AIG US Equity☆

ITEM 7 |Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Statement Regarding Forward-Looking Information and Factors That May Affect Future Results

This Annual Report on Form 10-K and other publicly available documents may include, and members of management may from time to time make and discuss, statements which, to the extent they are not statements of historical or present fact, may constitute “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward‐looking statements are intended to provide management’s current expectations or plans for future operating and financial performance, based on assumptions currently believed to be valid and accurate. Forward-looking statements are often preceded by, followed by or include words such as “will,” “believe,” “anticipate,” “expect,” “expectations,” “intend,” “plan,” “strategy,” “prospects,” “project,” “anticipate,” “should,” “guidance,” “outlook,” “confident,” “focused on achieving,” “view,” “target,” “goal,” “estimate” and other words of similar meaning in connection with a discussion of future operating or financial performance. These statements may include, among other things, projections, goals and assumptions that relate to future actions, prospective services or products, future performance or results of current and anticipated services or products, sales efforts, expense reduction efforts, the outcome of contingencies such as legal proceedings, anticipated organizational, business or regulatory changes, the effect of catastrophic events, both natural and man-made, and macroeconomic and/or geopolitical events, anticipated dispositions, monetization and/or acquisitions of businesses or assets, the successful integration of acquired businesses, management succession and retention plans, exposure to risk, trends in operations and financial results, and other statements that are not historical facts.

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All forward-looking statements involve risks, uncertainties and other factors that may cause actual results and financial condition to differ, possibly materially, from the results and financial condition expressed or implied in the forward-looking statements. Factors that could cause actual results to differ, possibly materially, from those in specific projections, targets, goals, plans, assumptions and other forward-looking statements include, without limitation:

•the impact of adverse developments affecting economic conditions in the markets in which we operate in the U.S. and globally, including financial market conditions, macroeconomic trends, fluctuations in interest rates and foreign currency exchange rates, inflationary pressures, including social inflation, pressures on the commercial real estate market, and an economic slowdown or recession and geopolitical events or conflicts;

•the occurrence of catastrophic events, both natural and man-made, which may be exacerbated by the effects of climate change;

•disruptions in the availability or accessibility of our or a third party’s information technology systems, including hardware and software, infrastructure or networks, and the inability to safeguard the confidentiality and integrity of customer, employee or company data due to cyberattacks, data security breaches or infrastructure vulnerabilities;

•our ability to effectively implement technological advancements, including the use of artificial intelligence (AI), and respond to competitors' AI and other technology initiatives;

•the effects of changes in laws and regulations, including those relating to privacy, data protection, cybersecurity and AI, and the regulation of insurance, in the U.S. and other countries in which we operate;

•our ability to successfully dispose of, monetize and/or acquire businesses or assets or successfully integrate acquired businesses, and the anticipated benefits thereof;

•concentrations in our investment portfolios, including our continuing equity market exposure to Corebridge Financial, Inc. (Corebridge);

•our reliance on third-party investment managers;

•changes in the valuation of our investments;

•our reliance on third parties to provide certain business and administrative services;

•availability of adequate reinsurance or access to reinsurance on acceptable terms;

•our ability to adequately assess risk and estimate related losses as well as the effectiveness of our enterprise risk management policies and procedures;

•changes in judgments or assumptions concerning insurance underwriting and insurance liabilities;

•concentrations of our insurance, reinsurance and other risk exposures;

•nonperformance or defaults by counterparties;

•the effectiveness of strategies to retain and recruit key personnel and to implement effective succession plans;

•difficulty in marketing and distributing products through current and future distribution channels;

•actions by rating agencies with respect to our credit and financial strength ratings as well as those of its businesses and subsidiaries;

•changes in judgments concerning the recognition of deferred tax assets and the impairment of goodwill;

•our ability to address evolving global stakeholder expectations and regulatory requirements with respect to environmental, social and governance matters;

•the effects of sanctions and the failure to comply with those sanctions;

•our ability to effectively implement restructuring initiatives and potential cost-savings opportunities;

•changes to sources of or access to liquidity;

•changes in accounting principles and financial reporting requirements or their applicability to us;

•changes to tax laws in the U.S. and other countries in which we operate;

•the outcome of significant legal, regulatory or governmental proceedings;

•our ability to effectively execute on sustainability targets and standards;

•the impact of epidemics, pandemics and other public health crises and responses thereto; and

•such other factors discussed in:

–Part I, Item 1A. Risk Factors of this Annual Report;

–this Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) of this Annual Report; and

–our other filings with the Securities and Exchange Commission (SEC).

Forward-looking statements speak only as of the date of this report, or in the case of any document incorporated by reference, the date of that document. We are not under any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Additional information as to factors that may cause actual results to differ materially from those expressed or implied in any forward-looking statements is disclosed from time to time in other filings with the SEC.

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INDEX TO ITEM 7

Page

Use of Non-GAAP Measures 38

Critical Accounting Estimates 40

Executive Summary 47

Overview 47

Regulatory, Industry and Economic Factors 47

Consolidated Results of Operations 48

Business Segment Operations 53

General Insurance 54

Other Operations 61

Investments 62

Overview 62

Investment Highlights in 2024 62

Investment Strategies 62

Credit Ratings 68

Insurance Reserves 70

Loss Reserves 70

Liquidity and Capital Resources 74

Overview 74

Liquidity and Capital Resources Highlights 74

Analysis of Sources and Uses of Cash 75

Liquidity and Capital Resources of AIG Parent and Subsidiaries 76

Credit Facilities 77

Contractual Obligations 77

Off-Balance Sheet Arrangements and Commercial Commitments 78

Credit Ratings 79

Financial Strength Ratings 80

Regulation and Supervision 80

Dividends 80

Repurchases of AIG Common Stock 80

Dividend Restrictions 81

Enterprise Risk Management 81

Overview 81

Risk Governance Structure 81

Risk Appetite, Limits, Identification and Measurement 81

Credit Risk Management 82

Market Risk Management 82

Liquidity Risk Management 84

Operational Risk Management 84

Business and Strategy Risks 84

Insurance Risks 85

Glossary 88

Acronyms 90

Throughout the MD&A, we use certain terms and abbreviations, which are summarized in the Glossary and Acronyms.

We have incorporated into this discussion a number of cross-references to additional information included throughout this Annual Report to assist readers seeking additional information related to a particular subject.

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ITEM 7 | Use of Non-GAAP Measures

Use of Non-GAAP Measures

Throughout this MD&A, we present our financial condition and results of operations in the way we believe will be most meaningful and representative of our business results. Some of the measurements we use are “non-GAAP financial measures” under SEC rules and regulations. GAAP is the acronym for “generally accepted accounting principles” in the United States. The non-GAAP financial measures we present may not be comparable to similarly-named measures reported by other companies.

We use the following operating performance measures because we believe they enhance the understanding of the underlying profitability of continuing operations and trends of our segments. We believe they also allow for more meaningful comparisons with our insurance competitors. When we use these measures, reconciliations to the most comparable GAAP measure are provided on a consolidated basis in the Consolidated Results of Operations section of this MD&A.

Book value per share, excluding investments related cumulative unrealized gains and losses recorded in Accumulated other comprehensive income (loss) (AOCI) adjusted for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets (collectively, Investments AOCI) (Adjusted book value per share) is used to show the amount of our net worth on a per share basis after eliminating the fair value of investments that can fluctuate significantly from period to period due to changes in market conditions. In addition, we adjust for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets held by AIG in support of Fortitude Re’s reinsurance obligations to AIG (Fortitude Re funds withheld assets) since these fair value movements are economically transferred to Fortitude Re. Adjusted book value per share is derived by dividing total AIG common shareholders’ equity, excluding Investments AOCI (AIG adjusted common shareholders' equity) by total common shares outstanding.

Book Value per share, excluding Goodwill, Value of business acquired (VOBA), Value of distribution channel acquired (VODA) and Other intangible assets (Tangible book value per share) is used to provide a useful measure of the realizable shareholder value on a per share basis. Tangible book value per share is derived by dividing Total AIG common shareholders’ equity, excluding intangible assets (AIG tangible common shareholders’ equity) by total common shares outstanding.

Book Value per share, excluding Investments AOCI, Goodwill, VOBA, VODA and Other intangible assets (Adjusted tangible book value per share) is used to provide a useful measure of the realizable shareholder value on a per share basis after eliminating the fair value of investments that can fluctuate significantly from period to period due to changes in market conditions and Fortitude Re funds withheld assets since these fair value movements are economically transferred to Fortitude Re. Adjusted tangible book value per share is derived by dividing AIG adjusted common equity, excluding intangible assets, (AIG adjusted tangible common shareholders’ equity) by total common shares outstanding.

Book value per share, excluding Investments AOCI, deferred tax assets (DTA) and AIG’s ownership interest in Corebridge (Core operating book value per share) is used to show the amount of our net worth on a per share basis after eliminating Investments AOCI, DTA and AIG’s ownership interest in Corebridge. We believe this measure is useful to investors because it eliminates the fair value of investments that can fluctuate significantly from period to period due to changes in market conditions. We also exclude the portion of DTA representing U.S. tax attributes related to net operating loss carryforwards (NOLs), corporate alternative minimum tax credits (CAMTCs) and foreign tax credits (FTCs) that have not yet been utilized. Amounts for interim periods are estimates based on projections of full-year attribute utilization. As NOLs, CAMTCs and FTCs are utilized, the corresponding portion of the DTA utilized is included. We exclude AIG’s ownership interest in Corebridge since it is not a core long-term investment for AIG. Core operating book value per share is derived by dividing total AIG common shareholders’ equity, excluding Investments AOCI, DTA and AIG’s ownership interest in Corebridge (AIG core operating shareholders’ equity) by total common shares outstanding.

