THIRD QUARTER NOTEWORTHY ITEMS
* Refers to financial measure not calculated in accordance with generally accepted accounting principles (non-GAAP); definitions of non-GAAP measures and reconciliations to their closest GAAP measures can be found in this news release under the heading Comment on Regulation G and Non-GAAP Financial Measures.
American International Group reported financial results for the third quarter ended September 30, 2021.
AIG President and CEO Peter Zaffino said: “We continue to build momentum and execute on our strategic priorities as evidenced by another quarter of outstanding financial results, as well as significant progress on AIG 200 and the separation of Life and Retirement from AIG. Against the backdrop of a very active CAT season and the ongoing global pandemic, AIG colleagues demonstrated continued resilience and are performing at a high level delivering value to our stakeholders and excellence in all that we do.
“General Insurance delivered very strong results demonstrating the underwriting discipline now embedded in our culture and the benefits of our volatility reduction efforts through a well-articulated risk appetite and reinsurance program that performed well. Net premiums written grew by 11%, driven by Commercial Lines growth of 17%, which was balanced between 18% growth in North America and 15% growth in International reflecting improved retention, outstanding levels of new business, and a continued strong rate environment. We also reported another quarter of impressive underwriting profitability, with a combined ratio of 99.7 inclusive of catastrophe losses, and 90.5, as adjusted, which represents a 2.8 point improvement from the accident year combined ratio, as adjusted, in the third quarter of 2020.
“Life and Retirement was once again a solid contributor to profitability delivering adjusted pre-tax income of $877 million and a return on adjusted segment common equity of 12.2%.
“In the third quarter we repurchased $1.1 billion of common stock, redeemed $1.5 billion of debt and ended the quarter with $5.3 billion of liquidity, all demonstrating the strength of our balance sheet and exceptional financial flexibility as we execute against our capital management strategy.
“AIG’s performance in the third quarter and through the first nine months of the year validates the strategy we have been executing on over the last few years. We have vastly improved the quality of our portfolio by delivering superior risk solutions, we continue to embed operational excellence across the organization, and we recently reached a significant milestone toward making Life and Retirement a standalone company by closing on the sale of a 9.9% equity stake to Blackstone. AIG is well on its way to becoming a top performing company that delivers sustainable profitable growth over the long-term.”
For the third quarter of 2021, net income attributable to AIG common shareholders was $1.7 billion, or $1.92 per diluted common share, compared to net income of $281 million, or $0.32 per diluted common share, in the prior year quarter. The increase was primarily due to net realized gains in the current quarter compared to net realized losses in the prior year quarter and overall strong General Insurance underwriting results, including lower CATs. These pre-tax increases were partially offset by Life and Retirement, which had higher DAC amortization principally due to the impact of the annual assumption review which was partially offset by the gain from the sale of our retail mutual fund business and higher income tax expense primarily due to higher income from operations.
AATI was $837 million, or $0.97 per diluted common share, for the third quarter of 2021 compared to $708 million, or $0.81 per diluted common share, in the prior year quarter. The increase was primarily due to strong General Insurance underwriting results, including lower CATs, partially offset by lower APTI from Life and Retirement.
Total consolidated net investment income for the third quarter of 2021 was $3.7 billion, down 2% from $3.8 billion in the prior year quarter primarily due to lower returns from fair value option equity and fixed income securities, partially offset by strong alternative investment income from private equity. Total net investment income on an APTI basis* was $3.3 billion, an increase of $78 million compared to the prior year quarter reflecting higher private equity income.
Full release here
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