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(Reuters) — American International Group Inc. reported a 21 percent decline in first-quarter profit on Wednesday, due to higher catastrophe and bad weather claims, as well as weaker investment income.
The insurer posted $938 million, or $1.01 per share, in net income for the first quarter, down from $1.20 billion, or $1.18 per share, in the same period a year earlier.
On an adjusted basis, its earnings were $963 million, or $1.04 per share, compared with $1.37 billion, or $1.36 per share, in the same period a year earlier.
Analysts were expecting earnings of $1.27, on average, per share, according to Thomson Reuters I/B/E/S, after lowering their estimates by about 6 percent since last June. It was not immediately clear if the numbers were comparable.
Mudslides in California, winter storms across the United States and an earthquake in Papua New Guinea contributed to $376 million worth of catastrophe losses in AIG's general insurance business during the quarter.
Those costs slashed the unit's quarterly adjusted pretax income by more than half, to $510 million from $1.1 billion in the year-earlier period, and drove its expense and loss ratios higher.
In AIG's life and retirement business, adjusted pretax income fell 1 percent to $892 million. The insurer attributed that decline to lower-yielding assets.
The results mark the end of three full quarters for AIG under Chief Executive Officer Brian Duperreault, who took charge of AIG last May, vowing to grow the company and boost revenues.
He has since been working to improve underwriting practices, increase AIG's focus on technology and install new executives across the insurer to jumpstart profits. But his steps have yet to boost the bottom line, and AIG's stock is down 10 percent since Mr. Duperreault's arrival on May 14, 2017.
In after-hours trading, AIG shares were 1.9 percent lower at $53.82.
Barbara Luck has left XL Group Ltd. to head American International Group Inc.’s North American casualty business.