American International (AIG) 4 Aug 202020 Q2 Earnings call transcript

Good day, and welcome to AIG's Second Quarter 2020 Financial Results Call.

As a reminder, 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.

you joining thank and morning all us. for Good quarter results announced will cover afternoon. financial second AIG's Today’s yesterday XXXX The news the on after our quarter release, were be the website supplement financial will at results call. presentation www.aig.com, later and filed XX-Q the and for today financial posted strategic the Today's may effects on performance, of statements, mix and relating to including COVID-XX remarks business comments market forward-looking company contain priorities, conditions, including AIG. on of future performance events management's are current statements based expectations. not guarantees These and or are materially. differ may events and performance Actual could to XXXX be described Form time. this Report results that the in of effects our other XX-Q Annual SEC, factors Factors include the with the and of cause differ XXXX filings determined XX-K first report on cannot COVID-XX fully at made inclusive which recent on quarter Form and AIG, under any result as whether and otherwise. obligation forward-looking any future or expressly a any update obligation events is AIG not to statement, of information, new disclaims

may measures which release, turn remarks and over some on our call refer earnings presentation, The financial financial most measures. I'll website. our is available in to the figures of all the Additionally, GAAP earnings to Brian. of included non-GAAP such are supplement to now reconciliation comparable

Dachille, and Doug formidable I to will Officer is a you Investment Mike catastrophe. hope quarter last joined also for morning, Chief COVID-XX and strength remarkable call show I'm continues us our and Q&A. by on Good staying ongoing from available Kevin AIG healthy and and resiliency Peter, and remains be as the for team joining safe. participating everyone thank today. Like is our different locations.

we protected our become each on unified how collateral culture to created and to to through reinsurance clients to allowing build are the this foundation These balance I other other, XXXX economy the and us stakeholders instil a time. second and and working focused on global workforce a global in best-in-class team incredibly sheet am remotely adjusted quarter, effectively supporting of effects the program. Our its and actions the proud tolerances Throughout adjusted excellence, addition our implement unprecedented and strengthened late catastrophes. during continue underwriting and strong manage since on to risk natural of COVID-XX more has has

made initiatives the June sheet balance represented of closing across strategic which vast progress legacy our also We de-risked on the including a the early sale in our stake majority AIG, of majority portfolio. of significantly Fortitude, and

reflected up extended in Our was also overall held this how investment focus during on uncertainty. market of de-risking portfolio is the period

and complex underlying results some diversified second our such prior impact had accounting while which our quarter. overall, the our with asset the strong on class I'm launch was outlined the more second give pleased sector added positive to But sale of contributes significant on also as quarter. There in what GAAP of and are calls implications and on are call, in in Mark, we last very by portfolio other in outlined balance of on the quarter, industry we details our XXXX, our As a performance sheet. will with results. which this Fortitude, Syndicate our noise line the developments to

half for the the were in with total billion company successful to over CAT to May. XXth, sale, liquidity our June to debt first estimated our million, well at quarter the parent the flexibility enhanced also offering of With as related losses our year estimated $XXX reflecting Fortitude completed COVID respect the We $XXX financial net net $XX from as second $XXX proceeds the million losses This we in of million. brings CATs, COVID-XX. including

process follow a outlined earnings In for at and last second arriving call. our an as that quarter, capital COVID we rigorous view to COVID the event on estimates same AIG. continue event, We Peter our not for thoughtful the

As been business the what date line are of impacted, being we to with different which has of to the ramifications in pandemic unfold, expected. lines continue

respect ratio Turning than in rate as XXX the the across discipline and With in impressive seen XX expected. to impact point COVID-XX. prior rigour & quarters and property financial to business With the in at are and reversing second team as the General improved to and combined The negative lines with risk Insurance, distribution to as to to market XX.X%, global, issues strong Life to in first excluding I've in we environment the leader clients saw broad-based respect and changes the CATs, the over are due we results Retirement, they solving much in volatility the GI the coming the have basis commercial more and continued the starting remarkable. continue instilled underwriting improvement improved market over and to a our across for increases be year multiple is current terms hedging quarter quarter partners. accident years see quarter. continue in particularly are several program rate, of Peter perform accelerating conditions, drive is our These our underwriting last of and of quarter business we profitability increases a

in signs pandemic watermark Although of a within remain represent we quarter And the provide early low on our & his more rates it second will that is seeing Kevin, still sales. remarks. Retirement days, in details range mortality Life models. mid are will

AIG XXX into also We operational our second so made the from have of the moved our far. and we already in in seen demonstrable results quarter. programs progress significant phase efforts execution We

we Peter. To XXXX, journey three more to our second of began hear we are years through ago. You'll from summarize where relative the quarter where this about

on & substantially three AIG our operating model units. Insurance, by core Investments. focus While to successfully changing we've and reshaped Life business General Retirement

Retirement conditions portfolios, and to results commercial improved remediate sheet balance financial achievements flexibility. by reduced vastly and increased and work our to leading confident underwriting in where is our insurance seeing liabilities runoff right legacy this we our I all Investment in to related colleagues strongest risk. core AIG majority a focus across on to risk us, also become General and our growth, Life With remain We of AIG These with de-risked particularly are performing and exposures significantly portfolio. are business the in to complex the some the its for reduced strategically interest volatility, Insurance, vast personal future able our our behind and financial work the businesses rate business and And well-positioned capabilities and of capital our company capital leverage eliminated essentially we we now the of extraordinarily General and the on market path to franchise. portfolios in long-tail portfolio the Fortitude, top are that Insurance, strengthen deploy in in sale Commercial a careers. lines of & our position the our

courageous conversations of the the around depths throughout inequality led to to events that Before At United I across our traumatic address for movements the that often a outpouring the upset and want AIG, were the turn States difficult the and moment deeply our the saw by continues the of do an exposed in recent We and which to racial United world. other to over I take to world. colleagues Peter, call empathy, organization. equality exist of parts States

we empathy fixes, have steps are We last of make and confident no term We foster I Like moving diversity must important team formulating know to take. few am lasting we are over a the taken we is quick inclusion, issues, near, beyond conversation short global while we to do and years a now our will leadership more. AIG, and there actions culture my taken at committed the and support complex our the company. have that must other of on we change at colleagues with longer

AIG, continue at Peter, excellence that in only with diverse which our transformational at journey all levels achieved all we the remain know over we you. steadfast in of pursuit exceptional our talent be As we to can do, organization. we of

progress my marks of Brian update Thanks, we extraordinary. finish Brian. anniversary third look plan journey, where market General at comments on is the the morning, I joining quarter will everyone. And at results, team and good regarding made on second AIG I This back detail started our our the with provide COVID-XX, when an environment Insurance and AIG Brian's XXX. I month current to more Today has

we culture, establishing underwriting on our during year discussed calls, we've of portfolio limits first dramatically standards GI AIG the required terms and prior determined at global altering As overhaul in complete a deployed.

