Ame ric a n I Ame ric a n I nte rna tio na l Gro up I nte rna tio - - PowerPoint PPT Presentation

▶
ame ric a n i ame ric a n i nte rna tio na l gro up i nte
SMART_READER_LITE
LIVE PREVIEW

Ame ric a n I Ame ric a n I nte rna tio na l Gro up I nte rna tio - - PowerPoint PPT Presentation

Feb 27, 2023 677 likes •919 views

Ame ric a n I Ame ric a n I nte rna tio na l Gro up I nte rna tio na l Gro up, I nc nc . F o urth Qua rte r 2011 Re sults Co nfe re nc e Ca ll Pre se nta tio n Co nfe re nc e Ca ll Pre se nta tio n F e b rua ry 24, 2012 Ca utio na ry

slide-1
SLIDE 1

Ame ric a n I nte rna tio na l Gro up I nc Ame ric a n I nte rna tio na l Gro up, I nc .

F

  • urth Qua rte r 2011 Re sults

Co nfe re nc e Ca ll Pre se nta tio n Co nfe re nc e Ca ll Pre se nta tio n F e b rua ry 24, 2012

slide-2
SLIDE 2

Ca utio na ry Sta te me nt Re g a rding Pro je c tio ns a nd Ca utio na ry Sta te me nt Re g a rding Pro je c tio ns a nd Othe r I nfo rma tio n Ab o ut F uture E ve nts

T his do c ume nt a nd the re ma rks ma de within this pre se nta tio n ma y inc lude pro je c tio ns, g o a ls, a ssumptio ns a nd sta te me nts tha t ma y c o nstitute “fo rwa rd-lo o king sta te me nts” within the me a ning o f the Priva te Se c uritie s L itig a tio n Re fo rm Ac t o f 1995. T he se pro je c tio ns, g o a ls, a ssumptio ns a nd sta te me nts a re no t histo ric a l fa c ts b ut inste a d re pre se nt o nly AI G’ s b e lie f p j , g , p p y re g a rding future e ve nts, ma ny o f whic h, b y the ir na ture , a re inhe re ntly unc e rta in a nd o utside AI G’ s c o ntro l. T he se pro je c tio ns, g o a ls, a ssumptio ns a nd sta te me nts inc lude sta te me nts pre c e de d b y, fo llo we d b y o r inc luding wo rds suc h a s “b e lie ve ”, “a ntic ipa te ”, “e xpe c t”, “inte nd”, “pla n”, “vie w”, “ta rg e t”, o r “e stima te ”. I t is po ssib le tha t AI G’ s a c tua l re sults a nd fina nc ia l c o nditio n will diffe r, po ssib ly ma te ria lly, fro m the re sults a nd fina nc ia l c o nditio n indic a te d in the se pro je c tio ns, g o a ls, a ssumptio ns a nd sta te me nts. F a c to rs tha t c o uld c a use AI G’ s a c tua l re sults to diffe r, po ssib ly ma te ria lly, fro m tho se in the spe c ific pro je c tio ns, g o a ls, a ssumptio ns a nd sta te me nts inc lude a c tio ns b y c re dit ra ting a g e nc ie s; c ha ng e s in ma rke t p p j g p y g g g c o nditio ns; the o c c urre nc e o f c a ta stro phic e ve nts; sig nific a nt le g a l pro c e e ding s; c o nc e ntra tio ns in AI G’ s inve stme nt po rtfo lio s, inc luding its munic ipa l b o nd po rtfo lio ; judg me nts c o nc e rning c a sua lty insura nc e unde rwriting a nd re se rve s; judg me nts c o nc e rning de fe rre d po lic y a c q uisitio n c o sts re c o ve ra b ility; judg me nts c o nc e rning the re c o g nitio n o f de fe rre d ta x a sse ts; judg me nts c o nc e rning the re c o ve ra b ility o f a irc ra ft va lue s in I L F C’ s fle e t; a nd suc h o the r fa c to rs a s disc usse d thro ug ho ut Pa rt I , I te m 1A. Risk F a c to rs a nd in Pa rt I I , I te m 7. Ma na g e me nt's Disc ussio n a nd Ana lysis o f F ina nc ia l Co nditio n a nd Re sults o f Ope ra tio ns in AI G’ s Annua l Re po rt o n F

  • rm 10-K

fo r the ye a r e nde d De c e mb e r 31, 2011. AI G is no t unde r a ny o b lig a tio n (a nd e xpre ssly disc la ims a ny o b lig a tio n) to upda te o r a lte r a ny pro je c tio ns, g o a ls, a ssumptio ns o r o the r sta te me nts, whe the r writte n o r o ra l, tha t ma y b e ma de fro m time to time , whe the r a s a re sult o f ne w info rma tio n, future e ve nts o r o the rwise . T his do c ume nt a nd the re ma rks ma de o ra lly ma y a lso c o nta in c e rta in no n-GAAP fina nc ia l me a sure s. T he re c o nc ilia tio n o f suc h me a sure s to the mo st c o mpa ra b le GAAP me a sure s in a c c o rda nc e with Re g ula tio n G is inc lude d in the F

