American International Group Inc. earned $1.6 billion in net income for the first quarter of 2014, a 27.2% drop from the same period a year earlier, AIG said Monday.
Catastrophe losses for the quarter were $262 million, compared to $41 million in the first quarter of 2013. “Including related premium adjustments, net adverse development was $162 million, compared to net favorable development of $52 million for the first quarter of 2013,” said AIG in a statement. “This adverse development was partially offset by a reserve discount benefit of $105 million in the first quarter of 2014 related to the previously disclosed changes in U.S. pooling arrangements.”
AIG's property/casualty operations' net written premiums for the initial quarter of 2014 dropped 1.3% from those of a year earlier, declining to $8.33 billion. The operations posted a $97 million underwriting loss in the quarter compared to a $232 million profit in the same quarter of 2013.
Total pretax income for property/casualty operations decreased 25.6% year-over-year to $1.16 billion.
The insurer's first-quarter combined ratio deteriorated to 101.2% from 97.3% during the same period a year earlier.
AIG President and CEO Robert H. Benmosche stated that he was very pleased with AIG's solid operating profits this quarter.
“The earnings power of our business coupled with our customer strategy reinforce the strength of our foundation throughout our core insurance operations. I am encouraged by the positive momentum we've generated around the world, which has enabled us to become closer to, and better serve, our customers,” he added in a statement.
“These results reflect strong operating income across our insurance operations, as well as execution of our capital management strategy,” Mr. Benmosche continued. “We remain diligently focused on increasing operational efficiency, managing our expenses, and investing in technology; we continue to look at ways to simplify and make our organization more efficient to ensure that we are creating a company that will thrive well into the future.”