zippy1 Posted February 22, 2013 Share Posted February 22, 2013 I hope someone can explain to me in simple terms what´s the difference between BW of $66.38 and the BW less accumulated other comprehensive income (AOCI) of $57.87 is. Which one is the best measure of "progress"? Insurers have large bond portfolios which are usually held as "Available for Sale" for accounting purposes. These bonds have to be marked to market as the bond values changes (say, if bonds which have increased in value due to interest rates falling). BW includes these changes. However, liabilities for life insurers, which are also interest rate sensitive are not marked to market. Ex-AOCI basically removes the changes in value of "Available for Sale" from BV. For P&C insurers, we do not need to make this adjustment as liabilities are not very interest rate sensitive. For life insurers, it makes sense to look at Ex-AOCI. Vinod Vinod, Thanks for the explanation. Link to comment Share on other sites More sharing options...
orion Posted February 22, 2013 Share Posted February 22, 2013 @Vinod. Thanks! Link to comment Share on other sites More sharing options...
Liberty Posted February 22, 2013 Share Posted February 22, 2013 Not the whole thing yet, but some pieces of the bloomberg interview: http://www.bloomberg.com/video/benmosche-aig-to-emerge-a-strong-global-company-DrXWAy0WQK6bc6Y_ehIXBw.html http://www.bloomberg.com/video/benmosche-i-m-making-10-5m-per-year-on-average-0wPOtYyWRyeHS~VulHYwgA.html http://www.bloomberg.com/news/2013-02-22/benmosche-says-aig-to-build-non-u-s-life-after-asset-sales-1-.html Link to comment Share on other sites More sharing options...
racemize Posted February 22, 2013 Share Posted February 22, 2013 I've updated the reserve triangle development spreadsheet for 2012 (attached).AIG_Reserve_Triangle_Analysis_2012.xlsx Link to comment Share on other sites More sharing options...
racemize Posted February 22, 2013 Share Posted February 22, 2013 Not the whole thing yet, but some pieces of the bloomberg interview: http://www.bloomberg.com/video/benmosche-aig-to-emerge-a-strong-global-company-DrXWAy0WQK6bc6Y_ehIXBw.html http://www.bloomberg.com/video/benmosche-i-m-making-10-5m-per-year-on-average-0wPOtYyWRyeHS~VulHYwgA.html http://www.bloomberg.com/news/2013-02-22/benmosche-says-aig-to-build-non-u-s-life-after-asset-sales-1-.html full video: http://www.bloomberg.com/video/aig-s-benmosche-on-business-strategy-bailout-pay-QCefrVaGQ1SKknrCsZLFLA.html/ Link to comment Share on other sites More sharing options...
Olmsted Posted February 22, 2013 Share Posted February 22, 2013 Some snippets from the conference call transcript (via SeekingAlpha): Hancock on international initiatives: A good example is AIG’s investment in the PICC group, which strengthens our partnership with the PICC property casualty company. We have also achieved profitable growth through our long term accident and health relationship with PICC and we’re excited about additional consumer opportunities in China. We recently announced a bank assurance agreement with HSBC. AIG will act as the exclusive provider of non-life insurance products to customers in Turkey and France through this agreement. We anticipate it will significantly enhance our ability to market A&H products in Turkey, one of our strategic business expansion countries. In Israel, we purchased our partner’s 50% share in AIG Israel, a successful direct marketing business with strong in-country brand recognition. It sounds like the old AIG (in the good sense). Hancock again on improvements in underwriting performance: P&C accident year loss ratio over eight quarters, it’s an annualized decline of about 2.6% per annum. It’s a bit more of a rapid improvement in the fourth quarter, but that’s slightly out of line of trend, because you had an elevated number in Q4 11 versus a depressed level in Q4 12. So as you normalize that out, you can think about an improving trend of about 2.6 per annum. It’s the result of a number of initiatives that we have signaled very clearly: business mix shift, as we re-underwrite out of business lines where we had clear unattractive economics and managing the account relationships in multiline relationships in an intelligent way to shift to a better mix of business by customer, by geography. But also through greater use of analytics and technical pricing models, and segmentation at a more granular level. And then finally, through a number of initiatives to reduce claims leakage, where we are seeing significant benefits from applying analytics to fraud management, management of legal expense, and other factors. So we continue to see progress, no let up in that trend, and we’re making a conscious tradeoff between expense and loss ratio as we improved the quality and repeatability of our business. Benmosche on SIFI: ...some days you wish you could have a simple company, but then we wouldn’t be AIG. Link to comment Share on other sites More sharing options...
