#1AIG Fourth Quarter and Full Year 2019 Financial Results Presentation February 13, 2020 Updated slide 21 & 22 on 2/13/2020 4:00pm#2Cautionary Statement Regarding Forward-Looking Information This document and the remarks made within this presentation may include, and officers and representatives of American International Group, Inc. (AIG) may from time to time make and discuss, projections, goals, assumptions and statements that may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These projections, goals, assumptions and statements are not historical facts but instead represent only a belief regarding future events, many of which, by their nature, are inherently uncertain and outside AIG's control. These projections, goals, assumptions and statements include statements preceded by, followed by or including words such as "will," "believe," "anticipate," "expect," "intend," "plan," "focused on achieving," "view," "target," "goal" or "estimate." These projections, goals, assumptions and statements may relate to future actions, prospective services or products, future performance or results of current and anticipated services or products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, anticipated organizational, business or regulatory changes, anticipated sales, monetization and/or acquisitions of businesses or assets, or successful integration of acquired businesses, management succession and retention plans, exposure to risk, trends in operations and financial results. It is possible that AIG's actual results and financial condition will differ, possibly materially, from the results and financial condition indicated in these projections, goals, assumptions and statements. Factors that could cause AIG's actual results to differ, possibly materially, from those in the specific projections, goals, assumptions and statements include: changes in market and industry conditions; the occurrence of catastrophic events, both natural and man-made, and the effects of climate change; AIG's ability to effectively execute on AIG 200 operational programs designed to achieve underwriting excellence, modernization of AIG's operating infrastructure, enhanced user and customer experiences and unification of AIG; AIG's ability to consummate the sale of its controlling interest in Fortitude Holdings and AIG's ability to successfully manage Legacy Portfolios; changes in judgments concerning potential cost saving opportunities; actions by credit rating agencies; changes in judgments concerning insurance underwriting and insurance liabilities; the impact of potential information technology, cybersecurity or data security breaches, including as a result of cyber-attacks or security vulnerabilities; disruptions in the availability of AIG's electronic data systems or those of third parties; the effectiveness of strategies to recruit and retain key personnel and to implement effective succession plans; the requirements, which may change from time to time, of the global regulatory framework to which AIG is subject; significant legal, regulatory or governmental proceedings; concentrations in AIG's investment portfolios; changes to the valuation of AIG's investments; AIG's ability to successfully dispose of, monetize and/or acquire businesses or assets or successfully integrate acquired businesses; changes in judgments concerning the recognition of deferred tax assets and goodwill impairment; and such other factors discussed in Part II, Item 7. MD&A and Part I, Item 1A. Risk Factors in AIG's Annual Report on Form 10-K for the year ended December 31, 2019 (which will be filed with the Securities and Exchange Commission), Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) in AIG's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2019, Part I, Item 2. MD&A in AIG's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019, Part I, Item 2. MD&A in AIG's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2019, and Part II, Item 7. MD&A and Part I, Item 1A. Risk Factors in AIG's Annual Report on Form 10-K for the year ended December 31, 2018. AIG is not under any obligation (and expressly disclaims any obligation) to update or alter any projections, goals, assumptions or other statements, whether written or oral, that may be made from time to time, whether as a result of new information, future events or otherwise. This document and the remarks made orally may also contain certain non-GAAP financial measures. The reconciliation of such measures to the most comparable GAAP measures in accordance with Regulation G is included in the earnings release and Fourth Quarter 2019 Financial Supplement available in the Investor Information section of AIG's corporate website, www.aig.com, as well as in the Appendix to this presentation. Note: Amounts presented may not foot due to rounding. AIG 2#3Strong 4Q19 and FY'19 results driven by General Insurance underwriting profit and stable Life and Retirement earnings 4Q19 Financial Results 4Q19 adjusted after-tax income* (AATI) of $919M ($1.03 per diluted share) versus 4Q18 adjusted after-tax loss (AATL) of $559M (-$0.63 per diluted share) 4Q19 adjusted pre-tax income* (APTI) of $1.2B versus 4Q18 adjusted pre-tax loss (APTL) of $669M primarily due to: - Improved GI AYCR, as adjusted*, of 95.8% compared to 98.8% in 4Q18 Lower CATS of $413M compared to $798M in 4Q18 Net favorable development of $153M compared to unfavorable $365M in 4Q18 NII increased to $3.5B reflecting higher alternative investment income ($288M vs. -$139M in 4Q18) Annualized yield for alternative investment income was ~12%, above 8% yield assumption · 4Q18 Legacy L&R run-off included $105M of loss recognition expense on certain Accident and Health cancer and disability blocks FY'19 Financial Results FY'19 AATI of $4.1B ($4.59 per diluted share) versus FY'18 AATI of $1.1B ($1.17 per diluted share) APTI of $5.5B increased from FY'18 primarily due to: - - Improved GI AYCR, as adjusted, of 96.0% compared to 99.7% in FY'18 Lower CATS of $1.3B compared to $2.9B in FY'18 Net favorable development of $294M compared to unfavorable development of $362M in FY'18 Life and Retirement APTI of $3.5B and adjusted ROCE of 13.7% NII increased to $14.4B, compared to $12.7B in FY'18 reflecting higher alternative investment income ($1.4B in FY'19) Lower adjusted effective tax rate of 22.1% AIG * Refers to financial measure not calculated in accordance with generally accepted accounting principles (Non-GAAP); definitions and abbreviations of Non-GAAP measures and reconciliations to their closest GAAP measures can be found in this presentation under the heading Glossary of Non-GAAP Financial Measures and Non-GAAP Reconciliations. 3#4Strong investment performance in 2019 ($ in millions, unless otherwise indicated) Invested Assets(3)(4) Net Investment Income General Insurance Life and Retirement Legacy Other Operations Consolidations and Eliminations Total Net Investment Income - APTI Basis(1) Add: Changes in Fair Value of Securities Used to Hedge Guaranteed Living Benefits Add: Changes in the Fair Value of Equity Securities Subtract: Net Realized Capital Gains Related to Economic Hedges and Other Net Investment Income per Consolidated Statements of Operations General Insurance 1% 2% 4% 9% 13% $82.4B 71% Life and Retirement 0.4% 3% 4% 18% $181.7B 75% Fourth Quarter Full Year 2018 2019 2018 2019 $349 $766 $2,668 $3,444 1,921 2,071 7,922 8,461 527 688 2,325 2,480 43 92 45 370 (27) (155) (232) (365) $2,813 $3,462 (1) 15 $12,728 (128) $14,390 228 153 159 58 43 $2,754 $3,587 124 $12,476 158 $14,619 Legacy Total AIG (2) 2% 4% 2% 7% 6% 5% 8% 14% $51.0B $337.6B 78% 74% AIG Fixed Maturity Securities - AFS, at fair value(5) Source: AIG 4Q19 financial supplement. Mortgage and other loans receivable Other Invested Assets (6) Fixed Maturity Securities - Other, at fair value(4)(7) Other common and preferred stock, at fair value Short-term Investments (1) For 4Q18 and prior periods, our non-insurance subsidiaries recorded investment income in other income. Beginning 1Q19, investment income represents amounts recorded in net investment income by our insurance and non-insurance subsidiaries. (2) Includes Other Operations and consolidations and eliminations (not shown). (3) Based on carrying value as of December 31, 2019. (4) Excludes the carrying value of securities used to hedge guaranteed living benefits. (5) As of December 31, 2019, our Fixed Maturity securities - AFS portfolio was approximately 80% fixed rate and 20% variable rate. Fixed Maturities securities - AFS values exclude AOCI for the segments, but includes AOCI for Total AIG (6) Other Invested Assets include hedge funds / private equity, real estate investments, long-term time deposits, private common stock and affordable housing partnerships. Hedge funds / private equity include investments accounted for under the equity method of accounting, where changes in our share of the net asset values are recorded through investment income or investments where we have elected the fair value option for which changes in the fair value are reported through investment income. (7) Fixed Maturity Securities - Other are securities for which we have elected the fair value option. Changes in the fair value of these securities are reported through net investment income, which can result in significant fluctuation in the total return. As of December 31, 2019, our Fixed Maturity Securities - Other portfolio of $8.3B was approximately 31% fixed rate and 69% variable rate. 4#5Strengthened financial flexibility and improved Adjusted ROCE ($ in millions, Except per Share Amounts) Selected Balance Sheet Data Financial debt, including hybrids AIG shareholders' total equity Dec. 31, Dec. 31, 2018 2019 Variance Adjusted ROCE 8.3% Adjusted common shareholders' equity* Total capital $23,734 $23,349 ($385) 56,361 65,675 9,314 47,621 51,231 3,610 $81,043 $90,776 $9,733 +6.2 pts 2.1% FY'18 FY'19 Adjusted BVPS Leverage Ratios +7.2% $58.89 $54.95 Debt & preferred stock to total capital ratio 29.3% 26.2% (3.1) pts Debt & preferred stock to total capital ratio (ex. AOCI) 28.8% 27.8% (1.0) pts FY'18 FY'19 Per Share Data Leverage Ratio (Ex. AOCI) Common shares outstanding 866.6 870.0 3.4 28.8% -1.0 pts 27.8% Book value per common share Book value per common share - ex. AOCI Adjusted book value per common share* AIG $65.04 $74.93 15.2% $54.95 $66.67 $69.20 $58.89 3.8% 7.2% FY'18 FY'19 * Refers to financial measure not calculated in accordance with generally accepted accounting principles (Non-GAAP); definitions and abbreviations of Non-GAAP measures and reconciliations to their closest GAAP measures can be found in this presentation under the heading Glossary of Non-GAAP Financial Measures and Non-GAAP Reconciliations. 