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American International Group, Inc. (AIG) Q4 2022 Earnings Call Transcript

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American International Group, Inc. (NYSE:AIG) Q4 2022 Earnings Conference Call February 16, 2023 8:30 AM ET

Company Participants

Quentin McMillan – Vice President, Managing Director and Head-Investor Relations

Peter Zaffino – Chairman and Chief Executive Officer

Sabra Purtill – Executive Vice President and Interim Chief Financial Officer

David McElroy – Executive Vice President and Chief Executive Officer-General Insurance

Conference Call Participants

Elyse Greenspan – Wells Fargo

Paul Newsome – Piper Sandler

Erik Bass – Autonomous

Alex Scott – Goldman Sachs

Operator

Good day, and invited to AIG's Fourth Quarter 2022 Financial Results Conference Call. This convention is being recorded.

Now, astatine this time, I would for illustration to move nan convention complete to Quentin McMillan. Please spell ahead.

Quentin McMillan

Thanks very overmuch and bully morning. Today's remarks whitethorn see forward-looking statements, which are taxable to risks and uncertainties. These statements are not guarantees of early capacity aliases events and are based connected management's existent expectations. AIG's filings pinch nan SEC, including our yearly study connected Form 10-K and our quarterly reports connected Form 10-Q, supply specifications connected important factors that could origin existent results aliases events to disagree materially.

Except arsenic required by applicable securities laws, AIG is nether nary responsibility to update immoderate forward-looking statements if circumstances aliases management's estimates aliases opinions should change. Additionally, today's remarks whitethorn mention to non-GAAP financial measures. The reconciliation of specified measures to nan astir comparable GAAP figures is included successful our net release, financial supplement, and net presentation, each of which are disposable connected our website astatine www.aig.com.

Finally, today's remarks will talk nan results of AIG's Life and Retirement conception and Other Operations connected nan aforesaid ground arsenic anterior quarters, which is really we expect to proceed to study until nan deconsolidation of Corebridge Financial Incorporated. AIG's segments and U.S. GAAP financial results arsenic well arsenic AIG's cardinal financial metrics pinch respect thereto disagree from those reported by Corebridge Financial. Corebridge Financial will big its ain net telephone tomorrow connected Friday, February 17, and will supply further specifications connected its results.

With that, I'd now for illustration to move nan telephone complete to our Chairman and CEO, Peter Zaffino.

Peter Zaffino

Good greeting and convey you for joining america to reappraisal our 4th fourth and afloat twelvemonth 2022 results. Following my remarks, Sabra will supply much item connected definite topics, including Life Retirement results and our way to a 10% aliases greater ROCE, and past we will return questions. Kevin Hogan and David McElroy will subordinate america for nan Q&A information of nan call. Today, I will screen 4 topics. First, I will supply an overview of our 4th fourth financial results. Second, I will reappraisal highlights from nan afloat year, including immoderate of our awesome accomplishments, which were singular fixed nan very challenging conditions we faced passim 2022 successful nan equity markets and nan security industry. Third, I will unpack successful immoderate item marketplace conditions starring up to January 1 reinsurance renewals, wherever we saw important shifts that we judge will effect nan manufacture passim 2023 and possibly longer. Suffice it to say, this 1/1 renewal play was nan astir challenged that many, including myself, person seen successful our careers. And fourth, I will outline our 2023 priorities and outlook regarding superior management.

Before turning to our results, I'd for illustration to invited Sabra to nan call. We are fortunate to person her successful nan interim CFO role, while Shane is connected a aesculapian leave. Regarding Shane, I americium personally profoundly appreciative of nan tremendous outreach from galore of you. The number of group who person sent bully wishes for a speedy betterment is incredibly meaningful to maine and our guidance squad and peculiarly to Shane and his family. We look guardant to welcoming him backmost to AIG.

Now fto maine statesman pinch a little overview of AIG's 4th fourth results. Adjusted after-tax income successful nan 4th fourth was $1 cardinal and $1.36 per diluted communal share. We repurchased astir 780 cardinal of AIG communal banal and redeemed $1.8 cardinal of debt. AIG paid $243 cardinal successful dividends successful nan 4th fourth and Corebridge paid 2 dividends, totaling astir $300 cardinal pursuing its IPO successful September of 2022. Turning to General Insurance. In nan 4th quarter, nan mishap twelvemonth mixed ratio, ex-CATs, improved 140 ground points year-over-year to 88.4%, representing nan 18th consecutive 4th of separator improvement. Notably, underwriting income successful nan 4th fourth accrued 27% year-over-year to $635 million.

Global Commercial drove nan year-over-year increase, achieving an mishap twelvemonth mixed ratio, ex-CATs, of 84.1%, a 380 ground constituent betterment and a 69% summation successful underwriting income. Global Personal reported an mishap twelvemonth mixed ratio, ex-CATs, of 100.4%, a 610 ground constituent summation from nan anterior twelvemonth quarter, arsenic we continued to reposition this portfolio. Moving to Global Commercial, connected an FX-adjusted basis, North America commercialized nett premiums written accrued 3% and world accrued 2%. Global Commercial had beardown renewal retention successful its in-force portfolio and caller business continued to beryllium strong. Turning to REIT, momentum continued successful North America commercialized pinch wide complaint increases successful nan 4th of 3%, 7% if you exclude financial lines and 9% if you besides exclude workers' compensation. These complaint increases were driven by unit spot astatine 15%, Lexington astatine 12% and excess casualty astatine 9%, and nan vulnerability summation successful nan North America portfolio was 3%.

International commercialized complaint increases were 4%, driven by Asia Pacific astatine 9% and EMEA astatine 7%, and nan vulnerability summation successful nan world portfolio was astir 2%. Pricing, which includes complaint positive exposure, was up 6% successful some North America and international. While we knowledgeable downward unit connected complaint successful definite lines early successful nan 4th quarter, we saw a reacceleration of value increases towards nan extremity of nan quarter. For example, unit spot was up 15% successful nan 4th fourth pinch complaint betterment of 24% successful December erstwhile marketplace impacts from accrued catastrophes started to beryllium felt. We saw a akin upward activity astatine Lexington and peculiarly wrong nan spot portfolio pinch December seeing nan strongest complaint increases successful nan 4th quarter. Overall, we proceed to gain complaint supra nonaccomplishment costs trends, which contributed to affirmative separator description .

In Global Personal, starting pinch North America, nett premiums written declined 7%, reflecting our ongoing reshaping of this portfolio, peculiarly successful nan precocious and ultra-high nett worthy businesses that are portion of PCG. Later successful my remarks, I will talk our announcement connected Monday relating to PCG and our business pinch Stone Point Capital to create a caller Managing General Agency, aliases MGA. In International Personal, nett premiums written somewhat accrued by 1% connected an FX-adjusted ground owed to a rebound successful recreation and maturation successful A&H.

