX billion of you the development March separating be -- be, of we the the as COVID – assets rapid will the

of the So we're still impact. analyzing midst in the

and And to determine be I noted that estate real both portfolio very real international diverse. be what But our think the will portfolio. should our impact is domestic It early exposures. includes estate on it's it

learn go more impact on. the as So we'll things

learning loan estate is most about on obviously mortgage the we're commercial I think where real our side. the

So work real estate directly. those some the that's team team very market. where in And And into very, real going what's closely at insight the managed of estate commercial with getting real the AIG. those investments we're teams, equity mortgage on all loan are

still level that great have to happen. on line to in sight but what's early what's to So of it's we really determine market, – of sight going going

thanks Okay, Doug.

the get question we don’t why So, next then.

next our with take will We Sachs. question Kinar Yaron Goldman from

opening comments. return Hi, good the for just on I the to helpful XXXX guidance. morning rate and thanks everybody removal of with question start the very exit one want

make want and it mean it Just does XXXX? you it does what into or sure impact COVID see Does the what I perspective to continue that not could well from understand mean? your linger

to of COVID Well, that. difficult much down let take mean, don't knows? really there it quarters. It's to Who a how in impact it's XXXX. know if an quarterly go earnings. me And reemerge, is predictability will does predict question I whether you

if can't predict several a to try So years. don't you to quarter, predict want or the year I

strong work that last improvement. on. company very what continued years, to done has the important We're underlying note, of and GI. has show his it's been to the X though, the GI Peter think very, that over power continued in Good I have remains. the team

believe, that COVID are – returns improve. talking you going to pick if we the about, a for second, I So to continue the were out certainly, you if

on. is, we're And so on still that trajectory we're

impact company the again, event power and the have a I event, basis. would is long-term a Now think there. think of COVID COVID But the we L&R on you short-term certainly

an point. that So insurance the largest it's that industry, in COVID believe already the terms side, in it it side It and on effect event improving. that but And will market P&C a General for large. GI inflection the I improving that told been we've taker. in the -- it conditions I -- be the will was itself, be turning. was you we'll were rates risk And see Insurance, is

to going an to point. be This prove COVID inflection is

done and strong one; the has be strong that have been have with side risk of that companies on we've So, management, companies they're now, we companies right we with sheet, managed, one; to well balance going that.

we and feel can very is COVID so comes handle But impossible. believe with we just anything quarter-to-quarter And predicting strong. we that

I that helps. hope So,

Yes, it does.

question. Next

the capital not question COVID-related, but particular having industry's the So, history. largest from on large losses here? about my from in is And would being lines also that activity? about maybe losses markets talk you you when coming what foresee directly you'd P&C follow-up that event maybe L&R, expect COVID Can you the maybe catastrophe talk proportion in of very

about have let talk and talk in Well, what P&C the see I'll I'm Peter about going L&R. we to side, Kevin then

So, Peter, do you want that about to talk first?

quite Thank D&O M&A, that mentioned liability. a lines other few know Brian. could we quarter, were lines travel, first referring activity, A&H, We about workers' when whether some We Sure. compensation. the it's about to don't have you, to think

the we to very still have think we'll a very we and that watching the could consistent all we're have that an looking We and tell is it know you ongoing, a through. be add before, have thorough very We is certain way can at line impact. making process But carefully what rare. to which been is CAT any that I Brian's comments

we things as to will So, and that. adapt emerge develop,

updated we see and on looking think we to what said, we a great still is there's transpire everybody have But going, And have this I process, left two lines in where of will lines the even emerge. multiple keep geography we business of they as the and every It's keep everybody at great the have business. we're future. across and a impact process, quarter. we because But as global in will hard CAT months

Kevin, on L&R?

Thanks. Yes.

X around pricing. of pieces, really just then maybe reminder So, mortalities and in I'll address the a it markets

the there some quarter last the what we've delays below in trend we that pricing, the continues notice related period, of mortality certain first did had that reported the the was our in for So, documentations. were years. which generally two-plus reporting, later is But issuance in

So, we IBNR reporting. really just modest put running up for the

in do As circumstances expect ahead, evolve. additional there behaviors second and the and how mortality we third that we upon quarter, look be the will depending

