(Reuters) — American International Group Inc. reported a nearly 24% drop in fourth-quarter profit on Wednesday, hurt by losses linked to a winter storm that hit parts of North America late last year, and lower alternative investment income.
Property damage, flooding and power outages from frigid conditions in the U.S. and Canada in late December pushed AIG’s catastrophe losses for the quarter to $235 million, compared with $189 million a year earlier.
Last month, property and casualty insurer Travelers Cos. also reported. Inc. a decline in quarterly profit due to losses resulting from the winter storm.
Meanwhile, a decline in markets through 2022, with the S&P 500 posting its biggest percentage decline since the 2008 financial crisis, hit AIG̵7;s total consolidated net investment income, which fell 9% to $3.3 billion in the quarter ended Dec. 31.
Adjusted earnings after taxes attributable to the company’s common stockholders fell to $1.02 billion, or $1.36 per share, from $1.34 billion, or $1.58 per share, a year earlier.
However, CEO Peter Zaffino said in a statement that the company continued to improve the profitability of its non-life insurance business and ended the year with “the strongest underwriting results” the unit has ever achieved.
AIG’s insurance income rose 27% to $635 million, while net premiums in its non-life business fell 6%.
Non-life insurance’s total expense ratio improved to 88.4% from 89.8% a year earlier. The metric excludes catastrophe losses, and a ratio below 100 indicates that the insurer earns more in premiums than it pays out in claims.