2023-11-01 20:16:41
American International Group beat third-quarter profit forecasts on Wednesday, driven mainly by growth in its general insurance and life and retirement units.
Fixed index annuities, a popular investment and retirement savings option, have seen strong demand in recent months, with clients returning to market-linked products following an upturn in market sentiment. investors this year.
Increased demand for fixed-index annuities helped AIG’s life and retirement unit, which reported a 24% jump in adjusted pre-tax income.
AIG, one of the world’s largest commercial insurers, also said net premiums written in its general insurance arm for the quarter ended September 30 increased 1% to $6.46 billion.
The New York company’s general insurance underwriting revenue increased $443 million to $611 million.
Catastrophe costs for AIG also fell 29% from a year earlier, when the industry faced massive bills from Hurricane Ian, to $462 million in the third quarter, mostly due to the Lahaina wildfire and Hurricane Idalia.
Reinsurance broker Gallagher Re estimated global insured losses from natural catastrophes at $93 billion in the first nine months of 2023, with the United States accounting for 74% of losses.
AIG is faring better than its peer Travelers Companies, which last month reported a 14% fall in quarterly profit as severe wind and hail storms in parts of the United States led to higher losses due to natural disasters for the insurer.
AIG General Insurance’s combined accident year ratio was 86.3%, up from 88.4% the previous year. This ratio excludes losses due to catastrophes and a ratio below 100 means that the insurer collects more in premiums than it pays out in benefits.
The insurer’s total consolidated net investment income increased 33%, driven by higher income from fixed maturity securities and loan portfolios due to higher reinvestment rates.
Adjusted following-tax profit attributable to common shareholders rose to $1.61 per share, from 84 cents a year earlier. Analysts on average expected $1.50, according to LSEG data. (Reporting by Noor Zainab Hussain in Bengaluru; Editing by Krishna Chandra Eluri)
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