fareastwarriors Posted February 23, 2013 Share Posted February 23, 2013 http://www.bloomberg.com/news/2013-02-22/benmosche-says-aig-to-build-non-u-s-life-after-asset-sales-1-.html Benmosche Says AIG to Build Non-U.S. Life Insurance Link to comment Share on other sites More sharing options...
fareastwarriors Posted February 23, 2013 Share Posted February 23, 2013 http://www.bloomberg.com/video/aig-ceo-benmosche-govt-was-an-excellent-partner-Q3Q3z5pcSCmyeVuKgFNrgg.html AIG CEO interview on Bloomberg Link to comment Share on other sites More sharing options...
Liberty Posted February 23, 2013 Share Posted February 23, 2013 Thanks for posting. Interesting part at the end about how the treatments available for his type of cancer have improved since he was diagnosed. His last scan was clean, no "activity" detected. saying he'd like to stay on after 2014 if he has the energy and is feeling well and the board wants him to. Link to comment Share on other sites More sharing options...
gokou3 Posted February 23, 2013 Share Posted February 23, 2013 From Seeking Alpha Q4 CC transcript: Bob Benmosche On the capital management side, what we’ve said is some of it’s geography, and some of it is reducing interest expense, which would be our debt reduction and improving profits. All of that gives you a better coverage ratio, covered by the operating companies. And so that’s our highest priority. Continues to be our highest priority. We are working very closely with the rating agencies to make sure they are comfortable. Keep in mind that we came out of this crisis much more rapidly than anybody - I won’t say anybody, but I’m not sure there aren’t more than two or three of you on the phone that was with us three years ago realized when we’d get to where we are today. And so the speed that this has occurred in, they just want more time to see us continue to evolve with the good, solid earnings that you’ve seen so far. Having said that, as they continue to be comfortable, as we continue to perform through the year, we continue to make progress on our coverage ratio. What I’ve said was I would love to be able to put a dividend on the stock. I think that makes sense, because it increases the number of potential shareholders for this company. And as we continue to progress through the year, to the extent we could do a share buyback, we’d like to be able to do that as well. But we’re going at a pace so that clearly we’re looking for, as you saw, with two ratings [unintelligible] already, with [unintelligible] pieces of our company starting to turn positive and potential upgrade. So an upgrade to AIG over the next couple years, I think, would be the important statement that says we have accomplished a strong comeback as an investment-grade company. And that’s the goal we have, and 2015 is our aspirational date, and we’re still marching pretty quickly towards that date and the things we need to achieve for it. Re: capital management, sounds like 2013 will be mostly debt reduction. Link to comment Share on other sites More sharing options...
mankap Posted February 23, 2013 Share Posted February 23, 2013 I am expecting a token dividend in 2013. We may not see buyback in 2013. Link to comment Share on other sites More sharing options...
PlanMaestro Posted February 24, 2013 Author Share Posted February 24, 2013 http://www.aig.com/Chartis/internet/US/en/4Q12-Conference-Call-Presentation-02-21-13-435PM-FINAL_tcm3171-474925.pdf * Parent liquidity of $16.1 billion including $12.6 billion in cash & short term investments. (reflects AIA share sale) * $16.7 billion DTA. (and another in $5.1 billion Life DTA valuation allowance) * Agreement to sell up to 90% of ILFC recorded as held-for-sale * Insurance company distributions of $1.3 billion in 4Q12 and $5.3 billion for the full year. ($1.0 billion was contributed to AIG Property Casualty in 4Q12) * Future annual distributions expected to be $4 – 5 billion. * P&C: completed annual reserve study of worker’s comp and other long tail lines, supporting current reserve levels. * Life: year end RBC ratio approximately 510%, well above capital maintenance agreement threshold of 385%. Link to comment Share on other sites More sharing options...
dcollon Posted February 25, 2013 Share Posted February 25, 2013 Comments from Deutsche BankDB_on_AIG.pdf Link to comment Share on other sites More sharing options...
mankap Posted February 26, 2013 Share Posted February 26, 2013 Thanks for posting it. DB has been a bull on AIG for a long time. But the writing has lot of good information. DB is expecting 0.40 dividend in 2014 and they are not ruling out buyback in 2013. I think it all boils down to how soon AIG can bring COR to less than 100. Link to comment Share on other sites More sharing options...
