AIG profit beats estimatesPosted On: Aug. 1, 2023 3:50 PM CST
(Reuters) — American International Group Inc. exceeded second-quarter profit expectations, driven by growth in its life and retirement unit and lower-than-expected catastrophe losses in what was a very expensive quarter for the industry.
AIG said net premiums written in its general insurance arm for the quarter grew 10% to $7.5 billion.
Adjusted after-tax income attributable to common shareholders climbed to $1.75 per share from $1.39 a year earlier. Analysts on average had expected $1.59, according to Refinitiv data.
AIG's life and retirement unit saw a 42% jump in premiums and deposits, partly helped by record sales in fixed index annuities.
Total consolidated net investment income rose 37% to $3.6 billion, helped by higher income from fixed maturity securities and loan portfolios due to the higher reinvestment rates.
The New York-based company's general insurance underwriting income fell 26%, hurt by $250 million in total catastrophe-related charges, mainly related to U.S. storms and Typhoon Mawar, which hit the Western Pacific island of Guam in May.
Reinsurance broker Gallagher Re preliminarily pegged global insured losses from natural hazards in the first six months of 2023 at $52 billion, while weather and climate events alone were expected to have driven an insurance bill of $46 billion.
AIG's general insurance accident year combined ratio was 88%, compared with 88.5% a year earlier. The metric excludes catastrophe losses, and a ratio below 100 signifies that the insurer earns more from premiums than it pays out in claims.
AIG also said it increased its share repurchase authorization to $7.5 billion.