Please stand by. We're about to begin. Good day and welcome to the AIG's First Quarter Financial Results Earnings Conference. Today's conference is being recorded. At this time, I'd like to turn the conference over to Ms. Liz Werner. Please go ahead.

Thank you, Jennifer, and before we get started this morning, I'd like to remind you that today's presentation may contain certain forward-looking statements which are based on management's current expectations and are subject to uncertainty and changes in circumstances. Any forward-looking statements are not guarantees of future performance or events. Actual performance and events may differ, possibly materially, from such forward-looking statements. Factors that could cause include the factors described in our first quarter Form 10-Q and our 2015 Form 10-K under Management's Discussion and Analysis of Financial Condition and Results of Operations and under Risk Factors. AIG is not under any obligation and expressly disclaims any obligation to update any forward-looking statements whether as a result of new information, future events, or otherwise. Today's presentation may contain non-GAAP financial measures. A reconciliation of such measures to the most comparable GAAP figures is included in our financial supplement and is available on our website, www.aig.com. Nothing in today's presentation or in any oral statements made in connection with this presentation is intended to constitute nor shall it be deemed to constitute any offer of any securities for sale or the solicitation of an offer to purchase any securities in any jurisdiction. This morning, I am joined by the members of our senior management team including our CEO, Peter Hancock; our CFO, Sid Sankaran; Head of Commercial, Rob Schimek; Head of Consumer, Kevin Hogan; and our Chief Investment Officer, Doug Dachille. And so, we will all be available during Q&A. And at this time, I'd like to lead off the prepared remarks with Peter.

Thank you, Liz, and good morning, everyone. I'm happy to report the tangible progress we're making as we deliver on our strategic plan. Across AIG, we're working hard to execute on a transformation that will lead to improved profitability and will best serve all our stakeholders. As we've been repositioning the company, the support of our brokers, clients and employees has been greatly appreciated and is essential to our success. In the first quarter, we reported $0.65 of operating earnings per share, including market-related losses of $0.48 largely due to hedge funds. Our market-sensitive assets continue to decline, and Sid will speak to our progress to further reduce these asset exposures. We're off to a solid start to the year and in the quarter, we reduced expenses by 5% and returned $4 billion of capital to shareholders. As you can see on slide three and later in the presentation, our organizational improvements are proceeding on plan, and we're on target to reach our $1.6 billion in gross expense reduction by 2017. The steady pace of capital return continued throughout the quarter. Our strong capital and leverage ratios, attractive free cash flows, and risk management discipline allow us to execute on our plan to return $25 billion of capital to shareholders through 2017. We have also provided details on the key drivers of our normalized ROE improvement including unusual items. It's important to note that normalized ROE may fluctuate from quarter to quarter due to discrete tax items, as was the case this quarter. Additionally, the seasonality of anticipated catastrophe losses may result in quarterly ROE volatility. These fluctuations should not meaningfully impact full-year ROE, and we expect our full-year normalized ROE to be within our 8.4% to 8.9% targeted range. While we've seen market volatility impact our investments this quarter,…

Thank you. Operator, before you open the line, I just want to remind everybody that similar to the past quarters, we'll take one question and one follow-up. And then we'd ask that you please get back in queue so that we can answer as many questions as possible. With that, I will begin the Q&A.

And we'll go first to Jay Cohen with Bank of America.

Yes. Thank you. Just one question on the Personal Insurance. You talked about the A&H [Accident and Health] business being, I guess, restructured. What's going on in that business? What kind of premium declines you would be expecting going forward? Kevin T. Hogan - Executive Vice President; Chief Executive Officer, Consumer: The A&H restructuring has been undertaken for the last couple of years, Jay. And I think what we're seeing in A&H is a combination of foreign exchange effects, particularly in the international business which is the bulk of that business, and it is the faster growing part of that business. So, in particular, in the United States in the travel business, we have focused on a sustainable and competitive position there. And we believe that recent market developments are likely to ensure that our position is the one that our distribution partners will be choosing.