Now turning to nan afloat year. We made tremendous advancement passim 2022 connected a number of cardinal priorities. I could not beryllium much pleased pinch our team's expertise to execute connected aggregate analyzable strategical objectives crossed AIG astatine once. Our astir important and impactful accomplishment was completing nan IPO of Corebridge successful September of 2022 contempt nan very challenging equity marketplace conditions we had to navigate. Notably, Corebridge was past year's largest IPO successful nan U.S. and nan largest financial services IPO since 2020. We besides proceed to turn underwriting income successful General Insurance, which accrued astir $1 cardinal year-over-year, nan 2nd twelvemonth successful a statement pinch complete $1 cardinal of maturation successful underwriting income.

As I noted connected past quarter's call, we besides reached important milestones connected AIG 200 that person modernized our exertion infrastructure and operational capabilities while executing connected an exit tally complaint savings of $1 billion, six months up of schedule. We besides changed AIG's finance guidance strategy and building done successful partnerships pinch Blackstone and BlackRock, and we are seeing nan benefits of these partnerships crossed AIG and Corebridge.

Turning to afloat twelvemonth consolidated financial results for AIG. Adjusted after-tax income successful 2022 reached $3.6 cardinal and was $4.55 per diluted communal share. We returned $6.1 cardinal to shareholders done $5.1 cardinal of AIG communal banal repurchases and $1 cardinal of dividends. We vanished 2022 pinch 734 cardinal shares outstanding, a 10% alteration since nan extremity of 2021. And we executed connected a number of superior guidance actions to found nan standalone Corebridge superior building while reducing AIG indebtedness by astir $10 billion. Consolidated financial indebtedness outstanding was astir $21 cardinal astatine year-end pinch $11.8 cardinal astatine AIG and $9.4 cardinal astatine Corebridge.

Now fto maine screen afloat twelvemonth 2022 results for General Insurance. As you know, an important facet of our turnaround complete nan past fewer years has been instituting a civilization of underwriting excellence. And our rigor successful this area is now intelligibly benefiting our financial results. General Insurance achieved underwriting income of $2 cardinal successful 2022, contempt nan manufacture again experiencing complete $100 cardinal of insured earthy catastrophe losses. And we exceeded our mixed ratio committedness by achieving a sub-90 mishap twelvemonth mixed ratio, ex-CATs, successful each 4 quarters. As I've noted connected anterior calls, and it's worthy repeating, since 2018, we wholly overhauled our underwriting standards and overlaid these standards pinch a broad reinsurance programme that tin accommodate to marketplace conditions into our portfolio arsenic it continues to alteration and improve. Overall, gross limits deployed were reduced by complete $1.2 trillion during this period. We besides meaningfully and deliberately shifted our world portfolio operation successful bid to reposition AIG for nan future.

For example, Global Commercial now represents 74% of our nett premiums written, up from 57% successful 2018. And Lexington is now 17% of our North America commercialized business, up from 12% successful 2018. If you exclude Validus Re, Lexington is now 23% of North America commercial. As a consequence of this work, our existent portfolio is very good positioned for 2023. I will talk successful much item later, erstwhile I reappraisal January 1 reinsurance renewals, really marketplace dynamics person shifted and really AIG should use arsenic we look to capitalize connected charismatic opportunities for amended risk-adjusted returns.

Now fto maine item a fewer of nan cardinal businesses successful General Insurance that contributed to our capacity successful 2022. Lexington, our market-leading excess and surplus lines business, had 18% nett premiums written maturation successful 2022, up complete 50% since we transitioned this business to attraction connected nan wholesale market. This business besides accrued underwriting profitability, excluding CATs, by 60%, and it achieved a sub-80% mishap twelvemonth mixed ratio, ex-CATs, for 2022. Glatfelter continued its terrific performance, increasing nett premiums written by 14%, expanding underwriting income and achieving an 85% mishap twelvemonth mixed ratio, ex-CATs. The acquisition of Glatfelter allowed america to importantly elevate nan value of our programs business.

Global Specialty, which includes our world marine, power and aviation businesses, grew nett premiums written by complete 15% connected an FX-adjusted basis. This was driven by beardown customer retention of 88%, caller business maturation and complaint increases crossed nan portfolio. Global Specialty generated beardown net successful 2022 pinch an awesome mishap twelvemonth mixed ratio, excluding CATs, of 80%. These are conscionable immoderate examples of businesses that we prioritized past twelvemonth based connected their marketplace position, our differentiated worth proposition to clients and our expertise to make beardown underwriting results. We spot awesome opportunities for these businesses going forward, and they are beardown anchors for AIG that we expect will lend to profitable maturation successful 2023.

Our Global Personal business performed good considering immoderate of nan post-pandemic headwinds we saw successful nan first half of 2022 and our strategical repositioning of nan business. Also, arsenic I mentioned connected our past call, nan effect from deemed hospitalizations successful Japan and to a lesser grade Taiwan contributed complete $160 cardinal successful losses successful 2022, having a 290 ground constituent effect connected nan International Personal mishap twelvemonth mixed ratio. This mishap held merchandise was discontinued successful 2022.

Turning to afloat twelvemonth nett premiums written. General Insurance grew 4% connected an FX-adjusted basis, driven by 6% maturation successful Global Commercial. North America grew 7% and International Commercial grew 6%. We had beardown renewal retention successful our in-force portfolio pinch North America improving by 300 ground points to 86% and International achieving 86% for nan afloat year. And arsenic a reminder, we cipher renewal retention anterior to nan effect of complaint and vulnerability changes. Turning to underwriting profitability for nan afloat year. 2022 was different twelvemonth pinch beardown progress. The General Insurance mishap twelvemonth mixed ratio, ex-CATs, was 88.7%, an betterment of 230 ground points year-over-year. The afloat twelvemonth saw a 180 ground constituent betterment successful nan mishap twelvemonth nonaccomplishment ratio, ex-CATs, and a 50 ground constituent betterment successful nan disbursal ratio.

Global Commercial achieved an awesome mishap twelvemonth mixed ratio, ex-CATs, of 84.5%, an betterment of 460 ground points year-over-year. The nonaccomplishment ratio was nan biggest contributor pinch a 330 ground constituent improvement, and nan mixed ratio, including CATs and PYD of 89.6%, represented a 920 ground constituent betterment year-over-year. The mishap twelvemonth mixed ratio, ex-CATs, successful Global Personal deteriorated 430 ground points to 99.2% for nan reasons I've outlined before.