XXXX, us? there impacts what we significant sheet leave adverse expect and but could to that overall expect be for the expect on balance mortality some does some we based where So, know, factors. We see don't to offsetting some

reduced ultimately market go expected reflect back. portfolio, immediately mean, fee The that move, reduces of In terms the It I that impact is and on the particularly there's the effects, when markets our when actually is, in and options. SOP credit additional things. to we our overall profits annuities down, future X fair the also look, reality emerges which future. spreads, all two immediate reserve they X when equity income, see as have in in the particularly serves reserves, we increase to changes value

product rates what not on is and is effects current how spreads, leads and to treasury investor pricing the But the price pace those So base yield thing, market certainly, all-time only are also that which based are about to our at rates where expectations is but two shape do we where curve of lows, is ability And short-term reversible. to and feel credit third are. where And the -- pricing. appetites are.

how it's it we're that that on environment, in price long-term and on we to sales but be to resolves. what expectations future able environment, the anticipate And power is based disruptions there's Certainly, have. the the to still the going difficult so

perspectives the the environment. on of three and Retirement those Life potential have are So earnings long-term the I

I'd of comments add Peter's business, like he workers' there, Yaron, mentioned thing one to comp. just about And lines certain

workers' over finds years. probably X in remember that AIG sensitive think X, has the And mostly north average is have last de-risked compensation important business now million. loss AIG it's of related deductibles itself to I $X which where that significantly, programs,

parcel think penetrate state, to to falls has the really all determined temporary, permanent you to debt major comp about area, work by a that's be statutorily going that it. It away. standard when a So and in medical be deductible, underneath that's

is book positioned we're think I the So what talking here. given well about

of think a Yes. there's in COVID to number yes, coming been comp, Peter have a but, And in mentioned I and just you but earlier, otherwise. one the other piece that claims on claims this there decline in, coming are recognize

seen be to worker So has of the concept. it remains net what the effect COVID on

Abby, let’s to next something an With keep that's on. go question. So to the that, eye

take question Morgan Michael from will with next Stanley. our Phillips We

on the to near-term maybe profitability you. you morning. core year? General and how expected, want touch economy continued underwriting Good I how your and affect plan given profitability the drops think comments for might this the Insurance Thank remainder about that of of on exposure in improvement impact

Michael, well, Peter. that's Okay.

So you do why don't Peter, that?

close you we're M&A we travel in be Okay. that form a aerospace, Having of that lines paying I all mentioned mean, where some off I captive. that very you mentioned some of are economic marine remember in the of on and over SIR certainly generated to our segmentation our would that from in going for business be there's portfolio, quarter. Thank headwinds the are some and workers' the meaningful fall businesses of demographic falloff compensation. second funded and loss, of attention to could prior by We that be affected think the watching the COVID-XX. is I but said areas would to XX% either of got energy, deductible question. question in for them or

direct And terms There off will though a ratable on be but basis. some, don't sales, in because much of it the be we excess auto of more rated correlation, exposure have not we so headwind have modest it's that a direct is as payroll, And will an we a premium. do not think it even generates therefore, is premium will reduction. done

We adjust terms have we excess premium. how different factors in of

So we just don't pronounced. going as to be think it's

increasing, workers' those drop on commensurate a compensation, COVID a our mentioned It's are seeing are while losses that Brian in but frequency. the an we're decrease observation yet, not retaining dropping. that, in trend clients losses it's are where

that basis excess So there's business affect. premium other to repositioning will on as going some attach there's we areas for lines as portfolio, We of growth. at our said, the I of an where commensurate be and we look opportunities

growth. for select repositioned will have the that can give leadership in also us are, position portfolio, the and some we we that demonstrate where AIG like think opportunities the As we marketplace

Michael, anything Thanks. else?

you, Thank it. it. That’s No. Peter. Appreciate

Abby, Michael, question. Okay. next Thanks,

our Paul We with from Piper question Newsome will Sandler. next take

have of Good the loss concerned you morning. reinsurance Thanks more Could a that property. you talk – that Totalbank versus a a the everyone. loss with loss in call about than loss. the little how liability protect catastrophe for could you liability-type CAT from property I'm seems big the the

simple excess loss to think is all I cash size. can't is but liability we recall properties, I feel

So I terms don't know in to with regard of coverage [indiscernible]?

Okay.

our in you talk want us So Paul, COVID reinsurance program? a to versus about

instead Yes. was If loss? loss property liability a of a COVID

Yes.