Thank you. That's helpful, and then, just a follow-question for Rob. Rob, obviously, you've got ambitious goals this year in the Commercial side. As you look at the first quarter, can you talk about – and I know this is not going to happen in a linear fashion – but can you talk about the progress you made in the first quarter relative to what you had expected and where you are at this point? Robert S. Schimek - Executive Vice President; Chief Executive Officer, Commercial, American International Group, Inc.: Okay. Sure, Jay. I'll say that overall, I'm quite pleased with where we were in the first quarter. I would say that our progress with respect to reinsurance was better than we had anticipated. Our progress with respect to the longer tail lines, Casualty in particular, was better than we had expected. But our progress with respect to shorter tail lines – Property was the area that I think that we didn't live up to my expectations. And in particular, that was with respect to attritional losses in the U.S. I'm very confident that the team has some good strategies and a great plan for what we'll do to address that in 2016, but overall, I'm quite pleased with the progress.

We'll go next to Randy Binner with FBR Investment. Randy Binner - FBR Capital Markets & Co.: Thanks. Just a couple on Commercial lines. Just to get the numbers right on the Swiss Re. I think you said that there be $1.5 billion ceded relative to 2015 and the decreased in this quarter's top-line in Commercial lines was attributed to the Swiss Re deal. So, is the Swiss Re deal something like $1 billion ceded off of gross? And is it mean – is that the right way to think of it so that would be two-thirds of it and the remaining third would be something that you try to negotiate over the balance of 2016? Robert S. Schimek - Executive Vice President; Chief Executive Officer, Commercial, American International Group, Inc.: I want to make sure I – that I say this for you as clearly as possible. First of all, I don't want to comment about Swiss Re specifically. Let's just talk about reinsurance transactions overall. So, what I said in my prepared remarks is that we have – we expect to see $1.5 billion of additional premiums related to quota share in 2016 compared to the 2015 levels. So, we already were using quota share in 2015. The increase from all reinsurance transactions, Swiss Re and other during 2016, we expect to increase the amount that we see by $1.5 billion. So, as we write business throughout the course of 2016, a piece of the business that we write in 2016 will attach to this quota share reinsurance agreement. And you should think of it as that premium volume, on a net-written-premium basis, will decline but it won't affect earned premium until those premiums earn in over the course of the next year after the date they've been…

We'll go next to Josh Shanker with Deutsche Bank.

Yeah, thank you for taking my question. Sid, in his prepared remarks said that there were about $4 billion in hedge fund redemptions set and $1-point-something billion so far had been received. How does that compare to the $2 billion plan to – capital plan – what are the relationship between those two numbers exactly? Siddhartha Sankaran - Chief Risk Officer & Executive Vice President: Well, I think the main thing you need to look at is with respect to what we put in notice for redemption, that typically the capital charge for those assets is roughly 50% or even slightly north of that. So, take the $4 billion and apply the capital charge and that gives you a sense of what you think the capital impact should be.

And the second question is given the reinsurance transaction in the quarter, what were the impacts that they had on first quarter loss ratio and expense ratio given where you would have been if those transactions had not been put in place? Robert S. Schimek - Executive Vice President; Chief Executive Officer, Commercial, American International Group, Inc.: Yes, they are minimal. They're minimal because we've not earned much of that premium in the first quarter.

We'll go next to Brian Meredith with UBS.

Yeah, thanks. Couple questions here. First one, Rob, just curious, the growth coming from Property lines and if you look at kind of broker service and stuff, that's been the most competitive line of business out there. Can you kind of describe your Property book, where you're growing, and why we shouldn't be concerned that you're growing in what the brokers are saying is the most competitive line? Robert S. Schimek - Executive Vice President; Chief Executive Officer, Commercial, American International Group, Inc.: Yes. Well, first thing I'll do is I'll acknowledge and reaffirm that that is the most competitive line. You'll notice when I commented about rates, I said that Property rates in the U.S. were down in the first quarter, and that's actually been a continuing theme over the course of the last two years at least. Our growth in Property has been focused on the highly engineered space. As we mentioned previously, we've increased the number of engineers on our team today to be approximately 700 engineers worldwide. Most of those engineers support our Property business but not solely our Property business. And actually, today, we have more engineers than underwriters in the U.S. property market. So, when we're growing in Property, what we're doing is transforming our book from being one where we were a capital provider amongst many to instead being a risk management partner with our clients where we're using our engineering capability to reduce the likelihood of a loss in the first place. And so, our growth in that area is in the large limit Property space and in the middle market Property space where engineering is the backbone of the business that we're writing. We're shrinking in the traditional excess and surplus lines shared and layered Property business.

