Investor Presentaiton
2Q20 Impacts Related to Fortitude Accounting
April and May 2020
(Pre-closing)
2 months of Fortitude APTI, or $96M is included in Legacy
■ 2Q20 net loss of $7.9B for AIG (AATI of $571M) reflects 2
months, or $165M ($27M on an AATI basis), of non-controlling
interest associated with Fortitude
($M)
June 2020
(Post-closing)1
1 month of embedded derivative activity is reflected in AIG
GAAP results
Net underwriting income
Net investment income - Fortitude Re FWA
Net realized capital losses - Fortitude Re FWA:
Net realized capital gains - Fortitude Re FWA
Net realized capital losses - Fortitude Re
embedded derivative
2Q20
$ -
116
AIG
June 2, 2020 (At Closing)
AIG recorded $4.3B reduction in AIG shareholders' equity
primarily due to a $6.7B after-tax loss partially offset by a $2.4B
increase in AOCI due to the release of shadow adjustments
primarily related to future policy benefits
On an adjusted basis, the impact to common
shareholders' equity is $2.5B as of June 30, 20203
The $6.7B after-tax loss is comprised of:
-
$2.7B loss related to the write-off of prepaid insurance
assets and DAC upon deconsolidation of Fortitude
$4.0B loss on sale, primarily as a result of increases in
Fortitude's equity principally related to mark to market
movements since December 31, 2018
The loss on sale did not negatively impact the statutory capital
of AIG's insurance subsidiaries
96
(837)
Net realized capital losses on Fortitude Re FWA
(741)
Loss from continuing operations before
($625)
income tax benefit
(131)
($494)
438
($56)
Income tax benefit²
Net loss
Change in unrealized appreciation of all other investments²
Comprehensive loss
Other balance sheet changes related to Fortitude Re:
Investments and other assets includes funds withheld assets
(FWA) of $41.5B
"
Reinsurance assets, net of allowance, of $34.6B reflecting loss
reserves and future policyholder benefits ceded to Fortitude Re
Funds withheld payable liability of $42.0B
Cumulative unrealized gains and losses related to Fortitude
Re's FWA of $4.2B
1) Various assets supporting the Fortitude Re funds withheld reinsurance arrangements are reported at amortized cost, and as such, changes in the fair value of these assets
are not reflected in the financial statements. However, changes in the fair value of these assets are included in the embedded derivative in the Fortitude Re funds withheld
arrangements. During the period from June 2, 2020 to June 30, 2020, these assets appreciated by $56M on a after-tax basis.
2) The income tax expense (benefit) and the tax impact in AOCI was computed using AIG's U.S. statutory tax rate of 21%.
3) Adjusts for the cumulative unrealized gains and losses related to Fortitude Re's FWA.
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