American International (AIG) 5 Nov 24 2024 Q3 Earnings call transcript

AIG's third quarter 2024 earnings call highlighted the company's exceptional underwriting results, rigorous expense discipline, and strategic progress in several areas. Key themes and trends that emerged from the call include:

Strong Underwriting Performance AIG reported strong underwriting results for the quarter, with an adjusted after-tax income of $798 million and an adjusted pretax income of $1.2 billion. The company's underwriting income for the quarter was $437 million, with a combined ratio of 92.6%. These figures represent a significant improvement from the previous year, underscoring AIG's ability to navigate the challenging market conditions.

Growth Opportunities AIG's leadership expressed confidence in the company's growth prospects, particularly in the areas of general insurance and international commercial. The company reported net premiums written growth of 3% year-over-year, driven by over $1.1 billion of new business growth. AIG's international commercial business also saw a 6% increase in net premiums written, with strong growth in commercial property and energy sectors.

Catastrophe Market The call also addressed the impact of catastrophes on the company's performance. AIG reported preliminary industry estimates of insured losses from natural catastrophes in excess of $100 billion for the year, with a projected total of $125 billion for the industry by the end of the year. Despite these challenges, AIG's underwriting and reinsurance strategy has enabled the company to mitigate the impact of catastrophic events, as evidenced by a significant decrease in catastrophe losses compared to previous years.

Innovation and Digital Transformation AIG's commitment to innovation and digital transformation was highlighted in the call. The company announced the launch of a collaborative space in Atlanta for end-to-end underwriting, which will allow for the innovation and evolution of the underwriting process. AIG is also investing in AI and data strategies to enhance its underwriting capabilities and improve operational efficiency.

Capital Management AIG's capital management strategy was a significant focus of the call. The company reported a debt to total capital ratio of 17.9%, reflecting its strong financial position. AIG also announced plans to return approximately $1.8 billion to shareholders through share repurchases and dividends, demonstrating its commitment to shareholder value.

Looking Ahead Going forward, AIG is positioned for continued success, with a focus on sustainable underwriting profitability, operational efficiency, and strategic growth opportunities. The company's strategic initiatives, including AIG Next, are expected to deliver significant cost savings and enhance operational capabilities. AIG's leadership expressed confidence in the company's ability to navigate market challenges and capitalize on growth opportunities, positioning the company for long-term success.