American International (AIG) 6 Nov 202020 Q3 Earnings call transcript

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

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

joining Good us morning, you and thank for today.

for and and will an entail. He will AIG we of leadership separation give quarter on our overview with expand your last questions. remarks will update what the will Given General the Life XXX. and the I much my announcements process provide of handle on as and differently will our Insurance Life and on for possible Retirement. made most objective week, results as today's the call we time Retirement Peter an to separation leave changes focus of third

for Kevin for be the of Lastly, provide Dave results Q&A and Doug our will the call. additional color Hogan, available Dachille McElroy quarter. Mark portion financial will on the

uncertainty. economic manage continues in global the earnings through release, ongoing saw our AIG you to As

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the As leadership leadership the elected the Chief ongoing assume a proud on want will I as abilities the effective in of excellent of directors significant and Peter focus been Peter AIG XXXX, our Executive AIG to we become also executive to which, that of and strength greatly CEO future. leader He in week, the I has worked of times industry. a measure, action. a capacities and for growth. leading exemplifies with he historic. and of be visionary. business, building and and in decisive the years, several hard-working announced he to and know is will the I them congratulate and company will time, him I'm want transition on I March teams willingness is General for great Peter. great change who will hands. I extremely admire an designed last track character, our It's AIG, continuing successfully rare any building and by serve Insurance Since our both in become unanimously strategic of legacy record turnaround honor operational joining be the at executed in has our At Peter of momentum AIG, Peter's demonstrates and I've an Board he in proven take thank Board. Executive many CEO their to support. Officer This that next AIG Chairman for X. AIG AIG's -- I to me

last announcement big week. Turning to second our

tax as we included in the work have team That stated review the examining structure AIG strategic, several output be This to financial of very AIG. significant the to businesses a change shareholders and operational, best position clear. with structure legal capital implications benefit examined interest over from our determine this I review And would advisers, our stakeholders. is and is review if very composite before, largely independent a both due As GI strengthen across done has the market and other the and continually was leaders. assistance last we our and and of them months simpler This will foundational L&R. conducted of the comprehensive the to

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structures, current example, For business, be stronger the time. resilient valuations, market sheets, and AIG's has core be benefit attractive believe with cash and And continue recapitalization the to their more our leaders sectors significant. as diversification each separate will will more of capital decreased capital over with strong balance have structure appropriate the flows. companies earnings sustainable less our and the respective appropriate composite businesses tax benefits become in We of with

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for that course, and While the value we be separation of other provides in long-term that stakeholders. will, best are confident require will will execute approvals, shareholders way we and regulatory the complex process a

providing process transparency to the updates and with committed are We as forward. moves you

it Peter. I'll Now over turn to

everyone. AIG the morning, words lead Brian. to to you, Good company. this I the for appreciate kind your opportunity Thank and want Board thank

additional yesterday AIG, living will market approach on expand into them This our are to our is regarding a to Brian's continue At well on. period time, noted, I of purpose start to challenges. provide of sustained through are AIG worked General and last opportunities focused overview clients, Life insight to our Life a partner structure. that Life third And issues, With of can Brian Retirement than composite well we a our structure this and value ask capture as we're we shareholders I'll said, to in I'll separation in significantly challenging economic we during briefly and our months. XXX. the results the future. of concluded morning, risk with key over create separate provide insurance as solve work all times, things undertook greater maintaining Insurance We and review solutions from current prepared We comments continually the into tomorrow Retirement, and and several lastly, for Brian over cycles consistent global an complex comprehensive be will we full our our providing especially for As that areas help period whether respect will of on Retirement. the I'll to ourselves AIG. the uncertainty. quarter plan Then progress outline with

basis. benefits benefits. many leader we can our in separation Insurance, took result without as a support as foundation position from A Life model factors, strengthen and one, possible impediments stand-alone Two, and Among manage that materially reduce we've volatility late potential AIG General that progress capital XXXX the any including a the not believe for analysis poised can on in factors of to be a into profitable business significant we Our Insurance strong of a market General account itself our Insurance are: Retirement of growth. and and General risk the sustainable, more diversification made separation. since effectively thrive would and of loss portfolio

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part In fact, we're we facilitate important leverage of operational the XXX AIG doing as will work to separation.

