AIG beats Q3 profit estimates on general insurance, life and retirement gains

Reuters

Published Nov 01, 2023 04:26PM ET

(Reuters) - American International Group (NYSE:AIG) exceeded third-quarter profit expectations on Wednesday, driven mainly by growth at its general insurance and life and retirement units.

A popular investment and retirement savings option, fixed index annuities have seen strong demand in recent months as customers wade back into market-linked products following a recovery in investor sentiment this year.

The surge in demand for fixed index annuities helped AIG's life and retirement unit, which saw a 24% jump in adjusted pre-tax income.

AIG, one of the world's biggest commercial insurers, also said net premiums written in its general insurance arm for the quarter ended September 30 grew 1% to $6.46 billion.

The New York-based company's general insurance underwriting income jumped by $443 million to $611 million.

Catastrophe-related charges for AIG also fell 29% from a year earlier, when the industry faced huge bills from Hurricane Ian, to $462 million for the third quarter, mainly due to Lahaina Wildfire and Hurricane Idalia.

Reinsurance broker Gallagher Re pegged global insured losses from natural catastrophes in the first nine months of 2023 at $93 billion, with the United States accounting for 74% of the losses.

AIG fared better than peer insurer Travelers Companies (NYSE:TRV), which last month reported a 14% fall in quarterly profit, as severe wind and hail storms in parts of the United States drove up catastrophe losses for the insurer.

AIG's general insurance accident year combined ratio was 86.3%, compared with 88.4% a year earlier. The metric excludes catastrophe losses and a ratio below 100 signifies the insurer earns more from premiums than it pays out in claims.