The paragraph introduces AIG's Fourth Quarter and Full Year 2024 Financial Results Conference Call. It mentions that forward-looking statements discussed during the call are subject to risks and may differ from actual results, with details available in AIG's SEC filings. A reconciliation of non-GAAP measures is provided on their website. Following the deconsolidation of Corebridge Financial, its results are shown as discontinued operations in AIG's financial statements. AIG has also realigned its organizational structure, and their CFO, Keith Walsh, will elaborate on these changes.

The paragraph discusses AIG's approach to presenting its financial results, emphasizing that their adjusted after-tax income per diluted share and General Insurance results are shown on a comparable basis. This adjusted view accounts for the sale of Crop Risk Services, Validus Re, and other business changes for more accurate year-over-year comparisons. The intention is to provide a clear representation of AIG's performance and future business prospects. The paragraph notes that details of these adjustments are available in the earnings presentation and then introduces Peter Zaffino, AIG's Chairman and CEO, who is set to start the review of the company's financials. Before delving into financials, Zaffino acknowledges the impact of recent California wildfires and highlights the company's support efforts on the ground, while also noting the broader challenges posed by the increasing frequency of such catastrophic events.

The paragraph outlines the agenda for a speaker's remarks, beginning with highlights of AIG's strong fourth-quarter performance, followed by their 2024 strategic accomplishments, a summary of the year's financial results, insights into the reinsurance market, and updates on AIG's capital management strategy. The speaker then details the fourth-quarter results, noting a realignment of AIG's General Insurance business into three segments: North America Commercial, International Commercial, and Global Personal. Notable achievements include a 7% year-over-year increase in net premiums written to $6.1 billion, led by an 8% growth in Global Commercial lines. Additionally, new business in Global Commercial grew by 16%, with a high retention rate of 86%. Net premiums earned increased by 6%, while adjusted after-tax income per share rose by 5% to $1.30. The company's combined ratio results were strong, with a calendar year combined ratio of 92.5% and an accident year combined ratio, excluding catastrophes, of 88.6%.

In 2024, AIG saw significant achievements, including strong financial performance and strategic initiatives. The company focused on risk-adjusted growth, divested non-core businesses, and completed the separation of Corebridge Financial, marking a major milestone. Key steps in Corebridge's journey included partnerships with Blackstone and BlackRock, the largest US IPO in 2022, and selling a 22% stake to Nippon Life. These moves simplified AIG, making it more streamlined. Additionally, the AIG Next initiative achieved $450 million in savings, with further benefits expected in 2025.

In 2024, AIG effectively executed its capital management strategy, returning $8.1 billion to shareholders through share reductions and dividend increases. The company received significant dividends from subsidiaries and reduced its debt to capital ratio, ending the year with strong liquidity. AIG launched its first generative AI solution, AIG Underwriter Assist, enhancing underwriting through data automation, supported by partnerships with leading tech firms. Additionally, AIG introduced Reinsurance Syndicate 2478 in collaboration with Blackstone, as part of its strategic reinsurance efforts. Financially, AIG saw a 28% year-over-year increase in adjusted after-tax income, totaling $3.3 billion.

The article discusses AIG's strong financial performance in 2024, driven by improved underwriting results, expense reductions from AIG Next, increased investment income, and effective capital management. General Insurance achieved a 6% increase in net premiums written to $23.9 billion and a 7% rise in net premiums earned to $23.5 billion. The adjusted accident year combined ratio was 88.2%, showing a sixth consecutive year of improvement, while the overall combined ratio was 91.8% for the third consecutive year below 92%. Underwriting income remained steady at $1.9 billion despite higher catastrophe losses. In Global Commercial, net premiums written grew by 7% to $16.8 billion, with significant growth in North America Commercial and Lexington. International Commercial and Global Personal also saw increases, driven by factors like energy, personal auto, and high net worth business segments.

The paragraph discusses AIG's strong performance during the January 1, 2023, reinsurance renewal season, crediting its consistent strategy and execution. The reinsurance market reset at the start of 2023 resulted in higher retentions and pricing increases, with property reinsurers focusing on upper layers with more remote return periods. Depending on loss activity, this led to risk-adjusted rate reductions, notably 10% to 15% reductions for upper catastrophe layers. Aon’s study reveals a global rise in reinsurance retentions, with US attachment points increasing by 280% over ten years. In 2024, natural catastrophe losses totaled approximately $145 billion, significantly impacting insurers due to increased retentions, with primary carriers retaining 90% of such losses in 2023 and 2024 while the reinsurance industry absorbed the remaining 10%.

