AIG profit beats Wall St estimates on general insurance boost

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FILE PHOTO: The AIG logo is seen at its building in New York's financial district

(Reuters) – American International Group Inc exceeded market estimates for quarterly profit on Thursday as its general insurance business faced fewer natural catastrophe and COVID-19 pandemic-related claims.

The U.S. insurer posted an underwriting income of $20 million in its general insurance business in the third quarter, compared with a $423 million loss a year earlier.

The business recorded catastrophe losses of $628 million, mainly from Hurricane Ida and floods in the United Kingdom and Europe. That compared with $790 million a year ago, which included $185 million of estimated COVID-19 losses.

Global insurers last year faced a sharp rise in payouts related to the health crisis, but a wider availability of COVID-19 vaccines has eased the pressure.

Adjusted after-tax income attributable to AIG’s common shareholders rose to $837 million in the quarter to Sept. 30, from $708 million a year earlier.

AIG earned 97 cents per share on an adjusted basis, beating analysts’ estimates of 88 cents, according to Refinitiv.

The company’s general insurance accident year combined ratio – which excludes catastrophe losses – was 90.5 for the quarter, compared with 93.3 a year earlier.

A ratio below 100 means the insurer earns more in premiums than it pays out in claims.

Gross premiums written rose 13% to $8.3 billion in the general insurance business.

AIG’s life and retirement unit posted a 13% fall in adjusted pre-tax income to $877 million.

The company said the planned initial public offering of the unit, in which Blackstone Group has bought a sizeable stake, was on track for 2022.

(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Aditya Soni)