American International Group (AIG) reported strong underwriting and investment results in in its General Insurance and its Life and Retirement divisions, despite catastrophe losses from winter storms and Covid-19 mortality claims.
For the first quarter, net income was $3.9 billion compared to $1.7 billion in the prior year quarter. AIG said the increase was primarily due to higher net investment income.
General Insurance, which includes North American and International commercial and personal lines insurance, reported adjusted pre-tax income was up 69% to of $845 million. The quarter saw growth in net premiums (up 9% to $6.5 billion) and underwriting income ($73 million compared to an underwriting loss of $87 million in the prior year quarter). Also, net investment income increased 31% to $772 million from the prior year quarter.
The General Insurance combined ratio was 98.8 including catastrophe losses, a 2.7 point improvement from the prior year quarter despite 7.3 points of catastrophe losses primarily from winter storms.
“The successful repositioning of our global portfolio over the last three years allowed us to pivot from remediation to profitable growth, which we expect to continue throughout the year,” the company said in its announcement.
Commercial lines net premiums written grew 25% from the prior year quarter driven by both North America and International.
North America and International personal insurance net premiums written decreased 74% and 0.4%. respectively. The International personal insurance accident year combined ratio was 94.0, a 1.5 point improvement. The North America personal insurance accident year combined ratio increased 7.9 points to 105.9 compared to the prior year quarter due to the impact of Covid-19, most notably on the travel business and changes in business mix.
Life and Retirement adjusted pre-tax income was $941 million due to strong net investment income, partially offset by higher mortality from Covid-19.
AIG is in the midst of preparing an initial public offering of its life and retirement business.
“AIG had an excellent start to the year and that is reflected in our first quarter results with growth in General Insurance and continued strong performance in Life and Retirement,” said Peter Zaffino, AIG president and chief executive officer. “Our first quarter results reflect significant momentum as we continue our pursuit to become a top performing company.”
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