I that's Peter, you again. Well, Okay. guess,

Paul. Brian Thanks, and

outlined said reduced and program volatility I had So that property our we significantly.

limits. On significant we've net building actually retain time significantly a gross program even limits over as to done reduce think put so limits side, the that the been we've AIG and well as more. I used within out we the that We liability

on did quota on basis share. and of loss we also an excess that also And a

an on So the we XXX% example, have we have would limit, as our above less on a limit share we a XX% plus general probably, have on retention million. policy, first liability reinsurance depending than that quota $XX

issue multi significant you $XX the have have – $XX policy, we a policy, So and between million. million if net a sized is

So as of the excess on quota we share loss. protection as the have well significant actually

in. just me let Paul, along his reinsurance a and is tremendous Look, put and So solid, to Peter jump together. done has that team with our good job

of with. defense way manage is we to Our portfolio our the start first-line

rely to can't is. than make better a portfolio you it on reinsurance so And

work, limits feel that vis-à-vis about and that's along a impact and situation tremendous attachment selection, as amount lines points unfold. – of the our confident done business we've pricing will COVID casualty those all the impacts and property o we of management, risk where very

I just add So that. want to

another anything did Paul, else? have So – you

me. for Thanks for very you the much. it That’s answer and thank No.

Okay.

You’re you. welcome, Paul. Thank

Abby? question, Next

is Autonomous with next Research. question Our from Ryan Tunis

Yes. Good BI of of total limit. for I said Q&A. that the There's somewhat confirm in a thanks. might notional Hey, X% could big you But some get, I morning. Peter just like roughly? earlier sounds of number to that wanted coverage that, property affirmative guess, be

said one. Well, Peter, I ahead. go

go Peter, ahead.

to not that would the gross I Sorry, our of permanent have, was, and our total limits trigger Ryan. previous we provided What I my that the that than was said limits. X% coverage. property that that well in that triggers have on I sublimits again, a said is of less that a answer limits when you which outlined bunch What compare affirmative, coverage those we

that that claims that, terms the limits, just It's suggesting that's confirm what So, in insured-by-insured than for again, goes adjudicating not amount. of on then coverage losses. or it what that there and have X%. that is less And are we well I'm we it's we case-by-case,

business go. add talked through, ever of through, this Ryan, in that in we lot we Yes. about things a come they anything first trying quarter. me tell I've the they is, of as I've that something long been occurring you And and went seen. seen loss. the I as that losses years. Peter assess just a went seen to process through, time, here. difficulties process to went let that XX-plus I've I've that evaluating – the in it's have And good

through They everything looked every bit of was the to potential have it whether evaluated would reason where was post done. They portfolio. gone was, reserve, and a be at there there it if the

everything everybody happened that So that understands I we make conservative to that, in are for everything first want there. just that, quarter. we believe appropriate, the sure that albeit that the have posted happened reserve

yes. Yes,

what reinsurance? So look interruption, respond the And could about basis might how you just loss on that book? growth also, Thanks. number, within million bit net seeing a talk you're just little losses the does business $XXX Validus like a of

again. you Okay. Peter, that's Well,

on, the gross same up of thought what look put Re, and have process was and quarter. our AIG estimate Okay. the in taken gone net at we've based best seat-by-seat we first With Validus a for that we core outlined exposures the the again,

the as In an terms the terms what of not net to I've we the going is, reinsurance into could But with net the some the that structures look, again, were of what reinsurance. growth, go I'm were is in detail over to time. grow great outlined apply outlined the thought that event I there's I meaningful mean, IBNR. loss still loss versus growth in evolving

Thanks, Okay. next Abby, the go let’s question. to Ryan.

from with KBW. next will Shields We our question take Meyer

to mind no non but given for it no circle coverage, soft there decision related property is How exclusion, seems question, about of be top would saying think little virus investors. damage but of qualify? a that commercial lot of Thanks. This where a bit of is should apparent court some we

technical can Well, Peter, question, it's a do this? you

that comment and Hey Meyer. really outlined is question we where have granted exclusions can coverage, hard because very I do think demographics have It's that hypothetical. and it we of that we a only it's again, and the policies the think, The affirmative really I thing on specific. to answer it's, we where

And so, it applies our I think don't it's portfolio. hard that to really answer to because

I there? maybe unrelated guess, fair, I would better Am international assuming, shelter results personal in expected That's in international order. lines, Okay. missing question. I something have place an

lines, Peter? personal International

a on portfolio, It's in Yeah. XXXX had What, the we doing it been but what had and you've we the happened the in as international put earned impacted runoff did anomaly, lines? we that not personal premium much basically as an into underwriting earned program, still runoff so re again premium, commercial. was of not in XXXX that as

lost little of a just We've premium. bit

in held putting but an new areas that very of the real personal is perhaps right ratios, accident in. all platform and the very much them opportunities performance international absolute particularly they We are strong. direction, the so, like like And there's for and an discrete growth, look in going some across, think not the digital A&H book we're

in is runoff of that trend of read the Meyer. just, impact wouldn't a I So a terms into of business.

