10th August 2022
AIG chairman & ceo Peter Zaffino comments “AIG had another excellent quarter. General Insurance reported outstanding results and Life and Retirement again delivered a solid performance considering the significant market headwinds in the second quarter.
Due to the high degree of equity market volatility in May and June, we decided to defer the launch of the Corebridge Financial initial public offering IPO). Deferring the IPO provided us with an opportunity to further accelerate progress on numerous separation initiatives and to solidify the capital structure of this business as a standalone company. Completing the IPO is a significant priority for us and we remain ready to execute, subject to regulatory approvals and market conditions.
General Insurance’s culture of underwriting excellence continues to be evidenced in our financial results. Meaningful top-line growth, strong renewal retention and new business, intentional improvements in business mix, rate above loss cost trends, coupled with a disciplined and focused approach to minimising volatility, led to impressive profitability improvement.
The combined ratio of 87.4 represents AIG’s first sub-90 quarter in over fifteen years and improved 510 basis points year-over-year. Consistent with our strategy to manage volatility, catastrophe losses were very modest in the quarter coming in at $121m, or 1.8 points of the combined ratio. The adjusted accident year combined ratio of 88.5improved for the 16th consecutive quarter–totaling 1,250 basis points of improvement over this period and 2,080 basis points of improvement in Global Commercial Lines. Overall, I am very pleased with our overall performance and the momentum we have heading into the second half of 2022.
Life and Retirement experienced another solid quarter of sales growth in fixed annuities supported by Blackstone’s origination capabilities. Additionally, Life and Retirement is starting to see a positive impact in its base portfolio net investment income from higher interest rates and credit spreads.
During the second quarter, we began to transfer certain assets under management to BlackRock in accordance with our recently announced asset management arrangement. We expect the majority of the remainder of the approximately $150bn of assets under management to be transferred by the end of 2022.
Lastly, certain capital management priorities were accelerated in the second quarter, including issuing $6.5bn of Corebridge Financial debt and subsequently redeeming or repurchasing $7.6bn in aggregate principal debt of AIG. In addition, we returned $2bn to shareholders through $1.7bn of AIG common stock repurchases and $256m of dividends.
Thanks to the outstanding efforts and hard work of our global colleagues, AIG continues to drive excellence across the company that will create long-term value for all our stakeholders.”
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