American International Group, Inc. (AIG) reported a 2009 Q3 profit of US$455 million, compared with a net loss of US$24.5 billion in 2008 Q3.
“Our results reflect continued stabilization in performance and market trends," AIG president and CEO Robert H. Benmosche said. "Pricing in our commercial property casualty business has been stable.
"Management continues to monitor rates closely and maintain underwriting discipline, turning away some renewal business due to aggressive pricing by existing and new competitors."
AIG's general insurance segment, branded as Chartis in July 2009, reported its operating income before net realized capital gains (losses) was US$722 million in 2009 Q3. This compares to US$105 million in the third quarter of 2008.
"Third quarter 2009 underwriting losses were primarily driven by credit crisis related claims and continued adverse development of prior accident year loss reserves," AIG said in a press release. "Third quarter 2008 underwriting losses were primarily driven by catastrophe losses."
The general insurance segment recorded net premiums written of US$8.1 billion in 2009 Q3, a 13% decline compared to last year’s third quarter.
"The decline was partially due to the effect of foreign exchange, the sale in 2008 of the unit’s Brazilian operations, and the strategic decision to remain price disciplined, particularly in workers’ compensation, as well as to the overall effect of the weakened economy," the company said in a release.
The combined ratio of AIG's general insurance segment in 2009 Q3 was 105.2%, compared to 104.5% in the prior year period.
The combined ratio of the commercial insurance segment was 106.4% in the quarter, a decrease of 2.6 points from the comparable prior year period.
"This decrease was primarily driven by the significant reduction in catastrophe losses, partially offset by higher net adverse development from prior accident years."
AIG's foreign general insurance operations recorded a combined ratio of 103.4% in 2009 Q3, an increase of 6.2 points from the comparable prior period.
This was "primarily driven by an increase in charge-offs and transition costs as well as losses related to the worldwide financial crisis," the company said.