Now fto maine move to reinsurance renewals astatine January 1 of this year. As I stated connected our past net call, we knew this renewal play will beryllium very challenging and lead to basal changes successful nan marketplace that would effect 1/1 renewals. The marketplace was faced pinch a operation of factors that added further unit to dynamics that were already creating sizeable stress. We had apical world macroeconomic trends. We had geopolitical uncertainty. We had short-term unit connected nan plus broadside of nan equilibrium expanse arsenic a consequence of rising liking rates, ostentation and rate fluctuation. We had further earthy catastrophe losses precocious successful nan 4th quarter, and expanding wave and severity of secondary perils continued.

And 2022 ended pinch complete $130 cardinal of insured earthy catastrophe losses, making 2022 nan 5th costliest twelvemonth connected grounds for insurers, pinch 5 retired of nan past six years having exceeded $100 billion. Hurricane Ian, successful particular, proved to beryllium a catalyst that changed marketplace dynamics moreover much importantly than expected and yet led to shifts successful nan marketplace that required nan manufacture to rethink reinsurance placements and nan commensurate changes that needed to return spot successful nan superior market. The unprecedented levels of earthy catastrophes connected a world standard massively impacted nan reinsurance marketplace successful a mates of ways. Increased earthy CAT activity has resulted successful elevated spot CAT ceded nonaccomplishment ratios pinch mean incurred nonaccomplishment ratios from 2017 done 2022 exceeding 85% compared to 2012 done 2016 erstwhile mean incurred nonaccomplishment ratios trended beneath 30%, a melodramatic deterioration.

And complete nan past 5 years, secondary perils contributed much than 50% to eventual nonaccomplishment erstwhile compared to superior perils. These marketplace dynamics besides impacted nan proviso of reinsurance and retrocessional capacity and nan costs of superior summation for nan industry, which impacted almost each lines of business and territories, sloppy of nonaccomplishment experience. On apical of each of this, very small caller superior entered nan market. Available superior is estimated to person decreased astir 20% year-over-year.

Now fto maine outline what happened successful nan spot CAT and retro markets successful particular, owed to nan precocious level of CAT losses successful 2022, which were further exacerbated by events successful nan 4th quarter. 50% of world spot CAT limits, which we estimate to beryllium $425 billion, renewed astatine January 1. Approximately 70% of world retro limits estimated astatine $60 cardinal incept astatine January 1. Reinsurers heavy reliant connected highest peril retro protection look greater unit arsenic a result, whereas larger much diversified reinsurers were amended capable to negociate retro capacity constraints. As a result, a mostly of programs placed connected January 1 saw security companies forced to summation retentions.

Despite these marketplace challenges, AIG navigated this analyzable and aggravated renewal play highly well. We knew we were successful a beardown position heading into January 1, fixed nan repositioning and nan improved value of our world portfolio, coupled pinch our sizeable efforts to trim our gross portfolio highest exposures. As we expected, this allowed america to capitalize connected galore charismatic opportunities, and this proved to beryllium a competitory advantage arsenic we had an exceptionally successful renewal season. It's besides worthy noting that AIG's reinsurance purchasing is, by design, much heavy weighted to January 1 than nan wider market. The benefits of this are twofold. Concentrating nan bulk of our purchasing astatine January 1 allows AIG to maximize nan result crossed each of our reinsurance placements. And we person clear statement of show connected our reinsurance costs for nan afloat year, which is peculiarly valuable successful a market, which we judge will proceed to beryllium incredibly challenging.

Some of nan highlights of our January placements see nan following. With respect to spot catastrophe placements, we obtained much limit than we purchased successful 2022, and we judge we person nan lowest attachment points connected a return play measurement for North America windstorm and earthquake amongst our adjacent group, and our modeled exhaust limits are astatine higher return periods compared to past twelvemonth for each of our placements. These placements should further trim volatility, which is thing we stay very focused connected and they supply america pinch important equilibrium expanse protection successful nan arena 1 aliases a bid of important catastrophe events occur.

Specifically, we separately made due changes to our North America spot CAT treaties to bespeak our improving portfolio pinch nan retention of our commercialized CAT portfolio attaching astatine $500 cardinal and Lexington successful our programs business having an attachment constituent of $300 million. The spot CAT aggregate screen that we placed has 4 retentions earlier attaching, and for North America, Japan, and Rest of World, it now could connect successful nan 2nd event, which is an betterment from 2022. Our spot CAT per existent structures mostly stayed nan aforesaid for International, and we judge they are market-leading pinch Japan's retention staying level astatine $200 cardinal and nan Rest of World attaching astatine $125 million.

Many factors improved our wide spot CAT reinsurance program, pinch highlights being: we were capable to attain astir $6 cardinal of limit, including expanding our per occurrence excess of nonaccomplishment placement; we maintained debased attachment points connected a exemplary basis; we received support for a $500 cardinal aggregate placement; and our wide walk for AIG accrued little than 10% connected an absolute and risk-adjusted ground versus 2022.

With respect to PCG, we accelerated portfolio remediation, which is driving further gross vulnerability reductions successful cardinal CAT-exposed states wherever nonaccomplishment costs, ostentation and basal modelling changes person not kept pace. This allowed america to trim nan full limit acquisition for nan PCG-specific CAT program, which partially offset accrued pricing unit owed to Hurricane Ian.

Overall, casualty renewals, some excess of nonaccomplishment and our quota stock placements, renewed adjacent to expiring position connected a risk-adjusted ground pinch nary effect connected ceding commissions. Our reinsurance partners support their support for AIG pinch accordant capacity deployment and reinsurance position and clear nickname of nan value of our portfolio. The outcomes we achieved astatine January 1 besides bespeak nan worth of nan investments we person made successful our reinsurance strategy and, coupled pinch our relationships and credibility pinch reinsurance partners, are a testament to nan assurance nan reinsurance marketplace has successful AIG and its guidance team. We admit nan ongoing support we person received from our reinsurance partners.

As we look up to 2023, nan world faces galore uncertainties. And successful uncertain times, our domiciled arsenic a market-leading world security institution is moreover much important. With nan momentum we person built and nan spot of our portfolio, AIG is now highly good positioned to strategically turn and lead nan marketplace by providing thoughtful master proposal connected consequence solutions for our clients, distribution partners and different stakeholders.

Like 2022 we person group retired eager strategical and operational priorities for 2023. We will proceed to amended and put successful lines of business and General Insurance, wherever we spot important maturation potential, notably Lexington and Global Specialty. I item Lexington because it is presented and will proceed to coming tremendous maturation and profitability opportunities for us. And early indications are that nan complaint momentum we saw successful this business astatine nan extremity of 2022 and into early 2023 will continue. We expect meaningful maturation successful Lexington this year, led by Property where, complete nan past fewer years, we person prudently tightened limits, improved position and conditions and accrued profitability, while driving apical statement growth.

