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

American International Group, Inc. Conference Call Presentation Third Quarter 2016 November 3, 2016

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 “will,” “believe,” “anticipate,” “expect,” “intend,” “plan,” “focused on achieving,” “view,” “target,” “goal,” 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; negative impacts on customers, business partners and other stakeholders; 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; AIG’s ability to successfully manage run-off insurance portfolios; AIG’s ability to successfully reduce costs and expenses and make business and organizational changes without negatively impacting client relationships or AIG’s competitive position; AIG’s ability to successfully dispose of, or monetize, businesses or assets, including its ability to successfully consummate the sale of United Guaranty Corporation (UGC or United Guaranty) and certain related affiliates to Arch Capital Group Ltd. (Arch); 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) in AIG’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2016 (which will be filed with the Securities and Exchange Commission), Part I, Item 2. MD&A and Part II, Item 1A. Risk Factors in AIG’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2016, Part I, Item 2. MD&A and Part II, Item 1A. Risk Factors in AIG’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2016, and Part II, Item 7. MD&A and Part I, Item 1A. Risk Factors in AIG’s Annual Report on Form 10-K for the year ended December 31, 2015. 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 2016 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. Nothing in this presentation or in any oral statements made in connection with this presentation is intended to constitute, nor shall it be deemed to constitute, an offer of any securities for sale or the solicitation of an offer to purchase any securities in any jurisdiction. 2

Progress On Financial Targets FY 2016 YTD Objective Selected 3Q Actions Target Sept. 30, 2016  Reduce The expense decline in 3Q16 reflected our actions to reduce 6% Reduction 10% 1 employee-related expenses and professional fees GOE, ($806mm)  Restructuring charge of $210 million related to our ongoing (~$700mm) Operating Basis efficiency program Increase  Normalized ROE of 7.1% in 3Q16 reflects seasonally higher Normalized 8.4 - 8.9% 8.3% expected catastrophe losses ROE Grow  BVPS, ex. AOCI & DTA, including dividend growth, of $62.39 Book Value per 14 - 16% 5% increased 1% for 3Q16 reflecting net earnings and accretive Common Share, share repurchases ex. AOCI & DTA 2  Additional share repurchases of $946 million through November Return Capital to 2, 2016 $12.5B $9.8B  Shareholders Targeting return of $25 billion of capital to shareholders through 2017. Improve 65.6 4 Commercial  Reflects our continued remediation and repricing strategy, (3Q16) ~62 3 partially offset by higher volatility in short-tail lines AYLR, As 64.1 4 (9M’16) Adjusted 1) On a constant dollar basis. Excludes expenses of AIG Advisor Group, which has been divested. 2) Adjusted for dividend growth. 3 3) The ratio represents quarter-end exit run rate. 4) Excludes the benefit of the UGC quota share reinsurance arrangement. See Note 1 on Page 34.

Consolidated Operating Financial Highlights ($ in Millions, Except per Share Amounts) 3Q15 3Q16 Inc. / (Dec.) Operating revenues $13,179 $13,596 3% Pre-tax operating income (loss): Commercial Insurance 1 592 729 23% Consumer Insurance: Retirement 635 1,108 74% Life (40) 98 N/M Personal Insurance 62 178 187% Total Consumer Insurance 657 1,384 111% Total Insurance Operations 1,249 2,113 69% Corporate and Other 1,2 (401) (501) (25%) Total Pre-tax operating income $848 $1,612 90% After-tax operating income attributable to AIG $691 $1,097 59% After-tax operating income attributable to AIG per diluted share $0.52 $1.00 92% Return On Equity: ROE – After-tax operating income – ex. AOCI & DTA 3.5% 6.7% Normalized ROE 5.9% 7.1% Book Value Per Common Share (BVPS): Dec. 31, 2015 Sept. 30, 2016 BVPS $75.10 $85.02 13% BVPS – ex. AOCI & DTA $58.94 $61.41 4% BVPS – ex. AOCI & DTA, including dividend growth $59.26 $62.39 5% 1)Beginning in 3Q16, the operating results of United Guaranty and Institutional Markets are reported in Corporate and Other, consistent with the way our chief operating decision makers review and assess the business performance and make decisions about resources to be allocated. The earnings associated with the Commercial Insurance quota share with UGC are being presented in Commercial Insurance. 4 Prior periods have been revised to conform to the current period presentation. See Note 1 on Page 34 for additional information. 2)Includes consolidations and eliminations.

Impact of Review of Actuarial Assumptions Operating Loss of $0.23 1 Per Diluted Share in 3Q16 ($ in Millions) Consumer Insurance Corporate and Other – Institutional Markets $330 $39 ($47) ($622) ($84) Fixed Annuities Retirement Income Solutions Institutional Markets Group Retirement Life  Lower surrender rates in low interest rate environment  Mortality experience studies indicated increased impacted fixed annuities and universal life with secondary longevity, particularly on disabled lives on a legacy block guarantees. Separate account long-term asset growth rate of structured settlements underwritten pre-2010. This assumption for variable annuity business decreased from legacy block accounted for over 80% of the charge. 8.5% to 7.5%. 1) Net income also includes $43 million of pre-tax losses ($0.03 per diluted share) related to the update of assumptions for the valuation of guaranteed minimum withdrawal benefit and fixed index crediting features accounted for as embedded derivatives, which are excluded from operating income. 5

UGC Sale     Quota Share A Compelling Strategic Estimated Post-Closing Positive Capital Arrangement Allows for Transaction Financial Impact Management Impact Retention of Attractive Economics  ~$450 million 1 estimated  Sale was more efficient  Increases confidence in  AIG will retain 50% quota and risk-reducing than a U.S. GAAP after-tax gain achieving $25 billion share on business written multi-tranche public market on sale at closing. capital return goal. in vintages 2014-2016. offering. Average annual pre-tax  Retain UGC’s tax attribute  $3.4B consideration, earnings impact is  AIG will own ~9% of Arch DTA at closing. includes $2.2B of cash estimated at ~$150 common shares at closing. liquidity at closing plus an  Removal of UGC at million for 2017 and 2018, additional $250 million in  AIG has a track record of closing. declining thereafter. pre-closing dividends. thoughtful disposition of concentrated equity ownership positions. Note: Consummation of the UGC sale is subject to obtaining the requisite regulatory approvals or non-disapprovals and other customary closing conditions. See Note 1 on Page 34. 6 1) Assumes a closing date of December 31, 2016.