5#6Fourth Quarter 2019 Financial Detail AIG 6#74Q19 APTI of $1.2B versus APTL in 4Q18 driven by improved underwriting results and higher net investment income ($ in millions, except per common share amounts) 4Q18 4Q19 Variances Adjusted Pre-tax Income (Loss): General Insurance Life and Retirement Other Operations¹ Total Core Legacy Portfolio Total adjusted pre-tax income (loss) AATI(L)* attributable to AIG common shareholders AATI(L)* per diluted share attributable to AIG common shareholders ($722) 623 $778 $1,500 839 216 (420) (586) (166) (519) 1,031 1,550 (150) 177 327 ($669) $1,208 $1,877 ($559) $919 ($0.63) $1.03 $1,478 $1.66 Net income (loss) attributable to AIG common shareholders ($622) $922 Consolidated adjusted ROCE (4.6%) 7.3% $1,544 11.9 pts General Insurance Underwriting Ratios: Loss ratio 80.1% 65.6% B/(W) 14.5 pts Less: impact on loss ratio Catastrophe losses and reinstatement premiums (11.3%) (6.5%) Prior year development (5.3%) 2.2% Adjustments for ceded premium under reinsurance contracts and other 0.4% 0.3% Accident year loss ratio, as adjusted 63.9% 61.6% Expense ratio Combined ratio Accident year combined ratio, as adjusted 34.9% 34.2% 115.0% 99.8% 98.8% 95.8% 4.8 pts 7.5 pts (0.1) pts 2.3 pts 0.7 pts 15.2 pts 3.0 pts Key Takeaways ■ General Insurance APTI increased significantly primarily due to: Underwriting income of $12M including: • lower CATS of $411M, net favorable PYD of $153M, and improved AY results of $284M Increased NII reflecting alternative investment income versus a loss in 4Q18 ■ Life and Retirement APTI increased primarily due to favorable impacts from equity market returns, favorable impacts from lower interest rates resulting in higher income on fair value option bonds and gains on calls, and higher assets driving higher base portfolio income; partially offset by spread compression due to lower reinvestment yields and slightly higher general operating expenses ■ Other Operations APTL before consolidation and eliminations, increased slightly due to an increase in interest expense from consolidated investment entities of $44 million Legacy Portfolio APTI increased primarily due to higher NII and a $105M loss recognition expense on certain Accident and Health cancer and disability blocks in 4Q18 Adjusted effective tax rate of 19.3% * Refers to financial measure not calculated in accordance with generally accepted accounting principles (Non-GAAP); definitions and abbreviations of Non-GAAP measures and reconciliations to their closest GAAP measures can be found in this presentation under the heading Glossary of Non-GAAP Financial Measures and AIG Non-GAAP Reconciliations. 1) Includes corporate GOE not allocated to segments, certain compensation expenses not distributed to reporting segments, interest and other expenses as well as consolidation, eliminations and other adjustments. 7#84Q19 & 4Q18 noteworthy items 4Q18 - Income / (Loss) 4Q19 - Income / (Loss) ($ in millions) Catastrophe losses, net of reinsurance¹ Pre-tax After-tax4 ($798) EPS (diluted) ($630) ($0.71) Pre-tax After-tax4 EPS (diluted) ($413) ($326) ($0.36) (Unfavorable) favorable prior year loss reserve development, net of reinsurance (365) (288) (0.32) 153 121 0.13 Actuarial assumption update in Legacy Life and Retirement run-off (105) (83) (0.09) Investment Performance: Better (worse) than expected alternative investment returns² (340) (269) (0.30) 59 47 0.05 Better (worse) than expected DIB and GCM returns (31) (24) (0.03) 60 60 47 0.05 Better than expected fair value changes on Fixed Maturity Securities - Other accounted under fair value option² 50 50 40 0.04 29 29 23 0.03 Changes in the fair value of Equity Securities³ Total noteworthy items (143) (113) (0.13) ($1,732) ($1,368) ($1.54) ($112) ($88) ($0.10) AIG 1) 4Q19 includes losses of ($411M) and ($2M), pre-tax, from General Insurance and Legacy General Insurance Run-off Lines, respectively. 4Q18 includes a loss of ($826M) and income of $28M, pre-tax, from General Insurance and Legacy General Insurance Run-off Lines, respectively. 2) The annualized expected rate of return is 8% for alternative investments and 6% for fair value option fixed maturity securities for all periods presented; fair value option fixed maturity securities includes the fair value changes on the DIB and GCM asset portfolios. 3) Beginning 1Q19, changes in the fair value of equity securities are excluded from APTI. 4) Computed using a U.S. statutory effective tax rate of 21%. 8#9General Insurance: Continued improvement in Combined Ratio despite Typhoon Hagibis ($ in millions) 4Q18 4Q19 Catastrophe Losses, Net of Reinsurance ($M) Net premiums written $6,424 $5,830 Net premiums earned $7,171 $6,372 $826 $137 Loss and loss adjustment expense 5,743 4,180 Acquisition expenses 1,605 1,362 $4111 General operating expenses 894 818 $689 $98 Underwriting income (loss) ($1,071) $12 $313 Net investment income $349 $766 Adjusted pre-tax income (loss) ($722) $778 4Q18 North America 4Q19 International Calendar Year Combined Ratios Accident Year Combined Ratios (excl. CATS) walk AYCR, as adjusted, improved 3.0 pts 115.0%² 11.3% 99.8%2 98.8% 95.8% CYCR 5.3% 6.5% 12.5% improved 0.3 pts 12.8% 2.0 pts 0.7 pts 34.9% 34.2% 15.2 pts 22.4% 21.4% 63.9% AYLR, as 61.6% 63.9% adjusted improved 2.3 pts -2.2% 4Q18 4Q19 4Q18 ■AYLR, As Adj. ■Acq. Ratio GOE Ratio ■PYD Ratio ■CAT Ratio AYLR AYLR Validus/Glatfelter UW Actions/Mix 1) Includes $233M from Typhoon Hagibis and $146M from Texas Tornadoes and California Wildfires. 61.6% Expense Ratio 4Q19 ■AYLR, As Adj. Expense Ratio AIG 2) Calendar year combined ratio includes adjustments for ceded premium under reinsurance contracts and other in 4Q18 and 4Q19. 9#104Q18 $2,944 2,161 783 4Q19 $2,814 1,990 824 General Insurance: North America underwriting results improving, driven by better Commercial AYLR and lower CATS ($ in millions) Net premiums written Commercial Lines Personal Insurance Key Takeaways: Net premiums earned $3,428 $3,140 Commercial Lines 2,594 2,333 Personal Insurance 834 Underwriting income (loss) ($871) ($19) Commercial Lines (541) (111) Personal Insurance (330) 92 Net investment income $296 $641 807 NPW decreased 4% due to underwriting actions and changes in reinsurance programs in 2019 AYLR, as adjusted, decreased 0.2 pts due to beneficial impact of underwriting and reinsurance actions, partially offset by higher crop losses GOE ratio increased slightly as the decline in GOE was less than the decline in net premiums earned Acquisition ratio decreased 2.0 pts driven by changes in business mix Adjusted pre-tax income (loss) ($575) $622 Underwriting Ratios: 4Q18 4Q19 B/(W) North America Combined Ratio Commercial Lines AY combined ratio, as adjusted 99.0% 95.4% 3.6 pts 125.3%¹ 100.6%1 Catastrophe losses and 19.6% CYCR, as adjusted, 9.8% 9.8% 8.0% 1.8 pts reinstatement premiums improved 24.7 pts 10.0% (3.1%) Prior year development 13.3% 2.1% 11.2 pts 96.6% 94.6% Combined ratio¹ 120.9% 104.8% 16.1 pts AYCR, as 10.2% adjusted, 10.4% Personal Insurance 20.5% improved 2.0 pts 18.5% AY combined ratio, as adjusted 89.8% 92.2% (2.4) pts Catastrophe losses and 49.8% 14.8% 35.0 pts reinstatement premiums 65.9% AYLR, as adjusted, 65.7% Prior year development Combined ratio¹ (17.8%) 17.8 pts improved 0.2 pts despite impact of Crop 139.6% 88.6% 51.0 pts 4Q18 4Q19 Calendar Year Combined Ratio AYCR, As adjusted CAT Ratio PYD Ratio GOE Ratio Acquisition Ratio AYLR, As adjusted AIG 1) Calendar year combined ratio includes adjustments for ceded premium under reinsurance contracts and other in 4Q18 and 4Q19. 10#114Q18 $3,480 $3,016 1,561 1,379 1,919 1,637 $3,743 $3,232 1,852 1,528 Personal Insurance 1,891 1,704 Underwriting income (loss) ($200) Commercial Lines (251) $31 (25) General Insurance: International underwriting results continue to reflect better AYLR, as adjusted ($ in millions) Net premiums written Commercial Lines Personal Insurance Net premiums earned Commercial Lines 4Q19 Key Takeaways: ■ NPW decreased 13% primarily due to underwriting actions and changes in reinsurance programs in 2019 AYLR, as adjusted, decreased 4.4 pts primarily driven by Specialty Lines, Talbot (Lloyd's Syndicate) and Japanese Personal Auto ■ GOE ratio increased 0.7 pts as the decline in GOE was less than the decline in net premiums earned Personal Insurance 51 56 ■ Acquisition ratio was roughly flat Net investment income $53 $125 Adjusted pre-tax income (loss) ($147) $156 Underwriting Ratios: 4Q18 4Q19 B/(W) International Combined Ratio Commercial Lines AY combined ratio, as adjusted 102.3% 97.2% 5.1 pts 105.4% 99.1% Catastrophe losses and 3.7% CYCR, as adjusted, 3.4% 7.2% 3.3% 3.9 pts improved 6.3 pts reinstatement premiums 1.0% (1.4%) Prior year development 4.1% 1.1% 3.0 pts 100.7% 97.1% Combined ratio 113.6% 101.6% 12.0 pts AYCR, as 14.5% adjusted, 15.2% Personal Insurance improved 3.6 pts 24.1% 24.2% AY combined ratio, as adjusted 99.1% 97.0% 2.1 pts Catastrophe losses and 0.2% 3.3% (3.1) pts reinstatement premiums 62.1% Prior year development Combined ratio (2.0%) (3.5%) 1.5 pts