What You Need to Know
- The Life and Retirement unit posted $716 million in adjusted after-tax income.
- The total yield on the investments behind AIG variable and indexed annuities was 4.45%.
- Annuity premiums and deposits were up sharply.
American International Group continues to move toward selling a large stake in its Life and Retirement business to investors by the end of the second quarter.
The size of the initial public offering will depend on market conditions, Peter Zaffino, AIG’s CEO, told securities analysts today.
“We continue to expect to retain a greater-than-50% interest immediately following the IPO,” Zaffino said.
The Life and Retirement business would pay a cash dividend of $8.3 billion to AIG, and it should still have enough resources to pay annual dividends of $400 million to $600 million to its shareholders, Zaffino predicted.
The business would fund the cash dividend to AIG by issuing bonds.
Zaffino said AIG wants the Life and Retirement business to do well.
“Our goal remains to achieve a successful IPO of a business with a capital structure that is consistent with its industry peers,” he said. “Life and Retirement has a strong balance sheet and limited exposure to legacy liabilities, and its insurance operations have a history of strong cash flow generation.”
Zaffino spoke to securities analysts during a conference call AIG held to go over results for the fourth quarter of 2021 with securities analysts. The New York-based insurer streamed the call online and has posted a recording on its website.
The comments about the Life and Retirement IPO are similar to what Zaffino said during the conference call AIG held to discuss its results for the third quarter of 2021.