Return on equity – Adjusted after-tax income excluding Investments AOCI (Adjusted return on equity) is used to show the rate of return on common shareholders’ equity excluding Investments AOCI. We believe this measure is useful to investors because it eliminates the fair value of investments which can fluctuate significantly from period to period due to changes in market conditions. Adjusted return on equity is derived by dividing actual or, for interim periods, annualized adjusted after-tax income attributable to AIG common shareholders by average AIG adjusted common shareholders’ equity.

Return on Equity – Adjusted After-tax Income, Excluding Goodwill, VOBA, VODA and Other Intangible assets (Return on tangible equity) is used to show the return on AIG tangible common shareholder’s equity, which we believe is a useful measure of realizable shareholder value. We exclude Goodwill, VOBA, VODA and Other intangible assets from AIG common shareholders’ equity to derive AIG tangible common shareholders’ equity. Return on AIG tangible common equity is derived by dividing actual or, for interim periods, annualized adjusted after-tax income attributable to AIG common shareholders by average AIG tangible common shareholders' equity.

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ITEM 7 | Use of Non-GAAP Measures

Return on equity – Adjusted after-tax income excluding Investments AOCI, DTA and AIG’s ownership interest in Corebridge (Core operating return on equity) is used to show the rate of return on common shareholders’ equity excluding Investments AOCI, DTA and AIG’s ownership interest in Corebridge. We believe this measure is useful to investors because it eliminates the fair value of investments that can fluctuate significantly from period to period due to changes in market conditions. We also exclude the portion of DTA representing U.S. tax attributes related to NOLs, CAMTCs and FTCs that have not yet been utilized. Amounts for interim periods are estimates based on projections of full-year attribute utilization. As NOLs, CAMTCs and FTCs are utilized, the corresponding portion of the DTA utilized is included. We exclude AIG’s ownership interest in Corebridge since it is not a core long-term investment for AIG. We believe this metric will provide investors with greater insight as to the underlying profitability of our property and casualty business. Core operating return on equity is derived by dividing actual or, for interim periods, annualized adjusted after-tax income attributable to AIG common shareholders by average AIG core operating shareholders’ equity.

Adjusted pre-tax income (APTI) is derived by excluding the items set forth below from income from continuing operations before income tax:

•changes in the fair values of equity securities, AIG's investment in Corebridge and gain on sale of shares;

•net investment income on Fortitude Re funds withheld assets;

•net realized gains and losses on Fortitude Re funds withheld assets;

•loss (gain) on extinguishment of debt;

•all net realized gains and losses except earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-qualifying (economic) hedging or for asset replication. Earned income on such economic hedges is reclassified from net realized gains and losses to specific APTI line items based on the economic risk being hedged (e.g. net investment income);

•income or loss from discontinued operations;

•net loss reserve discount benefit (charge);

•net results of businesses in run-off;

•pension expense related to lump sum payments to former employees;

•net gain or loss on divestitures and other;

•non-operating litigation reserves and settlements;

•restructuring and other costs related to initiatives designed to reduce operating expenses, improve efficiency and simplify our organization;

•the portion of favorable or unfavorable prior year reserve development for which we have ceded the risk under retroactive reinsurance agreements and related changes in amortization of the deferred gain;

•integration and transaction costs associated with acquiring or divesting businesses;

•losses from the impairment of goodwill;

•non-recurring costs associated with the implementation of non-ordinary course legal or regulatory changes or changes to accounting principles; and

•income from elimination of the international reporting lag.

Adjusted after-tax income attributable to AIG common shareholders is derived by excluding the tax effected APTI adjustments described above, dividends on preferred stock and preferred stock redemption premiums, noncontrolling interest on net realized gains (losses), other non-operating expenses and the following tax items from net income attributable to AIG:

•deferred income tax valuation allowance releases and charges;

•changes in uncertain tax positions and other tax items related to legacy matters having no relevance to our current businesses or operating performance; and

•net tax charge related to the enactment of the Tax Cuts and Jobs Act.

Ratios: We, along with most property and casualty insurance companies, use the loss ratio, the expense ratio and the combined ratio as measures of underwriting performance. These ratios are relative measurements that describe, for every $100 of net premiums earned, the amount of losses and loss adjustment expenses (which for General Insurance excludes net loss reserve discount), and the amount of other underwriting expenses that would be incurred. A combined ratio of less than 100 indicates underwriting income and a combined ratio of over 100 indicates an underwriting loss. Our ratios are calculated using the relevant segment information calculated under GAAP, and thus may not be comparable to similar ratios calculated for regulatory reporting purposes. The underwriting environment varies across countries and products, as does the degree of litigation activity, all of which affect such ratios. In addition, investment returns, local taxes, cost of capital, regulation, product type and competition can have an effect on pricing and consequently on profitability as reflected in underwriting income and associated ratios.

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ITEM 7 | Use of Non-GAAP Measures

Accident year loss and accident year combined ratios, as adjusted (Accident year loss ratio, ex-CAT and Accident year combined ratio, ex-CAT): both the accident year loss and accident year combined ratios, as adjusted, exclude catastrophe losses and related reinstatement premiums, prior year development, net of premium adjustments, and the impact of reserve discounting. Natural catastrophe losses are generally weather or seismic events, in each case, having a net impact on AIG in excess of $10 million and man-made catastrophe losses, such as terrorism and civil disorders that exceed the $10 million threshold. We believe that as adjusted ratios are meaningful measures of our underwriting results on an ongoing basis as they exclude catastrophes and the impact of reserve discounting which are outside of management’s control. We also exclude prior year development to provide transparency related to current accident year results.

Results from discontinued operations, including Corebridge, are excluded from all of these measures.

Critical Accounting Estimates

The preparation of financial statements in accordance with GAAP requires the application of accounting policies that often involve a significant degree of judgment.

These accounting estimates require the use of assumptions about matters, some of which are highly uncertain at the time of estimation. To the extent actual experience differs from the assumptions used, our consolidated financial condition, results of operations and cash flows could be materially affected.

LOSS RESERVES

Loss reserves represent the accumulation of estimates of unpaid claims, including estimates for claims incurred but not reported and loss adjustment expenses, less applicable discount. We regularly review and update the methods used to determine loss reserve estimates. Because these estimates are subject to the outcome of future events and because loss trends vary and time is often required for changes in trends to be recognized and confirmed, changes in estimates are common.

The estimate of loss reserves relies on several key judgments:

•the determination of the actuarial methods used as the basis for these estimates;

•the relative weights given to these models by product line;

•the underlying assumptions used in these models; and

•the determination of the appropriate groupings of similar product lines and, in some cases, the disaggregation of dissimilar losses within a product line.

Numerous assumptions are made in determining the best estimate of reserves for each line of business, in consideration of expected ultimate losses, loss cost trends and loss development factors, where appropriate. The importance of any one assumption can vary by both line of business and accident year. Because such assumptions may differ from actual experience, there is potential for significant variation in the development of loss reserves. This estimation uncertainty is particularly relevant for long-tail lines of business.

All of our methods to calculate net reserves include assumptions about estimated reinsurance recoveries and their collectability. Reinsurance collectability is evaluated independently of the reserving process and appropriate allowances for uncollectible reinsurance are established.

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ITEM 7 | Critical Accounting Estimates

Overview of Loss Reserving Process and Methods

Our loss reserves can generally be categorized into two distinct groups: short-tail reserves and long-tail reserves. Short-tail reserves consist principally of U.S. Property and Special Risks, UK/Europe Property and Special Risks, U.S. Personal Insurance, and UK/Europe and Japan Personal Insurance. Long-tail reserves include U.S. Workers’ Compensation, U.S. Excess Casualty, U.S. Other Casualty, U.S. Financial Lines, and UK/Europe Casualty and Financial Lines.

Short-Tail Reserves

In short-tail lines of business, such as property or personal insurance, where the nature of these claims tends to be higher frequency with short reporting periods, with volatility arising from occasional severe events, the actual losses reported make up a greater proportion of the ultimate loss estimate. During the first few development quarters of an accident year, the expected ultimate losses generally reflect the average loss costs from a period of preceding accident quarters that have been adjusted for changes in rate and loss cost trends, mix of business, known exposure to unreported losses, or other factors affecting the particular line of business. For more mature quarters, specific loss development methods and/or frequency/severity methods may be used to determine the incurred but not reported (IBNR). IBNR for claims arising from catastrophic events or events of unusual severity would be determined taking into account information known by the claims department, using alternative techniques or expected percentages of ultimate loss emergence based on historical emergence of similar events or claim types.

Long-Tail Reserves

Estimation of loss reserves for our long-tail business is a complex process and depends on a number of factors, including the product line and volume of business, as well as estimates of reinsurance recoveries. Experience in more recent accident years generally provides limited statistical credibility of reported net losses on long-tail business. That is because in the more recent accident years, a relatively low proportion of estimated ultimate net incurred losses are reported or paid. Therefore, IBNR reserves constitute a relatively high proportion of loss reserves.