up either one rating with and precise currently an to We're to a agency sense market or or a separation approvals, AIG of considerations throughout ownership and sale more form urgency subject Life will of step agencies the separation interest of the the proceeding of and followed Retirement, to to XX.X% and we dispositions with over process. and regulators by of continue regulatory of be Board our time. engage will While initial rating remaining private IPO contemplate conditions, determine

sell of network. Life to product the the remain clients, our as superior will businesses deliver continuing Finally, the portfolio business and platform laser-focused pieces, to on break is and Throughout other strength separation to its process, of not it position distribution distribution we partners, stakeholders. intend our shareholders to Retirement we and breadth and up in a and value significant do diversified

severity than business our more reflects Insurance, in XXX portfolio year our by approximately General XXX points a a ago which margins. Commercial mix Insurance, further surprisingly, by was in better The book the with continues compared which XXX to Travel our our another portfolio we business basis active actions. Insurance XX.X% North accident ratio. in by quarter loss The achieved year sessions management and XX.X% of Syndicate XXXX. business, Personal underwriting impacted Turning the continued event reduced third improved basis driven expense both improvement not a and third accident be third premium ratio, ratio, of volumes In of year a related billion has The to CAT driven to business, and loss to lower very by was by basis America with in points year-over-year excluding by globally. With lower The mix combined Personal excluding ex industry and quarter low-to-moderate quarter. America $XX XXXX. of to results positive catastrophe, per higher CAT to XX.X% to core Japan of compared due the CAT, with by improved XX% COVID-XX, mix upper range result points in accident respect year as in Commercial a an quality improvement lower ratio of impacted North was our our alone. business to In reinsurance quarter

CAT the net COVID-XX quarter. disclosed for to the estimates we $XXX estimates. loss COVID-XX, respect is CAT Included Validus quarter $XXX Travel, number estimates, totaled Re. million third last of With loss Contingency our to loss and of related primarily As million this week, in reinsurance,

estimates $XXX slightly Our loss over year-to-date are million. net COVID-related

with losses the and aggregate volatility. other under in Our reinsurance program to occurrence, for occurrence programs to Private covers. we per Regardless expect of and to expected of and per limited reinsurance our severity Client International as limiting due year recoveries have COVID-XX-related frequency additional we our CATs Group be continues perform losses, of CAT place CAT in overall various protections discrete remainder natural the

we're losing pursue premium continued Turning third quarter, rate-on-rate to our and seeing has In while as not across sustained pivoted momentum team there and our risk-adjusted margin discipline decisions, growth rates the of in focus improvement to underwriting business. portfolio optimization most on account-level our rate. Commercial, our continued lines expansion. In strategy, is

rate over over in led by Excess And XX%. increases in increases of over North prior XX% In our compared to approximately rate Property Commercial Property For driven compared increases prior D&O. were In year Rate they In were by third increases XX% in basis Excess the in Rate they had America It's XX% the in were increases were Surplus International And Financial Commercial important by our aviation quarter led led and to in were and quarter, Casualty, the trade third policy Lines results. that were Financial Commercial in XX%. XX%, rate Specialty. year, XX%. on X% Lines, Commercial take the to Admitted into and over they third the Lines, Specialty, to they a the accident over XX%, D&O. XX%. by over time Lines, year we're Financial achieving they earn quarter were rates year. were energy, were in XX%. business and XX%, credit. note are will U.K.

increases outpacing that achieving confident are rate we're Additionally, our loss cost are the increases we in portfolio.

renewals. Turning upcoming to Re Validus and X/X

and increases well rate in as are capacity quoted be risk-adjusted to on disciplined being in with conditions quoted over changes. current rate lines covers continues active terms to most aggregate Retro deploying with conditions. being rate covers. perils terms very business meaningful and focus increases altering only terms tighter being Double-digit is with team appropriate model as acceptable double-digit with the Our and preferred

to the carriers rate business market. faced in a view turning conditions environment for more P&C Life have want how than Retirement, to for challenging and I decade. provide we Before context Insurance the

frequency have conditions catastrophes. been gripped low interest increase rates and an since Soft coupled and market historically the in XXXX industry and natural of severity have with

XX the $XXX natural As quarter have expected approximately over These through expected aggregate to losses double example, XXXX at nearly an losses $XX billion. of are looking loss. Property, XXXX the Median been third amount last amounts the years for are estimated when annual billion. industry exceed of the CAT

pricing And numbers has these natural these catastrophes, new keep of include losses from For adjusted light of in norms. COVID-XX. mind, in catastrophe none

generated excluding is XXXX. to due retention basis confirm that the and XXXX, challenges we distribution have flight do to and particularly end significant below in achieve fruition, we has looking us help these demonstrate work With General will of represent line quality our our an growth This XXXX. them relationships complex. complex of more we'll COVID. will accident top increasingly we in believe And our partners a the been the are becoming We point achieve of momentum year a ratio, The X,XXX manage, since CATs, and the and by we clients Insurance strength XX%. rates combined the to from environment, improvement is clients backed believe with that

