of AIG is going to start with some opening comments, then we'll head into Q&A. Following the practice we've had all day, I'll start off with a few questions. If you have questions that you want to address to Peter, please make sure to raise your hand. The lights are a little bright, I will try and see you. I may miss you at first glance, but our point is to get your questions answered to the extent that we can. With that, I'm going to hand it over to Peter, and thank you. Thanks, Meyer. It's great to be here with everyone today at the KBW Insurance Conference. I really appreciate the opportunity to participate. Before we transition, as Meyer said, to the Q&A portion, I'd like to give about 10 minutes of opening remarks just to highlight some of the progress we've made at AIG over the past few years. Of course, you expect me to say this, but I need to note upfront that given our announcement last night regarding the IPO of Corebridge, I will not be able to comment on the IPO itself or say much about the business. I'm sure you can appreciate that my remarks on this topic will be very limited. In July, I crossed the five-year mark at AIG. I couldn't be more pleased with the progress our team has made since we began this journey to dramatically reposition and completely change the strategy at AIG and how we actually operate the business today. Since 2018, we've tackled incredibly complicated issues, addressed fundamental problems in the core P&C business, and transformed the way AIG operates. Once we identified the problems, we knew what was in front of us, and it would take time to properly remediate in order to position AIG for long-term success and value creation. You can see me, Greg, right? Okay. For a complete turnaround in GI, which is our general insurance business, we needed to address a variety of things. The poor underwriting results, and those were over a prolonged period of time, our underwriting structure, and the team that needed to be overhauled and refocused. We needed to significantly reduce volatility in the portfolio due to large CAT and non-CAT losses. We needed to establish a more prudent and sustainable reserving philosophy with overhauled claims and actuarial operations. There were businesses that needed to be exited or totally repositioned. We had a very ineffective reinsurance strategy, and needed to establish a new measured strategy for growth that moved away from taking large positions on single risks, and instead place significant focus on combined ratio improvement while positioning businesses for better risk-adjusted returns as well as top-line growth. In addition, the business has required massive transformation of its core operations, investments in foundational capabilities to modernize our infrastructure, the development of better end-to-end processes, and the ability to capture and utilize data more effectively. We did a tremendous amount of diligence on AIG's core foundational capabilities to design and launch an operational program that eventually became known as AIG 200. This was an enormous undertaking when we launched it. We decided to compress the transformation and accelerate it during the global pandemic, which was very hard but very successful. It took a unique group of leaders to execute on this turnaround, particularly knowing it would take some time before the financial and operational benefits would become apparent. As we moved through the General Insurance turnaround at AIG 200, we also determined that the life retirement and the property casualty businesses would drive more value for stakeholders as separate companies. I know most of you have heard of this before. I thought it's worth laying out again. The last five years have been about the heavy lift that was required to position AIG for success for today and over the long term as a global property and casualty company. Most importantly, I want our stakeholders to recognize that AIG is not the same company it was in 2018. Let me give you some specifics of what we did to accomplish the goals we set out to achieve over the last five years. First, with respect to the underwriting turnaround in General Insurance, the key change was creating a culture of underwriting excellence, which was largely driven by the hiring of hundreds of experienced underwriters that were not at AIG at the time. To give you a sense of the dramatic steps that were required to move quickly, 3,000 underwriters had their authority revised, mostly to reflect our risk tolerances and to reposition businesses based on our view and where we thought we could get the best risk-adjusted returns over time. While I could spend endless hours on the statistics and how the portfolio's changed, here's a few highlights. If I start with the reduction in gross limits, we remain committed to our strategy of re-underwriting the entire global portfolio as quickly as possible to improve the quality and to reduce volatility. Achieving the results you've now seen over the last few quarters required bold and disciplined action. Since 2018, we've reduced our gross limits by over $1 trillion. The cumulative rate increases on our gross portfolio has been over 50% from 2018 through the second quarter of 2022. This includes over 100% rate increases in retail property, excess casualty, Lexington Casualty and property, and in cyber liability, just to name a few. While rate increases have come down on a nominal basis compared to prior years in certain areas, we're focused on retention of a high-quality book and maintaining price above loss cost trends and continuing to develop margin. Our strategic reinsurance program is unrecognizable compared to the structure, the quality, number of treaties, and the net risk that AIG had five years ago. In 2017, as an example, the property CAT attachment point in North America was $1.5 billion. In international, if you exclude Japan, no catastrophe treaties were even purchased by AIG. They're 100% net. Today, our property CAT, we have per occurrence attachment points ranging from $100 million in international, $200 million in Japan, $250 in North America. We also have aggregate treaty limit available that can be utilized for frequency in CAT or used as additional vertical limit on top of our per occurrence programs. Briefly on casualty, we significantly reduced our net retention from $100 million to a maximum of $15 million. Ceding commissions have improved on many of our core treaties, but our casualty quota share has improved by 800 basis points over the last two years. Very positive developments and reflect the quality of the portfolio that exists today. While we're repositioning the portfolio, we pivoted to growth. We've had seven consecutive quarters of net premium growth in commercial lines, driven by a more disciplined underwriting approach, leading to more