Got you. And then, just a follow-up then on the Property. Would that carry lower attritional loss ratios, those engineered lines, and maybe more volatility to them? Robert S. Schimek - Executive Vice President; Chief Executive Officer, Commercial, American International Group, Inc.: We expect those engineered loss to carry – lines to carry – lower attritional loss ratios, yes.

And we'll go next to... Robert S. Schimek - Executive Vice President; Chief Executive Officer, Commercial, American International Group, Inc.: I'll just add that we also use reinsurance as a tool in the Property space and we'll continue to look in opportunities for reinsurance in the Property space, to manage severe losses as well as, of course, to manage our natural catastrophe exposures.

And we'll go next to Larry Greenberg with Janney.

Good morning. So Rob, the increase in the reduction of premium in Commercial, the $2.5 billion from $1.5 billion for this year, I assume a big part of that increase is coming from reinsurance. But just any color on the breakdown of that? Robert S. Schimek - Executive Vice President; Chief Executive Officer, Commercial, American International Group, Inc.: Yes. That is really completely from the increasing use of reinsurance. I think, just say that the reinsurance market has been more robust than we had initially anticipated. And as you know, we're viewing our reinsurers as partners. We have excellent relationships and opportunities to succeed together. But ultimately, the business that we're ceding to those reinsurers is improving our mix of business and ultimately not passing business that is poor business from AIG to our reinsurers. But instead, the reinsurers, I think, find the business that we're ceding attractive for a number of reasons including the fact that many – in many cases – they're holding less capital against the business than we are. And many of our reinsurers also have a lower targeted return level than AIG has. And then, of course, I think that the reinsurers really believe in the underwriting actions that we've taken. So, those are the things that I think have created the increase in use of reinsurance and that's the primary driver of the increase.

Great. And then just one follow-up for Sid. Since you are reporting the DIB and GCM in the other asset line, we're getting less disclosure on that. And I'm just wondering if you could give us what the equity is today in the DIB and GCM, and perhaps some numbers on how much in ABS CDOs are held there? Siddhartha Sankaran - Chief Risk Officer & Executive Vice President: Yeah. I think that I would point you to – we don't give that disclosure on the DIB and GCM anymore – but the large bulk, as we've said, of the equity in DIB and GCM is in the ABS Holdings. And that number typically, although it changes in terms of mark-to-market, is in the range of $2.5 billion to $3 billion.

And we'll go next to Josh Stirling with Sanford Bernstein. Josh Clayton Stirling - Sanford C. Bernstein & Co. LLC: Hi. Good morning. Peter, thank you for taking the question. I appreciate all the color and update on the operating initiatives. Obviously, it's great to hear about all the progress. I'm wondering if you'd be willing to speak to sort of – to a higher level question. If you think strategically, it's been a couple of months since you folks announced a new strategy and announced that you'd accept some activists joining your board. I'm wondering if you can update us a bit on your conversations sort of within the group as well as just your general thinking on some of the big strategic questions, like remaining at SIFI in light of the MetLife court victory, or how you're thinking on divestitures as evolving as your businesses become more modular. And I ask both of these, in particular I think, because you've said you'd very much like to beat your $25 billion capital return goals over the next two years and I kind of imagine that you're probably going to have to consider additional divestitures or maybe pursue a path to de-SIFI to achieve that.

I think that as we've indicated, the $25 billion goal is achievable with all of the actions that we've laid out. So, I would say that there is contingency against adverse market environment baked into our plan. So, I do not think that being a SIFI in any way inhibits that $25 billion goal. It's not a binding constraint at all. But I think that the MetLife decision certainly raises the opportunity, should it be favorable, to consider that down the road. But I repeat that our current designation as a non-bank SIFI does not constrain our objectives as laid out in our strategic update. So, we are watching very carefully the appeal process and we point to the efforts that we've made as a company to delever the company, to derisk the company since the crisis. So, I think that any designation by FSOC around non-bank SIFI status should look at the metrics relative to others to show what we've done to delever the company. And so, I think that we have great confidence that our plan to improve operating margins, to return capital to shareholders will deliver expansion in ROE in our operating portfolio, and the thoughtful divestiture of the legacy assets in an orderly way will realize the optimal balance between book value growth and ROE expansion. Josh Clayton Stirling - Sanford C. Bernstein & Co. LLC: That's helpful, Peter. I'm wondering, Rob, if just tactically one of – we've had a lot of conversation about reinsurance and I really love your guys' slide on page 14. I'm wondering if we could sort of set reinsurance aside though for a second and just think about sort of gross or sort of primary – sort of an ex-reinsurance view of the business. Can you give us some –…

