Chairman & CEO letter to shareholders

Dear AIG Shareholder:

Following several years of significant transformational work, AIG entered 2022 a stronger, better company focused on continuous and sustainable improvement in our strategic positioning, and in our financial and operational performance. I am very proud of the outstanding results we delivered in 2021 and the value our global colleagues created for our clients, distribution partners, shareholders and other stakeholders.

Your investment in AIG is well-placed as we pursue a future of discovering new potential and leading the industry to new heights of relevance and consequence in the global economy, which will create value for all our stakeholders.

Most impressively, AIG’s improvement was shaped within an ever-changing and highly unpredictable external operating environment. Our industry is central to global economic stability and growth and plays a critical role in supporting communities and helping them re-build when catastrophes (CATs) and other disruptive events occur. 

As risk experts, AIG enables its clients to make intelligent and informed risk decisions, which fuels economic expansion. Spotlighting and elevating the multi-faceted and multi-dimensional risks the world is facing has never been more important than it is today – and AIG is a global leader in these crucial risk explorations.  

Looking back at 2021, our global team successfully addressed several of our strategic imperatives:

  • Progressed underwriting excellence, developed a strong underwriting culture and achieved improved underwriting profitability, all of which is sustainable due to the execution of our deliberate, multi-year and carefully crafted strategy;
  • Continued to execute on a comprehensive reinsurance program to significantly reduce risk to our balance sheet, including concentration risk, and minimize overall volatility, even in the highest CAT years in recent history;
  • Prepared Life & Retirement for an independent, standalone future, including divesting a 9.9 percent stake and establishing a strategic asset management partnership with Blackstone, which enhanced our flexibility regarding an initial public offering (IPO);
  • Advanced our AIG 200 operational programs, and accelerated our progress despite the day-to-day workplace disruptions caused by the pandemic; and
  • Focused on capital management by returning capital to our shareholders through share repurchases and dividends, while at the same time reducing leverage and investing in important growth initiatives.


An underwriting profit was reported every quarter of 2021 despite an environment of ever-increasing natural catastrophe risk

The magnitude – and corresponding results – of AIG’s turnaround is truly unprecedented. AIG’s turnaround is apparent in our financial performance. It is apparent in how our leaders are driving the organization forward. It is apparent in how we are investing and preparing for a more dynamic future. It is apparent in the commitments we are making to improve our communities, invest in our colleagues and preserve our environment. 

AIG – Pivot to Sustainable Profitability 

In 2021, AIG pivoted to profitable growth – building on a foundation of underwriting excellence, operational excellence, volatility reduction and talent enhancement.

While there is more work to be done, our team has demonstrated an ability to execute on complex priorities under any conditions, which should provide our stakeholders with great comfort that they can trust this team to continue to deliver on our strategic priorities. 

The most instructive way to showcase our pivot is to highlight the steady improvement in our financial performance and financial metrics over the past several years. Our improvement is evident in our key measures of underwriting profitability, operational improvement, top-line growth, shareholder return, capital management and in the efficiencies gained through AIG 200 because of prudent investments designed to achieve improved business processes. 

The 2021 narrative begins with Total Shareholder Return (TSR). In 2021, AIG’s TSR was 54 percent compared to 29 percent for the S&P 500 and 18 percent for the S&P 500 Property & Casualty peer and industry indices. Creating such strong TSR is a very positive step for AIG and demonstrates our significant progress.

We arrived at this TSR because of our commitment to exceptional execution of our portfolio remediation strategy, followed by our portfolio replacement plans, where we underwrote risks that were aligned with our risk tolerance. In addition, we improved terms and conditions, focused on obtaining appropriate premium for the risks we underwrote and we customized a comprehensive reinsurance program to complement our underwriting.

Commercial Lines new business growth 27%, rate increases 13%, North America retention 82%, International retention 86%

There are other metrics that tell an even more compelling and instructive investment narrative and provide us with confidence as we push forward with our vision for the future. 

First, Net Income Attributable to AIG Common Shareholders was $9.4 billion, or $10.82 per diluted common share in 2021, compared to a $6.88 per share loss from the previous year.

Second, General Insurance improved its Combined Ratio by 15.6 points from 2018 to 2021, and General Insurance improved its Accident Year Combined Ratio (AYCR)* 8.7 points from 2018 to 2021, from 99.7 percent to 91.0 percent. We will achieve our goal of sub-90 AYCR on a full-year basis in 2022, which is ahead of original guidance.

