Insurer cuts back in personal accident amid “challenging conditions”
AIG Europe made a profit of £408.5m in 2015, up less than 1% on the £406.5m it made in 2014.
The insurer’s accounts also show it cut back in personal accident business during the year.
The company said a positive performance in commercial lines in 2015 was offset by “challenging conditions” in its consumer business, of which personal accident is a part.
Overall, AIG’s net written premium increased 2% to £3.55bn (2014: £3.49bn), and operating expenses fell by 3% £1.32bn (2014: £1.36bn) because of “targeted cost savings”.
But net claims increased by 4.6% to £2.23bn (2014: £2.13bn) because of claims in the property and aviation sectors.
The combined operating ratio improved slightly to 98.2% from 98.4%.
Investment income increased by 7% to £239.9m (2014: £224.3m).
AIG Europe chief executive Anthony Baldwin (pictured) said: “The challenging backdrop and flat investment environment that we witnessed in 2015 has reinforced the importance of staying focused on underwriting discipline and our emphasis on risk-adjusted profitability.
“Thanks to our focus on our major competencies, we have improved our business mix towards our core customers, products and distribution partners, whilst our investment in improving the customer experience has contributed to high retention ratios.”
He added: “We remain confident that we can compete effectively in this challenging market by focusing our efforts on our major assets and capabilities, including our multinational expertise, global footprint, ability to deploy large capacity lines, and our strong relationships with our clients and distribution partners.”
Personal accident cutback
AIG Europe’s accounts show that consumer business net written premiums fell 2.2% to £865.8m (2014: £885.1m).
Within this line, the drop was mainly driven by personal accident business, where net written premiums fell 7.4% to £434.1m (2014: £468.8m).
This offset a 3.7% growth in personal lines business, which comprises home and motor, to £431.7m (2014: £416.3m).
In commercial lines, its biggest area, net written premiums grew by 3.3% to £2.69bn (2014: £2.60bn).