American International Group, Inc. Conference Call Presentation - PowerPoint PPT Presentation

American International Group, Inc. Conference Call Presentation Third Quarter 2015 November 3, 2015

Cautionary Statement Regarding Forward Looking Information This document and the remarks made within this presentation may include, and officers and representatives of American International Group, Inc. (AIG) may from time to time make, projections, goals, assumptions and statements that may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These projections, goals, assumptions and statements are not historical facts but instead represent only AIG’s belief regarding future events, many of which, by their nature, are inherently uncertain and outside AIG’s control. These projections, goals, assumptions and statements include statements preceded by, followed by or including words such as “believe,” “anticipate,” “expect,” “intend,” “plan,” “view,” “target” or “estimate.” It is possible that AIG’s actual results and financial condition will differ, possibly materially, from the results and financial condition indicated in these projections, goals, assumptions and statements. Factors that could cause AIG’s actual results to differ, possibly materially, from those in the specific projections, goals, assumptions and statements include: changes in market conditions; the occurrence of catastrophic events, both natural and man-made; significant legal proceedings; the timing and applicable requirements of any new regulatory framework to which AIG is subject as a nonbank systemically important financial institution and as a global systemically important insurer; concentrations in AIG’s investment portfolios; actions by credit rating agencies; judgments concerning casualty insurance underwriting and insurance liabilities; judgments concerning the recognition of deferred tax assets; judgments concerning estimated restructuring charges and estimated cost savings; and such other factors discussed in Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) and Part II, Item 1A. Risk Factors in AIG’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015, Part I, Item 2. MD&A in AIG’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2015, Part I, Item 2. MD&A in AIG’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015 and Part I, Item 1A. Risk Factors and Part II, Item 7. MD&A in AIG’s Annual Report on Form 10-K for the year ended December 31, 2014. AIG is not under any obligation (and expressly disclaims any obligation) to update or alter any projections, goals, assumptions or other statements, whether written or oral, that may be made from time to time, whether as a result of new information, future events or otherwise. This document and the remarks made orally may also contain certain non-GAAP financial measures. The reconciliation of such measures to the most comparable GAAP measures in accordance with Regulation G is included in the Third Quarter 2015 Financial Supplement available in the Investor Information section of AIG's corporate website, www.aig.com, as well as in the Appendix to this presentation. 2

Third Quarter 2015 Highlights Continued Strategic Actions and Capital Management After-tax operating income of $691mm ($0.52 per diluted share) – Market volatility impact on investment returns drives YoY comparisons Financial – Pre-tax restructuring charge of $274 mm; plan to reduce net expenses by $1.0B - $1.5B by 2017 Overview – Normalized ROE, ex. AOCI and DTA, of 6.9% for 9M’15 – Book value per share, ex. AOCI and DTA, of $61.91; growth of 6.3% YTD (growth adjusted for dividend increase is 6.6%) – Repurchased approximately $3.7B of shares in 3Q15 (additional $602mm repurchased through Capital & the end of October 2015); $2.9B remaining under authorization at October 31, 2015 Liquidity – Parent liquidity of $11.2B at September 30, 2015; insurance company distributions of $2.8B – Reducing costs and deploying capital more efficiently – Focus on exiting businesses that lack current or realizable potential synergy with our core Strategic Focus operations – Continuing to build capabilities in science, data, analytics and technology 3

AIG Consolidated Operating Financial Highlights ($ in Millions, Except per Share Amounts) 3Q14 3Q15 Inc. / Dec. Operating revenues $15,476 $13,179 (15%) Pre-tax operating income (loss): Commercial Insurance: Property Casualty 952 569 (40%) Mortgage Guaranty 135 162 20% Institutional Markets 153 84 (45%) Total Commercial Insurance 1,240 815 (34%) Consumer Insurance: Retirement 1,094 635 (42%) Life 50 (40) N/M Personal Insurance 120 62 (48%) Total Consumer Insurance 1,264 657 (48%) Total Insurance Operations 2,504 1,472 (41%) Corporate and Other 1 81 (624) N/M Total Pre-tax operating income $2,585 $848 (67%) After-tax operating income attributable to AIG $1,722 $691 (60%) After-tax operating income attributable to AIG per common share $1.19 $0.52 (56%) Return On Equity: ROE – After-tax operating income – ex. AOCI & DTA 8.5% 3.5% Book Value Per Common Share: Book value per common share $77.35 $79.40 3% Book value per common share – ex. AOCI & DTA $58.11 $61.91 7% 1)Includes consolidations and eliminations. 4