The paragraph discusses changes in the distribution of insured losses between insurers and reinsurers, noting a shift prior to 2023 from about a 50-50 split to a focus on managing specific exposures. It highlights a significant rise in average annual losses from wildfires, particularly in the U.S., over the years, with recent California wildfires alone potentially costing insurers $40-$50 billion. This contrasts with historical patterns where insurance has covered a larger portion of economic losses, as seen with Hurricane Katrina. The increasing frequency and cost of secondary perils like wildfires are outmoding past benchmarks for catastrophe loss projections, indicating an upward trend in natural disaster expenses.

The paragraph discusses AIG's strategy to mitigate risks from potential high catastrophe losses, especially in California. Despite a predicted increase in insured catastrophe losses in 2025 due to factors like severe wildfires and warm ocean temperatures, AIG has reduced its California exposure since 2022 and optimized its reinsurance strategy. This includes maintaining key retention levels and expanding coverage in North America and internationally. AIG has adjusted its reinsurance purchasing to manage capital efficiently and reduce underwriting volatility, resulting in a stable first loss exposure and reduced second and third event exposures for 2025.

The paragraph discusses AIG's recent successes in renewing and establishing proportional treaties, particularly for high net worth portfolios, while maintaining or improving ceding commission levels. AIG validated its strategy of making Private Client Select a standalone MGU, adding major underwriting companies and utilizing quota share reinsurance. Although there is caution in the casualty market, AIG successfully renewed its core casualty treaties under favorable conditions, reinforcing its leadership position. AIG also launched a new reinsurance syndicate at Lloyd's with Blackstone-managed funds, connecting insurance risk with sophisticated investors for mutual benefit.

The paragraph discusses Blackstone's collaboration with AIG, emphasizing their reinsurance strategy's role in establishing AIG as a leading global P&C underwriter. AIG has surpassed expectations in its capital management strategy, with plans to repurchase $10 billion in shares by 2025, leaving $3.4 billion remaining. Their share repurchase authorization has $5.6 billion left, with expectations to normalize repurchase levels by 2026. AIG ended the year with strong liquidity and does not plan significant leverage changes in 2025. They intend to review and possibly increase their dividend in alignment with share count reduction, pending board approval, with a focus on profitable growth and capital allocation for optimal risk-adjusted returns.

The paragraph discusses AIG's strong start to 2025, emphasizing expected organic growth through its Global Commercial business and restructured reinsurance program. The company aims to deliver a 10% plus core operating ROE for the full year 2025 by maintaining strong underwriting results, improving investment income yields, simplifying its business model, and balanced capital management. AIG highlights its robust 2024 performance and plans to leverage its industry expertise and operational excellence for differentiation and client value. Additionally, Keith Walsh outlines changes in financial reporting, with the General Insurance business now divided into three segments: North America Commercial, International Commercial, and Global Personal. The Global Personal segment consolidates various lines, including Global Accident and Health, Personal Home and Auto, Global Warranty and Services, and High Net Worth businesses.

In the updated financial disclosures, AIG has revised its reporting segments and product line net premiums written disclosure for enhanced clarity and alignment of core business, reflecting these changes retrospectively in its 2024 reports. AIG's operations now focus on activities related to being a global regulated parent company and exclude runoff business results from adjusted pre-tax income. The fourth-quarter General Insurance results showed an adjusted pre-tax income of $1.2 billion. North America commercial premiums rose by 9% year-over-year, while International Commercial premiums increased by 7%. Global Personal premiums saw a 1% increase, with a 5% growth on a comparable basis when adjusting for the sale of the Global Personal Travel and Assistance business, impacting results in 2025. The Global Personal segment recorded $7.1 billion in net premiums written for the full year 2024.

In modeling for 2025, the sale of the Global Travel business is expected to reduce net premiums written by approximately $720 million, impacting growth by about 10 percentage points. General Insurance reported quarterly underwriting income of $454 million, a decline of $156 million from the previous year due to increased catastrophe losses, including $325 million primarily from Hurricane Milton and adjustments related to Hurricane Helene. The General Insurance calendar year combined ratio was 92.5%, with an accident year combined ratio as adjusted at 88.6%, influenced by a slight increase in the accident year loss ratio while the expense ratio remained stable. There was a favorable prior year development of $102 million in reserves, with contributions from ADC amortization, DVRs, and non-DVR adjustments, primarily in US short-tail lines. Annual detailed valuation reviews (DVRs) are conducted for each product line, comprising $40 billion of reserves, with comprehensive assessments spread across quarters.

