The general insurance business of the American International Group Inc (AIG) encountered lesser number of natural calamities during the latest completed quarter, along with lower insurance claims because of Covid-19 infections helped the insurer to report profits for the quarter that was more than what analysts were expecting.
In the third quarter of the current year, the general insurance business of the United States insurer generated an underwriting profit of $20 million, while it reported a loss of $423 million for the same quarter a year earlier.
Catastrophe losses of $628 million, mainly related to claims from Hurricane Ida and floods in the United Kingdom and Europe, was recorded by the firm in the quarter. In comparison in the same period a year ago, the company had got such claims worth $790 million, which comprised of claims of about $185 million in losses related to the Covid-19 pandemic.
A steep increase in payouts related to the health crisis was reported by insurance companies throughout the world because of the pandemic, but that pressure has been eased significantly this year because of wide spread of Covid-19 vaccines around the world.
In the quarter to Sept. 30, the company reported a rise in adjusted after-tax income attributable to the common shareholders of the company to $837 million compared to $708 million in the same quarter a year ago.
AIG earned 97 cents per share on an adjusted basis, beating analysts’ estimates of 88 cents, according to Refinitiv.
For the third quarter, the general insurance accident year combined ratio – which does not include catastrophe losses – of the company came in at 90.5, compared to 93.3 for the same quarter a year earlier.
A ratio below 100 means the insurer earns more in premiums than it pays out in claims.
The company reported a 13 per cent rise in its gross premiums written at $8.3 billion in the general insurance business. A 13 per cent drop in its adjusted pre-tax income in AIG’s life and retirement unit to $877 million was also reported by the company.
The company was on track to launch its planned initial public offering of the unit, where a sizable stake is owned by Blackstone Group, in 2022, the company also said.
(Adapted from USNews.com)