AIG General Insurance Q4 Income Up 19% on Underwriting, Investments

American International Group (AIG) during the fourth quarter 2023 recorded underwriting income of $642 million within its General Insurance segment — a slight increase from $635 million during the same quarter the prior year.

Adjusted pretax income (APTI) in the segment increased 19% to about $1.44 billion in the fourth quarter on a 38% increase in investment income to $795 million.

Chief Executive Officer Peter Zaffino said General Insurance booked a 15% increase in full-year underwriting income to $2.3 billion.

“Our unwavering commitment to underwriting excellence and ability to manage volatility remain fundamental to the sustainability of AIG’s underwriting income growth,” Zaffino said of General Insurance results in a statement. “The full-year 2023 combined ratio of 90.6 represents an improvement of 130 basis points year-over-year.”

“2023 margins and underwriting income were the best results achieved in recent history,” continued Zaffino, adding that the portfolio led to “exceptional success” at Jan. 1 reinsurance renewals.

AIG noted that it completed the sale of Validus Re to RenaissanceRe on November 1, 2023 so only one month of Validus Re results was included in fourth quarter results for the General Insurance segment that absorbed $122 million of total catastrophe losses ($54 million in North America and $68 million in International). Favorable prior year reserve development was $69 million net of reinsurance compared to $151 million for Q4 2022.

Fourth quarter net premiums written in General Insurance were up 3% to about $5.8 billion, and the combined ratio for the segment improved slightly (0.8 points) to 89.1. For all of 2023, net premiums written increased 5%.

While net premiums written for North America personal lines increased 37% to $549 million during the fourth quarter, North American commercial lines saw net premiums decrease 7% to about $2.1 billion.

The New York-based insurer’s fourth quarter overall net income attributable to common shareholders fell to $86 million compared to $545 million for the same quarter last year. The decline was primarily driven by higher realized losses on Fortitude Re funds. Investment income increased to about $3.9 billion compared to about $3.3 billion for Q4 2022.

Full year 2023 net income attributable to shareholders was $3.6 billion compared to $10.2 billion for 2022.

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