  • urth Qua rte r 2011 F

ina nc ia l Supple me nt a va ila b le in the I nve sto r I nfo rma tio n se c tio n o f AI G's c o rpo ra te we b site www a ig c o m AI G s c o rpo ra te we b site , www.a ig .c o m . I RS Circ ula r 230 Disc lo sure : T

  • e nsure c o mplia nc e with re q uire me nts impo se d b y the I

RS, we info rm yo u tha t (i) a ny U.S. ta x a dvic e c o nta ine d in this c o mmunic a tio n (inc luding a ny a tta c hme nts) is no t inte nde d o r writte n to b e use d, a nd c a nno t b e use d, fo r the purpo se o f a vo iding pe na ltie s unde r the I nte rna l Re ve nue Co de ; (ii) a ny suc h ta x a dvic e is writte n in c o nne c tio n with the pro mo tio n o r ma rke ting o f the ma tte rs a ddre sse d; a nd (iii) if yo u a re no t the o rig ina l a ddre sse e o f this c o mmunic a tio n, yo u sho uld se e k a dvic e b a se d o n yo ur pa rtic ula r c irc umsta nc e s fro m a n inde pe nde nt a dviso r.

2

slide-3
SLIDE 3

2011 Ac c o mplishme nts Se t the Sta g e fo r Sig nific a nt Va lue Cre a tio n 2011 Ac c o mplishme nts Se t the Sta g e fo r Sig nific a nt Va lue Cre a tio n

Co mple te d Re c a pita liza tio n

  • F

RBNY Cre dit F a c ility re pa yme nt U S T P f d h $20.7 b n $47 b

Ke y 2011 Ac tions

  • Pro fita b le

g ro wth o f c o re i

2012 F

  • c us
  • I

nc re a se d fina nc ia l

Implic ations

Re c a pita liza tio n

  • U.S. T

re a sury Pre fe rre d e xc ha ng e $47 b n Clo se d Dive stiture s

  • Sa le o f AI

G Sta r & E diso n

  • Sa le o f Na n Sha n
  • Sa le o f Me tL

ife se c uritie s $4.8 b n $2.2 b n $9.6 b n b usine sse s

  • Ac tive c a pita l

ma na g e me nt fle xib ility

  • F
  • c use d

po rtfo lio o f Stre ng the ne d L iq uidity

  • Re vo lving Cre dit F

a c ility

  • Co nting e nt Ca pita l No te s
  • I

L F C Cre dit F a c ilitie s $4.5 b n $500 mm $2.3 b n

  • Sa le o f AI

G sha re s $8 7 b n(1)

  • Co ntinue d de -

le ve ring , de - risking a nd b usine sse s

  • Sta b ilize d

ra ting s Ac c e sse d Ca pita l Ma rke ts

  • Sa le o f AI

G sha re s

  • AI

G se nio r de b t issua nc e

  • I

L F C se nio r de b t issua nc e $8.7 b n(1) $2.0 b n $4.6 b n Co ntinue d Ca pita l

  • Se nio r de b t fo r hyb rid e xc ha ng e

$2.4 b n mo ne tiza tio n o f no n-c o re a sse ts

  • Pre pa ra tio n fo r

g

  • I

mpro ve d

  • pe ra ting

pe rfo rma nc e Ca pita l Ma na g e me nt

  • Sha re re purc ha se a utho riza tio n

$1.0 b n Re invig o ra te d Co re Busine sse s

  • I

mpro ve d o pe ra ting pe rfo rma nc e

  • Co mple te d c a sh re de plo yme nt

St di id d d t F e d o ve rsig ht p

3

  • Stro ng divide nds a nd no te

re pa yme nts fro m sub sidia rie s $3.0 b n

1) I nc lude s De pa rtme nt o f the T re a sury pro c e e ds o f $5.8 b illio n.

slide-4
SLIDE 4

F

  • urth Qua rte r 2011 K

e y T he me s F

  • urth Qua rte r 2011 K

e y T he me s

Highlights Note wor thy Ite ms

Ca pturing ra te inc re a se s a t Cha rtis

  • U.S. / Ca na da +4%
  • Wo rke rs Co mp. & Pro pe rty +8%
  • Sig nific a nt CAT

lo sse s a t Cha rtis

  • Hig he r tha n e xpe c te d a c c ide nt ye a r

lo sse s in Wo rke rs Co mp. a nd Pro pe rty Be nig n Cha rtis re se rve de ve lo pme nt

  • Ne t fa vo ra b le de ve lo pme nt

$13 mm

  • L
  • we r a lte rna tive inve stme nt re turns
  • F

a vo ra b le litig a tio n se ttle me nt; I BNR c ha rg e a t SAF G p $ Ste a dy divide nds fro m insura nc e c o mpa nie s

  • Cha rtis $629 mm
  • SAF

G $324 mm Stro ng life sa le s a nd sta b le ne t fl t SAF G

  • Re ta il life sa le s +9%

N t fl $673

  • Co ntinue d lo w inte re st ra te

e nviro nme nt flo ws a t SAF G

  • Ne t flo ws $673 mm

Stro ng g ro wth a nd de c lining de linq ue nc ie s a t UGC

  • NI

W +$3.8 b n

  • De linq ue nc y c o unts (19%)

DT A va lua tio n a llo wa nc e $ b DT A va lua tio n a llo wa nc e re le a se d

  • $17.7 b n

4 No te : Pe rc e nta g e c ha ng e s a re to fo urth q ua rte r o f 2010.

slide-5
SLIDE 5

F ina nc ia l Hig hlig hts F ina nc ia l Hig hlig hts

GAAP re po rte d re sults in 4Q11 re fle c t a U.S. c o nso lida te d inc o me ta x g ro up de fe rre d ta x a sse t va lua tio n a llo wa nc e re le a se o f $17.7 b illio n ($9.34 pe r sha re ).