Third, General Insurance Net Premiums Written (NPW) grew 13 percent in 2021, including an excellent 18 percent growth in Commercial Lines. We achieved this NPW growth while continuing to reduce limits deployed. This reduction totaled more than $1 trillion over the last few years, which is unprecedented and accounts for the significant volatility reduction we achieved and our ability to attract high-quality reinsurers.

Fourth, Life & Retirement generated Adjusted Pre-Tax Income of $3.9 billion in 2021, which is 11 percent higher than the previous year. Premiums and Fees were $9.1 billion in 2021, which is 21 percent higher than the previous year. In addition, Return on Adjusted Segment Common Equity* for the year was 14.2 percent, which puts Life & Retirement in the top quartile among its peer group in profitability. This business continues to operate as a leading retirement savings and protection company as it prepares for a standalone future.

Fifth, in 2021, we returned $3.7 billion in capital to shareholders through share repurchases and dividends, while reducing financial leverage 470 basis points from 29.3 percent at year-end 2018 to 24.6 percent at year-end 2021 and repaying $4 billion of debt. In addition, we reached $10.7 billion of excess liquidity in 2021, which is before any Life & Retirement IPO proceeds.

Finally, and important to our colleague, and client and broker experience improvement efforts, and overall operating excellence and efficiency, AIG 200 remains on track to provide $1 billion of run-rate savings with a $1.3 billion cost-to-achieve. During the pandemic, we made significant progress across the AIG 200 operational programs, particularly with respect to IT modernization, and we compressed our transformation to accelerate cloud migration and digitization of workflows. AIG 200 will make AIG an easier company to do business with while improving the day-to-day work experience of our colleagues. 

Overall, I am extremely proud of these results. While we recognize there is more progress to be made on our journey to be a top performing company, the stage has been set for a successful 2022.

AIG – Delivering on Excellence

There are no shortcuts to excellence.

Excellence requires a well-executed strategy with multiple, disciplined steps of progress over a period of time and a willingness to adapt to an ever-changing external landscape. At AIG, we are striving to be an excellence-based and results-oriented company – in everything we do.

We strive for excellence and positive results in our financial performance, in how our colleagues serve our clients and distribution partners, in our performance as evaluators and underwriters of risk and in our performance as an agent of change in helping the world navigate global challenges and environmental, social and governance (ESG) issues.  

At the same time, we are committed to operating with transparency and setting realistic and achievable goals.

“AIG 200 will make AIG an easier company to do business with while improving the day-to-day work experience of our colleagues.”

Leading change in a changing world, however, requires being a company of action – and setting a standard with actions. We believe that insurance companies, like AIG, can be a catalyst for positive change as it relates to sustainability advancements and renewable energy expansion. We are investing in education and guidance toward logical and sensible paths forward for the clients and industries we serve.

AIG is focused on the realities of climate change and its impact on the insurance industry. Data about increasing CAT frequency and severity across the globe is unambiguous, and therefore, we must respond proactively and intelligently. The insurance industry has experienced a record number of severe CAT losses in recent years. Since 2012, there have been 12 CAT events with insured losses exceeding $10 billion and ten of those occurred between 2017 and 2021i. Total CAT losses were approximately $120 billion in 2021, which is the second highest total of all timeii.

Furthermore, 2021 was the sixth warmest year on record since the National Oceanic and Atmospheric Administration (NOAA) began tracking global temperatures in 1880iii. Hurricane Ida, estimated at $36 billion of insured losses, was the third largest hurricane on record. In North America, $17 billion of winter weather losses was the largest on record for this peril. And, $13 billion of insured losses for European flooding was the costliest disaster on record for the continentiv

This data is why we committed to achieving net zero greenhouse gas emissions by 2050 or sooner across AIG’s operations as well as our global underwriting and investment portfolios. As we execute on these milestones, we are committed to using science-based emissions reduction targets, aligning with the latest climate science to meet the goals of the Paris Agreement.

To ensure that AIG remains at the center of these important global conversations, we also added diverse voices to our already strong Executive Leadership Team. Currently, 50 percent of our Executive Leadership Team is female or ethnically diverse.