consistency, and the terrific support of our distribution partners. We reported 85% retention on our global commercial business. As a reminder, we calculate renewal retention prior to the impact of rate and exposure change. This is the fifth consecutive quarter of $1 billion of new business or more for our global commercial segment. What did all this work lead to? In the second quarter of the year, in general insurance, we achieved the first sub-90 calendar year combined ratio since prior to the financial crisis. This was a significant milestone for AIG. With respect to AIG 200, as I said in our second quarter earnings call, we've achieved or contracted to achieve $1 billion of cost savings six months ahead of our original schedule. This is an incredible accomplishment for our company and our stakeholders. Additionally, in 2021, we entered into a strategic partnership with Blackstone, where they purchased 9.9% equity of Corebridge. We changed our operating model regarding how we manage investments. We entered into an agreement with Blackstone to manage up to $92.5 billion of Corebridge assets over time. We have separate partnership with BlackRock, where they will manage up to $90 billion of assets from Corebridge and up to $60 billion of assets in AIG. Lastly, we've been executing on a thoughtful capital management strategy that balances investing in profitable growth, reducing leverage, returning capital to shareholders through dividends and stock repurchases. Over the last four quarters, we've purchased 90 million shares or over $5 billion, reducing total shares outstanding over that period by 10%. Since the start of this year alone, we've reduced AIG debt by $7.9 billion, bought back 53 million shares, and paid approximately $500 million in dividends. Our path towards 10% or greater ROCE is based on four priorities, which we outlined on last quarter's call, which gives us a line of sight to a minimum 300-400 basis points of ROCE improvement. They are continued momentum and underwriting excellence, expense reduction, the IPO and separation of life retirement business, and continued execution on our capital management priorities. We expect to reduce our share count to the 600 million-650 million range while maintaining leverage in the 20%-25% level, along with strong capitalization at the insurance subsidiary company level. I'm really pleased with how far we've come and the momentum that we currently have. Given the track record of our team, I'm very confident in our ability to continue to execute on multiple complex and transformation initiatives regardless of the environment we operate in. I think we've proven that. We're on a clear path to being a market leader, delivering excellence in everything we do. Thank you, Meyer, for the opportunity to have a few prepared remarks, and we can transition now to Q&A. Yeah. Fantastic. Am I allowed to sit next to you? Yeah, please. I think the lights are actually a little bit less painful in the middle, so hopefully that'll help a little. Having worked in the insurance industry myself for a little while, and just hearing the list of things that AIG has fixed, I can confirm there were people that said that it couldn't be done. That is an absolutely phenomenal track record. I do have some questions beyond that. I'm going to start with sort of a tricky one, and that is one of the elements that you've highlighted and successfully executed on is reduction of volatility. In that context, how do you maximize the value of what used to be Validus? Validus was an intelligent volatility insurer/reinsurer, and that's being, I think, de-emphasized, if that's the right word, at AIG right now. Well, Validus Re has performed very well. Chris Schaper, who leads that business now, has done a tremendous job of reshaping the risk profile. Validus Re, when we acquired it, had a significant presence in how it deployed limit, particularly in the Southeast, but in CAT zones, it's a CAT reinsurer, so that's not a surprise. I think the risk-adjusted returns for the Southeast have been difficult for reinsurers. We've reduced, since 2018, our exposure in Florida by over 60%. Validus, still while it's repositioning the mix of its business, still had a combined ratio in the mid to high 80s in the last quarter. It's really providing very good results. As you said, because of volatility and our risk appetite for CAT losses, we do have Validus Re buying retro that's aligned with our overall risk appetite for AIG. There is less volatility in that business. Again, you could have better returns if you're willing to take more volatility. I think if you did that over the last five years, you would have been a proven loser, I mean, in terms of the business. The reason why I think it's really strategic and helpful for AIG is treaty reinsurance companies can pivot much faster to take advantage of risk-adjusted returns in different areas of the business Than an insurance company. If Chris decides, again, we look at it in its entirety, so he doesn't decide on his own, but he comes to me, Shane Fitzsimons, the CFO, Mark Lyons, how we're going to deploy capital, we may do a little bit more casualty because the terms and conditions are better and the risk-adjusted returns are better. Shifting some CAT capacity into international because we feel that those are better risk-adjusted returns. You can't do that on the insurance company side. We can pivot that business much faster, and I think we've done that. Okay. Phenomenal. We should assume then, if I'm understanding correctly, that there's a place for legacy Validus at AIG. It just doesn't look the way it did in a different marketplace. Yes. How can we think or how should we think about the CAT load, the AAL, the exposure at the current updated AIG? Well, we don't really provide AAL numbers, but I think the first thing I would take a look at is that when AIG used to publish AALs, it was off of a significant net. I just said they didn't buy treaty reinsurance in international or had a $1.5 billion of per occurrence attachment points. That AAL really had to fund the frequency and severity of CAT. Today, we have very low net retentions. I think we're very conservative in terms of our funding for those net retentions with a CAT load that is appropriate. It's always adjusted just based on and reflects the portfolio that we have. When we talk about shedding a $1 trillion of limit, a lot of that was property. On the commercial business, the peak zone exposures don't exist like they did four or five years ago. That's not another way to say that we don't focus on that all the time because we do. As I said, we just have very low net retentions in CAT today. That frequency is well-funded through loss cost. Okay. Phenomenal. Another business mix question, here really focusing on international personal lines. There's a significant contribution of Japanese personal lines there. I was hoping you could explain the strategic upside to housing that under the same umbrella that houses large account commercial and, obviously, to a different extent because of the Lloyd's operation, high net worth personal lines. Broadly speaking, what are the upsides to keeping those together? Second, strategically, are there cross-sell opportunities between the skills that you've developed in those markets and in the commercial lines? We have a unique footprint. Japan's our second largest country at AIG. If you look at the Japanese market, it's dominated. 