American International Group, Inc. (NYSE:AIG) Q2 2019 Earnings Conference Call Transcript

Aug 07, 2019 • 11:30 am ET

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American International Group, Inc. (NYSE:AIG) Q2 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day and welcome to the AIG's Second Quarter 2019 Financial Results Conference Call. Today's conference is being recorded. And now at this time, I would like to turn the conference over to Ms. Liz Werner, Head of Investor Relations. Please go ahead.

Executive
Elizabeth Werner

Thank you Jake, and good morning, everyone. Today's remarks may contain forward-looking statements, including comments relating to company performance, strategic priorities, business mix and market conditions. These statements are not guarantees of future performance or events and are based on management's current expectations. Actual performance and events may materially differ. Factors that could cause results to differ include the factors described in our first quarter 2019 Form 10-Q, our 2018 Annual Report on Form 10-K and other recent filings made with the SEC. AIG is not under any obligation and expressly disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Additionally, some remarks may refer to non-GAAP financial measures. The reconciliation of such measures to the most comparable GAAP figures is included in our earnings release, financial supplement and slide presentation, all of which are available on our website, www.aig.com.

This morning you'll hear prepared remarks from our CEO, Brian Duperreault; our COO and CEO of General Insurance, Peter Zaffino; our CEO of Life and Retirement, Kevin Hogan; and, our CFO, Mark Lyons. During Q&A, we ask that you limit your questions to one and with one follow-up.

And at this time, I'd like to turn the call over to Brian.

Executive
Brian Duperreault

Thank you. Good morning, and thank you for joining us to review our second quarter results.

As we continue to position AIG for long-term sustainable and profitable growth, disciplined execution of our strategy is reflected on our strong performance in the second quarter and first half of 2019. Adjusted return on common equity for the second quarter was 10.4% and 11% year-to-date. Adjusted after-tax income was $1.3 billion or $1.43 a share for the second quarter and $2.7 billion or $3.01 per share year-to-date, nearly $1 per share improvement over the first half of 2018.

Throughout the first half of 2019, we remained focused on the foundational work that continues across AIG, particularly in general insurance, which delivered a second consecutive quarter of profitability with an accident year -- I mean an accident quarter combined ratio, including actual CATs of 98.7% or 96.1% as adjusted. The calendar quarter combined ratio was 97.8%. The turnaround at general insurance, which has been led by Peter Zaffino and his team is impressive. AIG is taking a leadership position in its approach to disciplined underwriting and innovative reinsurance strategies, and we have strong momentum heading into the second half of 2019. I can confirm that we expect to achieve underwriting profitability for the entire year. Peter will provide more detail in his remarks on the significant progress being made in general insurance.

With respect to premium rate trends, I want to follow up on my comments from the first quarter. Rate