American International Group (AIG) Aktie

Good day, and welcome to AIG's Second Quarter 2026 Financial Results Conference Call. This conference is being recorded. Now at this time, I would like to turn the conference over to Quentin McMillan. Please go ahead.

Thanks very much, Michelle, and good morning. Today's remarks may include forward-looking statements, which are subject to risks and uncertainties. These statements are not guarantees of future performance or events and are based on management's current expectations. AIG's filings with the SEC provide details on important factors that could cause actual results or events to differ materially. Except as required by applicable securities laws, AIG is under no obligation to update any forward-looking statements if circumstances or management's estimates or opinions should change. .

Today's remarks may also refer to non-GAAP financial measures. The reconciliation of such measures to the most comparable GAAP figures is included in our earnings release our financial supplement and earnings presentation, all of which are available on our website at aig.com. Finally, today's remarks related to net premiums written growth are presented on a constant dollar basis. Please refer to Page 26 of the earnings presentation for reconciliations of such metrics.

With that, I'd now like to turn the call over to our President and CEO, Eric Andersen.

Good morning, everyone. Thank you for joining us today. I'm pleased to share our strong second quarter results and the meaningful progress we are making across AIG. Our team is executing well on delivering the financial commitments we outlined at our 2025 Investor Day, which we remain on track to achieve. On the call today, I will review our second quarter financial highlights, provide perspective on the current market environment and discuss our strategic priorities that will guide our continued progress and growth. Following my remarks, Keith Walsh will provide more detail on our financial performance, and Jon Hancock will join us for Q&A.

Now let me review a few financial highlights. In a dynamic environment, we delivered another strong quarter, which contributed to an exceptional first half of the year. Our performance reflects the benefits of our diversified portfolio, continued momentum from organic growth in our strategic transactions and disciplined execution by our talented team. Adjusted after-tax income per diluted share was $2, a 10% increase year-over-year and adjusted after-tax income was $1.1 billion. Core operating ROE was 11.1% in the second quarter and 11.6% for the first half of 2026. Underwriting income was $686 million, a 10% increase year-over-year. The accident year combined ratio, as adjusted, was 88.1% and an improvement of 30 basis points from the prior year quarter. The calendar year combined ratio was 89%, also an improvement of 30 basis points over the prior year quarter.

Net premiums written increased 9%, or 11% excluding North American Property, reflecting organic growth in select high-performing segments of our global commercial portfolio. growth in Global Personal driven by our Accident & Health and high net worth businesses and contributions from our recent strategic transactions, which are providing meaningful growth in line with our expectations.

Global Commercial Insurance net premiums written increased 9% year-over-year. North America commercial net premiums written increased 9% year-over-year. We saw growth in retail casualty and across various segments of our financial lines portfolio, partially offset by declines in Lexington, driven by property where we are continuing to take disciplined actions to effectively manage the competitive environment, which I will discuss in more detail. International commercial net premiums written increased 10% and driven by growth in Property and Marine, partially offset by financial lines, where we continue to be targeted and disciplined in our underwriting.

In Global Commercial, retention was 88% and new business, including our strategic transactions, was $1.9 billion, a year-over-year increase of 37%. Our team made outstanding progress improving the performance of our Global Personal Insurance business. Net premiums written increased 8% in the quarter, driven by momentum in Accident & Health, reflecting our team's ongoing focus on building a robust pipeline that has resulted in several notable new client wins as well as continued organic growth in our high net worth business. Finally, we returned $904 million in capital to our shareholders in the second quarter, inclusive of $641 million in share repurchases and $263 million in dividends.

Now let me share some observations on the current market environment. There's a lot of conversation about where we are in the cycle. I would characterize the market as transitioning from an extended phase of broad positive pricing into a more selective environment, where profitability and growth are increasingly dependent on line-specific dynamics. Over the last several quarters, capacity has increased significantly across the market, including through E&S carriers, MGAs and MGUs, delegated authority structures, ILS and sidecars. While this influx of capacity has created a competitive pricing pressure in certain lines like property, we believe it has also created opportunities.

Our experience shows that in this type of environment, clients tend to become more discerning about the origination of capacity. They distinguish among providers that are simply pass-throughs for third-party paper or focused solely on excess coverage from those that offer holistic solutions, along with underwriting excellence, client service and responsive claims handling. This is where AIG is strongly positioned. We are seeing this play out in property where our expertise and the diversity of our global property portfolio are important advantages.

Last quarter, we detailed the challenging dynamics in the North American property market, particularly in E&S, where pricing has continued to be under pressure, fueled by excess capacity and competition. Given the ongoing rate pressure, we have intentionally continued to contract our Lexington property portfolio in targeted areas, while selectively growing the parts of the property portfolio, we believe will deliver the best risk-adjusted returns. Where we see pricing that is not adequate, we are offering terms that reflect our view of the risks. As a result, we are retaining business where we can achieve acceptable terms while walking away from business that does not meet our underwriting standards. This has resulted in a meaningful 9 percentage point reduction in premium retention at Lexington Property in the second quarter.

The pricing environment, combined with our deliberate actions, have reduced overall growth in North America by over 3 percentage points. Our North America retail property portfolio has a different composition than our Lexington property portfolio. While the environment remains competitive, we continue to find targeted opportunities for growth, including through our Everest renewal rights transaction. In international property, rates are declining at a more moderate pace than in North America. This remains an attractive portfolio with opportunities in many countries for sustained profitable growth, supported by lower peak catastrophe exposure.

Turning to casualty. Our underwriting discipline and technical claims expertise have positioned us well across our portfolio. In North America Retail Casualty, pricing is up double digits and remains above loss cost trends. While rate increases have moderated from the elevated levels we saw at the peak of the market cycle, we are focusing on maintaining rate adequacy and strong risk-adjusted returns. In North America excess casualty, we are achieving mid-teen pricing increases, and we have been disciplined on attachment points, terms and conditions, limits and risk selection. In international casualty, we have a broad geographic portfolio with a significant portion of our business in markets with lower litigation environments. While there is increasing competition and pricing is beginning to become more competitive in some areas, we continue to see select opportunities for profitable growth, supported by our underwriting and claims expertise as well as our differentiated multinational capabilities.

In Global Specialty, we are closely watching the energy and aviation markets. where we are seeing pricing that we believe does not fully reflect heightened exposure in the Middle East conflict and recent large industry losses. In contrast, political violence and terrorism rates increased in the second quarter driven by the elevated risk exposure associated with the broader conflict. For example, our political violence pricing increased 9% in the second quarter compared to a decrease of 8% in the first quarter. We are also seeing broader demand for these products as clients sharpen their focus on risk mitigation and protection. In summary, across our global and diverse portfolio, we continue to deploy capital selectively where pricing, margin and risk quality are within our appetite and deliver targeted risk-adjusted returns.

Now I'd like to expand on AIG's unique competitive advantages and how we intend to convert these strengths into sustained earnings growth and long-term value creation. AIG has an enviable global platform, deep underwriting expertise, a broad set of products and risk solutions, robust claims capabilities and a team of outstanding colleagues. We also have 1 of the most recognized brands in the industry, which helps us compete in markets around the world. Together, these strengths make AIG a leading global underwriting company. Our durable foundation enables us to expand the ways in which we access business, deploy capital and provide value to clients and distribution partners to become even more relevant in the market.

At the core of our strategy is a significant opportunity to become an essential partner to our clients by connecting our businesses more effectively across AIG and deploying capital in innovative ways to drive long-term value. Our growth plan is built around 5 strategic priorities: Delivering exceptional underwriting performance and deploying capital towards opportunities with the strongest risk-adjusted returns. Using our balance sheet and reinsurance program efficiently to support profitable growth while prudently managing volatility. Expanding our AI capabilities to improve decision-making, quality and productivity. Maintaining expense discipline. And investing in our team and talent to strengthen execution, connectivity and our ability to bring the full capability of AIG to our clients.

Let me go deeper into how we will execute against each priority, beginning with underwriting performance and our strategic deployment of capital. Our colleagues have done exceptional work, transforming AIG and building a stronger, more focused company. That foundation allows us to be more responsive to client needs and more effective in supporting our partners while maintaining underwriting excellence. Across every line of business, we look at risk at the individual level, the portfolio level and through the lens of different distribution strategies in order to bring forward innovative solutions. We are focused on growing attractive areas of our portfolio by bringing together AIG's global underwriting, claims and risk expertise to help clients and partners better understand the risks they face and deliver more comprehensive solutions that support their evolving needs.

Let's take data centers as an example. These are end-to-end multiline projects for global AI hyperscalers that require financing, construction, marine, cyber, energy, operational, multinational programs and bespoke risk solutions. AIG is 1 of the few insurers that can bring all of these capabilities to the table with the expertise to manage the complex scale and timetable these projects require, and we are demonstrating leadership in this area.

Moving to our geographic presence. We are looking at opportunities to expand our reach in regions where we see attractive opportunities for disciplined growth. As an example, during the second quarter, we announced an agreement to acquire Everest Insurance operations in Colombia. Upon closing, it will give AIG access to 1 of the largest and fastest developing insurance markets in Latin America, supporting our growth ambitions in the region. Beyond specific growth opportunities, our ability to bring AIG's full capabilities to clients navigating changing conditions and fast-moving risk is equally important.

In the Middle East, where the conflict remains highly fluid, especially around the Strait of Hormuz, we have continued to provide advice, capacity and support to clients operating in the region. This is where our global platform and the expertise of our underwriting and claims teams really matters. We are staying closely connected to governments, marine and shipping clients directly exposed to developments in the street, and those on the ground managing supply chain constraints and other challenges. Our claims team has been working closely with clients to help them navigate these complex situations and respond quickly as conditions evolve. These examples demonstrate the demand of our diversified multiline solutions and the significant value we can create when we operate as 1 globally connected team. Second, we will continue to use our balance sheet and reinsurance program to support profitable growth while managing volatility.

Over many years, AIG has built a consistent framework for generating underwriting profit through disciplined risk selection, prudent limits and the strategic use of reinsurance. We benefit from an attractive portfolio and deep relationships with exceptional reinsurance partners, and we achieved favorable outcomes at our June 1 reinsurance renewals. Reinsurance continues to be an important tool in managing volatility and tail risk and we evaluate our program continuously to ensure it remains aligned with market conditions and our return objectives. This disciplined approach extends to how we manage capital. Fundamentally, we believe in a balanced capital management philosophy.

Our top priority is to grow the company profitably by expanding earnings, premiums, our invested assets and our overall tangible book value. If we can't deploy capital at attractive returns, we will return it to shareholders through share repurchases and dividends. Given our current share price at a modest premium to tangible book value, we view the repurchase of our shares is a very attractive use of capital. Third, we intend to continue to scale AI to improve decision-making, quality and productivity across AIG. Technology and AI are central to how we are creating long-term value for clients, colleagues and stakeholders. -- helping us make better decisions, unlocking capacity for growth and enabling our teams to operate with greater speed, consistency and effectiveness.

As we have scaled underwriting by AIG Assist and claims by AIG Assist, our operational results remain strong and consistent. Where deployed, our underwriters are reviewing more submissions and generating significantly faster, improving their productivity. Importantly, our AI capabilities also enable us to access valuable commercial insights, particularly in how we understand and engage with our broker partners. As more submission data flows through underwriting by AIG Assist, we can analyze broker level results to gain greater visibility into their performance. and distribution trends, including where we are seeing the most success. This information will enhance how we partner with brokers, provide a clearer view of the broader market ecosystem and enable data-driven decisions that can create value across market cycles. We are pleased with the progress we are making, and we continue to thoughtfully scale our AI capabilities across the company.

Fourth, we will continue to maintain expense discipline while investing for growth. Our expense philosophy is focused on prioritizing resources in areas that directly serve clients and support sustainable growth. We are investing in underwriting talent in priority areas, strengthening how we engage with distribution partners, advancing our claims capabilities and deploying technology to support these opportunities. At the same time, we are refining our end-to-end processes to simplify workflows, reduce friction and deliver efficiencies. This discipline should create capacity to fund our strategic priorities. We remain on track to reduce the general insurance expense ratio of below 30% for full year 2027.

Fifth, we will continue to invest in our team and talent to strengthen execution, connectivity and our ability to bring the full capabilities of AIG to clients. One of AIG's greatest strength is the depth of talent across the company. Our colleagues are doing exceptional work managing market dynamics, advancing underwriting excellence and serving as trusted experts to our clients and distribution partners. We have a deep bench of leaders across AIG and have made several internal promotions over the last few months, underscoring our commitment to developing and advancing talent from within. At the same time, we are adding experienced external talent and new capabilities to strengthen connectivity across AIG, pursue emerging growth areas in key verticals and product lines and reinforce a more agile, connected go-to-market culture. These internal promotions and targeted external appointments reflect our commitment to invest in our teams with talent that supports our strategic growth initiatives and help us build capabilities in areas where we see attractive returns.

In closing, we continue to make significant progress on shaping the future of AIG as a market leader and best-in-class global underwriting company. Today, AIG has a stronger, more focused portfolio, talented and dedicated colleagues, a demonstrated commitment to underwriting excellence, meaningful growth opportunities, considerable potential to benefit from data, technology and AI, a strong balance sheet and significant financial flexibility. I am very enthusiastic about the future of the company and confident in AIG's next chapter. That confidence reflects not only the achievements we have made but the clear path ahead. We are well positioned to drive value for our stakeholders over the long term, thanks to the dedication of our talented colleagues around the world. Their commitment to our clients, our partners, key stakeholders and each other continue to differentiate AIG.

With that, I'll turn the call over to Keith to review our financial results in greater detail before we take questions.

Thank you, Eric, and good morning. We had a strong second quarter and exceptional first half of 2026. I will expand on the financial highlights. Second quarter general insurance adjusted pretax income was $1.5 billion, up 4% from the prior year quarter, reflecting higher underwriting income and higher interest income, partially offset by lower income from our alternatives portfolio. Net premiums earned were $6.2 billion, up 5% year-over-year. Underwriting income increased 10% year-over-year to $686 million, driven by improved accident year underwriting results and more favorable prior year reserve development, partially offset by higher catastrophe losses.

For the first half of 2026, general insurance underwriting income increased 68% to $1.5 billion, reflecting an excellent 13% increase in accident year underwriting earnings lower catastrophe losses and more favorable prior year reserve development. Overall, first half 2026 net premiums written grew 13%, which we expect to support earnings growth as it earns in over 2026 and 2027.

Moving to second quarter underwriting ratios. General Insurance accident year combined ratio as adjusted was 88.1%, an improvement of 30 basis points from the prior year quarter. The improvement was driven by a lower expense ratio of 30.8%, which improved 20 basis points year-over-year. As we've mentioned in prior calls, it is better to look at our expense ratio over the course of the year to see the trend in underlying improvements. As of June 30, 2026, the trailing 12-month expense ratio was 30.7%, reflecting increased operating leverage and continued expense discipline. As Eric stated, we are on track to bring our expense ratio below 30% for full year 2027.

The accident year loss ratio as adjusted of 57.3% improved 10 basis points from the prior year quarter. Total catastrophe charges for the quarter were $210 million and included $75 million in net losses related to the Middle East conflict.

Prior year development. Net of reinsurance and prior year premium was $145 million favorable and included $146 million of net favorable loss reserve development, $26 million of ADC amortization and $27 million of prior year return premiums. The favorable development was driven primarily by continued favorable loss experience, most notably in U.S. workers' compensation of $177 million and U.S. property and special risks of $79 million. This was partially offset by strengthening in U.S. excess casualty of $74 million, predominantly in accident years 2016 and 2023. Specifically, in 2023, we took the opportunity to slightly increase that accident year to bring it in line with the level of prudence reflected in 2024 and 2025.

There are several key factors in our process that give us confidence in our reserves. First, the continued execution of our limit management strategy has resulted in lower limits with tighter terms and conditions across our portfolio. Second, our comprehensive reinsurance program helps to mitigate severity risk while providing an additional layer of external validation from our reinsurance partners about our assumptions. Third, we conduct a review of the entire portfolio every 90 days, allowing us to identify emerging trends earlier and react quickly. We complement this with monthly looks at actual versus expected movements and regular interactions to inform the underwriting, claims and actuarial feedback loop. We continue to feel confident with our reserve position. Overall, second quarter General Insurance calendar year combined ratio improved 30 basis points year-over-year to 89.0%. The combined ratio for the first half of the year was 88.1%, and an improvement of 450 basis points, an outstanding result.

Moving to segment results. North America Commercial accident year combined ratio as adjusted was 86.7% and an increase of 50 basis points over the prior year quarter. The accident year loss ratio, as adjusted, was 63.4%, an increase of 30 basis points, driven by changes in business mix as we reduced certain property lines and earned in more casualty business, combined with rate pressure, particularly in property. The expense ratio increased 20 basis points, driven by the acquisition ratio, which was 50 basis points higher due to mix change, while the GOE ratio improved by 30 basis points. This quarter included 410 basis points of catastrophe losses and 680 basis points of favorable prior year development. Overall, North America commercial calendar year combined ratio was 84.0% an excellent result and an improvement of 190 basis points from the prior year quarter.

International Commercial accident year combined ratio as adjusted was 87.3%, an increase of 230 basis points. The accident year loss ratio was 55.2%, a 100 basis point increase year-over-year, reflecting rate pressure partially mitigated by underwriting actions and reinsurance benefits. The expense ratio rose 130 basis points to 32.1%, driven entirely by a higher acquisition ratio. The increase in the acquisition ratio was primarily driven by strong new business growth and changes in business mix. While our recent strategic transactions benefited the overall expense ratio in the quarter, they contributed to a higher acquisition ratio, which was more than offset by the benefits in the GOE ratio. The international commercial calendar year combined ratio of 91.3% and included 390 basis points of catastrophe losses, driven by $75 million of net losses related to the Middle East conflict.

Moving to Global Personal. The business generated strong growth momentum in Accident & Health and high net worth, as Eric outlined, while delivering continued profitability improvement. Second quarter underwriting income of $114 million increased nearly $90 million year-over-year and our adjusted accident year underwriting income more than doubled. The accident year combined ratio as adjusted was 91.2%, a 490 basis point decrease year-over-year driven by strong improvement in both the accident year loss ratio and expense ratio.

The accident year loss ratio improved 270 basis points to 51.5%, driven by underwriting actions and lower reinsurance costs. The expense ratio improved 220 basis points primarily driven by continuing benefit of more favorable high net worth commission terms. This quarter included 170 basis points of catastrophe losses and de minimis prior year development. Second quarter calendar year combined ratio was 92.9%, an improvement of 560 basis points year-over-year. For the first half of 2026, the combined ratio was 91.2% and a 1,200 basis point improvement. We are pleased with the progress we are making as the actions we've taken to reposition the portfolio continue to earn through.

Moving to pricing. Starting with North America Commercial. Eric outlined details of the property market, so my comments will focus on other lines. Excluding property, North America Commercial renewal pricing increased 5% year-over-year. North America Casualty pricing remains favorable with retail casualty pricing increasing 10%, exceeding loss cost trend and including a 14% pricing increase in excess casualty. In Glatfelter and programs, which focus on small and medium businesses, pricing increases were 7% and 5%, respectively. In financial lines, our pricing, excluding cyber was flat for the quarter, which improved from the prior year. We have been successful in obtaining rate across all segments of our book and in targeted classes of D&O, we have seen positive pricing change. Overall, we believe financial lines will be less of a headwind moving forward.

In International Commercial, renewal pricing declined 6% following multiple years of compounded rate increases. By line of business, global energy store pricing decreased 15% and Financial lines pricing was down 4%. Where the market conditions are highly competitive, we will focus on preserving margin and being disciplined in the application of our underwriting standards.

Moving to net investment income. Second quarter total net investment income on an APTI basis was $908 million. General Insurance net investment income was $871 million, flat year-over-year. In our core fixed income portfolio, net investment income grew 4% from the prior year quarter. During the second quarter, we continued to reinvest at higher yields with the average new money yield on our core fixed income portfolio roughly 60 basis points higher than sales and maturities. The annualized yield was 4.72%, a 30 basis point improvement over the prior year quarter. The steady growth in our core fixed income portfolio was partially offset by lower alternative investment income of $13 million, down from $48 million in the prior year quarter. The decline was due to private equity, which posted a loss of $8 million. As a reminder, private equity is reported on a 1-quarter lag and the second quarter results reflected the market volatility and valuation marks from the first quarter of 2026.

We continue to execute on our previously announced investment partnerships where we have deployed capital and expect to see the benefits moving forward. Moving to other operations. Second quarter adjusted pretax loss was $142 million versus a loss of $101 million in the prior year quarter. The difference was driven by lower net investment income and other of $39 million compared to $92 million in the prior year quarter, which included $27 million of Core Bridge dividends. In addition, the current quarter had lower short-term investment income.

Turning to capital management. We have a strong balance sheet and significant financial flexibility. Our capital management priorities remain focused on deploying capital to support profitable growth and delivering attractive long-term returns to shareholders. We maintained our strong financial position and ended the quarter with $9 billion of debt outstanding and a total debt to adjusted capital ratio of 17.6%. In May, we sold approximately 25 million shares of Core Bridge common stock for $710 million, which was the remainder of our holdings. This sale marks the culmination of our 5-year separation process and a significant milestone as we've transformed into a focused global property and casualty insurer.

Book value per share at June 30, 2026 was $77.39, up 4% from the prior year quarter, reflecting growth in net income as well as the favorable impact of lower interest rates partially offset by capital return to shareholders through dividends and share repurchases. Adjusted tangible book value per share was $72.18, up 3% from the prior year quarter. In summary, we delivered a strong second quarter with excellent underwriting results that contributed to an exceptional first half of 2026. We remain on track to deliver on our Investor Day goals.

With that, I will turn the call back over to Eric.

Thanks, Keith. And Michelle, we're ready for questions.

[Operator Instructions] Our first question comes from Alex Scott with Barclays.

First one I had is on the leverage in the business. I mean when I look at AIG, I mean, you guys have done so much in the combined ratio and expenses. And you really look similar to peers on a lot of those metrics now. but the ROE is still lower than peers, mostly because of, I think, the premium leverage in the business. And so I just wanted to get your feel on how do you think about the excess capital that you have -- is there anything structural that prevents that from moving up more significantly? And how do you manage that through a soft market where it's a little bit more difficult to grow? .

Thanks, Alex. There's a lot of questions in there. Let me start by saying just from an excess capital standpoint first. As an insurance company, we're pretty fortunate to have a rock solid balance sheet. And as I think I said in the prepared remarks, we see a lot of opportunities to grow the business. And so our preference is to focus on growing into the capital base. But at the same time, I think we've demonstrated that we're big believers in returning capital through buybacks and dividends, which is a focus for us as well.

I think you also saw that we've entered into select targeted transactions over the last 12 to 24 months that do contribute to premium volume and capabilities, which has been additive to the portfolio, and we're going to continue to look for things that fit that same category. But ultimately, we're well capitalized. We have strong liquidity. We have debt capacity, 3 important strengths that drive and are so important for us as a global insurer and ultimately, to get to the high end of the ROE range that we talked about at Investor Day, it requires strong execution around underwriting, around expense discipline, investment income, capital management, we're focused hard on the underwriting profitability. We're focused hard on driving higher yields and then talking through how we actually support the balance sheet with the financial flexibility. So we feel pretty good about where we are, and we see a lot of opportunities in the future.

Our next question comes from Meyer Shields with KBW.

We've heard a number of executives talk about how social inflation in the U.S. may be leveling off or moderating a little bit. And I'm wondering setting aside what you're booking and what you're embedding in pricing, what are you monitoring? And what are you seeing in terms of the pace of social inflation?

Meyer, thanks for the question. Listen, I think there's been a lot of talk around social inflation and litigation funding and all the aspects that have been driving everything from nuclear verdicts to just overall cost increases. I would say there's been some efforts in some states, whether it was North Carolina, around litigation funding, New York on auto reform, all good green shoots. But ultimately, we haven't seen anything that says that it's moderating at this point, and we're certainly not building that into our pricing at this stage.

Okay. Perfect. And then a quick question for Keith. You talked about getting accident year '23 excess casualty sort of in line with subsequent years. And I understand why that wouldn't have an impact on any need for changing this year's loss picks. But what about accident year '22, '21? Is there significant IBNR there that would also need to be reviewed?

Meyer, maybe -- this is Eric. Let me just jump in, and I just want to provide 1 or 2 comments before Keith answers that question, which he will do well. I think he laid out in the prepared remarks sort of the factors around our reserving process, right, whether it was the limit management strategy, the re-underwriting, the reinsurance program, the reserving philosophy. And I personally spent a lot of time in the last couple of months going through with the team, our reserving process, how we build the loss picks at a granular level, what the actuarial claims and underwriting triangulation does to get ahead of trends, the robust governance over it. So I feel really good where we are. But with that, Keith, finally a little bit of color.