90% is Tokio Marine, Mitsui Sumitomo, and Sompo. We're the largest non-domestic insurance company in the world in Japan. We have real scale and size. I really think it's a business that has great opportunities for us in the future to grow organically as well as to improve the combined ratios. Its biggest business is accident and health, which already prints below 90 combines, and think that there's opportunities to improve that over time. We've been doing some remediation within Japan. It's just really pruning the personal property and some of the personal auto portfolio just to improve that. If you think about the Japanese market, it's a very sophisticated and mature insurance company market. The capital is mature, the distribution is not the same in terms of the quality of what you have in insurance companies, meaning they have more distribution channels than the United States does, as an example. I think the opportunity for us is in terms of being more relevant is going to have more digital capabilities. The Japanese market's not a big consolidation market, even though the big three consolidated 15 years ago or so. On the distribution side, it's very hard. I think enabling that distribution with better digital capabilities will enable us to distribute products more effectively. I do think that the digitization of workflow is going to be very helpful for our business because it's much smaller and can be more standardized, not the entire part, but a lot of it can be, and I think that will give us margin accretion over time, and one that we've been working on as part of AIG 200. I wouldn't think that there's expansion in terms of I'm thinking of a traditional multinational, there'd be some on the fringes, but where I think there could be real opportunities is, for instance, cyber. Cyber is not big or prevalent in Japan. Sometimes it trails what the West does in products. I see opportunities in all financial lines, but in particularly, cyber is a real growth area for us, and we have tremendous expertise, as you know, in that segment and one that I think we can bring a lot to the market in Japan. I'm really optimistic. It takes time, we have scale, and it's a very tough market to enter. Okay. Phenomenal. Thank you. I wanted to switch gears a little bit and talk about the domestic wholesale market. Obviously, there's been some news today with Ironshore going entirely wholesale. Last holdout. Right. Well, there's always. You need someone to capitulate. How does the market look from your perspective? Let me stop there because it's intentionally a broad question. The wholesale market has changed dramatically. I'd have to give it thought in terms of are there parts of the business that have changed more? What used to be a traditional, which I don't think we're in, by the way, but a traditional hard market versus soft market and very difficult to place businesses, if you go back 10, 20 years ago found their way to wholesale brokers, which found their way into excess and surplus lines. That's the old model. Now, AIG and the Lexington and a lot of the executives that left AIG had the model where you can do dual distribution, which I think has proven to fail. You have to focus on where distribution, the admitted market's more retail, the non-admitted is much more wholesale. What's happened since five or six years ago, is the wholesale distribution channel has grown 3 or 4 times that of retail. I think the organic growth for wholesale brokers, they'll have to tell you, but it's 20%-30%. They're doing three things. One is they're grabbing market share. They're growing faster. That's number one. Number two is they are creating more delegated authority through their MGUs and MGAs, where, again, the old model would be to get 1 or 2 carriers to do a line of business. Now they're getting these syndicated, they're much more sophisticated, and they're getting these placement syndicate again, grabbing market share, and they've become a professional placement arm for agencies of mid to small size. All of that is propelling growth, and I don't think it's cyclical. If you go back 20 years, obviously Ryan didn't exist, but they just weren't that large, they became much more an adjacency. Today, the top 3 wholesale brokers all place $15 billion or more of premium into the market. That has changed. They see, and nor do I, any slowdown in terms of their ability to grow, and they become much more specialized and have much more expertise. I think the companies that win are ones that dedicate themselves to understanding that market. What happened, I have a retail background, as you know. If a wholesale E&S player took both distributions, they get the bottom of the barrel of both retail and wholesale. This is the way it works. Retail's not going to go and advocate for a market that a wholesale broker can go to, and the wholesale broker's not going to give his best business to an underwriting company that's going to accept retail. The winners are the ones that have both businesses and both dedicated distributions that are clear. I think you can see it, like Lexington. There are other businesses, like I talked about Japan, accident and health, our global specialty businesses that I am very high on. I think the best opportunity for AIG is what we've done in Lexington. The growth, our relevance in the market. If I look at the rate environment, it's not something that's shopped a lot. Where in the retail, the traditional placement mechanism is send it out to multiple carriers, figure out the ones you want to align with and get the best pricing and clear the market. On wholesale, it goes to usually 1 or 2 markets. You hit the bid, you bind it. I think it's less price sensitive, and we've seen that. We've had 16 quarters in a row of double-digit rate increase in property wholesale. In Lexington itself, it's at 13 quarters in a row of greater than 10% rate increase. I think it's just a business and a dynamic that is going to continue to evolve, but whenever the market shakes out, they're going to have been a huge net winner. Fantastic. Sorry, it's a long answer, but it's a complicated business with wholesale retail, and I think there are nuances. Ironshore had the