Liberty Posted February 26, 2013 Share Posted February 26, 2013 Comments from Deutsche Bank Thank you. Update: So if AIG gets to 10% ROE in 2015, I'm curious to know what their ROE number would be like without the DTA inflating the "e"... Link to comment Share on other sites More sharing options...
orion Posted February 26, 2013 Share Posted February 26, 2013 Stock it up 1.27% Warrants are down 0.22% Oh Mr Market.... :o Link to comment Share on other sites More sharing options...
fareastwarriors Posted February 26, 2013 Share Posted February 26, 2013 AIA Posts Higher-Than-Expected 89% Growth in 2012 Profit AIA Group Ltd. (1299), the third-largest Asia-based insurer by market value, reported a higher than expected 89 percent growth in net income last year. Net income rose to $3 billion, or 25.1 cents a share, in the 12 months to Nov. 30, from $1.6 billion, or 13.3 cents, a year earlier, the Hong Kong-based company said in a statement to the city’s stock exchange today. The number beat the $2.7 billion average estimate of 12 analysts surveyed by Bloomberg. Value of new business rose 27 percent to $1.2 billion, the first time it topped $1 billion in at least four years. Chief Executive Officer Mark Tucker has been focusing on the indicator of projected future profitability of new policies after AIA was hurt by financial trouble at former parent American International Group Inc. and Prudential Plc (PRU)’s attempted takeover in 2010. http://www.bloomberg.com/news/2013-02-26/aia-posts-higher-than-expected-89-growth-in-2012-profit.html crown jewel still shining pretty bright Link to comment Share on other sites More sharing options...
nkp007 Posted March 1, 2013 Share Posted March 1, 2013 (Reuters) - Insurer American International Group Inc eliminated the U.S. government's last financial interest in the company on Friday, buying back warrants from the U.S. Treasury for about $25 million. The government rescued AIG at the depths of the financial crisis as the insurer teetered on the brink of bankruptcy. The bailout ultimately totaled $182 billion, and when all was said and done the Treasury owned more than 90 percent of the company. The Treasury sold the last of that stock last year but still held some warrants. AIG said Friday it had repurchased all of them. They had originally been issued in 2008 and 2009. "The U.S. Treasury does not have any residual interest in AIG after AIG's repurchase of these warrants," the company said in a statement. Link to comment Share on other sites More sharing options...
Liberty Posted March 1, 2013 Share Posted March 1, 2013 At today's price, that's about 1.825 million warrants. Link to comment Share on other sites More sharing options...
MYDemaray Posted March 1, 2013 Share Posted March 1, 2013 At today's price, that's about 1.825 million warrants. I believe these were different warrants... The warrant issued in 2008 provided the right to purchase approximately 2.7 million shares of AIG common stock at $50.00 per share, and the warrant issued in 2009 provided the right to purchase up to 150 shares of AIG common stock at $0.00002 per share. Link to comment Share on other sites More sharing options...
Liberty Posted March 1, 2013 Share Posted March 1, 2013 At today's price, that's about 1.825 million warrants. I believe these were different warrants... The warrant issued in 2008 provided the right to purchase approximately 2.7 million shares of AIG common stock at $50.00 per share, and the warrant issued in 2009 provided the right to purchase up to 150 shares of AIG common stock at $0.00002 per share. My bad. Thought they had kept some tarp warrants. Link to comment Share on other sites More sharing options...
Mephistopheles Posted March 1, 2013 Share Posted March 1, 2013 At today's price, that's about 1.825 million warrants. I believe these were different warrants... The warrant issued in 2008 provided the right to purchase approximately 2.7 million shares of AIG common stock at $50.00 per share, and the warrant issued in 2009 provided the right to purchase up to 150 shares of AIG common stock at $0.00002 per share. I wonder what the purpose was of issuing 150 warrants at a near $0 strike price. Link to comment Share on other sites More sharing options...
Liberty Posted March 1, 2013 Share Posted March 1, 2013 I wonder what the purpose was of issuing 150 warrants at a near $0 strike price. Hopefully it's a typo and they actually wanted 150,000,000 shares ;) Link to comment Share on other sites More sharing options...
Liberty Posted March 2, 2013 Share Posted March 2, 2013 I'm sure many of you have read the recent books about AIG. Which would you say is the best? If you had to rank those you've read? I've currently got these on my list but I'm not sure where to start: Fallen Giant Fatal Risk The AIG Story Thanks! Link to comment Share on other sites More sharing options...
mankap Posted March 2, 2013 Share Posted March 2, 2013 Purchase of warrants will reduce the diluted share count by 2.7m .It is not a big no. but still is equivalent to buy back of 2.7 m shares. Link to comment Share on other sites More sharing options...
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