American International Group Inc on Wednesday reported a quarterly loss as the insurer was hit with catastrophe losses and made a lower return on investments in a volatile market.
Excluding realised investment gains and losses and some other items, AIG posted a loss of $559 million, or 63 cents per share, for the fourth-quarter ended Dec. 31, compared with income of $526 million, or 57 cents per share, in the year-ago quarter.
On that basis, Wall Street analysts expected income of 42 cents per share, according to IBES data from Refinitiv.
AIG shares fell 3 percent to $42.80 in after hours trading.
The company’s general insurance unit reported an underwriting loss of $1.1 billion, compared with a loss of $846 million a year ago, largely due to Hurricane Michael and the California wildfires.Still, AIG said its general insurance accident year combined ratio – which excludes changes from losses incurred in past years – was 98.8 for the quarter, compared with 100.2 a year ago.
A ratio below 100 percent means the insurer earns more in premiums than it pays out in claims. The accident year ratio is a measurement that AIG Chief Executive Brian Duperreault has cited as the best gauge of the unit’s long-term profitability. The number excludes catastrophe claims and reserve charges.
Duperreault, who took the helm at AIG in May 2017, has pledged to turn the company around. His most critical task is a return to profitable underwriting, something that AIG, one of the largest U.S. insurers, has not achieved since 2007.
The combined ratio in AIG’s commercial insurance unit, which includes losses for catastrophes, was 115 compared to 113 in the year ago quarter.