playbook of the old AIG when Lexington was bigger than everybody else, and had a dual distribution. I think they've chosen I don't know what was behind the decision, but it's going to be aligned with the way the rest of the market is. One last fact too, is I think 5 years ago, again, you'd have to ask the wholesale brokers for the exact number, but wholesale-only insurance companies, I think you count them probably 10 or less. Today there's 50 or more that have said, "We're just going wholesale, and that's who we're dedicated to, and that's where we get our business from." The market's changed. No, nothing that I say at any point in time should be interpreted as wanting you to pull back on the details of your answers. One serious point underlying that is that we tend, from our perspective, to look at just the financials as they're reported. There's so many, I'll call them soft factors, and agency relationships are one of those that are probably underappreciated just in terms of how powerfully they can impact insurance companies. I say that as someone who worked maybe on the wrong side of that in the 1990s, and I'll stop at that point now. If I can carry on the excess and surplus lines component of it. I think you're making a very intelligent pivot to writing more of the high-net-worth homeowners on non-admitted paper because, in some cases, the, my words not yours, overly political ramification of regulation makes it literally impossible to earn adequate returns. Can you talk about how that interplays with the syndicate, which was a prior strategy intended to manage high-net-worth, I'm going to say, catastrophic exposure or volatility? I'm afraid this might be another long answer. Sorry. You've identified if you look at the core principles of the business, and that the high net worth tends to be not exclusively, but mostly in peak zones, right? The increased frequency of CAT losses, and the sort of secondary perils, which means they're not really the primary CAT expectations When companies model expected loss from CAT. If you look at the retro market, 9 out of 10 of the last years in terms of retro losses have been dominated. More than half the losses have come from secondary peril, not primary peril. You get lured into this, I have the right CAT loss for wind and quake, but you got flood, you had wildfire. I think the operating model got tested. I can talk about reinsurance capacity. A lot of that, in terms of going to peak zones, is not all done, but largely done by insurance-linked securities, alternative capital, which is getting stressed too. It's trapped capital, their expectations of returns. You start to get a little bit of a variation of what the cost is of reinsurance. That should be no different than cost of reinsurance in a market should reflect what your loss cost would be if you held a net. It shouldn't be that different. You have professional experts pricing what they think is the expected losses. When you have inflation, cost of goods going up, replacement cost going up, CAT losses going up, then we don't even know what the supply chain, but also the effect of the pandemic, which is, I hate to pick on one place, so sorry if I identify a town that someone lives in. But if you say Naples, what used to be a $2 million now is a $5, it's knocked down to put up a $10, then you have supply chain. All of a sudden, you have aggregation issues that you hadn't contemplated in the past. All that, then you can't pass those costs on through regulatory rate filings. You can't change coverages as readily. You have to do filings, what you can include versus exclude, you're limited. Again, I'm making it up, but if your clients have two, three homes, is there a way to aggregate that together where you take frequency out and you're just basically doing excess? Can't do that in the admitted market. When we talk about the lack of flexibility of form, rate, and being able to scale your aggregation in certain geographies in real time or even within the year, it kind of leads you to the non-admitted market. Again, back to my belief with, it's not everywhere. We're not going to do it in every state. We're not going to do it with every product. But the areas where we started with California, then there's other peak zones that will follow that methodology, we believe that we can accelerate the change in that portfolio faster. That's one point. The other question you asked about the syndicate was a partnership with Lloyd's. Obviously, everyone knows the cost of capital is mid-single digits, it's less expensive to deploy capital. We entered into a partnership where we demonstrated this is what we want to do with the portfolio. They're barred entry. They can't get into the business. They liked it. John Neal, in particular, was in favor of it. We built a partnership with them where they take a large portion through the syndicate, it was approved in a manner where it was super supportive because they wanted to be part of the business, wanted to partner with AIG, where they take a lot of the quota share and frequency. We are not turning ourselves into a company that doesn't want to take risk, but we substantially have reduced the risk that we have as we reposition the portfolio to be balanced between the non-admitted and admitted. It just takes a little bit of time. Okay. How does the freedom of rate and form that you're moving toward, and I'm thinking specifically with homeowners, how does that impact the amount of risk that you're willing to retain on that book? Well, it allows you to be much more specific on, for instance, you may have a, again, I'll make up an example. You had a $20 million home, and you're only willing in this particular geography to issue $10 million limits. It allows you to do that. All we ask is tens, and we fill that out, and it gets purchased that way. You're able to control aggregation much better. Also, the way in which you can have total aggregation strategies and deploy them in non-admitted is much easier than admitted because you just can't cycle the book in terms of how you want to position it for the best risk-adjusted returns. We don't expect to churn the book, but by the time you notice you have to get multiple quotes in the admitted market to go to the non-admitted, you don't need to do that once you're in the non-admitted market. I think it just gives us a lot more flexibility in shaping that portfolio. Quite frankly, that's been, other than the Chief Actuary role, Mark Lyons' number one job is focusing on the stratification by state, by line of business in terms of where we want to reposition this portfolio. Okay, great. Thank you. Again, if there are questions here, please don't hesitate to raise your hand, let me know. I'm seeing, I guess, Heather? Hi. Hi. A question on the Russian planes issue. The trade press names you