AIG returns to profit as it reaps rewards of restructuring
American International Group (AIG) enjoyed a return to solid profits in its first quarter results as its CEO highlighted the company was enjoying the fruits of actions it has taken to execute to strengthen its balance sheet and improve earnings quality.
The company made a net profit of $1.1 billion in the first quarter compared with a loss of $183 million in the same period a year earlier. Its pre-tax operating income increased to $1.7 billion compared with $1.1 billion a year earlier.
The company stressed its ongoing efforts to improve its portfolio. Net premiums written by its commercial insurance unit, for example, dropped by 17 percent (or 14 percent on a consistent dollar basis) to $3.6 billion in the quarter as it executed a strategy of better risk selection and also bought more reinsurance.
It said the increased use of reinsurance in property represented 4 points of the decline, while the remaining 10 points was related to continued execution on our strategic portfolio actions throughout the first quarter of 2017, and the important January 1st renewal date in Europe.
“Our first quarter results highlight the success of the actions we have taken to execute on our strategy, strengthen our balance sheet, and improve earnings quality,” said Peter Hancock, AIG chief executive.
“Operating results across our core Commercial and Consumer businesses improved and we continued to return excess capital to shareholders. Since January 1, 2016, we have returned over $18 billion of capital towards our $25 billion target. We will continue to execute our strategy and further build on our position as a leading global insurance company.”
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