NYSE$AIG

American International Group Inc · Q1 2020 earnings

Q1 2020 earnings · · Investor relations

Briefing

AIG reported a net income attributable to AIG common shareholders of $1.7 billion for Q1 2020, driven by pre-tax net realized capital gains. The adjusted accident year combined ratio in General Insurance continued to improve, and Life and Retirement delivered solid results despite unfavorable capital markets.

AIG's Q1 2020 results showed a net income of $1.7 billion, primarily due to significant pre-tax net realized capital gains. The company's core businesses, General Insurance and Life and Retirement, delivered strong results, with General Insurance improving its adjusted accident year combined ratio. However, COVID-19 is expected to be the single largest CAT loss the industry has ever seen.

  • Net income attributable to AIG common shareholders was $1.7 billion, or $1.98 per diluted common share.
  • Adjusted after-tax income attributable to AIG common shareholders was $99 million, or $0.11 per diluted common share.
  • General Insurance reported an adjusted pre-tax income of $501 million, with an underwriting loss of $87 million, impacted by $272 million of estimated COVID-19 related losses.
  • Life and Retirement reported an adjusted pre-tax income of $574 million, reflecting unfavorable impacts from equity markets.

Headline financials

Total Revenue

$14.4B

Previous: $12.5B+16.0%
EPS (adj)

$0.11

Previous: $1.58-93.0%
Accident year combined ratio, as adjusted

95.5%

No prior period
Free Cash Flow

$1.75B

Previous: $654M+167.4%
Net Income

$1.75B

Previous: $654M+167.4%
Operating Income

$3.11B

Previous: $1.47B+111.3%
Gross Profit

$5.26B

Previous: $3.52B+49.3%
Cash & Equivalents

$2.74B

Previous: $2.57B+6.7%
Total Assets

$510B

Previous: $513B-0.5%

Revenue & EPS history

AIG · Revenue · Quarterly

$14.4B

Q1 2020+16%vs Q1 2019
Beat estimate in 11 of 16 quarters(69%)
ActualEstimate

Forward guidance

Due to the significant uncertainty created by the COVID-19 crisis, AIG is withdrawing previously issued guidance, including that relating to Adjusted Return on Common Equity. However, the company expects to see continued improvement in General Insurance, particularly in the adjusted combined ratio, and does not believe that the impact of COVID-19 will result in a material reduction of its long-term return profile in Life and Retirement.

Tailwinds

  • Continued improvement in General Insurance, particularly in the adjusted combined ratio.
  • The impact of COVID-19 will not result in a material reduction of our long-term return profile in Life and Retirement.
  • AIG was in a strong financial position before this crisis began and remains in a strong financial position today.
  • AIG is well-positioned to emerge as a global insurer of choice with significant financial flexibility.
  • The significant body of work our team has undertaken since late 2017 has served us well as we navigate through this evolving situation.

Headwinds

  • COVID-19 crisis has created significant uncertainty.
  • It will take time to understand its broader ramifications.
  • AIG is withdrawing previously issued guidance, including that relating to Adjusted Return on Common Equity.
  • COVID-19 will be the single largest CAT loss the industry has ever seen.
  • AIG recognized a pre-tax loss of $210 million, primarily consisting of asset impairment charges; this charge did not impact adjusted pre-tax income.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q1 2020

Historical avgQ1 2020

+0.4%

Avg return

Earnings day

+1.8%

Avg return

5 days after

+1.9%

Avg return

30 days after

58%

40 / 69 earnings

Positive

+11.5%

Q1 2010

Best reaction

-11.0%

Q2 2011

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+5.1%+3.9%-0.7%
Q4 2025+4.6%+4.4%+2.3%
Q3 2025-5.4%-4.7%-4.6%
Q2 2025+2.0%+4.3%+3.4%
Q1 2025+3.2%+1.1%+4.7%
Q4 2024+1.2%-2.1%+9.5%
Q3 2024-0.4%-0.2%+0.3%
Q2 2024-5.2%-11.2%-2.5%
Q1 2024+3.7%+6.2%+4.7%
Q4 2023-0.8%+0.4%+8.8%
Q3 2023+5.0%+4.3%+7.6%
Q2 2023+1.6%+0.7%-2.9%
Q1 2023+4.8%+3.4%+7.5%
Q4 2022+1.0%-1.1%-23.2%
Q3 2022+0.5%+1.6%+10.7%
Q2 2022+3.3%+10.8%+3.6%
Q1 2022+8.3%+5.4%-1.5%
Q4 2021+1.7%+2.2%+1.1%
Q3 2021-3.5%-3.8%-12.7%
Q2 2021+8.2%+12.8%+17.0%
Q1 2021+4.7%+3.1%+9.3%
Q4 2020+4.5%+2.9%+15.5%
Q3 2020+5.0%+21.0%+28.8%
Q2 2020-7.5%-4.6%-7.2%
Q1 2020+4.9%+15.7%+39.1%
Q4 2019-10.7%-9.7%-47.5%
Q3 2019+3.7%+4.8%-0.6%
Q2 2019+4.5%+1.3%+0.9%
Q1 2019+6.8%+9.6%+13.9%
Q4 2018-8.3%-3.4%+0.5%
Q3 2018+5.3%+7.7%+5.6%
Q2 2018-2.4%-3.6%-3.3%
Q1 2018-7.8%-5.4%-5.4%
Q4 2017-0.4%-1.7%-6.4%
Q3 2017-4.1%-3.9%-7.4%
Q2 2017+0.9%-0.8%-7.3%
Q1 2017+1.9%+0.6%+4.4%
Q4 2016-8.0%-5.5%-4.9%
Q3 2016-4.2%-2.3%+5.1%
Q2 2016+7.2%+9.0%+9.6%
Q1 2016+0.2%
Q4 2015+1.0%
Q3 2015-3.3%
Q2 2015-2.8%
Q1 2015+1.9%
Q4 2014+3.3%
Q3 2014-0.3%
Q2 2014+0.3%
Q1 2014-3.5%
Q4 2013-0.1%
Q3 2013-7.1%
Q2 2013+6.2%
Q1 2013+8.1%
Q4 2012+2.3%
Q3 2012-6.4%
Q2 2012+1.6%
Q1 2012-5.6%
Q4 2011+2.7%
Q3 2011-1.2%
Q2 2011-11.0%
Q1 2011-3.0%
Q4 2010-3.7%
Q3 2010-0.2%
Q2 2010+4.4%
Q1 2010+11.5%
Q3 2008-7.9%
Q3 2009-7.9%
Q2 2009+5.5%
Q2 2008+5.5%

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