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Net premiums earned up in second quarter at AIG; combined ratio improves


August 5, 2014   by Canadian Underwriter


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American International Group (AIG) Inc. released Monday its financial results for the three months ending June 30, reporting underwriting income in property and casualty of $101 million, compared to an underwriting loss of $223 million during the same period in 2013. All figures are in United States dollars.

For the second quarter of 2014, New York City-based AIG reported net premiums written in P&C of $9.213 billion, down 0.5% from 9.263 billion in Q2 2013. Q2 net premiums earned were up 2% year-over-year, from $8.347 billion in 2013 to $8.531 billion in 2014.

Its combined ratio improved 3.8 points year over year, from 102.6% in Q2 2013 to 98.8% in the most recent quarter. The loss ratio dropped 3.4 points, from 68% in Q2 2013 to 64.6% in Q2 2014.

“AIG’s results in the second quarter were solid,” president and CEO Robert Benmosche stated in a press release. “Overall, our businesses demonstrated our continued discipline and resilience, underscoring our focus on improving the results of our core insurance businesses.”

Benmosche, who joined AIG as CEO in 2009, is scheduled to be replaced as president and CEO Sept. 1 by Peter Hancock, AIG’s executive vice president. Benmosche is also scheduled to resign from the board of directors and assume an advisory role, the firm announced earlier this year.

“Catastrophe losses were $139 million, compared to $316 million in the second quarter of 2013,” AIG stated Aug 4. “Including premium adjustments, net prior year favorable loss reserve development was $14 million, compared to net prior year adverse loss reserve development of $154 million for the second quarter of 2013. The lower catastrophe losses and net favorable loss reserve development were partially offset by an increase in Commercial Insurance severe losses of $193 million, compared to $38 million in the prior-year quarter.”

In commercial P&C, AIG reported net premiums written of $5.816 billion in Q2 2014. Underwriting income was $239 million in Q2 2014, compared to an underwriting loss of $88 million in Q2 2013. The loss ratio in commercial P&C was 67.7% in the most recent quarter, down 4.9 points from 72.6% in Q2 2013. AIG’s commercial P&C combined ratio improved 6.3 points, from 101.7% in Q2 2013 to 95.4% in Q2 2014.

In consumer P&C, in Q2 2014,  AIG reported net premiums written of $3.407 billion, a loss ratio of 55.8% and a combined ratio of 98%. In Q2 2013, the consumer P&C combined ratio was 100.1%.

For all of AIG, net income attributable to AIG was $3.073 billion in Q2 2014, up 12.5% from $2.731 billion in Q2 2013. Total revenue from life and retirement was $4.46 billion in Q2 2014. Investment income in P&C was $1.254 billion in Q2 2014, down 4% from $1.309 billion in Q2 2013.


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