(Reuters) – American International Group Inc. reported a nearly 17% increase in first-quarter earnings on Tuesday that topped market estimates as strong emissions gains and lower disaster losses dampened a decline in investment income.
The company – one of the world’s largest commercial insurance companies – said gross premiums written in its general insurance business rose 7% in the first quarter to $ 11.51 billion.
The strong results come at a time when the insurance industry is facing substantial claims from the months-long war in Ukraine that has triggered extensive sanctions.
AIG, whose adjusted after-tax income attributable to the company’s common shareholders jumped to $ 1.07 billion, said its results were also supported by “focused risk selection.”
Reuters reported last month that the company was considering cutting protection for Russia and Ukraine to protect itself from the risk of heavy claims.
AIG earned adjusted earnings of $ 1.30 per share, compared to an average analyst expectation of $ 1.18 per share, according to Refinitive IBES data.
The company also benefited from a sharp reduction in disaster losses in its general insurance unit, reflecting a trend seen in the Traveler Companies Inc. sector.
Over the past two years, the insurance industry has been flooded with claims from companies that have lost revenue due to the covid-19 crisis, but this has eased as the economy has reopened.
The non-life insurance’s total accident year amounted to 89.5%, compared with 92.4% a year earlier. The measure excludes catastrophic losses and a ratio below 100 means that the insurer earns more on premiums than it pays in damages.
After several months of large investment gains, AIG reported a 11% reduction in consolidated net investment income, as the market loss caused by the Ukraine crisis and the Federal Reserve’s aggressive policy tightening hit its portfolio.