18 May 2018Insurance

AIG losses more than double in Europe in 2017

AIG Europe reported a pre-tax loss of £431.5 million for 2017 (ending Nov. 30, 2017) after a negative £171.1 million in the 2016 financial year.

During 2017, the natural catastrophes in the Caribbean and North America impacted AIG Europe’s property business, the company said. There was also a larger than expected number of severe losses. A number of large loss developments from prior underwriting years across a number of lines, notably casualty and financial lines, also affected the loss ratio.

“2017 was a challenging year,” said AIG Europe CEO Anthony Baldwin. “Alongside our peers, our performance was impacted by a combination of natural catastrophes, continued competitive pressure and low investment returns.

“These challenges validate our strategy to focus on underwriting discipline and on more profitable business lines and I’m pleased to report that we continued to improve our business mix towards these lines.

“In the last few months we have taken various steps to reduce future volatility and improve our performance. We have greater protection from natural catastrophes going forward thanks to a Group wide catastrophe programme and have added reinsurance to smooth volatility. We have reduced our exposures by lowering net limits on certain lines and have continued to improve risk selection through our focus on profitable business,” Baldwin added.

“Although the trading environment remains challenging, we view 2018 with confidence,” he noted.

Overall, AIG Europe reported a 7 percent year on year increase in net premiums written to £3.92 billion for the year ended Nov. 30, 2017, supported by underlying business growth as well as favourable currency movements.

The company noted that a “strong performance” came from personal insurance as well as financial lines, offset partly by market conditions in property as well as the decision to step away from less profitable business.

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