AYLR, as adjusted, improved 4.4 pts 57.7% 97.3% 96.8% 0.5 pts AIG 4Q18 4Q19 Calendar Year Combined Ratio CAT Ratio PYD Ratio AYCR, As adjusted GOE Ratio Acquisition Ratio AYLR, As adjusted 11#12Life and Retirement: Reflects strong asset growth from new business and favorable equity markets, active spread management and favorable mortality, partially mitigated by continued headwinds from lower interest rates Adjusted Return on Common Equity 3.2 pts 7 AIG 13.0% 9.8% 4Q18 4Q19 Adjusted Pre-Tax Income ($M) $839 $78 $623 $51 $50 $209 $87 $159 $501 $327 4Q18 ■Individual Retirement ■Group Retirement 4Q19 ■Life Insurance ■ Institutional Markets Premiums and Deposits ($B) $8.2 $7.1 $0.8 $0.5 $1.0 $1.1 $2.1 $2.3 $4.2 $3.2 4Q18 4Q19 ■Individual Retirement Life Insurance ■ Group Retirement ■Institutional Markets General Operating Expenses ($M) $416 $388 $16 $13 $162 $156 $105 $122 $114 $116 4Q18 4Q19 ■Individual Retirement ■Group Retirement Life Insurance ■Institutional Markets 12#13Life and Retirement: Individual Retirement reflects flat net flows for Annuity Business, asset growth and continued spread compression Premiums ■ APTI improvement driven by favorable impacts from equity market returns and lower interest rates driving higher income on fair value option bonds Continued spread compression as a result of higher yielding assets rolling off the large in-force portfolio, while continuing to maintain pricing discipline ($ in millions) 4Q18 4Q19 Key Takeaways Premiums and deposits $4,225 $3,156 15 39 Policy fees 194 209 Net investment income 912 1,019 Advisory fee and other income 155 154 Total adjusted revenues 1,276 1,421 Benefits, losses and expenses 949 920 Adjusted pre-tax income (APTI) $327 $501 Net Flows ($B) ■ Net flows, excluding Retail Mutual Funds, are lower than 4Q18 primarily due to lower interest rates driving lower Fixed Annuity sales ■ Growth in assets under administration driven by strong equity market performance and higher Annuity net flows in the first half of 2019, partially offset by net redemptions in Retail Mutual Funds Assets Under Administration ($B) 11.7% Premiums and Deposits $139.1 $13.3 4Q18 $1.7 $0.7 $1.4 $0.4 $4.2 $43.7 4Q19 $0.8 $0.8 $1.4 $0.2 $3.2 $82.1 $155.4 $12.0 $49.7 $93.8 4Q18 4Q19 Surrender and Other Withdrawals General Accounts ■Separate Accounts Retail Mutual Funds 4Q18 4Q19 $1.1 $0.9 $1.0 $0.1 $1.7 $4.0 $1.1 $0.2 $1.2 $3.4 Net Flows1 4Q18 ($0.5) ■ Fixed Annuities Variable Annuities Index Annuities Retail Mutual Funds 4Q19 ($1.0) 1) Includes death and other contract benefits. AIG Base Net Investment Spread 1.83% 3.22% 1.70% 2.83% 4Q18 4Q19 ■Fixed Annuities Variable and Index Annuities 13#14Life and Retirement: Group Retirement results reflect asset growth, active spread management and investments in business platform ($ in millions) Premiums and deposits Premiums 4Q18 4Q19 $2,106 $2,312 2 Policy fees 107 112 Net investment income 517 537 Advisory fee and other income 54 71 Total adjusted revenues 682 722 Benefits, losses and expenses 523 513 Adjusted pre-tax income (APTI) $159 $209 Net Flows ($B) Key Takeaways ■ APTI is higher than 4Q18 driven by favorable impacts from equity market returns, partially offset by costs for investments in operating platforms ■ Continued to focus on active spread management in the current low interest rate environment. 4Q18 base net investments spread included a non-recurring item, after adjusting for this item, base net investment spread trends are within expectation ■ Net flows are unfavorable to prior year primarily due to higher group surrenders, partially offset by higher group acquisition deposits ■ Growth of assets under administration driven by robust market performance Assets Under Administration ($B) 14.5% $109.1 Premiums and Deposits $95.3 $21.7 $17.9 $37.8 $32.2 4Q18 4Q19 $2.1 $2.3 $45.2 $49.7 4Q18 4Q19 ■General Accounts Surrender and Other Withdrawals ■Separate Accounts Mutual Funds 4Q18 4Q19 4Q18 ($0.6) $2.6 $2.9 Net Flows1 4Q19 ($0.8) Base Net Investment Spread 1.72% 1.59% 4Q18 4Q19 1) Includes death and other contract benefits. AIG 14#15Life and Retirement: Life Insurance produced strong International sales and mortality trends within overall pricing assumptions in millions) Premiums and deposits Premiums Policy fees Net investment income Other income 1 4Q18 4Q19 $987 $1,047 378 405 363 386 287 288 17 9 Total adjusted revenues 1,045 1,088 Key Takeaways ■ APTI declined from 4Q18 as a result of 4Q18 positive reserve refinements, partially offset by improvement in mortality experience in 4Q19 ■ Growth in premiums and deposits reflects strong International Life sales Benefits, losses and expenses 958 1,037 • Mortality was favorable to pricing assumptions Adjusted pre-tax income (APTI) $87 $51 By Product² $111 $110 11% 14% 36% 53% 4Q18 33% 53% 4Q19 ■Term ■Universal Life Group and Other Life New Business Sales ($M) By Geography $111 $110 23% 26% 77% 74% 4Q18 4Q19 ■US ■ UK 1) Includes other income primarily related to commission and profit sharing revenues received by Laya Healthcare from the distribution of insurance products AIG 2) Universal Life includes single premium and unscheduled deposits as of 2019 (formerly included with Group and Other Life); FY18 figure was restated to align with current presentation method 15#16Life and Retirement: Institutional Markets driven by disciplined growth with improved margins ($ in millions) 4Q18 4Q19 Premiums and deposits Premiums Policy fees Net investment income Other income Total adjusted revenues $848 $545 Key Takeaways 816 501 40 41 205 1 1,062 769 Benefits, losses and expenses 1,012 691 227 0 ■ Premiums and deposits are lower than 4Q18 as Pension Risk Transfer issuance declined ■ Net investment income favorably impacted by increasing asset base driven by disciplined growth in the portfolio and favorable alternative asset returns ■ Maintained pricing and expense discipline while opportunistically growing the portfolio Adjusted pre-tax income (APTI) $50 $78 Premiums and Deposits ($M) GAAP Reserves by Line of Business ($B) $848 8.6% $19.8 $21.5 AIG $6.7 $545 $6.4 $0.7 $761 $1.2 $5.0 $4.8 $450 $5.9 $4.4 $87 4Q18 ■ Structured Settlements ■Stable Value Wrap $94 $1 4Q19 $3.0 $3.2 4Q18 4Q19 ■ Pension Risk Transfer ■COLI/BOLI ■ Guaranteed Investment Contracts 16#17Other Operations and Legacy Portfolio ($ in millions) 4Q18 4Q19 Other Operations Results: Total adjusted revenues $182 $220 Benefits, losses and expenses: Policyholder benefits and losses incurred 15 10 Acquisition expenses 5 4 Other Operations Key Takeaways General operating expenses 332 342 Interest expense: Interest ― Corporate 264 260 Interest Other1 Total Interest expense Total benefits, losses and expenses 17 57 ■ Other Operations APTL before consolidation and eliminations increased slightly due to an increase in interest expense from consolidated investment entities of $44 million 281 317 633 673 Adjusted pre-tax loss before consolidation ($451) ($453) and eliminations Consolidation, eliminations and other adjustments 31 (133) Adjusted pre-tax loss ($420) ($586) ($ in millions) 4Q18 4Q19 Legacy Portfolio Results: General Insurance run-off lines $7 ($8) Life and Retirement run-off lines (137) 103 Legacy Investments (20) 82 Adjusted pre-tax income ($150) $177 Noteworthy Items (pre-tax): Catastrophe losses, net of reinsurance in General Insurance $28 ($2) Legacy Portfolio Key Takeaways ☐ Legacy Life and Retirement APTI increased due to higher NII and 4Q18 $105M loss recognition expense on certain Accident and Health cancer and disability blocks Legacy Investments adjusted pre-tax income increased primarily due to higher NII and lower GOE Annual actuarial assumption update charge in Life and Retirement ($105) 1) Interest expense-other primarily represents interest expense on consolidated investment entities. AIG 17#18Full Year 2019 Financial Detail AIG 18#19FY'19 APTI of $5.5B increased $4.1B from FY'18 with lower CATS, net favorable PYD, improved General Insurance AY underwriting results and higher NII ($ in millions, except per common share amounts) FY'18 FY'19 Variances Adjusted Pre-tax Income (Loss): General Insurance Life and Retirement Other Operations¹ Total Core Legacy Portfolio Total adjusted pre-tax income (loss) ($469) $3,533 $4,002 3,190 3,458 268 (1,525) (2,014) (489) 1,196 4,977 213 $1,409 $5,478 3,781 501 AATI* attributable to AIG common shareholders AATI* per diluted share attributable to AIG common shareholders $1,064 $4,084 $1.17 $4.59 288 $4,069 $3,020 $3.42 Net income (loss) attributable to AIG common shareholders ($6) $3,326 Consolidated adjusted ROCE 2.1% 8.3% $3,332 6.2 pts General Insurance Underwriting Ratios: Loss ratio 75.7% 65.2% B/(W) 10.5 pts Less: impact on loss ratio Catastrophe losses and reinstatement premiums (10.5%) (4.8%) Prior year development (1.5%) 1.1% Adjustments for ceded premium under reinsurance 0.3% 0.1% 5.7 pts 2.6 pts (0.2) pts contracts and other Accident year loss ratio, as adjusted 64.0% 61.6% Expense ratio Combined ratio Accident year combined ratio, as adjusted 35.7% 34.4% 111.4% 99.6% 99.7% 96.0% 2.4 pts 1.3 pts 11.8 pts 3.7 pts Key Takeaways ■ General Insurance APTI increased significantly primarily due to: lower CATS of $1.3B, net favorable PYD of $294M, improved AYCR, as adjusted, of 96.0%, and and increased NII reflecting higher alternative investment income ■ Life and Retirement APTI increased due to favorable impact from equity market returns, favorable impacts from lower interest rates resulting in higher income on fair value option bonds and gains on calls, and higher base investment spread resulting from new business; offset by base investment spread compression, impacts from Life reserve refinements, impacts from the year over year annual actuarial assumption updates and lower but still favorable mortality ■ Other Operations APTL before consolidation and eliminations, increased due to higher GOE and an increase in interest expense from consolidated investment entities Legacy Portfolio APTI increased primarily due to higher NII and a loss recognition expense on certain Accident and Health cancer and disability blocks in 2018 * Refers to financial measure not calculated in accordance with generally accepted accounting principles (Non-GAAP); definitions and abbreviations of Non-GAAP measures and reconciliations to their closest GAAP measures can be found in this presentation under the heading Glossary of Non-GAAP Financial Measures and AIG Non-GAAP Reconciliations. 