AIG benefits from improved consumer business in Q2
American International Group (AIG) has posted a rise in second-quarter operating profit, helped by improvements in its consumer business.
After-tax operating income increased to $1.45 billion in the second quarter of 2017 compared to $1.31 billion in the same period a year ago.
The consumer insurance pre-tax operating income increased 33 percent to $1.26 billion over the period, reflecting improvements across all consumer modules, according to the company. Consumer insurance benefited from improved underwriting results, expense reduction and stable earnings from the company’s retirement businesses.
“Our second quarter results show the value of AIG’s diverse businesses and the opportunities we have to grow profitably,” said Brian Duperreault, president and CEO. “We will build on AIG’s strong franchise by maximizing the value of our international footprint, which distinguishes us from many of our competitors. While market conditions remain challenging, we are committed to disciplined underwriting and are focused on investing in profitable growth.”
Pre-tax operating income from the commercial insurance operations declined 24 percent year on year to $716 million in the second quarter, reflecting higher property losses and the impact of the second half 2016 increase in loss estimates. Continued execution of strategic portfolio actions resulted in a 15 percent decrease in net premiums written for commercial insurance, the company added. The combined ratio in commercial insurance deteriorated to 102.7 percent from 98.3 percent over the period.
Overall, AIG’s net income declined to $1.1 billion in the second quarter 2017 compared to $1.9 billion in the prior-year quarter, primarily reflecting net realized capital losses of $69 million compared to net realized capital gains of $1.0 billion a year ago, the company said.
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