Yes. Thanks a lot, Eric. Meyer, as we look at our reserves, there's ranges of estimates that were informed by different methods and assumptions. Eric commented on our process, so I won't repeat that. What I'll tell you is we made the comment predominantly in accident year '16 and '23, and that's where we saw the impact. But our experience, specifically on '23 is broadly in line with our expectations, and we continue to be in our expected range of outcomes and that includes the more recent accident years as well. For 2023, specifically, we took the opportunity to move up in the current range. And that now brings us to a similar level to years '24 and '25. We're not seeing material or any deterioration, any real deterioration in '23 and no change in frequency or severity. We just felt it was simply prudent to move up in that range to be more consistent.

Our next question comes from Brian Meredith.

So 2 quick ones. First, I guess, for Keith, I'm just curious, Keith, you talked about how the acquisition ratio is kind of trending up a little bit because of mix shift. What is the impact that's having on your core loss ratios? Do you expect that to continue to kind of trend upwards here as perhaps you ship out of a property and more into the casualty lines? .

Listen, let me just open with that for a second because I do think it's important to just lay a few comments on top of it. Certainly, as rates moderate across the portfolio, you're going to see some pressure on the loss ratios. It's something we watch. We talked -- I think in the prepared remarks, we mentioned what we've been doing in the E&S portfolio, we mentioned that we're talking or we're looking at the energy business just to make sure that we're getting the right price for the risk-adjusted return that we're looking for. So business mix is going to be an important part of this.

But I think on the acquisition ratio, I think the point we're trying to make here is that there are certain portfolios and certain transactions that may add to the acquisition costs, but ultimately, you provide less expenses to that portfolio. And so it improves the overall expense ratios, but it just comes in different buckets. And so I think we're trying to do is get you to look across the whole in its entirety versus the individual pieces. But with that, Keith, anything you would add?

Thanks, Eric. And just specifically on the loss ratio piece, mix is a big part of it, Brian, as you mentioned, and we've been talking about this for several quarters, as we have pulled back or reduced in the property market, remember, second quarter is a very large quarter, and we've gotten larger in casualty you tend to get that mix shift and you get the loss ratio tick up a bit. More broadly speaking, you've seen this in the commercial lines book for 5 of the last 6 quarters, right, as we move forward. I'll just make a broader comment, and this goes back to what we've been saying for the last couple of years. Our accident year combined ratio, adjusted margins have largely held, and that's a function of some of the pressures you're seeing in commercial lines loss ratios being offset by the really strong work that was done on the personal insurance side as well as the progress we continue to make on the expense ratio. So we feel really good about where we're at with our overall margins.

That makes a lot of sense. And then, Eric, just curious, thanks for all the commentary on kind of growth and how you're thinking about growing here. But how do you think about the pricing environment in your context of what the growth outlook is here and how you're thinking about growth via organic or inorganic? Are you thinking we're going to see consistent kind of pricing out like we are today, things get more competitive? Do you think maybe look more towards inorganic versus organic? Maybe give us a little color around that. .

Sure. It's a great question, and it's something we talk a lot about. Listen, from a components of growth standpoint, we did 9% in the quarter, and we did 13% in the first half. And when we talk about the strategic transactions versus what we're doing organically, it's getting more difficult to distinguish between the 2. When you think about our underwriters and the way they are approaching each client and each program, whether it's an Everest renewal placement on top of an AIG placement, certainly, how we work that down into a structure for a client is important. So we take a client view as opposed to a transaction view, but we do manage it internally just to make sure we've got eyes on it, as you would expect. So for us, it's really about can we get access to the right products at the right pricing with the right terms and conditions to be able to sort of do that with our clients.

But as I said in the prepared remarks, we're not opposed to continuing to look for strategic opportunities where we can deploy capital and get the right return for ourselves, whether that's in the U.S., whether that's around the world, going to continue to do that because I do think it allows us to continue to broaden our relationships with our clients. It often brings new talent and new skill sets to the organization. And so it's something you're going to see us continue to do.

Our next question comes from Michael Zaremski with BMO.

Great. Back to the topic of growth and relative to the kind of the mid, maybe upper end range of the ROE goals that you set out at the Investor Day last year in which Eric, you mentioned on the call this morning, how big of a factor is high single digit to low double-digit premium growth to kind of get to that range in terms of operating leverage, ultimately.

So listen, let me start with a couple of opening points, and then I'm going to ask Jon Hancock to jump in as well to get his perspective. But as I said a few minutes ago, I think we're having a great growth here. I mean, 13% in the first half, I think, is an excellent result. But we are at a point in the cycle where cycle management becomes a primary tool to make sure that we maintained a disciplined approach to the market. We do think there's attractive organic opportunities in the market, and we're going to continue to be selective to be able to position ourselves across all 3 of our segments.

Maybe if you think about the strategic transactions we did, we knew going into this year that growth was likely going to be more challenging. And so converting them has been a big priority for the work that the team has been doing over the last 6 to 12 months as those things have come online. But listen, the property market continues to be under broader pressure. We talked about the E&S market a lot, but certainly, internationally, which doesn't have as much volatility, but certainly, seems to want to mimic the U.S. market more and more as the days go by. But in casualty remains pretty attractive. We're seeing the rate increases in the books that we need and to be able to hit our risk-adjusted returns and we like the international portfolio. So overall, we actually see some great opportunities. But Jon, why don't you chime in with your thoughts?

Okay. Yes. Thanks. I won't repeat what you and Keith have already said. But I think it's worth just repeating we take a prudent approach. We know where we are in the cycle. And this isn't the first time many of us have experienced a market cycle, isn't it? We've been expecting it. We've been preparing for it, and we're managing it for sure. And Eric said a couple of times, we have a really diverse portfolio across the globe. And we're seeing different market dynamics and different risk attributes actually in different parts of the world. So yes, it's a competitive market for sure, but lots of good growth opportunities.

So without repeating what's been said, I'll give you a couple of examples, I think, which are relevant. I mean, Global Specialty, which we talk about a lot. I mean, we're market leaders in all of those segments and we've seen several years of significant rate increase and strong profit. That leadership means we can go after the business we want and at the same time, remain disciplined about obtaining the right risk-adjusted returns at those targets we talk about. And we expect to continue to grow. But I'd also call out energy within that Global Specialty portfolio. It's strategically important to us. It's 1 of the strongest long-term underwriting franchises we've got.

But right now, we're not happy with what we're seeing going on in the market in terms of pricing, which we don't believe is reflective of the loss activity or the underlying risks actually. But we're not an index step to the market. We've got a great leadership team, huge amounts of management data. So we're taking the right actions all the way through. But we're watching it carefully. And in the meantime, we pick our way through the best opportunities.

And I'll just give 1 more flip to probably the opposite end of the risk spectrum actually. And we've talked about it a couple of times on the call. We talk about accident health a lot. So in many ways, it is the opposite of Global Specialty, high volume, low limit. We're recognized as a leader in A&H. We've been starting to show some really solid growth, which we expect to continue. We've got a global footprint in A&H, and we see good near- and long-term opportunities in a lot of the countries we operate. We've got a great pipeline already delivering some notable wins, and we expect to see more. So to micro examples across a broad portfolio.

Thanks, Jon. And maybe just to put a bow on that topic. It does in this market and with our diversified portfolio gives us a chance to play both offense and defense under different market environments. And we're focused on converting these advantages, but profitability is always the North Star, and we want to make sure as we grow, we're growing in a smart prudent way.

Got it. That's helpful. And just quickly a follow-up, a question on technology, but it dovetails on the growth conversation again. At the Investor Day and subsequently, you guys have discussed some kind of exciting initiatives to I guess I'd phrase it as get more business through the pipes in terms of being able to respond to submissions, et cetera, is maybe you can kind of update us of, is that having a noticeable difference yet? Or is that still kind of more of a work in progress?

No, that's a great question. And I would say maybe just from a little bit of a personal perspective on it, and then we'll go into what AIG has been doing, which I do think is industry-leading and very exciting for our company. just from my background, an area of focus over many years has been working on the end-to-end insurance process, identifying ways to make it more efficient, more scalable, more effective, everything from how do we get more business, how do we process it more efficiently and how do we make sure we're delivering a better colleague experience and a better client experience, which are really a term you're going to hear us anchor to in the future, making sure that all the investments that we're making really do improve our colleague experience and how they do their business, whether it's an underwriter, an underwriter assistant, a claims person, someone that works in 1 of our corporate functions.

And then ultimately, they have to drive client outcomes, whether it's new business for us and new products for them, whether it's better claims service, whether it's speed of the business of insurance, whether it's invoices or policies or all those things. So really focused on anchoring to what makes it better for our colleagues first and what makes it better for our clients. And I would say, over the last couple of months, I've been investing a lot of personal time in with our team, making sure that I'm up to speed with AIG's strategy, whether it's the relationships we have with our great partners, but really, more importantly, how are we rolling out AIG Assist, underwriting by AIG Assist, claims by AIG Assist, that we're actually, as we've been talking about in prior quarters that we're actually getting it into the hands of our colleagues, and we're able to see advantages that grow from that investment.

And I talked a little bit in the prepared remarks about the broker level insights I could have talked about the speed and the number of submissions, which I think we've talked about in the past, which continues to happen for us. We're seeing more business, we're quoting more business and we're able to actually get a better line of sight on consistency in the underwriting speed in the process, and we feel really good about that, and we're going to continue to drive that forward.

The broker level insight it was -- we wanted to point out is something a little bit different. And what we're learning as we go through the volume and in a way where our AI strategy gives us better insight, is as we're dealing with our distribution partners, we're able to learn pretty quickly where we're seeing better business, from an office from a firm, from an office down to a broker, which gives us the opportunity to pivot and actually spend the right resources where we are getting the best outcomes. And so we're in early days of that, and it was sort of a derivative outcome to all the work we've been doing around underwriting by AIG assist. But as we roll that through the organization, the ability to use our client distribution teams and our broker distribution teams to focus in on where we see our best opportunities, we think we'll make it more efficient.

It may not be more submissions, but it might be better submissions, submissions that match our appetite with partners and clients that want to use our organization to handle their risk needs. So early days on that, but an exciting new piece for us and really just underscores making these kind of investments as you innovate and lead in this space does provide benefits that we didn't necessarily see going into this, but ultimately, if something as we connect our sort of front-end facing part of the organization, really starting to work that angle pretty hard.

Our next question comes from Rowland Mayor with RBC Capital Markets.

I was wondering if you could size the premium contribution from the Convex quota share in the quarter. I think it would be helpful since there's built in growth from that over the next few years.

Listen, I would say when you look at the 9% in the second quarter and the 13%, we've talked about it coming in a couple of different buckets. Certainly, the organic number, somewhere I would call low to mid-single digits. And then the other -- but honestly, as I said before, with the Everest transaction gets a little difficult to track as we start to go client by client where we have a shared relationship. And so the rest of it fills in with some of the other transactions. So we haven't really broken out the pieces. But just to give you some sense, we talked a little bit about the reinsurance tailwind in the first quarter. That's largely dissipated in the second, and the rest of the transactions kind of filling the rest of the percentages.

And then maybe going a bit of a different direction. Corporate debt issuance to support AI build-out has been a growing topic of interest. I'm just wondering if in your fixed income portfolio starting to have significant allocations to AI-related corporate debt?

Yes, go ahead, Keith.

Yes, Rowland, thanks. We don't have significant allocations to AI-specific related debt. I mean I did mention on the last quarter call a bit about within private credit, direct software exposure, for example, is 16 basis points of the portfolio. So I would say any of these allocations are pretty immaterial at this point.

Our next question comes from Pablo Singzon with JPMorgan.

The Global Personal Lines business combined ratio has been running close or better to your Investor Day target for the past several quarters. So how much of that in your view is the result of a generally favorable environment for personal lines versus changes that you have put through and perhaps your mix as well, right? Because we recognize that there are other lines in there aside from homeowners and personal auto? So any perspective would be helpful.

Sure. Listen, I think it's always hard to put those answers in specific buckets because they all have an impact on it, but we're excited about what's happening with the global personal business. we highlighted in the prepared remarks, the growth that we're seeing, 7% NPW growth, 220 basis point improvement in the expense ratio, 490 basis points improvement in the combined ratio. So all really positive and positive direction. We're excited about the business in general. We see it as an opportunity for us to really expand and connect the firm globally in areas that are pretty exciting. But the high end worth profitability, it was premium growth. It was underwriting actions. It was some reinsurance savings, lower acquisition costs, running the business better around operating expenses.

And then Jon talked about the A&H business, we're starting to see some good growth with the building pipeline, and we're investing behind that leadership team. We feel like they are really world-class and have really got the sort of the business line growing for us. So it has some cat to it, as we all know, especially the high net worth business, and we've been a little bit fortunate. But ultimately, I think the fundamentals of the business are very solid and we continue to invest in it.

And then second, just on expenses. You had mentioned you're on track to reach our 30% target. The expense ratio ticked up sequentially, but I think that reflects the seasonality in your reporting, right? So maybe if you could talk about your expectations for the second half and more broadly, how you think expense management and perhaps newer tools like AI will help you in subsequent years?

Great. So maybe I'll take it first and then maybe I'll turn it to Keith for some additional -- some color. But as we said in the prepared remarks, we remain on track to achieve the sub-30% expense ratio for full year that's been something that the organization has been on a journey on even before the Investor Day commitment, but obviously, it's a focus for us. And why are we confident about it, we are really disciplined on expenses, and we've made tremendous progress. The growth that we're achieving in '26 is going to bring some strong operating leverage. And I would just say before Keith probably said it 3 more times, you can't really look at it quarter-to-quarter. It does have fluctuations, but look at it over a rolling 12 months. But Keith, why don't you go from here?

Yes. Pablo, thanks for the question. And I appreciate it could sometimes be difficult on the outside, the quarter-to-quarter movements. And that's why we've always stressed looking at it over the course of a year or longer stretch of time. And as Eric said, we continue to make progress. Just a couple of points in not to belabor, but I'll say it again, 3 points. Point 1 on a rolling 4 quarters, which I think is the best way to look at it to see the trend where a 30.7%, and just keep in context, we ended 2025 at 31.1%, right? So we continue to make progress on that metric.

Point two, premium leverage, right, as Eric has stated, the written premium is quite strong this year. And as that earns in that will continue to give us leverage on this ratio as we move forward as our net premiums earned grows. And then point three, expense discipline. Another way to look at it is looking at the nominal numbers. I think that's really important to give it another view. And what I do is you look at the GOE and the other expenses in the corporate segment add them together. And if you look at for the second quarter and the first half, those expenses were flat year-over-year FX adjusted against 5% premium growth. So it shows the expense discipline and the leverage that we're getting and why we have confidence going forward, we'll continue to get that.

And maybe 1 more comment. I think you also asked about the AI expense and whether we'll see that as a help. Ultimately, how we become more efficient, technology will play a big role in it. But if the underlying question was really about headcount, the strategy for us on the deployment of AI is not to have less colleagues, but to have our colleagues become more efficient and work with more clients. So that's really where we're going with the investments, and that's how we're looking at it. And I think that's why we went hard at the center of the business.

When we went to underwriting, we went to claims, that's what we do, and we feel really strongly that the rollout of our AI strategy will help us be better in both certainly, with the underwriting side of it, you see more, you get more consistent, you learned distribution things that we were talking about. And then on claims, our ability to interact with our clients faster, more efficiently, in a way that helps them solve either get their claim paid quickly or at least to respond to them in a way that they feel like they're being cared for, I think it helps us build brand and helps us build relationships that ultimately help us drive more business and help us hold the business that we have.

Our next question comes from Elyse Greenspan with Wells Fargo.

My first question, I don't think you guys gave an update on the premium growth guide, right, which was low to mid-teens for the year. It does sound like maybe a bit more cautious on property that we've heard from others. So do you think you're at the low end or maybe a bit below that as we think about potential growth in the second half? .

Listen, I think it's a marketplace right now, right? And as we look into the second half, we're pretty happy with the 13% through the first half and 9% in the quarter. But ultimately, what we've been trying to communicate is that we're not going to chase growth blindly, that we want to make sure we maintain our underwriting standards and we maintain the discipline because we want to be a profitable, well-run organization over a long period of time. So we're going to react to the market cycle as it is.

That said, we do see opportunities for growth, and we're pushing really hard in that space to make sure that we are taking advantage of every opportunity that we have. It's still a little early in the year. And so right now, we feel really good about where we are.

And then my second question, 1 target you guys didn't address today, right, was the leverage target, which had been 15% to 20%. Obviously, that was taken down through the years, and that's lower than what we typically see from some P&C companies. So is there thoughts about potentially bringing that up or changing that target at some point as a way to free up capital, whether for growth, M&A or incremental capital management. .

Elyse, it's Keith. We haven't given -- we haven't reiterated that 15 to 20 in quite some time. Obviously, we're at 17.6%. We're within that range. we run with a conservative leverage in the company, and we have a lot of dry powder, and we feel really good about where we're at. And so we have a Eurobond that will be coming -- get refinanced later in the year, that will be due early next year. But at this point in time, we like our leverage situation where it's at.

So thank you, everybody, for joining the call today. I just want to express my sincere appreciation to our colleagues around the world as well as our clients and partners I also want to give a special thank you, if I can, to Peter Zaffino. His partnership throughout this transition, and he's really been fantastic as guidance has been great. And I think the overall organization has benefited from it, and I certainly have as well. So I'm looking forward to building on the foundation in the months ahead and sharing our continued progress. And we'll talk next time. Thank you very much.

Good day, and welcome to AIG's First Quarter 2026 Financial Results Conference Call. This conference is being recorded. Now at this time, I'd like to turn the conference over to Quentin McMillan. Please go ahead.

Thanks very much, Michelle, and good morning. Today's remarks may include forward-looking statements, which are subject to risks and uncertainties. These statements are not guarantees of future performance or events and are based on management's current expectations.

AIG's filings with the SEC provide details on important factors that could cause actual results or events to differ materially. Except as required by applicable securities laws, AIG is under no obligation to update any forward-looking statements if circumstances or management's estimates or opinions should change.

Today's remarks may also refer to non-GAAP financial measures. The reconciliation of such measures to the most comparable GAAP figures is included in our earnings release, financial supplement and earnings presentation, all of which are available on our website at aig.com.

With that, I'd now like to turn the call over to our Chairman and CEO, Peter Zaffino.

Good morning, everyone. Thank you for joining us today to review our first quarter financial results. Following my remarks, Eric Andersen will provide his initial perspectives on AIG and share some commentary on the quarter. And then Keith Walsh will provide more detail on our financial performance. Jon Hancock will join us for the Q&A portion of the call.

We had a very strong start to 2026 and delivered an exceptional first quarter, the strongest first quarter that we've seen since I've been at AIG. During my remarks, I will share key first quarter highlights and discuss our outstanding progress towards our Investor Day objectives, provide a perspective on the property market since it's receiving a lot of attention this quarter and outline the progress we're making on our AI and digital strategies.

Before we get started, I'd like to take a moment to address the ongoing conflict in the Middle East and what it means for our people, our clients and the broader environment in which we operate. We have a significant number of colleagues in the region, and their safety remains our top priority. From the outset, our teams quickly shifted to enable remote operations, and we remain in close contact to make sure our colleagues have the support and resources they need. The impact on our industry will continue to evolve, and we remain focused on managing risk in a complex global market.

Demand for expertise in property and energy, trade credit, and political risk insurance is increasing as clients navigate heightened uncertainty related to shifting trade policies. The direct impact on AIG is not material based on what we've seen to date, but we're not complacent. We're monitoring accumulation risk, adjusting underwriting guidelines where warranted, stress testing our investment portfolio and staying very close to our reinsurance partners. Just as important, we are continuing to stay close to our clients and brokers, helping them understand coverage, navigate claims issues and manage through this volatile environment.

Now let me turn to our results. We had an excellent start to the year and have been very focused on advancing our strategic investments and delivering on the ambitious 3-year guidance that we provided at Investor Day in 2025. In order to achieve these objectives, we intend to continue delivering balanced net premiums written growth with excellent accident year combined ratios to support earnings expansion across our core businesses, while also focusing on our nominal expense base. Net premiums earned growth is expected to benefit AIG in the back half of 2026 and as we enter 2027.

In the first quarter, General Insurance net premiums written increased 18% year-over-year on a constant dollar basis, driven by our Global Commercial Insurance business, which increased 21% year-over-year and our Global Personal Insurance business, which increased 11% year-over-year. All 3 business segments performed exceptionally well, supported by our recent strategic transactions, our differentiated reinsurance strategy and profitable organic growth that's in line with market peers.

I want to provide a little bit more context on reinsurance. As I discussed during our fourth quarter call, AIG achieved enhanced terms and conditions and favorable pricing during the January 1 renewal cycle. We negotiated substantial year-over-year savings, which included the Everest portfolio providing a meaningful tailwind to our net premiums written in the first quarter. It's worth noting that AIG's property catastrophe placements have lower modeled attachment points and higher exhaust limits for each geography on a risk-adjusted basis.

For AIG, our strategy of maintaining a consistent low net retention for natural catastrophes through the cycle means that we will benefit from more attractive reinsurance pricing as evident in the positive impact to our net premiums written.

We've discussed our Global Personal Insurance business in prior quarters, and I want to recognize the significant improvement in the financial performance, which has been deliberate. We grew net premiums written 11% in the first quarter, benefiting from the restructuring of our related reinsurance treaties and organic growth along with meaningful improvement in the expense ratio, which decreased 410 basis points. The accident year combined ratio as adjusted improved 570 basis points to 89.9%. The calendar year combined ratio was 89.4%, a strong improvement from 107.9% in the prior year. We continue to make outstanding progress in our Global Personal Insurance business.

Shifting back to overall General Insurance financial results. The expense ratio was 29.3%, an improvement of 120 basis points year-over-year. The accident year combined ratio as adjusted was 86.6%, an improvement of 120 basis points year-over-year. The calendar year combined ratio was 87.3%, an improvement of 850 basis points year-over-year. Adjusted after-tax income per diluted share was $2.11, an increase of 80% year-over-year. Core operating ROE was 12.2%. Overall, we achieved very impressive financial results across the entire company, another exceptional quarter of execution from all of our AIG colleagues from around the world.

Turning to capital management. During the quarter, we returned $760 million of capital to shareholders, including $519 million of share repurchases and $241 million of dividends. As we announced yesterday, the AIG Board of Directors approved an 11% increase in our quarterly dividend to $0.50 per share starting in the second quarter of 2026. This marks the fourth consecutive year of double-digit percentage increases and reflects the Board's confidence in our strategy and AIG's long-term outlook. Our total debt to total adjusted capital ratio was 17.7% at quarter end.

As we discussed on our last earnings call, we've continued to reduce our ownership of Corebridge Financial. At the end of the first quarter, our equity interest in Corebridge was approximately 5.6%. We anticipate fully exiting our position by selling down our remaining stake in 2026, subject to market conditions. We expect the primary use of these proceeds will be for additional share repurchases. As we look ahead, AIG has tremendous financial strength and strategic optionality to execute against our objectives, profitability ambitions and our capital management priorities.

Turning to the property market. On our second quarter call last year, we spent time discussing the market's competitive dynamics and providing detail on our portfolio. I wanted to provide a further update based on current market conditions and the pricing pressure we have seen across the market on the U.S. large account segment. As a reminder, we have multiple points of entry into the global property market where we deploy capital for the best risk-adjusted returns.

First, our balanced and profitable International Property business represents approximately 40% of AIG's $6.5 billion gross premiums written property portfolio. I'm using gross premiums written because it's more accurate reflection of our performance without the impact of reinsurance. As a point of reference, the International Property portfolio's calendar year combined ratio was on average in the low 70s across 2024 and 2025. The International Property market rate environment is very different from the U.S. International pricing was down 4% in the quarter. And this was only the second quarter of rate reductions that we have had in the last 5 years.

In the U.S., we have a strong performing retail property portfolio, which is majority shared and layered, and had calendar year combined ratios in the 70s in 2024 and 2025. In excess and surplus lines, the Lexington middle market portfolio has performed exceptionally well. This has been one of the fastest-growing segments in property and continues to deliver one of the best combined ratios in our global property portfolio. We've been deliberate in our growth and believe our AI implementation, which I will discuss later in more detail, will further enable this.

The Lexington large account shared and layered business in excess and surplus lines, which is less than 10% of our global property portfolio, has been under significant pricing pressure over the last year, and that's a different story. Given continued pressure on rate on a policy year basis and our general observations, we have been contracting our Lexington large account portfolio, and you should expect that to continue throughout the year if the current market environment persists.

We have been and will continue to be more selective on new business within the portfolio, which decreased 19% year-over-year. Across the portfolio, we are willing to nonrenew accounts that no longer meet our expected risk-adjusted returns. As part of this disciplined approach to underwriting, we're able to quickly redeploy capacity to areas of the market that provide more attractive opportunities for profitable growth.

Now I want to discuss the progress that we continue to make on AI and digital. After years of extensive work exploring how to embed AI into our underwriting workflow, we outlined our blueprint at our Investor Day in 2025. That work reinforced our conviction that AI has the potential to materially improve performance and drive better solutions for our clients and for AIG.

