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00:00You're only been on the job for what a couple of months now you took over on June 1st and
00:05you've already had one conference call and I know you can't necessarily take the credit or blame for everything that
00:11happened in the previous quarter.
00:12But but let's kind of start there. It's kind of what you articulated to investors a couple of last Friday
00:18I should say and exactly sort of where you sort of see taking the IG over the next year or
00:23two.
00:23Great. Well, first of all, it's great to be here. Thanks for having me. And listen, I think I've come
00:28into the company at a really privileged time.
00:30It's building on some great momentum that the company's been building over the last several years. Great balance sheet, great
00:36opportunity to help clients.
00:38It's such an interesting time in our industry in terms of our relevance.
00:42And, you know, one of the things we tried to say to the investors and the analysts that were covering
00:46us was if you think about what's going on in the world today,
00:48you find insurance in almost every aspect of it, whether it's what's going on in the Middle East, what's going
00:54on with the data center build out with AI around it is insurance.
00:59And so our opportunity to help clients and work with clients and build on our underwriting capabilities and skill sets,
01:05I think, gives us a great opportunity going forward on the underwriting thing.
01:09I mean, you came from a on a broker. You're now running an underwriter in a IG.
01:14I mean, did that skill set match up? Yeah, listen, I think ultimately, first of all, there's a lot to
01:20learn.
01:21And I really enjoy digging into it and getting to learn a new organization.
01:24And it's a great culture and it's a great team. But in the end, we're all trying to help clients
01:29manage their risk,
01:30whether you're consulting as a broker would do or whether you're actually providing the capital.
01:34So ultimately dealing with the clients, understanding what the clients are working on or what they're worried about.
01:40That is the same. How you bring product and service is a little bit different.
01:45But honestly, it's been a it's been a great experience so far.
01:48Talk to me a little bit about first about the business coming out of this most recent quarter.
01:52I mean, premium growth is up. I average it out over the first half.
01:56So the last two quarters, you're running at about 13 percent.
01:59Yep. What is your expectation for the full year?
02:02I know there was some discussion as to why you didn't sort of reaffirm the low end of that previous
02:07forecast.
02:07Why not? Listen, I think the marketplace is coming off of a five to six year positive pricing cycle all
02:13around the world,
02:13which is unusual. It's one of the longest I've seen in my career.
02:17And so but today it's becoming more of a product line by product line market where there's more capital that's
02:22come in
02:22in certain classes like property where the prices have come down in key areas.
02:26But liability still still a positive pricing environment.
02:30And then some specialty products, whether it's energy or whether it's shipping or political violence based on the risk dynamics.
02:36And it's kind of a global comment. So overall, we're coming off of this massive cycle.
02:42And so we're just trying to be more more protective of our shareholders equity to make sure that we're only
02:47deploying capital
02:48where we're actually going to get a good return for them.
02:50Is there something that you're seeing up ahead that's maybe causing you to be a little bit more cautious?
02:56No, some of it, yes. Where the pricing is under pressure, we certainly don't want to chase growth just for
03:02growth's sake
03:02without the right margin. But at the same time, there's great opportunities out there.
03:07As the world has gotten more risky, our ability to help clients navigate that volatility provides, I think, for an
03:13AIG in particular,
03:14a great opportunity.
03:15Well, talk about the political risk, or I should say the geopolitical risk right now.
03:19Obviously, the Strait of Hormuz, you took some losses on that in the most recent quarter.
03:23Give me a sense here as to how you're approaching ensuring what is or is not maybe going in and
03:28out of the Strait of Hormuz.
03:29Sure. Certainly from a shipping standpoint, which is where everybody tends to focus on, we're staying really close in touch
03:35with governments, with the ship owners themselves, trying to understand what's happening.
03:39But ultimately, we're trying to provide capacity for them as they try and transit the Strait.
03:44At the same time, we also have insurance in Dubai and around the Middle East.
03:50So it's more than just shipping. That's where the political violence piece is becoming a product that is in big
03:55demand at the moment,
03:56as you might expect. And we're trying to lean in to help our clients that are there on the ground
04:00trying to manage it.
04:01I know there's still a lot of moving parts as to what's transpiring, what the potential Iran deal.
04:05But if we do get into a situation where there is some sort of toll or fee either controlled by
04:10Iran or Oman,
04:11is that something, is that a scenario where AIG would still be at the capacity to actually insure ships?
04:17Well, listen, we've never really stopped. And so it's not been an insurance problem. It's been a safety problem.
04:24And so the shipbuilders or the ship owners don't want to put their ships in harm's way, so to speak.
04:28But our ability to price the risk and allow them to at least quantify what it would cost if they
04:32decide they want to go through the Strait
04:34is something we feel pretty strongly we need to continue to keep doing.
04:37And so ultimately, if and when peace ultimately comes in that area, we'll continue to provide capital to our clients.
04:44One of the other big lines of business out there for insurance these days is in the AI space and
04:49the build out there.
04:51Kind of quantify exactly kind of what the business opportunity is there and what is it exactly that people would
04:57be looking to insure?
04:58Sure. So if you think about these data centers, there's 850 active ones going.
05:02They need everything from project finance all the way through to operations.
05:06So that's construction. That's cyber. That's property. That's liability. You go through the whole list.
05:10I think one of the advantages for us as AIG is we do the full suite of products.
05:15And so our ability to talk holistically to a hyperscaler about what they need and our ability to help participate
05:22in all the different areas,
05:23I think, is a competitive advantage for us and something we're leaning heavy on.
