AIG Up 26 Percent In Second Quarter
NU Online News Service, July 24, 3:12 p.m. EDT?American International Group Inc. said today its second-quarter net income increased by 26 percent to $2.28 billion compared with the $1.8 billion in profit the company reported one year ago.
New York-based AIG, the world's largest insurer by market value, cited a number of positive developments that contributed to its robust quarterly results.
The insurer pointed out that its general insurance net premiums written rose to $8.84 billion in the second quarter, a 30.4 percent boost from one year ago–most of this growth, AIG noted, was driven by the increasing cost of liability insurance in the United States.
The combined ratio for general insurance also improved to 92.27, down from 94.09 during the 2002 second quarter.
Vinay Saqi, equity analyst at New York-based Morgan Stanley, offered a positive review on AIG's latest figures. "Overall, results in property-casualty were very good," Mr. Saqi said in his report. He noted that AIG's total non-life premium growth of 30.4 percent from one year ago was better than his expectation.
Commenting on his company's second-quarter numbers, AIG Chairman Maurice Greenberg said, "AIG had a very good quarter."
"General insurance, life insurance and financial services all had record results," Mr. Greenberg observed. "Retirement savings and asset management had improved performance as equity markets made gains."
He also said AIG's domestic personal lines had "very good current results" as net premiums written went up 11.6 percent from last year to reach $900.4 million. "Rates have continued to firm," he said.
Further commenting on the high-priced hard market, Mr. Greenberg noted property-casualty rates in AIG's Domestic Brokerage Group continued to rise. "Rate increases ranged from 30 to 40 percent in most casualty lines" in the second quarter, he said. "More in certain lines such as directors and officers insurance and excess casualty coverage. Property rates, which had increased significantly over the last few years, were up modestly in the second quarter."
And Mr. Greenberg also commented that the agreement this past June to buy some of General Electric's insurance units will further strengthen AIG's business: "In June, we announced an agreement to buy from General Electric its life insurance operations in Japan and auto and home insurance business in the U.S.," he said. "These acquisitions will enhance our position in attractive markets and businesses where AIG has proven capabilities."
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