We besides scheme to summation finance successful our assumed reinsurance business successful 2023, peculiarly done Validus Re. As we person discussed connected anterior calls, complete nan past fewer years, we've been highly focused connected driving worth done a disciplined approach, involving beardown consequence assessments, sound portfolio construction, a patient committedness to underwriting excellence and prudent superior management. Over this play of time, nan derisking wrong Validus Re was peculiarly acute successful nan Global Property CAT market, wherever year-over-year, we reduced participations crossed nan portfolio while concurrently purchasing sound retrocessional protections to prudently negociate nan portfolio and trim volatility, each successful statement pinch our rhythm guidance strategy. As a result, we were successful a beardown position to capitalize connected charismatic opportunities astatine January 1. The spot market, successful particular, repositioned and became very compelling successful position of risk-adjusted rates on pinch enhanced structures arsenic good arsenic beneficial position and conditions.

Rate changes wrong Property CAT scope betwixt 30% and 100% successful nan U.S. arsenic good arsenic successful highest zones extracurricular nan U.S. Risk-adjusted complaint increases were astir 50% successful nan U.S. Property and 35% successful International Property and similarly, mean separator betterment was astir 50% year-over-year crossed nan full portfolio. Property CAT ROEs for some nan U.S. and International business accrued by greater than 100% year-over-year. Additionally, we obtained improved position and conditions, including favorable activity successful attachment points successful each Property lines.

For Casualty lines, quota shares remained sound pinch ceding commissions moving favorably for reinsurers by 1 to 2 points, on pinch position and conditions remaining successful statement aliases improved. The consequence of these actions included nett premiums written astatine January 1 accrued complete $500 cardinal aliases 50% year-over-year. This summation was driven astir 30% from U.S., spot 15% from International Property, 45% from casualty placements and nan remaining 10% was from Specialty, including Marine and Energy. The mostly of caller spot limit was deployed to existing clients pinch a important level of backstage position being achieved connected our U.S. spot writings.

Looking ahead, we will proceed our measured attack for different renewals. For example, if meaningful marketplace changes continue, we will cautiously see our positions astatine nan April 1 Japan renewals, and we will proceed to beryllium very cautious pinch superior deployed astatine June 1 successful Florida.

Turning to Private Client Group aliases PCG, this business remains a strategical privilege for america successful 2023. As you know, complete nan past 2 years, we person undertaken a important re-underwriting effort successful this portfolio, reduced aggregate exposure, transitioned definite states to nan non-admitted marketplace and developed beardown partnerships pinch Lloyd's and reinsurers to trim volatility.

On Monday, we announced our volition to launch, successful business pinch Stone Point Capital, a recently formed MGA that will underwrite connected behalf of AIG and yet different superior providers successful nan high- and ultra-high nett worthy markets. AIG will transportation halfway PCG solutions to nan MGA, which will connection a azygous end-to-end agent and customer portal, a broad group of merchandise offerings, a simplified information storage and nan underwriting capabilities of AIG. The MGA will beryllium rebranded arsenic Private Client Select, aliases PCS, and will beryllium led by Kathleen Zortman and our existent squad astatine PCG. We spot this caller building arsenic a logical adjacent measurement successful nan improvement of PCG and judge it will create important worth for clients, brokers and different stakeholders.

Additionally, disbursal subject will proceed to beryllium a privilege for AIG. In summation to savings from AIG 200 that we expect to gain successful during 2023, we scheme to move $300 cardinal of expenses presently sitting successful AIG firm GOE to Corebridge upon deconsolidation. Separately, we will proceed to align our target operating exemplary and further trim absolute expenses crossed AIG Parent and General Insurance to bespeak nan truth that AIG is becoming 1 company. This year, we will besides stay focused connected completing nan operational separation of Corebridge from AIG, and we are moving towards a secondary offering of Corebridge communal banal by nan extremity of nan first quarter, taxable to marketplace conditions and regulatory approvals. Our existent anticipation is that nan mostly of nett proceeds of nan secondary offering will beryllium utilized for AIG communal banal repurchases.

And arsenic I stated connected our past call, we are revisiting AIG's dividend, which has not changed successful galore years. We expect to opportunity much astir this connected our first 4th telephone successful May.

With respect to superior guidance priorities, successful 2022, we did a important magnitude of activity to materially amended nan superior structures of some AIG and Corebridge. With nan simplification successful AIG indebtedness we achieved, our post-deconsolidation leverage will beryllium successful statement pinch best-in-class peers.

And pinch respect to stock buybacks, we person $3.8 cardinal remaining connected our existing stock repurchase authorization.

Our balanced superior guidance accuracy will proceed to let for finance successful maturation opportunities, while returning due levels of superior to shareholders done stock buybacks and dividends. We besides stay unfastened to compelling inorganic maturation opportunities, should they arise.

Before turning nan telephone complete to Sabra, I would for illustration to region and opportunity that 2022 was different incredibly important twelvemonth for AIG. Our colleagues did an exceptional job, peculiarly connected nan Corebridge IPO and nan continued underwriting and operational improvements that are intelligibly showing done successful our financial results. Our travel to beryllium a top-performing institution continues, and I afloat expect 2023 to beryllium different twelvemonth pinch important momentum and advancement crossed nan organization.

With that, I'll move nan telephone complete to Sabra.

Sabra Purtill

Thank you, Peter. Today, I will reappraisal nett finance income, further colour connected our 4th fourth and afloat twelvemonth 2022 results successful superior guidance and besides update you connected nan advancement we are making connected our way to a 10%-plus adjusted return connected communal equity aliases ROCE.

Turning to nett finance income, connected an APTI basis, 4th fourth nett finance income was $3.0 billion, down $331 cardinal aliases 10% compared to 4Q 2021. Similar to trends passim 2022, nan alteration was owed to little replacement finance income, principally connected backstage equity investments, and little enslaved telephone and tender premiums and owe prepayment fees. For nan afloat year, nett finance income connected an APTI ground was $11.0 billion, down $1.9 cardinal owed to nan aforesaid trends.

For nan 4th and nan afloat year, we achieved higher caller money reinvestment rates and complaint resets from floating complaint securities. In 4Q 2022, nett finance income connected fixed maturities and owe and different loans roseate $224 cardinal sequentially, pinch 29 ground points of output improvement, which was up of our 10 to 15 ground constituent forecast. Since 2nd 4th of 2022, erstwhile we began to crook nan curve connected finance yields, nan summation has been 55 ground points.

