The company’s net income totaled $1.66 billion, a 490% jump over the year-earlier net of $281 million. Results in 2020 were depressed by pandemic-related shutdowns and the reluctance of many Americans to fly, which hurt AIG’s travel-insurance business. AIG had taken a $185 million third-quarter charge against earnings for estimated Covid-19 losses. The year-earlier results also were depressed by costs related to a divestiture.
AIG’s so-called adjusted income, which is closely watched by Wall Street analysts because it excludes certain items judged nonrecurring, totaled $837 million in this year’s third quarter, up 18%.
AIG said its general insurance unit, which is one of the world’s biggest sellers of property-casualty insurance to businesses world-wide, continued to show improvement in terms of crucial profit metrics.
Net premiums written, one of the revenue metrics, increased 11%, driven by commercial lines growth of 18% in North America and 15% internationally. Those increases reflected more customers renewing their policies, new business and an industry environment in which insurers are able to push through higher prices.
The general insurance unit also houses AIG’s travel coverage, warranty sales and a business of insuring the property of wealthy people, known as its Private Client Group. In North America, net premiums written for these various products also grew 11%, while shrinking 3% internationally.
Increased consumer spending drove higher sales of travel insurance and warranty products. AIG said those sales increases were partially offset by lower volume for its Private Client Group as the company sought to more selectively choose the properties it would insure.
AIG has been among insurers non-renewing homeowners in various locations, as it seeks to reduce its exposure to risks, including wildfires in California, according to insurance brokers.
AIG President and Chief Executive Peter Zaffino said the strong results came “against the backdrop of a very active CAT season and the ongoing global pandemic,” a reference to catastrophes.
AIG said its underwriting profit for the most-current quarter included $628 million of catastrophe costs, predominantly from Hurricane Ida as well as U.K. and European floods. That compared with $790 million of catastrophes in the prior-year quarter, which included the $185 million of estimated Covid-19 losses. Despite an elevated level of global catastrophe activity in the third quarter, AIG said its losses were contained by improved underwriting and enhanced reinsurance protections.
The improvement in AIG’s results follow several years of turnaround work by Mr. Zaffino, who joined AIG in 2017 as global chief operating officer under its previous chief executive, Brian Duperreault. Mr. Zaffino took over as CEO on March 1.
AIG is preparing for an initial public offering of its life-insurance and retirement unit. The company earlier this month closed on a sale of a 9.9% equity stake in the unit to Blackstone Group Inc.