AIG REPORTS 2000 NET INCOME EXCLUDING REALIZED CAPITAL GAINS -LOSSES- ROSE 14.8 PERCENT TO RECORD $5.74 BILLION; Net Income Per Share As Adjusted Gained 15.0% To $2.45.Business Editors NEW YORK--(BUSINESS WIRE)--Feb. 8, 2001 American International Group
American International Group, Inc. (AIG) (NYSE: AIG; TYO: 8685 ) is a major American insurance corporation based in New York City. , Inc. (AIG AIG addressee indicator group (US DoD) AIG American International Group, Inc AiG Answers in Genesis (religious group in defense of Scripture) AIG Artificial Intelligence Group AIG Australian Industry Group ) today reported that its income excluding net realized capital gains (losses) increased 14.8 percent to $5.74 billion for the year 2000 and 15.9 percent to $1.53 billion in the fourth quarter of 2000. Net income for 2000, including net realized capital gains (losses), increased 11.5 percent to $5.64 billion, compared to $5.06 billion in 1999. For the fourth quarter of 2000, net income totaled $1.50 billion, an increase of 14.1 percent, compared to $1.31 billion in the same period of 1999. Revenues for the year 2000 rose 13.1 percent to $45.97 billion from $40.66 billion in 1999. Fourth quarter revenues totaled $12.51 billion, an increase of 13.8 percent over $11.00 billion in the year earlier quarter. At December December: see month. 31, 2000, AIG's consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: assets approximated $303 billion, an increase of 13 percent, compared to $268 billion at the prior year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. . In 2000, shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. increased to approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $40 billion, a 20 percent increase over the $33.3 billion reported at December 31, 1999. Following is a summary table of fourth quarter and full year information (in millions, except per share amounts).
FOURTH QUARTER TWELVE MONTHS
2000 1999 Change 2000 1999 Change
Net income,
as reported $1,497.3 $1,312.2 14.1% $5,636.1 $5,055.4 11.5%
Income, as
adjusted (a) $1,528.1 $1,318.5 15.9% $5,736.5 $4,998.6 14.8%
PER SHARE
RESULTS:(b)
Net income,
as reported $ 0 .64 $ 0 .56 14.3% $ 2.41 $ 2.15 12.1%
Income, as
adjusted (a) $ 0 .65 $ 0 .56 16.1% $ 2.45 $ 2.13 15.0%
Average shares
outstanding 2,345.6 2,351.3 2,343.2 2,350.2
(a) Adjusted to exclude realized capital gains (losses), net of taxes. (b) Share information reflects the three-for-two split in the form of a 50 percent common stock dividend, paid July July: see month. 28, 2000. Income before income taxes, minority interest and realized capital gains (losses) for the year 2000 increased 14.8 percent to $8.49 billion from $7.39 billion reported last year. For the fourth quarter of 2000, income before income taxes, minority interest and realized capital losses amounted to $2.24 billion, an increase of 15.9 percent over the $1.94 billion reported in 1999. Foreign exchange rates negatively affected the translation into U.S. dollars of foreign currency net premiums written, as shown in the following table, which compares fourth quarter 2000 to fourth quarter 1999. Worldwide life insurance includes life premium income and other considerations.
