AIG Executives Outline Path to Underwriting Profit in 2019


“We do see it coming. We expect that in 2019 we’re going to be in an underwriting profit position, not a great one, but a profit. And we’ll move from there to a great one.”

So said Brian Duperreault, president and chief executive officer, American International Group (AIG), speaking with analysts on a conference call explaining that despite another quarterly loss due to major catastrophe losses, his company, in particular its General Insurance unit, is on the right track.
While managing a significant global catastrophe, General Sigorta, Duperreault, continued to make progress on yetenek improving their insurances, repositioning reinsurance structures, improving world-class talent and driving efficiency Önemli.

“We are staying on the road to produce an underwriting snow.“

General Insurance Assistant General Manager and CEO Peter Zaffino announced the 201 fundamental changes’n in the insurance strategy and the reinsurance that AIG secured to reach this 2019 profit position. For example, the insurance company reduced the gross limits of the property from $ 2.5 billion to $ 750 million and its net limit fell from $ 611 million to $ 143 million. The gross limits of the victim fell from $ 250 million to $ 100 million.

Zaffino said General Insurance also benefited from the reinsurance to support growth. As an example, AIG has now extended its existing international losses surplus deal to a global program that risks risks over primary and over-unregistered lines in the United States.

AIG has added a new ability to focus on strengthening its focusing capabilities. In recent days, David McElroy has been Arch’tan and newcomer to Peter Bilsby’s Global Specialty Business from Talbot to become CEO of AIG’s hotline division Lexington Insurance.

Zaffino said he formed a structure to support insurers all over the world, under Tom Bolt, from Berkshire Hathaway, who joined the AIG one year ago as editor-in-chief.
Zaffino said that the changes iğ produce AIG as a better and more agile partner müş are müş very positive feedback müş from brokers, customers, and reinsurers.

The underwriting development strategy is counted upon by the program manager Glatfelter Insurance Group, whose program is praised by Zaffino as a highly selective program manager with a record of profitability and a talented leadership team. Zaffino said Glatfelter will help AIG to reposition its current US program business, saying the insurance company is currently undergoing more than 50 percent of its current programs.

The third quarter results of the global insurance company reflected $ 1.6 billion of major catastrophe losses. The disaster losses in Japan represented more than half of the general disaster losses in the neighborhood. This has been one of the biggest disaster seasons in Japan in 25 years and AIG is Japan’s largest foreign insurance company.

AIG is restructuring the disaster reinsurance program for Japan. For the upcoming 2019 renewal, he said he plans to make the program a single tower to increase its effectiveness and further reduce its net risk on a net and frequent basis.

The results of the North American Personal Insur- ance included additional $ 148 million in damages related to California mud slips that occurred in the first quarter of 2018. AIG officials answered questions that the losses had not been caught before. Increased demand for inspection, construction services, higher costs and higher additional costs than expected by a high net worth customer. However, Duperreault expresses the possibility that the occurrence of late occurrences of an “anomaly” will occur again.

Zaffino said AIG has already seen improvement. While the adjusted year-on-year combined ratio was 99.4 percent, the corrected accident year loss rate indicates a 240bp improvement in the portfolio management underlying the 63.6 level and a more moderate loss compared to the previous quarter and the second quarter of 2018. “

Expense reductions should begin to become apparent in the fourth quarter and in 2019.

In May, Arch’s chief actor Mark Lyons said he was busy studying reserves. 75 percent of total damage reserves are reviewed. An area where material replacement consolidation was necessary was particularly in the portfolio of excessive losses around the risks of construction defects. AIG has been working to reduce the impact of construction defect area since 2009, he said.

In the fourth quarter, the actuarial team will review the remaining 25 percent of US finance lines, employee compensation, international loss reserves outside the UK and Europe, and personal lines. At this point, he assured analysts that he had never seen “red flags” which worried him unnecessarily for the fourth-quarter lines.

Lyons stressed that the recent reserve fees were due to past writing practices and that AIG had nothing to do with the revised underwriting strategy.

Suspecting the benefits of overcoming breathing, as defined by them, Lyons praised the system now, and then put an exclamation mark on the idea that this time was different. ”My 40 years of experience in property and casualty says that these changes are material and will lead to better loss rates in any market,“ he said.

Lyons is not the only skeptic when it comes to business returns.

Since AIG reported a net loss of $ 1.3 billion in the third quarter, S & P Global Ratings has not had any adverse impacts since June 2017. Profit margin until 2019.

Sürdür Our primary rating focus, oda said S & P.

The overall insurance-adjusted accident-year loss ratio increased to 63.6 in the third quarter of 2018 (compared to 66 in the same quarter of the previous year), while the results fell from 62.3 to 64 in 2018 on a nine-month basis. .

S & P said the ability to overcome performance with external talent appointments could actually delay efforts to improve. S & P said, içinde Underlining management’s opaque medium-term financial targets to correct the core of operations, excluding the goal of delivering a commitment profit by the first quarter of 2019 over the years, S said S & P. ”We expect AIG to improve the writing results slowly, but it may be difficult to achieve mixed-rate combined rates compared to the first quarter of 2019.“

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