In competitive be become addition, we to repositioned to businesses clients. needed in knew our to that and marketplace the relevant more

evolving by and global world comprehensive unpredictability program, built We and quickly successfully reinsurance been program has This in our and which volatility appetite component moved and across communicated the team strategy, of marketplace. allowing us our and risk the bench vastly portfolio. to our portfolio critical to as faster a the was overall a re-underwriting reduced in improves. design completely to outcomes also move accepted We a was strengthened world-class revamped a GI

result We also strengthening, in of outlined last portfolio commercial call, underwriting our XXX% from our with for and there known significantly is XX.X%, profitable significantly be second accident through with our of achieved continue the growth. improvement. more opportunities Syndicate work momentum XXXX quarter results. With while has profit respect outstanding has as global and goal XXXX partnership gone as our will the always entering Personal combined the I since to and the private XXXX to we group, our with our us year basis remediated to positioned ratio this and client improvement an diversification allow that it point of financial XXX further been creation adjusted a portfolio, a In improve This for Insurance, of team de-risked PCG Lloyd's. by now we've to is considerable done will built

to June, clients, we transition is Mutual to market fall. designed an our most the in PCG Lloyd's, addition we structure this brokers and our focus the capital the and middle announced where areas of coupled In we allows innovative disposition upper clients now the agents. to a Heritage us late Liberty Insurance middle net market as market bring business leader agreement as and PCG well the segment worth upper value high with in on with carefully the

of this challenges give Our constraints our zones of access new AIGs the Prior into perils we more you all actions inherent various and our had peak face the grow contributed and between to insight removes on type is that in the risk capital return this partners XX% to and to we global quarter, business second this in a concentration the To portfolio to in portfolio. ability took PML to and we bit property volatility reduces resulting periods. reinsurance PCG. XX%

will which in we put portfolio the we maintain new model allow forward, PCG XX% us the to in place have light capital a expect Going we profitably grow interest. that

next providing the other property which decisions, retro these capacity the social Since income more COVID-XX including of GI In detail Mark, will quarters. and significant fee industry began, few earnings inflation, the unprecedented this quality global our constraints regarding and from the faced catastrophes, the partners frequent on and claims pandemic improve our reinsurance we including economic meaningful administration will natural rates, for lower interest headwinds, impact journey headwinds services, resulting have from more ongoing underwriting it over has created. the receive capital recently and and addition, PCG of provide and our making business. has actions will will

the in ones agile for COVID able becoming more in provide adjust bodes issues the that are workforce clients needed We and abnormal connected, and environment for new global that stronger, the Our created the in by which a our more believe solve a be risk to working well future. is will new company companies that nimble complex unified we're and continuity is that best market.

saw second Insurance. General the We momentum quarter. in to Turning continued

Our focus to positive profitability on underwriting results. produce continues

in this quarter on earlier, more As point improvement the in remarks. provide I year-over-year. excluding a catastrophes combined mentioned Mark, the XXX his ratio, was XX.X%, accident will year basis second detail

Our and to the market multiple in of well achieving excess leadership rate across we loss position cost in trends. business are accelerate continues lines of

consecutive rate has in when quarters seen leading COVID a benefiting to the acceleration you resulted COVID-XX. in improvement quality up from significant, we this to the rates been believe are that particularly that XX We consider flight in Brian and this market improvement we As of has mentioned, dynamic.

we second and foundation the of saw quarter, be built moved to the responsive business remote In a new example strong our retention. stakeholders to days environment in slowed needs. commercial client in portfolio the challenging global in quickly to work everyone we improvement allowed COVID-XX, early revenue as us While an for both

growth deploy In in continuing addition, on certain while to Property terms further adjusted Excess we conditions limit a such lines, many are we basis. Primary business resetting are risk and Casualty, that and in discipline, as our lines with pursuing will and and portfolio strengthen of

turning we of $XXX million This of losses $XXX civil catastrophe $XX million related million a of million catastrophes. brings year-to-date. reinsurance, $XXX losses our booked COVID-XX related Now net CAT of COVID-XX In the of and second estimated losses losses, natural quarter million net estimated to reflecting unrest $XXX losses. to total

Our based the as first through aggregate through as the quarter, of the our estimate broad-based relevant lines COVID second the of evaluation first is and IBNR. includes half well for experience actual of on year business and

As activity we process, casualty, experts quarter, of that large Like a expected, tested first marine, COVID including assumptions the health, quarter claims, quarter, increased we a COVID impacted in property, number the they first the credit, we second workers from very quarter lines and first trade used of quarter, accident We compensation, estimation financial related utilizing of travel, and that actuarial. claims estimation to the in and and thorough and Re. our full process our Validus business in be continued lines and confirmed the sound. conducted finance underwriting first contingency,

showing As policies majority losses our business virus cause exclusions a business overwhelming on was to viruses and related the of the property damage the contained direct or interruption a our loss for stated that that the otherwise call caused I reminder, last physical interruption. of commercial require that

we with disease suspension shown business was and many instances commercial disease, infectious be led governmental terms coverage be conditions also specified offering conditions the strict where present noted sublimits in to We continue provided related small to disease, challenged. so upheld the fraction only affirmative small that of only physically regardless and terms coverage, that guidelines, to of were we've it only under have these limiting in policies a for certain that and operations. and can believe done and I property underwriting the exclusions will where

