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American International Group, Inc. 2020 Annual Report Executive Chair of the Board AIG’s focus Letter to Shareholders will continue to be centered stakeholders – and each other – even on value as their own lives and work situations were significantly disrupted. creation for our AIG’s 2020 financial results and shareholders, progress on strategic initiatives demonstrated the considerable clients and changes we have made across the organization since late 2017. Today, distribution we are a significantly de-risked company with a stronger balance partners, sheet, fortified reinsurance programs, enhanced underwriting capabilities, colleagues, and and a diverse platform of products and services. This substantial communities. progress allowed us to announce our intention to separate the Life and Brian Duperreault Executive Chair of the Board Retirement business from AIG. American International Group, Inc. In 2020, we also announced Your trust and confidence in AIG leadership transitions, with Peter are well placed. Zaffino taking on the role of Chief Dear AIG Shareholder: Executive Officer and me becoming Sincerely, Executive Chair. Peter and I For AIG, 2020 was a year to remember seamlessly transitioned into these because of our improving financial new roles on March 1, 2021. performance and the substantial Doug Steenland has become advancements we made to become a Lead Independent Director of the top-performing company and leading AIG Board. insurance franchise. It was also a Brian Duperreault year to never forget because of the As Executive Chair, I look forward to Executive Chair of the Board pandemic that brought economies supporting Peter as we continue our American International Group, Inc. to a standstill, and the unfortunate journey toward industry leadership. displays of social and racial injustice Together, we have tackled many of that permanently changed our the foundational challenges facing perspective on true advancement the company. I take pride in what the with respect to diversity, equity, team has accomplished and know the and inclusion. company and our colleagues will be in great hands with Peter as President & As Executive Chair, In 2020, AIG’s 45,000 global colleagues Chief Executive Officer. I look forward to were remarkably strong as we served our clients and communities while I am also confident that the entirety supporting Peter as also investing for a successful future. of AIG is aligned with the long-term we continue our I want to thank each of them for their goals and objectives of each of you unyielding resilience, dedication, and – our shareholders – as well as our journey toward perseverance in supporting our many other stakeholders. industry leadership. 2 AIG 2020 Annual Report President & Chief Executive Officer Letter to Shareholders Dear AIG Shareholder: In 2020, the world changed for everyone and every organization. It is an honor to be writing to you The responsibilities, accountabilities, as AIG’s President & Chief Executive and opportunities facing commercial Officer. Following the transition from enterprises today, especially related Brian Duperreault to me on March 1, to the well-being and health of 2021, I am looking to the future with colleagues, surpasses anything the gratitude and a sense of optimism. global business community has ever faced. A pandemic, combined with I want to thank Brian and the other social and racial injustices, shook the members of the Board of Directors foundation of our economies, our for their confidence in me and for sense of normalcy, our belief systems, giving me the opportunity to lead and the stability of our communities. AIG. I also want to thank our hard- working, diligent, and committed AIG manages risks around the colleagues whose focus and world, and in March 2020, the most dedication over the last few years immediate risk we faced was our Peter Zaffino President & Chief Executive Officer allowed us to make remarkable colleagues’ health and safety while American International Group, Inc. strategic, operational, and financial they continued to serve our clients, progress, which has positioned policyholders, and distribution AIG for long-term profitability and partners during an unprecedented industry-leading performance. time of disruption and uncertainty. We transitioned over 90 percent of At AIG, success At AIG, success starts with our our workforce to a remote working colleagues. environment virtually overnight and starts with our more than a year later continue to colleagues. For our colleagues to thrive, we manage through this global health must invest in them and continually and economic crisis. develop and evolve the skill sets required to allow us to achieve The AIG Board of Directors and underwriting and operational Executive Leadership Team are excellence, and meet the changing proud of the job our colleagues did needs of our clients and distribution in rising to this challenge while partners with respect to risk looking out for each other and our management and insurance. We many stakeholders. must also maintain an inclusive and diverse work environment where