Fo urth Q ua rte r ($ in millions, e xc e pt e arnings pe r share )

2011 2010 C ha ng e

Re ve nue s $17,409 $21,202(1) (17.9)%

Ne t inc o m e a ttrib uta b le to AIG 19,798 11,176 (1) 77.1% Afte r- ta x o pe ra ting inc o m e (lo ss) a ttrib uta b le to AIG $1,558 $(2,214) N/ M Dilute d e a rning s pe r c o m m o n sha re :

Ne t Inc o me a ttrib uta b le to AIG $10.43 $16.60 (37.2)% Afte r-ta x o p e ra ting inc o me (lo ss) a ttrib uta b le to AIG 0.82 (15.99) N/ M

Bo o k va lue pe r c o m m o n sha re $55.33 $46.80 (2) 18.2%

5 1) T he 2010 GAAP re sults inc lude the c o nso lida te d re sults o f AI A prio r to sa le a nd a n a fte r-ta x g a in o n sa le o f dive ste d b usine sse s o f $13.5 b illio n, ne ithe r o f whic h is re fle c te d in a fte r-ta x o pe ra ting inc o me . 2) Pro fo rma g iving e ffe c t to the Re c a pita liza tio n a nd c o mmo n sha re s issue d o n c o nve rsio n o f e q uity units.

slide-6
SLIDE 6

Co mpo ne nts o f Afte r-ta x Ope ra ting I nc o me (L

  • ss)

So lid insura nc e o pe ra ting e a rning s in 4Q11, de spite hig he r tha n e xpe c te d CAT s.

Co mpo ne nts o f Afte r ta x Ope ra ting I nc o me (L

  • ss)

Fo urth Q ua rte r ($ in millions) 2011 2010 ($ in millions) 2011 2010 Insura nc e o p e ra tio ns C ha rtis $348 ($3,974) SunAme ric a 931 1,043 Mo rtg a g e G ua ra nty (re p o rte d in O the r) (23) 154 T

  • ta l Insura nc e O pe ra tio ns

1,256 (2,777)

Airc ra ft Le a sing 119 (606) Dire c t Inve stme nt b o o k (27) 394 G lo b a l C a p ita l Ma rke ts 46 293 C ha ng e in fa ir va lue o f AIA a nd Me tLife se c uritie s 1,021 27 C ha ng e in fa ir va lue o f Ma id e n La ne III 208 382 Inte re st e xp e nse (456) (660)* C o rp o ra te e xp e nse s a nd e limina tio ns 92 (461)

Pre - ta x o pe ra ting inc o m e (lo ss) a ttrib . to AIG 2,259 (3,408)

Inc o me ta x (e xp e nse ) / b e ne fit (580) 1 756 Inc o me ta x (e xp e nse ) / b e ne fit (580) 1,756 No nc o ntro lling inte re st – T re a sury/ Fe d (96) (403) O the r no nc o ntro lling inte re st (25) (159)

Afte r- ta x o pe ra ting inc o m e (lo ss) a ttrib . to AIG $1,558 $(2,214) Afte r- ta x o pe ra ting inc o m e (lo ss) pe r dilute d c o m m o n sha re $0.82 $(15.99)

6 * I nc lude s $110 millio n o f F RBNY inte re st in 2010.

slide-7
SLIDE 7

De fe rre d T a x Asse t Ove rvie w

AI G ha s sub sta ntia l ta x a ttrib ute c a rryfo rwa rds tha t a re a va ila b le unde r U.S. ta x la w to

  • ffse t future U.S. fe de ra l inc o me ta x o b lig a tio ns.

De fe rre d T a x Asse t Ove rvie w

A s o f 12/ 31/ 11 G ro ss De fe rre d

($ in billions)

T ype O rig in/ So urc e G ro ss Attrib ute s De fe rre d T a x Asse t Utiliza tio n/ L im ita tio ns

No n-L ife

  • AIG FP
  • FRBNY Lo a n

C o mmitme nt Fe e $42.8 $15.0

  • Use a g a inst C ha rtis, ILFC , UG C a nd

AIG Pa re nt inc o me

  • Limite d use (35%) a g a inst

SunAme ric a ta xa b le inc o me

Ne t O pe ra ting L

  • ss

C a rryfo rwa rd

C o mmitme nt Fe e SunAme ric a ta xa b le inc o me

  • 2028–2031 Exp ira tio n

L ife

  • SAFG

$2.4 $.8

  • Use a g a inst SunAme ric a inc o me
  • 2025 Exp ira tio n
  • 2025 Exp ira tio n

C a pita l L

  • ss

C a rryfo rwa rd

L ife (SunAme ric a )