Retirement. It spent his the months a performance. to consistent of Turning a last the of I've record to positioned delivering with has well working extremely market and Life is that couple Kevin team and analyze in and business. is this track franchise

was adjusted and common quarter was income XX.X%. attributed pretax return million adjusted Third $XXX equity on

higher variable favorable market of results deferred as Third and lines all quarter well in recovering returns. costs private equity reflected business, driven performance equity strong strong by sales levels, resulting impacts in to reserves and as acquisition annuity

is the will discussed The be a base additional times up, limits in the tender term long of higher which in macroeconomic and income, the Additionally, form credit drove levels sensitivities, benefit compression. spread and of especially short-term previously offset lower spreads of sensitivities volatility. held interest Kevin stress and high tighter rates recognizing call generally in of that

tactical we impacted in by our the noted base compression substantially on quarter, investment As returns spread short-term lower and position. second been has cash investment reported

be XX to the compression. points in spreads of basis annual range spread continue impact, this base investment Excluding would X to

well. strong. deaths, and pre-pandemic this program COVID-XX-related has management balance sheet The in and performed estimated serve Retirement and and as consistent continued Excluding expected, favorable to Life our remains mortality discipline have hedge with Risk efforts trends. was experience business

risk view as long-term large differentiator. such we as care, a legacy blocks, lack of our Additionally,

annuity quarter retail low became rebounded second the levels our As new significantly more accustomed expected, as to from a partners historically working distribution sales environment.

large We also we guaranteed the Retirement during in X third Group contracts where institutional grew quarter. markets in sales investment successfully issued

opportunities capital arise and second as remain Our levels, to well deploy attractive and business. from and decreased total premiums deposits quarter our confident we across positioned

in Now on core key be highlight. more to announced change in brief transformational order we like in and our Since I'd marketplace AIG. on and have we at A XXX. investing focused let the AIG make me real XXXX, XXX AIG to few in a processes infrastructure competitive provide been update points

on million run and to our likely are original of this rate We track deliver guidance exceed $XXX will savings year. exit

shared shared the to million whereby existing expect acquire subject us will we important and which digital our initially team, with with Accenture below to entering experience. also recently An Accenture, modern that the is our This will Working of services come we global time. a improve true a user regulatory marks processes achieved XXXX. footprint. help cost the operations Accenture end-to-end overall in expand partnership services $XXX We achieve to approvals phase over with Accenture, first platform that with create expect to communicated will the AIG will milestone for relationship we was into agreement

XXX unchanged. against end to rate billion targets overall billion remain by expect $X.X Our We savings deliver XXXX $X run a of for of the total investment. still AIG

not we to Life due separation anticipate or significant do of Retirement. Lastly, the changes any planned and delays

franchise I the it Since thank to Throughout, build have I with has his our steadfast in I far so to conditions. Brian his achieved the world's Mark, remained X and turn over what where in commitment I'd we we shortcuts proud of Brian journey. navigated I'm Brian no quick fixes. started, unprecedented mid-XXXX, my leading in truly over Before to or insurance incredibly joined like years. remarks last for leadership end

continuing I know colleagues excellence they both have despite commitment COVID-XX. due all and and very I to experienced, Brian as bright we close all Our I company. do our say look in AIG we the we've behalf and speak disruption out future personally that look forward of on significant to colleagues a a demonstrated unmatched with for XXXX ahead to to that to resilience professionally work all when

to turn I'll Now over it Mark.

you, and Peter, everyone. Thank good morning,

of million on the million which compared year catastrophes adjusting a announced in in solid for third adjusted the of sufficient briefly time inclusive allow to Life second, net after pretax the and of I fixed Retirement have or private business XXXX. drivers $XXX $XXX the third, compared order to of addition of third of expenses million share operating or third were: securities; income third $XXX earnings increased and General reported $XXX Life development, total discuss assumption AIG, income improved Peter Brian key of AIG or As maturity of exclusive million strong will AIG million and reduced this update; share and and income results separation impact quarter impact Retirement Q&A. $XXX already Fortitude, general the quarter the annual actuarial commented APTI, to very investment underwriting prior from gain, results, to income, the quarter quarter hedge 'XX; and for results, fourth, $X.XX diluted of fund of reflecting of XXXX higher million. after-tax per The by the $X.XX Insurance per up equity in $XXX a approximately to one, adjusted the

Turning to General Insurance.

by adjusted announced the losses to income down from $XXX of quarter primarily quarter pretax, Third offset higher the million, million stemming catastrophe previously from of million XXXX, income third was $XXX pretax net alternatives. investment partially $XX due

net the favorable unfavorable of development respect total reviewed result $XX more gain. from was this than prior $XX amortization reviews -- reserves. reserves $XX.X ADC XX% were bringing with me, carried year As to year-to-date million, of of of The the billion to reflects carried deferred which development were million quarter, excuse development, of

development was Property unfavorable areas cyber, gross World, and Lines, environmental, primary The U.K., million businesses, Casualty Pacific Western and and well workers' were program of Europe Asia reviewed amortization European lines. $XX Financial compensation, impact. as Casualty, Lines this short-tail as Canada So the Personal