In 4Q 2022, nan mean caller money output was conscionable complete 6% and astir 173 ground points supra income and maturities. New money rates were astir 157 ground points higher successful General Insurance and 190 ground points higher successful Life and Retirement.

In addition, during nan 4th quarter, we repositioned immoderate of nan General Insurance portfolio to fastener successful higher yields, while maintaining akin in installments value and duration. This resulted successful a humble superior nonaccomplishment of $57 million, but we expect nan portfolio to make higher nett finance income successful 2023 arsenic a result. Given existent marketplace levels, we expect further output uplift of 10 to 15 ground points connected nan consolidated portfolio successful 1Q 2023.

Before I caput into results for nan quarter, I want to statement that successful nan 4th quarter, we eliminated nan one-month reporting lag successful General Insurance International, which had a $100 cardinal affirmative effect connected our GAAP nett income for nan quarter. This alteration did not effect 4Q APTI, which stay connected nan aforesaid reporting ground arsenic nan anterior year. But successful 2023, GI International results will beryllium connected a almanac 4th ground and 1 period different than 2022, which will create immoderate flimsy timing mismatch successful quarterly nett premiums written comparisons, but pinch minimal effect for nan afloat year. Please spot Page 25 of nan financial supplement for much details.

As Peter noted, AIG reported adjusted after-tax income of $1.0 cardinal aliases $1.36 per diluted share. General Insurance delivered APTI of $1.2 cardinal compared to $1.5 cardinal successful nan anterior twelvemonth 4th owed to little finance income, partially offset by a $136 cardinal summation successful underwriting income. Prior twelvemonth improvement was $151 cardinal favorable successful nan 4th quarter, up from $44 cardinal of favorable improvement successful 4Q '21.

Net favorable amortization for nan ADC was $41 million, while North America favorable improvement was $148 million, and International was $38 cardinal adverse, mostly driven by casualty.

Fourth 4th Other Operations adjusted pretax nonaccomplishment of $451 cardinal improved $197 cardinal from past year, contempt $23 cardinal of further expenses related to nan Corebridge separation.

Annualized adjusted ROCE was 7.5% successful 4Q 2022, down from 9.9% successful 4Q 2021, principally owed to little replacement finance income.

Turning to Life and Retirement, beardown income momentum continued successful nan 4th quarter. Life and Retirement APTI was $781 million, down from $969 cardinal successful 4Q 2021, owed to little finance income connected alternatives and different output enhancements, partially offset by higher guidelines finance income and much favorable mortality.

Individual Retirement income were $3.8 billion, a 16% summation complete nan anterior twelvemonth 4th pinch Fixed Annuity income up 78% and Fixed Index income up 34%, adjacent grounds income for some products.

Group Retirement deposits grew 20%, driven by higher out-of-plan Fixed Annuity income and ample scheme acquisitions. The Life Insurance business had coagulated income pinch an improving operation of business successful nan U.S. and continued maturation successful nan UK.

In Institutional Markets, premiums and deposits were $1.6 billion, driven by $1.3 cardinal successful pension consequence transportation activity. New merchandise margins successful L&R were charismatic and successful excess of semipermanent targets, supported by higher caller money yields, including from Blackstone. After years of dispersed compression, L&R spreads are expected to amended successful 2023.

I wanted to make you alert of an update to our LDTI estimate. In nan first 4th of 2023, we will adopt a alteration successful accounting rule for LDTI pinch a modulation day of January 1, 2021. Our existent estimate is that arsenic of September 30, 2022, nan take would summation shareholders' equity betwixt $800 cardinal and $1.3 cardinal and AIG's adjusted shareholders' equity would summation betwixt $1.2 cardinal and $1.7 billion. This summation successful nan estimate has been predominantly driven by superior marketplace movements during 2021 and 2022.

Turning to afloat twelvemonth 2022, AIG reported adjusted after-tax income of $3.6 cardinal aliases $4.55 per diluted stock compared to $4.4 cardinal aliases $5.12 per diluted stock successful 2021. These results see overmuch stronger underwriting profitability successful GI, offset by little replacement finance income, arsenic antecedently described.

General Insurance APTI for nan afloat twelvemonth 2022 was $4.4 billion, up 2% from 2021 owed to nan $1 cardinal summation successful underwriting profitability, offset by little finance income. L&R APTI was $2.7 billion, down from $3.9 cardinal successful 2021, principally because of little finance income.

Other Operations adjusted pretax nonaccomplishment improved astir $400 cardinal successful 2022 owed to little wide operating expenses and higher income connected short-term investments. Full twelvemonth 2022 included further expenses from nan Corebridge separation of $51 million. And successful 2023, we expect an incremental costs of $75 cardinal to $100 cardinal successful Other Operations' GOE related to nan separation.

Adjusted book worth per stock was $73.87 astatine December 31, 2022, up 7% from year-end 2021.

Full twelvemonth adjusted ROCE was 6.5%, down from 8.6% successful 2021, chiefly owed to little replacement finance income, which was down $1.8 cardinal from 2021 aliases astir 340 ground points of ROCE compared to 2021.

At year-end, our superior security subsidiaries stay supra target ranges for statutory capital, pinch GI's U.S. excavation estimated successful nan scope of 4.85 to 4.95 and L&R estimated successful nan scope of 4.10 to 4.20.

In summation to nan beardown financial results, we besides executed connected aggregate superior guidance priorities successful 2022. As Peter described, we established a abstracted indebtedness capitalization building for Corebridge and subsequently reduced AIG holding institution indebtedness by $9.8 billion. This simplification successful AIG indebtedness will little AIG's holding institution liking disbursal from astir $1 cardinal successful 2021 to astir $500 cardinal successful 2023, excluding liking disbursal connected Corebridge issued debt.

In 2022, we besides returned complete $6.1 cardinal to shareholders pinch $1 cardinal of dividends and $5.1 cardinal of stock repurchases, yielding a 10% simplification successful shares outstanding. We ended nan twelvemonth pinch genitor liquidity of $3.7 billion.

Looking ahead, we stay highly committed and laser-focused connected delivering a 10%-plus ROCE aft nan deconsolidation of Corebridge. As Peter and Shane person shared previously, achieving this extremity is based connected sustained and improved underwriting profitability; executing a leaner operating exemplary crossed AIG; separation and deconsolidation of Corebridge; and continued balanced superior management, including reducing AIG communal shares to betwixt 600 cardinal and 650 cardinal shares done repurchases, while targeting indebtedness to full superior leverage astatine nan little extremity of nan 20% to 25% scope station deconsolidation. Progress connected each of these will summation ROCE, on pinch further tailwinds from higher reinvestment yields and replacement returns much accordant pinch semipermanent averages.