in of as Our quarter both the and business of based terms by and second catastrophe is where quarter estimation was coverage lines disease our specific provided still with impacted in COVID-XX conditions claims cases related actual we process all accelerating those fact geographies many and an in of for permanent losses. across terms commercial is property, world. COVID-XX under policies for ongoing infectious the the potentially in experience

assess aggregate June XX. While reflects our we have our an second which view quarter additional our exposures, from quarter best of to at estimate experience

reinstatement have have catastrophe remaining occurrence COVID aggregate America half expect limit. we we to catastrophe cover. North protection the gross property across global losses in substantial under Based through our Turning per we to recover and our treaty COVID treaty, for losses property per and lines. second With America global against related a impacted reinsurance related towers international current overall our reinsurance attaching per respect program, quarter, both our treaty, towers have of to expectations it under property And on provides occurrence per our most our includes separate meaningful to international. losses, occurrence catastrophe our addition a risk North retention our occurrence approximately the of one to before

to America in personal extent North billion commercial written $X.X X% was in strong premiums retentions against lower In lines in wind international by that net catastrophes America billion reductions sessions premium [ph] and light offset in we written was contract an America improvement reduction to reinsurance COVID-XX, peak prior negative to $X.X natural year. personal addition, remainder resulting due additional such we second of our in exposure the business related season. to anticipated limit Net second quarter XXXX The particular which year-over-year a premium XXX North of driven in X% of $X year-over-year, the a early grew commercial to could momentum. billion capacity partially growth by COVID-XX. from throughout lesser result the as we and and in quarter, and in was formation the approximately Net year and was aggregate going of net that a rate commercial. the The written Syndicate million Travel the continued have North lines, substantial or into entirely protection in the down purchased than in in

new While we in in COVID-XX, in large line due in financial account is business down, business financial did retail North as commercial casualty by driven our America primarily excluding to and our property was growth see Talbot. new lines, overall management property, business risk such M&A. growth Similarly excess international and lines,

the commercial global up which to Turning and XX% was Momentum remained translates international. XX% in to portfolio quarter, in XX% America in in rate. growth our North second and strong

D&O and up were XX%, XX%. rates property over over company was was was XX%, over excess XX% up [ph] up up retail example, public For over EPOI casually

UK and where Our than with underwriting up increases continued primarily up both and around strong. XX% lines With rate respect business were improvement by volume Re, more approach, XX%. to rate team of achieved specialty and aviation terms than Validus driven and conditions disciplined Talbots premium increasing more XX%, energy the its

reducing where in not XX%. rate were strong While Rates new approximately casualty specialty. approximately in meet terms and and and appetite, all and XX%, did business in in client up property non-property was up risk were by lines the our net rates conditions premium lines combined driven rates of sectors lines retention XX%, up agriculture,

a significant exposures there Validus in were to reduced continued lowering property, Re rate focus volatility. Although with increases property on be

positive our adjusted all there the top year, and of For will grow will with opportunities movement returns. line experience reinsurance improved remainder be continued risk the lines we rate to expected

to XXX. Turning AIG

execution. a driving disciplined be views built team a are to and of strong a on leaders basis have transformation conduct Our a operating and continues We who program rigorous top regular priority.

savings achieve client’s executing a We and billion million $XXX programs. savings highlight to on of AIG position $X.X track for this overall stages for dramatic coalescing strategic to to incorporating operational have rate streamline the $X With long brokers are improve with agents recent we modern and This effort currently made by digital through respect platform risk data targets partners the a distribution and AIG our we - clients, around on testing on and profitable our to have processes, the achieve run billion moving into term end and In centralized colleagues early program a in and of critical like across are decision-making operational our user of colleagues remain spend exit will experience delivery will now and model sustainable in AI rate XXXX, growth. still for feedback. run three services. global not visibility procurement, we're XXXX our management we're that achieving in to fully external PCG, product and use While I'd and in the increase cost progress AIG. of the all this of we've enhance changed. categories XXX, with function

well as We improved already With estate significant real savings, footprint. our have as we to continue and estate, supplier performance. achieved respect rationalize partner real to global

in Our announcement just is midtown working New Headquarters the will incorporate environment and and York consolidation learnings Greater of our Manhattan strategy. to example. reflected area regarding remaining recent design workplace from of key one Global metro in the will offices remote current new of successes global these our and the AIGs offices our be move The

We our core AIG surrounding remain the City York support in these team to clear performance, our other flexibility do entered of proud tremendous and do. our with played to strengthening focus a the and area, these and and clients, we journey operations stakeholders on hope the to our strength during time. New to very and I'm important recommitment this in we distribution city part to challenging our that in systems. made modernizing and challenging to AIGs colleagues have face and circumstances value our XXXX of to an committed has against excellence the communities shown deliver all priorities. history our progress meaningful underwriting has improve continuing role we through partners

turn Now, I'll Kevin. call the over to

Life $XXX will second the pre-tax we which Today you, our of of I Retirement XX.X%. overall & favorable the attributed outlook quarter million return Retirement current income are market been equity decreased first credit benefits morning, not generally recorded each expected the and spreads, from the quarter, is lag. equity fair returns resulting a on market equity results quarter. quarter quarter, everyone. Adjusted & Peter. Thank from million and costs, by driven With delivered adjusted the for of rebound pre-tax returns year, value mortality bonds of the by for quarter, impacted good $XXX negative in markets saw the adjusted strong unfavorable to from and results COVID-XX, second in the deferred last And private acquisition reflected during for they discuss equity businesses. compression. our very income quarter reserves on a for by to lower both and This recovery common in significant had one Life spread volatile our the reported returns since option

significant large quarter hold last enhancements limits have results sensitivities a related equity a up. Recognizing also continued in private reflected and generally we sensitivities, from the previously stress volatility, interest single year low current to rates, from yield second especially of for provided macroeconomic gain historic the Our IPO the benefited to times holding. of whereas quarter

balance would expect, maintain continued to of otherwise spread higher investments is our we than held we base levels cash higher liquidity have reported on as compression our However, have sheet. and

compression. from be markets to $XX million to first to of plus quarter. sensitivity based this spread impact million position, X% would in respectively adjusted by updated than of increase end our market estimates higher expect spreads equity levels or the yields, of investment larger decrease to equity or would in point a the change modest Relative pre-tax base annually, a We minus $XX on XX and have X increase the annual the approximately Excluding also total as range liquidity we market continue income basis to returns second quarter. the our