will focus Financial quarter's be areas. Next Casualty some U.S. on Lines and

Europe compensation, developments by This Lines, quarter's development and accident America, and internationally, and years. wildfire, North by mostly large in favorable short-tail Casualty, PYD Financial showed XXXX unfavorable driven primary prior workers' California driven in mostly mostly subro lines losses U.K. in a

perform accident with better better an American point the was improvement Lines than As adjusted quarter, by business ratio. points improved, to Peter basis prior last a an basis emanated the combined North improve with International points loss basis as XXX XXX XX%, year year, than XX.X% in Commercial basis the America continued year. mentioned, year, ratio from the an accident points XXX XXX basis adjusted to basis reduced combined XXX improved by which from was General XXX Lines from added improved Commercial this points our Lines also an Commercial margin year as for acquisition both ratio. comparable has of XXX improvement XX was Insurance of better would The while favorable ratio year significant PCG work lower frequency North XXXX. last several through ratio tailwinds global quarter-over-quarter, past driven above basis basis reflects impact International in XX% by with Syndicate to Insurance points due note Insurance really Personal in of loss points points, XXXX with business COVID years last higher achieved initial not expectations, ratio. of improved hard XXX drop emanating basis, to nearly well their expense GOE adjusted PCG The changes the on General of $XX by million. of basis the Personal momentum North the rate the Personal are Insurance also due results in on points noise as the as XXXX drive was business, American segment, Lines our Personal American in ratio year XXX.X% the formation the book. the well. Travel premium a approximate including that last I Canadian improved by margin associated year Warranty, by ratio. with combined to American will Japanese quarter the International Travel catastrophes, accident Personal and as and global on higher the discussed North lower to for accident discussed and auto was to net all significantly Lines reduction that expense Travel's in as XX% to A&H North XX% a prior adjusted combined drop call. with the ratio continued led earned

become as behind impacted were currency. in us, we in Commercial are pivoting Personal which by now the and evident X% written And results premiums as earned billion near-term Lines top With will are growth, still impact principally and premiums of gross approximately as Personal XXXX, portfolio Commercial, of specific impact impact Global Commercial In the Insurance reunderwriting reflecting down American $X.X reinsurance America new decreased to reinsurance the to down improved management net line have early quarter, areas. written approximately management due the of were largely actions business approximately by the before Insurance. both the well retention on stated, North as book. and premiums North XX%, portfolio net X%, the written Lines and COVID, but levels

increased the Specialty Lexington rate changes premiums momentum PCG. by written For premium a and mix XX% increased to lower our X%, significant year-over-year and to momentum. and International new flow, net Insurance shifts as the North Travel Talbot. Financial and approximately continued business growth impacted due America of premiums by Lines, by Property in business net instance, Personal reflecting result Commercial's increases rate written was business grew

in As we a the net Travel premiums reduction we on will basis, constant volatility International the because down as Lines will the the written retain and this case XX% business, structure reduce quarter. the Personal of Syndicate premiums. were of was enter book approximately of overall the XX% Personal PCG principally Insurance dollar XXXX,

new from in business, result also Japan, decrease was which of the most to Aside International had lower in COVID. of a due Personal the Travel, Insurances premiums slight

the up and Retirement. with income over XX% businesses. for million compared prior Now year turning to quarter, performance was pretax $XXX strong Adjusted to in most the Life

XXX% the XX% XX% annuities from annuities sales grew And modestly $XXX and up XX.X%, Third were low historically levels. Retirement's retail Sequentially, Variable quarter $XXX Peter quarter sales adjusted return and $XXX million. annuities second million, quarter, as rebounded basis. fixed XX% attributed indexed Also, annuity equity to mentioned, Life common second from were million noted, Peter on and up as was significantly Retirement also to on were Group a $XXX up in and negative, low over Life solid Retirement. institutional side, to million. the year-to-date limited material for legacy in of sheet a annuities although guaranteed strong issued crisis flows, $XXX deposits fixed Total and second long-term had levels with exposure on portfolio a contracts $X.X to balance long-duration markets, such annuities. investment alone. net payout during from care, large approximately investment of several quarter, large as variable million sequentially index and fixed still with blocks and were the annuities totaling The remains premiums or increased annuities quarter prefinancial rebound billion. liability

low last While the in product spread of the this additional in compression, rates interest strength environment. a portfolio diversity will drive our is year

lapse XX-year an mortality investments. APTI and $XX policyholder income XX-year assumption to also actuarial which we of to -- million income, net revised to Shifting quarter update, lower as previously, annual Our Net X.X% unfavorable an lowered policyholder on mostly in was forward $X.X third was our billion pretax resulting behavior income or assumption updated impact XXXX. basis assumptions. lapse, impact treasury to of approximately and the a million benign generally than X.X% from of from pretax unfavorable assumptions, net $XXX investment our and million $XXX adjusted

