Expense savings and strong results in its consumer insurance business were the highlights of the second quarter for American International Group Inc.
After-tax operating income was $1.4 billion for the second quarter 2017 compared to $1.3 billion.
Net income came in at $1.1 billion for the second quarter 2017, compared to $1.9 billion in the prior-year quarter, primarily reflecting net realized capital losses of $69 million compared to net realized capital gains of $1.0 billion a year ago.
General operating and other expenses declined $404 million or 15.6 percent to $2.2 billion in part due to organizational simplification and better use of technology.
Brian Duperreault, president and chief executive officer, who was named to the position in May, said the quarter showed the “value of AIG’s diverse businesses” and the opportunities the insurer has to grow profitably.
“We will build on AIG’s strong franchise by maximizing the value of our international footprint, which distinguishes us from many of our competitors. While market conditions remain challenging, we are committed to disciplined underwriting and are focused on investing in profitable growth,” he said.
Commercial Insurance
The insurer continued to execute strategic portfolio actions, which resulted in a 15 percent decrease in net premiums written for Commercial Insurance in the quarter.
Commercial Insurance pre-tax operating income declined reflecting higher property losses and the impact of the second half 2016 increase in loss estimates. This was partially offset by lower catastrophe losses and higher alternative investment returns.
The total commercial lines combined ratio was 102.7, compared to 98.3 for the same quarter last year. The commercial lines loss ratio increased by 3.6 points to 73.8 in the second quarter 2017.
Consumer Insurance
In the second quarter, Consumer Insurance (which includes individual retirement, group retirement, life insurance and personal lines insurance) pre-tax operating income increased 33 percent reflecting improvements across all products. Consumer Insurance benefited from improved underwriting results, expense reduction and stable earnings from retirement businesses.
The Personal Insurance combined ratio of 91.1 benefited from favorable loss experience and lower catastrophe losses. The loss ratio was 76.1. The favorable loss experience and lower catastrophe losses, along with an improved expense ratio and growth in net investment income, were partially offset by a lower earned premium base and lower net favorable prior year loss reserve development.
Topics Profit Loss AIG
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