$X increase consistent prior by XX million approximately annually movement quarter. minus or to a XX-year reinvestment decrease rates, point million to rates with or would basis plus $XX As earnings on

important nor well to are of is degree impacted these ranges it our since note exact the that factors. and market always, by linear, other not earnings are as sensitivity also timing As movements, as

a Our risk and expected strong. capital good are the margins at within discipline repriced for buffer current us second our to hedging our to environment. quarter quarter, especially noting our of currently Further, for distribution program fleet the and providing minimal well the our uncertainty XXX%, well many of responded our management these remain risk-based we sheet currently target balance in as ratio estimate be own between continued perform partners of challenging has significantly the restructured to as returns XXX% have and range in as Sales XXX% their to targets We the business remained were retail serving market, above products, times, our and generally XXX%, our lower [ph] in new challenges. annuity our

environment. Towards we the the our as began new the distribution of improvement responded quarter, end to partners in annuity see to activity, retail

and retail a indications, quarter based today, rebound seen business of on volumes to second suggesting pipeline our to have levels. build, we June from historically low improving early in As new compared strong sales continues

during has across Our channels times. position products broad especially and been advantageous these

as capital across attractive we business, concluding transfer expanded in our sales reinsurance example, as transactions. second remain to arise We opportunities confident well-positioned quarter, annuity deploy For significant pension risk our the businesses. languished several retail and

annuities. that turn I I negative noted of challenging resulted our net to for individual businesses. each quarter retirement sales flows our results for for Now, in will second environment The

international increased group as and and For lower group business, well as higher essentially deposits due to reduced sales. surrenders deposits Life to Despite total to [ph] individual new individual premiums. net acquisitions, lower premiums our premiums decreased and For sales, group due Insurance lower flows were due product flat life retirement,

five Based from the the that impact higher a claims assumptions. reinsurance XX% than [ph] in on our pricing in all estimate excess evolving mortality small of currently an including experienced acceleration of and longevity otherwise have also modestly mortality that reflect around is claims offsets is of net COVID-XX Our for dataset, causes, years. we of a we COVID-XX death related next and would estimate of level

will In longer of term long in be expect quarter. to do term isolation, Our will we assumptions. have COVID-XX review which our currently our third on in large studies occur recent mortality our experience mortality into assumptions a factored actuarial annual the losses impact experience not

For transfer institutional deposits retirement both premiums for continue across and earlier. To noted favorably income pension markets, for yield remain ever is risk new pipeline and solutions. We opportunities, opportunities the develop grew particular, and protection, through the well-positioned the the adjusted impacted attractive to direct meet needs was portfolio. by to enhancement pre-tax close, income lifetime reinsurance significantly In activity I very savings strong. we growing and

Now, I it will turn over to Mark.

second adjusted and or Kevin per the share, a billion income reported diluted areas of to you, liquidity preservation. this risk underlying compared million COVID after $X.XX insurances, $X.X and $XXX adjusted lower year-over-year improvement of results, produced capital general good million likely disciplined a morning from performance income of catastrophe on all. drivers stem strong Overall, in and in and reduction, year in Positive civil losses AIG $X.XX of returns Thank the tax investment stronger our per with income. quarter, costs. share contributions the particularly thematic reduction continued AIG adjusted or pre-tax from were quarter and The of higher along key XXXX. $XXX focus retirement accident unrest, ongoing net

expense profitability general basis and focus year drove in XXX Peter management the underwriting As the noted, insurance ratio ex-CAT. accident improvement combined continued on point

[ph] ratio by net point lower in $XXX non-civil for quarter second alternative ratio unrest made a and million XX.X reduction $XXX $XXX North in the the just out sale lines America and they but on from $XX points basis, continued X.X APGI in a catastrophe non-COVID points However, up income associated $XXX global million that improvement in X.X basis XXXX. of in was of of catastrophe CAT the discussed that million, basis and losses XXXX, improvement deferred aggregate stronger quarter of points I'd to the a million, points investment increase quarter quarter down XXX rates second ADC XXX improvement the a of the reinvestment and development with Insurance's net losses, $XX on even loss period losses. with commercial represent ratio which of basis favorable point second a second XXX was point gain. a in combined Prior international. General loss of was was the of amortization income, by loss versus impact impact represent available reserves million the due investment driven Peter

These and business the impact For combined compared expense of ratio North and both Syndicate change prior to the caused for to grow catch-up a lines, significantly allowing combined profitably the however to the premiums impacted mix which the ratio reduce of this which Personal sharp the in us America written lower loss within while structure travel the ratio quarter, the The for XXXX should some the book, only lines premiums the year. volatility include impacts, net caused continue business. premiums sessions segment quarter. negative personal future be structure to

approximately the we premium. Looking to forward anticipate retaining XX% of XXXX, PCG

the premium $XXX the our for of segment, insurance premium each next of balance two net million we as supplement, financial net respectively estimate for million written XXXX $XXX in and the quarters. totality the North personal America for and of earned However reported roughly of

Turning & to Life Retirement.