last of on prior million the on investment funds $XXX income the quarter. to this on stronger due prior reflecting Fortitude, reminder, compared private quarter's excluded on sale included the full Fortitude actually year the whereas a to Adjusting quarter year's APTI APTI basis year, income income an is net the accordingly, hedge quarter it As investment the of both and basis portfolio, net equity. third this grew an income

notes interest companies' maturities. was adjusted of billion the our consolidation to declined to The $XX GOE after $XX reflecting senior other than million due service higher eliminations principally and reduction. $X.X from May on focus expense million, Parent operations. loss pretax, XXXX third and AIG's to expense Turning issuance continued pretax XXXX, $XXX additional million quarter prefund of upcoming of

income impact longer in Fortitude APTI within results option quarter, the $XX the of of pretax segment a value the as investments. Legacy by Legacy's Fortitude a to to down assumption result higher favorable slightly the Legacy gains reflects no to on also of compared lower update. million offset $XX fair actuarial portfolios related or quarter Our adjusted due at income annual third sale, of million XXXX reflected

withheld September per down from Adjusted common Now the DTA third debt after up holding XXXX, sequentially June Fortitude had At the the per and was billion net to and X% assets, share, cumulative was At XX. gains of quarter unrealized balance X% the turning assets expenses cash which $XX.XX, $XXX book of share excludes funds million. per and maturity of book August X% June liquidity up as XXXX. value dividends on September parent sheet. XX, short-term well $XX.XX XX, share, value AIG from from year-end, AOCI prior as $XX.X but company

into Looking tax the XXXXs. balance to we IRS the date back expect cross-border the to transactions quarter, next of on that pay settlement

the quarter, to the year-end, with potentially $XXX that had final related penalties. recently litigation the are approximately case by second We and interest million principal we calculation settled During the from prepaid associated IRS. and awaiting

netting, billion. We lower estimate, we which total have accrued may the our at have interest below $X.X which requested amount remaining settlement

As earnings. debt, that points third quarter, XXX in been driven had which approximately prefunded maturing growth by ratio basis for we the reduced debt retained in leverage, by and

and despite well-capitalized continuing rates, credit our Finally, COVID. profitable the and subsidiaries impact experience operating primary low of remain

and the good pool uncertainty risk-based providing capital For XXX%; U.S. target it now the estimated XXX% ranges the General it's of both turn and for Insurance, and XXX%; between a current fleet to buffer I for quarter and will ratio over XXX% we both Life back environment. Brian. that, between With to our third be estimate above be in the to Retirement,

I Mark. the you, it time of this. guess Thank portion Q&A is for

operator, why we don't start? So

Greenspan our [Operator of Wells first Instructions]. We take now can Elyse from question Fargo.

going first comments on your Peter, My Retirement. and is Life question, to back

separation option IPO reference mentioned you was But bold, either a it the XX.X%. mentioned private the like sale. for You sounds then to or in an

confused the some So I just down subsequent guess can a please. sales on private could I'm of get L&R, of you on the clarity If private that? sale, of comment, XX.X% what that sale after go I route a

that, please? and Peter, take go ahead

consider it but approach predict XX.X% less, referencing Yes, private for can't a IPO. that could to that that future, be would Thanks, Yes. be could was be percentage, the And there Elyse. would so the -- there not we be above said same would we an the or the that. the anything but sale, for that XX.X% we

would first or or less from event party private in the an would came that step. the something IPO about I think as be the So whether a initial it's XX.X% of it

for guess, Okay. private full think there was just time it XX.X% XX.X% a the IPO party, a I private was you road. looking disposition a the of for then so two, the a -- guess, I if sale L&R? it Is or, option the be And as to if for subsequent down these then sales of frame you'd

Got you.

Okay. Yes.

unfolds. how will other sale term, whether or we'd the really, have or time we'd would closing ultimate mean of IPO near first communicate in required regulatory to process we depend we Elyse, line, an the to we're XXXX. I we'll step and a the of or think I pursue like on on in course, make the to separation the So like think sale, to like But going decision can that that minority approvals. IPO see And close of promptly.

of next Shanker now can America. Bank take from of We question our Josh

general question what Travel around first exclusive the volumes accident premium guidance with growing next of Is was and the premiums? that So year. happens

question. Peter? that's think a I Peter's Well,

Josh. line not Insurance, for in believe Thanks, we It grow grow headwind that would top No. caveats. Yes. conditions we that without the can exclusive. in where the can prolonged mean we we have Travel, a I was even we think but General line those top

the given down double-digit in third numbers where at is. those And look for range, who the liability, premium low quarter pricing

at So sounds them like about this concerns for gives business price. liability appetite it your

You've attractiveness of and the on couple of of business that of books writing couple of business XXXX? last the in on confidence How in years run lot liability does your a liability reflect last the years. -- on November obviously

Go ahead, Peter.

