(Reuters) – American International Group exceeded second-quarter profit expectations on Tuesday, driven by growth at its life and retirement unit and lower-than-expected catastrophe losses in what was a very expensive quarter for the industry.
AIG, one of the world’s biggest commercial insurers, said net premiums written in its general insurance arm for the quarter ended June grew 10% to $7.5 billion.
Adjusted after-tax income attributable to common shareholders climbed to $1.75 per share from $1.39 a year ago. Analysts on average had expected $1.59, according to Refinitiv data.
AIG’s life and retirement unit saw a 42% jump in premiums and deposits, partly helped by record sales in fixed index annuities.
Total consolidated net investment income rose 37% to $3.6 billion, helped by higher income from fixed maturity securities and loan portfolios due to the higher reinvestment rates.
The New York-based company’s general insurance underwriting income fell 26%, hurt by $250 million in total catastrophe-related charges mainly related to U.S. storms and Typhoon Mawar, which hit the Western Pacific Island of Guam in May.
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Reinsurance broker Gallagher Re preliminarily pegged global insured losses from natural hazards in the first six months of 2023 at $52 billion, while weather and climate events alone were expected to have driven an insurance bill of $46 billion.
Last month, peer insurer Travelers Companies reported a 98% slump in quarterly profit, as severe storms in parts of the United States caused the insurer’s catastrophe losses net of reinsurance to jump to $1.48 billion.
AIG’s general insurance accident year combined ratio was 88%, compared with 88.5%, a year earlier. The metric excludes catastrophe losses and a ratio below 100 signifies that the insurer earns more from premiums than it pays out in claims.
AIG also said it increased its share repurchase authorization to $7.5 billion.
(Reporting by Noor Zainab Hussain in Bengaluru)