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AIG Q3 profit falls on hurricane costs, lower return on investments



(Reuters) — American International Group Inc. on Tuesday reported a more than 39% drop in quarterly profit as investment income fell by more than $1 billion and losses from Hurricane Ian pushed up disaster bills.

Industry experts expect the losses from the storm that battered areas of Florida and South Carolina in September, which modeling firm Verisk Analytics Inc. estimated to cost insurers as much as $57 billion, would put smaller insurers out of business.

AIG, one of the world’s largest commercial insurers, reported $600 million in catastrophe losses in the quarter, of which about $450 million was attributable to Hurricane Ian, the insurer said.

Adjusted earnings after taxes attributable to the company̵

7;s common stockholders fell to $509 million in the third quarter ended Sept. 30, or 66 cents a share, from $837 million, or 97 cents, a year earlier.

Total consolidated net investment income decreased 28% to $2.7 billion, primarily impacted by lower alternative investment income.

Chairman and CEO Peter Zaffino said the results were “more impressive when viewed against the backdrop of a challenging macroeconomic environment and one of the largest hurricanes with insured losses in US history.”

AIG’s net premiums written in its non-life insurance business rose 3% on a constant currency basis, while insurance income rose to $168 million from $20 million a year earlier.

Non-life insurance’s total accident rate for the year amounted to 88.4%, compared to 90.5% a year earlier. The measure excludes catastrophe losses, and a ratio below 100 means the insurer earns more in premiums than it pays out in claims.

The results also come after AIG’s life insurance and pensions division, Corebridge Financial, raised $1.68 billion in September in the biggest IPO so far this year.


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