return quarter's decline. on increase to in the recovery after to aided related mentioned, in by Life & XXXX the $XXX amortization XX.X% of first DAC a was of Retirement million that the annualized market equity financial for the that the Kevin APTI As large due achieved lower amortization markets, quarter of quarter, attributed

well in both quarter income and XX% but nearly be investment sequential Net $X.X So group Kevin the large of one both as lower noticeably Shifting due measure a with a rates a quarter and and impacted included in second an from noted particularly also it basis. in evaluation – unit through reduction Retirement described both surrender/LAP of a the equity [ph] better XXXX the the with it which private basis $XXX primarily quarter information were for amount we Investments. report generally second IPO product APTI. market on a billion his Insurance life to by was sets, is various and quarter or lag of of equity lower received losses gain. the & the others recorded over Life $XXX timing swing quarter on the industry, on year-over-year million high second one-time than retirement, compared APTI $XXX attributed in as General negative this reserve managers. to was The million XXXX individual should that returns, private return the driven year-to-date results, million quarter Like equity. has

of improved strong XX quarter On $XXX the the a basis, from impact We'll in by first the note GAAP quarters reflects the But on second recovery NII. market only to option capital value the million though get This although the income. related APTI please almost that investment second that APTI investments valuations. months quarter sheet. after however, more had of fair will funds net So even the in include loss XXXX continue second will into and quarter, balance included of income our reflects quarter's March sequential two tax Fortitude income future hedge too. on themselves and not be Fortitude,

pre-tax the Reflecting loss million, and fourth XXXX. consolidations improvement the higher on into expense expense of $XXX eliminations for our was quarter $XX XXXX the expense interest after $XX sequentially increase half May operations, issuance adjusted other corporate will half million the and an from AIGs improvement and of reductions, and corporate of of second first continuous was to due million to Turning of bond focus XXXX. interest slightly

million of quarter, in is one-off million impact million APTI General portfolios. had Fortitude other interests. $XXX remaining $XX $XXX of The to & Investment legacy not-consolidating Life Insurance, the before from related Retirement Our and the was of segment which

closing. Fortitude we the it the because noted, earnings of included quarter the as upon funds on from sale APTI quarter the earnings of June, during excluded the to second economics for Xnd were June shifted in and As May month net are closed APTI. assets completed assets The of on the and withheld Brian April for only Fortitude those

after to line to tax income below GAAP adjusted attributable net from impacts income the common shifting shareholders Now equity. on

I'd like non-economic second to The largely two included quarter items unpack.

a of today. reserves. of a XXX gains which second recorded approximate discussed of and call is through involves annuity an partial on or annuity designed which NPA. GAAP of filed our requires the And large during program, represents $X our quarter, shown recorded XXXX, I item billion on focused hedging XXX pre-tax interest be equity is hedge which the our quarter first we first reversal the The In this pages non-performance last and variable XX-Q, adjustment GAAP the will changes loss, recognition we program in rate which later as the to on offset market

involves The Fortitude. sale second of item the

asset management significant de-risking the represents and this sale a As Brian majority noted, in balance our sheet our improving liability of profile. completion stake milestone

I created However, the complex to GAAWP to included involved. accounting supplement financial help so accounting. noise of will impacts will we've basis, cut slides, XX-Q our disclosures a lot direct I through in But it the the five that associated highlight robust also you key navigate a and also on

as your now Additionally, like staff five core I'd communicate understanding. to to help we our investor ready follows. make highlights relations with are stands sure The

First, re-insurer nearly from fully now AIG collateralized in $XX retains billion third a of party GAAP which reserves a are X.X% recoverable now interest.

the and recognition the GAAP company. the had are accounting our have interest to impact fair valued reflect policyholder as analogous non-economic, value been benefit economics. aligned fair GAAP would value, most the low fair higher of on is statutory capital liabilities. no the transaction fair is current the importantly don't insurance adverse this have had Second on accounting and closely more underlying been but Accordingly assets their The reflect true largely value adjustments marked reserving that GAAP practices impact perhaps to the with reserves rates

shareholders a equity reduction. impact is perspective the a $X.X common from accounting billion Third, on GAAP

an our billion equity being reduction adjusted in for AOCI. adjustment $X.X funds However, appreciation included common major assets $X.X supporting on on the shareholders the a is impact withheld unrealized of the with difference Billion lesser

As are broad you recall, of AIGs items. income the AOCI equity. net historically $X.X two of Fourth, components dollar GAAP is adjusted common the of billion the comprised in shareholders loss removed one of items definition

reinsurance de-consolidation prepaid First billion for of $X.X expenses. previously on disclosed the loss is a assets and deferred acquisition

is loss this quarter withheld treatments. due the in the funds financial assets. which will increase $X the which GAAP mark-to-market updated the AIG has portfolio, Fortitude totaled in is volatility below sale There to item Fifth, on second equity measures line remove primarily be the our The investment non-GAAP primarily GAAP asymmetrical result. ongoing from billion, accounting on several to

disclosures, adjustments. given before the So minimis end management's navigate performance, segments plus this, legacy of operating definitional assessing align asymmetry continuing to be-re the Investor lastly to Relations better help our of our with And APTI. for to segmenting team on will need this, will now de year view contribution and understanding we drive this these expected

Turning to the unrealized June the adjusted XXXX on from and AOCI, per the and per $XX.XX, year which ago. excludes value share, down funds was year At one X.X% balance down withheld assets value ago X.X% book gains XXth sheet. share book was Fortitude from DTA one

compared tighter During we XX, negative of spreads March the net impact second had mark-to-market with $XX.X credit AFS XX on increase securities the quarter. a the quarter, in billion that to at March AOCI reversed in

billion At is liquidity $X.X position this addition environment. our June a facility. strong of We emphasis had undrawn continue on in XX, high economic place credit billion. to a capital in This and ample AIG revolving liquidity parent to $XX.X fully maintaining

and of we issued billion During Fortitude, which at were the senior the sale of billion quarter, of retained to billion receive related $X.X $X.X $X.X proceeds second debt parent. of

precautionary made to that border date pre the million on We payments related the to back $XXX XXXXs. facility tax March $X.X billion XXXX our borrowing principal previously cross disclosed repaid also our a to penalties credit settlement and and transactions in full on IRS

plan balance the calculation near for settlement netting final ultimate this notes of in the in of interest requested. of calculation of billion year, pay billion on billion as depending and of $X.X will have potentially to pending maturity end in repurchase XXXX. potential the half this with term shares not We in the up $X.X by the interest $X.X interest well as to amount senior second We do the which receipt of quarter of application the AIG notes maturing has the the XXXX, first crude

cash be of All hand. with which will on funded

solid above capital. At & the XXth, the review. levels Retirement are to operating potential buffers for stable remained liquidity for were General higher end regular following US market prior outlook and fleet of above annual fleet Also, affirmed RBC pool AIG's very strong. Life year losses, capital June subsidiary insurance as or for capitalization Turning ranges, its impacts. our by absorbing ratings volatility and our credit levels target and S&P COVID-XX Insurances providing ratios

and navigate financial ongoing we We continue as environment. to prioritize flexibility capitalization liquidity, uncertain this strong operating

focused is profitability, executing our on low past. significantly continuing on strong Insurance rate compared a portfolio environment General Life and to managing Our derisked improvement schedule balance interest are remain Retirement liquidity diversified We & XXX and on investment AIG budget. the sheet in and years and and of prudently

will We to a more are convinced AIG that unusual as now resilient And Brian. back company. turn will this exit call over crisis with the I stronger, that,

Thank you, Mark.

