Net income falls but “significant achievements” are hailed in P&C
by Jen Frost
AIG has reported its first quarter 2023 results, experiencing a significant decline in net income but highlighting achievements in P&C.
AIG reported net income of $23 million in the first quarter of 2023, down from $4.2 billion in the prior-year quarter.
The insurer’s pretax loss from continuing operations was $231 million in the quarter, compared with pretax income of $5.7 billion in the first quarter of 2022.
“The decrease was primarily due to net realized losses in Fortitude Re retained embedded derivatives funds, as well as net realized losses excluding Fortitude Re retained fund assets and embedded derivatives, and lower income from alternative investments, partially offset by higher P&C underwriting income and investment income. on fixed-maturity securities and loan portfolios,” the insurer said in a press release.
“These pre-tax movements were partially offset by lower income tax expense, as well as a higher net loss attributable to non-controlling interest due to non-controlling interest losses in Corebridge in 2023 compared to earnings in 2022 and 12.4% floating public interest from initial stake. public offering (IPO),” AIG said.
Adjusted after-tax income (AATI) was $1.21 billion, or $1.63 per diluted common share, versus $1.49 per diluted common share, in the year-ago quarter, AIG said.
AIG’s board of directors approved a 12.5% increase in the quarterly dividend on the insurer’s common stock to $0.36 per share beginning in the second quarter of 2023, according to the news release. This was hailed as “another milestone that reflects the confidence we have in AIG’s future earnings power” by AIG Chairman and CEO Peter Zaffino.
P&C net written premiums increased 5% year-over-year, with the insurer reporting a combined ratio of 91.9%, a one-point improvement over the prior-year quarter. The insurer saw P&C generate underwriting revenue of $502 million, its strongest first-quarter underwriting result in 15 years.
“These significant achievements demonstrate that our P&C strategy of focusing on underwriting excellence and volatility management enables sustainable growth and long-term underwriting profitability,” said Zaffino.
The environment in which AIG operates “is continually changing and remains volatile and unpredictable,” said the president and chief executive officer.
Also this quarter, AIG finalized a deal with Stone Point Capital that saw it confirm the launch of Private Client Select Insurance Services (PCS) independent managing agent (MGA). PCS is expected to start producing business in the third quarter of 2023 and serve the ultra-high net worth (UHNW) and high net worth (HNW) markets, the insurer said in an April update.
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