Skip To Main Content

Letter to Shareholders

Dear AIG Shareholder:

I am very pleased to share AIG’s 2022 Annual Report with you, our valued shareholder. In this Annual Report, we highlight the journey AIG has been on for the past few years and our vision for the future.

In this Annual Report, you will see our dedication to sustainable value creation, continuous improvement, balance sheet strength and quality outcomes for investors — all making AIG an attractive investment.

In a year defined by substantial, global macroeconomic headwinds, AIG remained focused and we made remarkable progress in our transformation in ways that benefitted all stakeholders, including our shareholders. AIG’s 2022 accomplishments further solidified our foundation as we continue to position the company for future growth and as an industry and market leader.

Most importantly, the AIG narrative is about our commitment to delivering excellence in everything we do and building for long-term, profitable growth.

Performing in a Complex Macroeconomic Environment

In 2022, AIG’s total shareholder return (TSR) was approximately 14%, while the average S&P 500 TSR was down approximately 18%. Achieving this level of TSR in a tumultuous market environment is a major accomplishment in and of itself; and it was only one of AIG’s many accomplishments.

Against a backdrop of devastating natural disasters occurring with increased frequency and severity, volatile equity markets, rising interest rates, global inflationary concerns, energy shortages and pricing surges, cybercrime, the Russia/Ukraine conflict, geopolitical unrest generally, and more, AIG — and the entire global business community — navigated a commercial landscape that required agility and adaptability, strategic thoughtfulness, and conviction in execution.

As a result of the hard work and determination from our colleagues across the globe, we executed on multiple strategic priorities and entered 2023 with significant momentum. We are positioned to capitalize on growth opportunities and are developing a culture grounded in alignment around common goals, continuous improvement, high performance, underwriting and operational excellence, inclusiveness and integrity.

Excellent 2022 total shareholder return

Significantly outperformed the S&P 500 and reflects execution of balanced capital management priorities as well as AIG’s well-received vision of the future

Creating Value and Positioning AIG for Growth

Our commitment to continuous improvement is built into AIG’s Purpose and Values and has been one of the guiding principles of our turnaround, transformation and future growth potential.

Improving the core business of AIG and truly transforming the company was something we knew could not be accomplished in a single year. It required a commitment to change across many areas of the company — underwriting, portfolio derisking, reinsurance, operational processes and other transformation, talent retention and development, expense management, digital optimization, relationships with distribution partners and clients, regulatory engagement, transparency in communication, and investments in our communities.

We also knew we had to be patient and have fortitude to stay the course — even pivoting while navigating a global pandemic — and that positive results would emerge over time.

Today, AIG is a very different company. We are an industry and market leader, and we strive to set the standard in all that we do.

AIG and Corebridge Financial: two market-leading companies

AIG’s successful IPO of Corebridge Financial in September 2022, which yielded $1.7 billion of gross proceeds, was the year’s largest IPO in the U.S.

Our 2022 Accomplishments

Over the course of 2022, we made progress on many fronts, reinforcing our reputation as a company that can deliver on multiple, complex priorities at the same time. I am very proud of what our global colleagues accomplished. Below are a few highlights.

  1. Our most significant accomplishment was the completion of the initial public offering (IPO) of Corebridge Financial — the largest U.S. IPO in 2022 — in a market where external dynamics were extremely challenging.

  2. We established a standalone capital structure for Corebridge while deleveraging AIG’s balance sheet. These actions enhanced the strength of the balance sheets of both companies and set the foundation for financial flexibility and delivering on financial commitments made to our respective shareholders.

  3. AIG returned over $6 billion to shareholders through $5.1 billion of AIG common stock repurchases and $1.0 billion of dividends. We finished the year with 734 million shares outstanding, a 10% decrease from the end of 2021. Corebridge paid approximately $300 million of dividends to its shareholders from the date of its IPO through year-end 2022.

  4. Our General Insurance business delivered the strongest underwriting profitability AIG has ever achieved, as full year 2022 underwriting income nearly doubled from the prior year to $2.0 billion. This translates to more than $7 billion of cumulative improvement in our underwriting profitability since 2016.

  5. The combined ratio of 91.9% and accident year combined ratio, as adjusted* (AYCR), of 88.7% improved 3.9 and 2.3 points, respectively, from the prior year. The latter marked the fulfillment of our goal to achieve a full year, sub-90 AYCR, following 18 consecutive quarters of improvement and four sub-90 quarters in 2022.

  6. AIG 200, our multi-year effort to improve efficiency and enhance digital effectiveness, reached significant milestones, including achieving a modernized technology infrastructure and operational capabilities, while executing on exit run-rate savings of $1 billion six months ahead of schedule.

  7. We changed the strategy and structure of our investment management groups at AIG and Corebridge, including through partnerships with Blackstone and BlackRock where we are leveraging their investment expertise and technology platforms to improve performance. Since 2021, we transferred management of approximately $50 billion and $150 billion of assets, respectively, to each of these partners.

  8. In 2022, AIG was recognized as one of the 50 most community-minded companies in the United States by Points of Light, a nonpartisan, global nonprofit organization that inspires, equips and mobilizes millions of people to take action that changes the world.
“We made progress on many fronts, reinforcing our reputation as a company that can deliver on multiple, complex priorities at the same time.”

Peter Zaffino, Chairman & Chief Executive Officer

Over $7B of cumulative improvement in full year General Insurance underwriting income since 2016

Leading the Industry with Expertise

The insurance industry has always been critical to the stability of the global economy. This is certainly true today in an increasingly complex environment. At AIG, we take great pride in offering exceptional risk solutions to our clients and distribution partners, while prudently managing our balance sheet and volatility.

