AIG Europe posts positive results despite softening rates

Profits at AIG Europe increased in 2015 despite what it called a competitive environment and softening rates.

The firm posted a profit before tax of £408.5 million, slightly ahead of £406.5 million in 2014.

AIG Europe also reported a 2 percent increase in its net written premium to £3.6 billion last year, up from £3.5 billion the year earlier. Its combined ratio also improved in 2015 to 98.2 percent, compared with 98.4 percent in 2014.

The company said it benefited from its broad product offering and mixture of mature and developing businesses across Europe, although currency fluctuations impacted the overall results.

A positive performance by the commercial business was offset by challenging conditions in the consumer business. Operating expenses decreased to £1.3 billion (2014: £1.4 billion) through targeted cost savings.

AIG Europe benefited from low levels of catastrophe losses, although adverse claims experienced in the property and aviation sector saw higher net claims of £2.2 billion (2014: £2.1 billion). The net loss ratio was marginally higher to 64.9 percent from 62.6 percent the year earlier.

Anthony Baldwin, chief executive of AIG Europe, said: “The challenging backdrop and flat investment environment that we witnessed in 2015 has reinforced the importance of staying focused on underwriting discipline and our emphasis on risk-adjusted profitability. Thanks to our focus on our major competencies, we have improved our business mix towards our core customers, products and distribution partners, whilst our investment in improving the customer experience has contributed to high retention ratios.

“We remain confident that we can compete effectively in this challenging market by focusing our efforts on our major assets and capabilities, including our multinational expertise, global footprint, ability to deploy large capacity lines, and our strong relationships with our clients and distribution partners.”