Worldwide Foreign Worldwide Foreign
General General Life Life
Insurance Insurance Insurance Insurance
Premium Growth in
Original Currency 14.0% 6.4% 7.3% 20.0%
Foreign Exchange
Impact (1.6) (4.8) (3.8) (6.0)
Premium Growth as
Reported in U.S. $ 12.4% 1.6% 3.5% 14.0%
Commenting on the fourth quarter and full year 2000, AIG Chairman M.R. Greenberg Green·berg , Joseph Harold Born 1915. American linguist. His influential works include Languages of Africa (1966) and Language Universals (1966). Noun 1. said, "AIG had a very good quarter and year. Our worldwide businesses reported strong results and met their goals for the year. Net income for the year 2000 before realized capital gains and losses rose 14.8 percent to a record $5.74 billion, or $2.45 per share. AIG is well positioned in 2001 in our principal markets. The strengthening rate environment across the board, both in the U.S. property-casualty market and in key overseas markets, is a major positive event for our industry and most particularly for AIG. "Our worldwide general insurance business had a strong quarter. Worldwide net premiums written increased 12.4 percent in the quarter to $4.50 billion, and 8.0 percent to $17.53 billion for the full year. We achieved an adjusted underwriting profit Underwriting profit is a term used in the insurance industry. It consists of the earned premium remaining after losses have been paid and administrative expenses have been deducted. It does not include any investment income earned on held premiums. of $152.9 million in the fourth quarter and a record $785.0 million for the full year. Our combined ratio for the quarter was 98.81, compared to 98.95 in last year's fourth quarter. For the full year, AIG's combined ratio was 96.73, compared to last year's 96.35. "We added $106 million to AIG's general insurance net loss and loss adjustment reserves for the quarter, and together with the acquisition of HSB (Hue Saturation Brightness) A color space that is similar to the way an artist mixes colors by adding black and white to pure pigments. The pigments are the hues (H), measured in a circle from 0 to 359 degrees (0=red, 60=yellow, 120=green, 180=cyan, 240=blue, Group, Inc., increased the total of those reserves to $25.0 billion at year-end 2000. "The Domestic Brokerage BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. Group benefited in the fourth quarter from the broad strengthening of commercial property-casualty rates and our array of specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. products and services tailored to the changing needs of our customers. Stronger rates are evident across virtually all classes of business, and we believe rates will continue to firm. Nonetheless, it bears repeating that commercial insurance rates have experienced a steady decline over the past decade, eroding the financial strength and balance sheets of many companies. Therefore, continued broad rate increases are essential to the future health of our industry. "AIG's domestic personal lines business did not meet our expectations, but relative to the market, performed satisfactorily. For the year 2000, net premiums written increased 16.1 percent to $2.51 billion. Virtually all companies in this market have been increasing rates during the year, and AIG has filed for rate increases in all states where we offer personal lines products. We expect to see these rate increases reflected in operating results toward mid-year, barring any unforeseen catastrophes. "United Guaranty As a verb, to agree to be responsible for the payment of another's debt or the performance of another's duty, liability, or obligation if that person does not perform as he or she is legally obligated to do; to assume the responsibility of a guarantor; to warrant. Corporation (UGC See user-generated content. ), our mortgage guaranty insurance subsidiary, had another outstanding year, with record operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. . UGC's results have benefited from a strong housing market. For the quarter and full year, UGC reported 10.1 percent and 20.6 percent gains, respectively, in operating income. "Our Foreign General Insurance Group, including the foreign operations of Transatlantic Holdings, Inc., achieved 6.4 percent and 7.4 percent increases, respectively, in net premiums written in original currency for the quarter and year. The strengthening U.S. dollar, particularly with respect to the Japanese yen “Yen” redirects here. For the other use, see Yen (disambiguation). “JPY” redirects here. For the Australian singer with the same moniker, see John Paul Young. , negatively impacted net premiums written. Also, opportunistically driven risk finance transactions can affect the growth in premiums written during any given quarter. Excluding risk finance transactions and foreign exchange, traditional Foreign General net premiums written rose 11.5 percent in the fourth quarter. The Group had combined ratios of 95.07 in the quarter and 94.09 for the year. Rates in the United Kingdom and Continental Europe Continental Europe, also referred to as mainland Europe or simply the Continent, is the continent of Europe, explicitly excluding European islands and, at times, peninsulas. are rising, following the same pattern that is evident in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . This reflects the poor underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. experience in many classes over a number of years, especially the effect of the major storms that have struck Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). in each of the past two
years.
