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-quarter net income of $2.34 billion, a 27 percent jump from $1.84 billion in 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 improved quarterly figures.

Commenting on his company's latest quarterly performance, AIG Chairman Maurice Greenberg said, "AIG had a very good quarter with record General Insurance pre-tax operating income, strong Life Insurance and Financial Services results, and continuing improvement 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 percent to reach $741.9 million compared to one year ago.

The insurer pointed out that its general insurance net premiums written rose 26.5 percent to a record $8.97 billion, led by a 32 percent boost in the domestic brokerage group. Its net premiums earned also rose, up 34 percent to reach $8.29 billion compared to the 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 current high-priced hard market, noting that, looking ahead, "we are reasonably confident that rates in many of the classes of business that AIG specializes in will remain firm for the rest of this year and well into next year."

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

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

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AIG Third Quarter Profit Up 27 Percent

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