Brian Duperreault

American International Group has continued to face General Insurance underwriting losses since President and CEO Brian Duperreault took the helm of the struggling insurer in mid-2017. He remains steadfast, however, that this will change in 2019.

“We do see it coming, and we expect in 2019 we are going to be in an underwriting profit position – not a great one, but a profit,” Duperreault said during AIG’s Q3 2018 earnings call on Nov. 1. “We will move from there to a great one.”

Duperreault’s comments follow disclosure on Oct. 31 that the insurer lost $1.3 billion in the 2018 third quarter versus a $1.7 billion net loss a year ago due to excess catastrophe losses in Japan and North America. AIG’s General Insurance loss ratio was 88.6, including 22 points from the $1.6 billion in catastrophe losses it faced in Q3.

Duperreault explained that the insurer has been making steady improvements in areas such as AIG’s General Insurance unit. While the Q3 numbers were negative, they do show an improvement, with a combined ratio of 124.4 versus 157.1 in the 2017 third quarter. Net premiums written grew overall in General Insurance and for the unit in North America, fueled by AIG’s acquisition of Validus.

Duperreault and his executive team made the case that AIG has continued to work to right itself in the long term, “deliberately and with a sense of urgency,” with an eye toward improving results and reducing volatility.

To get to that point, he said, AIG has been cautious in terms of interpreting improvement in its loss ratios.

“We may believe that these changes are taking place, but we want to see it start to play out in the actual numbers,” Duperreault said. “We’re going to take a more cautious approach to adjusting loss ratios down as we see the actual results start to show.”

While losses remained, investors on Nov. 1 showed optimism about AIG’s progress. The stock price closed at 43.12, up $1.83, or more than 4.4 percent.