American International Group Inc (AIG) Reports 92% Increase in Adjusted After-Tax Income in Q3 2023
Net income per diluted share was $2.81, and adjusted after-tax income per diluted share was $1.61, an increase of 92% from the prior year quarter.
General Insurance combined ratio was 90.5%, an improvement of 680 basis points from the prior year quarter.
Life and Retirement adjusted pre-tax income was $971 million, up 24% from the prior year quarter.
AIG returned over $1 billion to shareholders through $785 million of common stock repurchases and $261 million of dividends in the third quarter.
On November 1, 2023, American International Group Inc (NYSE:AIG) released its earnings report for the third quarter of 2023. The company reported a net income per diluted share of $2.81 and an adjusted after-tax income per diluted share of $1.61, marking a significant 92% increase from the same quarter in the previous year.
Financial Performance
AIG's General Insurance combined ratio improved by 680 basis points from the prior year quarter, standing at 90.5%. This includes 6.9 points of catastrophe losses and 2.7 points of favorable prior year development. The General Insurance accident year combined ratio was 86.3%, an improvement of 210 basis points from the prior year quarter. This was driven by the outstanding performance of the Commercial Lines with an accident year combined ratio of 81.7%.
General Insurance net premiums written increased by 1% year-over-year, or 9% on a comparable basis, driven by 16% growth in Personal Insurance and 6% growth in Commercial Lines. Life and Retirement adjusted pre-tax income was $971 million, up 24% from the prior year quarter, benefiting from continued growth in net investment spread.
Shareholder Returns and Portfolio Simplification
AIG returned over $1 billion to shareholders through $785 million of common stock repurchases and $261 million of dividends in the third quarter. On November 1, AIG announced the successful closing of the sale of Validus Re to RenaissanceRe, simplifying the portfolio and accelerating capital management plans.
Commentary
AIG Chairman & Chief Executive Officer Peter Zaffino said: In the third quarter, AIG delivered exceptional results driven by continued improvement in underwriting profitability and an outstanding quarter in our Commercial Lines business with an 81.7% accident year combined ratio, as adjusted. This quarters adjusted after-tax income per diluted share of $1.61 increased 92% from the prior year quarter. Our relentless focus on our strategic priorities has enabled us to accelerate our execution and generate significant sustainable value for shareholders and other stakeholders."
Outlook
Despite the challenges posed by the global economic environment, AIG's strategic focus on underwriting profitability and portfolio optimization has resulted in impressive results for General Insurance. The company's continued growth across the portfolio was notable in the third quarter, with General Insurance net premiums written increasing 1% year-over-year, or 9% on a comparable basis, driven by 16% growth in Personal Insurance and 6% growth in Commercial Lines.
Explore the complete 8-K earnings release (here) from American International Group Inc for further details.
This article first appeared on GuruFocus.
