AIG Q4 General Insurance Underwriting Income Down 29% on Catastrophes

American International Group reported fourth quarter 2024 net income of $898 million compared to $86 million the prior year, but insurance underwriting income was down 29% on high catastrophe losses.

AIG said the dramatic increase in income for the quarter was due to high net losses from discontinued operations recorded in fourth quarter 2023. These discontinued operations from the deconsolidation of Corebridge Financial affected full year 2024 net income results, finishing at a loss of $1.4 billion compared to net income of $3.6 billion for 2023.

CEO Peter Zaffino said the insurer’s “commitment to prudently managing risk and volatility” allowed it to finish the full year with about $1.9 billion (down 18% from a the year prior) in underwriting income in general insurance, consisting of its three new segments as part of a recent reorganization: North America Commercial, International Commercial, and Global Personal.

Related: AIG’s Hancock to Lead Global Personal Lines as Insurer Restructures Businesses

For Q4 2024, underwriting income was $454 million compared to $642 million in Q4 2023. Insurance operations paid out $325 million in losses from catastrophes during the period. About $300 million of the losses were attributed to hurricanes Milton and Helene in the North American Commercial segment.

Catastrophe losses and reinstatement premiums added 5.5 points to the quarter’s 92.5 combined ratio for general insurance. By comparison, the combined ratio was 89.1 for Q4 2023. The full year combined ratio for general insurance was 91.8 – the third consecutive year the combined ratio finished below 92, said Zaffino.

In North American Commercial, the Q4 combined ratio came in at 98.8 versus 85.1 the prior year quarter due primarily to the catastrophe losses. Underwriting income was down 92% for Q4 to $25 million and down 60% for the fully year to $548 million.

Growth of 5% in net premiums written in North American Commercial for Q4 was a bit of positive news, thanks to growth in casualty and AIG’s Lexington Insurance subsidiary.

Underwriting income in Global Personal went from $21 million in Q4 2023 to $82 million in Q4 2024. Full year underwriting income was $142 million compared to a loss of $8 million for 2023.

International Commercial is running at the best margins, with underwriting income up 19% for Q4 and 22% for the full year to $347 million and $1.2 billion, respectively. Combined ration improved to 83.1 for the last quarter of 2024 and 84.9 for the full year.