Our approach to using AI has been focused on 3 important components. First, you have to have an understanding of the technology and capabilities of large language models. Second, you have to have pattern recognition in order to know how to apply AI to your business. And third, you have to have a culture and a track record of execution in order to effectively deploy AI within an organization.

While we expect the technology would develop meaningfully over time, we could not have predicted the rapid pace of advancement over the last 9 months or the breadth of AI's potential application. We started our AI journey at the core of our business in underwriting, where we felt the impact will be most profound. At the time, large language models could handle discrete tasks like answering a question or reviewing documents with limited autonomous time.

In 2025, we launched underwriting by AIG Assist to help our underwriters review our submissions with more and higher quality information in a fraction of a time. After a successful launch, we began to deploy AIG Assist across 8 lines of business. We're very encouraged by the impact on underwriting metrics and improved data quality. In Lexington middle market property, which is an area we have targeted for growth, AIG Assist has helped deliver a 30% improvement on quoting more submissions, reduced time to quote for the underwriters by 55% and increased binding of submissions by approximately 40%.

Now with advancements in reasoning models, AI agents can review, challenge and eventually recommend underwriting observations so that our underwriters can make more informed decisions and provide more robust insights to supplement their experience and underwriting judgment. We're advancing our business model and AI implementation programs to leverage this potential.

To illustrate the magnitude of recent advancements in AI, when we began our work with Claude 2.0, AI agents could operate autonomously for less than an hour. Today, they can run autonomously for as long as 30 hours. This quarter, in close partnership with Palantir and Anthropic, we've begun the next phase of agentic AI at AIG that builds on early successes of AIG Assist. Using Palantir's foundry platform, we expanded our ontology, a digital map of our business that included our underwriting processes, workflows and data relationships. This ontology coupled with orchestration will enable us to deploy multiple AI agent teams to integrate with our core systems, which will improve decision-making and reduce costs over time.

As the logical next step in our AI deployment, we're creating a multi-agentic solution with a strong orchestration layer that coordinates specialized and trained AI agents to seamlessly supplement our underwriters' analysis and should further augment our underwriters' ability to assess risks and rate and provide coverage with real-time alignment.

In this phase, we expect each AI agent to be purpose-built for a specific underwriting function. For example, one agent may handle submission ingestion and data extraction, another may perform risk evaluation against our underwriting guidelines and another could benchmark pricing against our portfolio targets, all with a collaboration agent to synthesize input from other agent large language models. These agents will communicate and hand off work to each other to augment our underwriters, just like a well-functioning underwriting team, but operating at machine speed and with inherent consistency.

To illustrate an example of how quickly agents can learn a business, I want to outline a beta test that was recently conducted by Anthropic. As part of a closed evaluation, Anthropic hired a professional claims adjuster to review 100 claims ranked each as fraudulent or legitimate, and document the reasoning. Claude was then used to assess the same 100 claims. Claude's determination aligned with the adjusters 88% of the time, a very strong baseline for an out-of-a-box model with no claim specific tuning.

Fast forward to today, the latest version of Claude can elevate the performance of an entire claims team, surfacing patterns across submissions that are easy to miss when reviewing files one at a time, making our most experienced adjusters even more effective. Large language models can now hold a full file of claims information in context, every endorsement, every loss run, every guideline and reason across it with an audit trail.

Examples of what Claude routinely flags include time line inconsistencies, geolocation mismatches, linguistic fingerprints, prior claim patterns, document tamper signals and coverage gaps. The intuitive nature of the large language models and its ability to learn all of the information the claims expert had access to demonstrates the potential of large language models to work alongside our underwriting and claims professionals to drive improved data, decision-making, more timely responses and more accurate outcomes.

Importantly, we will be able to see what every agent is doing and can intervene in real time, if needed. Human oversight is and will continue to be essential to our underwriting processes. Overall, we're very pleased with the progress we're making, and we are beta testing the use of multi-agentic solution to enhance our team's productivity, efficiency and learning and development.

AIG entered 2026 with significant momentum, and our performance in the first quarter was outstanding. We achieved impressive results in a complex operating environment, and have a very good foundation to accelerate our strategic progress.

Finally, as I discussed last quarter, Eric Andersen joined AIG in February and will officially become our next CEO on June 1. Building on his decades of experience in the industry, Eric has hit the ground running, developing a detailed understanding of AIG, our business and our functions, and engaging with key stakeholders, including the AIG Board, colleagues, rating agencies, regulators and our clients, brokers and partners. We look forward to Eric's impact and leadership in 2026 and for years to come.

Now let me turn the call over to Eric.

Thank you, Peter. Good morning, everyone. I'm excited to join you today, and I'm honored to be part of AIG's leadership team at this pivotal juncture in the company's journey. I will begin by sharing my perspectives on AIG over the last 90 days since joining the firm. As you know, I served for decades as one of AIG's largest trading partners, and AIG has played an important part in my 3-decade long career in insurance. In that time, I came to know the company extremely well and gained deep appreciation for the valuable role it plays in the global property casualty insurance market.

Like many in the industry, I was impressed by the successful execution of the organization's transformation under Peter's leadership over the last several years. The company's balance sheet strength, improved underwriting, balanced portfolio and ambitious strategic direction and powerful momentum were clearly evident. The time I have spent over the last several months meeting with colleagues, clients, distribution partners and other stakeholders have been invaluable and validated my earlier observations.

AIG has demonstrated its ability to drive sustained profitability while balancing disciplined capital management with financial flexibility and building for the long term. This flexibility has enabled the execution of our recent transactions, which are already proving to be accretive to AIG's 2026 earnings.

Our culture of underwriting excellence is firmly embedded across the company and is a defining attribute in which our team has great pride. Deep expertise, coupled with our commitment to prudent risk-taking solidify AIG as a market leader, well positioned to advise and serve clients in today's complex environment while utilizing reinsurance strategically to control volatility.

As Peter has shared in depth. We are implementing a leading AI strategy designed to rapidly evolve alongside other advances in technology to deliver growth, data insights and quality decision-making. We expect our strategy to enable our businesses to be more effective over time. We have outstanding leaders. Our colleagues are highly engaged and the company is well aligned to deliver on our ambitious strategy and objectives.

Before joining AIG, I thoroughly reviewed the strategy and how the company's plans for the future were outlined in our 2025 Investor Day. I believed in the strategy then and today, I want to reaffirm my commitment to the strategy and delivering on our Investor Day financial guidance, which includes delivering operating EPS compound annual growth of over 20% over the 3 years ending 2027, driving core operating ROE of 10% to 13% through 2027, improving general insurance expense ratio to less than 30% by 2027, supporting the increase in our dividend by 10% in 2026, and achieving improvement in global Personal Insurance combined ratio to 94% by 2027.

I am encouraged by the strength of our results and I'm even more encouraged by the opportunities ahead. Our ability to grow is supported by our unique global platform, diversity of our products and distribution channels, risk expertise, complex claims capabilities, leadership across admitted and non-admitted markets, Gen AI capabilities and our spirit of innovation.

I'm also committed to maintaining our underwriting discipline and culture. One of my personal priorities will be to work very closely with our clients and distribution partners to provide tailored solutions that address the rapidly changing risk landscape. As one of the largest U.S. domiciled global insurers, we are proud to leverage our deep expertise in marine and war insurance and have joined other U.S. insurers in supporting the U.S. International Development Finance Corporation's maritime reinsurance plan to help restore confidence to the markets and support the flow of commerce in one of the world's busiest trade routes. This initiative builds on AIG's history of playing a central role in both public and private industry-led initiatives to deliver critical insurance solutions to respond to complex situations.

Turning to our first quarter financial results. Let me provide an overview of our performance in General Insurance. First quarter net premiums written growth was superb and representative of our intent to position our business favorably regardless of challenges in the market environment and to capitalize on our recent strategic actions. North America commercial net premiums written increased 36% year-over-year, with the growth largely driven by reinsurance changes and the Everest renewals in our retail business. We continue to achieve double-digit growth in our retail casualty portfolio as the market conditions are largely disciplined in liability lines.

Retail and Lexington property benefited from our successful January 1 reinsurance renewals. However, as Peter discussed, the U.S. property market environment remains very competitive, and our teams are continuing to take a highly disciplined approach to the layers in which we participate and how we deploy line sizes as we continue to navigate the current rate environment.

In financial lines, our team successfully continued to recalibrate in competitive D&O market segments where we are focusing on the value proposition of our differentiated offering and industry leadership. Western World, Glatfelter and Programs each had solid growth, which has been deliberate, and Programs benefited from our new special purpose vehicle with Amwins.

International commercial net premiums written increased 12% year-over-year with the majority of growth coming from the Convex whole account quota share, Everest renewals and reinsurance changes as the team prioritized organic growth discipline in a generally challenging rate environment. Global commercial retention remained very strong at 88%. The North America commercial retention was 88%. And international commercial retention was 89%. Global Commercial new business was $1.6 billion, including Everest renewals, an increase of 42% year-over-year.

Our team has continued to make very good progress with the conversion of the Everest portfolio. Retention is performing within our expected range, reflecting strong support from our clients and broker partners who are intentionally choosing to work with AIG in a competitive market. The collaboration between our team and Everest has been extremely productive, delivering mutually beneficial outcomes for both organizations.

As Peter mentioned, Global Personal Insurance had a very strong quarter with underlying growth initiatives beginning to gain traction. The team has done significant work to improve profitability and growth over the past year, and we believe we should see continued progress in these areas.

Before I close, I want to recognize the efforts of our team across the globe. They are doing an exceptional job navigating a dynamic market, prioritizing business with the highest risk-adjusted returns and collaborating with our clients and broker partners to identify optimal risk solutions. I'm looking forward to getting out on the road to meet more of our colleagues, clients, partners and investors around the world in the coming weeks and months.

Our first quarter results were outstanding and reflect robust progress on our strategy, substantial growth and sustained underwriting excellence. This has been an incredible way to start the year from which we will continue to build on our tremendous position of strength.

In closing, I am very excited to work with my fellow AIG colleagues to lead this remarkable company into the future. I want to thank Peter for the extraordinary accomplishments under his leadership to position us for success, and I look forward to continuing to work together as we capitalize on our strong foundation, disciplined capital management and sustained momentum.

I'll now turn the call over to Keith.

Thank you, Eric, and good morning. As Peter and Eric mentioned, we had a great first quarter, and I'm going to provide some additional detail. Adjusted pretax income was $1.5 billion, an increase of 65% from the prior year quarter. Underwriting income more than tripled to $774 million year-over-year, driven by lower catastrophe losses, improved accident year underwriting results and higher favorable prior year reserve development.

Accident year underwriting income adjusted for catastrophes rose 17%. This reflects transaction and organic growth while improving our underwriting margins, an excellent result in the current environment. On a constant dollar basis, General Insurance gross premiums written of $10 billion increased 7% year-over-year. Net premiums written of $5.6 billion increased 18%, reflecting strong growth across all 3 segments. For full year 2026, we continue to expect low to mid-teens net premium written growth in General Insurance. Net premiums earned were $6.1 billion, up 5% year-over-year.

Moving to our underwriting ratios. General Insurance accident year combined ratio as adjusted was 86.6%, an improvement of 120 basis points from the prior year quarter. This improvement was driven by a lower expense ratio of 29.3%, reflecting increased operating leverage and expense discipline. Over the past several years, we have made significant progress in reducing our cost structure and improving the expense ratio while investing for the future.

As individual quarters may reflect seasonal variability when thinking about the expense ratio run rate, it's better to look at the trailing 12-month trends and to model any improvement on a year-over-year basis rather than sequentially. The accident year loss ratio as adjusted of 57.3% was flat year-over-year. Total catastrophe losses for the quarter were approximately $180 million, with the largest losses attributable to winter storms.

Prior year development net of reinsurance and prior year premium was $132 million favorable and included $127 million of favorable loss reserve development, $26 million of ADC amortization and roughly $21 million of reinstatement premiums. The favorable development was driven primarily by continued favorable loss experience, most notably in U.S. property and financial lines. Overall, the general insurance calendar year combined ratio was 87.3%, an 850 basis point improvement year-over-year.

Moving to segment results. North America Commercial accident year combined ratio as adjusted was 85.5%, an increase of 120 basis points over the prior year quarter. This was primarily driven by a 90 basis point increase in the accident year loss ratio as adjusted due to changes in business mix as we reduced certain property lines and earned in more casualty business.

North America Commercial calendar year combined ratio was 85.5%, an outstanding result and an improvement of 840 basis points from the prior year. International Commercial accident year combined ratio as adjusted was 85.1%, an improvement of 30 basis points, driven by a 50 basis point improvement in the expense ratio. The International Commercial calendar year combined ratio of 87.3% improved 90 basis points year-over-year and was the 12th consecutive quarter of sub 90% combined ratio, underscoring the strength and consistency of the portfolio.

Peter described the performance in Global Personal, and I'm going to add some highlights. We continue to improve underlying profitability and deliver strong performance across both net premiums written and underwriting income growth. Accident year combined ratio as adjusted was 89.9%, a 570 basis point improvement compared to the prior year quarter. The calendar year combined ratio improved over 18 percentage points year-over-year to 89.4%. We are encouraged by the progress we're making as actions we have taken to reposition the portfolio continue to earn in.

Moving to pricing. We continue to take a disciplined approach to underwriting and pricing, prioritizing lines and accounts where we see attractive risk-adjusted returns. Starting with North America Commercial. Excluding the property business, our North America Commercial renewal pricing increase was 7%, largely in line with loss cost trend.

In North America Casualty, the overall pricing environment remains favorable with pricing in retail excess casualty up 14% and Lexington Casualty up 8%. In U.S. financial lines pricing was flat, reflecting continued moderation of price reductions aligned with our team's strategy to drive rate in targeted D&O segments. In North America Property, overall pricing decreased 11%. The market remains competitive, as Peter described in his remarks. In International Commercial, overall pricing was down 1% and was slightly positive, excluding financial lines in the first quarter. Casualty pricing improved in the quarter, up 5%, benefiting from positive rate change on auto. Property pricing was down 4% with modest variation by region while Japan continues to deliver both positive rate and pricing. Global Specialty pricing was down 1% and financial lines pricing was down 4%, a continuation of trends from the fourth quarter for both of these lines.

Moving to other operations. First quarter adjusted pretax loss was $125 million versus the prior year quarter loss of $66 million. The difference was driven by lower net investment income and other of $54 million compared to $110 million in the prior year quarter, owing to lower parent liquidity levels in addition to lower Corebridge dividends. Given current short-term interest rate levels, we expect the second quarter other operations net investment income and other line to be in the range of $30 million to $40 million, subject to market conditions.

Moving to General Insurance net investment income. First quarter General Insurance net investment income was $864 million, up 17% year-over-year. The increase was driven by our core fixed income portfolio, which grew net investment income by nearly 20% over the prior year quarter. This reflects the benefit of our proactive strategy to reposition the public fixed income portfolio.

During the first quarter, we continued to reinvest at higher yields with the average new money yield on our core fixed income portfolio roughly 80 basis points higher than sales and maturities. The annualized yield was 4.61%, a 51 basis point improvement over the prior year quarter. The strong growth in our core fixed income portfolio was partially offset by lower alternative investment income, which was $6 million compared to $43 million in the prior year quarter.

Private equity returns yielded 1.6% in the quarter, below our long-term expectation. It's worth noting that the private equity results are generally reported on a 1 quarter lag. Given the market volatility experienced in public markets throughout the first quarter, we expect second quarter alternative returns to remain below our expectations.

Next, I want to spend a few minutes on our private credit portfolio, as we've slowed our deployment in this asset class given market conditions. We define private credit very broadly, as in everything that is not a public security. It includes commercial mortgage loans, investment-grade private placements, asset-backed finance and direct lending. Our direct lending exposure is about $1.2 billion, less than 1.5% of the General Insurance investment portfolio. It is a diversified portfolio of middle market loans with an average loan size of about $6 million. We hold all direct lending on our balance sheet, not through business development companies, and the software exposure is approximately $130 million or just 16 basis points of the General Insurance portfolio. We will continue to deploy funds in a wide variety of assets with key managers including our new partners, CVC and Onex.

Book value per share at March 31, 2026, was $75.82, up 6% from the prior year quarter, reflecting strong growth in net income as well as the favorable impact of lower interest rates, partially offset by capital return to shareholders through dividends and share repurchases. Adjusted tangible book value per share was $70.85, up 4% from the prior year quarter.

In summary, we delivered a strong first quarter with excellent underwriting results. With that, I will turn the call back over to Peter.

Thank you, Keith. Michelle, we're ready for questions.

[Operator Instructions] Our first question comes from Meyer Shields with KBW.

Peter, I just want to start by saying, I've seen you take 2 companies from death door to top tier, so congratulations on a phenomenal career. The biggest question that we're just trying to figure out now is that as leading carriers and brokers, both successfully adopt AI, how does that impact what the carriers pay to the brokers? And since you've been on both sides of that debt, I was hoping you could talk about how you expect that to play out.

Yes. I don't -- look, thanks for the question. And how we interact with the brokers, I think, is going to be more of how we all get so much more efficient in exchanging data on information on submissions. I mean look at -- between me and Eric, you've got 2 people here that have a lot of broker experience. And they do a lot more than gather data and do placement. They're giving massive advisory to industry groups across the globe.

I think scale will matter over time. And as we look at the way in which data is being ingested through the mechanisms of a variety of large language models, I think we will be able to augment information that we get in submissions to be able to make better underwriting decisions. And what I was trying to give in that claims example in my prepared remarks is that not only our large language models sort of out of the box not tuned very capable and can give insight, but as they start to get trained a bit through experts, everybody benefits. And so the large language model gets more proficient, but also so does the underwriter, so does the claims executive in terms of what they learned in that calibration.

So I think in the future, as enterprise becomes a much bigger part of large insurance companies and large insurance brokers, the ability to collaborate will get even stronger.

Okay. That's very helpful. And then this is probably a smaller scope question. But I was hoping for any insight in terms of the impact of pricing on the Everest business. I know there's a mix of property and casualty. But I'm wondering how AIG's current pricing is impacting the gross premium volumes that you're bringing over from Everest?

Yes. Let me make a couple of comments, and then I'll ask Jon to maybe give a little bit of detail as he's been so intimately involved. Look, we looked at the portfolio in its entirety. We've been working very closely with Everest in the conversion. We've actually brought a lot of employees from Everest to AIG, and they've been doing a tremendous job. So they know the book. It's not as though you're handing off a portfolio from Everest to AIG without any insight. We have people here, terrific executives. Adam Clifford is running a lot of our international commercial, just a fantastic job. And this has been a book that has been coveted by a lot. I mean we talk to brokers, there's a lot of inquiries about the portfolio.

I don't want to go back to AI. But when we worked with Palantir on the ontology, we were able to get a look at the portfolio within a week about every upcoming month as to what the submission activity is going to be and what we like for pricing and what we thought we needed to restructure. And so we got ahead of that with the underwriters. And as Eric said in his prepared remarks, the conversion has just been outstanding, which just means that our broker partners want the conversion to go from Everest to AIG and the clients want that. And so I think that is really what I would want to take away and that the expectations in terms of loss ratio and combined ratio will be in line with what AIG's business has performed.

But Jon, maybe you want to give a couple of examples.

Yes. Thanks, Peter. I won't repeat things that you've said, but we're really pleased with this transaction. Everybody knows it's a renewal rights deal on business that we really like and complements our own portfolio. I agree with Peter here. The biggest compliment I can give this book is that everyone else is chasing for it. And if you don't believe Peter, if you don't believe me, go ask the brokers because everybody is chasing for this business. So we take that as good.

And when we talked about it last quarter, every indication we gave there still holds true. Now that the retention and the conversion is really strong, the ratios actually are just as we expected. We're 5 months in to converting business, but obviously, we're a lot longer into that to understanding the portfolio through our underwriters, through our actuaries, through our partnership with Palantir and the way we did that.

And we knew there were places in the portfolio where we'd want to reprice, restructure, play on different parts of the programs. And we're doing that. But it's also some other benefits here. We're collaborating really well with Everest. That's helped get that real support from our broker partners, that real will from our clients, they want to come to AIG. But it's also meant that we've been able to combine layers, everything is within risk appetite, take lead positions from follow positions. And as Peter said, we picked up -- we've targeted. We picked up some real good talent on the way. That's great for our ongoing business, but it's great for helping us manage the Everest portfolio as well.

Our next question comes from Brian Meredith with UBS.

First, Peter, I just want to congratulate you also on this incredible transformation that you've led here in your tenure at AIG. It's really been impressive and wonderful to follow as an analyst. Yes. I guess the first question I have, I want to dive a little more into Lexington in the E&S markets here. Not only are the property market is incredibly competitive, which you've been talking about here. But we've also heard from some companies, you're starting to see some cracks in casualty, maybe some moderation in pricing rates. We heard about terms and conditions softening up as well as maybe business moving back to the mid market from the E&S market. I'd love to get your perspective on that. Do you agree with it? And then what is the potential implications for AIG's growth in margins as we look forward here over the next, call it, 12 to 18 months on that?

Okay. Let me try to unpack how you like approach like Lexington, and I think it's important to differentiate between sort of the large accounts, shared and layered, and then some of the middle-market business. I don't want to repeat what I said in my prepared remarks, but we see in the shared and layered in E&S and property, rate decreases far away cutting into margin and we're going to need to shrink the portfolio in the current environment.

Just the one thing I would say is that we have a tendency as an industry to lock everything in the moment. We're coming into wind season. We're coming into an environment where there has been a lot of delegated authority, a lot of MGA writings and when there's CAT, sometimes it clears out, and there's opportunity. So we want to be positioned to take advantage of that.

I would say the middle market, I outlined it in the property sort of section, it has performed exceptionally well. there is a little bit more of a competitive rate environment, certainly in the middle market. But we see significant submissions, we see opportunities. They're selective. But I think as we start to get AI more embedded into Lexington, it's not because we see massive growth opportunities because the market is there. We see opportunities because we're not able to service the incredible submission flow, which has still been very strong.

So I think there's going to be pockets of opportunities in the mid-market on E&S. And don't forget, like in the way in which wholesale brokers position themselves, I always put it into 3 buckets. One was pure E&S. The other was they became placement mechanisms for the 40,000 independent agents that exist within the United States that wanted more market and then they had the delegated authority MGA. So we're really kind of focusing on the middle bucket in terms of where we look at middle market property and casualty. I do think the casualty has become a little bit more under pressure from rates. I still think that we have very good returns, and we'll just watch that very carefully as we go into the back half of the year, but it's not in the same bucket as the way the property has been performing.

Got you. Got you. And in terms and conditions, anything you can say there?

I think that's like on the ground, Brian. Like it depends on the industry group. It depends on the size and the class. I think look at their -- in these markets, there tends to be a little bit more in terms of conditions. But what we're seeing is nothing that is concerning or a trend across the portfolio.

Great. And then a follow-up, maybe more for Eric. Eric, so you come into a company now with significantly improved operationally, profitability, et cetera, et cetera, but also has a tremendous amount of excess capital. I'm just curious on kind of your thoughts on deploying that excess capital, thoughts on M&A and maybe how to increase the operating leverage here at AIG?

That's a great question and thanks. It's great to be here. And just, I know you said it, but I'll say it, too. The work that Peter and the team has done has just been outstanding in terms of organizing the firm. Listen, I think the opportunity is in front of us today with the plan that we've laid out right now in terms of how do we drive our organic growth, how do we continue to execute on the transactions that have been done, how do we evolve our offerings to meet our clients' needs in this risky environment. There's an awful lot to do over the next 12 to 24 months, just building on the strategy that we've laid out and really look forward to working with the team to make that happen.

And I would say, Brian, having been here for almost 9 years. We worked really hard to build that capital position, gave us the option value to do Everest, gave us the option value to assume risk for Convex. Eric and the team will be looking at opportunities. As the market gets more complicated, I think that comes with opportunity. And so like we have really worked hard on ROE. We know we have capital that we can grow into and we wanted just to provide AIG with as much option value as possible.

Our next question comes from Bob Huang with Morgan Stanley.

Also I just want to echo what Meyer and Brian said. Peter, as a former librarian, if you write a book, we'll definitely read it. So just to put it out there.

Thank you, Bob. But I'm not writing a book.

Okay. No, totally understandable. So my questions are all on AI. I know there's a lot of emphasis on AI. So my question is a bit theoretical. So apologies in advance. When you talk about a multi-agent collaboration and build out in underwriting functions, departmental level capabilities and then also the orchestration layer governing on top of it, it doesn't sound like a simple efficiency gain, but much more of a broader organizational and structural integration around AI. So is it fair to say 5 years down the road, 10 years down the road, there should be global-wide capability around that integration and coordination. And then there is a future state where your underwriting and your understanding of risk would be much more uniform globally. Does that sound right? I mean, is there like a future where the functions and then the coordinations will be globally across the permits in underwriting, and then that's essentially where the differentiation between you and other more regional underwriters should be? Is that the right way to think about it as we think about AI integration going forward?