For our long-tail lines, we generally make actuarial and other assumptions with respect to the following:

•Loss cost trend factors, which are used to establish expected loss ratios for subsequent accident years based on the projected loss ratios for prior accident years.

•Expected loss ratios, which are used for the latest accident year and, in some cases, for accident years prior to the latest accident year. The expected loss ratio also generally reflects the average loss ratio from prior accident years, adjusted for the loss cost trend and the effect of rate changes and other quantifiable factors on the loss ratio.

•Loss development factors, which are used to project the reported losses for each accident year to an ultimate basis. Generally, the actual loss development factors observed from prior accident years would be used as a basis to determine the loss development factors for the subsequent accident years.

•Tail factors, which are development factors used for certain long-tail lines of business to project future loss development for periods that extend beyond the available development data. The development of losses to the ultimate loss for a given accident year for these lines may take decades and the projection of ultimate losses for an accident year is very sensitive to the tail factors selected beyond a certain age.

We record quarterly changes in loss reserves for each product line of business. The overall change in our loss reserves is based on the sum of the changes for all product lines of business. The quarterly loss reserve changes are based on the estimated current loss ratio for each subset of coverage less any amounts paid. Also, any change in estimated ultimate losses from prior accident years deemed to be necessary based on the results of our latest detailed valuation reviews, large loss analyses, or other analytical techniques, either positive or negative, is reflected in the loss reserve and incurred losses for the current quarter. Differences between actual loss emergence in a given period and our expectations based on prior loss reserve estimates are used to monitor reserve adequacy between detailed valuation reviews and may also influence our judgment with respect to adjusting reserve estimates.

Details of the Loss Reserving Process

The process of determining the current loss ratio for each product line of business is based on a variety of factors. These include considerations such as: prior accident year and policy year loss ratios; rate changes; and changes in coverage, reinsurance, or mix of business. Other considerations include actual and anticipated changes in external factors such as trends in loss costs, inflation, employment rates or unemployment duration or in the legal and claims environment. The current loss ratio for each product line of business is intended to represent our best estimate after reflecting all relevant factors. At the close of each quarter, the assumptions and data underlying the loss ratios are reviewed to determine whether they remain appropriate. This process includes a review of the actual loss experience in the quarter, actual rate changes achieved, actual changes in reinsurance, quantifiable changes in coverage or mix of business, and changes in other factors that may affect the loss ratio. The loss ratio is changed to reflect the revised estimate if this review suggests that the previously determined loss ratio is no longer appropriate and, generally, shorter tailed lines of business are more likely to experience changes than longer tailed lines for immature accident years unless the information is directionally unfavorable.

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ITEM 7 | Critical Accounting Estimates

We conduct a comprehensive loss reserve detailed valuation review at least annually for each product line of business in accordance with Actuarial Standards of Practice. These standards provide that the unpaid loss estimate may be presented in a variety of ways, such as a point estimate, a range of estimates, a point estimate based on the expected value of several reasonable estimates, or a probability distribution of the unpaid loss amount. Our actuarial best estimate for each product line of business represents an expected value generally considering a range of reasonably possible outcomes.

The reserve analysis, globally, for each product line of business is performed by a credentialed actuarial team in collaboration with claims, underwriting, business unit management, risk management and senior management. Our actuaries consider the ongoing applicability of prior data groupings and update numerous assumptions, including the analysis and selection of loss development and loss trend factors. They also determine and select the appropriate actuarial or other methods used to develop our best estimate for each business product line, and may employ multiple methods and assumptions for each product line. These data groupings, accident year weights, method selections and assumptions necessarily change over time as business mix changes, development factors mature and become more credible and loss characteristics evolve. We consult with third-party specialists to help inform our judgments as needed. Through the execution of these detailed valuation reviews an actuarial best estimate of the loss reserve is determined. The sum of these estimates for each product line of business yields an overall actuarial best estimate for that line of business.

A critical component of our detailed valuation reviews is an internal peer review of our reserving analyses and conclusions, where actuaries independent of the initial review evaluate the reasonableness of assumptions used, methods selected, and weightings given to different methods. In addition, each detailed valuation review is subjected to a review and challenge process by specialists in our Enterprise Risk Management (ERM) group.

For certain product lines, we measure sensitivities and determine explicit ranges around the actuarial best estimate using multiple methodologies and varying assumptions. Where we have ranges, we use them to inform our selection of best estimates of loss reserves by product line of business. Our range of reasonable estimates is not intended to cover all possibilities or extreme values and is based on known data and facts at the time of estimation.

Actuarial and Other Methods for Our Lines of Business

Our actuaries determine the appropriate actuarial methods and segmentation. This determination is based on a variety of factors including the nature of the losses associated with the product line of business, such as the frequency or severity of the claims. In addition to determining the actuarial methods, the actuaries determine the appropriate loss reserve groupings of data. This determination is a judgmental, dynamic process and refinements to the groupings are made every year. The groupings may change to reflect observed or emerging patterns within and across product lines, or to differentiate risk characteristics (for example, size of deductibles and extent of third-party claims specialists used by our insureds). As an example of reserve segmentation, we write many unique subsets of professional liability insurance, which cover different products, industry segments, and coverage structures. While for pricing or other purposes, it may be appropriate to evaluate the profitability of each subset individually, we believe it is appropriate to combine the subsets into larger groups for reserving purposes to produce a greater degree of credibility in the loss experience. This determination of data segmentation and related actuarial methods is assessed, reviewed and updated at least annually.

The actuarial methods we use most commonly include paid and incurred loss development methods, expected loss ratio methods, including “Bornhuetter Ferguson” and “Cape Cod,” and frequency/severity models. Loss development methods utilize the actual loss development patterns from prior accident years updated through the current year to project the reported losses to an ultimate basis for all accident years. We also use this information to update our current accident year loss selections. Loss development methods are generally most appropriate for lines of business that exhibit a stable pattern of loss development from one accident year to the next, and for which the components of the product line have similar development characteristics. Expected loss ratio methods rely on the application of an expected loss ratio to the earned premium for the product line of business to determine the liability for loss reserves and loss adjustment expenses. We generally use expected loss ratio methods in cases where the reported loss data lacked sufficient credibility to utilize loss development methods, such as for new product lines of business or for long-tail product lines at early stages of loss development. Frequency/severity models may be used where sufficient frequency counts are available to apply such approaches.

A key advantage of loss development methods is that they respond more quickly to any actual changes in loss costs for the product line of business. Therefore, if loss experience is unexpectedly deteriorating or improving, the loss development method gives full credibility to the changing experience. Expected loss ratio methods would be slower to respond to the change, as they would continue to give more weight to a prior expected loss ratio, until enough evidence emerged to modify the expected loss ratio to reflect the changing loss experience. On the other hand, loss development methods have the disadvantage of overreacting to changes in reported losses if the loss experience is anomalous due to the various key factors described above and the inherent volatility in some of the lines. For example, the presence or absence of large losses at the early stages of loss development could cause the loss development method to overreact to the favorable or unfavorable experience by assuming it is a fundamental shift in the development pattern. In these instances, expected loss ratio methods such as Bornhuetter Ferguson have the advantage of recognizing large losses without extrapolating unusual large loss activity onto the unreported portion of the losses for the accident year.

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ITEM 7 | Critical Accounting Estimates

The Cape Cod method is a hybrid between the loss development and Bornhuetter Ferguson methods, where the historic loss data and loss development factor assumptions are used to determine the expected loss ratio estimate in the Bornhuetter Ferguson method.

Where appropriate, supplemental analysis for the given line of business may be performed in addition to the above described techniques such as Shareholder Class Action suit analysis for Directors and Officers (D&O) coverages.

Frequency/severity methods generally rely on the determination of an ultimate number of claims and an average severity for each claim for each accident year. Multiplying the estimated ultimate number of claims for each accident year by the expected average severity of each claim produces the estimated ultimate loss for the accident year. Frequency/severity methods generally require a sufficient volume of claims in order for the average severity to be predictable. Average severity for subsequent accident years is generally determined by applying an estimated annual loss cost trend to the estimated average claim severity from prior accident years. In certain cases, a structural approach may also be used to predict the ultimate loss cost. Frequency/severity methods have the advantage that ultimate claim counts can generally be estimated more quickly and accurately than can ultimate losses. Thus, if the average claim severity can be accurately estimated, these methods can more quickly respond to changes in loss experience than other methods. However, for average severity to be predictable, the product line of business must consist of homogenous types of claims for which loss severity trends from one year to the next are reasonably consistent and where there are limited changes to deductible levels or limits. Generally these methods work best for high frequency, low severity product lines of business such as personal auto. However, frequency and severity metrics are also used to test the reasonability of results for other product lines of business and provide indications of underlying trends in the data. In addition, ultimate claim counts can be used as an alternative exposure measure to earned premiums in the Cape Cod method.

The estimation of liability for loss reserves and loss adjustment expenses relating to asbestos and environmental pollution losses on insurance policies written many years ago is typically subject to greater uncertainty than other types of losses. This is due to inconsistent court decisions, as well as judicial interpretations and legislative actions that in some cases have tended to broaden coverage beyond the original intent of such policies or have expanded theories of liability. In addition, reinsurance recoverable balances relating to asbestos and environmental loss reserves are subject to greater uncertainty due to the underlying age of the claim, underlying legal issues surrounding the nature of the coverage, and determination of proper policy period. For these reasons, these balances tend to be subject to increased levels of disputes and legal collection activity when actually billed. The insurance industry as a whole is engaged in extensive litigation over these coverage and liability issues and is thus confronted with a continuing uncertainty in its efforts to quantify these exposures.

