AIG General Insurance reported underwriting income of $564 million for the latest quarter, according to the group’s earnings release. The group also returned $787 million of capital to shareholders.
Premium Growth Across Global Commercial and Global Personal
The General Insurance section of AIG’s earnings release opens with premiums: Third quarter NPW of $6.7 billion increased 7% from the prior year quarter on a reported basis and 8% on a constant dollar basis. On a non-GAAP basis, the highlights cite 7%* growth in Global Commercial and 9%* growth in Global Personal. The release also gives a non-GAAP growth rate for the segment: Excluding North America Property lines, General Insurance NPW increased 10%* from the prior year quarter.
For North America Commercial, the release states: Third quarter NPW of $2.5 billion increased 2% from the prior year quarter, primarily driven by Retail Casualty and Financial Lines. It continues: Excluding North America Property lines, North America commercial NPW increased 6% from the prior year quarter. InsuraBeat has separate coverage of Chubb’s North America Commercial and Overseas General results.
Severe Convective Storms and the General Insurance Underwriting Result
In the underwriting commentary of the General Insurance section, the release states: Underwriting income was $564 million, driven by higher earned premiums, strong accident year underwriting results and modest catastrophe losses. It also gives a non-GAAP measure: Accident year underwriting income, ex-CAT was $756 million, up 6% from the prior year quarter.
On catastrophes, the release states for General Insurance: Total catastrophe-related charges were $283 million, representing 4.4 loss ratio points, driven by severe convective storms in North America, compared to extraordinarily low catastrophe losses of $100 million, representing 1.6 loss ratio points, in the prior year quarter. General Insurance results for the latest quarter included favorable prior year development (PYD), net of reinsurance and prior year premiums, of $91 million, compared to $180 million in the prior year quarter.
In its discussion of the underwriting ratios, the release states for General Insurance: The combined ratio was 91.3%, compared with 86.8% in the prior year quarter, primarily reflecting higher catastrophe-related charges and lower favorable PYD. The non-GAAP accident year measure for General Insurance is given as: Accident year combined ratio, ex-CAT* of 88.4%.
InsuraBeat has separate coverage of W. R. Berkley’s earnings, underwriting and repurchases.
Group Net Income, Investment Income and Book Value
For the latest quarter, the release gives group net income this way: Net income attributable to AIG common shareholders was $844 million, or $1.60 per diluted common share, compared to $519 million, or $0.93 per diluted common share, in the prior year quarter. A non-GAAP measure, adjusted after-tax income (AATI), follows: AATI was $1.1 billion, or $2.06 per diluted common share, compared to $1.2 billion, or $2.20 per diluted common share in the prior year quarter.
General Insurance net investment income is reported separately: General Insurance net investment income was $1.0 billion, up 9% year-over-year, driven by the core fixed income portfolio. Group total net investment income for the latest quarter was $1.1 billion, compared to $772 million in the prior year quarter.
On returns, the highlights list: Return on equity (ROE) of 8.5% and Core Operating ROE* of 11.1%, the second being a non-GAAP measure. The highlights also state the following for a non-GAAP measure: Adjusted book value per share* was $81.25, an increase of 5% year-over-year. InsuraBeat has separate coverage of AIG’s earlier underwriting income coverage.
Share Repurchases, Dividends and the Chief Executive’s Remarks
On capital, the highlights list: Returned $787 million of capital to shareholders, through $527 million of share repurchases and $260 million of dividends. The release also carries remarks from Eric Andersen, AIG President & Chief Executive Officer. On profitability, he is quoted as saying the following about a non-GAAP measure: “In the third quarter, Adjusted after-tax income was $1.1 billion, or $2.06 per diluted share.”