"In Asia, our non-life In the physical sciences, non-life is an umbrella term set to distinguish or characterize those inanimate chemical precursors found in the primeval soup of the early years of planetary evolution from which life, theoretically, evolved or came into existence. operations did quite well, with very good underwriting results. Despite Japan's stagnant stagnant /stag·nant/ (stag´nant) 1. motionless; not flowing or moving. 2. inactive; not developing or progressing. economy, our business there was good, with stronger growth than was achieved by the domestic property-casualty industry. In Southeast Asia Southeast Asia, region of Asia (1990 est. pop. 442,500,000), c.1,740,000 sq mi (4,506,600 sq km), bounded roughly by the Indian subcontinent on the west, China on the north, and the Pacific Ocean on the east. , the breadth Breadth The percentage of assets or stocks advancing relative to those unchanged or declining. Also the number of independent forecasts available per year. A stock picker forecasting returns to 100 stocks every quarter exhibits a breadth of 400, assuming each forecast is of the AIG network and distribution system had a very positive impact on results. Our joint venture insurance company in Israel Israel, in the Bible Israel (ĭz`rēəl, ĭz`rāəl) [as understood by Hebrews,=he strives with God], according to the book of Genesis, name given to Jacob as eponymous ancestor of the Hebrews, the chosen people of God. , AIG Golden Insurance Ltd., received a license shortly after year-end to market commercial property-casualty insurance lines in that country. Previously, the company had been limited to personal lines. Also, AIG purchased a 90 percent share in an Egyptian non-life insurance company, Pharaonic Phar·aoh also phar·aoh n. 1. A king of ancient Egypt. 2. A tyrant. [Middle English Pharao, from Late Latin Phara Insurance Company S.A.E., adding to our extensive network in the Middle East. In addition, we have received a general insurance license for the Ukraine Ukraine (y  `krān, ykrān`), Ukr. Ukraina, republic (2005 est. pop. , a further step in building our network in
Central Europe Central Europe is the region lying between the variously and vaguely defined areas of Eastern and Western Europe. In addition, Northern, Southern and Southeastern Europe may variously delimit or overlap into Central Europe. and the C.I.S.
"In January January: see month. 2001, in an important development for AIG's global network, our joint venture general insurance company in India India, officially Republic of India, republic (2005 est pop. 1,080,264,000), 1,261,810 sq mi (3,268,090 sq km), S Asia. The second most populous country in the world, it is also sometimes called Bharat, its ancient name. India's land frontier (c. , Tata Tata (tä`tä), Parsi family of Indian industrialists, centered at Mumbai. The Tata enterprises, which encompass vast holdings in iron and steel, motor vehicles, power utilities, financial services, computer software, chemicals, textiles, and AIG General Insurance Co. Ltd., received its license to market both commercial and personal lines products in India. Our partner, the Tata Group The Tata Group is India's largest conglomerate company, with revenues in 2005-06 of Rs. 967,229 million (US $21.9 billion), the equivalent of about 2.8% of India's GDP, and a market capitalisation of US $57.6 billion now (only 28 of the 96 Tata Group companies are publicly listed). , with whom AIG has had a long relationship, is the premier business and industrial group in India. In addition, we have been advised that our joint venture life insurance company, Tata AIG Life Insurance Co. Ltd., has received approval in principle and the formal license should be issued shortly. This marks our return to India after an absence of 30 years. "Integration of HSB Group, Inc. and its subsidiary, The Hartford Hartford, city (1990 pop. 139,739), state capital, Hartford co., central Conn., on the west bank of the Connecticut River; settled as Newtown 1635–36 on the site of a Dutch trading post (1633; abandoned 1654), inc. 1784. Steam Boiler boiler, device for generating steam. It consists of two principal parts: the furnace, which provides heat, usually by burning a fuel, and the boiler proper, a device in which the heat changes water into steam. Inspection and Insurance Company, acquired in the fourth quarter, is proceeding very well in both new product development and in the provision of new opportunities to market HSB's strong lineup A criminal investigation technique in which the police arrange a number of individuals in a row before a witness to a crime and ask the witness to identify which, if any, of the individuals committed the crime. of insurance products and inspection services to AIG clients both in the U.S. and overseas. "Transatlantic Holdings, Inc., whose results are reported through both AIG's Domestic and Foreign General insurance