Letter to Shareholders

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.

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.

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 Next^TM

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.