As Peter mentioned, disbursal simplification remains an important goal. In nan pursuing years, we expect to execute $300 cardinal of further savings from AIG 200, pinch nan mostly earning successful done 2023; $300 cardinal of AIG firm wide operating disbursal moving to Corebridge upon deconsolidation; and further savings arsenic we modulation to a leaner operating model. As a reminder, each $500 cardinal of disbursal savings equates to 1 constituent of ROCE improvement.

I will now move nan telephone backmost complete to Peter.

Peter Zaffino

Thank you. Michelle, we'll return our first question, please.

Question-and-Answer Session

Operator

Thank you. [Operator Instructions] Our first mobility comes from Elyse Greenspan pinch Wells Fargo. Please proceed pinch your question.

Elyse Greenspan

Hi, thanks. Good morning. My first mobility is connected nan way to nan double-digit ROE target. So nan starting constituent is nan 6.5% from 2022, but I cognize that that does see immoderate publication from L&R and will successful nan adjacent term. So, tin you thief america pinch what nan starting constituent would beryllium if you stripped retired nan net publication and equity of Life and Retirement? Just trying to get a consciousness of nan ROE of nan ongoing business and really nan locomotion and that starting constituent changes, if you weren't including nan Life and Retirement business.

Peter Zaffino

Thanks, Elyse. I would deliberation successful position of really you should deliberation astir this, and for america to get to nan 10% ROE, Sabra outlined successful detail, there's really 3 awesome ways successful which we'll get there. One is done nan underwriting results, nan different is disbursal savings. The different is benignant of nan superior rebalance pinch stock repurchases and different superior management. So you should deliberation astir that arsenic a 300 ground constituent to 350 ground constituent target successful position of america getting to nan double-digit ROCE. Of course, nett finance income tin benefit, and that's much of a timing issue. We've ne'er said, moreover successful nan anterior calls, that publication from accrued NOI. NII will beryllium nan 1 that needs to lend to get america to nan 10%, but I deliberation – I would deliberation of it successful that scope for nan different components.

Elyse Greenspan

Okay. And past my 2nd question, you guys had taken up your nonaccomplishment inclination presumption to 6.5% past quarter. I'm assuming that didn't change, but correct maine if I'm wrong. And Peter, you said to pricing of 6%, which would put written pricing beneath nonaccomplishment trend, but you besides did say, right, that rates sewage amended arsenic we ended nan twelvemonth successful December. So would you expect nan 6% to spell supra nonaccomplishment inclination successful nan first quarter?

Peter Zaffino

Yes. Thank you. The first part, Elyse, we do not alteration our nonaccomplishment costs assumptions from what we had outlined successful nan 3rd quarter, truthful 6.5% remains our view. When you look astatine nan 4th quarter, for illustration you said, wide location was astir 6%. But erstwhile you – you person to return a mates of things into consideration. One is 4th fourth is our seasonally benignant of lowest-sized quarter. But if you look astatine financial lines, for illustration financial lines is moreover passim nan full year, first 4th done fourth, truthful had a small spot much of a publication to nan wide complaint scale successful nan 4th quarter.

Our International was very good balanced. We had beardown complaint successful areas wherever we felt we needed it, which is for illustration property, excess casualty. We're driving complaint arsenic we person been for nan past respective years successful Lexington, nan excess and surplus lines. And past I look astatine nan afloat twelvemonth successful position of North America, nan excess casualty unit property, Lexington, each getting double-digit complaint increases. And truthful for illustration we person been very focused connected nan complaint supra nonaccomplishment costs to proceed to create margin. I deliberation that's been evidenced done nan civilization that we've developed successful position of underwriting excellence.

We are very focused connected making judge that we proceed that, and its position and conditions and adjustments to really we building businesses going forward. December was overmuch stronger than nan first portion of nan quarter, and arsenic we look to January, that momentum is continuing.

Dave, possibly conscionable walk a infinitesimal connected what happened successful Financial Lines and D&O specifically?

David McElroy

Yeah. Thank you, Peter. And convey you, Elyse. To Peter's point, we person to beryllium observant astir generalizations because we are really hitting complaint of a inclination successful astir of our large businesses. The outlier is financial lines. And financial lines, you besides person to unpack a small spot and understand that excess D&O, and excess D&O successful ample nationalist companies is astir apt driving immoderate of nan macro numbers, but it's not driving nan behaviour underneath.

So successful our financial lines business, we person master liability. We person cyber. We person backstage institution business. We person financial institutions. And each those businesses are really getting complaint complete trend. But sometimes, erstwhile you aggregate up nan excess nationalist institution business, it suppresses it. And successful that case, Elyse, it's difficult to rationalize, I'll beryllium very frank. That's a spot where, if you're primary, you're still getting rate. You're still getting level possibly down a small bit, but you person risk-adjusted complaint that's helping.

In nan excess business, it's been very competitive. It's a different benignant of market. And it's really a marketplace that I would opportunity that rhythm negociate and companies that are being thoughtful and request to really wrestle with, whether that's a spot they're going to trade, okay? If nan rates are going down 20% to 30%, it's astir apt influencing immoderate of nan numbers that you look astatine connected an aggregate basis. And wrong that portfolio, your decisions are going to person to beryllium made arsenic to really you waste and acquisition there, okay?

In our case, it represents a mini magnitude of nan portfolio. But I'm conjecting that, that's really wherever nan commoditization of nan business is going to origin a small spot of symptom successful nan 2023, 2024 year, okay? But it's – I do – Peter deed it. We look astatine complaint complete inclination connected a very granular basis, and I deliberation we're comfortable pinch what that intends to our large businesses and moreover successful financial lines, what it intends to our sub-products there, and I deliberation that's an important portion of our story.

Peter Zaffino

Thanks, Dave. And don't forget, for illustration nan cumulative complaint increases we've achieved successful D&O complete nan past 3 years person been northbound of 80%. So again, it's a line, arsenic Dave says, we're laser focused on. We're not going to pursuit nan marketplace down. But nan cumulative complaint increases and separator developed hasn't been afloat recognized, and we're going to look to 2023 pinch a batch of discipline.

Next mobility please.

Operator

Thank you. Our adjacent mobility comes from Paul Newsome pinch Piper Sandler. Your statement is open.

Paul Newsome

Good morning. There's been an tremendous magnitude of conversation, and you evidently did a batch to adhd to astir excess casualty aliases excess of nonaccomplishment reinsurance and – but arsenic a ample relationship commercialized writer, I presume you're utilizing a batch of facultative arsenic well. And I was funny if nan comments that you're making widen into not conscionable benignant of excessive loss, but besides facultative and moreover quota stock arsenic being arsenic impacted arsenic immoderate of nan different pieces of nan business and really that would impact nan AIG?