  • Se c uritie s Le nd ing

T ra nsa c tio ns $21.2 $7.4

  • C a n o nly a p p ly a g a inst c a p ita l

g a ins fro m SunAme ric a (SunAme ric a ) T ra nsa c tio ns

  • 2013–2014 Exp ira tio n

Fo re ig n T a x C re dits

Ge ne ra l

  • AIA
  • ALIC O
  • C ha rtis

$4.6

  • Limite d to ta x o n lo we r o f ta xa b le

inc o me o r fo re ig n so urc e inc o me

7

1) Re c o rde d in Curre nt a nd de fe rre d inc o me ta xe s o n the Co nso lida te d Ba la nc e She e t. E xc lude s $0.6 b illio n o f o the r g e ne ra l ta x c re dits a nd a lte rna tive minimum ta x c re dits, a nd o the r o rdina ry a nd Othe r c o mpre he nsive inc o me re la te d De fe rre d ta x a sse t / De fe rre d ta x lia b ility. T he va lua tio n a llo wa nc e de c line d fro m $23.8 b illio n a s o f De c e mb e r 31, 2010 to $7.2 b illio n a t De c e mb e r 31, 2011 re fle c ting the ye a r-to -da te re le a se o f the va lua tio n a llo wa nc e o f $16.6 b illio n. T he re ma ining va lua tio n a llo wa nc e a t De c e mb e r 31, 2011 re la te s to the L ife I nsura nc e Ca pita l L

  • ss

Ca rryfo rwa rd.

  • C ha rtis

Inte rna tio na l

  • 2016–2021 Exp ira tio n

T

  • ta l:

$27.8 1

slide-8
SLIDE 8

Ca pita l

60 0

Bo o k Va lue Pe r Sha re

p

4Q11 hig hlig hts inc lude a $2.4 b illio n e xc ha ng e o f hyb rids a nd $70 millio n in sha re re purc ha se s. I n 1Q12, E I T F 09-G is e xpe c te d to re duc e BVPS b y $1.74 ($1.95 e x. AOCI ). Ca pita l Struc ture

($ in b illio ns, e xc e pt pe r sha re da ta )

4.24 2.64

50.0 60.0

$55.33 $46.80(3)

18%

8.5 9.3 14.6

Se nio r De b t

$138.3

(1)

52.69

30.0 40.0 Se nio r De b t Junio r Sub o rdina te d De b t Re de e ma b le NCI

(1)

$8.73 pe r shar e VA Re le ase 42.56

10.0 20.0

0 9 105.0

Co mmo n E q uity No n-re de e ma b le 3rd Pa rty NCI 0.0 De c . 31, 2010 De c . 31, 2011 BV,e x AOCI AOCI

0.9

De c . 31, 2011

Se nior F inanc ial De bt + Hybrids / Capitalization(2) 18.6%

8

BV,e x AOCI AOCI

1) Inc lude s AIG L

  • a ns, Mo rtg a g e s, No te s a nd Bo nds Pa ya b le , SAF

G Inc . No te s a nd Bo nds Pa ya b le , a nd L ia b ilitie s c o nne c te d to the trust pre fe rre d sto c k. 2) E xc lude s re de e ma b le no nc o ntro lling inte re st. 3) Pro fo rma g iving e ffe c t to the Re c a pita liza tio n a nd c o mmo n sha re s issue d o n c o nve rsio n o f e q uity units.

Se nior F inanc ial De bt / Capitaliza tion(2) 11.3%

slide-9
SLIDE 9

L iq uidity q y

Qua rte rly Ca sh Divide nds / Pa yme nts

1 200 1,400

($ in millio ns)

$1,280

  • Stro ng divide nds a nd no te re pa yme nts
  • f $3.0 billion in 2011.

775 108 505 324

400 600 800 1,000 1,200 SunAme ric a Cha rtis

$495 $953

  • f $3.0 billion in 2011.
  • E

xpe c te d a nnua l pa yme nts o f $4 – 5 b illio n.

  • Cha rtis divide nds o f $1.5 b illio n in 2011

$638

P t L i idit

530 130 775 629 250 365

200 400 4Q10 1Q11 2Q11 3Q11 4Q11

$250

$ de spite la rg e st CAT ye a r in its histo ry.

  • Pa re nt liq uidity so urc e s to ta l $14.0 b illio n

a t De c . 31, 2011. Pa re nt L iq uidity

3.2 1.0

Ava ila b le c a pa c ity unde r Co nting e nt L i idit F iliti

($ in b illio ns)

$14.0 9.8

L iq uidity F a c ilitie s Ava ila b le c a pa c ity unde r Syndic a te d Cre dit F a c ilitie s Ca sh & Sho rt-te rm inve stme nts

9

De c . 31, 2011

slide-10
SLIDE 10

Cha rtis – Unde rwriting Re sults

120 140

Cha rtis Unde rwriting Re sults

  • Ne t fa vo ra b le prio r ye a r re se rve

T

  • ta l Cha rtis

Co mb ine d ra tio sho ws c o ntinue d pro g re ss.

116.8

F

  • urth Qua rte r Hig hlig hts

85.7 78.3 69.2 68.7

40 60 80 100 120

de ve lo pme nt wa s $13 millio n in 4Q11.

  • Hig he r tha n e xpe c te d c urre nt

a c c ide nt ye a r lo sse s in 4Q11 fo r

116.8 109.0 100.3 99.4

31.1 30.7 31.1 30.7

20 40 F Y 2010 F Y 2011 F Y 2010 F Y 2011

160 5

y Wo rke rs’ Co mpe nsa tio n a nd Pro pe rty.