We continue to receive claims asserting injuries and damages from toxic waste, hazardous substances, and other environmental pollutants and alleged claims to cover the cleanup costs of hazardous waste dump sites, referred to collectively as environmental claims, and indemnity claims asserting injuries from asbestos. The vast majority of these asbestos and environmental losses emanate from policies written in 1984 and prior years. Commencing in 1985, standard policies contained absolute exclusions for pollution-related damage and asbestos. The current environmental policies that we specifically price and underwrite for environmental risks on a claims-made basis have been excluded from the analysis. Nevertheless, most of these legacy exposures have been heavily reinsured with very highly rated reinsurers.

The majority of our remaining exposures for asbestos and environmental losses are related to excess casualty coverages, not primary coverages. The litigation costs are treated in the same manner as indemnity amounts, with litigation expenses included within the limits of the liability we incur. Individual significant loss reserves, where future litigation costs are reasonably determinable, are established on a case-by-case basis.

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ITEM 7 | Critical Accounting Estimates

Key Assumptions of our Actuarial Methods by Line of Business

Line of Business or Category Key Assumptions

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ITEM 7 | Critical Accounting Estimates

The following sensitivity analysis table summarizes the effect on the loss reserve position of using certain alternative loss cost trend (for accident years where we use expected loss ratio methods) or loss development factor assumptions rather than the assumptions actually used in determining our estimates in the year-end loss reserve analyses in 2024:

(in millions)

Loss cost trends: Loss development factors:

U.S. Excess Casualty: U.S. Excess Casualty:

U.S. Excess Casualty:

6-months faster (550)

U.S. Financial Lines (D&O) U.S. Financial Lines (D&O)

10.0 percentage points increase 850 6-months slower 600

10.0 percentage points decrease (600) 6-months faster (500)

U.S. Workers' Compensation:

Tail factor increase(a) 900

Tail factor decrease(b) (550)

(a)Tail factor increase of 2.5 percentage points for guaranteed cost business and 3 percentage points for deductible business.

(b)Tail factor decrease of 1 percentage point for guaranteed cost business and 1.5 percentage points for deductible business.

For additional information on our reserving process and methodology, see Note 13 to the Consolidated Financial Statements.

REINSURANCE ASSETS

In the ordinary course of business, our insurance companies may use both treaty and facultative reinsurance to minimize their net loss exposure to any single catastrophic loss event or to an accumulation of losses from a number of smaller events or to provide greater diversification of our businesses. Reinsurance assets include the balances due from reinsurance and insurance companies under the terms of our reinsurance agreements for paid and unpaid losses and loss adjustment expenses incurred, ceded unearned premiums and ceded future policy benefits for life and accident and health insurance contracts and benefits paid and unpaid. The estimation of reinsurance recoverables involves a significant amount of judgment. Reinsurance assets include reinsurance recoverables on unpaid losses and loss adjustment expenses that are estimated as part of our loss reserving process and, consequently, are subject to similar judgments and uncertainties as the estimation of gross loss reserves. For additional information on reinsurance, see Note 8 to the Consolidated Financial Statements.

ALLOWANCE FOR CREDIT LOSSES ON CERTAIN INVESTMENTS

We maintain an allowance for the expected lifetime credit losses of commercial and residential mortgage loans and available for sale securities. The sufficiency of this allowance is reviewed quarterly using both quantitative and qualitative considerations, which are subject to risks and uncertainties. These considerations and the overall methodology used to estimate the allowance for credit losses are discussed in more detail in Note 6 and Note 7 to the Consolidated Financial Statements for available for sale securities and Commercial and residential loans, respectively.

FAIR VALUE MEASUREMENTS OF CERTAIN FINANCIAL ASSETS AND FINANCIAL LIABILITIES

Assets and liabilities recorded at fair value in the Consolidated Balance Sheets are measured and classified in a hierarchy for disclosure purposes consisting of three levels based on the observability of inputs available in the marketplace used to measure the fair value. We classify fair value measurements for certain assets and liabilities as Level 3 when they require significant unobservable inputs in their valuation. We consider unobservable inputs to be those for which market data is not available. Our assessment of the significance of a particular input to the fair value measurement of an asset or liability requires judgment.

For additional information about the valuation methodologies of financial instruments measured at fair value, see Note 5 to the Consolidated Financial Statements.

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ITEM 7 | Critical Accounting Estimates

INCOME TAXES

Deferred income taxes represent the tax effect of the differences between the amounts recorded in our Consolidated Financial Statements and the tax basis of assets and liabilities. Our assessment of net deferred income taxes represents management’s best estimate of the tax consequences of various events and transactions, which can themselves be based on other accounting estimates, resulting in incremental uncertainty in the estimation process.

Deferred Tax Asset Recoverability

The evaluation of the recoverability of our deferred tax asset and the need for a valuation allowance requires us to weigh all positive and negative evidence to reach a conclusion that it is more likely than not that all or some portion of the deferred tax asset will not be realized. The weight given to the evidence is commensurate with the extent to which it can be objectively verified. As such, changes in tax laws in countries where we transact business can impact our deferred tax asset valuation allowance. We consider multiple factors to reliably estimate future taxable income so we can determine the extent of our ability to realize net operating losses, foreign tax credits, realized capital loss and other carryforwards. These factors include forecasts of future income for each of our businesses, which incorporate forecasts of future statutory income for our insurance companies, and actual and planned business and operational changes, both of which include assumptions about future macroeconomic and AIG-specific conditions and events. We subject the forecasts to stresses of key assumptions and evaluate the effect on tax attribute utilization. We also apply stresses to our assumptions about the effectiveness of relevant prudent and feasible tax planning strategies. In performing our assessment of recoverability, we consider tax laws governing the utilization of net operating loss, capital loss and foreign tax credit carryforwards in each applicable jurisdiction. These tax laws are subject to change, resulting in incremental uncertainty in our assessment of recoverability.

Uncertain Tax Positions

Uncertain tax positions represent AIG’s liability for income taxes on tax years subject to review by the Internal Revenue Service (IRS) or other tax authorities. We determine whether it is more likely than not that a tax position will be sustained, based on technical merits, upon examination by the relevant taxing authorities before any part of the benefit can be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement. The completion of review, or the expiration of federal statute of limitations for a given audit period could result in an adjustment to the liability for income taxes.

For a discussion of our framework for assessing the recoverability of our deferred tax asset and other tax topics, see Note 21 to the Consolidated Financial Statements.

GOODWILL IMPAIRMENT

Goodwill represents the future economic benefits arising from assets acquired in a business combination that are not individually identified and separately recognized. Goodwill is tested for impairment annually, or more frequently if circumstances indicate an impairment may have occurred. A qualitative assessment may be performed, considering whether events or circumstances exist that lead to a determination that it is not more likely than not that the fair value of a segment is less than its carrying value. If management elects to perform a quantitative assessment to determine recoverability of carrying value or is compelled to do so based on the results of a qualitative assessment, the estimate of fair value involves applying one or a combination of common valuation approaches. These include discounted expected future cash flows, market-based earnings multiples and external appraisals, among other methods, all of which require management judgment and are subject to uncertainty, primarily as it relates to assumptions around business growth, earnings projections, and cost of capital.

For additional information on goodwill impairment, see Part I, Item 1A. Risk Factors – Estimates and Assumptions and Note 12 to the Consolidated Financial Statements.

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ITEM 7 | Executive Summary

Executive Summary

OVERVIEW

This overview of the MD&A highlights selected information and may not contain all of the information that is important to current or potential investors in our securities. You should read this Annual Report in its entirety for a more detailed description of events, trends, uncertainties, risks and critical accounting estimates affecting us.

REGULATORY, INDUSTRY AND ECONOMIC FACTORS

Regulatory Environment

Our operations around the world are subject to regulation by many different types of regulatory authorities, including insurance and securities regulators in the United States and abroad. The insurance and financial services industries are generally subject to close regulatory scrutiny and supervision.

For information regarding our regulation and supervision by different regulatory authorities in the United States and abroad, see Part I, Item 1. Business – Regulation and Part I, Item 1A. Risk Factors – Regulation and Note 21 to the Consolidated Financial Statements.

Impact of Changes in the Interest Rate Environment

Certain U.S. benchmark rates continued to fluctuate in 2024 as markets reacted to change in inflation trends, geopolitical risk and the decisions of the Board of Federal Reserve System. Our Net investment income is impacted by market interest rates as well as the deployment of asset allocation strategies to enhance yield, manage duration and interest rate risk. The changes in interest rates and credit spreads impact our ability to reinvest future cash flows at rates equal or greater than the rates on sales and maturities. For additional information on our investment and asset-liability management strategies, see Investments.

Impact of Currency Volatility

Currency volatility remains acute. Strengthening of the U.S. dollar against the Euro, British pound and the Japanese yen (the Major Currencies) impacts income for our businesses with substantial international operations. In particular, growth trends in net premiums written reported in U.S. dollars can differ significantly from those measured in original currencies. The net effect on underwriting results, however, is significantly mitigated, as both revenues and expenses are similarly affected.