And we'll go next to Michael Nannizzi with Goldman Sachs. Michael Nannizzi - Goldman Sachs & Co.: Thanks so much. Rob, you guys talked about Commercial overall, but you didn't really drill down into North America specifically. There, we did see nice margin improvement, a couple of hundred basis points and premiums were down there, 25%. I guess, one question I have is, over the 400 to 600 basis points of margin improvement that you're targeting, what proportion do you expect to come from North America versus international? And is the North America piece where the reinsurance and non-renewal has a more disproportionate impact? Robert S. Schimek - Executive Vice President; Chief Executive Officer, Commercial, American International Group, Inc.: You were correct on pretty much everything you said. The reinsurance is focused much more around North America. The remediation efforts are focused much more around North America, and to be specific, focus much more around the United States. We continue to see great opportunities for growth. And we see that the profitability in Canada, in North America feels good. I will say with respect to international, really, our bigger challenge in international is around expenses. The loss ratios in our international business I feel good about. We need to continue to make sure that we can deliver those loss ratios with an efficient structure that will keep our expense ratios at a manageable level. Michael Nannizzi - Goldman Sachs & Co.: I see. So, in terms of the loss ratio – that the severe losses ticked up year-over-year – was that for you an unusual level of severe losses or is that something you expect should continue in that sort of range? Robert S. Schimek - Executive Vice President; Chief Executive Officer, Commercial, American International Group, Inc.: Yeah, we really expect – first of all, severe losses overall were pretty much in line with our expectations. We do expect that severe losses will be lumpy quarter-to-quarter and we do think that they'll be lumpy from geography to geography. With that said, we continue to be keenly focused on severe losses in the international portfolio to make sure that we're managing that effectively. But quite frankly, I think – we think about it on an overall basis and we were satisfied with severe losses during the quarter.

And we'll go next to Jay Gelb with Barclays.

With regard to the share buyback, if I was looking at what a ratable level of share buybacks would have been over each quarter for two years, I was looking at around $2.75 billion; in the first quarter, that came in at $3.5 billion. So, does that mean that AIG is just kind of pulling forward the pace of the buyback or, I mean, based on my math, it looks like return of capital at that current pace could be slightly over $30 billion over the two years? Siddhartha Sankaran - Chief Risk Officer & Executive Vice President: Look, Jay, we don't really comment on our timing of capital return. I would just point you to, obviously, in the first quarter, we had very strong share repurchase. But in addition, two items of note, we did also generate incremental net present value via our debt tender and that obviously impacted our use of capital, as well as the warrants. So, we expect that we're not likely to follow any form of metronome in terms of the timing of share repurchase. It'll vary based on what we see as relative value quarter to quarter as we return capital and hit our $25 billion target.

In the past, you've said at least $25 billion. I just want to make sure that's still the case. Siddhartha Sankaran - Chief Risk Officer & Executive Vice President: At least $25 billion. That's correct.

All right. And then, Sid, are there any signs of a recovery in the alternative asset income in 2Q? I mean, that was a $900 million drag on results in the last quarter. Are you seeing any signs of recovery so far in 2Q? Siddhartha Sankaran - Chief Risk Officer & Executive Vice President: It's a little too early to tell right now, Jay. I mean, obviously, we'll have a better sense as the different indices provide their results to us shortly.

Well, I think the important thing to remember is that our strategy is to reduce our reliance on those alternative earnings over the course of the next 18 months. And so, as you look at the exit run rate of ROE of the operating portfolio at the end of 2017, you don't need to factor in any over-reliance on alternative assets as a source of net investment income.

