Insurance

AIG profit beats on strong underwriting, investment income

Key Points
  • American International Group beat Wall Street estimates for quarterly profit on Wednesday, boosted investment income.
  • The general insurance business reported its first underwriting profit last quarter since 2007, when it was hit by the financial crisis.
Pedestrians walk by the American International Group building.
Ramin Talaie | Bloomberg | Getty Images

Insurer American International Group beat Wall Street estimates for quarterly profit on Wednesday, boosted investment income, sending its shares up 2.7% in extended trading.

A strong performance in commercial and personal insurance in regions outside of North America helped the insurer post an underwriting profit of $147 million in its general insurance business compared with a loss of $89 million a year earlier.

The general insurance business reported its first underwriting profit last quarter since 2007, when it was hit by the financial crisis.

AIG said its general insurance accident year combined ratio, excluding changes from losses incurred in past years, improved to 96.1 for the quarter, from 101 a year earlier.

A ratio below 100% means the insurer earns more in premiums than it pays out in claims.

The insurer's net investment income jumped 19.4% to $3.7 billion, aided by higher returns from AIG's equity investments.

Net income attributable to the company's common stockholders rose to $1.10 billion, or $1.24 per share, in the second quarter ended June 30, from $937 million, or $1.02 per share, a year earlier.

On an adjusted basis, AIG earned $1.43 per share. Analysts on average were expecting $1.15, according to IBES data from Refinitiv.