I think it's for Q&A. time

we can start operator, Q&A So the process?

question Stanley. take go from our ahead. you. Instructions] Michael [Operator Phillips Morgan We’ll Please first now from Thank

Your open. line now is

And you. morning, good and everybody. Thank Brian

ratio going I'm loss guess, bit. First question, dive little into on improvement your America to where I core a on Commercial looks surface. North lines focus [ph] the that pretty decent

seen business, high case your, benefits, But - loss given talk may layers, accounts, that's corporate not to know, make COVID. see suspect not because that COVID for core sure, of we've book your North may be from of I frequency about high here. the larger some not limits that ratio Commercial. know, competitors and I You want some as America much in seeing much you benefit frequency you

maybe can bit behind that [indiscernible] you So really what’s about that little and talk X.X through a go improvement?

- the a Peter, thereof. or question and for Well, Peter benefits frequency I good Michael, lack that's answer can you think that's that?

morning, you good Michael. thank Brian, sure. Yeah, and

that business in the several auto Japan. take sign of to quarter. over not last You’re the the a seen our in expectations, there any better relative of was in frequency it international did we've If in quarters. correct, we some frequency But benefits was

where you You go compensation, to because to of know, had very workers most, COVID, - would XX% when we I most I the you related we think industries stands related greater. going I'm out which we've unique that's to million But have deductible of businesses frequency it's have that typically again, in know, to one is over the think or is a that in $X say XX% high because healthcare. retentions, it's about

related impacted quarter, haven't really have of on we frequency reduction business, how claims. to commensurate Again, hasn't in it seen we this lot their in but because then it retention again, And see that yet observation recognized frequency us. a want So non-COVID we a is emerges.

them know, already that workers claims You four are months, the we've on interesting is COVID about XX% thing very XX% closed. the seen one comp, of over is which over of back that, last

So that an it's we've be more seen we've we lines have and to a very different next you again, once bit compensation. slow the workers type recognize of that, update frequency and reduced give we’ll the it'll loss seen in quarter liability to little auto, experience. relative Other a

Okay, great. Thank you.

what you improvement, Second you question the one renovating talk about last margin that's the past would effort You how And rate, has couple the all few have be of you said. and more [ph] we're in can are done all much done? you were been you much can still trend of or process? throughout how But actually with done that and a that of guys be rates I in mentioned for year, that because efforts re-underwriting your inning companies did are [ph] all guess, all from years. getting where rates opportunities now

that's think Michael, again, Peter. Okay, I

Michael. Yeah,

in was remotely, we points retention you improvement was of basis driven North really going drove are know, better within it good know, international retention, you our a we opening - we in to had the said work points in improvement, we're I had, think on my America. which think everybody I industry XXX where has when the new comments, I what when XXX I headwinds areas of business, in growth, place. So the mean, seen what clients basis by

course, in getting a like of different rate. we reflects in I helpful saw dynamic that that by be the very know, So that we're I that and distribution to to the clients appropriate think we're deploying portfolio, need our capital, you and trying you the sure think And and make to returns. partners

contributed of of to we grow, retention the NPW combined a I think overall the portfolio positive So and commercial. a I environment, can like think the with we combination rate growth on

Okay, Michael.

Thanks.

Next question, please.

ahead. go our next now Elyse Greenspan take question Wells Fargo. We’ll from from Please

Your open. line is

My is the also question morning. Commercial Good to thanks. Hi, business. related first

and kind your start business think just spread can guys margin? digits you fit on prices You through know, excess sense and us the how some on of that you on know, trend. running in mentioned a between price said of that trends give so into you Could of your in double commercial on where getting and as you're far changed just know, loss the that's, about we this you the trend year, that, loss that's

thanks. Elyse, Okay.

trends, think can certainly et cetera, is question? the terms I you of Mark the in better answer responder. Mark,

Hello, Appreciate Brian. you, Elyse. that. Thank Yeah.

So you bit a auto, in about, that X% trend, the cost get areas, businesses, know, into digits. less, it's asking you pure When X%, take in the that. that probably think But mostly other than and together are is double know, it area. of with like little I other kind drops exposure excess loss trend property less things sensitive-related little weigh like then all with you got a off. - primary it when you've And bases, loss it lines you approaching

to digits that tell So tail it a at short that be we you almost I’ll up - the every average some into not line. weighted in excess give and single line thinking. there's the to some reflect to in going couple I'm could total, more but percentage and look volatile get where range and wanted you lines our double I points

share. growth I and And on But still quota mix premium, written no, question the that helpful. America on, some and guess North side, that lot of but impacted your know, business internationally on Personal by know, Commercial seen earned given, in earned a decelerating you it's the good took. on actions you [ph] both pretty just Commercial we've is lines second then that's within lines you is Okay, my

some could see right just year pressure it the way you earned could that Commercial is see on that the XXXX? that, balance some and in So to within know, to it of growth over earn-ins, given about the start we think

too, take you don’t please? why that one Mark,

know, seeing. you Casualty of the I share, question, really actually think get that's you're answered own what you your Yeah, the quota impact and increasing, you

you. thank Elyse, Okay.

Next question please?

