AIG Returns to Profit on Improved P/C Insurance Underwriting, Lower Catastrophes
Global insurer American International Group (AIG) reported positive fourth-quarter and year-end results thanks to General Insurance business results.
After reporting a net loss of $60 million for the fourth quarter of 2020, the company reported a net income of $3.74 billion for the final quarter of 2021. Additionally, full-year 2021 net income was $9. $4.4 billion, compared with a net loss of $6.0 billion in the previous year.
General Insurance, which includes the property/casualty and personal business, ended the fourth quarter with underwriting income of $499 million, after managing an underwriting loss of $171 million. dollars in the same quarter of 2020.
AIG President and CEO Peter Zaffino noted that General Insurance has produced “more stable underwriting results” while posting 13% net premium growth for the full year. That includes 18% growth in Trade Streams. Zaffino recorded “best revenue growth and significant reduction in volatility due to reduced gross limits and strategic use of reinsurance.”
General insurance generated a combined ratio of 92.4, down 10.4 points from 102.8 in the previous quarter. This improvement reflects lower disaster losses and overall strong underwriting results. Disasters including tornadoes and wildfires caused $189 million in damage in Q4 2021 – a significant drop from Q4 2020 when disaster damage was $545 million.
Total net premiums written in Q4 2021 increased 7% from the previous quarter thanks to 11% growth in North American Trading Companies and 15% in International Trading Companies. The company says these results are due to improved incremental rates, higher innovation times and high levels of new business.
According to the company, Commercial Lines underwriting results improved due to a better business mix and a net premium recorded of 13% along with continued interest rate hikes. The combined accident-year rate for North American Trade Lines improved 4.7 points to 88.9 and for International Trade Routes improved 2.5 points to 86.7 compared to the fifth quarter. before.
North American Personal Insurance net premiums rose 18%, reflecting a rebound in travel activity and lower reinsurance sessions. International Personal Insurance’s net premium fell 9% qoq mainly due to underwriting activities undertaken to improve portfolio structure and safety
Life Insurance underwriting results also improved. North American Life Insurance’s accident composite rate for the year improved 7.7 points to 94.9 quarter-on-quarter while International Personal Insurance’s accident-year composite rate was unchanged at 94.1.
Regarding the Life and Retirement business, Zaffino said that the company has made “significant progress in preparing the business to become an independent, independent company”. AIG sold a 9.9% stake in this unit to Blackstone Inc. for $2.2 billion last November.
During the fourth quarter, Life and Retirement increased annuity sales and enjoyed a favorable stock market impact on both portfolio and fee income. Adjusted earnings before tax increased by 10.8% for the full year and adjusted return on equity remained high at 14.2%.
AIG joins other major carriers Travelers and The Hartford to report improved fourth-quarter results.
Travelers reported quarterly profit of $1.3 billion, up $23 million and a record for the fourth quarter. Hartford increased its net written premiums by 10% from Q4 last year to a record $7.995 billion. During the quarter, Travelers achieved a consolidated consolidation ratio of 88.0.
Net income at The Hartford for the fourth quarter of 2021 ended at $729 million, up 36% from earnings of $537 million a year earlier. The insurer’s commercial division increased net income to $702 million in the fourth quarter – a 47% year-over-year increase. These positive results offset the 52% and 46% declines in fourth-quarter and year-over-year earnings to $81 million and $385 million, respectively, in the personal stream segment.
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