American International Group Inc Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Meyer Shields - Keefe, Bruyette & Woods, Inc. - Analyst : I want to start with a question about reserves, if I can. You talked about how recent accident year financial lines are emerging better than expected, but you're not booking that yet. Can you talk a little bit about what's happening in the older accident years for, I guess, financial lines or casualty? We saw the one-off issues, but I'm wondering, more broadly, is there the same sort of theme in the older accident years that could be getting closer to acknowledgment?

Question: Meyer Shields - Keefe, Bruyette & Woods, Inc. - Analyst : Yes. Just a quick one. Peter, you talked a lot about your expectations for property reinsurance in 2025. And I was hoping for an update on your thoughts of the appropriate reinsurance program property reinsurance program for AIG, whether you're thinking of other -- of changing your net exposure?

Question: Brian Meredith - UBS Securities LLC - Analyst : Peter, I think we're hearing a little bit from other companies about some improvement in your casualty, particularly E&S casualty lines and maybe properties moderating. I wonder if you could give some color on your view of market conditions and kind of organic growth opportunities here in the fourth quarter and heading into 2025?

Question: Brian Meredith - UBS Securities LLC - Analyst : Yes, absolutely. A bigger picture question here, Peter. So I think you said that you're expecting a 10% core ROE for 2025. If I look at pure companies, they're kind of trending in the mid- to even higher teens. What's your kind of longer-term view of kind of ROE aspirations? Do you think can get to peer ROEs? And what do you think it's going to take to get there? Is it more margin improvement? You need to kind of grow acquisitions? Just curious, bigger picture of your thoughts there.

Question: Rob Cox - Goldman Sachs & Company, Inc. - Analyst : I think you guys had previously noted M&A potentially becoming a more meaningful consideration for capital deployment. But you also mentioned revisiting share repurchase guidance as you expect some further liquidity coming in next year. Can you give us an update on your appetite for M&A and how that might help you reach premium leverage objectives quicker than organically? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 05, 2024 / 1:30PM, AIG.N - Q3 2024 American International Group Inc Earnings Call

Question: Rob Cox - Goldman Sachs & Company, Inc. - Analyst : Okay. Great. And as a follow-up on GOE and general insurance, didn't necessarily appear like it decreased as much as the run rate in the first half of the year. So I was just hoping you could discuss kind of the puts and takes in the general insurance, GOE ratio and if this level of improvement is sort of in line with expectations.

Question: Alex Scott - Barclays Capital Inc. - Analyst : I had a follow-up on just sort of the leverage. And I guess thinking through both leverage down at the operating companies as well as financial leverage. When I look at the ROE, that seems to be the place where you're under index versus some of the peers, not so much, like the actual combined ratio and so forth. So I was interested in, I guess, on the debt leverage side. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 05, 2024 / 1:30PM, AIG.N - Q3 2024 American International Group Inc Earnings Call Are we at a place where leverage can actually begin to come up as you see opportunities, particularly if you do engage in M&A? And then on the core operations, I mean, can you frame at all, like how much dry powder you see in terms of being able to lean into some of these opportunities if they get better at casualty?

Question: Alex Scott - Barclays Capital Inc. - Analyst : Got it. That's helpful. Maybe a quick follow-up, on personal lines in North America. Can you just give us an update on sort of where we stand with that MGA structure that was put in place? And over what period of time you'd expect that combined ratio to come down below 100%?

Question: Elyse Greenspan - Wells Fargo Securities, LLC - Analyst : My first question was just on the North America commercial. If I adjust out the one-off in the quarter, right, it came in at 61.1 on an ex cat accident year loss ratio basis. You guys are at 61.9 in the first half of the year. So I was just hoping to get more color on what drove the improvement in the quarter and if that's sustainable into the fourth quarter and 2025.

Question: Elyse Greenspan - Wells Fargo Securities, LLC - Analyst : Yes. My follow-up, I guess, would be, Peter, just building upon that comment, as you view the market conditions out over the next year, how do you expect the mix to shift between property and casualty relative to where it is today? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 05, 2024 / 1:30PM, AIG.N - Q3 2024 American International Group Inc Earnings Call