  • 4Q11 CAT

lo sse s o f $467 millio n, la rg e ly drive n b y the T ha ila nd flo o ds

Ac c ide nt Ye a r Co mb ine d Ra tio e xc l. Ca ta stro phe L

  • sse s

Ca le nda r Ye a r Co mb ine d Ra tio 125.4

80 100 120 140 160

160.5 107.3 108.9 102.1

la rg e ly drive n b y the T ha ila nd flo o ds

  • f $368 millio n.

35.1 32.8 35.1 32.8 74.5 73.8 69.3

20 40 60 80 4Q10 4Q11 4Q10 4Q11 10 4Q10 4Q11 4Q10 4Q11

E xpe nse Ratio L

  • ss Ra tio

Ac c ide nt Ye ar L

  • ss Ratio e xc l. CAT

s Ca le nda r Ye a r Co mb ine d Ra tio Ac c ide nt Ye a r Co mb ine d Ra tio e xc l. Ca ta stro phe L

  • sse s
slide-11
SLIDE 11

Cha rtis – F

  • urth Qua rte r Ne t Pre miums Writte n

($ in millio ns)

Co mme rc ia l NPW

  • Ra te s in the U S a nd Ca na da re g io n inc re a se d

Cha rtis F

  • urth Qua rte r Ne t Pre miums Writte n

E xc luding the impa c t o f fo re ig n e xc ha ng e , Cha rtis NPW inc re a se d a ppro xima te ly 2% fro m the fo urth q ua rte r o f 2010.

1,238 1,381

2 000 3,000 4,000 5,000

$4,510 $4,526

  • Ra te s in the U.S. a nd Ca na da re g io n inc re a se d

a ppro xima te ly 4% o ve r the prio r ye a r pe rio d le d b y Wo rke rs’ Co mpe nsa tio n a nd Pro pe rty, e a c h with ra te inc re a se s o f a ppro xima te ly 8%.

  • E

uro pe , F a r E a st a nd the g ro wth e c o no my

3,288 3,129

1,000 2,000 4Q10 4Q11

na tio ns a ll o b ta ine d po sitive ra te inc re a se s c o mpa re d to the prio r ye a r pe rio d.

  • Co ntinue d impro ve me nt in the mix o f b usine ss:

pre miums fo r the inte rna tio na l re g io ns a re 51% in 4Q11 c o mpa re d to 47% in 4Q10 a nd

4,000 5,000

($ in millio ns)

Co nsume r NPW

$3,339 $3 039

in 4Q11 c o mpa re d to 47% in 4Q10 a nd pre miums fo r Co nsume r I nsura nc e a re 43% in 4Q11 c o mpa re d to 40% in 4Q10.

  • U.S. Co mme rc ia l I

nsura nc e re fle c ts ma na g e me nt a c tio ns ta ke n with re spe c t to

681 700 2,358 2,639

1,000 2,000 3,000

$ $3,039

c a pita l inte nsive a nd unde rpe rfo rming line s o f b usine ss, fo c using o n pro fita b ility.

11

681 700

4Q10 4Q11 U.S. I nte rna tio na l

* Cha rtis Othe r NPW o f ($1) millio n a nd $13 millio n in 4Q11 a nd 4Q10, re spe c tive ly, a re no t pre se nte d a b o ve .

slide-12
SLIDE 12

SunAme ric a – F ina nc ia l Hig hlig hts

1 000 1,200

($ in millio ns)

Ope ra ting I nc o me

$931 $1,043

  • Stro ng o pe ra ting inc o me in 4Q11

b e ne fits fro m a fa vo ra b le litig a tio n

SunAme ric a F ina nc ia l Hig hlig hts

652 766 391 165

400 600 800 1,000

$931

b e ne fits fro m a fa vo ra b le litig a tio n se ttle me nt o f $202 millio n a nd fully inve ste d c a sh.

  • A $347 millio n de c line in a lte rna tive

inve stme nt re turns a nd a $105 millio n

200 4Q10 4Q11 Do me stic Re tire me nt Se rvic e s Do me stic L ife

inve stme nt re turns a nd a $105 millio n inc re a se in I BNR re se rve s ne g a tive ly a ffe c te d re sults. Ne t flo ws Ne t flo ws

866 731 654 673

500 1,000

  • Ne t F

lo ws re ma in po sitive . F ixe d a nnuity sa le s a ffe c te d b y lo w inte re st ra te e nviro nme nt.

(733) 654 673

  • 500

1Q11 2Q11 3Q11 4Q11

  • T
  • ta l a nd re ta il life insura nc e sa le s

inc re a se d in 4Q11 b y 24% a nd 9%, re spe c tive ly, fro m 4Q10.

12

  • 1,000

4Q10

slide-13
SLIDE 13

SunAme ric a – Ba se Yie lds a nd Ne t I nve stme nt Spre a ds

  • Ba se yie lds a nd ne t spre a ds b e ne fite d

fro m c a sh re de plo yme nt Ne t spre a ds inc re a se d in the fo urth q ua rte r.