Well, 5 to 10 years, we couldn't predict a year out. I mean when we did Investor Day, that's why I wanted to highlight some of the significant changes in AI deployment and AI capability. I do think there's great opportunities to learn from different parts of the world and to be able to apply the ingestion, the large language model learning, multi-agent orchestration in terms of helping decision-making.

Look, I think the most complicated part of the world is going to be Europe just because of GDPR and the use of data. It's very hard. And we've talked to a lot of our stakeholders there. It's very hard to beta test or roll something out in Europe without it being tested somewhere else just because of the complexity of how you're allowed to use data.

So I think that, look, there's a lot of differences across the world. A lot of Asia is very digitally enabled and very tech-oriented and believe that rollout and implementation, you have like different businesses that you need to customize. We're doing that in our Japan business. But I absolutely think in a 5-year period that the global capabilities in terms of the AI orchestration across an organization, not just in underwriting but across from front to back office will be profound. And I don't -- look, we're a large company, so I'm going to be biased, but I think you need to have size, scale and ability to beta test and try to work through this in order to get the most out of it.

Okay. Really appreciate that. Second question is around the AI expense costs. You talked about implementing Claude 2.0. Claude 2.0 has a lot of more token ingestions and inputs and things of that nature. As we think about just AI being much more of a variable cost rather than a fixed cost, when we think about your expense as we think about expense going forward, right? Can you maybe help us think about how that factors into your ROE considerations and things of that nature?

I think as we get into like '27, '28, not to [indiscernible], Eric, but like I think you'll start to get a lot more clarity in terms of what the expense components are of how we deploy it and what the benefits are on the revenue side. We've just begun. There's a lot of opportunities on the expense side. And why I haven't really spoken a lot about it is one is our first case was to go to the heart of the company, which is underwriting and then to go to claims. That's what we do. We're underwriters, and then in moments that our clients need us, we have to be able to deliver the best claims organization in the world, which under Julie Chalmers' leadership we're doing. So as we continue to move forward with the implementation of that, you're going to start to see benefits and efficiencies.

What we're starting to work through now is more enterprise and how you actually can take the orchestration of agents. And we moved more from Gen AI to agentic and now, we are going to look at how do you use autonomous with a lot of guardrails and supervision to work through reengineering our workflow. And with that, there's going to be a multi-agent orchestration. I can't give you a time frame. It could be '27, it could be '28. But I think there's going to be a lot of efficiencies that will create the bandwidth to reinvest in the business.

And so how we're thinking about it at AIG is more capabilities, more insight, more benefit for brokers and clients, create our own bandwidth for investment by reengineering process and having the ability in certain markets to be able to grow exponentially when there's opportunities.

Our next question comes from Michael Zaremski with BMO.

Great. I guess just question on the loss ratio, which has been excellent. But I just wanted to -- it's one of the main questions we get from clients. I guess, you've done a great job explaining why the reinsurance helps ameliorate some of the downward pricing impacts. I guess your reserves look even healthier year-over-year. I guess ultimately, you're still living in a soft market. So I just wanted to make sure, I guess we heard that there's some core loss ratio impact as you mix into casualty. But beyond that, should we just kind of just be -- just a little bit of kind of pressure from the soft market? Or I just want to make sure we don't get too maybe complacent or comfortable with just how excellent the loss ratio has been.

Yes. Thanks for the question. I think we saw in the first quarter evidence of the shift in mix of business with the accident year loss ratio increasing slightly by 50 basis points. Now the reinsurance did benefit that, meaning there's more net premium written and then there's a little bit earned in the first quarters, which will help us as we get into the second, third and fourth.

But yes, as we look to grow organically more in casualty because we think that the pricing environment and the risk-adjusted returns are above loss cost and want to continue to do that, and we are doing that organically. And then the conversion of Everest on a casualty basis as well as financial lines will change the mix a bit. And then the property, it's hard to predict. I mean, I would expect that, that will, in the E&S, start to decrease how much we'll see where the market is, but we ought to expect E&S in the sort of shared and layered to decrease. But I try to break out the overall property portfolio, which has performed exceptionally well, and we got a 40% international business that is very predictable rate environment is not the same.

And the other thing I would note Mike, is that when the market was really in our favor a couple of years ago, and we were getting significant cumulative rate increases, we didn't always recognize that just on the loss ratio. We continue to build margin. We continue to put more into the overall loss ratio to make sure what we're seeing was going to be accurate. And as it emerged, it was better than we expected.

So I think when you look at the loss ratios, why I broke down the reinsurance is that the reinsurance benefits because if you just say, look at our cost of goods sold, we buy a lot of property per risk, a lot of CAT, we're taking no more risk. I mean, so that's the other thing I just want to make sure I'm emphasizing is that when you look at the reinsurance and the savings, that's on same-store sales, same attachment points, modeling goes up, it helps on the risk-adjusted basis. AALs, like there was no compromise there. We have a property per risk cover that's very comprehensive that we got benefits from. Every excess of loss treaty that we placed at 1/1 was at or better in terms of terms and conditions and pricing. And so that will benefit us. And then, yes, there could be some deterioration in the property attritional loss ratios, which were exceptional, that could be.

And so that will have a mix where the loss ratio could go up based on that mix over time. But we're highly confident that we can offset that with expense discipline, earned premium growth and the expense ratio will go down.

Keith, he's already getting nervous, I can see him, that I'm going to give too much guidance. But I think when you look at what we put out in terms of the trailing 12 months, we're really getting after expenses. On a nominal basis, the company has been incredibly disciplined and always performs exceptionally well. And then you have earned premium coming in. So I would expect the expense ratio to benefit the loss ratio, will reflect the mix, and we're going to watch the margins and make sure that our accident year loss ratios reflect our observations on the business performance.

That's thoughtful and helpful. And just lastly, my follow-up for Eric. Congrats, we're looking forward to working with you. I mean, I don't expect you to kind of be able to specifically preview any changes you might make when you're officially in your seat. But just curious, you've been there for a bit now. Would you say there are some major changes or major projects you feel strongly about starting once you're in your seat based on what you've seen at AIG so far?

No, that's a great question and I appreciate it. Listen, I would say other than -- let me maybe go back and tell you what I've been doing over the last 90 days and give you a little bit of context. So other than the onboarding process, in terms of digging deep into the firm itself, I've had a chance to meet with a lot of colleagues, a lot of clients, all of our distribution partners, and really excited about the vision and the strategy and where we are as a firm. And as always, it's always about execution, right? Can we continue to work with our clients and partners and develop those deep relationships? Can we continue to build a great business that obviously, you've all been recognizing today over the next journey? And listen, I think the strategy that we laid out on Investor Day, how we actually want to deploy capital, how we want to position the company to help our clients. I love where we are. I was excited about it coming in. And 90 days in, I feel even more strongly about where we are today. So I would expect, as you look at the rest of the year, I would say we are going to drive hard on the existing strategy and look to perform.

Thanks, Eric. And I want to thank everybody for joining us today. There's a few thank yous that I want to say before we leave.

One is, I want to thank the sell side very much because it's been 9 years of complexity and your ability to dive in, try to be constructive, help learn so you can educate a variety of stakeholders has been hugely beneficial, and I'm very grateful for all that you did to allow us and enable us to make the progress that we did.

I want to thank our employees. They did an incredible job. I've only worked in big companies for the 35 years that I've worked after college. And so I have a perspective. And in great companies, a lot of times, the positions matter. You need very talented people to be in those positions, but it's the positions and the people. At AIG, it's the opposite. It's the people that made a massive difference and the positions ended up becoming a big part of how we structure the company. But the will to win here is like nothing I've ever seen. And they've done an incredible job. They accomplished an incredible amount and just keep it going because like the best days are ahead for this company, and there's no doubt about it.

And I just want to wish Eric the best of luck. As I said, the company is in great hands. Eric's been a student of the business and a practitioner for 3-plus decades, and this company is going to go from strength to strength.

So I just want to thank everybody, and have a great day.

Thank you for your participation. You may now disconnect. Everyone, have a good day.

Good day, and welcome to AIG's Fourth Quarter and Full Year 2025 Financial Results Conference Call. This conference is being recorded.

Now at this time, I'd like to turn the conference over to Quentin McMillan. Please go ahead.

Thanks very much and good morning. Today's remarks may include forward-looking statements, which are subject to risk, uncertainties. These statements are not guarantees of future performance or events and are based on management's current expectations. AIG's filings with the SEC provide details on important factors that could cause actual results or events to differ materially. .

Except as required by applicable securities laws, AIG is under no obligation to update any forward-looking statements if circumstances or management's estimates or opinions should change. Today's remarks may also refer to non-GAAP financial measures. The reconciliation of such measures to the most comparable GAAP figures is included in our earnings release, financial supplement and earnings presentation, all of which are available on our website at aig.com.

Following the deconsolidation of Corebridge Financial on June 9, 2024, the historical results of Corebridge for all periods presented are reflected in AIG's consolidated financial statements as discontinued operations in accordance with U.S. GAAP. Finally, today's remarks related to net premiums written are presented on a comparable basis, which reflects year-over-year comparison on a constant dollar basis and adjusted for the sale of global personal travel and assistance business as applicable.

We believe this presentation provides the most useful view of our results and the go-forward business in light of the substantial changes to the portfolio since 2023. Please refer to Page 29 of the earnings presentation for reconciliations of such metrics reported on a comparable basis.

With that, I'd now like to turn the call over to our Chairman and CEO, Peter Zaffino.

Good morning, everyone. Thank you for joining us to discuss our fourth quarter and 2025 full year financial performance. I will begin with prepared remarks, after which Keith will provide a detailed overview of our financial performance. John Hancock will then join us for the Q&A session. On our call today, I will briefly share key highlights from our excellent fourth quarter performance, review our outstanding full year financial performance, provide brief commentary on AIG's January 1 reinsurance renewals, discuss our fourth quarter strategic transactions and highlight our progress on our Gen AI and data and digital strategies. .

Finally, I will conclude with how AIG is positioned for continuing momentum into 2026. Let me begin with a brief overview of our fourth quarter performance and some of our key highlights. We delivered adjusted after-tax income per diluted share of $1.96, a 51% increase year-over-year. Underwriting income was $670 million, an increase of 48% year-over-year. Global Commercial net premiums written grew 3% despite North America retail property contracting due to our reduced appetite given the current market environment. We had strong new business growth led by international Commercial, which grew an impressive 14% year-over-year. The accident year combined ratio as adjusted was 88.9%, our 17th consecutive quarter with a sub-90% result. The calendar year combined ratio was 88.8% and an improvement of 370 basis points from the prior year quarter.

Overall, our fourth quarter performance reflects our consistent underwriting and operating discipline and closes out an exceptional 2025 and for AIG. Now let me walk you through our full year financial performance. Adjusted after-tax income per diluted share was $7.09, an increase of 43% year-over-year. Adjusted after-tax income for the year was $4 billion, an increase of 24% year-over-year. For the full year 2025, we generated underwriting income of $2.3 billion, an increase of 22% year-over-year.

2025 was the first year since 2008 that we delivered greater than $2 billion in underwriting income, excluding divested businesses, an important milestone in AIG's journey. For full year 2025, Global Commercial net premiums written were $17.4 billion, an increase of 3% year-over-year. Adjusting for the large closeout transaction in our casualty portfolio that benefited overall growth in that prior year, net premiums written increased 4%.

North America Commercial grew net premiums written by 4% or 5% when adjusting for the large closeout transaction. With balanced growth across the portfolio, that was partially offset by retail property, which contracted 8%. International Commercial grew net premiums written by 3%, primarily driven by Property and Global Specialty and partially offset by financial lines which contracted 5%.

In Global personal, net premiums written contracted 3% driven by higher ceded premiums under the high net worth quota share reinsurance treaty that we entered into at 1/12. In early January, Ross Buck Muller was named Executive Chairman of Private Client Select.

We have tremendous confidence in his ability to guide the high net worth business and believe he will have an immediate and positive impact in positioning the business for the future. Overall, Global Commercial new business grew 9% year-over-year. International new business grew 10% driven by Global Specialty, which grew 15%. North America Commercial Insurance produced over $2.6 billion of new business in the year, an increase of 8% year-over-year. We made strong progress reducing our expense ratio which ended 2025 at 31.1%, down 90 basis points from the prior year and remain focused on achieving our Investor Day target of a sub-30% expense ratio by 2027.

Our full year accident year combined ratio was 88.3% and our calendar year combined ratio was 90.1%, both outstanding results. For the full year 2025, excluding North America Property, Global Commercial Lines pricing, which includes rate and exposure increased 2% and with a 6% increase in North America and a 1% decrease in international. As we've discussed throughout the year, property markets in North America remained under pressure with increased competition in both the admitted and non-admitted market. Retail property pricing was down 10% and excess and surplus lines price was down 13% for the year.

Despite the challenging market dynamics, the accident year and calendar year combined ratios remained excellent in property. In North America Casualty lines, pricing remained favorable and continue to outpace loss cost trend with percentage increases in the mid-teens in wholesale and excess casualty. In North America Financial lines pricing was down 2% for the year. Pricing reductions moderated in the second half of the year with segments of our D&O portfolio ending the year with a positive rate change. In International Commercial, overall pricing was down 1% or flat excluding financial lines. Unlike the U.S., pricing and international property was up 3% for the year, offset by energy where pricing was down 10%, driven by abundant [indiscernible]. Net investment income on an APTI basis was $3.8 billion, an increase of 8% year-over-year, reflecting our shift to higher-yielding assets with strong financial ratings.

Core operating ROE was 11.1%, a 200 basis point improvement year-over-year and AIG's first adjusted ROE metric above 10% in over 10 years. Importantly, we delivered a strong performance in 2025, while maintaining our disciplined approach to capital management. We returned $6.8 billion in capital to our shareholders, including $5.8 billion in share repurchases and $1 billion in dividends. We also increased our quarterly dividend by 12.5% and the third consecutive year with a dividend increase of 10% or more.

Debt outstanding at year-end was $9 billion, and our debt to total capital ratio was 18%. We continued to reduce our ownership of Core bridge Financial, generating approximately $2.5 billion in gross proceeds over the course of 2025. At the end of 2025, our remaining ownership stake was 10.1%. This week, Nippon Life waived AIG's 9.9% retention requirement, which gives us the ability to sell down our position throughout 2026, which we intend to do subject to market conditions and regulatory approvals. Since we announced Blackstone's purchase by 9.9% equity ownership in Core bridge Financial in November of 2021. AIG has realized nearly $20 billion from our Core Bridge Holdings when accounting for share sales, receipt of extraordinary and common dividends and transition service fees. What's even more extraordinary is that AIG has been able to replace 100% of Cor bridge Financial and Validus Re's earnings per share in just 2 years.

Going forward, we're very well positioned with significant financial strength and liquidity to execute against our strategic objectives, our growth ambitions and our capital management priorities. I'll now turn to reinsurance. But before I provide more details on our January 1 renewals, I want to share a brief context on the reinsurance market. 2025 started with the California wildfires and that initially tempered reinsurance rate reductions for the industry. What followed was benign cat loss activity in the second half of the year, resulting in increased reinsurance capacity. This dynamic drove a favorable renewal environment for insurers at January 1. As a general statement, although reinsurers were prepared to compromise on pricing, they remain disciplined on attachment points at 1/1. Our long-term belief in holding firm on attachment points has proven to be advantageous for AIG.

We've always said, once you give it up, you don't get it back. and that remains true today. Turning to our January 1 renewal outcomes. AIG achieved enhanced terms and favorable pricing. We benefited significantly from the current environment with more aggregate capacity available in the market, our consistent buying an attractive portfolio and the exceptional relationships we've developed with our reinsurance partners.

Here are a few highlights. Our property catastrophe program continued to improve. The weighted average risk-adjusted rate decrease for AIG on property catastrophe is in excess of 15%, yielding substantial year-over-year savings. The return periods of the attachments of our property catastrophe coverage is broadly lower across our geographies and businesses. Our exhaust limit is at a comparable level for all regions worldwide. We were able to collapse the high net worth placement into our North America occurrence layer for the 500X to 500 layer. And finally, we achieved further efficiency in our aggregate protection, including a single maximum contributing loss rather than a separate one for each of the North America commercial and global personal portfolios. For Casualty, we're in a reinsurance market that differentiates for quality. And as a result, our treaties renewed with exceptional pricing and terms and conditions. Our quota share in North America maintained a very attractive ceding commission in the low 30s. Our excess of loss attachment and limits remain the same as the expiring treaties. However, our rate on subject premium decreased year-over-year.

Finally, we were able to add the Everest portfolio into the treaty at AIG's pricing and terms without an increase in nominal cost. Overall, I'm very pleased with our 1/1 renewals. Our approach to reinsurance continues to be an important component of our strategy to minimize volatility in our portfolio and positions AIG well for 2026. In the fourth quarter, we announced several strategic transactions. These are innovative, capital-efficient deals without balance sheet complexity, technology debt, legacy liabilities or meaningful expense investment.

All are expected to contribute to AIG's earnings, earnings per share and return on equity in 2026, and we believe these transactions should be more accretive in 2026 and 2027 than share repurchases. I'll take a moment now to provide an update on our progress. In October, we were very pleased to announce a renewal rights deal for Everest global retail insurance portfolio. The portfolio is well balanced across geographies and expands our global retail commercial footprint and distribution access while adding business that is complementary to our portfolio today.

As a reminder, the purchase price relating to Everest is calculated as a percentage of the total renewable premium of the Everest portfolio, which we now expect to be closer to $1.8 billion after doing more work with Everest. This would adjust our purchase price down from approximately $300 million to $270 million, with possible further downward adjustments of up to $70 million if less than 80% of the portfolios renew. We're making very good progress with the conversion of the Everest portfolio. We accelerated the conversion of $65 million in gross premiums written in the fourth quarter.

In January, we had a retention rate of 75%, reflecting approximately $180 million in gross premiums written, an impressive result considering that we did not commence work to convert the book in Europe until we receive the required regulatory approvals in December. This is a terrific performance and a validation that clients and brokers want AIG to have an expanded role on their insurance placements. AIG has many advantages in executing this conversion. We have ample capacity to grow reinsurance treaties that will benefit the business at a lower cost and a more advantageous expense base given we did not need to replicate Eves' infrastructure to service the business.

We expect the combination of these factors to drive a 10-point benefit to the combined ratio of the converted business. To support the conversion, we leverage our Gen AI capabilities to evaluate the Everest portfolio and prioritize the accounts we want to renew in a fraction of the time.

As we've discussed, we've deployed a robust oncology of AIG's businesses and we're able to quickly build in Everest Ontology, in essence, a digital twin of that portfolio, which allowed us to prioritize how the portfolios could blend together, enabling us to deliver compelling solutions for clients at our broker partners. We reviewed [indiscernible] portfolio to determine account limits, attachment points and pricing and to identify conversion strategies. In addition, we leverage our Gene solution underwriting by AIG Assist to accelerate the conversion process in key lines of business increasing renewal speed significantly.

We're pleased with our progress and our focus on ensuring a smooth transition in the portfolio over the next 3 quarters. Now I'd like to share more detail regarding our investment in Convex Group, where we took an approximately 35% equity interest, coupled with a 9.9% ownership stake in Onex majority owner, Onex Corporation. These investments closed on February 6, and they are expected to be accretive to AIG's earnings within the course of the year. As part of the Convex transaction, we also took a 7.5% whole account quota share of Onex business for 2026, which will earn in over the year. Our share will increase to 10% in 2027 and 12.5% in 2028 and thereafter.

This transaction was a rare opportunity to secure a long-term strategic partnership with 1 of the most highly respected specialty insurance companies and its majority shareholder. AIG has led the industry in utilizing third-party capital to develop innovative structures that create tailored risk-sharing solutions. After successfully launching Syndicate [ 247 ]8 at the start of the year, we closed 2025 with the formation of Syndicate [ 2479 ], a new special purpose vehicle launched in partnership with Amwins and Blackstone in December with a stamp capacity of $300 million of premium income. This partnership represents a differentiated model for portfolio underwriting, supported by third-party capital, including capital committed by the largest U.S. wholesale broker. We expect it will generate premium growth and fee income for a modest incremental capital commitment.

This is also the first time we've deployed our Gen AI capability in an SPV transaction. Partnering with Palantir we use large language models to match data and define risk characteristics within Amlin's program business that were aligned with the syndicates risk appetite. In addition to assessing future opportunities, this capability enables us to use advanced analytics to help shape the current portfolio. We have a strong pipeline of SPV opportunities, and we'll continue to pursue future opportunities for expansion in our specialty and other lines of business.

I'll take a moment now to update you on our Gen AI initiatives. We've made significant progress embedding Gen AI across our core underwriting and claims processes and expanding it across. As this work continues, our confidence has only grown in our ability to drive industry-leading impact on our deployment of Gen AI. Our top Gen AI priorities for 2026 include deploying underwriting by AIG assist and claims by AIG assist across the majority of our commercial businesses. Enhancing AIG's oncology by developing a comprehensive digital twin of AIG's processes, workflows and data elements to drive enhanced speed and efficiency.

Developing an orchestration layer to coordinate AI agents to drive better decision-making and reduce costs across the organization, and further utilizing Gen AI for AIG's SPV strategy, portfolio analytics and compute. Since our initial rollout of underwriting by AIG Assist, we've expanded its use to 7 additional lines of business including our Lexington business. We remain on track to complete our accelerated rollout to the rest of North America, U.K. and EMEA in 2026. We're already seeing benefits from these efforts.

For example, Lexington's business has seen a 26% increase in submission [ Cal ] year-over-year. As a reminder, at our Investor Day, we shared our ambition of reaching 500,000 submissions by 2030. As of the end of last year, we've already reached over 370,000 submissions, demonstrating the robust opportunity. We believe our use of Gen AI gives us a strong advantage going forward in this dynamic market. It's early days, but by deploying underwriting by AIG Assist and Lexington, we've delivered significant productivity gains. For example, for Lexington Middle Market property, our Sumit to bind ratio increased 35%.

Building on our foundation, we're exploring the next phase of our Gen AI strategy, focus on the orchestration of AI agents that can act as a force multiplier for our team. To do this, we're building an orchestration layer, whereby we signed responsibilities to AI agents and determine when these agents are activated.

The sequence of their tasks, what information they can access, how work is handed to other agents and instances when greater human oversight is required. We think of these AI agents as companions that operate alongside our teams with specific roles such as knowledge assistance that can provide relevant information in real time, advisers that can provide additional insight based on historical use cases and critic agents that challenge the knowledge and adviser agents as well as the underwriters decisions.

Through the orchestration layer, we can coordinate these agents to work together to help streamline simple, repetitive and lengthy processes to support decision-making. We made substantial progress on our Genii strategy in 2025 and remain focused on continuing to pursue the opportunities we see ahead to support our business goals.

2025 was an outstanding year of accomplishment in which we delivered against our strategic, operational and financial commitments and position the company for an exceptional 2026. Overall, we remain on track to meet or exceed the financial objectives we outlined at our Investor Day. We have strong momentum with growth expected to come from multiple sources, including organic growth initiatives, savings from excess of loss reinsurance, the continued successful conversion of the Everest portfolio, our whole account quota share with Convex, our special purpose vehicles and the repositioning of our high net worth quota share at [ 1/1 ].

Given our strategic transactions and several of the drivers I just mentioned, we're well positioned to drive premium growth into 2026. Because it's always hard to forecast, I'd like to take a minute to provide some perspective on what we see for net premiums written growth for the full year 2026, noting that this guidance reflects our views and assumptions as of today. For the full year 2026, we expect low to mid-teens net premiums written growth in general insurance, and we believe that 2026 is already off to a very strong start.

Before I hand it over to Keith, I want to briefly speak about the leadership transition we announced last month. I'm incredibly proud of our colleagues and the work we've accomplished together and I could not be more confident in AIG's future. With the company well positioned for its next phase, I felt it was the right time to retire as Chief Executive Officer and transition to the role of Executive Chair of the Board.

I'm very excited to welcome Eric Anderson to AIG on February 16 as President and CEO Elect. Eric is the right leader to take AIG into the next phase of its journey. He is a highly respected executive with nearly 30 years of experience at Aon. His accomplishments are widely recognized throughout the industry, the has consistently made positive contributions in every role he's held. Eric will be on the first quarter call and can share his perspective then, I want to assure you that he's fully committed to our Investor Day financial guidance and strategic objectives.

I look forward to working with him and our outstanding management team to drive AIG forward from a position of strength. As AIG enters this next chapter, I have great confidence in our company's leadership, the foundation we've built, and our ability to drive sustainable, profitable growth and create long-term value for all of our stakeholders.

Thank you, Peter, and good morning. We had a strong fourth quarter and full year. Starting with the quarter, we continue to make good progress with 51% growth in adjusted EPS and solid investment in underwriting results. This marks another quarter of improvement in our key financial metrics while continuing to build the financial strength of our balance sheet. Adjusted after-tax income for the quarter was $1.1 billion, an increase of 31% year-over-year. Underwriting income was $670 million, an increase of 48% year-over-year and net investment income was $954 million, an increase of 9%.

