American International Group’s property/casualty business booked a $171 million underwriting loss in the 2020 fourth quarter, barely a year after the insurer celebrated the division’s return to profitability.
COVID-19 and other catastrophe losses contributed largely to the General Insurance division’s underwriting loss versus a $12 million underwriting gain in the 2019 fourth quarter. Even so, AIG said it had some improving metrics. The company cited its Commercial Lines business, in particular, which produced an improved business mix along with healthy rate increases.
Overall, AIG lost $60 million in the fourth quarter (negative $0.07 per diluted share) and nearly $6 billion for all of 2020 (negative $6.88 per diluted share). In 2019, AIG reported fourth-quarter net income of $922 million ($1.03 per diluted share) and $3.3 billion of net income ($3.74 per diluted share) for all of 2019.
AIG attributed its full-year loss largely to a one-time item – a $6.7 billion after-tax loss from the sale and deconsolidation of Fortitude Group Holdings LLC on June 2. AIG received $2.2 billion at the closing, and the insurer said the transaction helped improve its risk profile and reduced exposure to long-tail runoff liabilities and related interest rate risk.
AIG CEO Brian Duperreault (soon to be executive chairman of the board when AIG President and COO Peter Zaffino replaces him in a few weeks) insisted that AIG’s fundamentals remain in a better position than they were a few years ago when he first joined the company.
“AIG’s fourth-quarter and full-year 2020 operating results demonstrate the continued progress we are making to position AIG for long-term, sustainable and profitable growth,” Duperreault said in prepared remarks. “We are effectively managing the impacts of COVID-19 and natural catastrophes and remain well capitalized in this environment of unprecedented uncertainty.”
Here are result highlights:
Source: AIG