05:26But it is absolutely maxing out the P&C insurance industry in terms of the limits that are required.
05:33The cat areas where they're being based provide some some risk to us.
05:37So I think overall for the industry in total, it's a great opportunity.
05:41I think for AIG in specific, it lets us use all the capabilities and all the different product expertise because
05:48they're all needed to do a real data center.
05:50We've talked a lot on this show about this idea of the mismatch right now between the build out in
05:56AI and the power needed to actually do it.
05:59Does AIG and your ability to cover it, is that sort of part of the insurance offering that you have?
06:05Yeah, certainly dealing with the power providers.
06:08Ultimately, you know, the regulators have their say as to whether you can build it, what the framework is,
06:13and how you have to bring your own power and the like, but we're dealing with the power providers to
06:18make sure we're providing the right level of insurance for them
06:20as they as they build out as part of the data center construction process.
06:24What about your own use of AI internally within the company?
06:28Yeah, it's pretty exciting.
06:29We kind of look at it in two ways.
06:31If you look at it from as helping our clients, right, all and it's being used across industry in so
06:36many different ways.
06:36So we're really pushing ourselves to understand how a client is using AI in their role, whether it's construction, whether
06:43it's professions, medical,
06:44just understanding it because it is becoming embedded in all these industries.
06:48And I think for us, it's the same.
06:50We look at it.
06:51We've decided to go kind of right into the heart of our business, look at it from an underwriting standpoint.
06:56Can we make our underwriters smarter?
06:58Can we get to things faster?
06:59Can we make it an easier process for us to conduct business with our partners?
07:03And then on the claim side.
07:04So, you know, when a claim comes in and we get two million of them a year, how you actually
07:09read the complaint, look at the policy language,
07:12put them together, get it into the hands of an adjuster who can then get to a client, that can
07:16take time.
07:17The ability to shorten that, get it into the hands of an adjuster who's experienced on the topic, I think
07:23gives us a better client experience,
07:24which is really what we're pushing for on that side.
07:27Is it creating, I guess, the ability to sort of make sure that the investigating claims in a more efficient
07:34manner,
07:35assessing new business opportunities in an efficient manner?
07:38All true.
07:38And the goal here is we want to make it better for our colleagues, make them smarter, make it faster,
07:43give them more information.
07:44And we want to anchor around our clients to make sure the experience is better, because ultimately you can do
07:51it faster, but you have to do it better.
07:52And we want the clients to feel that we're investing in technology and AI that will actually improve their service
07:59levels.
08:00There have been a lot of changes over the last few years to get AIG on the right track.
08:05You've gotten out of the life insurance business, your pure PNC.
08:08I was interested in the convex business, $2.1 billion deal to buy a stake, I should say.
08:13Any plans to increase that stake long term?
08:15No plans at all.
08:16We feel pretty confident that where we are with them is the right spot, which is about a third.
08:20We also provide some reinsurance on the back, so we share in a little bit of their underwriting, which was
08:25also something we were after.
08:27And so we're opportunistically looking for ways to deploy capital where we think we can get a good return for
08:31the shareholders.
08:32Well, when we talk about deploying capital, I assume that means more M&A.
08:37Are these going to be deals potentially larger than the $2.1 billion deal for the convex business?
08:41That's not on our horizon at the moment.
08:42Because ultimately, where we are in the insurance cycle, we do think there will be opportunities for M&A down
08:47the road.
08:47But we like what we're doing with our team right now and trying to grow the business on an organic
08:52basis.
08:52But we're going to be nimble.
08:53And when we see opportunities, we'll move on.
08:55Well, I am curious about that, though.
08:57I mean, when people look at your targets, and this came up on the conference call on the ROE and
09:01some of the other metrics there,
09:02a lot of that does seem driven by some of the M&A activity that has sort of built AIG
09:08up.
09:08You're confident you can meet those numbers without additional M&A?
09:12Yeah, I think so.
09:12Or also purely organic?
09:13Ultimately, we're fortunate to have a great balance sheet, big equity position.
09:19We've got, you know, our reserving is rock solid.
09:21And so our ability to sort of use the company today to grow into the business, we see enough opportunity
09:26organically to continue to grow.
09:27So we're confident about it.
09:28I have to ask you about your relationship with Peter Zofino.
09:31Obviously, he's done a lot to build this business.
09:33But he's staying around.
09:34I mean, he's going to be executive chair.
09:36Is he still involved in some of the digital businesses stuff?
09:39But it's a good relationship?
09:40It's been a great relationship.
09:41And I've been very fortunate.
09:42I also have known him for almost my whole career.
09:45So it's been helpful to have that personal relationship going in.
09:48And also joining the company in February as the CEO elect gave me a little bit of time to dig
09:54deep into the firm itself and really without the spotlight of being the CEO, but really be able to understand
09:59it.
10:00Peter's been a great help and great friend in this process.
10:03So really fortunate.
10:04Now that a lot of the legacy issues with AIG are over, the regulatory issues, that's all behind you here.
10:10When we talk about the long-term growth story, five, ten years down the road, I mean, what is sort
10:16of the main metric that you want investors to keep an eye on as to how they assess you and
10:21your performance?
10:22Look, ultimately, how we grow our net premiums written is going to be a key F for us.
10:26We've got a very strong capital base, and we need to grow into it.
10:29And so when you look at the risk opportunities around the world, they're extensive.
10:33But also in other places like accident and health, warranty, high net worth where we're a leader, there's opportunities both
10:40here in the U.S. and around the world to deploy that capital in a way I think that drives
10:44good shareholder return.
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