as the lead insurer on an all-risk claim for lost Russian planes. Presumably, it's a very large claim. It's in the billions. You can't be the only insurer out there on that risk. What do you think your total exposure would be if the Russian planes are deemed an all-risk loss in the end? One is I can't and I won't comment on individual claims on any circumstance, I can't really give a lot of details on that particular risk. What I would say is that we have a very good understanding of our gross exposures, and we've looked at all the different scenarios in terms of the potential outcomes and have significant reinsurance to where the estimates that we have in terms of reserves today, based on what we know and based on potential reinsurance recoverables, it will not be an event that will be significant. Okay. I'm looking around just to make sure that I'm not overlooking other questions. You mentioned Mark Lyons in the new Chief Actuary role, I really wanted to dig into that because I think it's sort of a fascinating position that we don't hear about in terms of identifying new opportunities for growth and make sure they're being maximized. I was hoping you could take us through what he's uncovered so far without necessarily uncovering too much competitive information. Everybody knows Mark's a very unique executive. He's got a very deep background in actuarial and underwriting portfolio work. Really, if I oversimplified it's identifying areas within the business in which we can grow the fastest. In other words, Lexington will be one, is that looking at the core underlying factors and what we think are the appropriate risk-adjusted returns and where we could really grow faster based on our expectations of combined ratios and ultimate losses over time. Identifying the top businesses there. I think we would say that accident and health, Lexington, global specialties, pockets of property, we see really good opportunities for growth. Also, in continental Europe, we've been growing, and actually, the rate environment has been terrific in terms of where our underlying combined ratios have been in terms of how we're driving that portfolio. He'll focus there, and then I give you statistics on terms of the index of the portfolio. We have him focusing on the best opportunities for growth and the best opportunities to not grow. Looking at, for instance, in the high net worth, how we reposition that business to make it attractive on combined ratios. There's other segments that we want to see the personal insurance performance better. We talk a lot about the commercial because of the journey in which we've taken, but improving the personal insurance combined ratios and the components of that business is a big part of what he's looking at as well. I think looking at the overall portfolio optimization, and then I think everybody knows that we hold reinsurance purchasing central, which means it comes to me, Shane, the CFO, and Mark in terms of how we purchase. Charlie Fry reports directly to me, and we make those decisions at an enterprise level. Mark weighs in on that as well in terms of what are the economics, what are the ultimate combined ratios, gross and net, and making sure that we're talking through how we optimize reinsurance as well. It's oversimplified of a lot of math and a lot of work, but he has a unique skill set to do it, and he's adding real value. Right. I don't know that it's possible to accurately communicate Mark Lyons without oversimplifying. Right. That's not a bad thing. I want to get an update on travel insurance because at one point in time during COVID. I shouldn't say at one point in time, COVID really impeded the premium volumes associated with that business, and that actually had an impact on overall segment results. Can you talk about where that is in terms of the return of that line of business? Yes, we saw meaningful growth, albeit off a really small base last quarter, so it's definitely recovering. We made a decision to not scale it down from an operational capability and call centers and investment in digitizing service during the pandemic where travel basically came to a halt. In the short run, it was diluted from a combined ratio standpoint just because there was no growth and we had the expense base. We're starting to build it back. I would break travel down from an international perspective because a lot of times it's an adjacent offering and as part of an accident and health product. It's not accident and health, but it's group accident and health and travel. In the United States, it's really a more independent business. We're watching it as it comes back in growth and can we get back to a normalized level where we think we can but want to see the combined ratios to be improved. We want to get to that level as to where we think the normalized growth is and evaluate it there. As you know, it's a little bit different than big acquisition expenses, lower loss ratio, but the pandemic proved that there is the black swan tail risk in that business. We have to look at and have been looking at the way in which we have to reprice that a little bit differently. I think it's a big focus area for us in 2023 as travel comes back, top-line normalizes, and we take a look at all the different economics that that business produces. Beyond the black swan events, is it performing sort of in line with expectations, not necessarily targets? It is. Our view is, are those targets in the way it's normalized in terms of its combined ratios, the right ratios for the environment that we're in? It's largely back to a normalized growth where it was in the past in terms of its overall combined ratios. We want to sort of test that and see if there's ways in which we can improve that. Okay, fantastic. I want to move to a slightly separate topic, we touched a little bit on reinsurance purchasing, and I want to delve into that. Can you walk us through the mechanics of the higher ceding commissions on the casualty quota share and really the timing for them manifesting? I'm not even looking for numbers necessarily. We'll take them if you want. Just the earnings mechanics or the quarterly mechanics of that emerging in your results. When we started, again, not to go back to go forward, AIG had a risk appetite where it would take on casualty, $100 million net each and every risk. That really concerned us. One of the first things we did was put together an excess of loss treaty to mitigate the volatility and vertical loss. That was point one. If you took a look at sort of the pricing and the makeup of the portfolio, we knew it needed to change, that meant quality of portfolio, terms and conditions, attachment points, ventilation, and then reflecting pricing above loss cost. We had to do all of that. As part of that, we decided to mitigate further the net exposure