AIG has reported its Q1 2023 results, experiencing a significant decline in net income but hailing achievements in general insurance.
AIG saw net income of $23 million for Q1 2023, shrinking from $4.2 billion for the prior year quarter.
The insurer’s pre-tax loss from continuing operations was $231 million for the quarter, versus a pre-tax income of $5.7 billion for Q1 2022.
“The decline was mostly due to net realized losses on Fortitude Re funds withheld embedded derivative as well as net realized losses excluding Fortitude Re funds withheld assets and embedded derivative, and lower alternative investment income, partially offset by higher general insurance underwriting income and investment income on the fixed maturity securities and loan portfolios,” the insurer said in a news release.
“These pre-tax movements were partially offset by a lower income tax expense as well as a higher net loss attributable to noncontrolling interest due to noncontrolling interest losses on Corebridge in 2023 compared to gains in 2022 and the 12.4% public floating interest from the initial public offering (IPO),” AIG said.
Adjusted after tax income (AATI) was $1.21 billion, or $1.63 per diluted common share, up from $1.49 per diluted common share, in the prior year quarter, AIG said.
The AIG board of directors has approved a 12.5% increase in the insurer’s quarterly common stock dividend to $0.36 per share starting in the second quarter of 2023, according to the press release. This was hailed as “another milestone that reflects the confidence we have in the future earnings power of AIG” by AIG chairman and CEO Peter Zaffino.
General insurance net premiums written increased 5% year-over-year, and the insurer reported a combined ratio of 91.9%, a one point improvement on the prior year quarter. The insurer saw general insurance deliver underwriting income of $502 million, its strongest first quarter underwriting result in 15 years.
“These significant accomplishments demonstrate that our strategy in general insurance of focusing on underwriting excellence and volatility management enables sustainable growth and underwriting profitability over the long-term,” Zaffino said.
The environment AIG is operating in “is continually shifting and remains volatile and unpredictable”, the chairman and CEO said.
Also this quarter, AIG finalized an agreement with Stone Point Capital that saw it confirm the launch of independent managing agent (MGA) Private Client Select Insurance Services (PCS). PCS is expected to start producing business in Q3 2023 and will serve the ultra high net worth (UHNW) and high net worth (HNW) markets, the insurer said in an April update.