segments, had solid performance in the fourth quarter and full year. Net premiums written rose 10.7 percent for the year 2000, with strong gains in operating income. Transatlantic is benefiting from the same environment of broad rate increases as AIG, in both its domestic and international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. . Transatlantic's core casualty business was particularly strong. "AIG's worldwide Life Division had an excellent full year and fourth quarter. Including the results of SunAmerica's life business, premium income and the sale of annuities, pensions and investment products rose for the full year by 20.2 percent to $29.60 billion. For the fourth quarter, these revenues rose 3.5 percent to $7.08 billion as the sales of annuities, pensions and investment products declined slightly. This was largely due to market timing considerations not reflective Refers to light hitting an opaque surface such as a printed page or mirror and bouncing back. See reflective media and reflective LCD. of the year's results as a whole or the business going forward. Life operating income before realized capital losses rose 18.1 percent for the year 2000 to $3.55 billion, and for the quarter increased 18.3 percent to $955.2 million. Our life distribution system markets a variety of life and investment products, and we are constantly introducing new products and services tailored to meet buyers' needs. "Once again, Asia was a major contributor to our life results, led by Japan, Southeast Asia and Taiwan Taiwan (tī`wän`), Portuguese Formosa, officially Republic of China, island nation (2005 est. pop. 22,894,000), 13,885 sq mi (35,961 sq km), in the Pacific Ocean, separated from the mainland of S China by the 100-mi-wide (161-km) Taiwan . Our new life company in Vietnam Vietnam (vēĕt`näm), officially Socialist Republic of Vietnam, republic (v), 128,400 sq mi (332,642 sq km), Southeast Asia. Occupying the eastern coastline of the Southeast Asian peninsula, Vietnam is bounded by China on the north, by Laos , licensed in 2000, is off to an excellent start. Central Europe has become an important component of our growing life business, and Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. achieved satisfactory results. In Japan, as reported earlier, AIG was named as the business sponsor for Chiyoda Mutual Life Insurance Company, a Japanese Japanese (jăp'ənēz`), language of uncertain origin that is spoken by more than 125 million people, most of whom live in Japan. There are also many speakers of Japanese in the Ryukyu Islands, Korea, Taiwan, parts of the United States, and life company that had applied for protection from its creditors. We are continuing to work with Chiyoda on the details of a reorganization plan A scheme authorized by federal law and promulgated by the president whereby he or she alters the structure of federal agencies to promote government efficiency and economy through a transfer, consolidation, coordination, authorization, or abolition of functions. for the company. "The Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. Group, led by International Lease Finance Corporation (ILFC ILFC International Lease Finance Corporation ILFC International Lunar Finance Commission (TV show: Space: 1999) ) and AIG Financial Products Corp. (AIGFP), produced outstanding results for the fourth quarter and full year 2000. Operating income for the Group gained 22.6 percent to $398.9 million in the quarter and 19.5 percent for the year to $1.29 billion. Both ILFC and AIGFP had record operating income and continued to expand their business franchises. A new management team was put in place at AIG Trading Group Inc. following AIG's purchase of the minority ownership interest of the previous management. We believe the new structure will strengthen that unit's performance going forward. Our consumer finance business, started in 1996, continues to make excellent progress in both its consumer loan and credit card businesses and contributed to the Group's operating income in 2000. "SunAmerica had a very good year in both asset management and in its variable annuity Variable Annuity An insurance contract in which, at the end of the accumulation stage, the insurance company guarantees a minimum payment. The remaining income payments can vary depending on the performance of the managed portfolio. business. Operating income for the year 2000 gained 26.2 percent to $1.41 billion. Retirement savings continues to be a major and growing business globally. SunAmerica, working with AIG units both domestically and overseas, is taking advantage of these expanding opportunities with products tailored to individual market needs. "AIG's Asset Management Group, which includes the asset management business of SunAmerica, posted excellent results for the fourth quarter and full year. Operating income for the quarter rose 14.1 percent to $109.7 million. For