AIG Third Quarter Profit Up 27 Percent

By Michael Ha

NU Online News Service, Oct. 23, 11:46 a.m.EDT?American International Group Inc. today posted a third-quarternet income of $2.34 billion, a 27 percent jump from $1.84 billionin profit recorded one year ago.

New York-based AIG, the world's largest insurer by market value,cited several positive developments that led to its improvedquarterly figures.

Commenting on his company's latest quarterly performance, AIGChairman Maurice Greenberg said, "AIG had a very good quarter withrecord General Insurance pre-tax operating income, strong LifeInsurance and Financial Services results, and continuingimprovement in Retirement Services & Asset Management."

Overall, the insurer's underwriting profit rose 47 percent to$573.2 million and its net investment income increased 12 percentto reach $741.9 million compared to one year ago.

The insurer pointed out that its general insurance net premiumswritten rose 26.5 percent to a record $8.97 billion, led by a 32percent boost in the domestic brokerage group. Its net premiumsearned also rose, up 34 percent to reach $8.29 billion compared tothe year-ago period.

The combined ratio for general insurance also improved to 93.05,down from 94.54 during the 2002 third quarter.

Mr. Greenberg expressed his optimism about the currenthigh-priced hard market, noting that, looking ahead, "we arereasonably confident that rates in many of the classes of businessthat AIG specializes in will remain firm for the rest of this yearand well into next year."

And Mr. Greenberg also commented that in the United States,AIG's domestic brokerage group had posted record net premiumswritten of $5.13 billion, up 31.6 percent compared to one year ago."In some classes of business, such as property and certain middlemarket coverage, rates have flattened out, but at an adequatelevel. Property rates were not impacted by Hurricane Isabel," heremarked.

Further commenting on his company's latest financial results,Mr. Greenberg said AIG's domestic personal lines also had a goodquarter, with an improved combined ratio of 97.20--down from 105.22one year ago--and $919.2 million in net premiums written comparedto $835.5 million in the 2002 third quarter. He also noted, "In thethird quarter, we closed on our purchase of GE's personal linesbusiness, which will enhance our market penetration and provideadditional claims management and service capabilities."