Q2 Results Good for AIG, Chubb, St. Paul

July 27, 2000

American International Group’s second-quarter operating profit rose 13 percent to $1.43 billion, matching analysts’ estimates. T

he New York-based insurer said net profit, including realized investment losses, rose 10 percent, to $1.41 billion, or 90 cents per share, from $1.28 billion, or 81 cents. AIG’s shares hit an all-time high of 127-3/16 Wednesday before closing at 124-7/8. The surge was most likely caused by positive comments from other insurers on rising premium rates in AIG’s core commercial insurance market.

“It was a good quarter for AIG overall, with strong results from most of our major businesses and continued progress in terms of firming pricing in the U.S. property-casualty market,” said AIG Chairman Maurice Greenberg in a prepared statement.

“Our second-quarter results are on track,” said Douglas W. Leatherdale, chairman and chief executive officer. “Property-casualty insurance price increases across all business segments have accelerated, revenues are up, and premium volume is up. Our business retention rates have remained high. And our asset management and life insurance investments performed very well.”

Second-quarter operating earnings per share of $0.69 were down from $0.72 per share in the second quarter of 1999, due chiefly to an increase in the company’s effective tax rate

Net income, which includes realized investment gains, was $184.6 million or $1.02 per share in the second quarter of 2000, compared with $193.3 million or $1.18 per share in the 1999 second quarter. For the six months ended June 30, 2000, operating income was $330.6 million or $1.85 per share compared with $329.9 million or $2.02 per share in the first six months of 1999. Net income for the first half of 2000 was $338.3 million or $1.89 per share compared with 1999 first half net income of $380.2 million or $2.32 per share.

Reported property and casualty net premiums written in the second quarter of 2000 grew 6.8% to $1.5 billion. U.S. premiums grew 13.5%; more than half of the increase was related to the acquisition of Executive Risk. Reported premiums written outside the U.S. declined solely because of the elimination of a three-month lag in the reporting of European results.

Excluding the effect of the European reporting change, non-U.S. premiums grew about 15% in local currencies. Reported property and casualty net premiums written in the first six months of 2000 increased 9.9% to $3.1 billion. Excluding the acquisition and the reporting change, premiums grew about 5% in the first half.

“Chubb had an excellent second quarter in all three major business segments,” said Dean R. O’Hare, Chairman and Chief Executive Officer.

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