These currencies may continue to fluctuate, especially as a result of central bank responses to inflation, concerns regarding future economic growth and other macroeconomic factors, and such fluctuations will affect net premiums written growth trends reported in U.S. dollars, as well as financial statement line item comparability.

General Insurance businesses are transacted in most major foreign currencies. The following table presents the average of the quarterly weighted average exchange rates of the Major Currencies, which have the most significant impact on our businesses:

Years Ended December 31, Percentage Change

Major Currency:

Unless otherwise noted, references to the effects of foreign exchange in the General Insurance discussion of results of operations are with respect to movements in the Major Currencies included in the preceding table.

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ITEM 7 | Consolidated Results of Operations

Consolidated Results of Operations

The following section provides a comparative discussion of our consolidated results of operations on a reported basis for the three-year period ended December 31, 2024. Factors that relate primarily to a specific business are discussed in more detail within the business segment operations section.

For information regarding the critical accounting estimates that affect our results of operations, see Critical Accounting Estimates above.

The following table presents our consolidated results of operations and other key financial metrics:

Years Ended December 31, Percentage Change

Revenues:

Net investment income:

Net investment income - Fortitude Re funds withheld assets 144 180 53 (20) 240

Net realized gains (losses):

Net realized losses on Fortitude Re funds withheld assets (39) (71) (99) 45 28

Benefits, losses and expenses:

Amortization of deferred policy acquisition costs 3,425 3,771 3,545 (9) 6

(Gain) loss on extinguishment of debt 14 (37) 303 NM NM

Net (gain) loss on divestitures and other (616) 29 153 NM (81)

Income tax expense:

Less: Net income attributable to noncontrolling interests 478 235 1,046 103 (78)

Return on equity (3.2) % 8.6 % 20.7 %

Adjusted return on equity 6.6 5.6 3.6

Return on tangible equity 8.1 8.5 N/A

Core operating return on equity 9.1 9.6 N/A

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ITEM 7 | Consolidated Results of Operations

(in millions, except per share data) December 31, 2024 December 31, 2023

Balance sheet data:

Debt of consolidated investment entities 158 231

Adjusted book value per share 73.79 78.50

Tangible book value per share 63.98 59.60

Adjusted tangible book value per share 67.62 72.96

Core operating book value per share 61.75 52.74

NET INCOME (LOSS) ATTRIBUTABLE TO AIG COMMON SHAREHOLDERS

Years Ended December 31, 2024 and 2023 Comparison

Net income (loss) attributable to AIG common shareholders decreased $5.0 billion due to the following:

•a decrease in Income (loss) from discontinued operations, net of income taxes of $4.8 billion as a result of the deconsolidation of Corebridge;

•a decrease in underwriting income driven by unfavorable prior year reserve development of $254 million, which does not reflect the benefit of recoveries under a retroactive adverse development cover, as well as the sales of AIG Re and Crop Risk Services, Inc. (CRS), partially offset by improved portfolio performance and growth;

•an increase in net income attributable to noncontrolling interest of $243 million primarily driven by Corebridge; and

•an increase in income tax expense of $1.0 billion as a result of higher income before taxes and discrete tax benefits in the prior year primarily related to a reduction in the valuation allowance and developments related to the potential resolution of an IRS audit matter.

The decrease in Net income (loss) attributable to AIG common shareholders was partially offset by the following:

•an increase in Net investment income of $809 million primarily driven by dividends received from Corebridge of $162 million and changes in its stock price and gain on sale of shares of $439 million, higher income on available for sale fixed maturity securities of $121 million and an increase in the fair value of equity securities of $96 million; and

•an increase in Net realized gains excluding Fortitude Re funds withheld assets and embedded derivative of $300 million, primarily driven by a $85 million decrease in losses from sales of securities, lower derivative and hedge activity losses of $103 million and a $132 million increase in foreign exchange gains, partially offset by lower sales on alternative investments of $45 million.

Years Ended December 31, 2023 and 2022 Comparison

Net income (loss) attributable to AIG common shareholders decreased $6.6 billion due to the following:

•decrease in Income (loss) from discontinued operations, net of income taxes of $7.2 billion as a result of the decrease in net income of Corebridge;

•decrease in Net realized gains on Fortitude Re funds withheld embedded derivative of $1.4 billion driven by interest rate movements;

•decrease in Net realized gains excluding Fortitude Re funds withheld assets and embedded derivative of $527 million, driven by $324 million decrease in other derivative and hedge accounting, $142 million decrease in foreign exchange transactions and losses on sales of securities of $103 million; and

•decrease in Income tax expense of $756 million primarily attributable to lower income from continuing operations.

The decrease in Net income (loss) attributable to AIG common shareholders was partially offset by the following:

•higher net investment income of $1.1 billion primarily driven by higher income on available for sale fixed maturity securities of $884 million and an increase in fair value of fixed maturity securities where we elected the fair value option of $420 million as a result of the higher rate environment;

•lower income attributable to noncontrolling interest of $811 million driven by the decline in net income at Corebridge; and

•higher underwriting income in General Insurance of $387 million, including $86 million attributable to eliminating the international reporting lag, reflecting the continued earn-in of positive rate change, strong renewal retentions and new business production, as well as increased favorable prior year development and lower catastrophe losses. Underwriting income was negatively impacted by unfavorable movements in foreign exchange. For additional information on the elimination of the international reporting lag, see Note 1 to the to the Consolidated Financial Statements.

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ITEM 7 | Consolidated Results of Operations

INCOME TAX EXPENSE ANALYSIS

For the years ended December 31, 2024, 2023 and 2022, the effective tax rate on income (loss) from continuing operations was 30.2 percent, 4.4 percent and 23.4 percent, respectively.

For additional information, see Note 21 to the Consolidated Financial Statements.

NON-GAAP RECONCILIATIONS

The following table presents reconciliations of Book value per share to Adjusted book value per share, Tangible book value per share and Core operating book value per share, which are non-GAAP measures. For additional information, see Use of Non-GAAP Measures.

December 31,

Less Intangible Assets:

Value of distribution channel acquired 127 145 273

AIG adjusted tangible common shareholders' equity $ 40,983 $ 50,253 $ 53,995

Less: AIG's ownership interest in Corebridge 3,810 6,738 8,690

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ITEM 7 | Consolidated Results of Operations

The following table presents reconciliations of Return on equity to Adjusted return on equity, Tangible return on equity and Core operating return on equity, which are non-GAAP measures. For additional information, see Use of Non-GAAP Measures.

Years Ended December 31,

Average AIG common shareholders' equity $ 44,051 $ 41,930

Average AIG tangible common shareholders' equity $ 40,254 $ 37,860

Average AIG common shareholders' equity $ 44,051 $ 41,930

Less: Average AIG's ownership interest in Corebridge 6,770 7,376

Less: Average Investments AOCI - AIG (2,351) (3,254)

Less: Average deferred tax assets 3,998 4,322

Average AIG core operating shareholders' equity $ 35,634 $ 33,486

Return on equity (3.2) % 8.6 % 20.7 %

Adjusted return on equity 6.6 5.6 3.6

Return on tangible equity 8.1 8.5 N/A

Core operating return on equity 9.1 9.6 N/A

The following table presents a reconciliation of pre-tax income (loss)/net income (loss) attributable to AIG to adjusted pre-tax income (loss)/adjusted after-tax income (loss) attributable to AIG:

Dividends on preferred stock and preferred stock redemption premiums 22 29 29

(Income) loss from discontinued operations 3,626 (1,137) (8,383)

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ITEM 7 | Consolidated Results of Operations

Weighted average diluted shares outstanding 657.3 725.2 787.9

(a)Noncontrolling interest primarily relates to Corebridge and is the portion of Corebridge earnings that AIG did not own. Corebridge is consolidated until June 9, 2024. The historical results of Corebridge owned by AIG are reflected in the Income (loss) from discontinued operations, net of income taxes.

(b)The year ended December 31, 2023 includes a valuation allowance release related to a portion of certain tax attribute carryforwards of AIG's U.S. federal consolidated income tax group, as well as valuation allowance changes in certain foreign jurisdictions.

(c)Includes all net realized gains and losses except earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-qualifying (economic) hedging or for asset replication and net realized gains and losses on Fortitude Re funds withheld assets.

(d)In the fourth quarter of 2024, AIG realigned and began excluding the net results of run-off businesses previously reported in Other Operations from Adjusted pre-tax income. Historical results have been recast to reflect these changes.

(e)In the year ended December 31, 2024, Restructuring and other costs increased primarily as a result of employee-related costs, including severance, and real estate impairment charges.

(f)For additional information, see Note 1 to the Consolidated Financial Statements.

PRE-TAX INCOME (LOSS) COMPARISON

Pre-tax income (loss) was $3.9 billion, $2.9 billion and $3.8 billion in the years ended December 31, 2024, 2023 and 2022, respectively.

For the main drivers impacting AIG’s results of operations, see – Net Income (Loss) Attributable to AIG Common Shareholders above.

ADJUSTED PRE-TAX INCOME (LOSS) COMPARISON

Adjusted pre-tax income (loss) was $4.3 billion, $4.3 billion and $2.9 billion in the years ended December 31, 2024, 2023 and 2022, respectively.

For the main drivers impacting AIG’s adjusted pre-tax income (loss), see Business Segment Operations.