while we accelerated that sort of transformation of the casualty portfolio and purchased, at that time, was a 50% quota share. Now it was booking above 100, getting anything-- normally the math on a quota share when you're doing it as an insurer is that you cede off and you get ceding commissions that are greater than your expense. This was like opposite. It was like we were ceding off, like the loss was the benefit in the early days because we really had no choice. I think it actually did help us accelerate the turnaround. I think reinsurers, professional reinsurers, big ones, which are the ones that are on our quota shares because it's so big, are your best report card because they're in the business. They're professional underwriters, professional actuaries. They understand portfolios. If nothing else, which again, they are more than that, they see every one of our competitors, they can benchmark and then decide whether to deploy capital. We really bent the curve two years ago where we felt that the economics were no longer balanced, meaning the original reason in which we bought the quota share was now different, the economics needed to be more balanced. In two consecutive years, the ceding commission has moved up 400 basis points, which is really, I mean, nothing's unheard of, but it's rare to have that happen two consecutive years. We took it down to 25% quota share because we wanted to hold more net. Getting a very attractive ceding commission from your partners who are experts at underwriting and see the portfolio changing dramatically and improving with margin, have boded with the way in which they've supported the program. I think we've seen that in multiple proportional quota shares that we've placed, including our cyber. Again, areas where you would say, if you talk to reinsurers, they come in here and talk, they're pulling out of U.S. casualty, they're pulling back on cyber. Not with us, they're not. I mean, we have tons of support. As a matter of fact, on cyber, and I won't go there in case you want to cover it in more detail, but in cyber, I think the reinsurers decided that an indexed approach across the market is a bad idea, and we're going to take capacity that we have and put it with the best insurance companies that know how to underwrite this. We actually had more capacity available to us last year than any year prior on how we underwrite and how we spread risk and the quality of the portfolio. One of the considerations that you need to balance as your book of business and its performance improves, you'll get better ceding commission on quota share arrangements. On the other hand, the gross profitability is better. What else should we be thinking about in terms of anticipating reinsurance purchasing strategy evolution? Well, it always evolves in multiple ways. You have a philosophy and strategy that you always have to execute against, and ours was to control volatility and make sure we're not in and out of the market because the reinsurance market doesn't like that, and you don't always get the sort of best partners and the terms that you need. Reinsurance, like I just mentioned on the casualty quota share, needs to reflect the current portfolio. As we continue to improve that gross portfolio and reposition it, the reinsurance needs to evolve with that. I think the investment community has, I'm sorry to say it, but I think that it has punished us more for volatility than others because of AIG's past. That phenomenon makes us buy a little bit more reinsurance on the CAT side than it's more than our risk tolerance. We can take a little bit more net. That will evolve when we feel that all stakeholders are aligned in terms of what should be the net risk appetite. Making certain that if you're not deploying the limits, do you need excess of loss that's fully ventilated to, if you look at, I'll mention the casualty as an example. If you're used to put out $100 million limits and we bought up excess of loss, that mitigated that, but if you're not deploying gross limits anywhere near that, you'll revise those reinsurance structures. Look, we purchased twice the amount of treaties that were purchased in 2017. We believe, and we have set this up since the beginning, is that reinsurance is very strategic for an insurance company our size, and I think we have the most senior people that are in charge of that in the industry. They were former public company CFOs, or they have expertise in the space greater than any one of their peers, and that's an advantage for us. We have, I think, come up with a lot of creative structures. We'll continue to do that. It'll evolve based on the gross portfolio, and the economics have to reflect the quality of underwriting that we have today. Phenomenal. That's very helpful. I want to turn to AIG 200 for a little bit. Okay on two separate levels. The first, you were very clear when AIG 200 first emerged that there was an expense savings component to it, but that wasn't necessarily the only end goal. There were functionality improvements that were associated with that. I was hoping you could update on that thought, and what we should expect going forward. Yeah. The AIG 200, the expense savings, again, you have to have financial targets. The expense savings became an outcome of the work that we were doing. We needed to modernize our infrastructure, and look it, I have 16 minutes left, I could spend the next six hours talking about this. Some of the things that really were important to us is getting better insight on our data, protecting our data, getting a better end-to-end process in connecting the entire company. An example in terms of our cloud strategy or how we stored data in the past was really bifurcated and we had public cloud strategy, and that was like 15%, 20%. We had a private cloud. We had our own data warehouse, our own data storage. There was nothing that was strategic. We were quite bold on determining that we're going to go from a public cloud of 15 and not go to 50, we're going to go to like 80. I think we were really bold in the transformation. Shane's here. He's shivering because he had to do all this before. Every time I mention the migration of the cloud or other things, the wound is still fresh of all the hard work that had to be done. We did a lot of the work that's required to transform the company. We talk about this compressed transformation, all it meant was, is that we were not going to go in a linear way, and we were going to benefit from having a bold vision for how we were going to position AIG for the future. The foundation data, the data architecture, the straight-through processing, we have more work to do on digitizing that. We did finance transformation with our ability to get more insight of data, close the books faster. It's a whole host of things that became outcomes