3 August 2016 Insurance

AIG’s profits rise but tighter risk selection shrinks P/C business

AIG enjoyed a substantial increase in its profits in the second quarter of 2016, but its net premiums written and combined ratio for its property/casualty business suffered.

AIG's net income for the three-month period ending June 30 was $1.9 billion, a 6 percent increase on the $1.8 billion it made in the same period in 2015.

The company's net premiums written for its property/casualty segment were $4.4 billion for the second quarter of 2016, a 21 percent decrease from $5.6 billion, the figure for the same period last year.

AIG attributed this decrease to the continued execution of its strategy to enhance risk selection in its property/casualty product portfolios, as well as the non-renewal of certain underwriting performing classes and the increased use of reinsurance.

The profitability of AIG's underwriting for property/casualty also decreased. The business’s combined ratio reached 102.1 percent, an increase of 3.3 percentage points from the same period last year.

“AIG’s second quarter results show strong improvement towards all the goals the Board and I announced in January,” said Peter Hancock, president and chief executive officer of AIG.

“We have executed more quickly and smoothly than expected and our confidence in reaching our 2017 financial targets is high as our earnings become more sustainable.”

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