Market Volatility Drives Year-Over-Year Operating Income Comparisons ($ in Millions) 3Q14 3Q15 After-tax EPS Income (Expense): Pre-tax After-tax Pre-tax After-tax Inc./(Dec.) Impact Investments: Alternative returns 1 $486 $316 ($23) ($15) ($331) Fair value on PICC investments 49 32 (255) (166) (198) ($0.64) Income from other assets 2 586 381 15 10 (371) Other Noteworthy Items: Workers’ compensation discount - - (78) (50) (50) Update of actuarial assumptions 3 121 78 (17) (11) (89) ($0.01) Pension curtailment credit - - 179 116 116 $1,242 $807 ($179) ($116) ($923) ($0.65) Total Note: Pre-tax amounts are tax effected using a 35% tax rate and EPS impact is computed based on the average of the reported diluted weighted average shares outstanding, for the respective period. 1)Includes income from hedge funds, private equity funds and other investment partnerships. 2)Includes the results of DIB/GCM that were separately reported in 2014. 3)Represents the effect on Life and Retirement results from the review and update of certain assumptions used to amortize DAC and related items for interest- sensitive products, including life and annuity spreads, mortality rates, surrender rates and variable annuity growth rates. The update of actuarial assumptions also included adjustments to reserves for universal life with secondary guarantees, group benefit claim reserves and loss recognition for certain discontinued long-term care products. 5

Progress on Financial Targets ($ in Millions, Except per Share Amounts) Progress on Financial Targets YTD Annual Targets 2015 Sept. 30, Commentary Through 2017 Target 2015 3–5% ↓$523  Net expenses declined 5.9% from 9M’14. Reduction in $350 - $600 from 9M’14 Net Expenses 1 ~50+ bps Increase  2015 target adjusted for the sale of AerCap 7.6% 2 in Normalized ROE, 6.9% shares. ex. AOCI and DTA 10+% Growth in Book Value  YTD growth of 6.6% driven by net earnings Per Share, ex. $64.05 $62.07 AOCI and DTA and and accretion from share repurchases. Including Dividend Growth 1)General operating expenses, operating basis (see non-GAAP measures in appendix). 2)The 2015 adjusted ROE target represents the initial 7.9% target reduced by the impact of 7 months of lost AerCap equity earnings following the sale of AerCap shares. The YTD 2015 actual ROE includes a 20 bps ROE contribution from AerCap earnings prior to the sale. 6

General Operating Expenses, Operating Basis Targeting 3-5% of Annual Reduction Through 2017 General Operating Expenses, Operating Basis ($ in Millions) Quarterly Comparison Year-to-Date Comparison Reported Δ Reported Δ $2,993 $8,924 (5.9%) (10.6%) $8,401 $24 $2,675 $77 $408 $56 $17 $1,233 $1,240 $389 $355 $1,099 $1,118 $371 $2,206 $6,515 $5,987 $1,898 9M'14 9M'15 3Q14 3Q15 Investment and other expenses Loss adjustment expenses Investment and other expenses Loss adjustment expenses Other acquisition expenses General operating expenses Other acquisition expenses General operating expenses  AIG manages expenses on a gross basis – before allocation to loss adjustment expenses, other acquisition expenses and investment and other expenses – as it provides a more meaningful indication of our operating costs. Note: General operating expenses, operating basis (see non-GAAP measures in appendix). 7