American International (AIG) 1 Aug 24 2024 Q2 Earnings call transcript

In the latest earnings call, AIG delivered strong financial performance for the second quarter of 2024, showcasing a remarkable turnaround and strategic initiatives that are positioning the company for a bright future. The call, led by Peter Zaffino, Chairman and CEO, and Sabra Purtill, EVP and CFO, highlighted key themes, trends, and strategic moves that underscore AIG's robust financial health and growth prospects.

Outstanding Financial Performance

The company reported an adjusted after-tax income of $775 million, representing a 38% increase in earnings per share year-over-year. This impressive growth was driven by strong organic growth, underwriting performance, and expense discipline. Net premiums written grew by 7%, with Global Commercial leading the charge with over 8% growth, underpinned by significant new business and improved retention rates. General Insurance's net investment income saw a 14% increase year-over-year, demonstrating the company's robust investment strategies.

Strategic Initiatives and Transactions

AIG's strategic initiatives were a highlight of the call, with the company announcing the sale of its global individual personal travel insurance and assistance business, signaling a focus on simplifying its portfolio and further positioning itself for the future. Another significant transaction involved entering into a strategic relationship with Ryan Specialty to become the excess and surplus lines distribution partner for high and ultra-high net worth markets. This move underscores AIG's commitment to transforming its high net worth business and capitalizing on the growing demand for customized insurance solutions.

Capital Management and AIG Next

AIG's capital management strategy has been a cornerstone of its success, with the company deploying over $30 billion in cash towards its goals. This has enabled AIG to reduce its overall share count significantly, positioning the company for future growth while maintaining a strong financial position. AIG Next, the company's accelerated operational efficiency program, is another strategic move aimed at reducing retained parent costs and driving operational efficiencies.

Deconsolidation of Corebridge

The deconsolidation of Corebridge, AIG's life and retirement business, marked a major milestone in the company's strategic journey. This decision, driven by a comprehensive analysis of value maximization for AIG shareholders, has positioned AIG to focus on its core insurance business while enabling Corebridge to thrive under new ownership.

Looking Ahead

AIG's outlook remains positive, with a focus on continued growth and strategic initiatives aimed at enhancing its position in the global insurance market. The company's commitment to underwriting discipline, expense management, and capital management is expected to drive further financial success.

In conclusion, AIG's second quarter 2024 financial results underscore its strategic transformation and robust financial health. With a clear focus on growth, operational efficiency, and strategic transactions, AIG is well-positioned to navigate the evolving insurance landscape and capitalize on emerging opportunities.