Personal and financial lines perform strongly in year to November
AIG Europe saw a positive underwriting performance overturned by catastrophe losses in the year to November 2017.
Net written premiums rose 7% to £3.9bn from £3.7bn a year earlier, driven by a strong performance from personal and financial lines. The company said this was partly offset by market conditions in property, which was hit by the natural catastrophes in the Caribbean and North America, and by the company’s decision to stay away from less profitable business.
The loss ratio was also hit by a number of large loss developments from prior underwriting years across a number of lines, notably casualty and financial lines..
Along with the poor investment environment, these factors resulted in a pretax loss of $432m, compared with a prior year loss of £171m.
Anthony Baldwin, chief executive of AIG Europe Limited, commented:
“2017 was a challenging year. Alongside our peers, our performance was impacted by a combination of natural catastrophes, continued competitive pressure and low investment returns.
“These challenges validate our strategy to focus on underwriting discipline and on more profitable business lines and I’m pleased to report that we continued to improve our business mix towards these lines.
“In the last few months we have taken various steps to reduce future volatility and improve our performance. We have greater protection from natural catastrophes going forward thanks to a group wide catastrophe programme and have added reinsurance to smooth volatility. We have reduced our exposures by lowering net limits on certain lines and have continued to improve risk selection through our focus on profitable business.
“Although the trading environment remains challenging, we view 2018 with confidence.”