And we'll go next to John Nadel with Piper Jaffray. John M. Nadel - Piper Jaffray & Co. (Broker): Thank you. Good morning. A question for Rob, I just wanted to follow up on a couple of quick data points here. The accident year loss ratio in Commercial, I believe you indicated that the reinsurance deals to-date really had no significant impact on that. But you expect, over the course of the next year, it has about a 2-point positive swing. Is that right? Robert S. Schimek - Executive Vice President; Chief Executive Officer, Commercial, American International Group, Inc.: That's correct. By the end of 2017, John, it'll have about a 2-points improvement in the adjusted accident year loss ratio. And remember, the reason that's the case is because the business that we write late this year won't be fully earned until late next year. John M. Nadel - Piper Jaffray & Co. (Broker): Understood. And then, so if we look at under the hood at the other pieces, you mentioned that attritional losses in the Property side were higher than you would have otherwise expected. When you look at the rest of the Commercial business, were there areas where you feel like you just outperformed relative to your expectations? Robert S. Schimek - Executive Vice President; Chief Executive Officer, Commercial, American International Group, Inc.: Yes. We continue to be very pleased with the performance of our Financial lines book of business. Continue – really, was quite happy with what we did in the Casualty space. That team has been working very hard over a long period of time. I'm quite proud of what our results are that we've achieved there. And so, I think that the combination of tools that we've developed, the discipline of the underwriters and the use of reinsurance all bode very well for what the outcome will be for us, for the longer-tail Casualty business. We're really focused, at this point in time, on improving the attritional losses in the Property book.

And we'll go next to Meyer Shields with KBW. Meyer Shields - Keefe, Bruyette & Woods, Inc.: Thanks. Let's start with a question for Sid. Is there any way of getting a handle of how much the capital charge is likely to go down for P&C assuming that the year-over-year improvements in both reserves and accident year results continue? Siddhartha Sankaran - Chief Risk Officer & Executive Vice President: Yeah. I think – we don't disclose that, but I think you're really likely to see, based on the shift in mix in Rob's business, that the other liability line in the Property Casualty companies which have, obviously, the highest RBC charge, that shift in business is going to drive that component of our RBC charge down. Meyer Shields - Keefe, Bruyette & Woods, Inc.: Okay. And, Rob, can you talk a little bit about the, I guess, the decline in the proportion of net written premiums from Product Set 1. Is that seasonality or is that the disappointment you were alluding to? Robert S. Schimek - Executive Vice President; Chief Executive Officer, Commercial, American International Group, Inc.: Yeah. So, I guess the way I want you to think about Product Set 1 is just remember that as you would likely expect, we're using internal tools and metrics to inform the underwriting actions in each of these product sets. And while in general we want to grow Product Set 1, we're guided by our return on equity and our RAP [risk-adjusted profitability] spread for each of these products in any given product set. So, during the first quarter, we did grow well in businesses such as cyber and M&A that are parts of Product Set 1, but we were disciplined in the highly competitive international Property market where we were guided by our ROE and our RAP metrics.

We'll go next to Paul Newman (sic) [Paul Newsome] with Sandler O'Neill. Paul Newsome - Sandler O'Neill & Partners LP: I guess my name changed but he was better looking. I have a couple questions. One relates to the hedge funds. As I think through next quarter's results from my expectation, I assume it looks like – because there's a lag in how you and everybody else reports hedge funds and alternatives – that essentially the first quarter hedge fund results will be your second quarter result. So, the piece that I'm not so certain about is the impact of the redemptions that have happened so far and whether or not the redemptions themselves will change how much of the results in the second quarter, given that you report the hedge funds and the alternatives on a lag? Siddhartha Sankaran - Chief Risk Officer & Executive Vice President: Yeah, I mean, I would just make two quick points. The lag impact obviously is a short lag, so we wouldn't anticipate a very material impact, and it's on a portion that's obviously on the equity method. The second point is we gave you our estimate of about $1.2 billion of proceeds. So, you can think of that as a reduction in our overall hedge fund exposure and assume that that's reinvested as we told you before in high grade – high investment grade bonds – and some real estate. Robert S. Schimek - Executive Vice President; Chief Executive Officer, Commercial, American International Group, Inc.: And more than half of the $1.2 billion came in April. Siddhartha Sankaran - Chief Risk Officer & Executive Vice President: That's right. Robert S. Schimek - Executive Vice President; Chief Executive Officer, Commercial, American International Group, Inc.: Of the redemption proceeds, so, well in excess of…

And I think that this is a continuation of a rebalancing of our Property portfolio that was – been going on for five years – which is to de-emphasize the overconcentration in Gulf cat-exposed Property and take advantage of the diversity of our geographic global reach as well as the investments we've made in highly engineered Property and middle market, where it's really avoided the concentrated risk that is prevalent in the shared and layered market that was in the Property book five years ago. So, I think this is a continued diversification of the Property book just to reduce the PML and AAL in a steady way. And obviously, the soft reinsurance market helps even more to iron out any concentrations.