SunAme ric a Ba se Yie lds a nd Ne t I nve stme nt Spre a ds

5.17% 5.28% 5.28% 5 20% 5.40%

Ba se Yie lds(1) fro m c a sh re de plo yme nt.

  • F

irst ha lf o f 2012 b a se yie lds sho uld a lso re fle c t fa vo ra b le ye a r-o ve r-ye a r c o mpa riso ns.

5.05% 4.80% 4.79% 4.93% 5.13% 5.08% 4.60% 4.80% 5.00% 5.20%

  • Susta ine d lo w inte re st ra te e nviro nme nt

e xpe c te d to pre ssure b a se yie lds.

  • Ac tive ma na g e me nt o f c re diting ra te s

limits spre a d c o mpre ssio n

4.53% 4.00% 4.20% 4.40% 4Q10 1Q11 2Q11 3Q11 4Q11

B N t I t t S d

(1)

limits spre a d c o mpre ssio n.

1.66% 1.54% 1.75% 1.80%

1.60% 1.80%

Ba se Ne t I nve stme nt Spre a ds(1)

1.22% 1.14% 1.48% 1.56% 1.21% 1.08%

1 00% 1.20% 1.40%

13

1.00% 4Q10 1Q11 2Q11 3Q11 4Q11 VAL I C WNL

1) E xc lude s a lte rna tive s a nd o the r e nha nc e me nts.

slide-14
SLIDE 14

SunAme ric a – Pro a c tive ly Addre ssing Susta ine d L

  • w I

nte re st Ra te s

E ffe c t o f c a sh re de plo yme nt e xc e e d e d impa c t o f lo we r yie lds in 2011.

SunAme ric a Pro a c tive ly Addre ssing Susta ine d L

  • w I

nte re st Ra te s

E ffe c t o f L

  • w Ra te s o n Annua l E

a rning s(1) 2011 Ma na g e me nt Ac tio ns

$ in m illio ns 2012 2013

Estima te d imp a c t o n p re -ta x o p e ra ting inc o me $0 – ($10) ($65) – ($80)

  • Co ntinue d disc ipline d

a ppro a c h to ne w b usine ss pric ing . A ti l i l

  • Ba se po rtfo lio yie lds pro je c te d to de c line

~2 b ps(2) pe r q ua rte r thro ug h 2013 in c urre nt ra te e nviro nme nt.

  • Ac tive ly ma na g ing re ne wa l

ra te s.

  • Re -pric e d life pro duc ts to

re fle c t c urre nt lo w ra te i

  • Ne w mo ne y yie lds a ppro xima te ly 4% – 5%.
  • No sig nific a nt DAC unlo c king o r sta tuto ry

c a pita l impa c t a ntic ipa te d. e nviro nme nt.

  • Re -filing c e rta in pro duc ts to

c o ntinue lo we ring minimum ra te g ua ra nte e s.

14 1) Assume s 10-Ye a r T re a sury Ra te re ma ins a t 1.88% thro ug h 2013. Assume s no a c c e le ra te d re a liza tio n o f c a pita l g a ins. 2) E xc lude s the impa c t o f ne t flo ws.

slide-15
SLIDE 15

Unite d Gua ra nty – Ove rvie w Unite d Gua ra nty Ove rvie w

Unite d Gua ra nty is the # 1 pro vide r o f mo rtg a g e insura nc e in the U.S. with 2011 NI W(1) o f $18 b illio n a nd a n e stima te d ma rke t sha re o f o ve r 30%.

NI W ($ in b illio ns)

7.1

8.0

  • Pe rfo rma nc e Pre mium, Unite d Gua ra nty’ s risk

b a se d pric ing pla n, ha s ha d a po sitive

3.3 2.5 3.1 5.6 7.1

2.0 4.0 6.0

p g p p impa c t o n b o th vo lume a nd c re dit q ua lity. NI W inc re a se d 86% in 2011 to $18.4 b illio n while re ta ining hig h c re dit q ua lity.

  • Priva te mo rtg a g e insura nc e pe ne tra tio n o f

ne w mo rtg a g e o rig ina tio ns inc re a se d fro m

Vintage Ave r age F ICO L T V

0.0 4Q10 1Q11 2Q11 3Q11 4Q11

e

  • g a g e o g

a o s c e a se d o 4.5% in 2Q 2011 to 5.7% in 3Q 2011(2).

  • De linq ue nt c o unts fe ll 19% while info rc e

de c line d 4%, le a ding to ye a r e nd DQ ra tio o f 13.8%.

Ye ar F ICO Sc or e L T V Ratio

2011 757 91 2010 760 90 16.3%

17.0%

Prima ry De linq ue nc y (DQ) Ra tio (%)

  • Ave ra g e re se rve / de linq ue nc y re ma ine d fla t

a t $27K fo r ye a r e nd 2011, c o nsiste nt with ye a r e nd 2010.

  • E

nde d ye a r a t 13:1 pre limina ry risk to c a pita l ra tio .

15.2% 14.6% 14.1% 13.8%

13.0% 14.0% 15.0% 16.0%

ra tio .

  • I

n 2011, Unite d Gua ra nty he lpe d a b o ut 40,000 fa milie s sta y in the ir ho me s.

