American International Group (AIG, Financial), one of the world’s largest insurance firms that is based in the U.S., was the only detractor to the Fund for the quarter. AIG issued third-quarter results that were slightly weaker than we had estimated. This was mostly due to higher than expected catastrophe losses and an actuarial adjustment in the company’s life insurance business that depressed quarterly earnings per share. However, AIG’s adjusted return on equity (ROE) reached 4.1% during the third quarter (compared with 2.4% in the year-ago period) and CEO Brian Duperreault remains confident that the company can achieve at least 10% core ROE by the end of 2021. Our investment thesis remains intact, and we believe AIG should reward shareholders over the long term.
From Bill Nygren (Trades, Portfolio) and David Herro (Trades, Portfolio)'s Oakmark Global Select Fund fourth-quarter 2019 shareholder commentary.