1) Includes corporate GOE not allocated to segments, certain compensation expenses not distributed to reporting segments, interest and other expenses as well as consolidation, eliminations and other adjustments. 19#20FY'19 & FY'18 noteworthy items FY'18 - Income / (Loss) FY'19 - Income / (Loss) ($ in millions) Catastrophe losses, net of reinsurance¹ Pre-tax After-tax5 EPS (diluted) Pre-tax After-tax5 EPS (diluted) ($2,948) ($2,329) ($2.56) ($1,273) ($1,006) ($1.13) (Unfavorable) favorable prior year loss reserve development, net of reinsurance (362) (286) (0.31) 294 232 0.26 Annual actuarial assumption update in Life and Retirement & Legacy² (208) (164) (0.18) (173) (137) (0.15) Investment Performance: Better (worse) than expected alternative investment returns³ Better than expected DIB and GCM returns (168) (133) (0.15) 451 356 0.40 2 2 0.00 60 47 0.05 Better than expected fair value changes on Fixed Maturity Securities - Other accounted under fair value option³ (66) (52) (0.06) 20 16 0.02 Changes in the fair value of Equity Securities4 Total noteworthy items (184) ($3,934) ($3,108) (145) (0.16) ($3.41) ($621) ($491) ($0.55) AIG 1) FY'19 includes losses of ($1,257M) and ($16M), pre-tax, from General Insurance and Legacy General Insurance Run-off Lines, respectively. FY'18 includes losses of ($2,919M) and ($29M), pre-tax, from General Insurance and Legacy General Insurance Run-off Lines, respectively. 2) FY'19 includes ($143M) and ($30M), pre-tax, from Life and Retirement and Legacy Life and Retirement Run-off Lines, respectively. FY'18 includes ($98M) and ($110M), pre-tax, from Life and Retirement and Legacy Life and Retirement Run-off Lines, respectively. 3) The annualized expected rate of return is 8% for alternative investments and 6% for fair value option fixed maturity securities for all periods presented; fair value option fixed maturity securities includes the fair value changes on the DIB and GCM asset portfolios. 4) Beginning 1Q19, changes in the fair value of equity securities are excluded from APTI. 5) Computed using a U.S. statutory effective tax rate of 21%. 20#21General Insurance: Underwriting results improved significantly from FY'18 due to improved AY results and lower CATS Calendar Year Combined Ratios Key Takeaways 111.4%¹ 1.5% 10.5% 14.0% 99.6%1 CYCR 4.8% improved 12.6% 21.7% 11.8 pts 21.8% 64.0% AYLR, as 61.6% adjusted, improved 2.4 pts -1.1% FY'18 FY'19 ■AYLR, As Adj. Acq. Ratio GOE Ratio PYD Ratio CAT Ratio Accident Year Combined Ratios (excl. CATS) walk AIG AYCR, as adjusted, improved 3.7 pts 96.0% 99.7% 0.2 pts 2.2 pts 1.3 pts 34.4% 35.7% 64.0% FY18 AYLR AYLR Validus/Glatfelter UW Actions/Mix ■AYLR, As Adj. 61.6% Expense Ratio FY19 Expense Ratio Combined ratio of 99.6% in FY'19 improved 11.8 pts primarily due to: Decrease in CAT ratio of 5.7 pts from FY'18; and Net favorable PYD in FY'19 of 1.1% versus net unfavorable of 1.5% in FY'18 ■ AYCR, as adjusted, of 96.0% in FY'19 improved 3.7 pts primarily due to: Decrease in AYLR, as adjusted, of 2.4 pts from FY'18 due to the beneficial impact from underwriting and reinsurance actions and inclusion of the acquisition of Glatfelter and Validus, partially offset by higher crop losses of 0.5 pts Underwriting expense ratio improved 1.3 pts from FY'18 largely driven by lower GOE ratio reflecting ongoing expense discipline 1) Calendar year combined ratio includes adjustments for ceded premium under reinsurance contracts and other in FY'18 and FY'19. 21#22FY'18 FY'19 $11,383 $12,103 8,025 8,854 General Insurance: North America accident year results improved and experienced lower CATS versus FY'18 ($ in millions) Net premiums written Commercial Lines Personal Insurance 3,358 3,249 Net premiums earned $12,314 $12,853 Commercial Lines 9,006 9,600 Personal Insurance Underwriting loss Commercial Lines 3,308 3,253 ($2,313) ($220) (1,330) (216) Personal Insurance (983) (4) Key Takeaways: NPW increased 6% due to the full year inclusion of the Validus and Glatfelter acquisitions, partially offset by underwriting actions and changes in reinsurance programs in 2019 AYLR, as adjusted, decreased 3.0 pts due to the beneficial impact of underwriting and reinsurance actions, partially offset by higher crop losses of 1.0 pts ■ GOE ratio declined, driven by continued expense discipline Net investment income $2,305 $2,929 Adjusted pre-tax income (loss) ($8) $2,709 Underwriting Ratios: FY'18 FY'19 B/(W) North America Combined Ratio Commercial Lines 118.8%1 AY combined ratio, as adjusted 103.6% 97.6% 6.0 pts 101.7%1 15.1% Catastrophe losses and CYCR, as adjusted, 6.8% 10.7% 6.2% 4.5 pts improved 17.1 pts reinstatement premiums 3.1% (1.8%) Prior year development 1.5% (1.3%) 2.8 pts 101.4% 97.0% Combined ratio¹ 114.7% 102.2% 12.5 pts 12.0% AYCR, as 10.5% adjusted, Personal Insurance 19.3% improved 4.4 pts 19.4% AY combined ratio, as adjusted 95.1% 95.0% 0.1 pts Catastrophe losses and 27.2% 8.2% 19.0 pts reinstatement premiums 70.1% 67.1% AYLR, as adjusted, improved 3.0 pts Prior year development Combined ratio¹ 7.4% 129.7% (2.8%) 100.1% 10.2 pts 29.6 pts FY'18 FY'19 Calendar Year Combined Ratio CAT Ratio PYD Ratio GOE Ratio Acquisition Ratio AYLR, As adjusted AIG 1) Calendar year combined ratio includes adjustments for ceded premium under reinsurance contracts and other in FY'18 and FY'19. AYCR, As adjusted 22#23FY'18 $15,024 FY'19 $12,989 6,916 Personal Insurance 8,108 6,203 6,786 General Insurance: International underwriting results reflect lower CATS and better AYLR, as adjusted ($ in millions) Net premiums written Commercial Lines Net premiums earned $15,191 $13,585 Commercial Lines 7,068 6,364 Personal Insurance 8,123 7,221 Underwriting income (loss) ($824) $309 Commercial Lines (764) 29 Personal Insurance (60) 280 Net investment income $363 $515 Key Takeaways: ■ NPW decreased 14% (11% excluding FX) primarily due to underwriting actions and changes in reinsurance programs in 2019, partially offset by the full year inclusion of the Validus acquisition AYLR, as adjusted, decreased 2.7 pts due to reduced net severity of loss events and beneficial impact of underwriting and reinsurance actions Acquisition ratio increased driven by changes in business mix ■ GOE ratio declined, driven by continued expense discipline Adjusted pre-tax income (loss) ($461) $824 Underwriting Ratios: FY'18 FY'19 B/(W) International Combined Ratio Commercial Lines AY combined ratio, as adjusted 100.3% 95.1% 5.2 pts 105.3% 97.7% Catastrophe losses and 6.8% CYCR, as adjusted, 2.9% 8.7% 3.1% 5.6 pts improved 7.6 pts reinstatement premiums 0.2% (0.3%) Prior year development 1.8% 1.3% 0.5 pts 98.3% 95.1% Combined ratio 110.8% 99.5% 11.3 pts AYCR, as 15.5% adjusted, 14.6% Personal Insurance improved 3.2 pts 23.7% 24.1% AY combined ratio, as adjusted 96.7% 95.2% 1.5 pts Catastrophe losses and 5.2% 2.8% 2.4 pts reinstatement premiums 59.1% Prior year development Combined ratio (1.2%) 100.7% (1.8%) 0.6 pts AYLR, as adjusted, improved 2.7 pts 56.4% 96.2% 4.5 pts FY'18 Calendar Year Combined Ratio AYCR, As adjusted GOE Ratio FY'19 CAT Ratio Acquisition Ratio PYD Ratio AYLR, As adjusted AIG 23#24Life and Retirement: Reflects strong asset growth from new business and favorable equity markets, continued active spread management partially mitigated with continued headwinds from lower interest rates, and mortality trends remain favorable to pricing assumptions Adjusted Return on Common Equity 1.1 pts 13.7% 12.6% Premiums and Deposits ($B)1 $29.8 $30.1 $3.0 $2.8 $3.9 $4.1 $8.4 $8.3 AIG FY18 FY19 $14.5 $14.9 FY18 FY19 Adjusted Pre-Tax Income² ($M) ■Individual Retirement ■ Group Retirement Life Insurance ■ Institutional Markets General Operating Expenses ($M) $3,458 $3,190 $291 $246 $246 $330 $937 $933 $1,984 $1,681 FY18 ■Individual Retirement ■ Group Retirement FY19 ■Life Insurance ■ Institutional Markets $1,597 $1,525 $62 $56 $611 $620 $456 $406 $443 $468 FY18 FY19 ■Individual Retirement ■Group Retirement ■Life Insurance ■ Institutional Markets 1) FHLB Funding Agreements issued within Individual Retirement and Group Retirement in 2018 totaling $1.3B are excluded as they are not considered part of the metric to measure core recurring performance. 2) Includes the impact from the annual actuarial assumption update of ($98M) and ($143M) at 3Q18 and 3Q19, respectively. 