NEW YORK: US insurer American International Group Inc (AIG) topped fourth-quarter profit expectations yesterday as it benefited from strong underwriting and lower catastrophe losses at its general insurance business.
Catastrophe losses came in at just US$189 million (RM791 million) in the quarter to Dec 31 and mainly stemmed from tornadoes in southern US states and wildfires. The year-ago figure was US$545 million, including US$178 million in estimated Covid-19 losses.
AIG and its global peers have been inundated with Covid-related claims since start of the pandemic in 2020, but the pressure has started easing in recent months due to the wider availability of vaccines.
The drop in catastrophe-related claims helped AIG's general insurance business post an underwriting income of US$499 million, compared with an underwriting loss of US$171 million a year earlier.
Gross premiums written for the general insurance business rose 12% to more than US$8 billion.
The company's adjusted after-tax income attributable to its common shareholder soared 57% to US$1.3 billion. It earned US$1.58 on a per-share basis, trouncing analysts' average estimate of US$1.19 per share, according to IBES data from Refinitiv.
The general insurance accident year combined ratio was 89.8, an improvement of 3.1 points from 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's life and retirement unit, its other large source of income, posted a 6% decline in adjusted pre-tax income to US$969 million.
The company said it had made significant progress in its plans to separate the life and retirement unit. AIG had sold a 9.9% equity stake in the unit to Blackstone Inc for US$2.2 billion in July last year. – Reuters