Peter Zaffino

Thanks, Paul. We do acquisition facultative successful definite segments of our business, but we were really referencing nan halfway treaties. When we look astatine consequence appetite, erstwhile we are reasoning done our expertise to protect nan equilibrium expanse and wherever we want to building treaties, we don't require facultative reinsurance for different segments successful bid to supplement nan halfway structure. So erstwhile I was referencing successful my prepared remarks, nan pact structures, we did an exceptional job. The squad really focused connected modeling changes, inflationary changes and wherever we thought superior was going to beryllium little costly versus much expensive.

An illustration of that would beryllium taking large excess of nonaccomplishment CAT crossed nan world. It gets excessively costly for allocation of capital, and that is thing we moved distant from. So we've built much vertical towers successful North America and successful world and Japan specifically. So I deliberation nan wide marketplace has responded astir to property. Casualty has started to tighten up. I still deliberation that there's ample capacity successful quota shares.

They whitethorn beryllium pinch immoderate tighter position and conditions and ceding commissions aliases by and large, it was placeable. And yes, facultative, I think, has go harder to spot connected spot conscionable based connected nan superior available. But for us, we don't heavy trust connected facultative to present results. It's really our halfway pact structures.

Paul Newsome

Makes sense. Can you besides talk astir nan alteration successful conditions successful commercialized lines? Obviously, AIG led nan marketplace successful changing position and conditions successful commercialized lines. Is nan effect beautiful overmuch afloat location now coming astatine AIG? And person you seen – are you seeing immoderate alteration successful nan marketplace arsenic good for position and conditions that's meaningful benignant of extracurricular pricing change?

Peter Zaffino

I deliberation we've done an exceptional occupation connected nan underwriting broadside pinch position and conditions. I deliberation nan full squad has focused complete nan past respective years arsenic not only – surely pricing's an output, but really we building our security deals, really we attraction connected customer needs, but besides really we customize position and conditions to make judge that we person nan due policies and endorsements successful nan marketplace. I don't deliberation it's over. It's thing that's a nuance, but arsenic we look to nan spot marketplace successful 2023, it's 1 of nan areas wherever erstwhile you study retired rate, you really person to understand nan risk-adjusted implications of complaint increases.

For instance, successful Excess & Surplus lines property, I expect to spot higher deductibles, much upwind deductibles, tighter position and conditions. We've seen what utilized to beryllium each risk, which covered each perils now to sanction perils, and truthful you tin portion retired a batch of sum successful position of erstwhile you're placing it, whether you're trying to lick for upwind aliases quake aliases flood, you don't supply each of nan apparels.

And truthful if you said to me, what's 1 of nan large areas that you'll spot an betterment successful 2023, it will beryllium connected nan position and conditions and really we value those perils. And I deliberation we will offer, peculiarly successful excess and surplus lines, nan due coverage, but we will beryllium restrictive connected position of conditions if we don't consciousness we're getting paid for them. So I don't deliberation it's over.

Paul Newsome

Thank you.

Peter Zaffino

Thanks Paul. Next question.

Operator

Thank you. Our adjacent mobility comes from Erik Bass pinch Autonomous. Please proceed pinch your question.

Erik Bass

Hi. Thank you. Just hoping you could thief america deliberation astir nan guidelines NII trajectory for 2023. So we've seen a bully measurement up successful nan past mates of quarters, and you gave immoderate guidance for nan first quarter. But really overmuch of nan summation is coming from resets connected floating complaint assets? And really overmuch is nan tailwind from higher reinvestment yields and nan portfolio changes that you're making that should proceed to build passim nan year?

Peter Zaffino

Thanks, Erik. As you know, this has been an progressive strategy for us, peculiarly complete nan backmost half of 2022. I deliberation nan squad has done an exceptional job. And Sabra, possibly you tin conscionable supply a small spot of penetration successful position of immoderate of nan NII and nan reinvestment rates.

Sabra Purtill

Yes, happy to do that. And I would conscionable note, we added a caller footnote connected Page 47 of nan financial supplement that gives you nan locomotion of nan output connected fixed maturity securities and loans. So you tin spot nan quarter-to-quarter betterment successful nan portfolio output connected that portfolio, which fundamentally statesman to crook nan curve successful nan 2nd 4th for a step-up successful yields. And we also, there, springiness you nan effect of nan different output enhancements, which year-over-year was astir a $400 cardinal headwind for AIG consolidated NII.

But to spell backmost to your mobility astir nan way forward, and I'll put alternatives to nan side. I mean, those are evidently volatile quarter-to-quarter. But for illustration I said, that was 340 ground points of headwind year-over-year. 2021 was an exceptional twelvemonth for replacement returns, whereas afloat twelvemonth 2022 was astir a 5.6% yield. So much successful statement pinch our mean assumption.

But to spell back, truthful successful nan quarter, arsenic I said nan caller portfolio output aliases nan caller money rates were conscionable supra 6% and astir 173 ground points complete nan assets going forward. And if you look astatine successful nan quarter, 4th fourth 2022 grew astir $160 cardinal conscionable owed to nan complaint resets and astir 14 ground points from nan pickup successful output connected nan portfolio.

Now successful 2023, nan effect is going to really dangle connected nan way and timing of marketplace rates, fed complaint hikes, changes successful in installments spreads arsenic good arsenic nan activity successful nan output curve. As nan GI has sewage a shorter long than L&R, and correct now we've sewage an inverted curve. So depending connected wherever you're investing, and you're going to person different impacts connected your yield.

So what I would conscionable benignant of constituent you to is, for nan afloat year, we are projecting astir $8 cardinal of reinvestment connected nan GI portfolio, $20 cardinal successful Corebridge. And for nan first quarter, we're projecting astir 10 ground points to 15 ground points of output uplift conscionable based connected wherever we are for rates.

Since nan marketplace is expecting further complaint increases, I would – from nan Fed, I would expect to spot much pickup from nan floating complaint statement resets during nan people of nan year. And past for illustration I said, really what we prime up successful nan 2nd aliases 3rd 4th is going to beryllium a usability of really nan style of nan output curve changes.

But nan constituent I would conscionable make successful full is that we are decidedly having a tailwind from higher rates and higher spreads successful nan market. In addition, during nan past respective months, because of nan – fundamentally nan changes successful nan spreads and wherever immoderate of nan opportunities were, we were capable to move up successful value connected nan enslaved portfolio investments while still getting a pickup successful nan output because of nan marketplace environment. So astatine this constituent successful time, I deliberation it's premature to springiness immoderate benignant of existent projection connected a dollar basis. But from a output pickup inclination we're very assured that we'll proceed to spot that during 2023.