advancement for everyone Value Creation: Shareholders is possible. Engaged and motivated employees serve our clients and The keys to value creation for our distribution partners well, which shareholders are to build a more results in client retention, focused and aligned organization acquisition, and expansion – and that is designed to deliver sustained, value creation for our shareholders industry-leading performance; to and other stakeholders. continue refining our operating AIG 2020 Annual Report 3 fundamentals with regard to implications, and delivery of Life underwriting, reinsurance, risk and Retirement’s strategy over the Our goal: appetite, strategic investments, long term. and particularly with capital reinforce the trust management; to return capital to our We are also making progress on shareholders through dividends and, AIG 200, our enterprise-wide effort and confidence when appropriate, share buybacks; focused on underwriting excellence, of our clients and to improve the experience of modernizing our operating working with AIG for our clients and infrastructure, enhancing the client every single day. distribution partners, which will drive and employee experience, and revenue and improved profitability. becoming a more unified company. We exceeded our target run-rate Overall, we are making very savings for 2020, and the costs good progress on our financial required to achieve were lower than performance as demonstrated by initially expected. We exited 2020 The real-time client experience AIG’s full-year 2020 operating results. with a $400 million run-rate benefit, demands digital excellence, a which is 30 percent ahead of the swiftness of information exchange, Our accident year combined ratio, as guidance we provided in 2020. and insights from data. To address adjusted*, for 2020 was 94.1 percent, this evolution, we continue to make a 190 basis-point improvement year- Our overall target for AIG 200 strategic investments in people and in over-year. The General Insurance remains unchanged. We expect to client-centered technology. In 2021, a Global Commercial Lines accident achieve run-rate savings of $650 major focus for AIG will be advancing year combined ratio, as adjusted*, million by the end of 2021 and to our digital strategy through the for 2020 was 93.2 percent, a 340 deliver aggregate run-rate savings effective use of data and process- basis-point improvement year-over- of $1 billion by the end of 2022 enabling technologies, which will year. Our target to achieve a sub-90 against a total investment of $1.3 provide us with valuable information percent accident year combined billion. AIG 200 will help drive long- upon which to make decisions. ratio, as adjusted*, is on track for term, sustainable value creation for the end of 2022. In addition, Life our shareholders. and Retirement’s adjusted pre-tax Value Creation: Communities income held steady at $3.5 billion in 2020, and the business achieved Value Creation: Clients and The COVID-19 pandemic, combined a solid 13.6 percent Return on Distribution Partners with the social and racial injustices Adjusted Segment Common Equity* we witnessed in 2020 – and the for the year, as Life and Retirement Protection from the unexpected, real-time challenges confronting continues to demonstrate its ability unwanted, and unknown for small- the business community to respond to thrive as a standalone company. and mid-sized businesses, large appropriately – makes being a enterprises, multinationals, families, company of action more important We are actively working toward and individuals is at the heart of than ever before. an IPO of up to 19.9 percent of Life what AIG does for its clients and and Retirement. Additionally, in distribution partners. Our goal as As a CEO with a platform and connection with our October 2020 risk management and insurance responsibility to impact lives, I feel announcement about separation, experts, working closely with our a deep sense of conviction that we we received inquiries from parties distribution partners, is to reinforce can never return to the prior status interested in aligning with us and the trust and confidence of our quo. Corporations and individuals potentially purchasing up to a 19.9 clients every single day. must do better by embracing and percent stake. We are carefully pursuing racial and social justice and weighing the relative merits of With a world that is rapidly advancements for our colleagues and this path compared to an IPO by changing, our clients’ and communities. At AIG, we are taking considering the impact on value distribution partners’ expectations deliberate and meaningful actions creation for AIG, execution certainty, and insights are also changing, and that will result in positive outcomes regulatory and rating agency we must keep pace. for our local and global communities. 4 AIG 2020 Annual Report For example, the AIG FoundationSM In 2021 and beyond, AIG’s focus will AIG’s future is committed funds to organizations continue to be centered on value focused on racial equity; we are creation for our shareholders, clients compelling.

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