AIG’s Duperreault highlights 2018 loss reduction and forecasts growth
Efforts to rectify issues in AIG’s core underwriting capabilities appear to be paying off as losses reduce year on year in its 2018 results, with Brian Duperreault, AIG’s president and chief executive officer, predicting the firm will “accelerate our progress in 2019”.
In the fourth quarter of 2018, the company reported a net loss of $622 million, a big improvement on the $6.7 billion net loss it made in the same period a year earlier. Its combined ratio for the quarter worsened by 1.7 percentage points to 115 percent from 113.3 percent in the same period in 2017.
The company reported a 6 percent rise in its gross premiums written for Q4 2018 for its general insurance business, which were $7.6 billion up from $7.2 billion in the same period in 2017.
For the full year, the company almost broke even, posting a net loss of $6 million, a dramatic improvement on the £6.1 billion it lost in 2017. Its total revenues for the year fell slightly to $30.6 billion compared with $31.3 billion a year earlier.
Brian Duperreault, AIG’s president and chief executive officer, said: “Throughout 2018, significant foundational work was undertaken to remediate AIG’s core underwriting capabilities. While many issues and challenges were uncovered, we moved quickly to reduce risk and volatility, as well as implement strategies that we believe will accelerate our progress in 2019.
“The world class talent that joined AIG throughout 2018 was a highlight, and our team is not taking shortcuts in building a top performing enterprise nor are we settling for easy fixes. Our work continues to restore AIG as the leading insurance company in the world and I remain confident we are on the right path to achieve long-term, sustainable and profitable growth.
“Our fourth quarter 2018 results showed positive improvements in general insurance, reflecting actions we took throughout the year to re-position and strengthen the business, and life and retirement remains a stable source of earnings with attractive returns. Results were negatively impacted by performance in both equity and credit markets, catastrophe losses that came within our previously disclosed guidance, as well as modest net unfavorable prior year loss reserve development driven largely by underwriting decisions from 2016 and prior years.
"We continue to expect to achieve an underwriting profit entering 2019 in general insurance and to reach double digit returns for consolidated AIG in three years.”
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