Okay. Thanks.

Thanks Peter. Meyer. Thanks

to Let's question. next the go

I think

from is next question Our Brian UBS. with Meredith

thanks. Yeah,

to you. Peter I'll it. We're for going Brian, one on have So, this

of the having both the the lights Given general as you've actually businesses, same at in life the well of the seen on TMT rethinking all rationale the the as strategic operation you're wondering insurance company? business COVID-XX in I'm if impact church

guess, Well, continue that's, so is you continually we I to my point. that's that. better have. Brian, this sense? thinking that structure know, where always with comfortable I at do We're to the we think to that And different job continues, Would in structure? my about, we Does be it think I a is -- make are, but job

There with and now comfortable at about two think looking that, keep that. that would about. think I reasons to there I'll together Right continue there. those we, nothing are we'll still why I but So it. were these is we're talk belong two But always

question, Brian? other Any

of Yeah, about one the here. this it. one I'm just is quick just thinking

had year? it largest well inch probably be we well the at think end $X cash if talking Ultimately, us lost the AIG going kind given potential each truly cash I -- the billion losses, for loss is of There's north $X of billion are largest over the you this day, guys. So about ever, of a with coverage, ever? back, last to of industry we if

limits there's been not reinsurance we're much I Well, the that de-risking we a event. all in profiles company and not able to change and We're done, where the management, us look company the we've complete, it, at improved risk, -- put us the an look Brian. we lead the we are withstand then, the stronger position were a at

want do it's that out do so point some people And because who I will process an believe event emerge this creating I the won't. were be the this understand well some and we and there in point going that before. to largest industry. to is going But -- inflection are We're in stronger that in we event that to through well demand than more this we're in and we

Makes sense. you. Thank

question. You are welcome. next Abby,

We question Andrew will with from Kligerman next take Credit Suisse. our

you good question. for Thank Hey, my morning. taking

of the And if wondering was hedging what was annuity COVID-XX On with numbers in could expect insurance a bit very might variable I'm more the variable the the side, your sensitivity the you What for to you hedging life annuity? expensive of give be? might you release the lastly, just business, call, talked all drill for range mean a during and you return the I what be? exposure, could think the And that on then that the regard of terms year. course about of strong. of maintaining Retirement you Life press in where for what said on the you good in profile profile could and kind life equity terms

thanks. Andrew, Okay,

jump to as Kevin, piece to the but think, why about Fortitude And I talk going COVID-XX and the happened well. Kevin, you don't the with variable obviously, would Doug program, the do like in the hedging the around hedging have annuity, what I'm So sensitivity about I -- on program.

So Kevin, you why start? don't

Andrew. Thanks, Brian. Thanks, Yes.

the So look, impacts, a I impacts. couple short-term guess the market covered market that from I'll perspectives. I of address

back the So Andrew? I'm I'm that. the go DAC equity mean, But options. not impacts it to fair and fair will -- need I impacts the that value in never sure sorry, move, when Those values when SOP the I move, markets clearly, to

Yes. I I series… I mean quickly apologize. would mortality. to needed clear, the be What

Mortality.

we So first it’s very the straightforward better quarter, pricing. that believe in there mortality in saw We are than reporting of claims. the those delays

going respond. As also second there's well how to the project on our are, where quarter we don't people and any impact And is balance on third are expect look it's first -- We at this modeled level people difficult sheet. quarter to how scenario. estimates within behave, to significant based the going current stress are

believe that's that are where So our current can geographical presence It's expected we about best presence losses. we and do. on the just based versus market the

of can hedging, first what all, hedge would you is, of you terms I what In say have. only

arms And after the hedging success have benefits, the our well big is mid-XXXXs. of because a part the of de-risked we sold VA program the so profile we that primarily race liability have of

fixed account And so because relative left We've cetera. control general risks. believe allocation, a We've that hedge is credit position that portfolio. hedgeable to volatility feature income an funds, hedged et spread, against natural market that open our includes requiring all we of our

resulting the the results is Over perform and the it's good to results, we as expected almost time, I in continued exactly our around various reported XX%, market effectiveness for hedge think dynamics, in quarter. the were

