Profit rose to $1.9bn in second quarter
US insurance group AIG made a net profit of $1.73bn (£1.3bn) in the first half of 2016, down 59% on the $4.27bn it made in last year’s first half.
The main cause for the slump in the half was the $183m loss AIG made in the first quarter as a result of weak investment returns and restructuring costs.
In the second quarter alone, AIG’s performance improved. The insurer’s net profit rose 6.2% to $1.91bn (Q2 2015: $1.80bn).
AIG chief executive Peter Hancock hailed the second quarter performance. He said: “AIG’s second quarter results show strong improvement towards all the goals the board and I announced in January.
“We have executed more quickly and smoothly than expected and our confidence in reaching our 2017 financial targets is high as our earnings become more sustainable.”
AIG has had a tough 2016 so far. It announced a wide-ranging restructuring programme in January, and has faced continued attempts to break up the company by activist investor Carl Icahn.
AIG’s commercial combined operating ratio (COR) for the first half of 2016 was a just-profitable 99.6%, almost unchanged from the 99.4% it reported in the same period last year.
Personal lines fared better, where the COR improved by 6.7 percentage points to a comfortably profitable 94.8% (H1 2015: 101.5%).
AIG’s first half gross written premium (GWP) was down 4.4% to $17.56bn (H1 2015: $18.37bn).
In the second quarter alone, AIG’s commercial COR deteriorated by 3.3 points to 102.1% (Q2 2015: 98.8%)
The personal lines COR improved by four points to 95.7% (Q2 2015: 99.7%).
Second quarter GWP was down 8.3% to $8.75bn (Q2 2015: $9.55bn).