American International Group, Inc. (NYSE: AIG) released its third-quarter 2024 financial results, highlighting robust performance in its Global Commercial Lines and continued progress in capital management.
Key Takeaways from Q3-2024 Results
- Net Premiums Written:
- General Insurance net premiums totaled $6.4 billion, reflecting a slight 1% decline on a reported basis but a 6% increase on a comparable basis.
- Global Commercial Lines contributed $4.5 billion, showing a 2% decline on a reported basis but a 7% growth on a comparable basis. North America Commercial Lines led with an 11% increase.
- New business written in Global Commercial Lines reached $1.1 billion, a 9% year-over-year growth.
- Underwriting Performance:
- Combined ratio stood at 92.6%, with an accident year combined ratio (AYCR), as adjusted*, of 88.3%.
- Catastrophe-related charges for the quarter were $417 million, equating to 6.9 loss ratio points.
- Earnings Highlights:
- Adjusted after-tax income* (AATI) per diluted share increased to $1.23, up 18% year-over-year, or 31% on a comparable basis.
- Net income per diluted share was $0.71, down from $2.81 in Q3 2023 due to the prior inclusion of Corebridge’s consolidated results.
- Capital Management:
- Approximately $1.8 billion was returned to shareholders, comprising $1.5 billion in stock repurchases and $254 million in dividends.
- Year-to-date, AIG has returned over $6 billion in capital to shareholders.
Leadership Insights
AIG Chairman and CEO Peter Zaffino credited the company’s results to its disciplined underwriting approach and capital management strategy. “AIG delivered excellent third quarter financial results with strong profitability and growth across our businesses highlighting the quality of the underwriting portfolio and our ability to deliver consistent earnings. The adjusted after-tax income per diluted share was $1.23 for the third quarter, an 18% increase year-over-year, or 31% on a comparable basis. These results demonstrate AIG’s ability to consistently deliver underwriting excellence and capital management discipline and the successful execution of our priorities.
“We continued to execute on our capital commitments with repurchases of $1.5 billion of common shares and dividends of $254 million in the third quarter. Through the first nine months of 2024, we have returned over $6 billion of capital to shareholders, reflecting our disciplined execution of our balanced capital management plan. We ended the quarter with an excellent total debt to capital ratio of 17.9% and parent liquidity of $4.2 billion,” Zaffino said. He noted the 6% pricing growth in Global Commercial Lines and highlighted Lexington Insurance’s 24% growth as a key driver of North America Commercial Lines’ success.
“We achieved meaningful growth this quarter, led by our Global Commercial business. Third quarter net premiums written grew 6% year-over-year on a comparable basis, driven by 7% growth in Global Commercial Lines, which maintained very strong retention of 88% while adding $1.1 billion of new business. North America Commercial Lines achieved 11% growth with new business growth of 22%, led by Lexington Insurance which grew 24%. Global Commercial Lines pricing, which includes rate and exposure, increased 6% excluding Workers’ Compensation and Financial Lines, largely in line with loss cost trend.”
Zaffino also emphasized AIG’s resilience in managing catastrophe-related challenges. “In a challenging catastrophe environment, this performance is remarkable, with industry insured losses expected to exceed the 2023 total of $125 billion,” he remarked.
Looking Ahead
Zaffino reaffirmed AIG’s focus on underwriting excellence and the execution of “AIG Next,” the company’s strategic initiative to strengthen its financial position.
“Through 2024 and beyond, we remain incredibly focused on underwriting excellence and executing on AIG Next. We have made substantial progress over the last several years to improve the financial strength of AIG. I want to thank our clients, partners and stakeholders for their trust in us, which is a direct result of the outstanding risk expertise and claims services provided by our dedicated colleagues.”
AIG ended the quarter with a total debt-to-capital ratio of 17.9% and $4.2 billion in parent liquidity, underscoring its strong financial standing.