the year 2000, operating income gained 37.0 percent to $430.2 million. At year-end 2000, AIG's third party assets under management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. , including retail mutual funds and institutional accounts, totaled approximately $35 billion." GENERAL INSURANCE General insurance pretax income pretax income Reported income before the deduction of income taxes. Pretax income is sometimes considered a better measure of a firm's performance than aftertax income because taxes in one period may be influenced by activities in earlier periods. before realized capital gains for the year 2000 was $3.49 billion, 9.4 percent above the $3.19 billion reported last year. For the fourth quarter of 2000, general insurance pretax income before realized capital gains (losses) was $855.2 million, an increase of 11.1 percent compared to $769.5 million in 1999. Worldwide general insurance net premiums written for the year 2000 amounted to $17.53 billion, 8.0 percent ahead of the $16.22 billion in 1999. In the fourth quarter, general insurance net premiums written were $4.50 billion, an increase of 12.4 percent, compared to $4.01 billion last year. General insurance net investment income rose 7.3 percent to $2.70 billion in 2000 and 8.5 percent to $702.3 million in the fourth quarter. LIFE INSURANCE AIG's worldwide life insurance operations reported pretax income before realized capital losses of $3.55 billion in the year 2000, an increase of 18.1 percent, compared to $3.01 billion in 1999. For the fourth quarter, life insurance pretax income before realized capital losses increased 18.3 percent to $955.2 million, compared to $807.4 million last year. For the year 2000 life insurance premium income and other considerations rose 20.2 percent to $29.60 billion from $24.62 billion in 1999. Fourth quarter premium income and other considerations amounted to $7.08 billion, a gain of 3.5 percent, compared to $6.84 billion in 1999. Life insurance net investment income rose 14.8 percent to $7.12 billion for the year 2000, compared to $6.21 billion last year. For the fourth quarter, net investment income amounted to $1.94 billion, an increase of 17.0 percent, compared to $1.66 billion in the same period last year. FINANCIAL SERVICES Financial services pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern operating income amounted to $1.29 billion for the year 2000, compared to $1.08 billion last year, an increase of 19.5 percent. For the fourth quarter, financial services operating income increased 22.6 percent to $398.9 million, compared to $325.5 million in 1999. ASSET MANAGEMENT Asset management pretax operating income amounted to $430.2 million for the year 2000, compared to $314.1 million last year, an increase of 37.0 percent. For the fourth quarter, asset management operating income increased 14.1 percent to $109.7 million, compared to $96.2 million in 1999. AIG is the leading U.S.-based international insurance and financial services organization and the largest underwriter underwriter n. a company or person which/who underwrites an insurance policy, issue of corporate securities, business, or project. (See: underwrite) UNDERWRITER, insurances. One who signs a policy of insurance, by which he becomes an insurer. of commercial and industrial insurance in the United States. Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in approximately 130 countries and jurisdictions throughout the world. AIG's global businesses also include financial services and asset management, including aircraft leasing, financial products, trading and market making, consumer finance, institutional, retail and direct investment fund asset management, real estate investment management, and retirement savings products. American International Group, Inc.'s common stock is listed on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. , as well as the stock exchanges in London London, city, Canada London, city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826. , Paris, Switzerland Switzerland (swĭt`sərlənd), Fr. Suisse, Ger. Schweiz, Ital. Svizzera, officially Swiss Confederation, federal republic (2005 est. pop. 7,489,000), 15,941 sq mi (41,287 sq km), central Europe. and Tokyo Tokyo (tō`kēō), city (1990 pop. 8,163,573), capital of Japan and of Tokyo prefecture, E central Honshu, at the head of Tokyo Bay. . Caution concerning forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This press release may contain forward-looking statements. Please refer to AIG's Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended September September: see month. 30, 2000 for a description of the business environment in which AIG operates and the important factors that may affect its business. AIG is not under any obligation to (and expressly disclaims any such obligations to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.
American International Group, Inc.
