American International Group President and CEO Brian Duperreault insists that the insurer’s General Insurance unit will generate an underwriting profit through all of 2019. During the insurer’s May 7 investor call, some analysts seemed concerned that natural catastrophes could gum up that promise.
AIG asserts otherwise, however. Its General Insurance unit produced a $179 million underwriting profit for Q1 after nearly two years of regrouping and revamping the insurer’s underwriting portfolio and approach. It’s the division’s first underwriting profit since the financial crisis a decade ago, media reports note. Duperreault assured analysts that the profit trend should continue through the year and beyond, catastrophes or not.
“Over a long period of time there will be years we have catastrophes and years we don’t, but on average we expect to make an underwriting profit, and I expect to make an underwriting profit this year,” Duperreault told analysts.
Still, no one can predict the weather, a point he was quick to make.
“I can’t predict whether it’s going to be a big [catastrophe] year or not,” Duperreault said.
Thoughts on Lloyd’s
Duperreault didn’t just talk about AIG’s long-promised General Insurance underwriting profit pledge. He also gave kudos to Lloyd’s of London and its CEO John Neal, who proposed a plan earlier this month he said would halve the cost of buying insurance through the venerable market. The long-range proposal would combine streamlining, digitization and a broad modernization of Lloyd’s operations.
“In my view, Lloyd’s is taking actions that are necessary for it to regain its preeminent position in the industry,” Duperreault said. “Our acquisition of Validus was driven in part because of [the Validus-owned] Talbot, a Lloyd’s platform, so we are pleased to see Lloyd’s embarking on a plan to restore its position in the marketplace.”
AIG closed its $5.6 billion acquisition of Validus Holdings in mid-2018, a move that boosts its reinsurance capacity, Lloyd’s presence and offerings on the specialist insurance side.