AMERICAN INTERNATIONAL GROUP, INC. Q4 FY2024 earnings call

• Fourth Quarter Performance: Delivered strong underwriting results, with General Insurance net premiums written at $6.1 billion (+7% YOY), adjusted after tax income per share at $1.30 (+5% YOY), calendar year combined ratio at 92.5%, and accident year combined ratio (excluding catastrophes) at 88.6%.
• 2024 Strategic Accomplishments: Deconsolidated Corebridge Financial, achieved $450 million in run rate savings via AIG Next, reduced shares outstanding by 12% and increased dividends by 11%, returning $8.1 billion to shareholders, launched AIG Underwriter Assist (GenAI solution), and launched Reinsurance Syndicate 2478 at Lloyd's.
• Full Year Financial Results: Adjusted after tax income was $3.3 billion ($4.95 per diluted share, +28% YOY), driven by strong underwriting results, expense reductions, and net investment income growth.
• Reinsurance Market: Strong 01/01 renewals, impact of California wildfires (expected AIG loss ~$500M, exposure reduced since 2022), and AIG's reinsurance strategy focusing on capital preservation and portfolio optimization.
• Capital Management: Progress in share repurchases, ended 2024 with $7.7 billion parent liquidity, aiming for 10%+ core ROE in 2025 through profitable growth, underwriting excellence, and capital allocation.

General Insurance was realigned into three segments: North America Commercial, International Commercial, and Global Personal. In North America Commercial, net premiums written increased 9% year-over-year, with adjusted pre-tax income (APTI) of $1.2 billion. International Commercial saw net premiums written rise 7% year-over-year with APTI of $1.2 billion. Global Personal had net premiums written increase 1% on a constant currency basis, but faced a headwind from the sale of the Global Personal Travel and Assistance business; adjusting for this, growth was 5% in the quarter driven by a 16% increase in the Global High Net Worth business. For full year 2024, General Insurance net premiums written were $23.9 billion (6% increase YOY) and net premiums earned were $23.5 billion (7% increase YOY), with an accident year combined ratio of 88.2%.

• Share Repurchases: $10 billion target for repurchases in 2024-2025, with $3.4 billion remaining for 2025 and expected to exceed guidance.
• Core ROE: Aim for 10%+ core operating ROE in 2025, driven by profitable growth, sustained underwriting excellence, expense management, and balanced capital management.

• California Wildfires: Expected loss to AIG ~$500M, but exposure reduced since 2022; potential industry recalibration due to large catastrophes.
• Reinsurance Market Volatility: Fluctuations in reinsurance pricing and retentions, with potential impact on underwriting results.
• Regulatory Complexities: Complicated regulatory environment, especially in high-exposure states like California, affecting pricing and risk management.

Q: Alex Scott asked about core ROE including wildfire impact and organic growth.

A: Peter Zaffino confirmed 10%+ ROE includes wildfire impact, highlighted commercial portfolio strength, and plans for Global Personal improvement.

Q: Meyer Shields inquired about AI in underwriting and high net worth lines.

A: Peter Zaffino discussed GenAI data ingestion benefits and progress in high net worth underwriting, including quota share partnerships.

Q: Jon Newsome asked about M&A and regulatory environment.

A: Peter Zaffino mentioned disciplined M&A approach and complexities in California's regulatory landscape.

Q: Michael Zaremski asked about expense ratio and casualty pricing.

A: Peter Zaffino discussed expense absorption and strong casualty pricing in North America, with cautious optimism on rate environment.