Turning to General Insurance. Net premiums written were $6 billion, an increase of 1%. This was driven by global commercial with growth of 3%. We continue to post excellent underwriting margins across general insurance, building on our multiyear track record. Accident year combined ratio as adjusted was 88.9%, a 30 basis point increase year-over-year. Accident year loss ratio was 56.8%, a 100 basis point increase year-over-year or 70 basis points, excluding travel.

The increase was driven by additional margin in our casualty loss picks, favorable loss experience in the prior year quarter in Global Specialty and change in business mix as we grow more casualty over property, partially offset by underlying improvement in global personnel. General insurance expense ratio was 32.1%, a 70 basis point improvement year-over-year, driven by the acquisition ratio, partially offset by a higher GOE ratio due to the reapportionment of expenses into the business from other operations. This will be the last quarter we talk about the push down of expenses into the business from our lean parent initiative. We achieved this in 2025 and have a clean baseline to compare 2026. Total catastrophe losses for the quarter were $125 million or 2.1 loss ratio points, predominantly driven by Hurricane Melissa.

Prior year development, net of reinsurance and prior year premium was $116 million favorable, which included $120 million of favorable loss reserve development, $31 million of ADC amortization and $35 million prior year premiums. The favorable development almost entirely stemmed from North America commercial with $94 million, primarily driven by U.S. financial lines, property and Canada Casualty. Overall, the general insurance calendar year combined ratio was 88.8%, a 370 basis point improvement compared to the prior year quarter, an excellent result.

Now moving to the segments. North America Commercial Insurance grew net premiums written by 3%. The growth was driven in targeted areas, notably programs, which increased 17%. Western World was up 14% and and excess casualty grew 11%. This was partially offset by retail and Lexington property, which declined 19% and 10%, respectively. These lines continue to be where rate pressure remains most prevalent. Retention in North America was 89% in admitted lines and 76% in Lexington, an excellent outcome for an excess and surplus lines business.

New business grew 8% year-over-year, driven by financial lines and casualty. North America Commercial accident year combined ratio as adjusted was 87.2%, an increase of 260 basis points over the prior year quarter. The accident year loss ratio of 62.2% was up 100 basis points, owing to changes in business mix as we reduced certain property lines and earning more casualty and captives business, which are beneficial to the overall combined ratio but carry a higher loss ratio.

The expense ratio of 25.0%, was up 160 basis points, including a 60 basis point increase in the acquisition ratio due to change in business mix and a 100 basis point increase in the GOE ratio owing to lean parent. North America commercial calendar year combined ratio was 84.7% and an outstanding result and an improvement of 14.1 points from the prior year, driven by continued strong margins, lower catastrophe losses and favorable prior year development.

Turning to International Commercial. Fourth quarter net premiums written increased 4%. This growth was led by Global Specialty up 9%, driven by Marine and casualty, which increased by over 15%. This was partially offset by financial lines, which was down 6% as retention remains strong, but rate pressure continues to weigh on growth. International retention remained strong at 87%, which was balanced across the folio.

New business was excellent, up 14% year-over-year. Accident year combined ratio as adjusted was 85.9%, an increase of 230 basis points. The accident year loss ratio was 54.2%, a 130 basis point increase year-over-year. This was primarily owing to energy, where market loss experience in 2025 was higher compared to an unusually favorable 2024. The expense ratio rose 100 basis points to 31.7% and due to movement of expenses from other operations. The international commercial calendar year combined ratio was 88.8%, underscoring the strength and consistency of the portfolio.

Turning to Global personnel. Net premiums written were down 6% year-over-year, largely driven by the high net worth quota share reinsurance treaty, which was a headwind in 2025. [ Accident ] year combined ratio as adjusted was 95.3%, a 360 basis point improvement year-over-year, adjusting for the divested travel business. The accident year loss ratio of 52.9% improved 60 basis points, driven by the personal auto portfolio, both from rate and underwriting actions within certain international markets leading to stronger underlying profitability.

The expense ratio improved 300 basis points to 42.4% as the acquisition ratio benefited from improved commission terms in the U.S. high net worth business. The global personal calendar year combined ratio was 94.3%, an improvement of 110 basis points year-over-year. Moving to fourth quarter pricing, starting with North America. Excluding the property business, our North America commercial renewal pricing increase was 6%. In North America Casualty, the overall pricing environment remains favorable, with retail excess casualty up 15% and Lexington Casualty up 12%. Both remained above loss cost trend. In U.S. Financial lines pricing was down 2%, in line with the third quarter. We continue to believe our portfolio is strong, and we are well positioned as a market leader.

In North America Property, competition persisted across both the admitted and E&S markets with incremental softening in mid-market from the third quarter. We remain disciplined in our underwriting standards, and focus on targeted areas where we can achieve adequate risk-adjusted returns. Our cumulative rate increases over the past several years and disciplined approach enabled us to maintain strong profitability across our admitted and E&S businesses during this market cycle.

International Commercial overall pricing was down 2%. Casualty pricing increased 2%. Global Specialty pricing was down 1%, an improvement from the third quarter. Overall [indiscernible] remains above our technical view following several years of cumulative rate increases, and we continue to see global specialty as an area of growth.

Property pricing was down 2% and Financial lines pricing was down 4%. Our well-diversified portfolio allows us to navigate different market conditions, prioritizing lines of business that offer the most compelling risk-adjusted returns. Moving to other operations. Fourth quarter adjusted pretax loss was $129 million versus the prior year quarter of $150 million. Looking at full year results, adjusted after-tax income was $4 billion, an increase of 24% year-over-year.

The improvement was primarily driven by stronger underwriting results, an increase in net investment income and expense benefits from AIG next. For 2025, General Insurance net premiums written grew 2%. General Insurance full year accident year combined ratio as adjusted was 88.3%, largely in line with the prior year. The accident year loss ratio was 57.2%, a 100 basis point increase year-over-year or 40 basis points increase excluding travel. The increase was driven by the reapportionment of unallocated loss adjustment expenses, additional margin in our casualty loss picks, favorable loss experienced in the prior year quarter in Global Specialty and business mix change as we grew more casualty over property. This was partially offset by a 120 basis point improvement in global personnel. General insurance expense ratio was 31.1% compared to 32.0% for the prior year.

This is an outstanding result given the absorb of nearly $300 million of corporate parent expenses in general insurance in 2025. We are pleased with our progress and believe we are on track to achieve our target expense ratio of below 30% by 2027. Total catastrophes related charges were $920 million or 3.9 points of loss ratio. Prior year reserve development, net of reinsurance and prior year premium was $472 million, a benefit of 2.1 points to the loss ratio.

The full year 2025 combined ratio was 90.1%, an outstanding result and an improvement of 170 basis points versus 91.8% in 2024. Moving to net investment income. The fourth quarter net investment income on an APTI basis was $954 million, an increase of 9% year-over-year. Total insurance net investment income was $881 million, growing 13% year-over-year.

During the fourth quarter, the average new money yield on our core fixed income portfolio, including the fixed maturity and loan portfolio was roughly 65 basis points higher than sales and maturities. The annualized yield was 4.59%, a 68 basis point improvement over the prior year quarter. For the full year, general insurance net investment income reached $3.4 billion a 12% increase over 2024. This was primarily driven by our core fixed income portfolio, contributing $3.1 billion, up 17%. This increase reflects the execution of our strategy to reposition the public fixed income portfolio globally to capitalize on higher yields while maintaining a strong overall credit quality of A+.

We recently announced a new partnership with CVC a world-class global investment manager with deep capabilities across credit and private markets in over EUR 200 billion of assets under management. AIG will be a cornerstone investor in CVC's newly established private equity secondaries Evergreen platform, providing up to $1.5 billion from our existing $3 billion private equity portfolio.

In addition, AIG will invest up to $2 billion in a separately managed credit account, of which $1 billion will be deployed in 2026. CVC's new secondaries platform allows us to rebalance our private equity portfolio while driving operational simplification. Turning to other operations. Net investment income of $73 million declined $20 million over the prior year quarter and largely reflects income from our parent liquidity portfolio of $60 million and [ coverage ] financial dividend income of $12 million.

Turning to capital management. For 2026, we intend to repurchase at least $1 billion of common shares, subject to market conditions. As Peter mentioned, we are no longer subject to the 9.9% retention requirement from Nippon on our Core Bridge ownership. As we receive proceeds from the sell-down of our remaining core bridge position, we expect the majority will likely be deployed to additional share repurchases. We continue to execute our balanced capital management strategy, driving long-term value through investment in organic and inorganic opportunities as well as prudent capital return to shareholders. Book value per share at December 31 was $76.44, up 9% from December 31, 2024 reflecting strong growth in net income as well as the favorable impact of lower interest rates, offset by $6.8 billion of capital returned to shareholders through dividends and share repurchase.

Adjusted tangible book value per share was $7.37, up 4% from December 31, 2024. In summary, we delivered an excellent 2025 with disciplined underwriting, strong earnings growth, balanced capital management and execution of our strategic initiatives while investing for the future. We are well positioned to meet or exceed all of our Investor Day targets by 2027 or earlier.

With that, I will turn the call back over to Peter.

Keith, thank you. Michelle [indiscernible] for questions. .

[Operator Instructions] Our first question comes from Alex Scott with Barclays.

First one I had for you is on the expense ratio. There's obviously been some moving pieces with corporate expenses coming in and some work to remove a portion of those as well as some of the AI initiatives. So I was hoping you can sort of talk us through what we can expect from the expense ratio over the next few years as you're working through some of that.

Thanks, Alex. If I start -- let's start with the fourth quarter. One is it's like seasonally lumpy, and it's always due to the highest. So I wouldn't really anchor up the fourth quarter, but I'll give you at least the variables. It's primarily and almost entirely the parent expenses.

We had the last quarter in terms of taking a portioning and assigning expenses that set and other operations and parent into the business, which has done an exceptional job of absorbing creating bandwidth for the additional expenses. Also in the fourth quarter, we had some onetime approximately $20 million of PCS cleanup there were some things that were left over in terms of the transition, and we just recognize those in the fourth quarter. I would take a look at the full year. I mean, if you look at the full year, where again, we were allocating parent expenses north of $250 million, going from $12.6 million to 13% was de minimis. The business did an exceptional job of managing, again, additional expenses. It's fully loaded. We're not going to be talking about this in 2026 as to additional allocations or expenses. And I would expect the expense ratio to be lower on a run rate basis when you compare '26, '25. I mean we're all over the expenses. We made enormous progress in terms of total expenses. And this organization is incredibly focused on every single one of our Investor Day objectives and the expense ratio below 30% is a top priority, and we will get there.

Very helpful. The next one I wanted to ask on is just at a high level, the general insurance, net premium written growth that you mentioned sounded pretty strong relative to what I was thinking. So I'd be interested what portion of that is from the deals that you've announced as opposed to the organic growth. And the organic growth, where are some of the places you're getting that? And do we need to consider sort of new business penalty or mix shift or anything like that as we're thinking through our loss ratio trajectory?

Can I say a nice try on asking for further guidance. No, I can't break out. Look, we -- I want to just make sure that we gave you a line of sight as to what we're seeing as of today in terms of the growth. It comes from a variety of different places. And we have absolutely initiatives in place where we think that we can drive growth in the core business. The reinsurance at 1:1 was very beneficial for AIG and was not dropping coverage, as I said in my prepared remarks. I mean we look at the return period attachment points on [indiscernible] lower, the exhaust is the same. .

We're not changing our risk tolerance. We kept the casualty the same. So it is really just on sort of same-store sales, getting the benefit of that. I don't know if we outlined it enough in terms of the [ Convex ] sort of whole account quota share and the benefit of assuming that business [indiscernible]. This was -- for the SPV, it was the first one where we did third-party risk. And so we are taking some of that on our balance sheet and then the remaining is going into the SPV. So we'll see some organic growth from there. And I don't know how much I want to go into this just because I want to be able to take some other questions. But the high net worth was always supposed to be -- I mentioned this well over a year ago that we were going to do a whole account quota share to bring in partners. We brought in 5 and we would determine in a year or so if we wanted to reduce that.

And so we did reduce it to 3 and the 3 partners that we have could be likely insurance company paper options down the road for the MGA. And so there will be less session throughout 2026. So I think all of those are contributing in a way that is positive to growth and not one in particular is driving the outcome.

Our next question comes from Meyer Shields with KBW.

Keith, in your comments, you mentioned additional margin in Casualty lines. I was hoping you could add a little detail to that. .

Thanks, Meyer. Yes, we did talk about that. I wanted to just maybe level set a bit. One of the things we have talked about is we've been very conservative, I think, on our casualty and probably ahead of the curve over the last several years. We talked about at the Investor Day, we raised our loss cost trend assumptions back in -- of 2019 to double digits in this line. And so -- and by 2022, all excess casualty segments were at 10% or greater on our loss trend. But more recently, we're being conservative in our accident year picks, putting extra margin in for our longer tail lines. It really puts us in a position where we view our reserves as a position of strength and we've put that additional margin in our casualty loss picks, and it's largely related to macro uncertainties and it's not related to any deterioration in our underlying portfolio.

And while it's not specific to any risk. It's intended to cover uncertainties for things like social inflation and rising litigation costs. And so we feel really good about our positioning there. I wanted to highlight that. Okay.

That's helpful. Also within GI, there was a decent sequential step-up in interest and dividends. And I was hoping you could just break it down. Is there anything unusual in there? Or is that like a good starting run rate?

No. Thanks, May. There's a lot going on in the investment portfolio, and the team really has done an exceptional job this year and really transforming that. Just to give you a little bit of journey that we've been on. We've gone from a largely in-house asset manager when we owned Core Bridge to largely outsourced at this point with key partners. And at this point to give you a stat, Core bridge of our $80 billion portfolio only manages less than $3 billion at this point. And so we've really made that change. One of the things the team did this year is that we had many parts of the world, we had much lower yields on the portfolio. We did actively turned over about 40% of the portfolio.

And just to put that in perspective, and reinvested in higher yields, of course. Just to put that in perspective, a normal turnover for us would be about 15% of the portfolio a year. So that's an active 25% we turned over to reinvest at higher yields. Additionally, as you can imagine, we've been actively working with our private equity partners. We've sold down our real estate portfolio and push the proceeds to 1 of our partners. And with the CVC deal we just announced, we're really cleaning up on the PE secondaries where we just weren't earning an adequate return on where we were, and we think we're better positioned there. So it's a combination of many things, but the piece you're talking about is really the reinvestment into higher yields around the world.

Our next question comes from Bob Huang with Morgan Stanley.

Just want to just maybe dig a little bit deeper on to the AI commentary. Maybe starting with when you talked about 2026 being the implementation for orchestration layer on AI agents, not sure if you have an answer for this, but if we think about the infrastructure software side of things, would this be an orchestration that sits on top of all the technology for AIG and then thus manage that way? Or is the orchestration layer just for localized AI systems and then they essentially would manage localized AI initiatives. Like is there a way to think about that?

Yes. So thanks for the question. I think what we were referencing, we have made incredible progress in terms of the implementation of Gen AI and also trying to stay aligned the advancements of the tech companies that are making.

You can see it in this quarter, just massive CapEx, but also making material progress on their capabilities. So like when we talked out at Investor Day, we didn't really even talk much about orchestration. And we thought that what we had outlined in March was aspirational. And 6 to 12 months later, we see the capabilities are much greater. And so not only are we making massive advancements with data ingestion, shrinking digital workflow, but also in the large language models and the advancements. I'll use entropic as an example, we start off with Claude 2.0 and we're now at 4.6.

And so like a lot of those advancements. What I was referencing on the orchestration is just that the implementation of single agents throughout organizations is real. And there's great opportunities in functions in mid-office and front office, but orchestrating that in an orderly way of being able to get that at scale is what we're going to focus on in 2026. And so we've been experimenting with multiple agents on the underwriting side. than the functional side. I'd also add into like our back office, we outsourced to Accenture, I'll give you an example there. And they're doing an incredible job in terms of reinventing themselves in their ability to create agent large language models. We share in the savings, we share in the design of the orchestration and how it actually comes into our workflow. So I would expect to be giving you updates throughout the year in terms of the progress that we're making and making sure that it's not only -- it will be on the technology stack, but I'm talking more about orchestrating a significant amount of agents within the organization that are more organized.

Got it. So it sounds like a lot of opportunities on integration and AI side of things.

Absolutely.

But maybe just a follow-up on that. you've been on this technology and AI journey for some time now. Given the progress you've made thus far, what are the low-hanging fruits that you think that are -- readily you're ready to take advantage of. And then that can maybe show up in the numbers. And what are more of the complicated projects that you're excited about that perhaps is more further out 5 years down the road?

Yes. Thanks, Bob. I mean the first one is absolutely to reduce cycle time with the higher quality data to the underwriter. I mean we're seeing like a massive shift in our ability to process a significant submission flow way beyond our expectations without additional human capital resource. So that's been the biggest surprise. There's some training that's going to be required for us in terms of what does the underwriter look at if it has all of this rich information in a fraction of the time.

So that's a part of our training, and we've been doing that in '25, and we'll accelerate in '26. I want to repeat the answer that I just gave you, but I think the real long-term opportunity is going to be getting the orchestration of agents in an organization to be able to scale and be able to analyze that information that's not biased in a way that's through the entire workflow. So I think like -- if you think of a digital workflow from front to mid to back, you can shrink all of that with the implementation of and multiple agents with a proper orchestration. And there's a lot of companies that actually have orchestration capabilities. It's just a matter of doing it within your own sort of framework and making sure that you're working with the regulators and being very forward thinking and the partnership there. But I think the acceleration and the opportunity is greater than I thought at Investor Day.

Our next question comes from Elyse Greenspan with Wells Fargo.

My first question is on the expense ratio. So you guys [ 31 1 ] for '25. You guys reaffirmed the 30% 2027 target. Should we think of that as the improvements split between the next 2 years? Or is there anything, I guess, you would highlight what the expense ratio we think about getting from where you guys are to your target?

No, I think, Elyse, I think I outlined that really the expense ratio was a direct correlation to the parent expenses being taken from other operations and putting into the business. And again, I have to say the business did an exceptional job. We will not have that headwind in 2026. And I think from the expense discipline I think this company deserves a lot of credit for its ability to execute transformations, whether it was AIG 200 or what we did in the underwriting or what we did with AIG next. This is in the DNA of the company.

We will get the expenses out and we'll also get leverage from very strong premium growth. So I think that there's -- I don't want to revise guidance, but we are not nervous about getting to this in '27, and we expect to see meaningful improvement in 2026, and it will be much more predictable.

And then my second question is just on the capital color. Keith, I think you said a minimum of $1 billion. I just want to make sure understanding. So that's the baseline. And then if the corporate stake is monetized, that would come on top of the $1 billion in 2026.

Elyse, yes, that is correct. So we said at least $1 billion is our baseline. And then any core bridge proceeds, the vast majority of that will be deployed into additional share repurchase.

Our next question comes from Paul Newsome with Piper Sandler.

I was hoping, Peter, to maybe ask a big picture question as we get closer to the early call. About your experience in the soft market and what you think generally how things will evolve? You can tie it to what you think that's going to happen to revenues in the next year or just in general, if you think that this -- this is an extended soft market or something that could be short.

And I'm going to ask John -- I think John [indiscernible] away from London to answer your question and he has more experience on the underwriting side than IV. But the 1 big material item is you have to prepare for this well in advance. I mean, so in terms of how you're shipping a portfolio, if you want to be opportunistic, I think we've been incredibly thorough throughout the globe in terms of looking at and being very consistent on underwriting standards, and we always talk about getting the best risk-adjusted returns. We look at volatility, look at loss costs.

We look at margin on loss cost and we look at our ability to scale and also a very real and honest with humility, discussion around our relevance on those products in the marketplace. And I think we have leadership on so many of the products. And also not always looking at just the index. In other words, like we've seen property come off with rates. We want to be very careful. We're not looking to grow it. The property had its best year on an accident year basis, on a calendar year basis, from a combined ratio across AIG. I mean -- so like we want to make sure we're not overreacting, but being very conservative in terms of how we're actually deploying capital. So I don't think the entire market is in a soft market.

I mean, property always gets the headline where the minus 10s and E&S might be slowing down. But I'm like E&S, again, I like to look at submission count retentions and our submission counts in parts of [ elections ] are up 30%. That's a positive. And then you want to make sure that you're positioned the dislocation. I think when I look at like Lexington, Global Specialty, the next time there's a market turn, we are going to be able to grow substantially. John, maybe you could talk a little bit about cycle management.

Yes. Thanks, Peter. And I agree. I know we all talk about the market. I don't think for 20, 30 years has been such a thing as the market, there's multiple markets, multiple cycles going on at any one time. And it's not the entire market that dipping now. And this is all about being ready for it, isn't it? We have had, in some places -- when people talk about the hard market for last years, not everywhere it's been hard in [indiscernible] rate. So we've been planning for this for a long time. We've changed some of our processes, our robustness over our reserve revenues are lots picked on inflation planning. Our margin planning is -- has been strong anywhere. We've improved it hugely in readiness for this. We monitor micro segments, we monitor new versus new, we monitor different geographies. And we really do know, firstly, where the big growth opportunities are and also where the highest margin opportunities are. But we're also very, very clinical on where our risk-adjusted returns are and what we will and [indiscernible]. .

So -- and we talk a lot on these calls and in other forum. We have this diverse portfolio across the whole globe. And there is no single market on the process, of course, [indiscernible]. We're not in denial about that. It's not everywhere. It's not at the same time, different products, different geographies are at different stages of the cycle. So we react to that and we go looking for where the best opportunities are that suit us. And I'll just and I think it's important to note that the risk is sounding arrogant. We are really well positioned to manage this, and we are not an index for the market. If I saw our rate, our risk-adjusted returns exactly the same as the market. I've been very disappointed actually because we try and do things differently and use our capacity and our capability together.

That's great, John. And I think also, Paul, I'd just add one other thing is that you set the entire company of these markets, just not the underwriting portfolio. What's your leverage, what's your cash flow, what do you have for liquidity? How strong is the balance sheet. How strong have your loss picks been? How confident you are on the accident year loss ratios when you're looking to improve combined ratios like we are, we're taking it out of the expense because of efficiencies and how much have you been investing for the future as the world changes at a rapid pace, where I think we've been a leader in Gen II. So I think that we do a kind of like look at it really broadly and then making sure that the underwriters are really focused on delivering those returns.

[kay. You want -- Paul, do you want to last follow-up? .

I was just going to ask you about M&A. You may send in your comments that the recent deals have been hopefully better than buybacks. Is that kind of the baseline, if you take perspective for the M&A. [indiscernible]

Not always. I mean I think I want to be able to tell you how do we think about it in terms of earnings, EPS, ROE and how is it compared to share repurchase, for sure. I don't want to say always or never. But in today's environment, that's why Keith gave the guidance he gave is we think the best use of the proceeds from Corebridge today is in share repurchases that we've done some compelling investments that are going to help propel AIG over the next 2 years. And then as we get to the back half of '26. We'll look in terms of what those trade-offs are in the future.

Okay. Thanks, everybody. We really appreciate you participating today, and everybody, have a great day. .

Thank you for your participation. You may now disconnect. Good day.

Good day, and welcome to AIG's Third Quarter 2025 Financial Results Conference Call. This conference is being recorded. Now at this time, I would like to turn the conference over to Quentin McMillan. Please go ahead.

Thanks very much, and good morning. Today's remarks may include forward-looking statements, which are subject to risks and certainties. These statements are not guarantees of future performance or events and are based on management's current expectations. AIG's filings with the SEC provide details on important factors that could cause actual results or events to differ materially. Except as required by applicable securities laws, AIG is under no obligation to update any forward-looking statements if circumstances or management's estimates or opinions should change.

Today's remarks may also refer to non-GAAP financial measures. The reconciliation of such measures to the most comparable GAAP figures is included in our earnings release, financial supplement and earnings presentation, all of which are available on our website at aig.com. Following the deconsolidation of Corebridge Financial on June 9, 2024, the historical results of Corebridge for all periods presented are reflected in AIG's consolidated financial statements as discontinued operations in accordance with U.S. GAAP.

Finally, today's remarks related to net premiums written are presented on a comparable basis, which reflects year-over-year comparison on a constant dollar basis and adjusted for the sale of the global personal travel and assistance business as applicable. We believe this presentation provides the most useful view of our results and the go-forward business in light of the substantial changes to the portfolio since 2023. Please refer to Pages 27 of the earnings presentation for reconciliations of such metrics reported on a comparable basis.

With that, I'd now like to turn the call over to our Chairman and CEO, Peter Zaffino.

Good morning, everyone. Thank you for joining us today to review our third quarter 2025 financial results. Following my remarks, Keith will provide more detail, and then Jon Hancock and Don Bailey will join us for the Q&A portion of our call. This has been an exceptional third quarter for AIG and an incredibly busy one. We achieved tremendous EPS and ROE results as we continue to execute on our strategy to deliver sustainable, profitable growth. Last week, we had several announcements involving Convex Group, Onex Corporation and Everest Group. The key takeaway is that they are all expected to be earnings, EPS and ROE accretive in the first year post closing.

