American International Group reported third-quarter net income increased 142 percent over last year, putting losses from last year's catastrophic hurricane season behind it.
The New York-based insurance company reported net income rose $2.48 billion from $1.75 billion, or 66 cents a share, to $4.22 billion, or $1.61 cents a share.
For the nine months, net income rose 6 percent, or $576 million, from $10.03 billion, or $3.82 a share, to $10.61 billion, or $4.04 share.
"We had a very good quarter," said Martin J. Sullivan, president and chief executive officer, citing the strong performance of the company's diversified book of business.
The company's property-casualty business saw net premiums written rise 9 percent, from $10.3 billion to $11.22 billion in the quarter. Mr. Sullivan noted that the company suffered no catastrophes during the quarter and that its combined ratio stood at 89.1.
The combined ratio improved 2.34 points from last year's 91.44 for the same period excluding catastrophe loss. Including catastrophe, the combined ratio was at 112.06.
For the nine months, the combined ratio stands at 88.19 compared with 92.26 last year, excluding catastrophe. Including catastrophe, the combined ratio was 99.11 percent last year.
In addition to property-casualty, AIG also reports on a life insurance and retirement services division, and financial services operation.
Mr. Sullivan observed that "market conditions are mixed but generally stable. The U.S. market is witnessing continued tightening in catastrophe business and rates up 50 percent. Non-catastrophe property markets were flat or up 25 percent, he said. Rate increases are driven by account experience, he noted.
Overall, rates decreased an average 3-to-4 percent, while terms, conditions and attachment points "continued to hold up well," he said.
Outside the United States, rates were softer, down as much as 7 percent, added.
On the directors and officers business, related to the issue of backdating of stocks for executive compensation, he said suits filed against alleged violators involved shareholder derivative suits, which are less expensive to defend than class action suits.
"This appears to be a manageable issue for us," said Mr. Sullivan.
On news of the results, Standard & Poor's said today it revised its outlook on AIG from negative to stable. The company has a financial strength rating of "double-A-plus."
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