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ITEM 7 | Consolidated Results of Operations

The following table presents a reconciliation of General Insurance and Other Operations Net investment income and other/pre-tax income (loss) to Net investment income and other, APTI basis/adjusted pre-tax income (loss):

Consolidation and Eliminations — — — — — — 13 — — — (14) —

Other income (expense) - net (31) — 18 — (49) — 39 — (51) — 1 —

(Gain) loss on extinguishment of debt — — — 14 — — — (37) — — — 303

Net loss (gain) on divestitures and other — (522) — (94) — 18 — 11 — 15 — 138

Non-operating litigation reserves and settlements — — — — — — — 1 — (14) — (2)

Net loss reserve discount (benefit) charge — 226 — — — 195 — — — (703) — —

Net results of businesses in run-off — — (17) 111 — — (21) 31 — — (6) (25)

Business Segment Operations

In the fourth quarter of 2024, the Company realigned its organizational structure and the composition of its reportable segments to reflect changes in how the Company manages its operations, specifically the level at which its chief operating decision makers (CODMs) regularly review operating results and allocate resources. Our CODMs are the chief executive officer (CEO) and chief financial officer (CFO). The CODMs evaluate performance of the segments based on underwriting income (loss). The CODMs use this measure to benchmark AIG’s performance, assessing performance of the segments and in establishing management’s compensation.

As of December 31, 2024, AIG reports the results of its businesses through three segments and Other Operations. The three segments are North America Commercial, International Commercial and Global Personal. Other Operations predominantly consists of Net Investment Income from our AIG Parent liquidity portfolio, Corebridge dividend income, corporate General operating expenses, and Interest expense. Prior years’ presentations have been recast to conform to the new reportable segments. Our General Insurance business (General Insurance) consists of our three segments and the Net investment income related to our insurance operations.

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ITEM 7 | Business Segment Operations | General Insurance

General Insurance

PRODUCTS AND DISTRIBUTION

Commercial Lines

Property & Short Tail: Products include commercial and industrial property, including business interruption, as well as package insurance products and services that cover exposures to man-made and natural disasters.

Casualty: Products include general liability, environmental, commercial automobile liability, workers’ compensation, excess casualty and crisis management insurance products. Casualty also includes risk-sharing and other customized structured programs for large corporate and multinational customers.

Financial Lines: Products include professional liability insurance for a range of businesses and risks, including directors and officers, mergers and acquisitions, fidelity, employment practices, fiduciary liability, cyber risk, kidnap and ransom, and errors and omissions insurance.

Global Specialty: Products include marine, energy-related property insurance products, aviation, political risk, trade credit, trade finance and portfolio solutions.

On July 3, 2023, AIG completed the sale of CRS to American Financial Group, Inc. and in substance, AIG exited the crop business. For periods prior to the sale of CRS, the underwriting results are included in adjusted pre-tax income of General Insurance – North America Commercial.

On November 1, 2023, AIG completed the sale of Validus Reinsurance, Ltd. (Validus Re), including AlphaCat Managers Ltd. and Talbot Treaty reinsurance business to RenaissanceRe Holdings Ltd. (RenaissanceRe). For periods prior to the sale of Validus Re, the underwriting results are included in adjusted pre-tax income of General Insurance – North America Commercial.

For additional information, see Note 1 to the Consolidated Financial Statements.

Personal Insurance

Global Accident & Health: Products include group personal accident and business travel products for employees, associations and other organizations, and voluntary and sponsor-paid personal accident and supplemental health products for individuals.

On December 2, 2024, AIG completed the sale of its global individual personal travel insurance and assistance business to Zurich Insurance Group. The agreement includes the Travel Guard business and its servicing capabilities, excluding our travel insurance businesses in Japan and our AIG joint venture arrangement in India. Travel coverages offered through AIG’s Global Accident & Health business are also excluded from this agreement. For additional information, see Note 4 to the Consolidated Financial Statements.

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ITEM 7 | Business Segment Operations | General Insurance

Personal Lines: Products include personal auto and homeowners in selected markets, comprehensive extended warranty, device protection insurance, home warranty and related services, and insurance for high net-worth individuals offered through Private Client Select (PCS) in the U.S. that covers auto, homeowners, umbrella, yacht, fine art and collections.

General Insurance products in North America and International markets are distributed through various channels, including captive and independent agents, brokers, affinity partners, airlines and travel agents, and retailers. Our global platform enables writing multinational and cross-border risks in both Commercial Lines and Personal Insurance.

BUSINESS STRATEGY

Profitable Growth: Build on our high-quality portfolio by focusing on targeted growth through continued underwriting discipline, improved retentions and new business development. Deploy capital efficiently to act opportunistically and achieve growth in profitable lines, geographies and customer segments, while taking a disciplined underwriting approach to exposure management, terms and conditions and rate change to achieve our risk/return hurdles. Continue to be open to inorganic growth opportunities in profitable markets and segments to expand our capabilities and footprint.

Underwriting Excellence: Continue to enhance portfolio optimization through strength of underwriting framework and guidelines as well as clear communication of risk appetite and rate adequacy. Empower and increase accountability of the underwriter and continue to integrate underwriting, claims and actuarial to enable better decision making. Focus on enhancing risk selection, driving consistent underwriting best practices and building robust monitoring standards to improve underwriting results.

Reinsurance Optimization: Strategically partner with reinsurers to effectively manage exposure to losses arising from frequency of large catastrophic events and severity from individual risk losses. We strive to optimize our reinsurance program to manage volatility and protect the balance sheet from tail events and unpredictable net losses in support of our profitable growth objectives.

COMPETITION AND CHALLENGES

General Insurance operates in a highly competitive industry against global, national and local insurers and reinsurers and underwriting syndicates in specific market areas and product types. Insurance companies compete through a combination of risk acceptance criteria, product pricing, service levels and terms and conditions. We serve our business and individual customers on a global basis – from the largest multinational corporations to local businesses and individuals. General Insurance seeks to differentiate itself in the markets where we participate by providing leading expertise and insight to clients, distribution partners and other stakeholders, delivering underwriting excellence and value-driven insurance solutions and providing high quality, tailored end-to-end support to stakeholders. In doing so, we leverage our world-class global franchise, multinational capabilities, balance sheet strength and financial flexibility.

Our challenges include:

•ensuring adequate business pricing given passage of time to reporting and settlement for insurance business, particularly with respect to long-tail Commercial Lines exposures;

•impact of social and economic inflation on claim frequency and severity; and

•volatility in claims arising from natural and man-made catastrophes and other aggregations of risk exposure.

INDUSTRY AND ECONOMIC FACTORS

The results of General Insurance for the year ended December 31, 2024 reflect continued strong performance from our Commercial Lines portfolio and focused execution on our portfolio management strategies within Personal Insurance. Across North America Commercial and International Commercial we have seen increased demand for our insurance products and strong growth in new business. We continue to monitor the impact of inflation and other economic factors on rate adequacy and loss cost trends. Similarly, we are monitoring monetary policy actions taken or anticipated to be taken by central banks and the corresponding impact on market interest rates.

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ITEM 7 | Business Segment Operations | General Insurance

General Insurance – North America Commercial

North America Commercial continues to pursue profitable growth. While market discipline continues to support price increases across most lines, we are seeing capacity move back into the market in certain segments given pricing levels which is putting pressure on rates. We have focused on retaining our best accounts which has led to strong retention across the portfolio. These retention rates are often coupled with an exposure limit management strategy to reduce volatility within the portfolio. We continue to proactively identify segment growth areas as market conditions warrant through effective portfolio management, while non-renewing unprofitable business.

General Insurance – International Commercial

We are continuing to pursue growth in our most profitable lines of business and diversify our portfolio across all regions by expanding key business lines while remaining a market leader in key developed and developing markets. We are maintaining our underwriting discipline, reducing gross and net limits where appropriate, utilizing reinsurance to reduce volatility, as well as continuing our risk selection strategy to improve profitability.

General Insurance – Global Personal

Global Personal serves individuals as well as group and corporate clients across a broad range of products, markets, and client profiles. Amid competitive market conditions, we continue to benefit from improved underwriting quality and portfolio diversity, as well as investment in expanded capabilities and strategic distribution partnerships.

GENERAL INSURANCE RESULTS

Years Ended December 31, Change

Underwriting results:

Acquisition expenses:

Amortization of deferred policy acquisition costs 3,413 3,623 3,533 (6) 3

Catastrophe losses and reinstatement premiums (5.0) (4.3) (5.0) (0.7) 0.7

Accident year combined ratio, as adjusted 88.2 87.7 88.7 0.5 (1.0)

(a)Consistent with our definition of APTI, excludes net loss reserve discount and the portion of favorable or unfavorable prior year reserve development for which we have ceded the risk under retroactive reinsurance agreements and related changes in amortization of the deferred gain.

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ITEM 7 | Business Segment Operations | General Insurance

The following table presents General Insurance net premiums written by segment, showing change on both reported and constant dollar basis:

The following tables present General Insurance accident year catastrophes(a) by segment and number of events:

Flooding, rainstorms and other 3 $ 2 $ 98 $ — $ 100

Earthquakes 1 — 7 — 7

Reinstatement premiums 12 (2) — 10

Flooding, rainstorms and other 3 $ 10 $ 72 $ 20 $ 102

Reinstatement premiums 31 (1) 1 31

Flooding, rainstorms and other 3 $ 53 $ 103 $ 2 $ 158

Russia / Ukraine N/A (b) 10 97 — 107

(a)Natural catastrophe losses are generally weather or seismic events, in each case, having a net impact on AIG in excess of $10 million and man-made catastrophe losses, such as terrorism and civil unrest that exceed the $10 million threshold.

