By David Bull

May 1 - (The Insurer) – AIG delivered an earnings beat with $1.17 per diluted share of adjusted after-tax income compared to analysts’ consensus of $1.00 and an underlying combined ratio of 87.8% in its general insurance (GI) business that the insurer said represented its best first quarter results since the financial crisis.

The New York-based company’s net premiums written $(NPW.SI)$ for the quarter of $4.5 billion were flat on a reported basis but up 8% on a comparable basis, at constant dollars and adjusted for the sale of its global personal travel and assistance business.

Global commercial NPW grew 8% year over year, or 10% on a comparable basis to $3.2 billion, which AIG said included 14% growth in North America commercial and 8% in international commercial.

The company pointed to “continued optimization” in its reinsurance structure.

In line with recent quarters, new business written was a significant contributor, adding $1 billion, for 12% growth year over year.

The reported GI calendar-year combined ratio of 95.8% was 6.0 points higher, including the effect of 9.1 points of cat losses and reinstatement premiums partially offset by 1.1 points of favorable prior-year development.

Underwriting income was down 59% to $243 million, including the effect of $525 million of total cat-related charges, up from $106 million in the prior-year period. The biggest contribution came from the January California wildfires at $460 million, before reinstatement premiums.

LEX FUELS NA COMMERCIAL GROWTH

In North America commercial, underwriting income was down 45% to $129 million, with a combined ratio that increased 5.8 points to 93.9%, but improved by 1.6 points to 84.3% on an accident year adjusted basis.

AIG attributed top line growth to wholesale only operation Lexington, which benefited from new business production and strong retention, as well as programs platform Glatfelter and retail property.

AIG’s GI international commercial division reported underwriting income down 27% to $240 million, with a combined ratio that deteriorated by 4.6 points to 88.2% on a calendar year basis and by 2.4 points to 85.4% on an adjusted accident year basis.

The insurer’s GI global personal lines business fell to a $126 million underwriting loss, from a $30 million profit in Q1 2024, as its reported combined ratio increased by 9.6 points to 107.9%, but improved by 1.4 points on an adjusted accident year basis to 95.6%.

The deteriorating calendar-year underwriting result was driven by the impact of the California wildfires, partially offset by an improved expense ratio, said the insurer.

CAPITAL MANAGEMENT

In the quarter, AIG continued its capital management strategy as it returned $2.5 billion to shareholders, with $2.2 billion of share repurchases and $234 million of dividends.

AIG chairman and CEO Peter Zaffino commented: “Despite a challenging catastrophe quarter that produced elevated losses for the industry, AIG delivered very strong results. This outcome underscores the effectiveness of our technical underwriting expertise and strategic use of reinsurance, positioning us within our expectations for the remainder of the year.

“In addition, we reported AIG’s best first quarter accident year combined ratio, as adjusted, since the financial crisis, reflecting the exceptional quality of our underlying portfolio.”

The executive reiterated the company’s targets for a 10% plus core operating ROE for full year 2025. In the quarter, it reported a 7.7% core operating ROE.