Next UBS. Please Meredith question is go ahead. from from Brian

open. is line Your

numbered One you. question. broader and another questions Thank quick

a First income in one, we was going us Big Mark, drop dividend investment of what guidance there is second I run could right Insurance? now, quick yields? anything obviously, unusual like you interest and wonder on rate if Is kind quarter, as General a the as off, look far where give are there? that in to given

Go Hey, ahead, please. Mar.

Brian. you, thank Yeah,

were on out me asking Brian, investment you yields cut in You've bit about GI? a little

big in kind causing but Yeah. I else in anything wondering a rate? also there in much in something of investment I securities there's am drop rate And or looking off a just had you drop GI, if yield am sequentially. or overall that run that's or the true so particular, was

yes, Yes, actually.

You guys are good. getting

question. own you answering You’re

going last we quarter, things the allowed first on, the two think disclosure the to even that. was there's I So see quarter

drop see more is off is just it get the correction. a somewhat bit of said, later you I'll a one and caused what a So by that it you just little bit and of

So, of - a of the think you're was think would $XX come basis on as I last points, another extent current your so To There the the that and a XX has quarter's it. that. it down future And to is lot the heart quarter it floating, yield you're was your of seeing overstated. is and to correction. question, lower and million the that of a required yield at up right, the you do have and securities, retrospectively something that's you've what security like with GI implied – so over quarter. on in But if Canadian yield at happened booked, really than is, you're but is that catch of look that what what what what have look structured view stuff

be So and point looks as off you me a can not it sequentially, basis as to adjust appears. those of it X Brian, XX to drop some for it steep

Great.

Brian, a up? do follow you have

this you Yeah, for and absolutely Peter. is I guess, more Brian. And

business capital? type you acceptable And I'm your underlying Given how to had to now on earn alter believe wondering combined to low yields combined do of are if you kind targets? in return right ratio ratio of your do what achieve, an now. you or General Insurance need

guess Yeah, Well, I'll take question, digit Brian. probably interest with rate these a that. it I rates, higher great double comes down. a I returns that's low mean, with sense interest makes

an you the You because that know, it's now, more what difficult in that, I state right like. know, its steady gut and, of process the becoming possible. understand But, say my it's looks an digit range difficult know, double with It's say - evolving rates. is COVID would would to low something you evolving interest

what's it's So more over like, return you risk know, rates. the the free

down. thing say, So, have rates to driving to know, I move into and this you you that rising, like where take When terms on number it's to - that hit. are way can me conditions fixed we try market the not improving, just next and a I We're you're thanks. the market to hard we're don't best elevated - question, risk to you're we results the the that’s a guess, going the are to received with this get it going achieve advantage of marketplace, Can have level in of put Brian. this [ph]

Thank you.

from Our go Bass next Erik Please question comes ahead. from Autonomous Research.

is open. line Your

you. thank Hi,

in generate this about you'll the reduction the back over we've you from term see should benefits enhancing talked as the detracting fee line As from of those sense and of ‘XX Syndicate clear of do terms time. volatility Stepping in near perspective, earnings segment? income a or and some normalized from be makes personal positive and the

it then this let start I'll and Eric, pick with let Peter me up.

now certainly dislocation. into it a net bleed when be disruption Mark of so, grow capital-light of given approach it, the going and the the the and end when to not to net basically of we and we've CAT to grow a with the structure normalize, concentration third. benefits look unearned in the anything as us like second it grow a capital and the we there Obviously, though, So know, with change and spread structure benefit exposure, you we to a said, year, know, make Peter, and can take it business now is some ability allows Lloyds the you taken net this be you the a could Overall you approach that? the will is and grow. company, its this quarter and it as the out, will efficiency we add do ceded saw premiums the want have the to things actually - to

just points. you for growth That reposition couple Yeah, in capital increase important. as mean volatility a de-risking, think reduced the flexibility. I of Brian, said, portfolio I is

to going the up on largest is quarter the you the be catch quarter just premium, second second seasonally the on think I was know, net side. premium of because the, unearned the written and noisiest the

you’ll again, So see and to focused the still fourth, some not the the but been we third you and transition. degree on very in in second saw the just accelerating noise

competitive can the Syndicate the gone largely away to terms know, get very of XXXX unearned, we XXXX So then value. and reposition to in market, with you be in

business for is So to mean for we're going excited about really and partners. distribution what clients, this the and our

Erik, a follow follow have up you up? a Do you have do

& you of of in the And how second, shift Or just to you do to Life your Life P&C backdrop? Retirement, with opportunities see And some favorable you. of subs? generate generation? sort you sales keep to thank capital lower of for the the does advantage Yes, excess more take planning level any in this are then capital to affect pricing outlook capital

we about sales, just of pickup Kevin the seeing have me because a it. talk let Well, are

premature back you be to but about get may I'll that. with the it Kevin, start piece? to sales want So to talk our capital,

But Yeah, some part of real sure. know, saw of towards June, the signs the Thanks, in lowest we was you latter Erik. quarter The memory. life.

was was the to look down And back around we the really the double. the June, was XX%. disrupted at if During most the month July, which that channel, bank almost bank channel just of the was channel quarter, over

to know, that that starting impacted you the that channel we've seen So turn most the around. disruption

I dealers, tended broker companies. they they many XX%. we know, sales than earlier IMOs, were adopted, that about think to and that the advisors, down financial virtual But and you For practices reprice

increase. June, with and repricing what leveled saw caught companies in and And the June, annuities the other think sales following increase to sales of I of [ph] so as day over the saw bit. substantial that per continued is looking our at a up field pipeline we growing July we Again, playing month

in continues, see is And continued over performing trend the So the June July retirement customers they And conditions X% services, pretty to we're Life way second our in And on the in individual individual well. the particularly premiums, know, sales. quarter. we are third that the over periodic disruption, its second. focused continue second up channel it's that that and growth our X% are, optimistic important we’re again, sales retirement back saw backbone and and channel the follow grow generally note the advisor direct down if is about that quarter very which recovery quarter. business, only despite really their we'll in retail the of in Insurance to you

optimistic pipeline strategy So third second up when beyond, watermark the as opened ever that will channel, and the the in feel all the and uncertainties fact up you is strong quarter the prevail recognizing we that we've and it as seen back the with market. cautiously risk that the low we've in reinsurance pension business will quarter our transfer and be

add, in Yeah. the pretty look the are And right the GI you sales good. returns now to extreme much Thanks, at greatest And the the if you know, our It's might attention Kevin. as think will yes. opportunities and where quarter growth second GI in maybe move we have I’ll – just seem not we But, indicated. occurring. be though, more as looks

question the then next please? So on we move to

ahead. next And Sachs. from comes Goldman go Kinar Yaron you. Please Thank question from

