American International Group, Inc.

Ladies and gentlemen, good day and welcome to AIG's first quarter 2020 financial results conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Ms. Fabra Purcell, head of investor relations. Please go ahead, ma'am.

Thank you. Good morning and thank you all for joining us today. Our call today will cover AIG's first quarter 2020 financial results announced yesterday afternoon. The news release, financial results presentation, and financial supplement were posted on our website at www.aig.com, and the 10-Q will be filed later today. Our speakers today are Brian Dubereau, CEO, Gitter Zafino, President and COO of AIG and CEO, General Insurance, Kevin Hogan, CEO, Life and Retirement, and Mark Lyons, Chief Financial Officer. We will have time for Q&A after their remarks. Today's call may contain forward-looking statements relating to company performance, strategic priorities, business mix, and market conditions, including the effects of COVID-19 on AIG. These statements are not guarantees of future performance or events and are based on management's current expectations. Actual performance and events may differ materially. Factors that could cause results to differ include those described in our 2019 Annual Report on Form 10-K, and other recent filings made with the SEC, inclusive of the effects of COVID-19 on AIG, which cannot be fully determined at this time. AIG is not under any obligation and expressly disclaims any obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise. Additionally, some remarks will refer to non-GAAP financial measures. The reconciliation of such measures to the most comparable gap figures is provided in a news release and other financial results material, all of which are available on our website. I'll now turn the call over to Brian.

Good morning, everyone. It's been an extraordinary few months since we last spoke. Before we start, I want to say that I hope you and your families are healthy and that you've been able to adjust to the new normal that COVID-19 is creating for all of us. This crisis has been heartbreaking to witness as it unfolds across the globe. It's a tough time for everyone, and the uncertainty about how long it will last and what life will be like afterward makes this time even harder. I've witnessed a lot in my 40-plus year career in the insurance industry, but this health and humanitarian crisis, which quickly became a threat to the world economy, is like nothing any of us has experienced. We believe COVID-19 will be the single largest cat loss the industry has ever seen, and it will continue to have significant global economic ramifications for the foreseeable future. Having said that, it's been heartwarming to see the compassion and empathy that has emerged, the strength of the first responders, healthcare providers, and other essential workers on the front lines risking their lives to help others, and the people all over the globe sharing resources and helping each other are some examples of how we've come together to fight a common enemy. In many ways, this crisis has shown us that we have more in common than we do differences. AIG is not immune to this health threat. We've been fortunate to have a relatively small number of colleagues who tested positive for COVID-19. Our hearts go out to them and particularly to the families of a few who sadly passed away. Insurance companies play an important role during times of stress by helping companies and individuals manage risk and reassess risk appetite. The industry leadership AIG has demonstrated over the last couple of years continues, and we will take a leading role in helping clients and other industry partners manage through this unprecedented time. Turning to the topic of this call, I want to thank you for joining us. Our team is working remotely, so we are in different locations this morning. In addition to my remarks, you will hear from Peter, Kevin, and Mark. And Doug DeShiel, our Chief Investment Officer, will be available for Q&A. We will lengthen today's call because we want to make sure there is sufficient time to cover our usual topics in addition to COVID-19, and we want to answer your questions. I want to be very clear at the outset that AIG was in a strong financial position before this crisis began. remains and remains in a strong financial position today. We have been and will continue to be laser focused on actions that further strengthen our liquidity and capital. Our focus on fundamentals and the foundational work we have done since late 2017 to de-risk AIG and prudently protect our balance sheet has served us well as we navigate this crisis. Because of this ongoing work, I believe AIG will emerge from COVID-19 stronger and more unified with greater perspective, wisdom, and gratitude. Rises reveals character, and our leaders across AIG have shown incredible strength of character as they help colleagues adjust to new working conditions, assess what we need to do to keep AIG operating seamlessly, and focus on what we do best, which is helping our clients manage their most complex risks, especially through difficult times. Our executive leadership team in particular has navigated through many catastrophes, and they are applying their knowledge and experience as we work hard to protect our colleagues, serve our clients, keep an open line for communications with our global regulators and policymakers, and generally be a good global citizen. Our global workforce has shown tremendous resiliency over the last few months. Helping our colleagues has been top of mind for our executive team. In mid-March, we issued a $500 grant to each colleague globally, which equates to $30 million in the aggregate to help with unanticipated costs. We are also focused on helping communities where we live and work. To date, we have contributed masks, gowns, gloves, and other much-needed personal protective equipment. As we moved to remote working, we donated unused produce, perishables, and dairy products from our cafeterias and pantries to local shelters and other charitable organizations. We recently reinstated the AIG Foundation. We'll be making an inaugural $5 million contribution. The foundation's primary focus for the foreseeable future will be on COVID-19 relief efforts across the globe. Turning to our first quarter results, we reported net income of $1.98 per pound share and adjusted after-tax operating income of 11 cents per common share. Although our operating results were negatively impacted by COVID-19, our net income positively benefited from successful hedging strategies in our investment portfolio. It is important to note that our core business delivered strong results, and we are taking decisive actions to ensure that we do not lose the significant momentum we had as we moved into 2020. which continued through the first quarter of this year. While not easy, we took a very prudent yet robust approach to analyzing COVID-19 impacts across AIG. This is a very unique catastrophe and we will continue to be thoughtful and thorough as we move through each quarter while this ongoing event evolves. Forecasting the impact of COVID-19 in future quarters is difficult. In light of this week, and the continued uncertainty across the global economy, we are withdrawing the guidance we provided on our last earnings call, including our adjusted return on common equity outlook. Having said that, in general insurance, we do expect to see continued improvement in the combined ratio, ex-cats for 2020, and I believe that our global capabilities and expertise, coupled with our strong capital position, will be in even greater demand when COVID-19 begins to stabilize. In life and retirement, while there will continue to be short-term effects of volatile markets, we do not believe that the impact of COVID-19 will result in a material reduction of our long-term return profile. With respect to our investment portfolio, it is well matched to our liabilities and is diversified by asset class and industry sector, making it resilient to a credit downturn. Furthermore, spreads tightened through the end of April, resulting in a 70% or $6.5 billion recapture of the marks of market loss reflected on our March 31 balance sheet for fixed income available for sale securities. Looking ahead, the ongoing work we are doing, particularly as part of AIG 200, will result in AIG not only emerging from this crisis as a stronger, better company, but also as a global insurer of choice with significant capital and financial flexibility. I am very confident AIG will successfully move forward on its journey to become a top-performing company and a leading insurance franchise. With that, I will turn it over to Peter.