AIG General Insurance Combined Ratio Drops Below 90% For First Time In 15 years
AIG General Insurance Combined Ratio Drops Below 90% For First Time In 15 years
According to AIG, its general insurance combined ratio increased in Q2 2022 by 5.1 points when compared to the same quarter in 2021.
This was the company’s first sub-90 per cent combined ratio in fifteen years, according to a statement from the company. While this was going on, the general insurance adjusted accident year combined ratio increased by 2.6 points during the same time frame to 88.5 per cent.
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The company added that general insurance APTI, or adjusted pre-tax income, was $1.3 billion, reflecting an increase in underwriting income of $336 million over the same quarter last year and a combined ratio improvement of 5.1 points. According to the statement, this was caused by higher premiums with greater renewal retentions, positive rate change, robust new business generation, targeted risk selection, improved terms and conditions, and more favourable prior year development.
AIG General Insurance Combined Ratio Drops Below 90% For First Time In 15 years
Peter Zaffino, chairman and CEO of AIG, said: “AIG had another excellent quarter. General Insurance reported outstanding results and Life and Retirement again delivered a solid performance considering the significant market headwinds in the second quarter.
He added: “Due to the high degree of equity market volatility in May and June, we decided to defer the launch of the Corebridge Financial initial public offering (IPO). Deferring the IPO provided us with an opportunity to further accelerate progress on numerous separation initiatives and to solidify the capital structure of this business as a standalone company. Completing the IPO is a significant priority for us and we remain ready to execute, subject to regulatory approvals and market conditions.”
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The company added that its $563m in life and retirement adjusted pre-tax income showed reduced net investment income (NII), largely as a result of lower returns on alternative investments and lower yield improvements. This, it claimed, was largely offset by better mortality as compared to the same quarter last year.
Zaffino added: “Life and Retirement experienced another solid quarter of sales growth in fixed annuities supported by Blackstone’s origination capabilities. Additionally, Life and Retirement is starting to see a positive impact in its base portfolio net investment income from higher interest rates and credit spreads.”
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AIG General Insurance Combined Ratio Drops Below 90% For First Time In 15 years
He went on: “During the second quarter, we began to transfer certain assets under management to BlackRock in accordance with our recently announced asset management arrangement. We expect the majority of the remainder of the approximately $150bn of assets under management to be transferred by the end of 2022.
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The link-up with BlackRock was reported on these pages in March. Back then, the companies said that the arrangements contemplate BlackRock managing up to $60bn of the global AIG investment portfolio and up to $90bn of the Life & Retirement investment portfolio. Additionally, BlackRock’s Aladdin platform will provide investment management technology for both AIG and Life & Retirement.
The arrangements with BlackRock will be implemented in phases across AIG’s global operations, subject to customary onboarding and implementation requirements and any required regulatory approvals.
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