AIG Again Battered by Catastrophes But Reinsurance Lowers 3Q Net Loss


Catastrophe losses in Japan and North America pushed American International Group to a net loss of $1.3 billion for the third quarter of 2018, compared to a net loss of $1.7 billion in the prior-year quarter. Adjusted after-tax loss was $301 million the third quarter to $1.1 billion in the prior-year quarter.

The global insurer dealt with major catastrophe losses of $1.6 billion. Catastrophe losses in Japan represented over half of the overall catastrophe losses in the quarter. This has been one of the worst catastrophe seasons in Japan in 25 years and AIG is the largest foreign-based insurer in Japan. The Japan losses are net of $264 million of reinsurance recoveries.
Disaster losses in North America accounted for less than half of the overall catastrophic losses in the quarter and were largely due to the hurricane in Florence, in addition to the estimates of the loss caused by the California hurricane. For the quarter, the insurer added $ 170 million to reserves to cover higher costs than last year’s California forest fires.

AIG, California mud shifts estimate that after the Hurricane Florence lost $ 750 million in the total disaster reinsurance program in North America, it has run out of $ 750 million and has assumed the upper limit for the previously described loss estimate for Hurricane Michael.

The net catastrophic losses of AIG’s July reinsurers and expert writers, Validus, were about $ 200 million, mostly in relation to Japan.

In the quarter we saw that AIG agreed to receive the Glatfelter Insurance Group, a special expertise brokerage and program manager based in York, Pennsylvania. AIG relies on Glatfelter as an important part of its plan to reposition General Insurance and develop insurance. AIG has said it has not renewed 50 percent of the current program business book.

In a statement, Brian Duperreault, chairman and CEO, said he thinks the insurer is still on track to produce a profit margin despite current challenges.

. In the third quarter, we continued to meet our strategic priorities in order to achieve long-term, profitable growth, Dup Duperreault said. Iyat While managing a significant number of global catastrophic events, Genel Sigorta continued to make progress against key initiatives such as improving insurance capabilities, repositioning reinsurance structures, improving world-class capability and driving efficiency. We continue to stay on the road to produce a spelling profit. By reflecting the strength of our product expertise and distribution networks, Hayat ve Emeklilik achieved increased sales and fixed double-digit returns. ”
He said the company continued to work with ı a sense of urgency IG and m took firm steps to position AIG for the company-wide future Şirket.

Duperreault will speak to analysts Thursday morning.

Last month, AIG’s third-quarter catastrophic losses were estimated at $ 1.5 billion to $ 1.7 billion. Morgan Stanley analysts said it was much higher than they had expected. Big 3Q losses ini to question AIG’s ability to manage disaster risk management,’n said Morgan Stanley, gan should show continuous improvement to regain investor confidence over time. Büyük

At the same time, KBW analysts reduced their earnings estimates for AIG to iler greater than expected iler disaster losses and book value erosion, but KBW said it expects AIG to get enough results for its development over time.

General Insurance

The third quarter General Insurance recorded a loss of $ 825m before tax and a loss of $ 1.7 billion. Net written premiums increased by 4 percent to $ 6.8 billion. General Insurance combined ratio was 124.4 compared to 157.1 for the same quarter of the previous year, while the loss rate of 88.6 lost 22.0 points from disaster losses.

General Insurance in North America:

Pre-tax losses of $ 160 million included losses of $ 791 million in disaster, reinsurance, and serious losses of $ 88 million.
The net premiums written fell by 7.5%, mainly due to the additional premiums obtained through the acquisition of Validus from $ 275 million, while lowering the 2018 reinsurance programs and lower premiums stemming from the growth of Personal Insurance businesses.
An improvement in the loss rate in North America has been driven by significantly lower catastrophe losses and lower negative past year loss reserve development.
An increase in the expense ratio reflects a higher rate of acquisition expense resulting from the changes in the portfolio of the Personal Insurance portfolio and the increase in general operating expenses related to strategic initiatives.
General Insurance International:

The $ 665 million-adjusted adjusted pre-tax loss included $ 776 million in disaster-related losses, reinsurance, $ 65 million in serious losses, and $ 38 million in loss losses in the prior year.
The increase in net premiums was $ 165 million of additional premiums obtained from the acquisition of Validus, the growth of European Finance Lines businesses, and the Accident and Health and Personal Lines in Asia Pacific.
The third-quarter loss rate was 79.7. The year-to-date loss rate increased by 0.9 points to 58.2 in the same month. High loss losses on trade lines were offset by relatively lower losses (1.8 points) compared to the previous quarter.

Legal warning !
The information, comments and suggestions there are not covered by investment advice. It is based on the author's personal opinions. These views may not fit your financial situation and risk and return preferences. For this reason, based solely on this information, investment decisions may not have the appropriate consequences for your expectation. Our Site is not responsible for any direct or indirect damages incurred by the investors as a result of the use of the information on the Site, deficiencies in the sources, damages incurred by profit, moral damages, or damage to third parties.