AIG Underwriting Profit Rises as Premium Growth Slows
General Insurance net premiums written increased 9% to $7.516 billion.
American International Group (AIG), the global insurer, posted a 10% increase in adjusted earnings to $2.00 a share as underwriting profit rose and premium growth moderated.
The quarter marked a shift toward more selective, line-specific pricing after broader increases earlier in the year. Growth continued in Retail Casualty, Marine, Accident & Health and High Net Worth, while Property and Financial Lines faced rate pressure.
Net income declined 17% to $948 million, and diluted earnings fell 10% to $1.78 a share. Diluted earnings nevertheless improved from $1.41 in the first quarter and $1.35 in the fourth quarter. Adjusted after-tax income increased to $1.069 billion from $1.044 billion a year earlier, though adjusted earnings eased from $2.11 a share in the first quarter.
General Insurance underwriting income rose 10% to $686 million, slowing sequentially from $774 million. The combined ratio improved 30 basis points from a year earlier to 89.0%, though it deteriorated from 87.3% in the first quarter. Catastrophe charges increased to $210 million, including $75 million of net losses related to the Middle East conflict, while favorable prior-year reserve development rose to $145 million.
North America Commercial supplied the strongest commercial underwriting performance, with income rising 24% to $372 million and its combined ratio improving 190 basis points to 84.0%. International Commercial underwriting income fell 33% to $200 million as Middle East losses, rate pressure and acquisition costs pushed its combined ratio 540 basis points higher to 91.3%. Global Personal underwriting income increased 356% to $114 million, helped by improved High Net Worth commission terms and lower catastrophe and operating expenses.
Investment income weighed on the broader result. Total net investment income fell 23% to $1.127 billion, while investment income on an adjusted pre-tax basis declined 5% to $908 million and was roughly flat sequentially. Core operating return on equity fell to 11.1% from 12.2% in the first quarter, and Other Operations’ adjusted pre-tax loss widened 41% to $142 million.
AIG reiterated confidence in meeting the objectives set at its 2025 Investor Day. The company returned $904 million to shareholders, including $641 million through repurchases, and completed its exit from Corebridge Financial by selling its remaining shares for about $710 million.