The company is shifting its focus from reporting DVR outcomes to an overall reserve analysis, emphasizing AVE claims diagnostics and rate monitoring. In 2022, a provisional reserve was set aside due to inflation and macroeconomic uncertainties, mainly impacting workers' compensation reserves. After reviewing this provision, the company redistributed approximately $150 million to excess casualty due to its variable outcomes. Despite no indications of excess casualty emergence in traditional reserve methods, this move aligns with their cautious philosophy regarding reserve adjustments. Additionally, Global Commercial Lines pricing rose 5% year-over-year in the fourth quarter, excluding specific lines, while North America Commercial saw a 3% increase, or 7% excluding certain lines.

The paragraph discusses the financial performance and market conditions of a company, noting a 2% year-over-year increase in exposures and a healthy underwriting margin despite competition in property markets. North American casualty lines saw mid-teens rate increases, while financial lines faced challenges but showed signs of rate stabilization. International commercial pricing was flat or slightly up, with the company maintaining a strong position due to cumulative risk-adjusted rate increases since 2018. For 2024, excluding certain lines, global commercial pricing rose 6%, with North America at 8% and International at 4%. A fourth-quarter pretax loss of $150 million improved by 34% from the previous year, aided by reduced operating expenses and liability management, which lowered debt by $1.6 billion. The company anticipates further expense reductions by 2025 and mentions the runoff business, Blackboard.

In the fourth quarter, the company increased reserves for Blackboard by $112 million due to higher-than-expected loss activity. For 2024, net investment income on an APTI basis reached $3.5 billion, a 13% rise from 2023, primarily due to Corebridge dividends, higher short-term investment income, and increased reinvestment rates. Fourth quarter net investment income was $872 million, with General Insurance contributing $779 million and other operations $93 million. Increased reinvestment rates led to a new money yield of 5.38%, and the annualized yield on fixed maturities and loans was 3.92%. Alternative investment income rose by $26 million to $67 million, thanks to better private equity performance but was below the long-term expectation. The private equity portfolio, comprising over 25% real estate, faces ongoing pressure due to the macro environment. The adjusted effective tax rate for both the fourth quarter and full year was 24.6%.

The paragraph discusses the company's financial performance and projections. For 2025, they anticipate the adjusted tax rate to align with 2024, but it might vary due to the geographic mix of income. The company ended 2024 with a strong balance sheet, with the book value per share at $70.16, up 8% from the previous year, influenced by lower interest rates and reduced shares outstanding. However, the adjusted book value per share decreased by 6% due to the deconsolidation of Corebridge. The core operating return on equity (ROE) was 9.1% for the quarter and the year, with a goal to achieve over 10% in 2025. They returned $6.6 billion to shareholders through share repurchases in 2024 and aim for $10 billion in 2024-2025, already repurchasing $952 million in 2025. The paragraph concludes with Peter Zaffino handing the call over for questions, leading to Alex Scott from Barclays asking about the core ROE in relation to wildfire impacts and improvements.

The paragraph discusses a company's confirmation of a 10% ROE target, including accounting for a $500 million wildfire in January. The speaker highlights the company's effective portfolio structuring and reinsurance strategies, resulting in net retentions aligning with expectations despite increased activity. They mention maintaining similar first event losses in 2024, with reduced losses in subsequent events due to their reinsurance setup. The focus is on improving earnings and performance, particularly in the commercial portfolio, which has performed well, although the personal portfolio needs improvement. Jon Hancock's leadership is expected to enhance oversight and performance. The company also sees opportunities in NII and capital management, reaffirming their commitment to returning capital to shareholders while pursuing organic growth.

In the paragraph, Peter Zaffino and Jon Hancock discuss the company's strategy and performance concerning growth and profitability in their insurance portfolio, especially in the international market. Peter credits the team's success in enhancing client retention and optimizing underwriting practices for profitability, emphasizing capital deployment in opportunities with high risk-adjusted returns. Jon highlights the strong foundation of their international commercial portfolio and comments on the growth achieved through retention and new business, noting seasonality's influence on quarterly results, particularly in Q4. He suggests that annual performance is a better reflection of their momentum in 2024.