We believe each will accelerate AIG's progress and create long-term clue for our company and our stakeholders. And this was made possible due to our strong balance sheet, prudent capital management and financial flexibility. It's simply been an outstanding quarter, and I'm very proud of our colleagues for all they've accomplished together. For our call this morning, I will share a high-level overview of our third quarter results. provide a perspective on our strategic investments and renewal rights acquisition, give a brief update on our Gen AI initiatives and conclude with an overview of our capital management strategy and the progress against our Investor Day financial objectives.

In the third quarter, we delivered adjusted after-tax income per diluted share of $2.20, which is an increase of 77% year-over-year. Adjusted after-tax income for the quarter was $1.2 billion, an increase of 52% year-over-year, driven by our general insurance business. Underwriting income was $793 million, an increase of 81% year-over-year. Net investment income on an adjusted pretax basis was $1 billion, an increase of 15% year-over-year. The accident year combined ratio as adjusted was 88.3%, in line with the prior year quarter and a 16th consecutive quarter with a sub-90% result. The calendar year combined ratio was 86.8%, an improvement of 580 basis points from the prior year quarter.

Now let me provide some detail on our performance across the 3 business segments. Let's start with North America Commercial Insurance. Net premiums written were flat year-over-year. It's worth noting, which we mentioned on our third quarter 2024 earnings call, that we had a closeout transaction in our casualty portfolio that benefited overall growth in the prior year quarter. Adjusting for this, net premiums written would have increased 3%. This growth was driven in targeted areas, notably programs, which increased 27%, Western World, which increased 11% and excess casualty, which increased 8%. This was partially offset by retail property, which declined 10% and Lexington property, which declined 8%, where rate pressure has been most prevalent.

We spoke about property quite a bit last quarter. Keith will go into more detail in his prepared remarks, and we can discuss further in Q&A. Despite pressure on rates, the accident year and calendar year combined ratios remain exceptional for the property portfolio. North America new business was very strong. While Lexington's new business was flat year-over-year, it was the biggest nominal contributor to new business in North America. Its submission count was up 18% year-over-year. following significant increases over the last 2 years of 34% in the third quarter of 2024 and 47% in the third quarter of 2023. Financial Lines new business was up 16%, led by M&A.

Turning now to International Commercial Insurance. Net premiums written increased 1% year-over-year, driven by Marine, which increased 11% and property, which increased 6%. This was partially offset by financial lines which declined 6%. International Commercial had an outstanding quarter for new business led by specialty, which increased 17% year-over-year, driven by Marine, which increased 35% and and energy, which increased 30%. Property increased 24% and financial lines increased 12%, driven by higher M&A activity in the quarter.

In Global Personal, net premiums written decreased 4% driven by the high net worth quota share reinsurance treaty that we entered into at 1/1/'25. While this continues to improve profitability in the portfolio for 2025 and negatively impacted global personal net premiums written. We expect to see this premium trend reverse in 2026. Overall, it was a great quarter of performance for AIG, and it positions us for a strong finish to 2025. Last week was a momentous one for AIG. We announced strategic investments with Convex Group Onex Corporation and a transaction with Everest Group. These will strengthen AIG's long-term value and strategic positioning, and we expect they will be earnings, EPS and ROE accretive 1 year after closing, aligned with the objectives we outlined at Investor Day.

This is in line with my previous comments that we would look for compelling opportunities to deploy capital in ways that would be accretive to our financial metrics and to further build our business. As a point of reference, over the last 3 years, we've returned a total of $19 billion of capital to shareholders through approximately $16 billion of share repurchases and $3 billion of common stock dividends. In addition, we reduced debt by $4.5 billion. We now believe we have a capital structure that's optimal for our current business.

When you look at the global insurance industry, there's a scarcity of high-quality insurance assets. We've been fortunate to secure a long-term investment in 1 of the very best global specialty and reinsurance companies, Convex Group. I know Convex group extremely well and have known and traded with its Chairman, Stephen Catlin and Chief Executive Officer, Paul Brand, for over 20 years. I have deep respect for their expertise, leadership and the culture they have built. With Convex we will gain access to a world-class underwriting platform for complex specialty risks with a strong underwriting culture, a growing premium base and a proven track record of outstanding performance and profitability. Stephen and Paul have earned a reputation for building exceptional underwriting teams, and this is reflected in the company's impressive performance.

Convex was founded in 2019 and has consistently delivered very strong underwriting and financial results. With the combined ratio in the high 80s, no historical reserve issues, no legacy technology debt, a highly scalable platform and significant potential for continued growth. Over the last 3 years, Convex delivered a 25% compound annual growth in gross premiums written and an 18% average return on equity, demonstrating the strength of their business model and ability to produce sustainable long-term value. Last week, AIG agreed to acquire 35% equity interest in Convex while Onex Corporation took a 63% ownership position to be held directly on their balance sheet rather than through 1 of their investment funds.

In addition to benefiting from the ongoing success of Convex through an equity investment, AIG will also participate in Convex's portfolio through a whole account quota share, which enables us to share directly in Convex's underwriting growth and expected profitability over the short, medium and long term. The agreement gives AIG the opportunity to participate in 7.5% of Convex's portfolio on January 1, 2026, and and that will progressively increase to 10% by 2027 and 12.5% by 2028. The Convex transaction is expected to close in the first half of 2026.

As part of our discussions with Convex management, we were presented with an opportunity to acquire a minority ownership stake in Onex Corporation. With headquarters in Toronto, Onex is a leading private equity and credit investor with $56 billion of assets under management and 120 investment professionals based across Canada, the U.S. and the U.K. Our strategic relationship with Onex presents a unique opportunity for AIG to partner through an equity investment with a global asset manager with a strong record of investing in the insurance sector. Onex has made a number of notable and highly successful strategic investments in specialized insurance platforms, including Convex, Ryan Specialty, OneDigital and USI.

Let me unpack the details of our investment in Onex. We've agreed to acquire a 9.9% equity interest. Additionally, in line with our investment guidelines, we've committed to invest $2 billion over 3 years across Onex's broad asset management platform, which will provide us with a broader view of opportunities and deepen our market position within the global insurance industry. Keith will provide more detail in his remarks, but just to give you a brief overview, these investments have the potential to deliver a higher yield for AIG, supporting earnings growth and enhancing return on equity. We've evaluated investment opportunities in several fund managers in the alternative asset space over time and believe this is the right opportunity for us.

Post transaction, over 40% of Onex's’ total balance sheet net asset value is expected to relate to its majority ownership of Onex’. The Onex’ transaction is also expected to close in the first half of 2026. Finally, last week, we also announced our acquisition of the renewal rights for the majority of Everest's core retail commercial property and casualty portfolios representing approximately $2 billion of gross premiums written across multiple geographies. We greatly appreciate Everest's willingness to engage in a bilateral discussion to structure a transaction that further strengthens both companies and our mutual business relationship. We purchased the renewal rights for approximately $300 million with a potential downward adjustment of up to $70 million depending on how much of the portfolio is renewed with AIG.

Under the terms of the transaction, AIG did not take any of the endorse portfolio or unearned premium for policies with effective dates prior to December 31, 2025. And and we will not assume any liabilities for any of the policies previously underwritten by Everest. Everest employees will remain with Everest Group, though in certain geographies and businesses, we will work with Everest to offer opportunities to select staff members. We've also entered into a transition service agreement with the fine service levels to ensure continuity for clients and brokers as the portfolio is transferred to AIG.

In terms of the portfolio, it's well diversified across geographies and and classes of business. The largest portion of the in-force eligible gross premiums written is in the United States at $1.3 billion, followed by Europe at $400 million, the U.K. at $150 million Australia at $80 million and Singapore at $70 million. Approximately 60% of this portfolio will renew in the first half of 2026.

Canada, Latin America and certain lines of business, including aviation, surety and wholesale are specifically excluded. From a business mix perspective, the portfolio is approximately 40% casualty, 30% property, 25% financial lines with the balance being specialty classes. Everest's view, as stated on the earnings call is that there was no further reunderwriting of the casualty portfolio required and 80% of the adverse development in their casualty portfolio in the back years are from policies that have not been renewed. We will complete our own assessment, but believe they've done a very good job of remediating the portfolio.

We have extensive experience repositioning portfolios, particularly in casualty. It's my view that we have the best casualty underwriters in the business. And when combined with stricter underwriting standards, that Everest implemented over the last 12 months, we are confident that the portfolio will be positioned for success. AIG can absorb the business in our current infrastructure with no additional capital, and we will deliver an improved offering to clients and our distribution partners. The reaction from our broker partners of the transaction has been incredibly positive. They're very excited to work with us and committed to converting the book to AIG providing welcome continuity to their clients. We anticipate being able to add this portfolio into our 1/1 reinsurance treaty renewals with no change in terms and conditions.

This transaction adds further scale to AIG's upper middle and large account retail insurance book, providing an opportunity to drive premium growth without adding meaningful costs. The actions we have taken over the past several years have positioned us with the balance sheet and liquidity to pursue compelling opportunities when they materialize. Convex, Onex and Everest are unique opportunities that came to AIG first because of our strong brand, strong performance and the personal relationships that we've developed over time. As a result of these transactions, we are enhancing our earnings potential driving incremental ROE and putting our capital to work to drive long-term sustainable profitable growth.

Now I want to provide a brief update on Gen AI and how we are strategically embedding it into our core underwriting and claims processes. Each quarter and especially since Investor Day, we have meaningfully advanced progress and now we're deploying Gen AI solutions on a more accelerated basis. In my career, I've never seen anything progress at the pace and scale like I've witnessed in the last 6 months with Gen AI and compute. We at AIG want to be in a position to be able to adapt to these changes as effectively as possible. As a reminder, our objective has always been to provide more insight on the data that we receive from distribution partners through the submission process to enhance our underwriting. Supplement that data with reliable and verifiable additional sources and significantly reduced cycle time for our underwriters to make informed decisions in a fraction of the time. That is our future.

We started late last year with the rollout of underwriting by AIG Assist in our North America Financial Lines business, and we continue to see strong results. For our private and not-for-profit business today, we're processing 100% of the applicable submissions using underwriting by AIG Assist, which has increased our submit to bind ratio. This quarter, we deployed underwriting by AIG Assist in our Lexington Middle Market property and casualty business. In the E&S market and for Lexington, in particular, speed drives growth. As I outlined earlier and in prior calls, the middle market submission counts are growing dramatically. We have nearly 200,000 submissions year-to-date. We simply cannot get to all the submission activity -- and this is a problem that's not going to be solved by simply adding underwriters.

We are accelerating the rollout of underwriting by AIG Assist and will deploy across the rest of our Lexington business by the end of 2025. We've also moved up the rollout to the rest of North America, U.K. and EMEA commercial lines by 6 months. As a reminder, we've also been piloting claims by AIG Assist since last quarter, and we're seeing terrific results. We're reducing the time is taking our claims teams to receive first notice of loss reports and to issue coverage letters. One of the main challenges in implementing Gen AI solutions is the time and effort needed to build an accurate source of data from a heterogeneous population of documents. To make it easier, we developed a patent-pending approach called Auto Extract. Auto Extract is a capability that uses large language models to pull specific structured information from unstructured text such as documents in multiple formats, websites and conversations. It works by developing a content-specific large language model that generates prompts containing instructions on what to extract and then analyze the text and returns the requested data in a structured format.

This solution makes it easier to process, analyze and use large amounts of data that would otherwise require extensive manual effort. Another use case we've developed is a capability to ingest the Schedule P information for over 225 U.S. insurance companies. We leverage this information for a variety of insights to determine correlations among loss ratios over certain development periods, specific reserve development and other insights across specific lines of business such as other liability occurrence. We gathered over 4 million data points, augmented the data with publicly available information, created an ontology and trained an agent in the ontology to identify trends. We use this in our portfolio management efforts to support our business and provide unique insights.

I'll now shift to capital management. In the third quarter, we continued to execute against our disciplined and balanced strategy while maintaining our financial strength. Keith will take you through the specifics. As we look to the future, subject to market conditions, we intend to continue our share repurchases in 2026 and albeit at a normalized level. And over time, we will also look for more compelling opportunities to deploy capital to drive long-term strategic value.

Before I close, -- let me give you a little more specificity on how we're tracking to our Investor Day metrics. We set very aspirational objectives at Investor Day. And through the first 9 months of the year, we are ahead of what we outlined at the beginning of the year, which is an enormous achievement. As I noted earlier, EPS has been very strong in 2025. We achieved a core operating ROE of 13.6% in the third quarter, up 430 basis points year-over-year. Year-to-date, our core operating ROE is 10.9%, and which is well within the 10% to 13% range we stated at Investor Day and believe we can maintain and grow this metric through 2027.

We are continuing to make progress towards an expense ratio below 30% for General Insurance, and believe we have further opportunities to streamline our expense structure going forward. Finally, we grew our dividend per share by over 10% in 2025 and subject to board approval, we expect to be in a position to do the same in 2026.

In summary, we had an outstanding third quarter, made significant advancements in our strategic deployment of capital with 3 unique opportunities and we're very committed to delivering on our 3-year guidance.

I'll now turn the call over to Keith.

Thank you, Peter, and good morning. I'm going to expand on the financial highlights for the quarter. Adjusted pretax income, or APTI, was $1.6 billion, an increase of 51% from the prior year quarter. This was driven by strong results from the business, and execution of our investment portfolio strategy. General Insurance gross premiums written were $8.7 billion in the third quarter, an increase of 1% from the prior year. Net premiums written were $6.2 billion, a decrease of 1%. As Peter discussed, we had strong new business and retention in the quarter. I will comment on the rate environment later in my remarks.

For the third quarter, General Insurance accident year combined ratio as adjusted was 88.3%, which is the same as the prior year quarter. Accident year loss ratio was 57.4% and a 100 basis point increase year-over-year. This was primarily driven by the reapportionment of unallocated loss adjustment expenses and we had more favorable actual versus expected recognized in specialty in the prior year quarter. This is partially offset by underlying improvement in global personnel. Our general insurance expense ratio was 30.9%, a 100 basis point improvement year-over-year. For the first 9 months of 2025, -- the general insurance expense ratio was 30.8% compared to 31.7% for the prior year period.

This demonstrates our operational excellence and discipline in driving efficiencies and as we have shifted expenses from other operations into general insurance, while investing in underwriting capabilities, technology and infrastructure. For context, since 2023, the business has absorbed an additional $400 million of parent costs that used to be in other operations. We expect to be at $350 million of other operations expense for full year 2025. Our teams have done a fantastic job of managing expenses, and we expect to achieve our target of below 30% by 2027. Total catastrophe losses for the quarter totaled $100 million or 1.6 loss ratio points, an excellent result. Prior year development, net of reinsurance was $205 million favorable which included $174 million of favorable loss reserve development and $31 million of ADC amortization. North America Commercial was favorable $139 million across our property, casualty and financial lines.

International Commercial was also favorable by $47 million, primarily driven by shorter tail lines in Global Specialty partially offset by movements on select longer tail lines, largely driven by auto trends and adverse development on pre-2018 general liability reserves. Global Personal was $19 million favorable. These results include a reapportionment of the remainder of our uncertainty provision across all 3 segments, predominantly into longer tail lines. Similar to last quarter, -- this was not related to any observable deterioration in our book. We continue to build on our strong balance sheet and have a high level of confidence in our reserve position, supported by the favorable actual versus expected trends we continue to observe.

Overall, General Insurance calendar year combined ratio was outstanding at 86.8% and a 580 basis point improvement compared to prior year quarter.

Now moving to the segments. North America Commercial accident year combined ratio as adjusted was 85.4% and an increase of 30 basis points over the prior year quarter. The accident year loss ratio of 62.1% was up 30 basis points, owing to changes in business mix as we continue to earn in casualty business and reduce certain property lines and a partial onetime offset due to last year's casualty closeout transaction. The expense ratio was flat to last year at 23.3% and including a 60 basis point improvement in the acquisition ratio, offset by a higher GOE ratio due to the movement of expenses into the business from other operations.

The quarter included 310 basis points of catastrophe losses and 590 basis points of favorable prior year development. North America commercial calendar year combined ratio was 82.6%, an improvement of almost 13 percentage points.

Turning to international commercial. The accident year combined ratio as adjusted was 86.0% and an increase of 260 basis points. The accident year loss ratio was 54.4%, a 170 basis point increase year-over-year largely from reapportionment of unallocated loss adjustment expenses and less favorability in specialty, as we mentioned earlier. The expense ratio rose 90 basis points to 31.6% and driven by movement of expenses from other operations. This quarter included 80 basis points of catastrophe losses and 190 basis points of favorable prior year development.

The international commercial calendar year combined ratio was 84.9%. This is the tenth consecutive quarter of a sub-90% combined ratio for the International Commercial segment which speaks to the quality of our portfolio. Turning to Global Personal. The accident year combined ratio as adjusted was 95.5%, a 330 basis point improvement year-over-year adjusting for the divested travel business. The accident year loss ratio improved 90 basis points to 55.3% and driven by underwriting actions leading to stronger underlying profitability and lower reinsurance costs. The expense ratio improved 240 basis points to 40.2% and driven by the acquisition ratio, which is benefiting from a combination of improved commission terms in the U.S. high net worth business, operational efficiencies and changes in business mix.

This quarter included 80 basis points of catastrophe losses and 110 basis points of favorable prior year development. The global personal calendar year combined ratio was 95.2% and an improvement of 520 basis points year-over-year. We continue to make steady progress increasing the profitability of global personal as outlined at Investor Day.

Moving to rates. In North America, market conditions for pricing have remained largely stable. Excluding the property business, our North America commercial renewal pricing increase was 5%. In North America Casualty, the overall pricing environment remains favorable with retail excess casualty up 13% and Lexington Casualty up 14%. In North America Financial Lines, pricing was down 2%, in line with the second quarter. The pricing reductions have moderated, and we continue to focus on our differentiated offering and leadership position. North America property continued to see pricing pressure with the overall portfolio showing improvement from last quarter, largely as a result of mix. The property market rate environment remains challenging, and we continue to have strong profitability across our retail and wholesale business while prioritizing underwriting discipline.

International commercial overall pricing was down 2%. Across our international property portfolios, pricing was up 4%, driven by 16% rate increases in Japan. Global Specialty pricing was down 4%. Since 2018, the cumulative rate increases in our global specialty book have been very strong, with over 100% increase in energy where rates are currently challenged. Overall, pricing remains above our technical view. Talbot and Financial lines pricing was also down 4%. AIG's well-diversified global portfolio allows us to manage across geography and products, prioritizing lines of business that offer the best risk-adjusted returns.

Moving to other operations. Third quarter adjusted pretax loss was $116 million versus the prior year quarter of $135 million. This reflects a significant reduction in general operating expense and lower interest expense, partially offset by lower net investment income as we reduced our Corebridge financial stake. Total GOE across both General Insurance and other operations, was $866 million in the third quarter, up 1% from the prior year, adjusting for travel. For the 9 months of 2025, total GOE was $2.5 billion down 2% year-over-year, while net premiums earned grew by 5%. This is an impressive outcome, reflecting positive operating leverage, allowing us to create bandwidth for future investments.

The third quarter net investment income on an APTI basis reached $1 billion, an increase of 15% year-over-year. General Insurance net investment income was $945 million growing 22% year-over-year. The increase was driven by fixed maturity securities, owing to the optimization of our lower-yielding portfolios, asset growth and higher reinvestment yields in addition to improved alternative returns. During the third quarter, the average new money yield on the fixed maturity and loan portfolio was roughly 95 basis points higher than sales and maturities -- the annualized yield was 4.58%, a 69 basis point improvement over the prior year. Alternative investment income was also very strong this quarter at $137 million yielding 13.6% compared to $43 million and 4.3% in the prior year quarter.

Our well-diversified private equity portfolio contributed to this excellent performance. At Investor Day, we talked about opportunities to optimize our core portfolio, particularly in some lower-yielding geographies as well as prudently increasing the allocation to private credit when we see attractive premiums over public credit. As part of the reshaping of our portfolio, we have reduced hedge funds and global real estate by $1.5 billion collectively since 2021. We largely have completed the rebalancing of public credit across multiple geographies. Yields are now more consistent with where we believe we should operate, and we expect net investment income growth going forward to be more in line with asset growth given the current and projected level of global interest rates.

Over the next few years, we will opportunistically allocate funds to private credit which currently stands at $6.4 billion at the end of the third quarter or 8% of the GI portfolio. Overall allocations to private credit have not materially changed since Investor Day. As stated at Investor Day, we intend to take that up to 12% to 15% over time, subject to market conditions. Private credit is a large and diverse asset class, we expect to participate in the highest quality assets where we will get paid for the risk. We have private credit mandates with a small group of strategic partners who follow strict investment guidelines. We do a detailed review of every transaction we enter into and are very thoughtful about deployment and aggregation. We are pleased Onex will be 1 of those strategic partners.

We have committed to invest $2 billion over 3 years across Onex's’ broad asset management platform, including insurance co-investments outside of Onex funds which will provide us with a broader view of opportunities in the industry. We are in the process of divesting some noncore legacy private assets, mostly in real estate, and we will look to deploy some of those proceeds in Onex managed strategies over time, such as CLOs and broadly syndicated loan portfolios where Onex has a strong track record. Our expectation is that our investment opportunities with Onex will be accretive to our investment yield.

Turning to other operations. Net investment income of $77 million declined $43 million over the prior year quarter and largely reflect income from our parent liquidity portfolio of roughly $50 million and Corebridge financial dividend income of $20 million. This quarter, we updated the investment portfolio disclosure in our financial supplement to more clearly show the split between our general insurance portfolio and the assets sitting within other operations.

Turning to capital management. In the third quarter, we continued to execute in our strong, disciplined and balanced strategy while maintaining our strong ratings and financial flexibility. We completed the sale of another 31 million shares of Corebridge Financial for proceeds of approximately $1 billion. This brings our ownership in Corebridge to roughly 15.5%. We returned $1.5 billion of capital to shareholders in the third quarter through approximately $1.25 billion of share repurchases and approximately $250 million of common stock dividends. Through the first 9 months of the year, we have repurchased $5.3 billion, reducing shares outstanding to roughly $544 million. We continue to actively repurchase shares at what we view as attractive levels.

Subject to market conditions, we intend to continue our share repurchase in 2026, albeit at more normalized levels. As we stated at Investor Day, -- we generate roughly $3 billion of ordinary dividends from our insurance subsidiaries annually. We expect share repurchases up to $1 billion for 2026. We maintained our outstanding financial position in the third quarter. with strong parent liquidity and a debt to total capital ratio of 18%. Over time, we will also look for ways through additional investments and acquisitions to drive long-term strategic value for the company and our shareholders.

Book value per share at September 30 was $75.45, up 6% from September 30, 2024, reflecting strong growth in net income as well as the favorable impact of lower interest rates on investment AOCI. Adjusted tangible book value per share was $70.07, up 3% from September 30, 2024.

In summary, we delivered an excellent third quarter with annualized core operating ROE of 13.6% and 10.9% through the first 9 months of 2025. While the macro and insurance market remain dynamic, we are well positioned with multiple levers to drive continued strong performance.

With that, I will turn the call back over to Peter.

Thanks, Keith. Michelle, we're ready for questions.

[Operator Instructions]

Our first question comes from Alex Scott with Barclays.

I was hoping you could talk about the expected underwriting profitability from both the quota share as well as the renewal rights. And -- just hearing some of the things I was talking about on their call, it sounded like maybe the profitability is I'm sure it's improved from the underwriting actions they've taken, but it sounded like probably close to 100% combined ratio type stuff right now. So -- just wondering what that -- on both kind of side and the deals will look like out of the gate and where you expected to get it to over time? .

Yes. So Alex, I just want to clarify that you're talking about the quota share with Convex.

Yes, the quota share with Convex and then also the renewal rates with Everest, if you could comment on them separately. .

Okay. First of all, on Convex, it's a whole account quota share. It's a great company with a tremendous track record of profitability, and we are so pleased to be participating at 1/1 with a 7.5% share, that will grow to 10% in '27 and then 12.5% in the subsequent year. So that's really positive across our entire book, and we will benefit that from that because of the combined ratios that they run.

In terms of Everest, I'm going to make some comments, then I'm going to ask Jon Hancock to make a couple of comments because Jon ran the business process for the renewal rights for AIG. It's a $2 billion portfolio you have to take it in pieces. And so the international portfolio has performed very well. I mean, when we look at the combined ratios of their international business, it's similar to ours. and would expect the conversion for the combined ratios to be at ours and maybe even a little bit better over time because of the scale that can help the expense side.

