(Reuters) – U.S. insurer American International Group reported a near 24% fall in fourth-quarter profit on Wednesday, hurt by losses tied to a winter storm that hit parts of North America late last year, and lower alternate investment income.
Property damage, floods and power outages from frigid conditions in the United States and Canada in late December pushed up AIG’s catastrophe losses in the quarter to $235 million, compared with $189 million a year earlier.
Last month, property and casualty insurer Travelers Companies Inc also reported a slump in quarterly profit, due to losses arising from the winter storm.
Meanwhile, a downturn in the markets through 2022, which saw the S&P 500 log its biggest percentage decline since the 2008 financial crisis, hit AIG’s total consolidated net investment income, which fell 9% to $3.3 billion in the quarter ended Dec. 31.
Adjusted after-tax income attributable to the company’s common shareholders fell to $1.02 billion, or $1.36 per share, from $1.34 billion, or $1.58 per share, a year earlier.
Chief Executive Officer Peter Zaffino, however, said in a statement the company continued to improve the profitability of its general insurance business and closed the year with “the strongest underwriting results” the unit has ever achieved.
AIG’s underwriting income climbed 27% to $635 million from $499 million a year earlier, while net premiums written in its general insurance business fell 6%.
The general insurance accident year combined ratio improved to 88.4% from 89.8% a year earlier. The metric excludes catastrophe losses, and a ratio below 100 shows the insurer earns more from premiums than it pays out in claims.
(Reporting by Manya Saini in Bengaluru; Editing by Shinjini Ganguli)