GI. A on questions very much. you Thank of couple

I rates one guess, hand, term, driven also COVID the trend? with of other. how the well loss bit which can you first, And short improved have So favorable here talk asked fix ratio, excess North the you're sequentially? maybe in more On weakened but what's you on in year-over-year, about context I of actually loss thinking of I guess, America frequency, the commercial a loss

Yeah. Yaron. Thanks,

fix? loss Mark, question. Mark a that's think I

Brian. I lot Well, can of do have you a start certainly Thank that. you, forces.

know be, to And continued to market. about level have I an catalysts first it do increase rate, longer on impacts happy we the on But term lines increases, Peter COVID, party the for a don't We’re other and things, talked of statement. of of party example. think one this fair think I at increasing third you it’s many

upward more nail movement, is can of opposed a you a inflation of Social general lot as to specifics that down.

And so for in I freight amongst think that there's industry there's still up. the us the [ph] potential moving thought

we're think and between environment. to rates some more and inflationary there interest inflation normality heading be I should into an back probably

cost there increase, that seeing a So I from was a on great around, we of kind look and can it more and what the price fact can increases future more variability magnitude there's see where the price little there's get? and the cautious get, loss ago, year increase rate more that of we're the flipped Now we variability variability, trends. about this we

Okay.

have do up? you a Yaron, follow

I do.

those the that in you're about your some you in exposure that potential and constructive from I heard and peers So think growth – of in talk premiums quite commercial that’s is has coming impact the a sounds there? of we've lines and Can growing, offset exposure like it there. headwind? pretty on been

Yeah. Peter, about talk exposures? you can

question. the for Sure. Thank you, Yaron

to our I think you you think much we remember, about have business. as guaranteed competitors, cost when don't know, compared

reduction. it's that's on direct going effect correlation to commensurate premium in therefore, result to not a a so payroll And and sales,

cases. know, book you on deposits our we business, we You the excess most know, have as force minimum in that have, in

think know, know, have we look which some about headwind, we on you the call. terms had when, future modest payroll is of sales, you a of in could I talked to it on quarters changes in changes what frequency and last the and

I know, could we on terms And, of We're little those mean, know on structures. would fourth may on, of for with be coming quarter returns, while exposure a adjusted to and risk we to you premium, our bit know, capital, based know, look not light it a In impact material the up of because, terms solve today. are have deploying look on there what excess. exposure, trying headwinds we're as impact still and, in to better you - base slight to issues have I but have third premium, renewals, should we similar you led a overall on are

Thank little Maybe we one you. last could a We've run operator? question, late. take

you. Thank

comes ahead. JPMorgan. from question next Our go from Please Jimmy Bhullar

Your open. line is

Hi.

you on On and in market year, or a shrunk at you year. seeing last looking US you you're much the over of thinking discuss the you're international there? any in about recovery Are major a Can as either and I any portfolio the $X with your signs billion bit insurance wrote in that next having whether of how then in reinsurance, P&C, of sort travel restructured changes And think reinsurance given book, also that markets? little you premiums hardening program? book,

Jimmy the to business you didn't pick that I first referred that book what? of up… was

book... travel The

Yeah… got Yeah, it.

and book it's trying seeing… you're $Xbillion on I'm shrinking, whether get idea to an just

Yeah, I Jimmy. Thanks, Peter, those think both are yours.

Yeah.

not the quarter, travel, know, sales, cancellation. on had also So first only new you again, on one the second no had you the you

one negative North And contributed written. so that American that, that personal was the I was think a headwind to and premium

billion look to hard predict, don't know it's when Now we less It's in $X don't a going as We again, and evenly fairly terms it's resume. at, with than COVID. in North America to quarter-to-quarter. to spread we is what's of happen travel know going

modest contemplated, hard I there terms predict. third think think, know, I third be. to interesting, sales as about rate in in think the very a to CAT. again, really nobody would in is some that's our we the of that quarter, you would is, run have a clients, dynamic which But that what and We probably business

a the forward terms quarter And there's a of sorry, to in rebound, the business, didn’t be think think like and economics want QX sort you to this we'll think second what of are third get an price so rebase overreact, looks rebound in we quarter better. update I we give and going the know, or But a question, terms what travel to the going [ph] there's Jimmy? as it will in to as economics don't of that again, how if I starts terms it I'm be of not. in

reinsurance reinsurance more just retaining you in was or maybe risk of on program anyway? sort prices your thinking of up, changing are It kind going about

virtual which we're And have that Well, at normal we're than going under always scheduled multiple we with reinsurance - in partnerships structures we we repositioning, off any great to, geography really going But know, our business we have doing, we've programs trade try partners. don't are to every predictable reinsurance our portfolio, had talked dump across changes in excellent of look about making sure know, September, Therefore, that had stronger. Monte the we reinsurance gross with to and improvement our lines we the reflect growth treaties more kick we've we're trying that conditions have of we expect market the reduction because conditions. Carlo the outcomes. it to the underwriting I think the that that going will to reflect seen you I would is say would see and been a to volatility, much quarter-to-quarter. not you out at think probably meetings AIG XXX

is So be terms we refinements to reflect begin to in expect we changes, something think it have structures? materially some I portfolio but as of would today. those that I the they'll discussions, have don't what

Jimmy. you, you. Thank Okay. Thank

have I'm close and been safe just my to challenging grateful healthy. really fronts on hope thank masks. mean, this hard morning. around I few this And dedication Wear AIG and many, I the work joining colleagues your journey me everybody for everyone we're I let particularly us thank Well, and your so stays want on and many last for these months on and world.

Okay. Thanks, everybody.

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

disconnect. now may You