Upcoming AWS Coverage on The Allstate Post-Earnings Results

LONDON, UK / ACCESSWIRE / November 11, 2016 / Active Wall St. announces its post-earnings coverage on American International Group, Inc. (NYSE: AIG). The company reported its financial results for the third quarter fiscal 2016 (Q3 FY16) on November 02, 2016. The New York-based company's operating revenues and after-tax operating income register a 3% y-o-y and 59% y-o-y growth, respectively. Register with us now for your free membership at: http://www.activewallst.com/register/.

One of American International Group's competitors within the Property & Casualty Insurance space, The Allstate Corp. (NYSE: ALL), reported on November 02, 2016, its financial results for the quarter ended September 30, 2016. AWS will be initiating a research report on The Allstate in the coming days.

Today, AWS is promoting its earnings coverage on AIG; touching on ALL. Get our free coverage by signing up to:

http://www.activewallst.com/registration-3/?symbol=AIG

http://www.activewallst.com/registration-3/?symbol=ALL

Earnings Reviewed

During the three months ended in September 30, 2016, AIG reported operating revenues of $13.60 billion compared to $13.18 billion recorded at the end of Q3 FY15. The company's pre-tax operating income surged to $1.61 billion in Q3 FY16 from $848 million in the year ago reported quarter.

The multinational insurance corporation reported after-tax operating income of $1.10 billion, or $1.00 per diluted share, in Q3 FY16 compared to $691 million, or $0.52 per diluted share in Q3 FY15. Despite registering a robust year-over-year growth after-tax, operating income per diluted share fell short of market estimates of $1.21 per diluted share.

Net income for Q2 FY16 came in at $462 million, or $0.42 per diluted share, compared to net loss of $231 million, or $0.18 loss per diluted share in the prior year's comparable quarter. The company's return on equity (ROE) came in at 2.1% at the end of Q3 FY16 compared to a negative ROE of 0.9% at the close of Q3 FY15. Additionally, AIG's book value per share (excluding AOCI and DTA and including dividend growth) increased 1% year-over-year to stand at $62.39 as on September 30, 2016.

Segment Performance

The company's Commercial Insurance segment pre-tax operating income increased 23% y-o-y to $729 million in the reported quarter. However, net premiums written fell 17% y-o-y to $4.36 billion in Q3 FY16 due to the continued improvement of the risk selection strategy. During the quarter, the segment faced headwinds due to non-renewal of certain underperforming classes of business, increased use of reinsurance, and adherence to underwriting discipline in competitive market conditions.

In Q3 FY16, pre-tax operating income at the company's Retirement sub-segment surged 74% y-o-y to $1.11 billion, as the sub-segment witnessed higher net positive adjustment from the review and update of actuarial assumptions, and improved performance of alternative investments in hedge funds. The Premiums also grew 22% y-o-y to $45 million on higher immediate annuity premiums in the Fixed Annuities product line.

The Life sub-segment reported pre-tax operating income of $98 million in Q3 FY16 compared to operating loss of $40 million in the year-ago period. Furthermore, premiums grew 17% y-o-y in Q2 FY16 to $791 million, led by growth in international life and health sales.

During Q3 FY16, AIG's Personal Insurance sub-segment reported pre-tax operating income of $178 million compared to $62 million in the prior year's quarter. However, net premiums written fell 3% y-o-y to $2.92 billion due to lower contribution from the Accident and Health business.

AIG's Corporate and Other segment's Q3 FY16 pre-tax operating loss widened to $522 million from $396 million in the last year's quarter.

Dividend and Share Buyback

In a separate earnings press release on November 02, 2016, AIG's Board of Directors declared cash dividend of $0.32 per share. The dividend is payable on December 22, 2016, to shareholders of record on December 08, 2016.

Board of Directors also authorized a hike in repurchase authorization of AIG Common Stock to approximately $4.4 billion from previous repurchase authorization limit of $3.0 billion.

During Q3 FY16, the company returned total capital of $2.6 billion to its shareholders in form of repurchases of AIG's Common Stock amounting to $2.3 billion and $338 million in dividends. Furthermore, the company repurchased an additional $946 million of common stock during October 01, 2016, to November 02, 2016, period resulting in a total year-to-date capital return of $10.8 billion.

Sale of United Guaranty

On August 15, 2016, AIG announced that it had entered into an agreement to sell its 100 percent interest in United Guaranty Corporation (UGC) to Arch Capital Group Ltd. (NASDAQ: ACGL) for total consideration of $3.4 billion. As per terms of the deal AIG will receive $2.2 billion in cash, along with $250 million of newly issued Arch perpetual preferred stock or $250 million in pre-closing dividends, and $975 million of newly issued Arch convertible non-voting common-equivalent preferred stock.

Stock Performance

American International Group's share price finished yesterday's trading session at $63.21, climbing 3.74%. A total volume of 12.46 million shares exchanged hands, which was higher than the 3 months average volume of 5.97 million shares. The stock has advanced 7.99% and 14.83% in the last three months and past six months, respectively. Furthermore, since the start of the year, shares of the company have advanced 3.78%. The stock has a dividend yield of 2.02% and currently has a market cap of $70.47 billion.

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SOURCE: Active Wall Street