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AIG sees that commercial prices increase when COVID-19 hits results



American International Group Inc.'s adjusted net income more than halved during the second quarter, reflecting a significant increase in coronavirus-related losses, but the insurance company's chief executive said commercial insurance levels were rising at the fastest pace in decades. [19659002] "In terms of interest rates, the current environment is the strongest I have seen in more than 20 years, and the increases in recent quarters are accelerating due to COVID-19," said Brian Duperreault, CEO of AIG, about Tuesday's talks with analysts .

Interest rate hikes are broad and global, and "the changes we are beginning to drive in terms, especially in commercial real estate, are remarkable," he said.

Prices of AIG's operations increased by an average of 1

6% during the second quarter, said Peter Zaffino, AIG president and global chief executive, during the interview.

Retail and surplus accidents were up more than 35%, public sector managers and officials 'responsibilities increased by more than 50%, and employment practices' responsibilities increased by more than 30%, he said.

AIG's net profit after tax, adjusted to exclude the effect of the sale of its older portfolio, which it completed in the second quarter, fell to $ 571 million, a decrease of 55.1% compared to the same period last year [19659002] AIG reported $ 674 million in net disaster losses after reinsurance in the second quarter, including $ 458 million in coronavirus-related losses, $ 126 million in civil unrest and $ 90 in natural disaster losses, Zaffino said.

So far this year, AIG has reported $ 730 million in COVID-19 losses, he said.

The losses affected a wide range of policies, including travel insurance, emergency preparedness, property, trade credits, marine, indemnity, workers' compensation, accident and health, financial lines and reinsurance, Zaffino said.

About 70% of workers' losses were related to health insurance, he said, noting that about 50% of COVID-19 compensation has already been closed.

In anticipation that COVID-19 losses could lead to a reduction in reinsurance capacity, AIG purchased an additional $ 500 million in disaster insurance capacity in the second quarter, Mr … said Zaffino. AIG has revised its Purchase Reinsurance program since Duperreault was appointed CEO in 2017.

AIG's general insurance unit, which includes its property / claims business, reported a combined second quarter ratio of 106% and decreased from 97.8% in the same period last year .

The General Insurance Unit reported a net premium of $ 5.55 billion, a decrease of 16% compared to the second quarter of 2019; however, North American commercial lines increased net premium 6% to $ 2.5 billion.

Over the past three years, AIG has completed the restructuring of its operations, including reinsuring its business books, recruiting many new executives and selling its older portfolio, Mr Duperreault said.

The insurer can now focus on its core business and "strategically distribute capital towards growth, especially in the general insurance industries where we see some of the strongest market conditions in our careers," he said.

More insurance and risk management news about the coronavirus crisis here . Catalog


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