AIG reported Q4 earnings with a net loss of $60mn vs. $922mn in profits in the same quarter of 2019. General insurance adjusted pre-tax income rose 4% YoY in Q4 to $809mn due to higher net investment income. But this was offset by catastrophe costs totaling $545mn, driven by hurricanes and the pandemic. General insurance underwriting income for the quarter fell across North America while it rose internationally. For the full year, net losses were at $6bn “primarily driven by a $6.7bn after-tax loss from the sale and deconsolidation of Fortitude Group Holdings LLC (Fortitude) on June 2, 2020”. AIG received $2.2bn in consideration for the above sale.
CEO Brian Duperreault said, “AIG’s fourth quarter and full year 2020 operating results demonstrate the continued progress we are making to position AIG for long-term, sustainable and profitable growth. We are effectively managing the impacts of COVID-19 and natural catastrophes and remain well capitalized in this environment of unprecedented uncertainty.” AIG Parent liquidity stood at approximately $10.5bn compared to $7.6bn at December 31, 2019. AIG stated that in December 2020, they repaid $708mn in principal on its 6.4% 2020s and on February 1, 2021 they repaid $1.5bn in principal on its 3.3% 2021s. Total debt and preferred stock leverage at end-2020 was 28.4%. The board also declared a quarterly cash dividend of $0.32/share. AIG’s 5.75% 2048s were up 0.2 to 115.14, yielding 3.2%
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