(Reuters) – American International Group Inc beat first-quarter profit estimates on Thursday, as strong performance in its general insurance and life and retirement units blunted the hit from winter storms and coronavirus-related mortality claims.
The company posted an underwriting income of $73 million in its general insurance business in the quarter, compared with a loss of $87 million a year earlier, when it booked large losses related to the pandemic.
AIG, one of the largest U.S. insurers, said it had set aside $422 million for catastrophe losses in the unit, primarily related to winter storms, but estimated no COVID-19-related losses.
Global insurers last year faced a sharp rise in payouts related to the health crisis at a time when investments they rely on to pay claims unraveled.
Investment returns have now recovered and many insurers have seen a fall in coronavirus-related claims as vaccine rollouts help more economies to reopen.
Adjusted after-tax income attributable to AIG common shareholders rose to $923 million in the quarter ended March 31, from $105 million a year earlier.
Excluding items, AIG earned a profit of $1.05 per share, exceeding analysts’ estimates of 97 cents, according to Refinitiv IBES.
The insurer’s general insurance accident year combined ratio – which excludes catastrophe losses – was 92.4 for the quarter, compared with 95.5 a year earlier.
A ratio below 100 means the insurer earns more in premiums than it pays out in claims.
Gross premiums written rose 6% to $10.73 billion in the general insurance business, driven by the insurer’s North America and international commercial lines.
AIG’s life and retirement unit posted a 57% jump in adjusted pre-tax income to $941 million, driven partly by higher private equity returns.
The life insurance business, however, booked an adjusted pre-tax loss of $40 million, largely reflecting more deaths from the virus outbreak.
(Reporting by Noor Zainab Hussain in Bengaluru and Alwyn Scott in New York; Editing by Sriraj Kalluvila)