When you look at the U.S., I'll give you just in the spirit of time, the 3 pieces. First is property. Property portfolio runs very well. attritional loss ratios are similar to ours. We may put a little bit more cat load on their portfolio. But AIG's cat load for our funded AAL will not go up. We've been doing an exceptional job on our gross book as well as reinsurance. And so that will be at our combined ratios, which have been exceptional. If you look at financial lines, I think the loss ratios for their book run a little higher than ours, but expense ratio with the conversion of the portfolio will run lower. So I would think on the financial line, the overall combined ratio will be at hours. So there'll be very similar conversion in terms of overall economics on a combined ratio basis.

And then the 1 that gets all the attention is the casualty. So the casualty, when Everest reports out, they're doing it on their back book, the earned book not necessarily on a written basis. And so I think it's really important to take a look at that as to how it's run. I put it in my prepared remarks because it was their own comments in terms of the further reserve strength and it required was from a part of a portfolio, 80% that doesn't exist anymore. And then the other piece, and I'll get to the reinsurance in a second, is that I think it's my view that we have the best casualty underwriters in the marketplace by Barbara luck. We've done this before. We've looked at a portfolio and said, this is what we think the structure needs to be in terms and conditions and pricing. And so I think we have a really strong track record of delivering that. Even if we deliver the majority of the casualty portfolio, still be less than 20% of our overall casualty -- and we have a very sound, attractive and 1 of the best structures I believe, in casualty reinsurance, which means we protect it from volatility.

The ceding commission will absolutely be a tailwind and accretive to the combined ratio. We have a low 30 seed. We're bringing very little expense over. The acquisition expenses are at or slightly below ours. I would look to forecast them at hours. But we would expect even on a written basis, same-store sales with the way we're structured, the way we underwrite and the way we structure reinsurance that the combined ratios are going to improve in a meaningful way. Jon, do you want to just give a quick overview in terms of how you look to the book when we're doing diligence.

Yes. Well, thanks, Peter. I mean I'd start by saying I think this is a great deal for everyone for us, for Everest and critically brokers and clients. And we're getting great reaction from all of them. It's a strong AIG with a global footprint in lines of business that we like, we know and we already like a lot of -- and where we've already got big and existing relationships with everyone. So this is about building on that rather than start from scratch. And I love the fact we did the deal at pace. We both decided very early on. It was the right thing for us. Hence, that bilateral discussions that you talked about, Peter. We wanted to do it, but we did it thoroughly, and we did it quickly.

And everybody knows, AIG's commercial business is incredibly strong. You see that through our results every quarter, and we want it to grow faster. And I think this is a great opportunity to help do just that. AIG and Everest, we've got to know each other pretty well through this transaction. And as you say, we think they've done a really good job of building their business, reunderwriting where they need to be. But I would stress, I agree with you. It's not everywhere. It's in certain places. And it's a great fit for our existing business to add to it. It's a sort of business we like. And the incumbent is important in our industry. It's important for us, for the broker and client. It means we don't have to re-underwrite all over again. We do have that continuity.

We renew together rather than start and a renewal rights deal like this brings that into play. So there's an advantage to all of us. And as you say, we're determined to renew the whole portfolio. We've looked at the portfolio carefully -- and I want to say as well, we know there are some overlaps. Of course, there are sometimes we're on the same risks same or different layers, and we're really comfortable with that. We've looked at the portfolio. We've been managing our limits and exposures waiting for growth opportunities like this. So we know -- we've got plenty of capacity and everything will be well within our risk appetite. So that's how we looked at it. Now will get it renewed by making it seamless straightforward, given that continuity is so important.

And we've already reached out to thousands of brokers and hundreds of clients as have Everest. We started those conversations. And we've got tremendous support from all of those brokers and clients. We're very grateful for that. And we're totally focused now on getting this business into the portfolio.

Thanks, Jon. That's great. Alex, do you have a follow-up? .

As a follow-up, I noticed the comments suggest you're continuing to look for further opportunities. And so I just wanted to get a feel for how much more capacity do you have to go continue to do deals like this? What type of stuff are you looking at? .

Well, I said it at Investor Day, I've said it on these calls in the past, and I'll reiterate it now, which is that we look for opportunities that are strategically enhancing to AIG. We've laid out financial metrics in terms of earnings, EPS and ROE accretion. I think the really important point to think about is Convex, Onex and Everest were all bilateral negotiations, meaning it was just us involved. And there wasn't a process. And we're getting more reach outs for that just based on our capability speed to execution, just the quality in terms of how we position the business. And as Jon said, we've managed our gross and net limits. As Keith outlined in his prepared remarks, we have a lot of financial flexibility.

And so we will continue to look at opportunities that fulfill sort of that strategic intent. I would expect to see more. We saw quite a bit before we did these deals. I mean, this wasn't the first opportunity that are presented to us. and we'll make sure that it's very additive to AIG and that there is alignment with whoever we're working with. I think we just have to have confidence that we will execute and we do on the sort of financial metrics that we've outlined.

Our next question comes from Brian Meredith with UBS.

First one, just back on the capital situation. If I look at what you said about $5 billion of holdco liquidity at quarter end, and you've got the Corebridge deal and you've got a fair amount of holdco liquidity right now. I'm just curious what your thoughts are and what kind of the minimum level of holdco liquidity you want to keep on your balance sheet?

Yes. Thanks, Brian, I'll have Keith fill in the details. But I mean, of course, the quarter end liquidity didn't contemplate that we're going to have to use that for some of the investments we've just outlined and the strategic acquisitions. We did -- Keith is kept in his prepared remarks before the Q as to our ownership within Corebridge. We exercised last night, a sale of around 32 million shares. So that's another $1 billion of proceeds to fund the acquisitions, but also our continued capital management. And we will be very consistent in what we outlined at Investor Day. We returned so much capital to shareholders, and that was the right thing to do based on the liquidity and the divestitures of Corebridge. But I think we're in a more normal state now where we're going to have those balanced investments and continue to build inorganic opportunities. Keith? .

Yes. Thanks, Peter, and Brian. As you stated, we have about $5.3 billion of liquidity at the end of the third quarter. We are well capitalized we're also very patient, and we are going to keep several billion dollars of liquidity always at the company for just prudently as we measure it. As we look through how we deploy capital going forward, we're going to be patient, balanced and consistent, right? And it's got to make sense for shareholders and for growing the company. And so I think that's the way to think about this as we go forward. As we stated in our remarks, we think about $1 billion of run rate as far as the share repurchase is a good indication for 2026. And I'll leave it at that. .

That's helpful. And then second question, just curious, I want to hit on your expense ratio target of 30% below I'm just curious, given what's going on with the Everest transaction which obviously is going to be beneficial to your expense ratio and these AI investments that you're making, which I'm assuming you're already seeing some productivity improvements from the underwriters. Is that 30% just kind of a starting point? And is there meaningfully more we could see improvement in that ratio? .

I'm not a big fan, Brian, I've given guidance on guidance. But I think to try to address the question is -- let me go with Gen AI first. I do think that's going to give us a benefit in terms of growth and operational efficiency. But we just rolled it out to private non-for-profit, 1 of our smaller businesses. we're going to be sort of rolling that out to bigger business and do expect exactly what you outlined, but I don't really have exactly the time frame, 30% with Everest and other ways in which I think we can grow. We have the Everest conversion on the renewal rights. We have a whole account quota share with Convex. We think that organic growth is -- this quarter is not indicative of where we think we can drive organic growth. We are going to have some operating leverage. And our focus, like the 10% to 13%, like the 10% increase in the dividend is to get to the 30% and we're going to do everything we can to accelerate that. and then we'll revisit what we think is the appropriate expense ratio for the business that we have at that time.

Our next question comes from Meyer Shields with KBW. .

Great. Peter, I was hoping you could talk through, I guess, the earnings power of Convex or I guess the whole account quota share in the context of, I guess, both volatility and price declines in property catastrophe reinsurance. In other words, without getting too specific in numbers, how vulnerable are its earnings to what we think will be weakening pricing at 1/1.

They have a -- thanks, Meyer, for the question. They have a very diversified portfolio. Balance in insurance and reinsurance. Reinsurance is not just property. That's a percentage of their overall, but they're very prevalent in the specialty classes, casualty. They're like an exceptional underwriting group. I don't think that -- look, do they have property cat in the portfolio? Yes. But it's not -- if you look at and compare and contrast it to like a Validus, which had significant property cat and was exposed to the big regions within the United States. It's apples and oranges. Also in the U.K., companies are particularly like Convex, very smart in terms of how they buy ILWs, how they buy cat bonds and how they reduce their overall volatility to a single loss. So I think, look, we look at it. It's well within our risk appetite for our own assumed property. And as I mentioned, we don't expect AALs to go up, and we will manage those exposures to have not big volatility. And it's not something I would be concerned about. .

Okay. That's very helpful. And I just wanted to confirm that the renewal rights deal is already active in other words, that doesn't have to wait for any sort of regulatory approval for you to start looking at the renewal book. .

Jon maybe you can just give a very quick overview of where we are in terms of Meyer's question.

Yes. So it is active. Yes, Meyer, there's 1 important point here that in the EU we're in the process of seeking regulatory approval. And so when we get that and we expect it fairly soon, we hope for it fairly soon in active conversations everywhere else this is live. Let's say we are having active conversations with the brokers, the clients and with Everest underwriters and other folks to get this going as quickly as possible. .

We are up and running there. We are working incredibly hard with the distribution and clients and showing continuity and a huge commitment to this portfolio.

Our next question comes from Michael Zaremski with BMO Capital Markets.

I guess, a broad question on the competitive dynamics in the industry. The #1 question we've been getting for a while, and I'm sure it's up there on your list, too. It's just been the the pricing power environment in commercial insurance being softish or soft, depending on how 1 must define it? And whether we, as analysts, should start embedding some -- a bit of loss ratio degradation as a result into our models. And I know you you've done a good job explaining to us in recent quarters kind of why you feel you're -- that's not a great way to model. But any update would be helpful.

Yes. Thanks for the question. I have gone through it at length in some of my prior comments on these calls. And what I would think about as your modeling, whether it's rate loss cost, all the different variables that drive combined ratio is looking at the mix of the portfolio is really important because large companies, in particular, like an AIG, we give you an index on rate, but there's so much that's underneath that. as Keith outlined, casualty was strong, property ad headwinds. The difference between E&S and retail can be different depending on what's going on with the quarter, cyclicality -- and then, of course, I think it's really important.

We don't put out cumulative rate increases to be defensive on the current environment. We do it because we delivered a significant amount of margin over time that gives us the ability to cycle manage. And I spent a lot of time, like on property with the cost of goods sold as to how you actually build up the loss cost -- but yes, we're in a competitive environment. We're going through a shift. Property has been the 1 outlier this particular year. But I think it's a combination of a lot of factors. I still think it's a very profitable segment. If you underwrite it well and you protect volatility -- the other place that's seeing a little bit of price headwind is specialty where we're sizable.

But again, it has the same underlying dynamics, which has been very profitable setting terms and conditions being a the underwriter, structuring opportunities for clients. You can see even in a market that has headwinds, flight to quality matters. We see new business up, submission count up, -- and I think you just have to differentiate between companies as well just to see who's going to sustain versus being an index in the market. That's some high-level commentary.

Got it. And if I -- if I can ask Peter to ask my follow-up on the update you gave us on AIG Assist and the exciting things you all are doing using technology and AI. Specifically on the submission response stats you gave out about almost 200,000 submissions year-to-date in 1 area of middle market. I just want to make sure we're thinking about this correctly in that over time, as this technology is deployed throughout the entire organization that it will likely result in kind of a material change to the top line revenue trajectory relative to market conditions. Is that fair? .

Yes. A few comments. I mean, of course, when we talk about Gen AI, it could go in a variety of different directions. But -- what I would say is that we are focused on the example I've outlined in earnings and the example I've outlined in -- at Investor Day, is about getting more effective in digesting data and actually accessing more data points to make the underwriters more constructive. -- and allowing them to make better decisions. So like when we talk about like the example I gave now with Lexington is that if you can adjust broker data faster and take unstructured, structured PDFs, all different formats and getting into an underwriting process and then have large language models accelerate that to the underwriter. That's why I said speed matters. I mean that's what will drive growth.

And it's not about driving more like underwriting appetite, it's about getting to things that are within our appetite and being able to service that business faster and at scale. The other thing to think about is are you prepared in a market turn. And it will happen. And so when there is parts of our business that there's going to be either supply issues or there's not going to be the same capacity. Can you take advantage of those opportunities by servicing clients and brokers and scaling significantly. We are prepared to do that -- and then the last comment I would make is that we are preparing this company to compete in the environment that's going to exist across the world.

When you think about the technology, I'm not saying it because it's a sound bite of things are progressing over the last 6 months. It happens to be true. Like what's happening with like advancements of large language models or the orchestration in the future of agents that exist within organizations and different functions and different parts of underwriting, how do you manage through that? We are trying to accelerate implementation. So we're prepared for the changes that are happening at a rapid pace based on the capital expenditures from the large tech companies and feel very good about what we've done.

I actually feel like we have advanced our guidance from Investor Day and want this to be a big part of how we talk about our business in the future. So it's going to be better quality data, more data sources speed execution is going to be accelerated, and the underwriters are going to be able to make decisions faster and make more effective decisions. So that's where I want to be and feel very good about.

Okay. Thank you very much for the questions. I mean, as I said at the top of the call, it's been an exceptional quarter for AIG, the progress, the announcements that we made are just great examples of how we're moving the company forward with purpose and executing on our strategy. I'm incredibly proud of all of our colleagues. Without them, none of this happens. And so I want to thank all of my AIG colleagues for working at pace. And I want to wish everybody a great day. Thank you.

Thank you for your participation. You may now disconnect. Everyone, have a great day.

Okay. Good afternoon all for our final session of the day. We did save the best for last. So I want to introduce Peter Zaffino. CEO of AIG. We'll start with some introductory comments, and then we'll jump into Q&A.

Thanks, Meyer. Good afternoon, everybody. I just wanted to take a few minutes just to make some introductory comments, and then I look forward to spending some time with Meyer and some of the questions from the group. It's great to be back here. We appreciate the opportunity to spend some time and present to you.

In many ways, 2025 has been a real pivotal year for AIG. One of our defining moments, we talk a lot about it was at Investor Day in March. We set out a few key objectives there, which is really important for this year is we really want to put the pass of AIG behind us. Want to spend quite a bit of time providing more details on the company we are today and I'm sure we'll talk more about that over the next hour and demonstrated the positive impact the work our colleagues have done to reposition the company.

We highlighted and I want to emphasize a few very important things which were our underwriting culture. We've developed operational excellence, and that's been from driving and process to digitizing workflow to what we're doing today with Gen AI and of course, executing a very disciplined capital management strategy, all of that has given us a lot of financial and strategic flexibility for today. We also wanted to like introduce not capabilities, but more of what we were doing in terms of Gen AI and actually has received a lot of attention since Investor Day and I'm sure we'll talk about it today. We outlined ambitious long-term financial targets and remain on track to achieve those.

If I could spend a few minutes just highlighting the second quarter. Adjusted after-tax income per share increased 56% year-over-year and that was driven by underwriting income, which increased 46%. Our core operating ROE increased to 11.7% in the quarter and our calendar year combined ratio was 89.3%. So we thought that was an outstanding result for the second quarter. For the first half of the year, our EPS growth is tracking slightly above the 3-year objective. We talked about the 20%, notwithstanding a lot of CAT activity, the wildfires in the first quarter. So we're really pleased with the progress we've made through the first 6 months. We also returned $4.5 billion of capital to shareholders year-to-date through the second quarter and delivered a third consecutive year of double-digit dividend growth.

We also reached another significant millstones, S&P and Moody's upgraded the financial strength of our insurance company subsidiaries. And it's worth noting, this is the first upgrade that AIG received from Moody's since 1990. We had to go back quite a ways and so that was quite an achievement for us. We retired an additional $830 million of debt in the second quarter, now have a debt to total capital ratio of 17.9%, which is one of the best in the industry. We did talk a lot about on the recent earnings call, the rate environment. I'm sure we'll cover it today. But generally speaking, Property has had headwinds in 2025. Casualty has actually been strong particularly in Excess Casualty and Financial Lines has finally flattened out after a period of rate reduction.

Property, I spent a decent amount of time talking about actually, what are the components of property pricing and how you actually derive the rate making and how do you drive profitability? What's the impact of reinsurance? How do you look at AALs and wanted to make sure that we emphasize the level of diligence that we do in making sure we have a fully loaded CAT cost and all of our property costs are very transparent and we know how they move depending on market conditions. So we're well positioned to manage this environment, focus on growth opportunities, but most importantly underwriting profitability.

Before I shift to Q&A, I just do want to share a couple of comments on Gen AI. It's been a key focus for us. We want to embed it into our core business and end-to-end processes supporting underwriting and claims. The early results have been very promising. At Investor Day, I spoke about what were really aspirations, we had some pilots, we had some rollouts. But quite frankly, getting some of the tech leaders to join us and talk about what they thought was the work that we're doing. But in many ways, we've actually made more progress than what I thought we could do from when I outlined this originally in March just because of the rollout tech advancements have been significant. And so we've rolled out a few pilots. It was started years ago but a lot of companies are still testing. We're actually live now on things. And so I think that was important to mention.

We started to roll out a component part of our Financial Lines. And within the year, we'll be rolling out our E&S business, which is Lexington, and that we expect to deploy more of the commercial business in 2026. I do want to leave you with a sense of how fast things are moving. Some of the tech companies and hyperscalers are really driving the pace of innovation at a significant level their commitments are substantial in terms of CapEx. I mean, combined Microsoft Meta Alphabet and Amazon announced their intent to spend over $400 billion in CapEx on AI just this year. So I think in 2026, we ought to see this acceleration in terms of not only what we're planning, but new horizons as we start to roll all of this out.

So those are just some of the highlights. I know coming after a second quarter maybe not a lot of new information, but I just wanted to emphasize all the progress that we're making, executing incredibly well, momentum into the second half of the year. So that's why I just want to say for prepared comments. And then Meyer, maybe I'll just transfer over to you for some Q&A.

Perfect. And yes, and I should point out 2 things: one, that Peter is providing an update every year. And every year, the update is dramatically beyond where it was the prior year. So there's been a tremendous amount going on there. Related to that also, I think my question list is going to be all over the place because again there are so many things going on at AIG that are worth talking about.

So let me start with one. We spend a lot of time talking about talent and recruitment. We recently announced that John Neal is joining AIG as President. What is the President of AIG do? And what should we, on the investment side, expect from John?

Well, I was the President, so I'd say we actually did quite a bit. So he's got some...

Well, what's left?

John is one of the top executives in the insurance business. I've known him for a very long time. Actually, when I was at Guy Carpenter, I used to work with John before he even took over QBE on a lot of the reinsurance that is. I've known them very well for a long period of time. He's incredibly capable. He's had some unbelievable experiences, whether it's running QBE or most recently running Lloyd's. I talked to some of the investors earlier today, I think there's not a lot of companies that are really global and have a broad footprint, but John actually has a lot of global experience.

So he's going to fit incredibly well within AIG. Strong track record of underwriting strategy. He's kept incredibly relevant with all of the moving trends and has a tremendous following. So he's going to give us a lot of bandwidth in terms of the path in which we are going to continue our underwriting journey. But he can do so much more than that. He's really well known. So he'll be working with a lot of our stakeholders or whether it's investors, regulators, reinsurers and expect great things from him. And he's very additive to a very capable team that we already have. So we're anxious for him to join us later this year.

And it's November.

Technically, it's December. I'll leave it at that.

Fair enough. That's good enough for my [indiscernible].

I'm good to getting people to work before they're on the payroll.

When you talk about -- so AIG Next, another success in terms of like getting ahead of plan, both in terms of time and amount, You talked about not just cost savings but also increasing internal efficiencies where you could process business faster. And some of this may get back to the Agentic AI, but can you update us on where those efficiencies are playing out?

The original plan for AIG Next was actually mostly just cost takeout. We actually had said on some of our earnings calls that it's not going to be like AIG 200, we had 10 different operational programs and the baseline for AIG 200 was to improve the company. This was about getting rid of redundancy, getting a parent company, expense structure that fit with the size of the organization that we are. But we had some very terrific observations and insights.

Actually, Mia Tarpey, who's here today, actually led AIG Next. And we saw halfway through that there's a lot of things we can do on the operational side that can improve the organization in addition to getting cost out or cost into the business. And that was connecting a lot of the functions, better end-to-end process, allowing new opportunities for better insight on data and also what we're able to do on Gen AI today is based on the end-to-end connectivity of the organization. And a lot of that was done through AIG Next. So it ended up being a continuation of AIG 200 which was terrific because we had originally just planned for cost takeout but we were able to improve the company significantly during that period of time.

Okay. And in your introductory comments, you talked about Agentic AI being expanded to other product lines. When you said Lexington, is that every line of business like in Lexington, right?

It's -- yes, it will be predominantly -- it may not be every single line but it's going to be the Property and Casualty, which is and Financial Lines, which will be the predominant portion of it.

What are the data points that you track to demonstrate that it's working as expected?

Well, we focused on -- and again, I'll try not to make the answer too long. But when we had embarked on this journey, it was all about how do you take in data structured and unstructured how do you actually use data sources that you're not using today? How do you equip an underwriter with more underwriting criteria? And how do you reduce the cycle time substantially to be more efficient and to be able to look at submission flow and workflow to be able to drive growth.

And then we didn't spend a lot of time on this at Investor Day, but we've been doing this. It's evidenced through what we did with Blackstone and Lloyd's and creating a special purpose vehicle for own reinsurance is how do you allocate capital and optimize the portfolio. So like how do you connect all of that together? Lexington became a very big opportunity for us because we showed that the submission count, and it's still happening in E&S. Yes, there's been a rate environment and Property that's coming off. But quite frankly, it's been coming off in a lot of the property market admitted as well but submissions are still flowing in through non-admitted and through excess and surplus lines. The volume is very hard to handle when you start getting into hundreds of thousands of increased submissions for our own business and whether we were not efficient at the beginning or where we are today. I don't spend a lot of time thinking about that.

What I do know is we have 10x the amount of submissions as we once did, and you're not going to bring in 10x the amount of underwriters. So -- and then you look back to what's the bind sort of submitted ratio, it was 6%. Like so it's not as those 20, and it's like, oh, you want to get it to 25 or 30 that might feel hard. When the volumes start to increase when the business started to get more demand, our buying ratios went to 2%. And so yes, maybe we're more selective underwriters but 2% of what you're seeing seems largely inefficient. And we felt that getting that data and getting things more prioritized and having the underwriting cycle time decrease is going to allow us to grow significantly in that business. So that became the next evolution in terms of scale, which we should be able to have it done before year-end. And as we said, if we can just get back to our old bind ratio, it's north of $1 billion of growth and I think that, that would be a low bar for us what I think we can do over time.

Okay. Fantastic. Are there bottlenecks in terms of rolling it out even more broadly to every AIG region, every AIG line?

I wouldn't say bottlenecks, but how much change do you want to go through in an organization? I think we'll be very aggressive in terms of the rollout in 2026. We have to realize is that even since March the companies that I mentioned, not adding Palantir and [ Tropic ] other companies that are pivotal to our partnerships. They've accelerated their capabilities in the last 6 months, it's unbelievable. And how they can extract data, where they can extract it from, what we've seen is a lot more discussion around agents or individual large language models that can do specific tasks and how do you actually roll that out.

So I'm very optimistic that the rollout does not need to be as linear and that you can do it in multiple parts of the business at once, and that's what we plan on doing in 2026. You do need -- look, we're not having it make decisions for underwriters, but you need the underwriters, if I would say, not a bottleneck but a significant amount of heavy lift work is if an underwriter is looking at 100, 125 pieces of data, what are those? And what are the best sources that you can get in terms of property data or casualty data or financial data.

And one of the, I think, significant advancements that the large language models have made is that you can now find out where the source is coming from. So in other words, you get financial statements came from a rating agency or it came from something that's credible versus something that may be scrapped that you don't know where it came from, that's where there was more hallucinations. So I think the data accuracy is better. I think the underwriting criteria is better. The issue, it's not a problem, it's initiative to be aware of is that how much of these large language models become intuitive and how much further do they go in an organization than what you're asking them to do. If you start to implement a lot of different large language models at once that ontology gets super complicated. And so we're working through that as well to make sure that we understand the rollout. Again, it's not making decisions, but making certain that the organization can catch up to how we want to operate in the future.

Okay. Fantastic. When you look forward 5 years, this is maybe not a great question, can AI make underwriting decisions not today in 5 years?

I think they will be able to, what type of decisions and what you want them doing is really the question. But like even today, a simple example would be looking at sprinkler systems, is it water? Or is it suck the oxygen out of the room or is it [indiscernible] or knowing how to train large language models as to what's a better outcome on some of the subcomponents of underwriting, I think, will be very important and very helpful.

Okay. So to me, that sounds like maybe the prioritization that you talked about where the best emissions are at the top that gets more refined.

Submissions at the top and information that could be more binary in terms of how you train an agent, I think can be very helpful to the underwriting process.

