American International Group (AIG) reported much improved performance for its General Insurance division, which reported a combined ratio enhancement and $845 million of net earnings in spite of raised catastrophe losses due to US winter storm activity.The General Insurance company of AIG has actually been a crucial focus for experts in assessing the insurance companies performance improvement in the last few years and the first-quarter of 2021 saw the business reporting much better underwriting outcomes, with the combined ratio coming out at 98.8%, a 2.7 point enhancement from the previous year quarter.
This is despite Q1 2021s outcomes including 7.3 points of disaster losses (up on Q1 2020s 6.9%), after representing reinsurance recoveries.
Catastrophe losses to AIGs GI service came out at $422 million, after reinsurance, which the company said was largely due to the United States winter season storms and freezing weather condition.
Adjusted, AIGs General Insurance accident year integrated ratio came out at 92.4% for Q1 2021, which represents a 3.1 point enhancement from the previous year, driven by enhanced North America and International Commercial Lines underwriting results, the business said.
At the same time, AIG has gone for development in Q1, with industrial insurance premiums rising 25% year-on-year, with growth in the North America and International systems.
” AIG had an exceptional start to the year which is reflected in our very first quarter results with development in General Insurance and continued strong performance in Life and Retirement,” Peter Zaffino, AIGs President and Chief Executive Officer commented.
” In General Insurance, we provided strong development in net premiums composed, driven by our North America and International Commercial services, and underwriting profitability. The combined ratio was 98.8 inclusive of catastrophe losses and 92.4, as changed. The effective repositioning of our worldwide portfolio over the last three years allowed us to pivot from removal to profitable development, which we expect to continue throughout the year.
” Life and Retirement provided another solid quarter, with changed pre-tax income development driven by varied product offerings and increased investment returns. With strong sales and success, this service continues to be a market leader in the security and retirement savings market.
” Our strong balance sheet and monetary versatility allow us to continue to buy development and core operating fundamentals with capital returns to investors when suitable. During the very first quarter we redeemed $362 million of common stock and ended the quarter with $7.9 billion of liquidity.
” I am tremendously pleased with our global colleagues and what we have actually accomplished together. Our very first quarter results show substantial momentum as we continue our pursuit to end up being a top performing company.”
However, a deeper dive reveals that while AIGs underwriting paid on a worldwide basis, the North American underwriting unit saw a combined ratio of 108.4%, which was worse than Q1 2020s 103.8%.
It was International organization that drove the General Insurance success, as well as the financial investment return on the float produced, as North American underwriting was unprofitable across both business and personal lines for AIG in Q1.
Its clear the winter storm losses hit AIGs GI department hard in the United States, driving the deterioration in underwriting result on a reported basis.
” In General Insurance, we delivered strong growth in net premiums composed, driven by our North America and International Commercial businesses, and underwriting profitability. The combined ratio was 98.8 inclusive of catastrophe losses and 92.4, as adjusted. The successful repositioning of our international portfolio over the last three years permitted us to pivot from remediation to rewarding development, which we expect to continue throughout the year.