that improved AIG substantially. We report out the financial numbers. I think we have a operational capability the company has never had, and the future is constant improvement. There's things like we started with Japan. How do you digitize that to be better workflow, less manual process? How do you digitize the front end? Businesses that require cycle time as part of its competitive advantage, what are you doing to move that forward? How do you connect insight into claims data with underwriting decisions? All of that is part of the improvement that AIG 200 drove and the transformation. The future will be that we create our own bandwidth for investment to continue on that journey, because you're never there. Meaning that the world continues to evolve in terms of digitization, and being able to move faster and using those insights faster. I talk about the underwriting turnaround because everyone understands it. The operational one, that was as big, if not bigger than the underwriting because we had no muscle in the company. You bring in a McElroy or you bring in some underwriters like, "Oh, yeah, that's what good underwriting looks like, and I can follow that. I have some basic skills." When you bring in operational capabilities and you have no operational DNA to actually drive that forward, it was a big cultural shift and change. We were doing that on top of a big transformation in underwriting. We recognized that. We did our best to over-communicate the work that we were doing, but much like the underwriting, it was going to be hard work for the first 18 months with nothing to show for it. Now all of a sudden, we're coming through the other end, and we couldn't be more pleased with the outcomes and the improvement of the business and the connectivity of the company, which will serve us well when we deconsolidate. Fantastic. Not in any way to denigrate $1 billion of savings achieved ahead of schedule. How should we think about expenses going forward? What are the opportunities for continuing efficiency? Well, all of AIG 200 has not earned through what we said we've contracted. It's not line of sight. Line of sight means you've identified it, but you haven't operationalized. We've operationalized all of the billion-dollar savings, but you still have about a third or so to earn in over the next six quarters. That will be a benefit. As we start to deconsolidate, there will be resources and people that will be part of Corebridge. The future of AIG will be an operating model that is fit for purpose for a company our size, and we are going to work very hard to maintain that expense discipline and continue to improve the company. The reason why we sequence in the way, we don't want to create risk in the company as we work through more change in the next Six to 12 months, you should expect us to be a company that focuses on expense savings. I gave a number. It's going to be around $500 million relative to where we are today. We are working on that now through a rigorous process, and we'll execute it when we feel like we're not creating risk in the company. I would think, deconsolidation will be a really clear time to see, what does the future of AIG look like, and we'll be leading people up to that point. Okay. Excellent. Thank you. We touched on cyber a little bit. I want to ask a question in the context of points that you've made before, which is that AIG is ready for growth right now. Our overall perception, that's been reinforced over the various sessions we've had today, there's more demand for cyber insurance- Yeah than there is capacity right now. How do you take advantage of that and manage the aggregation risk? We are growing a lot on a growth basis. It's really being driven by a combination of international growth and overall rate. It is an area of our business that we think we have a lot of expertise. I think the underwriting continues to evolve as the risk evolves. It's not a static assessment. You have to look at ransomwares today. What's next, what industries have systemic impact, and trying to do the best we can to make sure that we understand the value that we're delivering to our clients in terms of risk assessment. I think that's a big part is that, if you have companies asking sometimes, like, what's the value of purchasing the cyber insurance? I mean, obviously, there's a coverage and an indemnification. It's also establishing risk management standards that companies who have adopted this have significantly improved their own operations over that period of time. Now you bring up an excellent point, which is risk aggregation and systemic implications. The way we think about that is in multiple ways. One is we've reduced our overall average gross limits substantially. They're in the $4 million to $5 million range in terms of overall gross limits. Also my comment around the reinsurance is that there's a flight to quality. We've had more reinsurance capacity available to us last year than in the past. We buy a large quota share, because we want to grow. We want to be relevant to our clients and focus on opportunities and where we can add value. At the same time, we're cautious. We want to make sure, two-thirds of the risk gets ceded out to a pool of reinsurers. We get a very attractive ceding commission in exchange for that, and we also buy aggregate on our net. It's managing the gross. It's establishing underwriting standards and making sure that we're working with our clients on risk management that continues to evolve. Having an eye towards the evolution of cyber risk over time, depending on geography, and finding new markets and where we could expand. I use Japan as an example. For the time being, I think, ample reinsurance on frequency and then the black swan in terms of aggregation, to make sure that we have the ample protection on the downside. I'm going to assume, but I want you to please confirm or correct this impression, that the nature of cyber risk is that the expertise that you've got in established markets right now, like the United States, translates very well to Japan in a way that maybe wouldn't be the case for casualty lines. Absolutely. I think if you say cyber also financial lines in a country like Japan, they really value the expertise and insight and allow us to focus on ways in which we can bring product to the market that is new and we think is scalable. Okay, excellent. This is sort of an industry-wide question, looking forward, the market has behaved reasonably well. You were careful to say that you didn't think of this as a traditional hard market, if I'm not mischaracterizing your comments. I mean, I was saying I start aging myself out in the marketplace. I mean, to me, a hard market has always been a lack of supply and a spike of price that eventually starts to mitigate. I think what we're seeing is