In a significant business turnaround, AIG has today reported net income attributable to AIG common shareholders of US$648 million (or US$0.72 per diluted common share) for the third quarter of 2019. This significant profit follows a net loss attributable to AIG common shareholders of US$1.3 billion (or US$1.41 per common share) in the same quarter of the prior year.
AIG primarily attributes this turnaround to lower catastrophe losses compared to the prior-year quarter. AIG’s pre-tax net realised capital gains stood at US$929 million, in comparison to the prior-year quarter’s pre-tax net realised capital losses of US$511 million.
“Our results this quarter reflect the significant, ongoing work across the company to lay a foundation for long-term, sustainable and profitable growth,” said president and CEO Brian Duperreault.
The success of AIG’s growth strategy is reflected in the results posted for the general insurance sector, which registered a third quarter adjusted pre-tax income of US$507 million. This profit was reported despite significant underwriting losses driven by catastrophe pre-tax losses of US$497 million on the back of large-scale environmental calamities including Typhoon Faxai and Hurricane Dorian.
Speaking on how the results for this segment have improved in line with company expectations, Duperreault said the increase was “driven by our focus on underwriting excellence, expense discipline and enhanced reinsurance strategy.”
The life and retirement sector meanwhile, has also benefited from AIG’s new strategy, recording a third quarter adjusted pre-tax income of US$646 million despite a charge of US$143 million for the annual actuarial assumption update. This is compared to the losses of US$98 million reported in the prior-year quarter.
“Life and retirement continued to produce solid results despite ongoing headwinds from the sustained low interest rate environment,” said Duperreault.
With this net income profit and the success of AIG’s general insurance and life and retirement sectors, Duperreault said that AIG is preparing to continue its plans for strategic development.
“As we approach 2020, we remain confident we will deliver underwriting profitability for the full year 2019 and deliver double-digit ROCE by the end of 2021,” he said.