We only need to analyze 2022’s Hurricane Ian to understand the delicate, yet essential, relationship that insurance carriers, reinsurance providers and distribution partners have with businesses and individuals across the globe. Hurricane Ian was a tragic event on a human level that also left devastating physical damage. From a humanitarian perspective, AIG rapidly deployed significant resources to the affected areas and provided immediate support and infrastructure to help individuals, businesses and communities rebuild.

Hurricane Ian also proved to be a catalyst that changed market dynamics even more significantly than expected. It ultimately led to shifts in the market that required the industry to rethink capital deployment, reinsurance strategies and the commensurate changes that needed to take place in the primary market. The unprecedented levels of natural catastrophes on a global scale also significantly impacted the reinsurance market and retrocessional capacity. This has resulted in an increased cost of capital for the industry, which impacted almost all lines of business and territories, regardless of loss experience. In addition, very little new capital entered the market.

AIG navigated the complex renewal season extremely well. We knew we were in a strong position heading into January 1, given the improved quality of our global portfolio, coupled with our considerable efforts to reduce our gross portfolio peak exposures, as well as the strong partnerships we have with reinsurance companies.

AIG Your Ally from Now to NextTM

While AIG was transforming its core business, we were also transforming the company’s culture.

AIG is a Purpose-driven and Values-based company, and our commitment to our Purpose and Values emerges most clearly in our culture and how we demonstrate allyship with our stakeholders. For our clients, distribution partners, colleagues, communities and more — we help improve and strengthen where they are today and strive to help them achieve a more successful future.

We are their allies from now to next.

One of AIG’s greatest examples of allyship is our title sponsorship of the AIG Women’s Open. AIG is proud to be the title sponsor of one of the most prestigious and celebrated championships in women’s golf. We became the title sponsor of the AIG Women’s Open in 2019 because we appreciate the sport, we appreciate the athletes, and most importantly, we see an opportunity to create meaningful, significant and positive change through our leadership. This sponsorship, and our partnership with The R&A to raise the profile of gender equity and gender pay equity, has permeated throughout our company, and has become a meaningful driver behind our core value of being an ally. Through our partnership with The R&A, we are elevating the women’s game of golf and recognizing, highlighting and rewarding the achievements of these elite athletes.

“Our journey to become a top-performing company, delivering excellence in all that we do, will continue to be our driving force as we focus on long-term, sustainable value creation for our shareholders.”

Peter Zaffino, Chairman & Chief Executive Officer

Key drivers on the path to double-digit adjusted return on common equity*

"Having fundamentally changed every part of the company and delivered exceptional performance on our underwriting and operational priorities, we have a renewed sense of purpose and strong momentum."
Peter Zaffino, Chairman & Chief Executive Officer

Our Vision for the Future

AIG’s turnaround, along with the transformation of our core operations, was impressive for many reasons. We significantly improved the company, tackling issues that had not been previously addressed, and the most important part of the progress we made was building a core foundation that will enable us to continue to improve in the future. Having fundamentally changed every part of the company and delivered exceptional performance on our underwriting and operational priorities, we have a renewed sense of purpose and strong momentum. AIG is very well positioned for 2023 and beyond.

As we look ahead, AIG’s next chapter will be focused on growing attractive businesses and continuing to shift our portfolio to deliver the best solutions for our clients while achieving improved risk-adjusted returns. We will continuously reposition our portfolio through our underwriting actions and prudent capital deployment.

The culture of underwriting excellence that we have created and our broad capabilities to solve risk issues, coupled with well-capitalized insurance subsidiaries and a strong balance sheet, provide AIG with significant flexibility. Additionally, our extensive insight into the current and evolving risk issues that clients and distribution partners face every day and ability to connect across the world through our global footprint provides us with a competitive advantage.

We continue to work towards the deconsolidation and an eventual full separation of Corebridge while we reposition AIG to operate as one, global property & casualty and personal insurance company. Our goal is to have a simpler and leaner operating model for AIG with optimized key end-to-end processes and workflows that allow us to efficiently deliver high-quality solutions and products to our clients and distribution partners.

A top priority for AIG in 2023 is to make significant progress towards reaching a 10% or greater adjusted return on common equity,* which we will achieve through continued improvement in underwriting results, expense reductions from AIG 200, implementing a new operating model for AIG, ongoing expense discipline, continued execution of the capital management actions we accelerated in 2022, and improvement in our net investment income as we continue to reposition our investment portfolio at more attractive re-investment rates.

Capital management will be a significant area of focus throughout 2023. We are committed to returning appropriate levels of capital to shareholders through share repurchases and dividend payments. In addition to ordinary-course return of capital, we also expect to use net proceeds from Corebridge secondary offerings in 2023 to accelerate our capital management strategy, with share repurchases being our primary focus. Our target count for shares outstanding remains 600–650 million and our target leverage ratio remains 20–25% post deconsolidation of Corebridge.

Overall, I am extremely proud of what we have accomplished, particularly in 2022. What our teams have achieved is remarkable and unprecedented in our industry. Our journey to become a top-performing company, delivering excellence in all that we do, will continue to be our driving force as we focus on long-term, sustainable value creation for our shareholders.

On behalf of our colleagues around the world, thank you for your ongoing trust and confidence in AIG.


Peter Zaffino

Chairman & Chief Executive Officer
American International Group, Inc.


* These are non-GAAP financial measures. The definitions and reconciliations of accident year combined ratio, as adjusted, and adjusted return on common equity to the most comparable GAAP measures are on pages 45, 46, 66 and 71 of the 2022 Form 10-K.