24 24#25Life and Retirement: Individual Retirement reflects positive net flows for Annuity Business, asset growth and continued spread compression ($ in millions) Premiums and deposits Premiums Policy fees 1 FY18 FY19 $14,473 $14,899 52 104 804 811 Net investment income 3,827 4,133 Advisory fee and other income 655 Total adjusted revenues 5,338 606 5,654 Benefits, losses and expenses 3,657 3,670 Adjusted pre-tax income (APTI) $1,681 $1,984 Annual actuarial assumption update ($52) APTI, excluding annual actuarial assumption update $1,733 ($63) $2,047 Net Flows ($B) Key Takeaways ■ APTI improvement driven by favorable impacts from equity market returns, impacts from lower interest rates driving higher income on fair value option bonds, and higher income resulting from growth in Index Annuity assets throughout 2019 ■ Continued spread compression trend as a result of higher yielding assets rolling off the large in-force portfolio, while continuing to maintain pricing discipline ■ Positive net flows, excluding Retail Mutual Funds, primarily driven by strong Fixed and Index Annuity sales ■ Growth in assets under administration driven by strong equity market performance and higher Annuity net flows in first half of 2019, partially offset by net redemptions in Retail Mutual Funds Assets Under Administration ($B) Premiums and Deposits FY18 $4.8 $3.1 $4.3 $2.4 $14.5 FY19 $5.3 $2.9 $5.5 $1.3 $14.9 Surrender and Other Withdrawals FY18 $4.1 $4.0 $0.5 $5.5 $14.1 FY19 $3.7 $4.1 $0.7 $4.7 $13.2 Net Flows² FY 18 FY19 ($2.9) ($1.5) ■Fixed Annuities Variable Annuities Index Annuities Retail Mutual Funds 1) Excludes FHLB Funding Agreement issued in 2018 ($1.1B) AIG 2) Includes death and other contract benefits 11.7% $139.1 $13.3 $43.7 $82.1 $155.4 $12.0 $49.7 $93.8 4Q18 4Q19 General Accounts ■Separate Accounts Retail Mutual Funds Base Net Investment Spread 1.95% 3.33% 1.86% 3.05% FY18 ■Fixed Annuities FY19 Variable and Index Annuities 25#26Key Takeaways Life and Retirement: Group Retirement results reflect asset growth, active spread management and investments in business platform ($ in millions) Premiums and deposits Premiums Policy fees FY18 FY19 $8,430 $8,346 34 16 446 429 Net investment income 2,172 2,240 Advisory fee and other income 239 262 Total adjusted revenues 2,891 2,947 Benefits, losses and expenses 1,958 2,010 ☐ Adjusted pre-tax income (APTI) $933 $937 Annual actuarial assumption update $17 ($17) APTI, excluding annual actuarial assumption $916 $954 update APTI is slightly higher than 2018 driven by favorable investment impacts and higher assets under management, partially offset by unfavorable year-over-year actuarial assumption updates and higher expenses related to investments in operating platforms Continued to focus on active spread management in the current low interest rate environment Full year net flows are favorable to prior year primarily due to higher group acquisition deposits and lower group surrenders Growth of assets under administration driven by robust market performance FY18 FY19 FY18 FY19 Net Flows ($B) Assets Under Administration ($B) Premiums and Deposits 14.5% $109.1 $95.3 $21.7 $17.9 $8.4 $8.3 $32.2 $37.8 $45.2 $49.7 4Q18 4Q19 Surrender and Other Withdrawals ■General Accounts ■Separate Accounts Mutual Funds FY 18 $10.7 $10.3 Net Flows² FY 19 ($2.6) ($2.8) 1) Excludes FHLB Funding Agreement issued in 2018 ($0.2B) AIG 2) Includes death and other contract benefits Base Net Investment Spread 1.77% 1.81% FY18 FY19 26 26#27Life and Retirement: Life Insurance produced strong International sales and mortality trends within overall pricing assumptions ($ in millions) Premiums and deposits Premiums Policy fees Net investment income Other income¹ FY18 FY19 $3,914 $4,086 1,554 1,619 1,258 1,488 Key Takeaways 1,137 1,203 58 42 4,007 4,352 3,677 4,106 Adjusted pre-tax income (APTI) $330 $246 ☐ Annual actuarial assumption update ($63) ($63) APTI, excluding annual actuarial assumption update $393 $309 Total adjusted revenues Benefits, losses and expenses ■ APTI is lower than 2018 resulting from the unfavorable year over year change in reserves, 2019 included a reinsurance recoverable write-off and lower but still favorable mortality experience Growth in premiums and deposits reflects strong International Life sales Mortality trends remain favorable and within pricing assumptions By Product² $478 $ 500 13% 22% 36% 28% 51% 50% New Business Sales ($M) By Geography 4.6% $478 $500 22% 36% 78% 64% FY18 FY19 ■Term Universal Life Group and Other Life FY18 FY19 ■US UK 1) Includes other income primarily related to commission and profit sharing revenues received by Laya Healthcare from the distribution of insurance products AIG 2) Universal Life includes single premium and unscheduled deposits as of 2019 (formerly included with Group and Other Life); FY18 figure was restated to align with current presentation method 27 27#28Life and Retirement: Institutional Markets driven by disciplined growth with improved margins ($ in millions) Premiums and deposits Premiums Policy fees Net investment income Other income Total adjusted revenues Benefits, losses and expenses Adjusted pre-tax income (APTI) Annual actuarial assumption update APTI, excluding annual actuarial assumption update FY18 FY19 $3,032 $2,758 952 1,861 161 165 786 885 1 1 1,900 2,912 1,654 2,621 $246 $291 $0 $0 $246 $291 Key Takeaways ■ Premiums and deposits reflect significant growth in Pension Risk Transfer throughout the year, offset by lower Guaranteed Investment Contracts ■ Net investment income favorably impacted by increasing asset base driven by disciplined growth in the portfolio and favorable alternative asset returns ■ Maintained pricing and expense discipline while opportunistically growing the portfolio AIG Premiums and Deposits ($M) GAAP Reserves by Line of Business ($B) 8.6% $19.8 $21.5 $3,032 $2,758 $6.7 $6.4 $717 $0.7 $1,946 $53 $1.2 $5.0 $4.8 $1,665 $801 $285 $323 FY18 FY19 ■ Structured Settlements ■Stable Value Wrap $5.9 $4.4 $3.0 $3.2 4Q18 4Q19 ■COLI/BOLI ■ Pension Risk Transfer ■Guaranteed Investment Contracts 28#29Other Operations and Legacy Portfolio ($ in millions) FY'18 FY'19 Other Operations Results: Total adjusted revenues $636 $845 Benefits, losses and expenses: Policyholder benefits and losses incurred 39 37 Acquisition expenses 11 18 Other Operations Key Takeaways General operating expenses 1,104 1,253 Interest expense: Interest Corporate 1,013 1,043 Interest Other¹ 53 203 ■ Other Operations APTL before consolidation and eliminations, increased due to higher GOE and an increase in interest expense from consolidated investment entities Total Interest expense Total benefits, losses and expenses 1,066 1,246 2,220 2,554 Adjusted pre-tax loss before consolidation ($1,584) ($1,709) and eliminations Consolidation, eliminations and other adjustments 59 (305) Adjusted pre-tax loss ($1,525) ($2,014) ($ in millions) FY'18 FY'19 Legacy Portfolio Results: General Insurance run-off lines $76 $77 Life and Retirement run-off lines 17 244 Legacy Investments 120 180 Adjusted pre-tax income $213 $501 Noteworthy Items (pre-tax): Legacy Portfolio Key Takeaways Legacy Life and Retirement APTI increased due to higher net investment income and a loss recognition expense on certain Accident and Health cancer and disability blocks in 2018 Catastrophe losses, net of reinsurance in ($29) ($16) General Insurance Legacy Investments adjusted pre-tax income increased due to lower GOE Annual actuarial assumption update charge in Life and Retirement ($110) ($30) 1) Interest expense-other primarily represents interest expense on consolidated investment entities. AIG 29#30Invested assets portfolio composition Total Invested Assets as of December 31, 2019 - $337.6 billion Total Portfolio Composition RMBS, 10% CMBS, 4% CDO/ABS, 7% Equities, 0% Bond Portfolio - $257.8 billion By Agency Credit Rating Non-rated, 1% By NAIC Ratings Corporate debt, 44% Loans, 14% Other invested assets, 6% Short-term investments, 4% Obligations of states, municipalities and U.S. government and government sponsored entities, 2% Below investment grade, 12% AAA, 17% AA, 18% BBB, 31% NAIC 1,61% Non-U.S. governments, 4% political subdivisions, 5% A, 22% Total Invested Assets as of December 31, 2018 - $314.2 billion Total Portfolio Composition RMBS, 12% CMBS, 4% CDO/ABS, 7% Equities, 0% Loans, 14% Corporate debt, 42% Other invested assets, 6% NAIC 2, 30% NAIC 3, 3% NAIC 4, 3% NAIC 5, 1% NAIC 6, 1% Non-rated, 1% Bond Portfolio - $240.8 billion By Agency Credit Rating By NAIC Ratings Below investment grade, 14% AAA, 18% NAIC 2, 30% AA, 17% NAIC 1, 61% Short-term investments, 3% BBB, 31% AIG Non-U.S. governments, 5% Obligations of states, municipalities and political subdivisions, 5% U.S. government and government sponsored entities, 2%. A, 20% NAIC 3, 3% NAIC 4, 3% NAIC 5, 1% Non-rated, 1% NAIC 6, 2% 30#31Capital position remains strong Parent liquidity remains strong at $7.6B at 12/31/2019, including $1.7B for an expected tax settlement with the Internal Revenue Service, which could be made as early as the first quarter of 2020 Capital Structure ($B) Risk Based Capital (RBC) Ratios² $90.8 $81.0 $1.5 Year-end Life and Retirement Companies General Insurance Companies $1.5 $21.8 $22.2 $1.8 Hybrids $0.9 $5.0 Financial Debt 1 $9.0 $10.2 $0.5 ■NCI 2018 389% (CAL) 394% (ACL) Total Equity: Total Equity: $67.4 ■AOCI $57.3 $51.2 $47.6 ■Preferred Equity $(1.4) December 31, 2018 ■Tax attribute DTA Adjusted S/E 2019 Estimated 395% -405% (CAL) 410%-415% (ACL) December 31, 2019 Dec. 31, Dec. 31, Ratios: 2018 2019 Credit Ratings³ Hybrids/Total capital 1.9% 1.7% S&P Moody's Fitch A.M. Best Financial debt / Total capital 27.4% 24.0% Total Hybrids & Financial debt / Total capital 29.3% 25.7% AIG - Senior Debt BBB+ Baa1 BBB+ NR Preferred stock / Total capital Total debt and preferred stock / Total capital 29.3% 0.5% 26.2% General Insurance - FSR A+ A2 A A Total debt and preferred stock / Total capital (ex. AOCI) 28.8% 27.8% Life and Retirement - FSR A+ A2 A+ A AIG 1) Includes AIG notes, bonds, loans and mortgages payable, AIG Life Holdings, Inc. (AIGLH) notes and bonds payable and junior subordinated debt, and Validus notes and bonds payable. 2) The inclusion of RBC measures is intended solely for the information of investors and is not intended for the purpose of ranking any insurance company or for use in connection with any marketing, advertising or promotional activities. ACL is defined as Authorized Control Level and CAL is defined as Company Action Level. RBC ratio for Domestic Life and Retirement companies excludes holding company, AGC Life Insurance Company. 2018 RBC ratio for Life and Retirement reflects the impact of tax reform. 3) As of the date of this presentation, S&P, Moody's, and A.M. Best have Stable outlooks; Fitch has Negative outlooks, with the exception of Life and Retirement, which is Stable. For General Insurance companies FSR and Life and Retirement companies FSR, ratings only reflect those of the core insurance companies. 