Net income per diluted common share was $2.03, compared to $3.43 in the prior year quarter, and adjusted after-tax income attributable to AIG common shareholders* (AATI) per diluted common share was $1.75, the highest quarterly adjusted earnings per share* (EPS) for AIG since 2007, compared to $1.39 in the prior year quarter.
General Insurance net premiums written (NPW) grew 10% and Commercial Lines NPW grew 14% year-over-year, or 11% and 13%, respectively, on a constant dollar basis and adjusted for the International lag elimination*
General Insurance combined ratio was 90.9% and accident year combined ratio, as adjusted* (AYCR) was 88.0%, representing the best second quarter AYCR since 2007
Life and Retirement adjusted pre-tax income (APTI) was $991 million, up 33% from the prior year quarter, benefiting from strong growth in base investment yield. Premiums were $2.5 billion, up 128% from the prior year quarter, and premiums and deposits* were $10.1 billion, up 42% from the prior year quarter supported by record Fixed Index Annuity sales
AIG repurchased $554 million of common stock in the second quarter and paid $268 million in dividends, reflecting a 12.5% increase in the quarterly common stock dividend
Announced the sale of Validus Reinsurance, Ltd. (Validus Re) to RenaissanceRe Holdings Ltd. (RenaissanceRe) for approximately $2.74 billion in cash and $250 million in RenaissanceRe common stock, representing another significant milestone in AIG's strategic repositioning of its global portfolio, reducing overall volatility and creating capital efficiencies
Successfully executed a secondary offering of Corebridge Financial common stock; following Corebridge Financial share repurchases, AIG ownership reduced to 65.3%
In early July, closed sale of Crop Risk Services for approximately $240 million in cash and completed the formation of Private Client Select with Stone Point Capital LLC to serve as a managing general agent for the high and ultra-high net worth personal lines business
On August 1, AIG Board of Directors increased share repurchase authorization to $7.5 billion
SECOND QUARTER 2023 NOTEWORTHY ITEMS
General Insurance APTI increased $62 million from the prior year quarter to $1.3 billion, driven by higher investment income, partially offset by lower underwriting income due to higher catastrophe losses and lower favorable prior year development, net of reinsurance and prior year premiums.
Life and Retirement APTI increased $244 million from the prior year quarter to $991 million, primarily due to higher base portfolio spread income, partially offset by lower alternative investment income and lower fee income.
Net income attributable to AIG common shareholders was $1.5 billion, compared to $2.7 billion in the prior year quarter, or $2.03 compared to $3.43 per diluted common share.
AATI was $1.3 billion, compared to $1.1 billion in the prior year quarter, or $1.75 compared to $1.39 per diluted common share, primarily due to higher Life and Retirement results and a 9% reduction in weighted average diluted shares outstanding.
Return on common equity (ROCE) was 14.0% and adjusted ROCE* was 9.4% on an annualized basis. Adjusted ROCE for both General Insurance and Life and Retirement was 12.2%.
Refers to financial measure not calculated in accordance with generally accepted accounting principles (non-GAAP); definitions of non-GAAP measures and reconciliations to their closest GAAP measures can be found in this news release under the heading Comment on Regulation G and Non-GAAP Financial Measures.
American International Group, Inc. (NYSE: AIG) today reported financial results for the second quarter ended June 30, 2023.
AIG Chairman & Chief Executive Officer Peter Zaffino said: 'In the second quarter, we continued to build on our momentum, delivering outstanding financial results as well as successfully executing on multiple strategic priorities. Second quarter adjusted after-tax income attributable to AIG common shareholders per diluted common share was $1.75, AIG's highest adjusted EPS since 2007, representing another significant milestone on our path toward sustainable earnings growth over the long-term.
'Our ability to continue to grow, manage volatility and improve profitability reflects our commitment to underwriting and operational excellence. In addition to our strong financial performance, our team executed on several transactions that will simplify AIG, reduce volatility, generate liquidity and capital efficiencies, and allow us to accelerate our capital management plans.
'In General Insurance, continued accident year underwriting margin improvement and strong growth resulted in yet another quarter of excellent financial results. Net premiums written increased 11%(+) year-over-year and Commercial Lines net premiums written grew 13%(+) driven by strong growth in North America Commercial Lines of 18%(+). North America Commercial rate increased 8% or 9% excluding Workers' Compensation while International Commercial rate increased 9%.
'The General Insurance combined ratio was 90.9%, inclusive of $250 million of catastrophe losses, or 3.9 loss ratio points, a tremendous result against the backdrop of a very challenging quarter for the industry. The second quarter accident year combined ratio, ex-CAT, was 88.0% and the lowest ratio recorded for the second quarter since 2007. This ratio improved by 50 basis points year-over-year and was driven by an excellent Global Commercial accident year combined ratio, ex-CAT, of 84.4%.
'Life & Retirement delivered very good results, with premiums and deposits of over $10 billion, a 42% increase year-over-year, benefiting from record sales in Fixed Index Annuities. Results included strong continued base net investment spread expansion.
'With respect to capital management, we continued to execute against our balanced strategy. In the second quarter, we increased our quarterly common stock dividend by 12.5% to $0.36 per share, representing the first increase since 2016 and we returned $822 million to shareholders through $554 million of AIG common stock repurchases and $268 million of dividends.