(b)As the Russia/Ukraine conflict continues to evolve the number of events is yet to be determined.

NORTH AMERICA COMMERCIAL RESULTS

Years Ended December 31, Change

Underwriting results:

Acquisition expenses:

Amortization of deferred policy acquisition costs 824 1,371 1,381 (40) (1)

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ITEM 7 | Business Segment Operations | General Insurance

Years Ended December 31, Change

Catastrophe losses and reinstatement premiums (9.7) (5.9) (6.9) (3.8) 1.0

Accident year combined ratio, as adjusted 85.1 84.6 86.7 0.5 (2.1)

(a)Consistent with our definition of APTI, excludes net loss reserve discount and the portion of favorable or unfavorable prior year reserve development for which we have ceded the risk under retroactive reinsurance agreements and related changes in amortization of the deferred gain.

Business and Financial Highlights

Net Premiums Written Comparison for the Years Ended December 31, 2024 and 2023

Net premiums written decreased by $3.0 billion driven by the sales of AIG Re and CRS, partially offset by growth in Casualty.

Net Premiums Written Comparison for the Years Ended December 31, 2023 and 2022

Net premiums written increased by $533 million, particularly in AIG Re and Property driven by continued positive rate change, higher renewal retentions and strong new business production, partially offset by decreases in Crop as a consequence of the CRS sale and Financial Lines.

Underwriting Income (Loss) Comparison for the Years Ended December 31, 2024 and 2023

Underwriting income decreased by $807 million primarily due to:

•lower net favorable prior year development (2.2 points or $252 million), primarily from Casualty which turned unfavorable driven by a large settlement of a legacy mass tort claim with most of the gross loss in accident years covered under the adverse development cover, partially offset by Financial Lines which turned favorable and higher favorable development in Property;

•higher Catastrophe losses (3.8 points or $187 million); and

•the sales of AIG Re and CRS.

This decrease was partially offset by a lower expense ratio (1.6 points) reflecting a lower acquisition ratio (2.9 points), partially offset by an increase in general operating expense ratio (1.3 points), primarily driven by changes in business mix including the impact from the sales of AIG Re and CRS.

Underwriting Income (Loss) Comparison for the Years Ended December 31, 2023 and 2022

Underwriting income increased by $611 million primarily due to:

•improvement in the accident year loss ratio, as adjusted (3.3 points) primarily driven by changes in business mix along with continued positive rate change, focused risk selection and improved terms and conditions;

•higher net favorable prior year reserve development (3.0 points or $327 million), primarily due to lower unfavorable development in Financial Lines, partially offset by lower favorable development in Casualty; and

•lower catastrophe losses (1.0 points or $127 million).

This increase was partially offset by:

•a higher expense ratio (1.2 points) reflecting a higher acquisition ratio (0.8 points) primarily driven by changes in business mix as well as an increase in general operating expense ratio (0.4 points).

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ITEM 7 | Business Segment Operations | General Insurance

INTERNATIONAL COMMERCIAL RESULTS

Years Ended December 31, Change

Underwriting results:

Acquisition expenses:

Amortization of deferred policy acquisition costs 1,018 943 938 8 1

Catastrophe losses and reinstatement premiums (2.9) (3.9) (5.0) 1.0 1.1

Accident year combined ratio, as adjusted 83.0 81.7 81.8 1.3 (0.1)

Business and Financial Highlights

Net Premiums Written Comparison for the Years Ended December 31, 2024 and 2023

Net premiums written, excluding the unfavorable impact of foreign exchange ($16 million), increased by $212 million primarily due to growth in Property, Specialty and Casualty driven by strength of renewal retentions and new business production, partially offset by the sale of AIG Re and lower production in Financial Lines.

Net Premiums Written Comparison for the Years Ended December 31, 2023 and 2022

Net premiums written, excluding the unfavorable impact of foreign exchange ($79 million), increased by $370 million primarily due to growth in Property and Specialty driven by continued positive rate change and strong new business production, partially offset by a decrease in Financial Lines.

Underwriting Income (Loss) Comparison for the Years Ended December 31, 2024 and 2023

Underwriting income increased by $225 million primarily due to:

•net favorable prior year reserve development of $73 million in 2024 compared to net unfavorable prior year reserve development of $140 million in 2023 (2.8 points or $213 million), primarily as a result of Specialty and Property which turned favorable and lower unfavorable development within Casualty, partially offset by Financial Lines development which turned unfavorable; and

•lower catastrophe losses (1.0 points or $72 million).

This increase was partially offset by:

•a higher expense ratio (1.0 points) reflecting an acquisition ratio (0.5 points) and general operating expense ratio (0.5 points) primarily driven by changes in business mix; and

•a higher accident year loss ratio, as adjusted (0.3 points) due to changes in business mix.

Underwriting Income (Loss) Comparison for the Years Ended December 31, 2023 and 2022

Underwriting income decreased by $137 million primarily due to:

•net unfavorable prior year reserve development of $140 million in 2023 compared to net favorable development in 2022 of $135 million (3.4 points or $275 million), primarily as a result of lower favorable development in Specialty, unfavorable development in Property and higher unfavorable development in Casualty, partially offset by favorable development in Financial Lines; and

•a higher accident year loss ratio, as adjusted (0.2 points) due to changes in business mix.

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ITEM 7 | Business Segment Operations | General Insurance

This decrease was partially offset by:

•lower catastrophe losses (1.1 points or $96 million); and

•a lower expense ratio (0.3 points) reflecting a lower acquisition ratio (0.9 points) primarily driven by changes in business mix and improved commission terms, partially offset by an increase in the general operating expense ratio (0.6 points).

GLOBAL PERSONAL RESULTS

Years Ended December 31, Change

Underwriting results:

(Increase) decrease in unearned premiums 54 (225) 459 NM NM

Acquisition expenses:

Underwriting income (loss) $ 142 $ (8) $ 165 NM % NM %

Catastrophe losses and reinstatement premiums (2.0) (2.6) (2.3) 0.6 (0.3)

Accident year combined ratio, as adjusted 97.6 99.3 99.2 (1.7) 0.1

Business and Financial Highlights

Net Premiums Written Comparison for the Years Ended December 31, 2024 and 2023

Net premiums written, excluding the unfavorable impact of foreign exchange ($199 million), increased by $166 million primarily due to Personal Auto and PCS, partially offset by lower production in Warranty.

Net Premiums Written Comparison for the Years Ended December 31, 2023 and 2022

Net premiums written, excluding the unfavorable impact of foreign exchange ($240 million), increased by $623 million primarily due to PCS resulting from changes in our reinsurance program.

Underwriting Income (Loss) Comparison for the Years Ended December 31, 2024 and 2023

Underwriting income increased by $150 million primarily due to:

•improvement in the accident year loss ratio, as adjusted (0.8 points) primarily driven by changes in business mix along with continued positive rate change;

•a lower expense ratio (0.9 points) reflecting a lower general operating expense ratio (1.8 points), partially offset by higher acquisition ratio (0.9 points) primarily driven by change in business mix; and

•lower catastrophe losses (0.6 points or $35 million).

Underwriting Income (Loss) Comparison for the Years Ended December 31, 2023 and 2022

Underwriting income decreased by $173 million primarily due to:

•lower net favorable prior year reserve development (2.0 points or $156 million), primarily in Personal Auto;

•a higher expense ratio of (1.1 points) reflecting a higher acquisition ratio (0.9 points) as well as increase in general operating expense ratio (0.2 points) primarily driven by changes in business mix; and

•higher catastrophe losses (0.3 points or $9 million).

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ITEM 7 | Business Segment Operations | General Insurance

This decrease was partially offset by:

•improvement in the accident year loss ratio, as adjusted (1.0 points) primarily driven by changes in business mix along with continued positive rate change, focused risk selection and improved terms and conditions.

Other Operations

Other Operations predominantly consists of Net Investment Income from our AIG Parent liquidity portfolio, Corebridge dividend income, corporate General operating expenses, and Interest expense.

OTHER OPERATIONS RESULTS

Years Ended December 31, Change

Net investment income and other $ 434 $ 190 $ (110) 128 % NM %

Benefits, losses and expenses:

Corporate and other general operating expenses 623 698 850 (11) (18)

Amortization of intangible assets 18 27 40 (33) (33)

Consolidation and eliminations (1) (17) 63 94 NM

*In the fourth quarter of 2024, AIG realigned and began excluding the net results of run-off businesses previously reported in Other Operations from Adjusted pre-tax income. Historical results have been recast to reflect these changes.

YEARS ENDED DECEMBER 31, 2024 AND 2023 COMPARISON

Adjusted pre-tax loss before consolidation and eliminations was $652 million in 2024 compared to $1.0 billion in 2023, a decrease of $381 million, primarily due to:

•higher net investment income and other of $244 million due to dividend income from Corebridge in 2024 compared to $0 in 2023 and on AIG Parent portfolio due to higher yields and higher average balance;

•lower corporate general operating expenses of $75 million primarily driven by employee related costs and other operating expenses; and

•lower interest expense of $53 million primarily driven by interest savings from $3.5 billion debt repurchases, through cash tender offers and debt redemption and maturity in 2023 and 2024, offset by interest expense of $10 million on $750 million Senior unsecured debt issued in the first quarter of 2023.