31#32Glossary of Non-GAAP Financial Measures and Non-GAAP Reconciliations AIG 32#33Glossary of Non-GAAP Financial Measures Glossary of Non-GAAP Throughout this presentation, we present our financial condition and results of operations in the way we believe will be most meaningful and representative of our business results. Some of the measurements we use are "Non-GAAP financial measures" under Securities and Exchange Commission rules and regulations. GAAP is the acronym for generally accepted accounting principles in the United States. The non-GAAP financial measures we present may not be comparable to similarly-named measures reported by other companies. The reconciliations of such measures to the most comparable GAAP measures in accordance with Regulation G are included within the relevant tables or in the Fourth Quarter 2019 Financial Supplement available in the Investor Information section of AIG's website, www.aig.com. We may use certain non-GAAP operating performance measures as forward-looking financial targets or projections. These financial targets or projections are provided based on management's estimates. The most directly comparable GAAP financial targets or projections would be heavily dependent upon results that are beyond management's control and the outcome of these items could be significantly different than management's estimates. Therefore, we do not provide quantitative reconciliations for these financial targets or projections as we cannot predict with accuracy future actual events (e.g., catastrophe losses) and impacts from changes in macro-economic market conditions, including the interest rate environment (e.g. estimate for DIB & GCM returns, net reserve discount change and returns on alternative investments). ■ Book Value per Common Share, Excluding Accumulated Other Comprehensive Income (AOCI) and Book Value per Common Share, Excluding AOCI and Deferred Tax Assets (DTA) (Adjusted Book Value per Common Share) are used to show the amount of our net worth on a per-common share basis. We believe these measures are useful to investors because they eliminate items that can fluctuate significantly from period to period, including changes in fair value of our available for sale securities portfolio, foreign currency translation adjustments and U.S. tax attribute deferred tax assets. These measures also eliminate the asymmetrical impact resulting from changes in fair value of our available for sale securities portfolio wherein there is largely no offsetting impact for certain related insurance liabilities. We exclude deferred tax assets representing U.S. tax attributes related to net operating loss carryforwards and foreign tax credits as they have not yet been utilized. Amounts for interim periods are estimates based on projections of full-year attribute utilization. As net operating loss carryforwards and foreign tax credits are utilized, the portion of the DTA utilized is included in these book value per common share metrics. Book value per common share, excluding AOCI, is derived by dividing Total AIG Common Shareholders' equity, excluding AOCI, by total common shares outstanding. Adjusted Book Value per Common Share is derived by dividing Total AIG common shareholders' equity, excluding AOCI and DTA (Adjusted Common Shareholders' Equity), by total common shares outstanding. ■ AIG Return on Common Equity (ROCE) - Adjusted After-tax Income Excluding AOCI and DTA (Adjusted Return on Common Equity) is used to show the rate of return on common shareholders' equity. We believe this measure is useful to investors because it eliminates items that can fluctuate significantly from period to period, including changes in fair value of our available for sale securities portfolio, foreign currency translation adjustments and U.S. tax attribute deferred tax assets. This measure also eliminates the asymmetrical impact resulting from changes in fair value of our available for sale securities portfolio wherein there is largely no offsetting impact for certain related insurance liabilities. We exclude deferred tax assets representing U.S. tax attributes related to net operating loss carryforwards and foreign tax credits as they have not yet been utilized. Amounts for interim periods are estimates based on projections of full-year attribute utilization. As net operating loss carryforwards and foreign tax credits are utilized, the portion of the DTA utilized is included in Adjusted Return on Common Equity. Adjusted Return on Common Equity is derived by dividing actual or annualized adjusted after-tax income attributable to AIG common shareholders by average Adjusted Common Shareholders' Equity. Core, General Insurance, Life and Retirement and Legacy Adjusted Attributed Common Equity is an attribution of total AIG Adjusted Common Shareholders' Equity to these segments based on our internal capital model, which incorporates the segments' respective risk profiles. Adjusted attributed common equity represents our best estimates based on current facts and circumstances and will change over time. Core, General Insurance, Life and Retirement and Legacy Return on Common Equity - Adjusted After-tax Income (Adjusted Return on Attributed Common Equity) is used to show the rate of return on Adjusted Attributed Common Equity. Adjusted Return on Attributed Common Equity is derived by dividing actual or annualized Adjusted After- tax Income by Average Adjusted Attributed Common Equity. Adjusted After-tax Income Attributable to Core, General Insurance, Life and Retirement and Legacy is derived by subtracting attributed interest expense, income tax expense and attributed dividends on preferred stock from APTI. Attributed debt and the related interest expense and dividends on preferred stock are calculated based on our internal capital model. Tax expense or benefit is calculated based on an internal attribution methodology that considers among other things the taxing jurisdiction in which the segments conduct business, as well as the deductibility of expenses in those jurisdictions. Adjusted Revenues exclude Net realized capital gains (losses), income from non-operating litigation settlements (included in Other income for GAAP purposes) and changes in fair value of securities used to hedge guaranteed living benefits (included in Net investment income for GAAP purposes). Adjusted revenues is a GAAP measure for our operating segments. AIG 33#34Glossary of Non-GAAP Financial Measures Glossary of Non-GAAP We use the following operating performance measures because we believe they enhance the understanding of the underlying profitability of continuing operations and trends of our business segments. We believe they also allow for more meaningful comparisons with our insurance competitors. When we use these measures, reconciliations to the most comparable GAAP measure are provided on a consolidated basis. Adjusted Pre-tax Income (APTI) is derived by excluding the items set forth below from income from continuing operations before income tax. This definition is consistent across our segments. These items generally fall into one or more of the following broad categories: legacy matters having no relevance to our current businesses or operating performance; adjustments to enhance transparency to the underlying economics of transactions; and measures that we believe to be common to the industry. APTI is a GAAP measure for our segments. Excluded items include the following: . changes in fair value of securities used to hedge guaranteed living benefits; changes in benefit reserves and deferred policy acquisition costs (DAC), value of business acquired (VOBA), and sales inducement assets (SIA) related to net realized capital gains and losses; changes in the fair value of equity securities; ⚫ loss (gain) on extinguishment of debt; . all net realized capital gains and losses except earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-qualifying (economic) hedging or for asset replication. Earned income on such economic hedges is reclassified from net realized capital gains and losses to specific APTI line items based on the economic risk being hedged (e.g. net investment income and interest credited to policyholder account balances); • income or loss from discontinued operations; . . . . net loss reserve discount benefit (charge); • . pension expense related to a one-time lump sum payment to former employees; income and loss from divested businesses; non-operating litigation reserves and settlements; restructuring and other costs related to initiatives designed to reduce operating expenses, improve efficiency and simplify our organization; the portion of favorable or unfavorable prior year reserve development for which we have ceded the risk under retroactive reinsurance agreements and related changes in amortization of the deferred gain; integration and transaction costs associated with acquired businesses; losses from the impairment of goodwill; and non-recurring external costs associated with the implementation of non-ordinary course legal or regulatory changes or changes to accounting principles. Adjusted After-tax Income attributable to AIG Common Shareholders (AATI) is derived by excluding the tax effected adjusted pre-tax income (APTI) adjustments described above, dividends on preferred stock, and the following tax items from net income attributable to AIG: deferred income tax valuation allowance releases and charges; changes in uncertain tax positions and other tax items related to legacy matters having no relevance to our current businesses or operating performance; and net tax charge related to the enactment of the Tax Cuts and Jobs Act (Tax Act); and by excluding the net realized capital gains (losses) from noncontrolling interests. ■ Ratios: We, along with most property and casualty