AIG and P/C Underwriting Post Profit for Q4

American International Group reported fourth quarter 2019 net income of $922 million compared to a net loss of $622 million in the prior-year quarter. The results reflected improvement in its closely-watched General Insurance (property/casualty) division where the insurer posted an underwriting income of $12 million for the quarter, compared with a loss of $1.07 billion for the same period in 2018.

For the full year of 2019, net income was $3.3 billion, compared to a net loss of $6 million in the prior year. The improvement was primarily due to a reduction in net catastrophe losses of $1.7 billion compared to the prior year; favorable General Insurance underwriting and reinsurance actions; an increase in net investment income of $2.1 billion.

General Insurance

In the fourth quarter, General Insurance produced net investment income of $766 million to go along with its underwriting income of $12 million. Catastrophe-related losses, net of reinsurance, totaled $411 million, including $233 million from Typhoon Hagibis and $146 million from Texas tornadoes and California wildfires. That was about half the catastrophe loss in the fourth quarter of 2018.

The General Insurance combined ratio was 99.8. The accident year combined ratio was 95.8, comprised of a 61.6 accident year loss ratio (an improvement of 230 basis points from the prior-year quarter) and an expense ratio of 34.2 (improvement of 70 basis points). The insurer said the decrease in accident year loss ratio reflected underwriting and reinsurance actions taken to improve the General Insurance book of business.

For full year 2019, General Insurance posted a combined ratio of 99.6 and an accident year combined ratio of 96.0, compared to 111.4 and 99.7, respectively, in the prior year.

For the third quarter of last year, General Insurance reported a $249 million underwriting loss, much of it due to catastrophe losses from Typhoon Faxai and Hurricane Dorian.

More on General Insurance results for the fourth quarter of 2019:

General Insurance North America – Commentary

General Insurance – International