American International Group (AIG) President and CEO Brian Duperreault has insisted that the insurer’s General Insurance unit will produce an underwriting profit for all of 2019, after a decade of losses. His promise has now come true for the second quarter in a row.
The division, which includes property/casualty commercial and personal lines, booked a $147 million underwriting gain for the 2019 second quarter, compared to an $89 million loss over the same period a year ago. AIG’s General Insurance arm produced a $179 million underwriting profit for Q1, and Duppereault said at the time that the whole year would continue that long-awaited trend. He repeated that pledge in prepared remarks issued with AIG’s Q2 2019 earnings release on Aug. 7.
“General Insurance achieved its second consecutive quarter of underwriting profitability resulting from underwriting and expense discipline, and reinsurance actions, and remains on track to deliver an underwriting profit for the full year,” Duperreault said.
The combined ratio for General Insurance came in at a healthy 97.8 for Q2, versus 101.3 over the same period a year ago.
AIG did well for the 2019 second quarter overall. The insurer reported $1.1 billion in net income for Q2. That compares to $937 million in net income in the same period a year ago.
Total consolidated net investment income reached $3.7 billion in the 2019 second quarter, up from $3.1 billion in Q2 2018, thanks to favorable market performance and income gains in AIG’s private equity portfolio, the company said.
General Insurance gross premiums written surpassed $8.6 billion in the second quarter, about the same as the same period a year ago. Net premiums written, at nearly $6.6 billion, dipped from more than $6.9 billion in the 2018 second quarter.
General Insurance net premiums written grew in North America on the personal lines side, but personal lines net premiums written declined internally.
In North America, net premiums written increased by 2.2% to $3.3 billion, largely due to the inclusion of the Validus and Glatfelter acquisitions. The North America combined ratio of 100.1 included 5.0 points of catastrophe losses. Internationally, net premiums written decreased 12.5% due to “underwriting actions taken to strengthen the portfolio and to maintain pricing discipline.” The International combined ratio was 95.5.
Duperreault said AIG’s overall results for Q2 are the payoff from last year’s “foundational changes” implemented to help the insurer return to growth and stability.
“Our strong second quarter performance demonstrated continued positive momentum through the first half of 2019,” Duperreault said. “The additional progress on our path to long-term sustainable and profitable growth reflected in this quarter’s results was driven by the foundational changes we implemented across AIG last year.”
Source: AIG
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