'In May, we announced the sale of Validus Re to RenaissanceRe for $3 billion, which is expected to close in the fourth quarter of 2023. In addition, we announced and successfully completed the sale of AIG's Crop Risk Services business to American Financial Group, Inc. for approximately $240 million. We also launched Private Client Select as a Managing General Agency with our partner Stone Point Capital LLC that will serve as an independent platform for the high and ultra-high net worth markets.
'In June, we completed a secondary offering of Corebridge Financial common stock. Furthermore, Corebridge issued a $400 million special dividend to its shareholders and executed the repurchase of $200 million of common stock from AIG and Blackstone. Including approximately $600 million in regular dividends, these actions resulted in approximately $1.2 billion of total capital returned to Corebridge shareholders since its initial public offering in September 2022. As a result of these actions, AIG received gross proceeds of approximately $1.7 billion and reduced its ownership in Corebridge to 65.3%.
'The scale of what AIG colleagues accomplished in the second quarter is extraordinary. I am more confident than ever in AIG's promising future as we continue our journey to be a top performing company delivering excellence in all that we do and creating sustainable long-term value for our stakeholders.'
(+) On a constant dollar basis for North America and on a constant dollar basis and adjusted for the International lag elimination for International. These measures are not calculated in accordance with generally accepted accounting principles (non-GAAP); definitions of non-GAAP measures and reconciliations to their closest GAAP measures can be found in this news release under the heading Comment on Regulation G and Non-GAAP Financial Measures.
For the second quarter of 2023, pre-tax income from continuing operations was $1.9 billion, compared to $3.9 billion in the prior year quarter. Net income attributable to AIG common shareholders was $1.5 billion, or $2.03 per diluted common share, compared to $2.7 billion, or $3.43 per diluted common share, in the prior year quarter. The decline in pre-tax income was primarily driven by a decrease in net realized gains on Fortitude Re funds withheld assets and embedded derivative as well as a decrease in net realized gains excluding Fortitude Re funds withheld assets and embedded derivative, higher catastrophe losses, lower net favorable prior year development (PYD) and higher interest crediting rates at Life and Retirement. The decline was partially offset by higher net investment income and continued improvement in accident year underwriting margin. These pre-tax items were partially offset by lower income tax expense due to a decrease in income from continuing operations and lower income attributable to the noncontrolling interest (NCI) due to a decrease in net income at Corebridge compared to the prior year quarter despite higher income attributable to NCI as a result of lower AIG ownership in Corebridge.
AATI was $1.3 billion, or $1.75 per diluted common share, for the second quarter of 2023, compared to $1.1 billion, or $1.39 per diluted common share, in the prior year quarter. The increase in AATI was due to higher Life and Retirement results, partially offset by higher catastrophe losses and lower net favorable PYD.
Total consolidated net investment income for the second quarter of 2023 was $3.6 billion, an increase of 37% from $2.6 billion in the prior year quarter, benefiting from higher income from fixed maturity securities and loan portfolios due to the higher reinvestment rates on new investments and floating rate securities. Total net investment income on an APTI basis* was $3.3 billion, an increase of $774 million from the prior year quarter.
Book value per common share was $58.49 as of June 30, 2023, a decrease of 1% from March 31, 2023 and an increase of 6% from December 31, 2022. The decrease from March 31, 2023 was driven by an increase in accumulated other comprehensive loss (AOCI) due to increased interest rates and the increase from December 31, 2022 was driven by a decrease in AOCI as a result of the Corebridge secondary offering and share repurchases discussed above. Adjusted book value per common share* was $75.76, almost flat compared to March 31, 2023 and December 31, 2022. Adjusted tangible book value per common share* was $69.99, an increase of approximately 1% from both March 31, 2023 and December 31, 2022.
In the second quarter of 2023, AIG repurchased $554 million of common stock, or approximately 10 million shares, paid $268 million of common and preferred dividends and repaid $388 million of debt maturities. AIG also received proceeds of approximately $1.2 billion from the Corebridge secondary offering, $264 million from the Corebridge special dividend and $180 million from the Corebridge share repurchase, contributing to parent liquidity of $4.3 billion as of June 30, 2023. AIG's ratio of total debt and preferred stock to total capital at June 30, 2023 was 32.3%, down from 32.8% at March 31, 2023, primarily driven by repayment of $388 million of debt and the Corebridge secondary offering. Excluding AOCI, the total debt and preferred stock to total capital ratio* was 26.0% at June 30, 2023.
On August 1, the AIG Board of Directors declared a quarterly cash dividend on AIG common stock of $0.36 per share. The dividend is payable on September 29, 2023 to stockholders of record at the close of business on September 15, 2023.
The AIG Board of Directors also declared a quarterly cash dividend of $365.625 per share on AIG Series A 5.85% Non-Cumulative Perpetual Preferred Stock, with a liquidation preference of $25,000 per share, which is represented by depositary shares (NYSE: AIG PRA), each representing a 1/1,000th interest in a share of preferred stock. Holders of depositary shares will receive $0.365625 per depositary share. The dividend is payable on September 15, 2023 to holders of record at the close of business on August 31, 2023.
AMERICAN INTERNATIONAL GROUP, INC. 