But I'm also pass the Doug going portfolio. of in feature Fortitude quarter first success hedging in was to because another to the on our

you, Thank Kevin. right. All

in to see just legacy what wanted which with I all in securities of segment, don't seeing interest credit established the fact and we the rate the on Fortitude. financials particularly gains to value you're capital really goes hedges, fair is and comment some respect legacy effect that see option to P&L don't that had realized through you all you and What So fact losses. in that extent, the impact are that mark-to-market is the and the

preserved as But prepared how that those Mark effective are for his – entity year entity said capital performed hedges how formed best how look don't were that remarks, the the the effect. is regulatory he you in way So ratios from made ago. see and really they how the were to the net a over and at

for hedging when reported that in sense how effective So the was that of you is volatility things APTI. statement a gives at seeing the our you're you look necessarily our that not strategy mark-to-market financial in

thank So, you.

And we're I we why long, think Okay. running question? little but take Abby, a last Doug. Thanks, don't one

Yes.

Frost be from question with will Advisors. Our next State Scott Street Global

for you Thank question. taking my

specifically the you expect thoughts Friday, piece seen. years single with You Willis assessment, said please paid? Could you to your I'm how is me. over profile, And the be claims and expect what largest are this the if here? P&C payment I'm you wrong, length released be on give COVID you're assuming of the shutdown and to multiyear correct but event us many on some basis develop industry's background ever what assuming do

payments, terms But claims me and just in and these in in let it. -- particularly very that start Well, then Okay. business add long the with interruption can terms from process payments. of Peter are

idea. So I think up you last we're Superstorm from we to business think interruption I cleaned just the just give Sandy some

in up of It So isn't nature. effects and North We're to course, mean, have global we're seeing we've is world. pandemic hard with anyway, Europe, think seeing assumption different seen seeing a Latin in in run you the I of the corner around every estimates, in of affected because America, the this here This first come in estimate, range, a but effects is the Japan. understand to is thing of reasonable terms that I and effects the we're in America. effects they lot but

the it and general to add is, the comp us about doesn't is well-positioned we've in comfortable risk our we this with very, on, question it's it's you and managed on on this COVID. how talked how event and take whether feel out across effects we business interruption, all or those very for position and and and cancellations things seen anything the So that? for that on much we've we're do to globe. The figure what's travel want how to Peter, of spread

end seen of ongoing said. of business, about of the out. Not and of documents different have good lot low of of see come is event is of wide because thing it's the a just you'll very I the as of the of high the you in nature cash. But lines much. range complexity what The predicting add terms written the that only terms wide We've the scale end in as would just

level it's very pinpoint the accuracy over anything of evolves hard until So, time. to or this

we going largest a a it's seen the mean, can mean, wide saying Well say saying? of that the really your you basis -- you saying statement $XX mean, I'm then it's be that, is They're is, world greater to get are again, to is that's how I at mean, to say what be on determining I range, or the how that than shutdown I of the you're trying we've getting of are event length When its again, it Katrina, we going -- there's ever basis when Katrina? than statement? what factor. So, I what can supports the exceed less that a year billion. to

Peter?

is Yes. off a on based so get industry on the I mean can with assumptions, let's we again, we an lot be an done at of length across we've spread happen -- what based off lot -- to can I a portfolio. ground-up of the industry the a we that look we're analysis done is we've it let's lines Willis going loss have out severity, get think again, to and of analysis what Willis business. not looking as a again, geographic across of the that severity, mean, done think loss is with multiple And in it ground-up what because have time, assumptions, geographic of our own done industry putting spread at time, of and business to multiple length business. lines of ranges And be

with we I of share estimate business, that an But Katrina. And came of when basis was that Brian's exceeded market we of the up look think statement. at different lines

appreciate told that, if that. I I'm helpful some the driving comments. you. of be you the would so behind It assumptions Okay. Thank us

time. you thank Well, very Like past I said, our we've gone much.

this So, want to I wrap up.

want stakeholders. clients and other our partners, thank distribution And everyone I so our this in for thank want all, and will I joining shareholders, together. of get to first again together And all through challenging today. this We're also we to us time

of finally, you've I together world. to not colleagues thank and accomplished importantly, my we've Most I want last few Guys the months. exceeded expectations our around the over what prouder could be

everyone, again. and healthy Goodbye. thank So, you be be please safe and

Ladies and gentlemen, thank your you participation. today's for and call this concludes we

You may now disconnect.