Home Uncategorized AIG increases profits as disaster losses narrow, premiums increase

AIG increases profits as disaster losses narrow, premiums increase

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World insurance conglomerate

American International Group Inc.

AIG 0.80%

posted strong earnings in the first quarter, benefiting from reduced disaster losses, new business growth and increased premium rates.

Another of the largest public insurers,

Prudential Financial Inc.,

ПРУ 1.22%

returned to a $ 31 million net loss for the quarter from net income of $ 2.83 billion earlier, while its operating income under close observation fell 25% to $ 1.22 billion. The life insurer credited net realized investment losses and related fees, reflecting rising interest rates during the period, while the previous quarter included significant return on investment as well as other differences on an annualized basis.

The

AIG

AIG 0.80%

the results reflect the turn of the business of selling property insurance against accidents to corporate clients around the world. The overhaul was led by Peter Zafino, who took over as chief executive in the previous quarter. AIG is also an insurer of wealthy households

AIG reported net income of $ 4.25 billion, up 9.9% from the $ 3.87 billion in the previous quarter, and its adjusted post-tax profit jumped 16% to $ 1.07 billion from $ 923 million. Wall Street analysts are tracking adjusted figures that exclude items that are considered unique. AIG’s net income for both periods includes realized income tied to the reinsurer in which it holds a minority interest.

AIG cites growth in its global commercial lines, which are policies sold to business customers, including more than $ 1 billion in new contracts for the fourth consecutive quarter, strong retention of existing customers and a 9% rate hike.

In addition to improving financial results, AIG also spoke in detail about the additional preparations for the planned separation of its business for life and retirement from the rest of the company. AIG will remain with its operation to eliminate the victims if the split occurs in the middle of this year. In late March, AIG announced that the new company would be called Corebridge Financial. On the same day AIG concluded a society with

BlackRock Inc.,

which will manage the assets of AIG and Corebridge worth up to $ 150 billion.

The BackRock deal stems from a deal last year under which the investment company

Blackstone Inc.

has acquired a 9.9% stake in the Life Insurance and Retirement Unit for $ 2.2 billion in cash and will manage some of its assets.

AIG results showed fewer effects of the Covid-19 pandemic than in previous quarters. AIG said the stronger demand for travel has led to a significant increase in premiums in the business of selling travel insurance.

Prudential said its operating income after taxes in the first quarter fell to $ 1.22 billion from $ 1.62 billion. Much of the decline was in the company’s global PGIM asset management unit, where adjusted pre-tax operating income fell 71% to $ 188 million from $ 651 million. Prudential cited factors, including lower income from sources, including “income from sowing and joint ventures and incentive fees,” as well as higher costs.

U.S. businesses reported adjusted pre-tax operating income of $ 943 million, up 12%. Units that showed improvement included his business of selling group life insurance and other employee benefits, as well as individual business of life insurance. These operations have led to an increase in pandemic-related deaths.

His online insurance agency is Assurance IQ for Data Science reported less loss pre-tax, $ 37 million compared to a loss of $ 39 million in the quarter last year.

Overall, AIG and other U.S. disaster insurers suffered fewer disaster losses in the first quarter of this year than in the previous period. In 2021, prolonged cold February weather in Texas and other states caused unexpected pipe freezes that led to significant water damage.

In the first quarter of this year, disasters included European storms, an earthquake in Japan and Australian floods. AIG said its results include $ 274 million in disaster costs, mostly from Australian floods, compared to $ 422 million in the previous quarter.

Email Leslie Schism to leslie.scism@wsj.com

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