AIG rebounds from massive loss with $9.4bn profit, excellent top line growth

Global insurance conglomerate  American International Group (AIG) has swung back to profit after suffering a significant loss of $6 billion at the same point last year. Not only that, the Peter Zaffino-led (pictured) company has improved underwriting profitability with top line growth and vastly reduced its volatility, while maintaining a liquidity of $10.7 billion at year-end 2021.

AIG produced a solid net profit of $9.4 billion for full-year 2021, compared with a net loss of $6 billion seen a year ago.

It attributed the increase to overall strong general insurance underwriting results, including lower catastrophes, higher net realised gains as well as net investment income, particularly within the alternative investments portfolio, and gains on divestitures.

However, noted that these pre-tax increases were partially offset by higher income tax expense primarily due to higher income from operations in 2021.

The company's core general insurance unit generated improved underwriting results, with 13% higher net premiums written driven by growth in commercial lines.

AIG chairman and chief executive officer Zaffino said: “ AIG delivered outstanding financial results with General Insurance continuing to produce improved underwriting profitability through excellent top line growth and vastly reduced volatility due to gross limit reductions and the strategic use of reinsurance, and Life and Retirement again making a meaningful contribution to our overall results. We ended the year with parent liquidity of $10.7 billion.”

Zaffino highlighted that the company has made “significant progress” in preparing the business to be independent and standalone, since announcing its intention to separate Life and Retirement from AIG.

“Over the course of 2021, we reduced debt and preferred stock leverage by 380 basis points to 24.6% by repurchasing $4 billion of debt, and we returned $3.7 billion to shareholders through common stock repurchases and dividends,” Zaffino added.

“ AIG entered 2022 better, stronger, and well positioned to continue to deliver value to all stakeholders as we continue our journey to be a top performing company,” he concluded.

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