Well, we've been reunderwriting lines the doing years for now. of a couple of liability

the seen positive we've so very shift a And way. the portfolio in in

And In the sessions in of in and lines can this we I cost. We think do liability very increases portfolio because even quota share. sessions top year, that we premium that net the excess just lot good that line. reinsurance feel getting put positioning the what are in had But share. a grow the loss you'll which written way meaningful, more quota are we on we above are Casualty the is see particular about we're on loss the just portfolio. that rate-on-rate and think on of believe we and we

part part we wouldn't reinsurance it. it's read it's a in say remediation, So I that and of into we are would I of the think grow that position to it.

gross growth? care the you to share written Would premium

I'm sorry?

Josh. again, that Say

than in premium to an down growth was Would low double much less share digits? gross Whether idea liability? you the it written care about

-- I same comment. it's No, would the

the on basis we gross line grow think I as top can well. a

next question of from comes Meredith Our UBS. Brian

the below XXX of do that's of and expense you How think ratio of to rate about 'XX. XX% respect be much that as How of kind of related? underlying -- you guidance with going when combined as ratio, it? I out kind think you is loss we assume ratio end to go Peter, the kind run AIG kind about

Brian. ahead, Go

ahead, Peter. Go

start about Yes, it's exit of to ratio. run as all rate, XXXX I the variables combined to of we end think contribute will thought and we But the improved just XXXX.

So -- on my on I AIG you some guidance remarks XXX. in prepared gave

we the rate to an run $X committed exit $XXX and remain we'll billion that of million year. so as So this recognize

expense improvement that the think could points about contributing a feel during basis We you of the grow of about time. couple top opportunity good hundred to period So line. very to

start We program will revised we will will that today. we to so have ratios. have line help the reinsurance we And growth, that a the will portfolio see reflect which think top

start quite into today, will is have increases likely as last vast piece the pivot need not we are the to will a so reunderwriting different we above to reinsurance will just going and much. then earn And portfolio. we the And loss forward, the to rate cost structure where

all to below X the And ratio so improved I think will combined those an variables contribute of XX%.

Our next question of from Piper comes Paul Sandler. Newsome

could that in different you use of you the past? do the what expected Perhaps And or for you'd if sale business? about get of proceeds prioritization be would from just if IPO talk Life the

use think, the was Paul, question So I of proceeds from the IPO.

that I you question? Mark, think the right. case, take that's And got that I would if

leverage. our the our act based question. which includes review debt be for Sure. Thanks, certainly of But primary share proceeds we'll focus reduce Paul, accordingly to any continuously disposition capital, initial use thanks best from priorities. AIG's repurchases the upon for the and those will Well,

another part little were there you audio? question a unclear the was in to my because Paul,

was No. on leverage. the of but sort debt just it, of focus I that those terms my was procedures? already mean that debt maybe all if in could mean of I leverage the you've prefunded sense further you

a more surprised guess bit I'm there's I So do. to that little

take you that? can Mark, Okay.

Sure, sure.

management That previously this though you and those since that, So did billion. But level Paul, raise billion perspective. leverage from AIG capital on year. right, about maturities, by provided liquidity to the liquidity. roughly the forthcoming with separation strong with from AIG. as obligations Retirement so ratios bolstered talked near-term of debt strategy management Life a focused upcoming we was have and debt this executing clearly of has we prefunded our attractively though, But reducing liquidity That remains $X.X May risk associated and noted, that $X.X on in

leverage remarks, prefund, settlement quarter we coming $X.X a have pushed billion. that in up tax did that the $XXX But knowingly. fourth of my know got I'd And we March million could we we've XXXX. by in So at which that's due up debt mentioned and maturing that the ratio $X.X be billion to prepared range

us. So in really -- have we right of those front priorities are

Gallagher of Evercore. question Our from comes Tom next

private for your into values of Have path values is don't intend is, and the we've insurers. to best guess my Insurance business potentially market the that seen it Peter, off in and break public of are double still life that you that consideration you in concluded sell Life recent indications pieces. taken some question mentioned current you market up I that shareholders? one the

take let Tom, add Peter it. one, to can and that me

you that our the lot it of We've And cross-unit at think when is we distribution. Life have the leading a to unequal understand just strength got there's platforms. business, we positions. of the synergies. They've breadth believe of look and I ongoing product market

provides and and the So pieces. believe, of knowledge the kind in that's valuable and together more than integrated stability platform, we expertise

is interact. done We've but of And lot machine derisking, where cleaned it a so all we've these things a up. really beautiful L&R

mean parts, I'll is products I some to the that the of greater say, is Peter, believe we definitely the way. greater. Tom. I want do each you whole of that? that helps, add to right So anything the hope than

as it's together. keeping value, believe Brian, and between prepared that just the I the and shareholder consistent performance Life Retirement produced structured look going it think did So is that we your to at and remarks alternatives most comments, my many create has

appreciate I that, guys.

capital over lot still sounds is in follow-up And like was dissynergy my It breakage in XXXX, if -- of Just an there diversification? some less a the billion. Is of so, could quantify estimate it? there that's back $X diversification you capital now.

