American International Group, Inc. (AIG) Q2 2024 Earnings Call Transcript

AIG's second quarter 2024 financial results reveal a company that has not only weathered the challenges of the past few years but also emerged stronger and more focused. The company's management, led by Peter Zaffino, has outlined a strategic vision that is aimed at driving growth and enhancing shareholder value.

A Strong Financial Performance

The company's financial performance in the second quarter was impressive, with adjusted after-tax income of $775 million or $1.16 per diluted share, representing a 38% increase in earnings per share year-over-year. This performance was driven by strong organic growth, underwriting performance, expense discipline, and a decrease in shares outstanding.

The company's net premiums written grew by 7%, led by Global Commercial, which saw over 8% growth. Underwriting income was $430 million, reflecting a significant improvement in the underlying underwriting income, excluding catastrophes, which improved by 17%. The combined ratio for the quarter was 92.5%, a slight increase from the prior year, but the accident year combined ratio, excluding catastrophes, improved by 170 basis points.

Strategic Transactions and a Focus on the Future

One of the most significant developments during the quarter was the completion of the deconsolidation of Corebridge Financial, a move that signals a new chapter in AIG's history. This transaction, which was a result of a four-year journey, has positioned AIG for the future and provided a clear path for growth. The company's strategic partnerships with Blackstone and BlackRock, as well as the sale of its global individual personal travel insurance and assistance business, are all indicative of a company that is focused on simplifying its portfolio and positioning itself for the future.

A Disciplined Capital Management Strategy

AIG's capital management strategy has been a key driver of its financial success. The company has deployed over $30 billion in cash towards its capital management goals over the past three years, resulting in maximum flexibility and a strong financial position. The company's debt outstanding has been reduced from $25 billion to $9.8 billion, and its debt to total capital ratio is now at 18%, well within its target range.

Looking Ahead

AIG's second quarter 2024 financial results paint a picture of a company that is well-positioned for the future. The company's strategic initiatives, coupled with its disciplined capital management strategy, have set the stage for continued growth and success. As the company looks ahead, it is focused on delivering value for its shareholders, driving operational efficiencies, and expanding its global reach. With a clear strategic direction and a strong financial foundation, AIG is poised to continue its momentum and capitalize on the opportunities ahead.