Financial Highlights
(in thousands, except per share amounts)
Three Months Ended December 31,
2000 1999 Change
General Insurance Operations:
Net Premiums Written $ 4,502,919 $ 4,006,876 12.4 %
Net Premiums Earned 4,785,517 4,165,616 14.9
Adjusted Underwriting Profit 152,854 122,249 25.0
Net Investment Income 702,307 647,266 8.5
Income before Realized
Capital Gains (Losses) 855,161 769,515 11.1
Realized Capital Gains (Losses) (3,860) 83,710 -
Operating Income $ 851,301 $ 853,225 (0.2)%
Loss Ratio 76.16 76.69
Expense Ratio 22.65 22.26
Combined Ratio 98.81 98.95
Life Insurance Operations:
Premium Income and Other
Considerations: (a)
Life $ 3,502,247 $ 3,101,287 12.9 %
Annuities, Pension and
Investment Products 3,582,359 3,741,542 (4.3)
Total 7,084,606 6,842,829 3.5
Net Investment Income 1,938,640 1,657,313 17.0
Income before Realized
Capital Losses 955,215 807,427 18.3
Realized Capital Losses (38,283) (86,063) -
Operating Income 916,932 721,364 27.1
Financial Services Operating Income 398,868 325,470 22.6
Asset Management Operating Income 109,680 96,156 14.1
Other Realized Capital Losses (3,433) (6,731) -
Other Income (Deductions) - net (71,740) (57,438) -
Foreign Exchange Losses (2,888) (4,057) -
Income before Income Taxes
and Minority Interest 2,198,720 1,927,989 14.0
Income Taxes 634,537 578,210 -
Income before Minority Interest 1,564,183 1,349,779 15.9
Minority Interest, after tax: (b)
Operating Income (65,539) (37,142) -
Capital Gains (1,301) (397) -
Net Income, as reported 1,497,343 1,312,240 14.1
Per Common Share (c) - Basic 0.64 0.57 12.3
- Diluted 0.64 0.56 14.3
Income, as adjusted (d) 1,528,087 1,318,497 15.9
Per Common Share (c) - Diluted $ 0.65 $ 0.56 16.1 %
Average Common Shares Outstanding (c)
- Basic 2,320,420 2,323,182
- Diluted 2,345,604 2,351,306
Twelve Months Ended December 31,
2000 1999 Change
General Insurance Operations:
Net Premiums Written $ 17,526,339 $ 16,223,885 8.0 %
Net Premiums Earned 17,406,850 15,543,807 12.0
Adjusted Underwriting Profit 784,972 669,245 17.3
Net Investment Income 2,700,784 2,516,691 7.3
Income before Realized
Capital Gains 3,485,756 3,185,936 9.4
Realized Capital Gains 38,461 294,694 -
Operating Income $ 3,524,217 $ 3,480,630 1.3 %
Loss Ratio 75.28 75.51
Expense Ratio 21.45 20.84
Combined Ratio 96.73 96.35
Life Insurance Operations:
Premium Income and Other
Considerations: (a)
Life $ 13,346,788 $ 11,494,471 16.1 %
Annuities, Pension and
Investment Products 16,253,817 13,126,049 23.8
Total 29,600,605 24,620,520 20.2
Net Investment Income 7,123,105 6,205,924 14.8
Income before Realized
Capital Losses 3,548,493 3,005,509 18.1
Realized Capital Losses (161,661) (147,656) -
Operating Income 3,386,832 2,857,853 18.5
Financial Services Operating Income 1,292,627 1,081,315 19.5
Asset Management Operating Income 430,225 314,069 37.0
Other Realized Capital Losses (13,975) (25,019) -
Other Income (Deductions) - net (261,072) (186,952) -
Foreign Exchange Losses (9,521) (9,702) -
Income before Income Taxes
and Minority Interest 8,349,333 7,512,194 11.1
Income Taxes 2,458,083 2,218,381 -
Income before Minority Interest 5,891,250 5,293,813 11.3
Minority Interest, after tax: (b)
Operating Income (243,759) (215,606) -
Capital Gains (11,392) (22,772) -
Net Income, as reported 5,636,099 5,055,435 11.5
Per Common Share (c) - Basic 2.43 2.18 11.5
- Diluted 2.41 2.15 12.1
Income, as adjusted (d) 5,736,500 4,998,617 14.8
Per Common Share (c) - Diluted $ 2.45 $ 2.13 15.0 %
Average Common Shares Outstanding (c)
- Basic 2,318,341 2,322,438
- Diluted 2,343,214 2,350,151
(a)GAAP premium income was $3,667,529 and $13,609,686 for the fourth
quarter and twelve months 2000, respectively, compared to
$3,318,189 and $11,941,864 for the fourth quarter and twelve
months 1999, respectively.