15

1) Ne w insura nc e writte n – o rig ina l princ ipa l b a la nc e o f lo a ns (F irst L ie n) 2) So urc e : Ba se d o n da ta fro m I nside Mo rtg a g e F ina nc e

12.0% 4Q10 1Q11 2Q11 3Q11 4Q11

slide-16
SLIDE 16

Appe ndix

16

slide-17
SLIDE 17

No n-c o re Asse ts – I nte re sts in AI A a nd I L F C

AI A a nd I L F C a re po te ntia l so urc e s o f liq uidity to pa y do wn UST pre fe rre d inte re st.

No n c o re Asse ts I nte re sts in AI A a nd I L F C

  • AI

G o wns ~33% o f AI A.

  • AI

G is e ntitle d to 99% o f the re sidua l

($ in billions) @De c . 31, 2011: AIA:

3 96 b l h $ 12 4 va lue upo n dispo sitio n.

  • Ca rrie d a t fa ir va lue thro ug h

e a rning s. 3.96 b ln sha re s $ 12.4 E sc ro w Ca sh 1.6 – E a c h HK $1 mo ve me nt in AI A sto c k pric e e q ua te s to a ppro x. $500mm in e a rning s mo ve me nt. (-) UST inte re st (8.4) Ne t Va lue to AI G $ 5.6

IL F C:

  • S-1 file d Se pt. 2011.
  • Ne t Bo o k Va lue o f $7.5 b illio n a t

17

Ne t Bo o k Va lue o f $7.5 b illio n a t 12/ 31/ 11.

slide-18
SLIDE 18

ML I I I Co mpo sitio n a nd Wind-do wn o f ML I I ML I I I Co mpo sitio n a nd Wind do wn o f ML I I

ML III Unde r lying Asse t T ype s

b y Ma rke t Va lue ($17.8 BN) At De c e mb e r 31, 2011

ML II Wind- down:

  • 100% o wne d b y SunAme ric a

16% 29% 7%

RMBS Prime RMBS Alt-A

  • 100% o wne d b y SunAme ric a
  • Re c o rde d a t fa ir va lue ($1.3 b illio n a t De c .

31, 2011)

18% 30%

RMBS SubPrime CMBS Other*

  • F

ull F RBNY re pa yme nt to b e ma de in Ma rc h 2012

  • AI

G re pa yme nt c o mme nc e s in 2012

ML I I I :

R t d i Oth O ti

* Othe r inc lude s CDO, Co rp, CL O, Co nsume r ABS, e tc .

  • E

xc e ss pro c e e ds split – 5/ 6 to F RBNY a nd 1/ 6 to AI G

  • All pro c e e ds to b e utilize d to pa y do wn

AI A SPV

  • Re po rte d in Othe r Ope ra tio ns
  • Re c o rde d a t fa ir va lue ($5.7 b illio n a t De c . 31, 2011)
  • Cha ng e in fa ir va lue re c o g nize d in Ne t I

nve stme nt I nc o me

AI A SPV

18

slide-19
SLIDE 19

Ma ide n L a ne I I I – Se nio r L

  • a n Pa y-Do wn Co ntinue s a s E

xpe c te d

Cumula tive c a sh distrib utio ns (e xc luding e xpe nse s) fro m ML I I I to ta l $15.2 b illio n.

Ma ide n L a ne I I I Se nio r L

  • a n Pa y Do wn Co ntinue s a s E

xpe c te d

$ b illio ns

Curre nt Ca pita l Struc ture F e d Se nio r L

  • a n Ba la nc e a nd Pa yme nt (I

nc luding Ac c rue d I nte re st)

12.9 12.3 10.9 9.8

20.0 25.0 12.0 14.0 16.0

24.3 24.4 24.2 22.6 19.9 18.5 17.3 16.3 15.1 14.1 12.9

10 0 15.0 8.0 10.0

F e d Balanc e 9.8 4 8 6.2 7.4 8.5 9.7 10.8 12.0 12.6 14.1 15.2 2.8 1 4 2 1 1 1 2 2

5.0 10.0 2.0 4.0 6.0

AIG Balanc e 5.5 1.9 4.8 0.3 1.6 1.4 1.2 1.1 1.2 1.1 1.2 0.6 1.5 1.1

0.0

I nc e ptio n 4Q,08 1Q,09 2Q,09 3Q,09 4Q,09 1Q,10 2Q,10 3Q,10 4Q,10 1Q,11 2Q,11 3Q,11 De c . 2011

Cumula tive F e d Pa yme nt Outsta nding F e d Ba la nc e Qua rte rly F e d Pa y Do wn 0.0

De c . 2011 19 So urc e : F e de ra l Re se rve Ba nk o f Ne w Yo rk

slide-20
SLIDE 20

L e g a c y F P: Wha t We ’ ve Ac c o mplishe d g y p

(1)

$ b f D b 31 (1) % R d ti

AI G will c o ntinue to de -risk the le g a c y F P po rtfo lio while e nsuring the firm re ta ins the ma ximum e c o no mic b e ne fit po ssib le .