insurance companies, use the loss ratio, the expense ratio and the combined ratio as measures of underwriting performance. These ratios are relative measurements that describe, for every $100 of net premiums earned, the amount of losses and loss adjustment expenses (which for General Insurance excludes net loss reserve discount), and the amount of other underwriting expenses that would be incurred. A combined ratio of less than 100 indicates underwriting income and a combined ratio of over 100 indicates an underwriting loss. Our ratios are calculated using the relevant segment information calculated under GAAP, and thus may not be comparable to similar ratios calculated for regulatory reporting purposes. The underwriting environment varies across countries and products, as does the degree of litigation activity, all of which affect such ratios. In addition, investment returns, local taxes, cost of capital, regulation, product type and competition can have an effect on pricing and consequently on profitability as reflected in underwriting income and associated ratios. AIG 34#35Glossary of Non-GAAP Financial Measures Glossary of Non-GAAP ■ Accident year loss and combined ratios, as adjusted: both the accident year loss and combined ratios, as adjusted, exclude catastrophe losses and related reinstatement premiums, prior year development, net of premium adjustments, and the impact of reserve discounting. Natural catastrophe losses are generally weather or seismic events having a net impact on AIG in excess of $10 million each and man-made catastrophe losses, such as terrorism and civil disorders that exceed the $10 million threshold. We believe that as adjusted ratios are meaningful measures of our underwriting results on an ongoing basis as they exclude catastrophes and the impact of reserve discounting which are outside of management's control. We also exclude prior year development to provide transparency related to current accident year results. Underwriting ratios are computed as follows: a) Loss ratio = Loss and loss adjustment expenses incurred Net premiums earned (NPE) b) Acquisition ratio = Total acquisition expenses NPE c) General operating expense ratio = General operating expenses NPE d) Expense ratio = Acquisition ratio + General operating expense ratio e) Combined ratio = Loss ratio + Expense ratio f) Accident year loss ratio, as adjusted (AYLR) = [Loss and loss adjustment expenses incurred - CATS - PYD] [NPE +/(-) Reinstatement premiums related to catastrophes (CYRIPS) +/(-) RIPS related to prior year catastrophes (PYRIPS) + (Additional) returned premium related to PYD on loss sensitive business ((AP)RP) + Adjustment for ceded premiums under reinsurance contracts related to prior accident years] g) Accident year combined ratio, as adjusted = AYLR + Expense ratio h) Catastrophe losses (CATS) and reinstatement premiums = [Loss and loss adjustment expenses incurred - (CATS)] [NPE +/(-) CYRIPS] - Loss ratio i) Prior year development net of (additional) return premium related to PYD on loss sensitive business = [Loss and loss adjustment expenses incurred - CATS - PYD] [NPE +/(-) CYRIPS +/(-) PYRIPS + (AP)RP] - Loss ratio - CAT ratio ■ Premiums and deposits: includes direct and assumed amounts received and earned on traditional life insurance policies, group benefit policies and life-contingent payout annuities, as well as deposits received on universal life, investment-type annuity contracts, Federal Home Loan Bank (FHLB) funding agreements and mutual funds. Results from discontinued operations are excluded from all of these measures. AIG 35#36Non-GAAP Reconciliations Adjusted Pre-tax and After-tax Income - Consolidated (in millions) Pre-tax income (loss) from continuing operations Adjustments to arrive at Adjusted pre-tax income (loss) Changes in fair value of securities used to hedge guaranteed living benefits Changes in benefit reserves and DAC, VOBA and SIA related to net realized capital gains (losses) Changes in the fair value of equity securities Loss (gain) on extinguishment of debt Net realized capital (gains) losses (a) (Income) loss from divested businesses Non-operating litigation reserves and settlements Unfavorable (favorable) prior year development and related amortization changes ceded under retroactive reinsurance agreements Net loss reserve discount (benefit) charge Integration and transaction costs associated with acquired businesses Restructuring and other costs Professional fees related to regulatory or accounting changes Adjusted pre-tax income (loss) After-tax net income (loss), including noncontrolling interests Noncontrolling interests (income) loss Net income (loss) attributable to AIG Twelve Months Ended Quarterly December 31, 4Q18 4Q19 2018 2019 $ (695) $ 1,036 $ 257 $ 5,287 27 (11) 154 (194) 40 (95) (152) (3) 19 (195) 310 193 (3) 71 (11) (8) 68 (56) 675 (66) 35 (371) 33 8 124 136 44 395 ༄'gསྐྱེ° ིིདྨེཡྻ 8 (6) (56) (158) 7 32 (448) (38) 75 19 (2) (267) 955 24 218 7 12 S (669)|$ 1.208 S 1.409 S 5.478 S (560) $ 869 $ 61 $ 4,169 (62) 60 (67) (821) $ (622) $ 929 $ (6) $ 3,348 Dividends on preferred stock 7 22 Net income (loss) attributable to AIG common shareholders $ (622) $ 922 $ (6) $ 3,326 Adjustments to arrive at Adjusted after-tax income (loss) (amounts net of tax, at U.S. statutory tax rate for each respective period, except where noted): Changes in uncertain tax positions and other tax adjustments Deferred income tax valuation allowance (releases) charges Changes in fair value of securities used to hedge guaranteed living benefits Changes in benefit reserves and DAC, VOBA and SIA related to net realized capital gains (losses) Changes in the fair value of equity securities Loss (gain) on extinguishment of debt Net realized capital (gains) losses (a)(b) (139) (Income) loss from discontinued operations and divested businesses (b) Non-operating litigation reserves and settlements Unfavorable (favorable) prior year development and related amortization རྨེསྶ 'ཁྱེ@ @⪜ (3) (9) (75) (120) (2) 15 254 152 (1) 14 (7) (51) 107 35 312 18636 (45) 533 28 (292) ཝཱངཊྛི ' ཡ-ཋ སྣ ུ (3) (351) ནིཏྟཱ ཙྩུཀྑུདྨེཝཔེ ངྑྱེཡྻgཋ (5) (21) 73)(9) AIG changes ceded under retroactive reinsurance agreements Net loss reserve discount (benefit) charge Integration and transaction costs associated with acquired businesses Restructuring and other costs Professional fees related to regulatory or accounting changes Noncontrolling interests primarily related to net realized capital gains (losses) of Fortitude Holdings' standalone results (c) Adjusted after-tax income (loss) attributable to AIG common shareholders Weighted average diluted shares outstanding (d) - 48 (559) $ (109) 919 S 46 660 1.064 $ 4.084 887.5 $ (0.70) $ (0.63) 896.4 1.03 $ 1.03 910.1 889.5 (0.01) $ 1.17 3.74 4.59 Income (loss) per common share attributable to AIG common shareholders (diluted) Adjusted after-tax income (loss) per common share attributable to AIG common shareholders (diluted) (a) Includes all net realized capital gains and losses except earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-qualifying (economic) hedging or for asset replication. (b) Includes the impact of non-U.S. tax rates which differ from the applicable U.S. statutory tax rate and tax only adjustments. (c) Noncontrolling interests is primarily due to the 19.9 percent investment in Fortitude Group Holdings, LLC (Fortitude Holdings) by an affiliate of The Carlyle Group L.P. (Carlyle), which occurred in the fourth quarter of 2018. Carlyle is allocated 19.9 percent of Fortitude Holdings' standalone financial results. Fortitude Holdings' results are mostly eliminated in AIG's consolidated income from continuing operations given that its results arise from intercompany transactions. Noncontrolling interests is calculated based on the standalone financial results of Fortitude Holdings. The most significant component of Fortitude Holdings' standalone results includes the change in fair value of the embedded derivatives, which moved materially in the year due to lower rates and tightening credit spreads in the first nine months of 2019, but reversed trend in the fourth quarter of 2019, and which are recorded in net realized capital gains and losses of Fortitude Holdings. In accordance with AIG's adjusted after-tax income definition, realized capital gains and losses are excluded from noncontrolling interests. (d) For the three-month period ended December 31, 2018, because we reported a net loss and an adjusted after-tax loss attributable to AIG common shareholders from continuing operations, all common stock equivalents are anti- dilutive and are therefore excluded from the calculation of diluted shares and diluted per share amounts. 36#37Non-GAAP Reconciliations Book Value Per Common Share and Return on Common Equity (in millions, except per common share data) Book Value Per Common Share Total AIG shareholders' equity Less: Preferred equity Total AIG common shareholders' equity (a) Less: Accumulated other comprehensive income (AOCI) Total AIG common shareholders' equity, excluding AOCI (b) Less: Deferred tax assets (DTA)* Total adjusted common shareholders' equity (c) Total common shares outstanding (d) Book value per common share (a÷d) Book value per common share, excluding AOCI (b÷d) Adjusted book value per common share (c÷d) Twelve Months Ended December 31, 2018 2019 $ 56,361 $ 65,675 485 56,361 65,190 (1,413) 4,982 57,774 60,208 10,153 8,977 47,621 51.231 866.6 870.0 65.04 $ 74.93 66.67 69.20 54.95 58.89 EA $ (in millions) Return On Common Equity (ROCE) Computations Twelve Months Ended Quarterly December 31, 4Q18 4Q19 2018 2019 Actual or Annualized net income (loss) attributable to AIG common shareholders (a) $ (2.488) $ 3.688 $ (6)$ 3,326 Actual or Annualized adjusted after-tax income attributable to AIG common shareholders (b) Average AIG Common Shareholders' equity (c) SS (2.236) $ 3.676 $ 1.064 $ 4.084 $ 57,474 $ 65,154 $ 60,819 $ 62,205 Less: Average AOCI (975) 5,299 1,193 3,261 Less: Average DTA 10,053 9,185 10,133 9,605 Average adjusted common shareholders' equity (d) $ 48.396 $ 50.670 $ 49.493 $ 49.339 ROCE (a+c) (4.3%) 5.7% 0.0% 5.3% Adjusted return on common equity (b÷d) (4.6%) 7.3% 2.1% 8.3% AIG * Represents deferred tax assets only related to U.S. net operating loss and foreign tax credit carryforwards on a U.S. GAAP basis and excludes other balance sheet deferred tax assets and liabilities. 