American International Group (AIG) Q2 2024 earnings summary

Executive summary

• Achieved deconsolidation of Corebridge Financial, marking a major milestone in multi-year strategy and resulting in a $4.7 billion after-tax loss due to AOCL recognition, impacting GAAP earnings but positioning for future growth.

• Adjusted after-tax income per diluted share rose to $1.16, a 38% year-over-year increase on a comparable basis, driven by organic growth, strong underwriting, and expense discipline.

• Returned nearly $2 billion to shareholders via $1.7 billion in stock repurchases and $261 million in dividends in Q2 2024.

• Record $1.3 billion in new Commercial Lines business, up 18% year-over-year, with strong global retention and expansion in high-net-worth market through strategic partnerships.

• Announced sales of global personal travel insurance and a 20% stake in Corebridge to Nippon Life, advancing portfolio simplification.

Financial highlights

• Net loss attributable to common shareholders was $4.0 billion ($5.96 per diluted share), compared to net income of $1.5 billion in prior year, primarily due to Corebridge deconsolidation.

• Adjusted after-tax income (AATI) was $775 million ($1.16 per share), up from $777 million ($1.06 per share) year-over-year.

• Net investment income increased 18% to $990 million, with adjusted pre-tax investment income up 14% to $884 million.

• Book value per share was $68.40; adjusted book value per share was $72.78 as of June 30, 2024.

• Debt to total capital ratio stood at 18.1%; parent liquidity was $5.3 billion at quarter-end.

Outlook and guidance

• Management remains focused on underwriting excellence, expense discipline, and capital management amid an uncertain global risk environment.

• Full-year 2025 combined ratio expected to be the same or lower than 2023's 91.6% (ex-crop and Validus), with improvement driven by expense ratio reductions.

• Accident year loss ratio ex-catastrophes expected to remain strong in the second half of 2024, similar to the first half.

• Share count targeted to reach 550-600 million by end of 2025, with $10 billion in share repurchases planned for 2024-2025.

• Management is monitoring inflation, interest rates, and currency volatility, which may impact investment income and loss cost trends.