Ne t No tio na l E xpo sure s

1.25

1.5

98%

Gro ss Ve g a ($ b n)(2)

(a s o f De c e mb e r 31)

$ bn as of De c e mbe r 31 (1) % Re duc tion De r ivative s Book 2008 2010 2011 2008 – 2011 2010 – 2011

Ma rke t De riva tive s ~1,450 258 131 91% 49% 0.02

0.5 1

98% Re duc tion Multi-se c to r CDS ~13 7 6 54% 14% Co rpo ra te 2008 2011 10.4

10 15

95% Re duc tion

Gro ss AT E ($ b n)(3)

Co rpo ra te Arb itra g e ~52 12 12 77% 0% Re g ula to ry Ca pita l CDS ~245 41 7 97% 83% 0.5

5

2008 2011

Po sitio n Co unt

Sta b le Va lue Wra ps ~40 23 20 50% 13%

T

  • tal L

e gac y D i ti (4) ~$1,800 $341 $176 90% 48%

35,200 2,000

10,000 20,000 30,000 40,000

94% Re duc tion

20 De r ivative s (4) $1,800 $341 $176 90% 48%

1) 2008 ne t no tio na l a mo unts a re a ppro xima te . 2) T he Gro ss Ve g a is c a lc ula te d a s the sum o f a ll the individua l po sitio ns’ a b so lute ve g a s a s if e a c h po sitio n is no t he dg e d. Altho ug h F P’ s b o o ks a re a lmo st c o mple te ly he dg e d o n a ne t Ve g a b a sis, the Gro ss Ve g a me a sure will he lp mo nito r ho w we ll the vo la tility risk is b e ing e limina te d. T he inte re st ra te o ptio n ve g a de no te s the c ha ng e in va lue due to a 0.1% inc re a se in no rma l vo la tility. F

  • r o the r de riva tive s (i.e ., E

q uity, Co mmo dity a nd F X o ptio n), ve g a de no te s the c ha ng e in va lue due to a 1% inc re a se in lo g no rma l vo la tility. 3) Gro ss AT E me a sure s the impa c t o f a thre e -no tc h do wng ra de . 2008 Gro ss AT E inc lude s $1.3 b illio n a ttrib uta b le to GI Cs. 4) E xc lude s $10.2 b illio n a nd $11.5 b illio n o f inte rc o mp a ny de riva tive s in 2011 a nd 2010, re spe c tive ly.

2,000

  • 2008

2011

20

slide-21
SLIDE 21

L e g a c y F P: Whe re We ’ re Go ing

(1)

T ype E stimate d Ave r age L ife De sc r iption AIG D i ki A ti iti d tf li h d i $94 b

L e g a c y F P: Whe re We re Go ing

Ac tive ly ma na g ing the po rtfo lio fo r ma ximum pro fit c o ntrib utio n a nd limite d risk.

Mar ke t De r ivative s

6.4 ye a rs

AIG De r isking Ac tivitie s and por tfolio he dging - ~$94 bn:

  • Ag g re g a te Va lue a t Risk o n Ma rke t De riva tive s is e ffe c tive ly ze ro a t a 95% c o nfide nc e le ve l
  • De riva tive s prima rily fa c ilita te he dg ing o f the a sse ts a nd lia b ilitie s o f the DI

B pro g ra m a s we ll a s a ffilia te c o mpa nie s’ o rdina ry c o urse risk ma na g e me nt a c tivity

3r

d Par

ty Clie nt T r ade s - ~$37 bn:

7.3 ye a rs

  • Ag g re g a te Va lue a t Risk o n Ma rke t De riva tive s is e ffe c tive ly ze ro a t a 95% c o nfide nc e le ve l
  • T

hird-pa rty tra de s prima rily inte rme dia te d a nd re pre se nt ~$37 b n o f to ta l re ma ining no tio na l

  • Bulk o f re ma ining tra de s e xpe c te d to re ma in until ma turity a s the y ha ve b e e n inte rme dia te d to pre se rve

e c o no mic va lue o r pro vide a ttra c tive funding

Stable Value

3 3 ye a rs

  • No re a lize d lo sse s e ve n thro ug h ma rke t stre ss o f 2008

Value Wr aps

3.3 ye a rs

  • E

xpe c te d to b e mo ve d to re g ula te d insura nc e e ntity o r third pa rty.

Multi- se c tor CDS

6.4 ye a rs

  • $243 mm pro fit c o ntrib utio n sinc e 12/ 31/ 08
  • Ma na g e d to re ta in sig nific a nt future upside
  • Whe re e c o no mic s a re c o mpe lling will c o ntinue to unwind tra de s
  • $1 840 mm pro fit c o ntrib utio n sinc e 12/ 31/ 08

Cor por ate Ar bitr age

4.2 ye a rs

  • $1,840 mm pro fit c o ntrib utio n sinc e 12/ 31/ 08
  • Va st ma jo rity o f no tio na l ha s b e e n inte rme dia te d to pre se rve e c o no mic s while e limina ting c o nting e nt

liq uidity

  • T

hird-pa rty c re dit re vie w c o nfirms no e xpe c te d lo sse s e ve n in stre ss sc e na rio s

Re gulator y

  • $243 mm pro fit c o ntrib utio n sinc e 12/ 31/ 08 o n te rmina tio n o f re la te d me zza nine a nd he dg e s.

21 Re gulator y Capital CDS

0.9 ye a rs

  • T

hird-pa rty c re dit re vie w c o nfirms no e xpe c te d lo sse s e ve n in stre ss sc e na rio s

  • E

xpe c t re ma ining po sitio ns to b e c a lle d whe n the y lo se the ir c a pita l b e ne fits