Well, Mark. can I guess, going I'm one, to you take just to that throw Tom, us that? Mark, through

sure. Sure,

a quite is XXXX as there's you been the know, pretty massive ago. portfolio much Tom, board. the So while And across to changes

the board. you XXXX, it, got when went We Brian targeted at really that a think across in program looked only arrived reduction you how when no it. not XXXX, revamped mean I but matter risk about risk you've from appetite, So the

the risk-based a And within both remembrance, reduction, and GI sides all and of and total operating balance Retirement So been of the things and on of the is capital GI implemented and the has those sheet, the involves parent for each see volatility Life and subsidiary, a which strong both successfully clearly bit in RBC reduced. risk you that's investments. and been L&R operations involved it's for And you of asked markedly little so kind about. as the and just and exactly

Retirement Fortitude on reserves. was Life detail, also only what of $X-plus and billion derisking, it billion transaction, we it's the great moving constitutes not went on investment GI, the $XX but which billion and reserves, $XX into those So of

those of with So lot rate of and look when covers loaded settlement clearly structured reserves, immediate see are reserves single under a you you the a annuity and lot interest premium risk.

issue as that So been type pushed of volatility has off kind now well. of and that now

way, been P&Ls what only the we marketplace portfolio about. that of that, it, and front that still Consequence, Peter debt have the We down which prefunding on liquidity have of management, improved trimming that both the referenced rate reinsurance risk billion we with securities. doing books advantage those capability $X.X And protect the that just it the we've on earnings talked and renewing The getting front-end structure having enormously. business to with not gone maturing in a right General the debt driving not has place but always properly. of -- taking of change was put terms conditions, allowed of but ADC the to earlier, XX% as management compound had into into to we kind book session. us massive, improved got risk classes the rates and that by things unused, The and proper the underwriting representing an that Insurance has

I lesser strength lot all is So around all think in, in in combined. of we've certainly and of reduction earnings, a volatility a those things -- of a got those earnings, there strength in lot

comes next Yaron of Our from question Sachs. Kinar Goldman

at. be separation. achieved Life still and and My Groups P&C confident in first after both around the separation. leverage commentary than leverage think comfortable Today, like you're question goes I financial where higher to entities the bit that the the sounds will a It is are leverage by

if that first rest? of So to consider the then there, connect a about XX.X% that to leverage selling and dots try is potentially sale talking at decreased some I guess, fund the you're why you'd I

up on might want brought the you have XX.X% then can maybe XX.X% to this but leverage question. I the you since and given go Mark, to Peter, Mark first, into and look, would Well, comment

the in Yes, a of think a don't deeper does deconsolidation number which issues? is know the foreign largely in as is Mark, and earn that's I go think, out meaningful tax bit I script, But will preserve want to today, to you but we Yaron, I that. it little the my XX.X% if credits

-- XX.X% because certainly Yes. Well, Peter said, still consolidate. you the as

of But is the really with reap the L&R consumption now benefits the where both two really especially years on are great you and and you important, both with been pretty he's use has as can shrinkage credit side. the have we platforms that the So that's of continue still that, GI, can now. over for a number to why basis FTC, older L&R because DTA, of tax is a where been think consumer on number consume go-forward about, the that. lot And big evident Yaron, it's foreign And prospects X the which strong has to one. noted,

important. think I that's So

respective that's Now both getting to businesses really have Insurance the back strongly do will are levels Retirement capitalized -- of today. RBC General Life all maintain the a ratio subsidiaries each and AIG and leverage the And at process is with regulators intention our validate to throughout to Peter ratings peers consistent this agencies, or referenced, as working our of these above and And remain our ratings. rating with we anticipate, we'll analysis. be and closely And operating and subsidiaries. our structure, the that target though, will strong

individual So generate of sufficient to and we effectively capital. their flexibility returns will compete organizations, both to separate financial believe above have as cost

do not reiterate, we either time, the So separation. in, as all equity part to in business of the with need at capital for anticipate again, this additional

you may for my combined helpful. rate need That's to ratio answer question, touched that? you the Peter, XXXX, to I regards the think, earlier. then been on Did And below has to this with Josh guidance momentum with your second XX%. Okay. have for achieve And

think? do Well, what you Peter,

In the current rate environment?