that people are like, "Oh, well, the hard market's over." It's like, well, there was never a supply issue. I'm not saying that the market didn't have some characteristics, but we can grow if we want to if the risk-adjusted returns are there. I'm sure some of our competitors are in the same spot. There's not a supply issue. That's why I just want to be very careful in terms of how we describe this market. It's been much more disciplined. I do think us shedding a trillion of limit over time had the market absorbing it for a while in terms of who's taking on sort of new business. The phenomenon of what comes after the pandemic and the inflation and supply chain issues and all the things that go along with that, had people cautious in terms of how they want to deploy capital in the future. I don't think it's not that they can, it's just that they're choosing not to. That's why I think it's a more disciplined market. We've seen a little bit of encroachment, really on public company D&O, where there's been a little bit of softness and maybe excess casualty, which aren't the lines that we would think of as necessarily being the first to soften when social inflation remains a concern. Right. It doesn't seem like that's spreading into other lines of business, but how do you interpret that in terms of setting expectations for the market? I think what you're seeing in D&O or casualty is the more commoditized high excess layers where you've had some new entrants in the market that cannot execute on their business plans. Whether the M&A has dried up or whatever they were going to do, there's just a little bit more competition that becomes a little bit more commoditized. We're not seeing that in the lead to mid-excess the way we are in high excess. I think that's what you're seeing a little bit in terms of pressure on the pricing, particularly in D&O. We'll see if that continues to persist or not. It's been really the last couple of quarters, there's been a little bit of pressure on high excess, more commoditized layers. Okay, thanks. There's a question in the back. Hi. Yeah. I have a question about this goes back a couple paragraphs, I guess, about the consistent improvement of the business. Value in our setting has generally been defined as material financial gain to shareholders. This is more of a leadership question, less technical, so I'm sorry to switch it up like this on you. As a leader of the company, are you examining, in the context of the increasing prevalence of ESG and very punishing social inflation cases, what value might mean in the future and how it might skew with new perceptions? ESG. Well, if I understand the question, we've been very transparent with ESG and published our first report last year and followed up this year. We've gone out, and I think we're probably a little bit behind, particularly in our environmental commitments on. We break it down really into 3 categories. It's the financial, which is investment. Operational, which is a little bit easier to make commitments than the underwriting, which is a little bit more complicated. We want to make sure we are thoughtful in terms of the guidance that we were going to provide in terms of what we can underwrite and what we can't. I think we actually did a very good job of outlining areas where we were not going to continue to underwrite just because we didn't believe in deploying capital there for a lot of different reasons, including the environment, and including making commitments as a company and an enterprise. I think you got to let it catch up a little bit in terms of operationalizing that. I think our leadership team, which is very committed to it, is also conscientious that setting goals for 2050 when none of us will probably be here, is probably a little hollow. We ought to show some ways in which in 2030 and some other intervals, we're going to have some objectives that are showing the achievements along the way. I think we have put together some very good underwriting of financial and operational commitments that we are working towards now. It's complicated because there are different views across the world as to how businesses are going to operate under ESG. Also, the Russia-Ukraine war presents all sorts of complications of commitments that were made. We're entering winter, and there may be some commitments that are put on hold in terms of how countries and companies actually execute on that. We're committed to it. We will continue to make policy revisions as we deem appropriate and making certain that our commitments are measurable, transparent, and become part of our company culture. It is very important. Thank you. Okay. Dan's got a question in the back. Thank you very much. With your businesses in Europe and discussions with your folks there or business leaders over there, how are you feeling about the outlook for business generation in light of stresses that we've seen even over the last couple of days and weeks? Thank you. With Europe, we have a very good business, one that I think has performed very well. Our segmentation, Europe, like Asia, is a cluster of countries in which you just aggregate information. Each one's a bit different. Like in France, we're much more driven towards more the larger accounts, where in Italy, we'll be much more in the SME. I think it depends on the segmentation. Also within Europe, you have tacit renewals, which is a meaningful portion of our portfolio that just gets renewed, and things that don't go out in the market. I'm cautious in terms of the expectations in terms of economic growth, obviously. I don't believe that we will have tempered growth based on the current conditions as I see it today. I still think that there's opportunities just because we have a small market share. If you look at the big European indigenous insurance companies relative to our size and scale in the four big European countries, there's a lot of opportunity for us to incrementally grow that's not going to be grabbing meaningful market share. I think that we will have modest growth. It will be more towards SME. I think that the business will continue to perform very well in terms of combined ratio, and will be a stable portfolio. I think it'll be largely as predicted, but I can't really I've got out of the predicting business because there's just too much going on in the world, and we'll see what happens in the coming months. Overall, it's been a very steady business. As you know, Europe is a big one-one, and we'll see what comes up in the next 60, 90 days. Okay. With that, I know Peter said that you could talk for hours about things. We could listen for hours, it does look like our time has come to a close. I just want to thank you for a phenomenal presentation. Thanks. It was a phenomenal story. Yeah, I really appreciate it. Thank you. Yeah. My pleasure.