(b)Represents minority shareholders' equity in operating income and
capital gains of certain consolidated subsidiaries, including
Transatlantic Holdings, Inc. and 21st Century Insurance Group.
(c)Share information reflects the three-for-two split in the form
of a 50 percent common stock dividend, paid July 28, 2000.
(d)Adjusted to exclude realized capital gains (losses), net of taxes.
American International Group, Inc.
Supplementary Data
(in thousands)
Three Months Ended December 31,
2000 1999 Change
General Insurance Operations:
Net Premiums Written
Brokerage Division $ 2,395,985 $ 2,024,419 18.4 %
Personal Lines 642,008 550,897 16.5
Mortgage Guaranty 118,070 105,708 11.7
Total Domestic General 3,156,063 2,681,024 17.7
Foreign General 1,346,856 1,325,852 1.6
Total 4,502,919 4,006,876 12.4
Operating Income (a)
Brokerage Division 511,285 522,413 (2.1)
Personal Lines (5,793) 17,300 -
Mortgage Guaranty 89,478 81,272 10.1
Intercompany Adjustments 13,204 17,313 -
Total Domestic General 608,174 638,298 (4.7)
Foreign General 246,987 131,217 88.2
Total $ 855,161 $ 769,515 11.1 %
Combined Ratio:
Brokerage Division 101.35 101.23
Personal Lines 105.36 101.97
Mortgage Guaranty 44.98 42.24
Total Domestic General 100.18 99.14
Foreign General 95.07 99.08
Losses & Loss Expenses Paid $ 3,538,320 $ 3,290,233 7.5 %
Change in Loss and LAE Reserve 106,342 (95,416) -
Losses and Loss Expenses Incurred 3,644,662 3,194,817 14.1
Net Loss and LAE Reserve 24,951,596 24,599,672 1.4
GAAP Underwriting Profit 152,854 122,249 25.0
Life Insurance Operations: (b)
Premium Income and Other Considerations
Domestic
Life (c) 163,721 130,649 25.3
Annuities, Pension and
Investment Products (d) 2,001,569 2,396,932 (16.5)
Total 2,165,290 2,527,581 (14.3)
Foreign
Life (c) 3,338,526 2,970,638 12.4
Annuities, Pension and
Investment Products (d) 1,580,790 1,344,610 17.6
Total 4,919,316 4,315,248 14.0
Net Investment Income
Domestic 1,071,221 896,474 19.5
Foreign 867,419 760,839 14.0
Total 1,938,640 1,657,313 17.0
Operating Income (a)
Domestic 363,105 285,097 27.4
Foreign 592,110 522,330 13.4
Total 955,215 807,427 18.3
Financial Services:
Revenues
International Lease
Finance Corp. 654,842 559,131 17.1
AIG Financial Products Corp. 344,209 241,142 42.7
AIG Trading Group Inc. 63,352 73,827 (14.2)
Other 94,722 63,968 48.1
Total 1,157,125 938,068 23.4
Operating Income
International Lease
Finance Corp. 177,519 160,333 10.7
AIG Financial Products Corp. 215,595 166,039 29.8
AIG Trading Group Inc. 21,564 32,605 (33.9)
Other 3,478 (19,116) -
Intercompany Reclassifications (19,288) (14,391) -
Total 398,868 325,470 22.6
SunAmerica:
Operating Income (b) 392,315 304,421 28.9
Total Sales (d) $ 2,709,640 $ 3,092,534 (12.4)%
Effective Tax Rates:
Excluding Capital Gains (Losses) 28.99% 30.02%
Capital Gains (Losses) Alone 35.40% 35.52%
As Reported 28.86% 29.99%
Twelve Months Ended December 31,
