American International Group Inc. reported second-quarter net income of $3.07 billion on Monday, a 12.5% increase over the same period last year, driven by higher profit in its property/casualty, life and retirement and mortgage guaranty operations.
The insurer said net written property/casualty premiums fell less than a percentage point to $9.21 billion in the quarter, while its combined ratio improved to 98.8% compared with 102.6% in the second quarter of 2013.
“AIG Property Casualty's pretax operating income increased to $1.4 billion as improved underwriting results were partially offset by a decline in net investment income driven by lower returns on alternative investments and lower income on investments accounted for under the fair value option,” AIG said in a statement.
Catastrophe losses were $139 million for the quarter, compared with $316 million in the second quarter of 2013.
However, on a first-half basis, AIG's net income dropped 5.2% to $4.68 billion. Net written property/casualty premiums fell less than 1% to $17.55 billion. The insurer's combined ratio improved to 99.9% in the first half of this year vs. 100.0% in the same period a year ago.
“AIG's results in the second quarter were solid,” AIG President and CEO Robert H. Benmosche said in the statement. “Overall, our businesses demonstrated our continued discipline and resilience, underscoring our focus on improving the results of our core insurance businesses,” he said.
“In many ways, this quarter, my last as president and CEO of AIG, was punctuated by two significant milestones: the completion of our sale of (International Lease Finance Corp.) to AerCap (Ireland Ltd.), which marks the last disposition of AIG's noncore businesses, and the appointment of Peter Hancock to succeed me as AIG's next president and chief executive officer.”
AIG announced in June that Mr. Hancock would succeed Mr. Benmosche as president and CEO effective Sept. 1.