Okay. Fantastic. You also mentioned the rating agency upgrades. Practically speaking, there's nothing -- I don't see anything wrong with those. What difference will those make?

I mean for our business, probably nothing. I mean -- but -- but from a perspective of this journey of bringing all of our stakeholders along we had to get an underwriting portfolio that was one of the worst performers to get to a top performer. We had to get limit management. We had to develop operational excellence. We had to bring -- we were getting no ordinary dividends out of our subsidiaries because the regulatory environment was one where AIG just disappointed. So it just -- it was kind of a last like stakeholder that had not sort of voted for the change in the improvement that we made and see that affirmation.

And then going back and say, like 1990, I was a trainee at the Hartford and there's no such thing as cell phones, voice mail. The world was different back then. So it's a long time. And so it was just more symbolic of we've come a long way. People are proud of it and it was just another last sort of vote in terms of, yes, we believe in all the things you're doing, and we believe in the financial strength of the company. So it was it was a good moment for the company.

Yes. No, there's any...

But no, in terms of trading, it won't matter. But we're going to keep telling everybody. We got upgrades since 1990. I like to.

It's great line. One -- okay, so we're -- I mean heading to [ Monte-Carlo ] soon, start talking about reinsurance. AIG buys a lot of property reinsurance. And we're in a presumably softening part of the property reinsurance cycle. So I know the timing of this question isn't great. But is AIG over reinsured? Are there ways of optimizing that? Or do we take advantage of changing -- not changing, declining pricing to further benefit shareholders benefit the company?

Over reinsured, under reinsured it is a strategy and philosophy each company has sort of a different view. If you're running a business in a global business that is running in the low 80s combined ratio with what would be technically considered a lot of reinsurance. I like that strategy. I'd like the predictability of volatility containment. And I don't like to be at the whim of what happens with the weather or major hurricane or wildfires. We have a risk tolerance and that's how we set up the entire company.

When the market started to change a lot a couple of years ago, we stuck really hard with lower retentions because, again, it was within that volatility containment and you either low the cost in for the reinsurance or you don't. And so my own view is that and I try to break this down because I get a lot of questions around this in the second quarter, which was how do you actually break out the components of Property? And I have this philosophical argument, I'll stay away from it but like why would reinsurance cost be that much more expensive than retaining it yourself. I mean you could take -- there could be a couple of philosophies.

One is, well, I'm not going to take a single year view, I'll take a 5-year view. Okay, well, that's been wrong each of the last 5 years to the -- like it's been higher than what would have been predicted. So that doesn't seem like the right way to play it. There's a cost of capital issue. Somebody has too much of a margin like whatever, that's in the eye of the beholder. But my view is this should be like fully loaded into the cost. And so if you think about a market that we're going into, what I try to break out is that a reduction in reinsurance costs benefits us because that is embedded into our product. If you just funded it net, it's an AAL, you don't reduce your AAL because the reinsurance market is going down, that's your expected losses and it has to stay the same.

So if the rates are coming down, and you don't have anything to offset that like reinsurance, like that's not coming down commensurate then you have to have margin compression and a meaningful amount of margin compression because you still have the same CAT net, you still have your same risk net. And if you're getting total premium coming off the top, well, that has to still fund that. So it goes really into your attritionals.

If our sort of cost of goods sold, I call it, is that of reinsurance is coming down at or more than the original pricing, well, then really, I'm only focusing on the attritional. Same thing on the risk is that it's much more manageable because that cat cost, which would be self-funded with AAL otherwise is coming down and so we get the same benefit for lower cost. And so I think like in a market, look, I don't root for an active CAT season or benign one, we manage through the cycle. But if the reinsurance costs are going to go down that benefits us and doesn't put as much pressure on pricing as it would if you kept substantially large nets.

Right. Okay. No, that makes a lot of sense. This is only tenuously related to that concept. But I've had this thesis for a while that when we look at lines of business where pricing has gone soft over the last few years. So D&O, Cyber, most recently Property, there's been a suddenness to those decreases compared to past cycles. And I know it's a mistake to assume that cycles will be identical, they're not. But how -- if that premise is true that cycles manifest themselves faster, how does that impact your ability to plan for the consolidated AIG?

You have to look at each line of business on its own merits. And again, the topic right now is Property. And you have to look at the cumulative effects of that. And so you have to have a plan there. I mean, in other words, with property like the cumulative rate increases have been north of 100% combined ratio is a bit excellent. You can look at -- for us, we have so many different points of entry into the property market, whether it's through admitted in the United States or non-admitted United States or through Europe or through Asia. We can hub in Singapore. We see it through Lloyd's. So there's so many different places and you want to take a look at don't want to manage it as an index, but there's opportunities in different parts of the world at different times. And so the planning is really what's going to happen if the rate environment is going to be down like we've seen in Property.

Well, okay, what kind of margin do you have? What type of combined ratios do you have? And can we manage through it? I think you also have to take a look at where you are in the market, are you lead in pricing? Are you setting the terms or are you just capacity following outcomes, that becomes a different outcome. And then you have to have a point of view as to how long you can sustain that. So I think, look, is the property market more aggressive in terms of some of the pricing coming off than we would have thought at the beginning of the year, yes it is. Dramatically? No, but a little bit more. And so we will see how it plays out through the rest of the year. but we have perhaps a different plan in '26 if the rate environment continues.

In Financial Lines we do the same thing, which is we reduced our writings when they start to become cumulative rate increases and commoditized layers, high excess, mid-excess, and we just started to nonrenew business. And there will always be pockets of where there's opportunities for growth. We're seeing that in casualty now, non-admitted as well as admitted. And I think some of the specialty classes have had some pressure on pricing. But again the same dynamics as our property book which has had really strong combined ratios.

And then you have to be prepared to grow when there's opportunities that exist in the marketplace from either dislocations or opportunities in different parts of the world and the geographies. So that's part of the planning process. And I think we're in a really good place in terms of understanding what the economics are for each of the lines of business that we trade in.

Right. Okay. Fantastic. I do want to look around the room if there are questions. I want to make sure that to getting the information that you need out of the session. So please raise your hand if you do have a question, and we'll get the mic to you.

In the absence of that, so another large commercial CEO, it's suggested [indiscernible] I need to know. I suggested that bigger companies are positioned to grow faster. And the backdrop to this question is we've seen huge market share concentration in personal lines among the biggest companies. some of whom became bigger because of skill but that dynamic has played out. We haven't really seen it in commercial lines. And [indiscernible] is that because of a number of factors, we should see that basically better growth at bigger companies. Are you seeing that? Do you expect that? How are you addressing that potentiality?

I think over time, I think that will happen. I don't know that we're seeing it right now because, again, it's always what you see in this marketplace where either some MGAs or capacity that has come in that needs premium needs volume until something happens that tempers a little bit of the growth. But I think over time, scale is going to matter significantly in some ways more than it ever has whether it's balance sheet, ability to have diversified growth, quality and expertise in underwriting to be able to scale a business. But and again, I'm trying to make every answer about Gen AI but I think in 3 years businesses that have invested, the pendulum is going to push those much further faster and those who have not been able to ingest and be able to accelerate cycle time will be, I think, very much disadvantaged and you have to have scale to make those investments, you have to have expertise in order to be able to operationalize it. And I think larger companies with scale are going to benefit from all of that significantly.

Okay. When you look at your competitor base, and I'm asking this because I don't get the sense that you compete a lot with smaller regionals writing small standard commercial policies. How do you see your advantage playing out there?

The footprint for every large insurance companies is a bit different. And so it's in pockets. I mean, obviously, in London, it's a big specialty where oneof the world's largest specialty underwriters. And so like we're competing with Lloyds, we're competing with other large insurance companies that may have some expertise in specialty classes. But I think we are the most sort of prominent amongst organizations in terms of size, scale, expertise, I believe that.

In the U.S., it's a little bit more in terms of how we scale. We've done an amazing job with Lexington in terms of its relevance to the marketplace and size and scale. So we had some formidable competitors there. But I do think that there's a way that you bifurcate that with size, expertise and ability to grow versus more commoditized. It's not all large players but there are specialty insurers that compete in that area that really differentiate themselves and Lexington is one of them. I mentioned Property in the many ways in which we can access property from so many different parts of the world. A very different business in Asia, I mean, we're the world's largest nondomestic insurance company in Japan where we haven't fully seen all of the benefits and I think potential of that business with some of our personal insurance, particularly A&H and some of the digital investments we're making there to fuel growth, that will be on the come.

And India I know it's not a consolidated business, but it's a big business and one that we think has one of the biggest growth potentials in terms of value, size, relevance and also when it gets out of its domestic sort of capacity, meaning it can actually do global business through the network of AIG. That could be very advantageous for us as well. So like we compete with a lot of different companies and a lot of different geographies. but really, I believe, bring expertise and value differentiation in the markets that we trade.

Okay. That's very helpful. You've talked about in the context of M&A, certainly, an [indiscernible] is to M&A with incredibly strict hurdles for financial, cultural and strategic upside. So the financial and cultural I think, would very much depend on a potential acquisition. Can you talk about where there could be strategic advantages to AIG from M&A?

Well, I think we've demonstrated through a lot of the work that we've done in restructuring the company that we would know how to embed an organization deal with the operational complexities and get that synergies that needed to be realized very quickly, but also embed an organization to be able to make certain that they are more benefited from being part of AIG than not. And that's dependent on a lot of different things.

I talk about like there may be segments we're not in an SME geographies that are additive to our global network, more scale in businesses where we already have size. A&H would be a great example, if we can find something that we thought it was high quality that we could bolt on to a big business that's profitable that we could accelerate that would be something that's very additive. But I think that there's a lot of -- I keep mentioning lot of strategic and financial flexibility I want to be patient, which doesn't mean wait forever but I want to make sure that whatever we do acquire is strategic, is ROE accretive, but also is a better fit for them and for us being together. And I think depending on the market and depending on the challenges of growth, that may come earlier or later depending on what happens with market conditions.

Okay. So if I can just not respond but a follow-up to that. Should we think about that strategic benefit as making AIG better or AIG making other businesses better consolidated with it?

Both. That would be our hope.

All right. One issue that's come up a lot, and I like this issue because it gives me the opportunity to talk about something besides pricing. And on the sell side that's 95% of my conversations is speed of processing for smaller applications. And I'm asking this question really in the context of Western World. How does it compare? And what are its prospects for developing further competitive advantages on speed and accuracy of response to brokers?

So Western World for those who don't know is part of our Excess and Surplus Lines business. It's really services the small end of commercial. And it's done remarkably well, whether it's been new products at speed to bind is very impressive and developing a risk appetite but also an ease of doing business in terms of ingesting data we know what our risk appetite is in those businesses. And it's actually penetrating into a market that we really haven't had much presence.

So I think the framework of that business is great. The strategy is evolving and our execution has been very good. That's sometimes the submission count there and the flow and growth has been tremendous. But I think in this world that we're in and that we're going to be competing with in the future, it's only going to get better.

Okay. Fantastic. And that's, again, you said you don't want to use AI as the answer to everything, but it's going to be have that broad relevant.

Yes, AI can help decision-making there a little bit more just because it's much more small commercial volatility around decision-making is not going to be great. And so hopefully we'll be able to advance it. But even today with the technology we have, it does serve our distribution very well because they can bind things in minutes not -- and so like getting to seconds doesn't really matter. But making sure that we can continue to enhance our ability to expand risk appetite when we want to or focus on specific industries and be able to target those submissions better.

Okay. Fantastic. I do want to scan the room again just to see if there are questions. I don't want to make sure I'm not overlooking them. Quick question on underwriting and claims talent and maybe other segments that I'm not thinking about also. But whether we're talking about the relentless formation of MGAs, where they're talking about brokers looking for talent, whether we're talking about underwriters. There does seem to be an elevated battle for talent right now. And I was hoping you could talk about where AIG participates. What do you do to attract to retain? And from a different perspective to develop talent so that you have superior underwriting and that persists or [indiscernible]?

I mean, we know the same dynamic as brokers do where teams get lifted out or there's significant war for talent in terms of groups of people because I think underwriting is different in that maybe business travels with brokers but it doesn't travel with underwriters. So I think you have a real opportunity to develop the culture that you want an underwriting organization. We've done a remarkable job with just terrific leadership that we have with an AIG, great practitioners. We had to add a lot of underwriters in '18, '19, '20. We have a tremendous training program and so getting out of university into our analyst program and then getting individuals working through the overall company has been tremendous. And so we supplement what we bring in from the outside with talent that is developed within AIG.

And so we're always looking for ways in which we can train and advance and enhance the skill sets that we have within the organization. And that means actually training to where the business is going, not where it's been. But yes, we're always like -- we're always going to be in the war for talent, retaining, attracting -- look at AIG, I don't fully understand it to be honest, is like it gets the headlines for everything. I mean there's been people that have left and like, who is that? Like I mean -- and it just gets headlines. And so our attrition has been very low. Our underwriters are very attractive in the industry just based on the experience that they've gotten in a sort of once-f-a-career opportunity to work through a turnaround and reunderwrite portfolios, be part of that. But I've been incredibly pleased with the quality of what we have, the culture we've developed and our ability to attract talent is tremendous.

And that attraction flow, if that's the right word. How does that compare not to 5 years ago when you really need to rebuild a bench, but like 2 or 3 years ago?

We have been very selective because it's really important now that we have -- there's different skills needed to re-underwrite a portfolio than to grow a portfolio or to be in an underwriting group that's not going through that level of rapid change. We're always looking to fill in technical expertise depending on like in London and Lloyd's, there's different classes of areas where we want to compete that we're adding and supplementing talent. But generally speaking, it's very specific as to knowing positions that we want to develop. I mean, look, AI is a big one right now. It is bringing in people from different industries. We just brought in somebody to be the Chief Digital Officer, Scott Hallworth, who has got a lot of banking experience in terms of being a Chief Digital Officer, but he was the Chief Actuary at Travelers. So coming in with a totally different lens of financial services, but being grounded in data and how our business operates. That's been a tremendous and will be addition to the organization. And so finding different capabilities that complement where we are today is a big part of what we're doing.

And no $200 million signing bonuses?

No.

Okay. Fair enough. On the MGA side, you guys do have a little bit of delegated underwriting authority. How do you manage that? I know -- I think there's investor concern that's probably a little exaggerated right now, but it does require a slightly different administrative skill. And I was hoping you could talk about the AIG approach.

Yes, we don't do a ton of delegated authority. That is not a priority. You're right, it's a different requirement in terms of skill set. If a -- now Glatfelter was a company of a great example where they were writing on behalf of another insurance company at the time, but like they had their own capital. They consider themselves an underwriting company and their track record proved that. But they also had a distribution in terms of voluntary firement that was and you couldn't really penetrate it. So do you want that expertise within the organization? So that was an example of an acquisition.

I think we use the same criteria for where we would do MGAs or MGUs, companies with experience, track record, skin in the game, alignment in terms of underwriting outcomes, not looking to drive top line growth at the expense of underwriting profitability and you'd rather do it with fewer than sort of spreading it out and watching it very carefully, to be honest, because that can -- and it's happened to AIG and many other companies in the past where that can go par shade pretty quickly in a market where you don't have a real accurate view of what the accident year loss ratios are, the growth and the development of the book of business. So I think there's been a lot of delegated authority. In my view, it's going to end in tiers over time for some of the organizations, but that, unfortunately, in our business takes a little bit of time.

Right. I mean that's -- I would argue that, that's true even on the traditional side with maybe slightly misaligned incentives.

Yes.

Right. I mean that's -- I would argue that, that's true even on the traditional side with maybe slightly misaligned incentives.

Yes.

I want to spend a little bit of time focusing on reserves, really from 2 perspectives. We did have some older accident year strengthening in the second quarter. And I want to get a sense is your comfort for other legacy mass torts for lack of a better word. And then one point that I think got -- that's been underappreciated is the fact that when we look at your quarterly results, and this is true, even in the second quarter, there's favorable development and it's favorable development besides ADC amortization or ADC gain amortization. So I want to talk about those 2. I know they're somewhat contradictory, but they are 2 different realms.

We're very focused on making sure that we continue to strengthen the balance sheet. We take a very conservative view on reserves. I wouldn't read into the back years at all, nothing emerged. There was nothing that said we have to do something on [indiscernible]. We decided to do it and have built some conservatism into that. We've been very focused, and I've said this on the first quarter call where we've built in some margin in some of our accident year loss picks, not from emergence, not from concerns on the accident year loss ratios, but just being conservative in terms of our view of the current environment.

There was the ADC amortization, a little bit of release but again, I think that was all very orderly. We've been doing it quarter after quarter. And Keith is spearheading a little bit more of getting away from these DVRs and looking at reserves in a more thorough way every quarter. Yes, there'll be deep dives in certain quarters on lines of business, but just getting a much more balanced view throughout the year instead of waiting for the third quarter or waiting for certain quarters for certain lines of business. We've been working hard on that since the end of last year.

And I think it's just patience and making certain that we are watching emergence of each of the accident years. We study Schedule P probably, and I don't want to compare it to other companies, but what has happened to the industry of whether it's other liability or other areas where there's long tail sort of claims activity and watching that emergence and watching our own. I mean, you know our absolute loss ratios are so much higher because they needed to be based on some of the underwriting that happened in the past. But we are looking at a variety of different metrics to make sure that we're being conservative and observant of what's happening in the industry.

Okay. Fantastic. And again, I want to look around just to make sure that I'm not overlooking anything. One there's some new occasional news articles on a shift of longer-tail casualty policies to more of a claims-made basis because it's not that much in the short term that the industry can do about social inflation but you can reduce the tail size, which would limit the compounding risk associated with that. How tenable is that? How much of AIG's book could and should be written on a claims-made basis that hasn't been so far?

Well, I mean you pointed out the benefits of doing claims made. I don't know that the segments that we trade and that clients are going to be as receptive to claims made as we may like. And certainly, when you're underwriting an occurrence form that has like a really long tail that making sure that you have the appropriate pricing for what could be loss cost inflation that may or may not be contemplated today is, of course, a concern with the class. What you do there is you focus on terms and conditions you focus on attachment points, you focus on limit deployment. We have -- again not every answer is reinsurance but we're only willing to take a certain amount of net depending on the gross limit deployed which is much smaller than what the historical portfolio would look like.

So some of that emergence became from maybe it wasn't great underwriting, but it also was significant net limit retention. That gets you in trouble when you have sort of vertical exposure and hadn't fully contemplated. So I do think that there are going to be pockets of industry classes that we will push pretty hard for claims made. I don't think it's going to be a predominant trend within the industry. Some companies are trying to put stuff together. I don't know what the take-up is. I don't think it's significant. But you have to really manage that through underwriting with the terms and conditions and focusing on how much limit you're willing to deploy? And are you following someone, we lead, we set the terms that's really important.

And I think what our reinsurance [indiscernible] not that I sat up here whatever, 5 years ago, you're 2 to 3 years into , you've got to play it out. But like we're like in the year 8 or 9 in terms of taking low nets within Casualty. We started sort of in '18, '19, but we also did the unearned portion of the book. And so we just don't have big attachment -- sorry, big retentions. We have lower attachment points and so as each year goes on, you're going to get more and more confidence in terms of how we think about ultimates, certainly on the back years but even on some of the more recent years.

Okay. No, that's very helpful.

I mean I'm speaking to an actuary, so it's dangerous but that's my view.

But yes, no, we're trying to get the sense. And I think it's been pointed out that there are a number of [indiscernible] focus on the insurance industry. And sometimes it's tricky to filter out where they have these stories, is this a real shift? Or is this a one-off? So I think that is a...

You got to do the work. When you look at companies -- again you go through Schedule P and see whose loss ratios held up from their original -- even go out like whatever go through 2015 start year 2, say everybody got a year 1 wrong. [indiscernible] like you can see companies that traditionally get it wrong. Like when you see companies that traditionally get it right, like -- and so I think that's important in terms of experience, looking at triangles, understanding, again, limit deployment and potential ultimates, and it's a complicated line.

And not to jump too far field from what you're saying but one of these analyses I've been working on and this is not going to come as a surprise to anyone. It's at the best predictor of whether a company will have adverse development on accident year x is if they did the prior year. So for me, it all fits into why I don't trust book value as a valuation metric. But your point is something that I'm more than happy to say, [indiscernible].

Yes. Book value is as good as the quality of the reserves, right? Like so if you have a view of what ultimate looks like, then you'd have a good view of book value.

Which may not be what companies are saying.

Correct.

Where are we on global personal in terms of the shift to [indiscernible] model, the shift to adequate pricing? And what are the long-term prospects?

Are we talking about high net worth or like just the general global personal?

I'm going to ask about both. Starting off on that...

Yes, I would say, if you start with the sort of bigger one, which is global personal, I would say, very good businesses, we've divested businesses that we didn't think were core. We need to grow A&H more. It's profitable, but it has not grown to the level it needs to grow. We have to have a little bit more profitability improvement in the personal defined as personal auto and homeowners that we do in international, not necessarily in the U.S.

But the big bed is going to be, can we get the high net worth and PCS to profitability and we will. It's been slower than I would have liked just in terms of some of the headwinds that have existed changing a model that I still believe the way we've structured this will work out in the long term but we need other carriers to be working with us and the MGA to be able to underwrite the business alongside AIG. That was the real driver of the quota share, which we'll see negative growth in 2025, but that is bringing in strategic partners that are going to learn more about the business that will either provide paper or will come off business. I mean we don't need the quota share for reinsurance ceded or they look at is a benefit in the short run on profitability because the ceding commission is higher than the expenses, we were able to lower the MGA expenses and get an enhanced ceding commission, okay, so what? That's a 400 or 500 basis point benefit. That's not going to be a long-term business strategy.

But I do think that the opportunity is going to be seen. We're growing in E&S more than we are in a minute, of course, but not as much as we need. We have been off to a slower start than I would have liked. And in the rest of '25 and as we get into '26, we're going to have to accelerate that growth or think about going more into an open market environment where we can see more submission activity. So it's working. The profitability improvement is there. It's happening this year but the absolute performance of the high net worth business is not where we want to be, but we're heading in the right direction.

Once the profitability has been addressed, what's the global market potential of high net worth homeowners? High net worth Personal Lines?

We won't go outside the U.S. I wouldn't expect to see that strategically in the next 3 years. I think the opportunity is I'm going to give you a number and then you can hold me to it but I think it's substantial. I mean I still believe that going into the sort of E&S environment, problem with admitted is if you're in the ultra-high net worth or high net worth you have to put out large policy limits. The accumulation in CAT exposure gets pretty heavy, very fast. If you look at areas that have always been problematic, there's been more TIV in those areas. Think of Florida, Texas, California, all have different dynamics. I still think the Northeast is the most exposed because of how weak the PMLs are and the TIVs are massive. And also if a category 3 ever found its way up this way, flooding construction type, we're not ready for it.

So look, there could be things that happen that accelerate it. But I think it's -- the opportunity over a longer period of time, is well within the hundreds of millions, maybe even greater than that. Because I just think that there's not -- the void isn't getting filled. You hear antidotes but they're real, which is like we've seen -- look, I'm not going to call it a trend yet but let me get through the full year. But even with what was happening with the wildfires is looking at sort of claims development because you want to be observant on inflation, supply issues. Is there more demand or replacement costs? Like what does it look like? I mean a lot more of our clients took the check and aren't rebuilding. And so like forget it like I'm not doing this, can't get insurance and I'm not going to be in a place where there's going to be more wildfires not protected. And so that's not really solving a problem. I think -- and again, we haven't seen something significant in Florida. I think there's more limit to be purchased and there's more demand if we are there to offer the product.

Fantastic. Anyone -- and again, if there are questions in the room, please let me know. But I want to focus on investment income, you talked in the Investor Day and again, not abruptly but taking more risk. Where are we in the process? How should we think about the timeline.

I didn't say that. I think Keith said that, thank you. What we are alluding to is that when we were fixing the underwriting side, we were also very conscientious of being conservative on the investment side. And so we went from a -- when we were part of AIG was Life Retirement and P&C, the general insurance, we had $325 billion of AUM and then we began to say, okay, is an outsourcing model or advantageous. Well, knowing we're splitting up, I'm not going to spend time on about Corebridge, but Blackstone come in, Nippon come in, we outsource a lot of the fixed income to BlackRock both Corebridge and AIG. But when you're $100 billion or thereabouts of AUM, developing a more outsourced model, not for the investment strategy, not for the asset allocation, but for the execution we felt was an appropriate model. And that's what we did and I think it's worked out really well.

Now along the way, we started to get out of hedge funds. We started to get out of some of the alternatives. And Keith has been working with the head of our investments [indiscernible] in terms of repositioning the alts or the reinvestment that we've had in fixed income. And so I think there is an opportunity for us because we were so conservative in terms of the overall percentage of asset allocation alternatives that there's ways in which we can get perhaps not chasing it but just executing better with a more balanced strategy where we can get a little bit more return 3.8 years, not the longest duration, not like life, but it's also not that complex.

Okay. And then last chance to -- as I look around the room. And if not, I am going to thank Peter. Please join me in thanking Peter for a very informative session.