2000 1999 Change
General Insurance Operations:
Net Premiums Written
Brokerage Division $ 8,805,428 $ 8,297,398 6.1 %
Personal Lines 2,509,806 2,162,211 16.1
Mortgage Guaranty 453,397 396,298 14.4
Total Domestic General 11,768,631 10,855,907 8.4
Foreign General 5,757,708 5,367,978 7.3
Total 17,526,339 16,223,885 8.0
Operating Income (a)
Brokerage Division 2,010,017 1,805,719 11.3
Personal Lines 76,497 189,109 (59.5)
Mortgage Guaranty 363,118 301,145 20.6
Intercompany Adjustments 76,792 66,760 -
Total Domestic General 2,526,424 2,362,733 6.9
Foreign General 959,332 823,203 16.5
Total $ 3,485,756 $ 3,185,936 9.4 %
Combined Ratio:
Brokerage Division 100.07 100.77
Personal Lines 100.84 96.29
Mortgage Guaranty 40.92 43.69
Total Domestic General 97.94 97.63
Foreign General 94.09 94.22
Losses & Loss Expenses Paid $ 12,987,803 $ 11,756,689 10.5 %
Change in Loss and LAE Reserve 116,589 (19,216) -
Losses and Loss Expenses Incurred 13,104,392 11,737,473 11.6
Net Loss and LAE Reserve 24,951,596 24,599,672 1.4
GAAP Underwriting Profit 784,972 669,245 17.3
Life Insurance Operations: (b)
Premium Income and Other Considerations
Domestic
Life (c) 628,757 568,699 10.6
Annuities, Pension and
Investment Products (d) 9,054,495 8,260,162 9.6
Total 9,683,252 8,828,861 9.7
Foreign
Life (c) 12,718,031 10,925,772 16.4
Annuities, Pension and
Investment Products (d) 7,199,322 4,865,887 48.0
Total 19,917,353 15,791,659 26.1
Net Investment Income
Domestic 3,925,949 3,496,764 12.3
Foreign 3,197,156 2,709,160 18.0
Total 7,123,105 6,205,924 14.8
Operating Income (a)
Domestic 1,310,967 1,062,175 23.4
Foreign 2,237,526 1,943,334 15.1
Total 3,548,493 3,005,509 18.1
Financial Services:
Revenues
International Lease
Finance Corp. 2,440,974 2,194,105 11.3
AIG Financial Products Corp. 1,055,459 736,602 43.3
AIG Trading Group Inc. 253,551 227,275 11.6
Other 301,415 182,398 65.3
Total 4,051,399 3,340,380 21.3
Operating Income
International Lease
Finance Corp. 653,925 590,071 10.8
AIG Financial Products Corp. 648,388 482,199 34.5
AIG Trading Group Inc. 62,141 109,356 (43.2)
Other 3,341 (15,146) -
Intercompany Reclassifications (75,168) (85,165) -
Total 1,292,627 1,081,315 19.5
SunAmerica:
Operating Income (b) 1,409,987 1,117,408 26.2
Total Sales (d) $ 12,934,476 $ 11,283,885 14.6 %
Effective Tax Rates:
Excluding Capital Gains (Losses) 29.53% 29.44%
Capital Gains (Losses) Alone 35.11% 34.77%
As Reported 29.44% 29.53%
(a)Operating income excludes realized capital gains (losses).
(b)Results for SunAmerica Inc. are included in Life Insurance
and Asset Management Operations.
(c)Life includes traditional life, interest sensitive and
variable life products.
(d)The decline in fourth quarter sales was largely due to
market timing considerations not reflective of the year's
results as a whole or the business going forward.
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