In June, we added Claude Wade as Executive Vice President, Global Head of Operations & Shared Services and Chief Digital Officer. In July, Sabra Purtill was promoted to Executive Vice President, Chief Risk Officer. In October, we announced Mark Lyons would become Executive Vice President, Global Chief Actuary & Head of Portfolio Management and Shane Fitzsimons would become Executive Vice President, Chief Financial Officer as of January 1, 2022. On the same date, Rose Marie Glazer was promoted to Executive Vice President, Chief Human Resource Officer. And, in early 2022, Constance Hunter joined our Executive Leadership Team in the newly created position of Executive Vice President, Global Head of Strategy & ESG.  

This same commitment to diversity and allyship was behind the action we took in August 2021 with regard to the AIG Women’s Open. Together, AIG and our partner, The R&A, increased the purse to be the largest prize fund in 2021 in women’s major championship golf. The AIG Women’s Open is one of the most prestigious and celebrated golf championships in the world. AIG is committed to serving as allies to women in golf, in business and in the communities where we live and work. Striving for pay equity and highlighting the achievements of successful women are critical components of this commitment and part of AIG’s core values.

Our commitment to ESG is central to discovering new potential.

AIG – Discovering New Potential

Just as important as AIG’s financial transformation is our ongoing cultural transformation.

Our global colleagues conduct business in approximately 70 countries and jurisdictions, and they are committed to casting a positive shadow on all corners of a complex and dynamically changing world. This deep commitment is at the heart of AIG’s Purpose Statement, which serves as the North Star in our journey to become a top performing company.

AIG’s Purpose Statement is: To Discover New Potential by Reimagining What AIG Can Do For You.  

We seek to create meaningful impacts during critical moments, such as our response during catastrophes. Our Purpose seeks to define the role we aspire to have in our industry, as well as in our global communities. We recognize that it is not just about winning, it is about how we win. 

We will win with excellence, ethics and integrity.

Discovering New Potential” represents the opportunity for us to build upon the work we do today with a view towards what insurance can do in the future.  This empowers us to unveil opportunities for our clients and distribution partners, as well as opportunities for our colleagues and communities. “Reimagining What AIG Can Do For You” underscores our commitment to being more client-, community- and colleague-centric. 

AIG is a Purpose- and Values-driven company and that shows up in our daily activities and behaviors through our connections to clients, distribution partners, communities and each other. A strong financial performance and a strong commitment to ethical corporate behavior are the cornerstone of AIG’s culture and purpose. 

To support our Purpose, our Values set clear expectations for what it means to work at AIG and to encourage the behaviors required to drive change. These Values are authentic to AIG – simple principles that amplify our strengths and can be easily integrated into day-to-day activities, attitudes and processes.

Our Purpose and Values define the role we aspire to have in our industry, as well as our societies at large, and will guide us toward our promising future.

AIG – A Promising Future

I am proud to be AIG’s Chairman & Chief Executive Officer and to lead AIG into its promising future. I appreciate the support of our Board of Directors and I am grateful for the strong leadership shown by my Executive Leadership Team. Most importantly, I appreciate the hard work and valuable contributions from our global colleagues, and the commitment to excellence they demonstrate every day.

The world around us is challenging our perspectives on risk and AIG is ready to manage complex issues that were barely imaginable a few years agoThis operating environment has also brought about new opportunities for industry leadership and value creation for our shareholders, clients, distribution partners, colleagues and communities.

In this re-envisioned world, insurance is more than a way for clients to handle what can go wrong, it’s a catalyst for all that can go right. This is the AIG that tackles risk and the AIG that Discovers New Potential – this is the AIG that will create long-term value for all its stakeholders.

Thank you for your investment of trust in AIG.


Peter Zaffino

Chairman & Chief Executive Officer
American International Group, Inc.


* These are non-GAAP financial measures. The definition and reconciliation of Accident Year Combined Ratio to the most comparable GAAP measure are on pages 58 and 91, respectively, of the 2021 Form 10-K and on pages 346 and 348 of this Annual Report. The definition and reconciliation of Return on Adjusted Segment Common Equity to the most comparable GAAP measure are included on pages 346 and 347 of this Annual Report.


i Aon. Catastrophe Insight, November 11, 2021.

ii Munich Re. Hurricanes, cold waves, tornadoes: Weather disasters in USA dominate natural disaster losses in 2021, January 10, 2022.

iii NOAA. Assessing the Global Climate in 2021, January 13, 2022.

iv Aon. 2021 Weather, Climate and Catastrophe Insight, January 25, 2022.