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American International Group (AIG) has been loss-making for the last two years, but the reported 2017 net loss of $6.08 billion hides improvements on the operating side as a more in-depth look into the numbers reveals and CEO Brian Duperreault is working on getting the insurance giant back on a growth path. A changed reinsurance cover structure is also part of the plan.
The losses published for 2017 follow a net loss of $849 million in 2016 and a net income of $2.20 billion in 2015.
The 2017 results were primarily impacted by a negative $7.53 billion tax effect, driven by the US tax reform. The Tax Cut and Jobs Act of 2017 (US Tax Reform) was enacted on December 22, 2017, reducing the statutory federal income tax rate from 35 percent to 21 percent, effective Jan. 1, 2018. As a negative side effect of the lower tax rate, insurers have seen a decline in their capitalization due to the write-down of their deferred tax assets (DTA) in line with the new tax regime.
AIG, Results, Growth, Profit, Brian Duperreault, Sid Sankaran, Peter Zaffino, Insurance, Reinsurance, North America, Global