Yes. that Does Yes. need to continue?

underlying getting not. terms environment looking not I of No, we're again, we or would future, of the XX% mean, today. fundamentals would XXXX when to to But at continue with I end not to of in below predicate we combined in as have this through did the rate have don't. that the I and I'm into -- will out myself talk the

Ryan question next comes of Tunis Autonomous Our Research. from

about, on you do. for is on And tax more right the going rather Tom's decide gave rationale you that the piecemeal why mentioned Just when sort approach? strategic guys guess, and But a sounded considerations I of of separation you what you're outright a to at follow-up than it looked the path question Brian like also capital forward it.

a in of business selling this capital and any, piecemeal than So Life process path if made the the of tax a of considerations better that what, more parts?

Okay, Ryan, let me start with this.

looked And GI belong they apart. better is when question, were -- and they question are Or you at and kind apart? conclusion this Retirement does when the of we better the So Life together? was

the So say, and you apart? of And the look okay, and Retirement the process. or same let is together me Life better Retirement it's at and kind Life

believe we Life is as if earlier, it, Retirement outlined really said than around that them and synergy separating business integrated, I I them. well greater itself, that the value As produces a there's

to there to and the And see get and should The Life where went see the that appropriately Retirement that value General together. through is have they have we separate capital, So question, Retirement value is decision. stand and We because all a ability but that was the Life Insurance, of are the the business, creation in was didn't -- we And value we strategic up all we L&R, I that? the we practical can we and believe -- say. it yes, that. between

really simple fell it but on helps, -- very process. So that I hope that Ryan.

And for your to of type early, the dissynergies Yes, hear Peter, thinking of when any then, it's on you it think -- base about associated thing. just I complexities thoughts I'd early about mean does. I stranded like that the cost with guess, just the there. I company, but cost,

Go ahead, Peter.

you. Thank Yes.

of the will investment AIG if at the would be in to up have Retirement is benefits that So on I I think I stand with how company going XXX an was -- investment IPO its costs do But we're and order -- or than that Retirement, about and were. be if about it more additional would what Life will Life own. think to to there

the AIG and in today. will AIG insight up ground do So just on bit additional calls through of there be to give future post our it. working addition would that in in think do that and more rate of little that no a separation, as more we'll be run at costs we're And there'll I quarter we one more you some XXX, terms work synergies be then expense and

question Shields Meyer comes And from our of final KBW.

Great.

that still On pronounced the call, year in improvement XXXX. ratio than Is got more that I we loss expectation? the underlying fourth XXXX the quarter sense think 'XX in accident would the be

Peter?

I Meyer, loss asking. want mean, rate sure you're above like, in just to Is what sure the it I really just terms understand understand of want I I to cost? question. make Well, Or make I

how -- improvement you that was the in environment? mean, guess, loss wondering of better is above I I and rate pulled whether more has helping been just would about XXXX, I'm any is absolute cost that forward. Or it but pricing originally XXXX expected talked

Mark, on the getting we're year to and want take do that just on -- policy you like rate what the increase? cost

Sure, to. Sure. happy Thank you, Meyer.

major prior not that's think So but in see secondly, I we've any one and in It's is it has of thing centered rate we U.S.; from don't clear increase. that reduction the see one, falling calls virtually -- informations just the not it's call all areas global, been of only off at the Peter this the we provided discussed. don't

to I group. we the and professionalism think others have the that's continued but underwriting not, some may, think of I tantamount

it of think So this way.

that quarter, calendar continues effective quarter, going by if it's have policy and that if build, increasing rate So off you adequacy of to to strength future quarters. kind into flow

going a and from 'XX, in to marginally have the So that. year, very being nothing see strong stopping it's XXXX than better way I

follow-up? a you do have Meyer,

Okay.

used of Just IPO the the one. and the it a sale DTA? or can that quick can from proceeds who Is possible Life be Retirement -- use

question. that be -- I used the to question of didn't piece could last that It last hear --

Is Life you and of IPO possible tax of against can some up or can and the use the Retirement? partial proceeds you credits sale that it the from Yes.

I think you. Well, Mark, that's

That's short really. to other not but there's answer than complicated much involved. no actually there's It's more and -- legal structures say, to that,

think Meyer. way leave I that's to the it, best

are continue loyalty with and all we at once very another indication the right at look, the dedication So stakeholders. track. today. our me time third that an on made you to And is colleagues I to really exciting think company for to want quarter certainly the and with our us tell, AIG, got our progress to and fact I impress joining I It's I'm pleased thank again their of we've all AIG.

will circumstances look unprecedented for while remain and market-leading our execute through confident that our to manage across to we'll businesses. elevating I to AIG. strategies separate growth, forward XXXX. we Retirement team And on globe, and continue the our the We from business Life continue

we So a you updating calls. great day. forward future Have you to much. very Thank look on

today's call. you participation. concludes Thank your This for

now may disconnect. You