In its Q1 2024 results, AIG has reported net income attributable to its common shareholders of $1.2 billion, marking a massive improvement compared to the $23 million recorded in the prior year quarter.
the increase in net income was primarily driven by net realized gains on Fortitude Re funds withheld embedded derivative, compared to net realized losses in the prior year quarter.
The firm’s adjusted after-tax income (AATI) in the opening quarter was $1.2 billion, flat compared to Q1 of 2023, reflecting higher underwriting income million and net investment income in General Insurance and improved results in AIG’s Other Operations.
However, this was mostly offset by a 20% decrease in Corebridge’s earnings included in AATI due to the reduction in AIG ownership over the last year.
Meanwhile, AIG’s total net investment income for Q1 2024 was $3.9 billion, an increase of 11% from $3.5 billion in the prior year quarter.
The firm explained that this was primarily driven by higher income from fixed maturity securities and loans due to higher reinvestment rates, partially offset by lower alternative investment returns and lower income on Fortitude Re funds withheld assets.
Looking at the General Insurance segment more closely, Q1 2024 net premiums written were $4.5 billion, marking a decline of 35% from the prior year quarter on a reported basis, but an increase on a comparable basis, with 1% growth in Commercial Lines and Personal Insurance relatively flat.
At the same time, Q1 2024 underwriting income increased $94 million from Q1 of 2023 to $596 million and included $106 million of total catastrophe-related charges, representing 1.9 loss ratio points, compared to $264 million, representing 4.2 loss ratio points, in the prior year quarter.
Thus, the combined ratio for the opening quarter improved by 2.1 points from 2023 to 89.8%, largely driven by a 1.9 point decrease in the loss ratio to 58.0%.
AIG Chairman & Chief Executive Officer Peter Zaffino, commented, “AIG began 2024 with very strong momentum in delivering on our strategic and operational progress while achieving exceptional financial results, reflecting the foundational capabilities we have cultivated over the last several years.
“In addition to outstanding profitability, this quarter was highlighted by the significant capital management actions we completed, placing AIG in a position of strength ahead of Corebridge Financial’s deconsolidation from AIG.”
Zaffino continued, “General Insurance had another quarter of impressive Commercial Lines profitability benefiting from continued strong underwriting performance and low levels of catastrophe losses as we continue to manage volatility in our results.
“Throughout 2024, we expect to continue to build on our momentum as we execute AIG Next, deconsolidate Corebridge and deliver underwriting excellence and profitable growth, further enhancing value to AIG shareholders and positioning AIG for the future.”