Peter Zaffino

Thanks Sabra.

Erik Bass

Thank you. That's helpful. And past secondly, I conscionable was hoping you could thief america deliberation astir nan trajectory for nan different operations nonaccomplishment said earlier and aft nan Corebridge separation. So it sounds for illustration GOE location should spell up successful 2023 because of immoderate of nan Corebridge expenses, possibly that's offset a small spot by liking savings. But past you'll get a large measurement down erstwhile you deconsolidate Corebridge erstwhile nan $300 cardinal comes out. Is that nan correct measurement to deliberation astir it?

Peter Zaffino

Yes, Erik, it is. We – successful Other Operations, deliberation astir it successful a mates of components. I deliberation you've outlined astir of them, is that upon deconsolidation we would person $300 cardinal aliases location thereabouts spell pinch Corebridge. I mean, location could beryllium immoderate step measurement up. I mean, it's difficult successful 2023 to look astatine each 4th because we're building Corebridge, arsenic we've talked astir before, arsenic a stand-alone nationalist company. So those amounts will beryllium successful each quarter, depending connected nan advancement that we're making. So deliberation astir nan $300 million.

I deliberation we'll person savings successful Other Operations passim nan twelvemonth abstracted from that successful nan $100 cardinal to $200 cardinal range. And past arsenic we get to nan early target operating model, we've fixed guidance from nan past that we expect that we'll get astir $500 million, not retired of each – that will not each travel retired of Other Operations. It travel retired of nan operation of what is General Insurance successful nan genitor institution today. But that will return deconsolidation. It will return america to get to nan target operating model. But I deliberation successful nan short run, you should deliberation astir Corebridge's $300 million, and that betwixt $100 cardinal to $200 cardinal of different reductions successful Other Ops is really I would deliberation astir it successful 2023.

Erik Bass

Thank you.

Peter Zaffino

Thanks Erik. Next question.

Operator

Thank you. Our adjacent mobility comes from Alex Scott pinch Goldman Sachs. Your statement is open.

Alex Scott

Hi. Good morning. First 1 I had is conscionable connected nett premium written maturation successful General Insurance. I mean we saw it slow successful 2022, peculiarly towards nan backmost extremity of nan year. And it sounds beautiful interesting, immoderate of nan opportunities you person some successful Validus Re and Lexington. But I conscionable wanted to get benignant of a higher level position from you connected what nan strategy has been to benignant of slow immoderate of that premium maturation successful nan backmost half of this year? And really you spot that perchance inflecting arsenic we spell into 2023?

Peter Zaffino

Thank you for nan question. You person to really look astatine nan afloat year, I believe, successful position of showing nan advancement of what we've done arsenic a company. First and foremost, again, I'll mention it again, which is simply a civilization of underwriting excellence. When we look astatine Commercial pinch a 340 ground constituent betterment successful nan 4th fourth successful position of its action twelvemonth mixed ratio, ex-CATs, 440 for nan year, I mean that's important progress. I mean, we made tremendous improvements successful profitability.

And truthful we've shaped nan portfolio nan measurement we for illustration it, wherever again, nan 4th fourth not each roads lead to financial lines. But again, it was conscionable a disproportionate magnitude of premium comparative to nan wide size. Fourth quarter's small. We saw existent bully maturation successful nan businesses that we want to turn in, which is successful nan excess surplus lines, world specialties. But arsenic we've been talking about, I dream it's evidenced done what we did astatine 1:1, which is why we wanted to put it successful nan prepared remarks, which is I kept talking astir taking aggregate down wherever we didn't deliberation we were getting nan due risk-adjusted returns.

But erstwhile we thought we felt that nan risk-adjusted returns were there, for illustration successful nan reinsurance business, we expanded importantly and expect to spot that done 2023. Can't really foretell nan market, but I don't judge this is each played through. We had a very analyzable 1:1, but you person Japan coming up and nan hardest portion successful position of nan reinsurance marketplace and frankincense past nan superior marketplace connected highest area is going to beryllium Florida astatine 6:1.

And truthful we deliberation there's awesome opportunities successful Excess & Surplus lines proceed to grow. Again, world specialties, unit spot crossed nan world. We'll watch international, but I don't judge that nan pact accrued pricing that happened, which was important astatine 1:1, will play its measurement done nan International business until 2024. Because a batch of nan deals, 60% of it comes up astatine 1:1, was priced disconnected of anterior twelvemonth treaties.

And truthful I deliberation this has momentum. We are incredibly good positioned. We person nary aggregate restrictions. And wherever we spot risk-adjusted returns that are attractive, which we already have, we're going to deploy capital. That was nan full thought of putting much superior successful subsidiaries, and past it goes to different lines of business. I mean, you cross-sell what we do successful casualty, really we play successful these different markets, we person specified tremendous pursuing arsenic lead experts successful underwriting that we believe, crossed nan world our level will beryllium very adjuvant to our clients, and we expect to find really beardown areas for growth.

Alex Scott

That's really helpful. Second 1 I had is much specifically connected casualty and excess casualty pricing. We've heard immoderate peer's benignant of talked astir pricing and expressed nan request for it to reaccelerate. And I deliberation immoderate investors look to beryllium getting a small much cautious astir nan imaginable for continued deceleration there. I felt for illustration your prepared remarks were a small much optimistic. I'd conscionable beryllium willing successful your position connected nan portfolio astatine AIG, what you're seeing successful nan marketplace and wherever you'd expect things to spell there.

Peter Zaffino

We watch it carefully. I mean excess casualty; we're still getting very beardown complaint we person for nan past mates of years. And that didn't extremity successful nan 4th quarter. My prepared remarks were really conscionable focused on; I don't deliberation nan marketplace that we entered successful nan 4th fourth is nan marketplace that we're in. There's been a batch of changes complete nan past 60 days, and for illustration each different statement of business it needs to guidelines connected its own, it needs to create margin. We want to beryllium blimpish successful our position and making definite that nan underwriting position and conditions are appropriate.

But we're watching it carefully. I haven't seen a important downturn successful position of pricing. It's been correct successful nan benignant of aforesaid scope for, arsenic I said, nan past six quarters. And it's thing that we're going to watch very cautiously successful 2023.

Alex Scott

Okay. Thank you.

Peter Zaffino

Okay. We greatly admit nan engagement and each nan questions and admit nan interest. And truthful I conscionable wish everybody a awesome day, and convey you for being here.

Operator

Ladies and gentlemen, this concludes your convention for today. Thank you for your participation. You whitethorn now disconnect.

Editor: Naga



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