We'll go next to Jimmy Bhullar with JPMorgan.

Hi. A couple of questions. First, Rob, you spoke in detail about your expectations on the loss ratio. Can you talk about the expense ratio in the Commercial business over the next couple of years? Robert S. Schimek - Executive Vice President; Chief Executive Officer, Commercial, American International Group, Inc.: Yeah. I'm really pleased with the progress we're making on the expense ratio. We participate as a part of the broader AIG expense initiative, which really has been underway for quite some time. And so, as you can see here, even in the first quarter, what's happening is the expense reductions that began previously are actually happening in front of the reduction of premiums that we're experiencing on a net earned basis. And so, it is our intention to continue to maintain a flat expense ratio as we continue to manage the overall book in the Commercial space.

Yeah. So basically, as premiums are coming down, you shouldn't really expect an improvement in expense ratio, but maybe overall expenses stay somewhat flat? Robert S. Schimek - Executive Vice President; Chief Executive Officer, Commercial, American International Group, Inc.: That's right. I think what happens is – I think expenses will decline, to be clear. I think that the expense ratio will be relatively flat. And again, just to be clear, when we are doing reinsurance on a quota share basis, we're receiving a ceding commission that is covering our fully-allocated costs on both a deal by deal, as well as on an overall basis across all of these quota share reinsurance agreements. So, as the premium volume comes down, we're also reducing the expenses proportionately.

We'll go next to Ryan Tunis with Credit Suisse. Ryan J. Tunis - Credit Suisse Securities (USA) LLC (Broker): Hey. Thanks. Good morning. I guess just taking a step back looking at slide 14, I mean, clearly there's a lot of moving parts here thinking about what we're run-rating at versus what's kind of earning in this quarter. I mean, the reported accident loss ratio in Commercial is 64.5%, but if you look at it on the written basis, it looks like it's closer to 63%, which would be about 75% of the way there to the 4 points you said you think you can get, when we're only a quarter into this. Is that the right way to think about it or would you caution us against that in any way? Robert S. Schimek - Executive Vice President; Chief Executive Officer, Commercial, American International Group, Inc.: Well, I guess I want to caution you against, is I think we're – we just state that I think that we're on target – and I don't want there to be any expectation beyond that at this point. What I think is important to understand on page 14, and I said this in my prepared remarks, the premium that we're showing for 2016 is on a net-premiums-written basis. But the accident year loss ratios that you're seeing are on an earned basis. And so, the earned accident year loss ratio, for example, that you're seeing in Product Set 3 of 86%, includes any of the premium that was earned in the first quarter for that Product Set regardless of when it was written. And so, I just would caution, it's very difficult for you to make any – particularly assumptions – that were anything other than on target at this point in time. Ryan J. Tunis - Credit Suisse Securities (USA) LLC (Broker): Okay, understood. And then just on Product Set 1, 7 points of accident year loss ratio deterioration there. Just curious how much of that would you attribute to pricing pressure, rate headwinds versus just elevated attritional losses? Thanks. Robert S. Schimek - Executive Vice President; Chief Executive Officer, Commercial, American International Group, Inc.: No, it's really all international Property. And the international Property book actually, last year, had particularly low loss ratios. And so, I am not so sure that – the combination, I think, of increased rate, rate pressure for Property on a global basis – but also, just that we performed particularly well in 2015 in the international Property space. So, I'm not concerned about the increase in the loss ratio that you're seeing there for Product Set 1. With that said, we focus on both the size of Product Set 1 and maintaining a strong performance from an underwriting perspective, in that, as well as all the other Product Set.

Operator, I'm afraid that we're going to have to follow up with whoever's left in the queue because we're over our allotted hour. And so, if it's possible – please reach out to me directly and we'll see if we can catch up with everybody and make sure we get to everyone's questions this morning. And thank you, all, for dialing in.

This does conclude today's conference. We thank you for your participation.