The paragraph discusses the positive growth and success in the International Commercial sector over the past year, highlighting a 4% growth and a strong renewal retention rate of 89%. There was over $2 billion in new business, demonstrating strong opportunities worldwide. The focus is on managing new business quality and price advocacy as closely as renewals. The company's market leadership, strong claims handling, risk management, and solid balance sheet are essential factors driving customer interest. The paragraph highlights significant growth in the Global Specialty domains, with marine business submissions increasing by 46% and marine energy achieving a 40% strike rate. Lastly, it notes a standout growth of 11% in the commercial property book, driven by fixing and repositioning efforts and strong rate rises.

In the article paragraph, Peter Zaffino and Don Bailey discuss the achievements and growth in the North American Commercial sector for 2024. The company achieved a 9% growth in net premiums, driven by strong retention rates (91% in retail and 76% in wholesale) and a 15% increase in new business. Lexington contributed significantly, with 48% of the new business and a 42% rise in submissions. This growth, which is strategic and diversified across retail, wholesale, and alternative channels, is attributed to distribution engagement and disciplined underwriting within the company's risk appetites.

In the paragraph, Peter Zaffino discusses the impact of artificial intelligence on underwriting processes, emphasizing the use of AI to enhance data ingestion and improve decision-making for underwriters. He highlights the complexity of handling a growing number of submissions and the need for efficient data processing. Zaffino mentions their collaboration with companies like Palantir and Anthropic to develop AI capabilities, which aim to drive growth and operational efficiency. He also anticipates further discussions on AI's impact during their Investor Day.

The paragraph discusses the efforts and progress made by a company, led by Peter Zaffino, in achieving growth and underwriting profitability in their high net worth personal lines business. They have improved the combined and loss ratios, with the Global Personal segment, particularly the private client service, contributing significantly. The company is implementing a balanced growth strategy involving both non-admitted and admitted lines, allowing for capital flexibility in response to client needs. They've successfully renegotiated ceding commissions with PCS, which is expected to improve expense and combined ratios. Additionally, they have secured a 30% quota share with six partners, all experts in the high net worth space, to support their growth ambitions.

In the conversation, Peter Zaffino addresses Jon Newsome's questions about AIG's business strategy. He indicates that AIG is largely finished with divesting non-core businesses and is satisfied with their current portfolio, particularly in commercial and global personal segments. Regarding future growth, he emphasizes that any potential mergers or acquisitions (M&A) must be compelling, meaning they should add value, complement existing geographies or products, and be accretive to return on equity (ROE). He also notes that while some businesses have scale, expanding further could be beneficial and is being considered.

The paragraph discusses a company's strategy of balancing organic growth opportunities with potential complementary business acquisitions. The company has achieved a size and scale that allows it to grow organically, supported by a strong capital base, but it remains open to inorganic growth if it adds value. The regulatory landscape, particularly in California, is complex due to state-specific regulations and exposure to natural disasters like earthquakes and wildfires. The company closely works with regulators to adapt to changes in catastrophe risks and better meet client needs.

In the paragraph, the speakers discuss challenges and complexities in the insurance industry, specifically in California, where modeling flaws result in insufficient preparedness for extreme events. They note that some state-established insurance solutions become the primary option, accumulating risk. They express a need for industry resets and improved collaboration between insurance companies and regulators for greater flexibility. The conversation shifts to a question about AIG's expense ratio, especially regarding ceding commissions, with an acknowledgment that while the expense ratio is higher than expected, the loss ratio is favorable. Despite the complexities arising from divestitures and operational shifts, Peter Zaffino expresses satisfaction with the company's discipline in managing expenses.

The paragraph discusses AIG's efforts to streamline operations by reducing expenses and focusing on a lean, transparent parent structure. The company has managed to cut approximately $125 million to $140 million in expenses through AIG Next, while absorbing nearly $200 million from other operations and technology. The goal is to continue improving financial ratios through 2025 without any disruptions. Michael Zaremski then asks about the casualty marketplace, and Peter Zaffino responds that there are strong opportunities in the sector, especially with significant rate increases, such as the 14% rate in Lexington Casualty for 2024.

The paragraph discusses AIG's success in the retail excess casualty sector, highlighting a 15% rate increase for the fifth consecutive year, exceeding loss cost trends and building margins. The company attributes this success to strong leadership and an exceptional underwriting team, particularly in the US under Barbara Luck. AIG has effectively repositioned its portfolio and secured strong reinsurance support, which has bolstered their leading market position. The paragraph concludes with Peter Zaffino expressing gratitude to AIG colleagues for their contributions and mentioning an upcoming Investor Day on March 31st.

This summary was generated with AI and may contain some inaccuracies.