37#38Non-GAAP Reconciliations Return on Common Equity Twelve Months General Insurance (in millions) Quarterly 4Q18 4Q19 Adjusted pre-tax income (loss) $ Interest expense on attributed financial debt (722) $ 778 142 151 Ended December 31, 2018 2019 (469) $ 3,533 544 Life and Retirement (in millions) Quarterly Twelve Months Ended December 31, 4Q18 4Q19 2018 2019 Adjusted pre-tax income 623 $ 839 $ 3,190 $ 3,458 589 Adjusted pre-tax income (loss) including attributed interest expense Income tax expense (benefit) (864) 627 (1,013) (100) 164 (120) 2,944 686 Interest expense on attributed financial debt Adjusted pre-tax income including attributed interest expense 31 47 107 173 592 792 3,083 3,285 Income tax expense 116 158 610 652 Adjusted after-tax income (loss) $ (764) S 463 IS (893) $ 2.258 Adjusted after-tax income 476 $ 634 $ 2,473 $ 2,633 Dividends declared on preferred stock 4 13 Adjusted after-tax income (loss) attributable to common shareholders (a) $ (764) S 459 (893) $ 2.245 Dividends declared on preferred stock Adjusted after-tax income attributable to common shareholders (a) 3 9 476 $ 631 $ 2,473 $ 2,624 Ending adjusted attributed common equity Average adjusted attributed common equity (b) Adjusted return on attributed common equity (a+b) $ 25,066 25,988 $ 25,142 25,109 $ 25,066 24,588 $ 25,142 25,078 Ending adjusted attributed common equity $ 19,695 Average adjusted attributed common equity (b) Adjusted return on attributed common equity (a+b) 19,475 9.8% $ 19,513 19,374 13.0% $ 19,695 $ 19,513 19,664 12.6 % 19,109 13.7 % (11.8) 9 7.3 % (3.6) % 9.0 % Twelve Months Core (in millions) Adjusted pre-tax income (loss) Interest expense (benefit) on attributed financial debt Adjusted pre-tax income (loss) including Quarterly 4Q18 4Q19 (519) $ 1,031 2018 Ended December 31, 2019 Legacy (in millions) Quarterly Twelve Months Ended December 31, $ 1,196 $ 4,977 Adjusted pre-tax income (loss) $ 4Q18 (150) $ 4Q19 2018 2019 177 $ 213 $ 501 (10) Interest expense on attributed financial debt Adjusted pre-tax income (loss) including 10 attributed interest expense Income tax expense (benefit) (519) (93) 1,031 1,206 4,977 attributed interest expense (150) 177 203 501 196 281 1,106 Income tax expense (benefit) (31) 37 43 105 Adjusted after-tax income (loss) $ (426) $ 835 IS 925 3,871 Dividends declared on preferred stock 7 22 Adjusted after-tax income (loss) attributable to common shareholders (a) $. (119) S 140 $ 160 $ 396 Adjusted after-tax income (loss) attributable to common shareholders (a) (426) $ 828 925 $ 3.849 Ending adjusted attributed common equity Average adjusted attributed common equity (b) Adjusted return on attributed common equity (a+b) $ 38,735 39,547 $ 44,213 43,774 $ 38,735 40,394 $ 44,213 41,955 Ending adjusted attributed common equity Average adjusted attributed common equity (b) Adjusted return on attributed common equity (a+b) $ 8,886 $ 7,018 8,849 (5.4) % 6,897 8.1 $ 8,886 9,099 $ 7,018 7,384 5.4 (4.3)% 7.6 % 2.3% 9.2 % AIG 38#39Non-GAAP Reconciliations Accident Year Loss Ratio, as adjusted, and Accident Year Combined Ratio, as adjusted General Insurance Twelve Months Twelve Months Ended December 31, Quarterly Ended December 31, General Insurance - North America Quarterly 4Q18 4Q19 2018 2019 4Q18 4Q19 2018 2019 Loss ratio 94.6 71.7 87.5 71.8 Loss ratio 80.1 65.6 75.7 65.2 Catastrophe losses and reinstatement premiums (11.3) (6.5) (10.5) (4.8) Catastrophe losses and reinstatement premiums (19.6) (9.8) (15.1) (6.8) Prior year development (5.3) 2.2 (1.5) 1.1 Adjustments for ceded premium under Prior year development (10.0) 3.1 (3.1) 1.8. reinsurance contracts and other 0.4 0.3 0.3 Adjustments for ceded premium under 0.1 Accident year loss ratio, as adjusted 63.9 61.6 64.0 61.6 reinsurance contracts and other Accident year loss ratio, as adjusted 0.9 0.7 0.8 0.3 65.9 65.7 70.1 67.1 Acquisition ratio 22.4 21.4 21.7 21.8 Acquisition ratio 20.5 18.5 19.3 19.4 General operating expense ratio 12.5 12.8 14.0 12.6 General operating expense ratio 10.2 10.4 12.0 10.5 Expense ratio 34.9 34.2 35.7 34.4 Expense ratio 30.7 28.9 31.3 29.9 Combined ratio 115.0 99.8 111.4 99.6 Combined ratio 125.3 100.6 118.8 101.7 Accident year combined ratio, as adjusted 98.8 95.8 99.7 96.0 Accident year combined ratio, as adjusted 96.6 94.6 101.4 97.0 Twelve Months Twelve Months General Insurance - North America - Commercial Lines Quarterly Ended December 31, General Insurance - North America - Personal Insurance Quarterly Ended December 31, 4Q18 4Q19 2018 2019 4Q18 4Q19 2018 2019 Loss ratio 93.6 80.7 87.6 76.8 Loss ratio 98.0 45.7 87.3 57.0 Catastrophe losses and reinstatement premiums (9.8) (8.0) (10.7) (6.2) Catastrophe losses and reinstatement Prior year development (13.3) (2.1) (1.5) 1.3 premiums (49.8) (14.8) (27.2) (8.2) Adjustments for ceded premium under Prior year development 17.8 (7.4) 2.8 reinsurance contracts and other 1.2 0.7 1.1 0.3 Adjustments for ceded premium under Accident year loss ratio, as adjusted 71.7 71.3 76.5 72.2 reinsurance contract 0.6 0.3 Accident year loss ratio, as adjusted 48.2 49.3 52.7 51.9 Acquisition ratio 16.5 13.2 14.6 14.5 General operating expense ratio 10.8 10.9 12.5 10.9 Acquisition ratio 33.0 34.0 31.9 33.8 Expense ratio 27.3 24.1 27.1 25.4 General operating expense ratio 8.6 8.9 10.5 9.3 Expense ratio 41.6 42.9 42.4 43.1 Combined ratio 120.9 104.8 114.7 102.2 Accident year combined ratio, as adjusted 99.0 95.4 103.6 97.6 Combined ratio 139.6 88.6 129.7 100.1 Accident year combined ratio, as adjusted 89.8 92.2 95.1 95.0 AIG 39#40Non-GAAP Reconciliations Accident Year Loss Ratio, as adjusted, and Accident Year Combined Ratio, as adjusted General Insurance - International Twelve Months Twelve Months Ended Ended General Insurance - International - Quarterly December 31, Commercial Lines Quarterly December 31, 4Q18 4Q19 2018 2019 4Q18 4Q19 2018 2019 Loss ratio 66.8 59.7 66.1 59.0 Loss ratio 80.5 65.4 75.5 64.4 Catastrophe losses and reinstatement Catastrophe losses and reinstatement premiums (3.7) (3.4) (6.8) (2.9) premiums (7.2) (3.3) (8.7) (3.1) Prior year development (1.0) 1.4 (0.2) 0.3 Prior year development (4.1) (1.1) (1.8) (1.3) Accident year loss ratio, as adjusted 62.1 57.7 59.1 56.4 Accident year loss ratio, as adjusted 69.2 61.0 65.0 60.0 Acquisition ratio 24.1 24.2 23.7 24.1 Acquisition ratio 19.8 21.8 20.2 21.0 General operating expense ratio 14.5 15.2 15.5 14.6 General operating expense ratio 13.3 14.4 15.1 14.1 Expense ratio 38.6 39.4 39.2 38.7 Expense ratio 33.1 36.2 35.3 35.1 Combined ratio 105.4 99.1 105.3 97.7 Combined ratio 113.6 101.6 110.8 99.5 Accident year combined ratio, as adjusted 100.7 97.1 98.3 95.1 Accident t year combined ratio, as adjusted 102.3 97.2 100.3 95.1 Twelve Months General Insurance - International - Personal Insurance Ended Quarterly December 31, 4Q18 4Q19 2018 2019 Loss ratio 53.4 54.5 58.0 54.3 Catastrophe losses and reinstatement premiums (0.2) (3.3) (5.2) (2.8) Prior year development 2.0 3.5 1.2 1.8 Accident year loss ratio, as adjusted 55.2 54.7 54.0 53.3 Acquisition ratio 28.2 26.3 26.8 26.9 General operating expense ratio 15.7 16.0 15.9 15.0 Expense ratio 43.9 42.3 42.7 41.9 Combined ratio 97.3 96.8 100.7 96.2 Accident year combined ratio, as adjusted 99.1 97.0 96.7 95.2 Net Premiums Written - Change in Constant Dollar General Insurance - International Foreign exchange effect on worldwide premiums: Change in net premiums written Increase (decrease) in original currency AIG Foreign exchange effect Increase (decrease) as reported in U.S. dollars Quarterly 4Q19 (13.3) % (13.3) % Twelve Months Ended December 31, 2019 (11.4) % (2.1) (13.5) % 40#41Non-GAAP Reconciliations Premiums* (in millions) Individual Retirement: Premiums Quarterly Twelve Months Ended December 31, 4Q18 4Q19 2018 2019 15 $ 39 $ 52 $ 104 Deposits 4.213 3,121 15,577 14,804 Other (3) (4) (8) (9) Premiums and deposits $ 4,225 $ 3,156 $ 15,621 $ 14,899 Individual Retirement (Fixed Annuities): Premiums $ 16 $ 33 $ 56 $ 80 Deposits 1,666 725 4,722 5,212 Other (4) (4) (13) Premiums and deposits $ 1,678 S 754 $ 4,765 S (12) 5,280 Individual Retirement (Variable Annuities): Premiums $ (1) $ 6 $ (4) $ 24 Deposits 715 839 4,245 2,852 Other 1 4 3 Premiums and deposits $ 715 $ 845 $ 4,245 $ 2,879 Individual Retirement (Index Annuities): Premiums $ $ $ A Deposits 1,383 1,362 4,250 5,466 Other Premiums and deposits $ 1,383 $ 1,362 $ 4,250 $ 5,466 Individual Retirement (Retail Mutual Funds): Premiums $ $ $ $ Deposits 449 195 2,361 1,274 Other Premiums and deposits $ 449 $ 195 $ 2,361 $ 1,274 Group Retirement: Premiums $ 4 $ 2 $ Deposits 2,102 2,310 34 8,605 $ 16 8,330 Other Premiums and deposits Life Insurance: S 2,106 $ 2,312 $ 8,639 $ 8,346 Premiums $ 378 $ 405 $ 1,554 $ 1,619 Deposits 417 436 1,649 1,659 Other 192 206 711 808 Premiums and deposits $ 987 $ 1,047 $ 3,914 $ 4,086 Institutional Markets: Premiums $ 816 $ 501 $ 952 $ 1,861 Deposits 25 36 2,015 867 Other 7 8 Premiums and deposits Total Life and Retirement: $ 848 $ 545 $ 65 3,032 30 $ 2,758 Premiums $ Deposits Other Premiums and deposits 1,213 $ 6,757 196 947 $ 5,903 210 2,592 $ 27,846 768 3,600 25,660 829 8,166 S 7,060 $ 31,206 $ 30,089 AIG * The twelve-month period ended December 31, 2018 includes deposits in Individual Retirement ($1.1 billion), Group Retirement ($0.2 billion) and Institutional Markets ($1.4 billion) of FHLB funding agreements. 41