AIG’s general insurance posts underwriting loss in Q2
American International Group (AIG) has reported an underwriting loss for its general insurance operations in the second quarter of 2018 as the loss ratio deteriorated.
The unit posted an underwriting loss of $89 million for the second quarter of 2018 compared to an underwriting profit of $149 million in the same period a year ago.
The loss ratio deteriorated to 65.7 percent from 64 percent over the period, driven by a high frequency of severe losses that totalled $293 million (4.5 pts) which is more than double the long-term average, according to the company.
Gross premiums written in general insurance grew 4 percent year on year to $8.65 billion in the second quarter of 2018.
“We remain diligently focused on pursuing long-term, sustainable and profitable growth across AIG, and our diversified businesses provide flexibility and strength to execute on our strategy,” said CEO Brian Duperreault.
“In the second quarter, we continued to take actions across general insurance to establish a culture of underwriting excellence and added stellar talent. Our efforts are taking hold and we remain committed to achieving an underwriting profit as we exit 2018,” Duperreault added.
The group’s net income declined to $937 million in the second quarter of 2018 from $1.13 billion in the same period a year ago.
“With the closing of the Validus acquisition in July, we have further enhanced our underwriting expertise and expanded our offerings. We also took actions to efficiently manage our Legacy liabilities with the partial sale of DSA Re, providing a path towards a standalone platform for managing run-off business. Moving forward, we will continue to look for opportunities to grow AIG and create long-term shareholder value.”
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