YEARS ENDED DECEMBER 31, 2023 AND 2022 COMPARISON

Adjusted pre-tax loss before consolidation and eliminations of $1.0 billion in 2023 compared to $1.6 billion in 2022, a decrease of $591 million, was primarily due to:

•higher net investment income and other of $300 million primarily driven by AIG Parent portfolio due to higher yields and higher average balance;

•lower corporate general operating expenses of $152 million primarily driven by a reduction in employee related costs and other operating expenses; and

•lower interest expense of $126 million primarily driven by interest savings from $11.0 billion debt repurchases, through cash tender offers and debt redemption and maturity in 2022 and 2023.

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ITEM 7 | Investments

Investments

OVERVIEW

Our investment strategies are tailored to the specific business needs of each segment by targeting an asset allocation mix that supports estimated cash flow needs of our outstanding liabilities and provides diversification from an asset class, sector, issuer, and geographic perspective. The primary objectives are generation of investment income, preservation of capital, liquidity management and growth of surplus. The majority of assets backing our insurance liabilities consist of fixed maturity securities.

Our Investment Management Agreements with BlackRock, Inc.

Since April 2022, AIG insurance company subsidiaries have entered into separate investment management agreements with BlackRock, Inc. and its investment advisory affiliates (BlackRock). As of December 31, 2024, BlackRock manages $62 billion of our investment portfolio, consisting of liquid fixed income, certain private placements and private equity assets. In addition, liquid fixed income assets associated with the Fortitude Re funds withheld asset portfolio were separately transferred to BlackRock for management in 2022.

INVESTMENT HIGHLIGHTS IN 2024

INVESTMENT STRATEGIES

Investment strategies are assessed at the segment level and involve considerations that include local and general market and economic conditions, duration and cash flow management, risk appetite and volatility constraints, rating agency and regulatory capital considerations, tax, regulatory and legal investment limitations, and, as applicable, environmental, social and governance considerations.

Some of our key investment strategies are as follows:

•Our fundamental strategy across the portfolios is to seek investments with similar duration and cash flow characteristics to the associated insurance liabilities to the extent practicable.

•We seek to purchase investments that offer enhanced yield through illiquidity premiums, such as private placements and commercial mortgage loans, which also add portfolio diversification. These assets typically afford credit protections through covenants, ability to customize structures that meet our insurance liability needs, and deeper due diligence given information access.

•Given our global presence, we seek investments that provide diversification from investments available in local markets. To the extent we purchase these investments, we generally hedge any currency risk using derivatives, which could provide opportunities to earn higher risk adjusted returns compared to investments in the functional currency.

•AIG Parent, included in Other Operations, actively manages its assets and liabilities, counterparties and duration. AIG Parent’s liquidity sources are held primarily in the form of cash and short-term investments. This strategy allows us to both diversify our sources of liquidity and reduce the cost of maintaining sufficient liquidity.

•Within the U.S., General Insurance investments are generally split between reserve backing and surplus portfolios.

–Insurance reserves are backed mainly by investment grade fixed maturity securities that meet our duration, risk-return, capital, tax, liquidity, credit quality and diversification objectives. We assess asset classes based on their fundamental underlying risk factors, including credit (public and private), commercial real estate and residential real estate, regardless of whether such investments are bonds, loans, or structured products.

–Surplus investments seek to enhance portfolio returns and are generally comprised of a mix of fixed maturity investment grade and below investment grade securities and various alternative asset classes, including private equity, real estate equity, and hedge funds. Over the past few years, hedge fund investments have been reduced.

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•Outside of the U.S., fixed maturity securities held by our insurance companies consist primarily of investment-grade securities generally denominated in the currencies of the countries in which we operate.

•We also utilize derivatives to manage our asset and liability duration as well as currency exposures.

Asset-Liability Management

The investment strategy within the General Insurance companies focuses on growth of surplus, maintenance of sufficient liquidity for unanticipated insurance claims, and preservation of capital. General Insurance invests primarily in fixed maturity securities issued by corporations, municipalities and other governmental agencies; structured securities collateralized by, among other assets, residential and commercial real estate; and commercial mortgage loans. Fixed maturity securities of the General Insurance companies have an average duration of 3.8 years, with an average of 4.2 years for North America and 3.0 years for International.

While invested assets backing reserves of the General Insurance companies are primarily invested in conventional liquid fixed maturity securities, we have continued to allocate to asset classes that offer higher yields through structural and illiquidity premiums, particularly in our North America operations. In addition, we continue to invest in both fixed rate and floating rate asset-backed investments to manage our exposure to potential changes in interest rates and inflation. We seek to diversify the portfolio across asset classes, sectors and issuers to mitigate idiosyncratic portfolio risks.

In addition, a portion of the surplus of General Insurance companies is invested in a diversified portfolio of alternative investments that seek to balance liquidity, volatility and growth of surplus. Although these alternative investments are subject to periodic earnings fluctuations, they have historically achieved yields in excess of the fixed maturity portfolio yields and have provided added diversification to the broader portfolio.

Available-for-Sale Investments

The following table presents the fair value of our available-for-sale securities:

Bonds available for sale:

U.S. government and government sponsored entities $ 3,267 $ 4,395

Obligations of states, municipalities and political subdivisions 3,143 4,833

Mortgage-backed, asset-backed and collateralized:

Total mortgage-backed, asset-backed and collateralized 17,663 15,272

*At December 31, 2024 and 2023, the fair value of bonds available for sale held by us that were below investment grade or not rated totaled $3.6 billion and $5.2 billion, respectively.

The following table presents the fair value of our aggregate credit exposures to non-U.S. governments for our fixed maturity securities:

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The following table presents the fair value of our aggregate European credit exposures by major sector for our fixed maturity securities:

Euro-Zone countries:

Remainder of Europe:

Investments in Municipal Bonds

At December 31, 2024, the U.S. municipal bond portfolio was composed primarily of essential service revenue bonds and high-quality tax-exempt bonds with 98 percent of the portfolio rated A or higher.

The following table presents the fair values of our available for sale U.S. municipal bond portfolio by state and municipal bond type:

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Investments in Corporate Debt Securities

The following table presents the fair value of our available for sale corporate debt securities by industry categories:

Industry Category

Financial institutions:

Money center/Global bank groups $ 3,642 $ 5,153

Securities firms and other finance companies 669 296

Regional banks – North America 1,314 2,029

*At December 31, 2024 and 2023, approximately 88 percent and 90 percent, respectively, of these investments were rated investment grade.

Investments in RMBS

The following table presents the fair value of AIG’s RMBS available for sale securities:

(a)Includes approximately $1.3 billion at both December 31, 2024 and 2023, of certain RMBS that had experienced deterioration in credit quality since their origination. This excludes impact of U.S. debt downgrade of Fannie Mae and Freddie Mac. For additional information on purchased credit deteriorated securities, see Note 6 to the Consolidated Financial Statements.

(b)The weighted average expected life was six years and seven years at December 31, 2024 and December 31, 2023, respectively.

Our investments guidelines for investing in RMBS, collateralized loan obligations (CLO) and other asset-backed securities (ABS) take into consideration the quality of the originator, the manager, the servicer, security credit ratings, underlying characteristics of the mortgages, borrower characteristics, and the level of credit enhancement in the transaction.

Investments in CMBS

The following table presents the fair value of our CMBS available for sale securities:

The fair value of CMBS holdings remained stable during the year ended December 31, 2024. The majority of our investments in CMBS are in tranches that contain substantial credit protection features through collateral subordination. The majority of CMBS holdings are traditional conduit transactions, broadly diversified across property types and geographical areas.

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Investments in CLO/ABS

The following table presents the fair value of our CLO/ABS available for sale securities by collateral type:

Collateral Type:

Other — 1

Unrealized Losses of Fixed Maturity Securities

The following table shows the aging of the unrealized losses of fixed maturity securities, the extent to which the fair value is less than amortized cost or cost, and the number of respective items in each category:

December 31, 2024 Less Than or Equal Greater Than 20% Greater Than 50%

to 20% of Cost(b) to 50% of Cost(b) of Cost(b) Total

Aging(a) Unrealized Unrealized Unrealized Unrealized

Investment grade bonds

Below investment grade bonds

Total bonds

(a)Represents the number of consecutive months that fair value has been less than cost by any amount.

(b)Represents the percentage by which fair value is less than cost.

(c)For bonds, represents amortized cost net of allowance.

(d)Item count is by CUSIP by subsidiary.

The allowance for credit losses was $4 million for investment grade bonds and $34 million for below investment grade bonds as of December 31, 2024.

Commercial Mortgage Loans

At December 31, 2024, we had direct commercial mortgage loan exposure of $3.3 billion.

The following table presents the commercial mortgage loan exposure by location and class of loan based on amortized cost:

Numberof Loans Class Percentof Total

(dollars in millions) Apartments Offices Retail Industrial Hotel Others Total

State:

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ITEM 7 | Investments

Numberof Loans Class Percentof Total

(dollars in millions) Apartments Offices Retail Industrial Hotel Others Total

State:

*Does not reflect allowance for credit losses.

For additional information on commercial mortgage loans, see Note 7 to the Consolidated Financial Statements.

Net Realized Gains and Losses

The following table presents the components of Net realized gains (losses):