AIG’s general insurance business posted weaker pre-tax income for the December quarter, dragged down by a decline in alternative investment income.

The general insurance division’s adjusted pre-tax income fell to $US1.21 billion ($1.76 billion) from $US1.51 billion ($2.19 billion) a year earlier as alternative investment income dropped $US489 million ($711 million), the insurer said.

Gross written premium fell 5% to $US7.59 billion ($11.03 billion). However, AIG said the underwriting results were “better” with income rising by $US136 million ($197 million) to $US635 million ($923 million).

AIG says the underwriting results included $US235 million ($341 million) of catastrophe losses before reinstatement premiums, notably from Winter Storm Elliott, compared to $US189 million ($274 million) in catastrophe losses in the prior year quarter.

The combined ratio improved 2.5 percentage points to 89.9% for the quarter.

“2022 was an extraordinary year of progress for AIG,” Chairman and CEO Peter Zaffino said, pointing out the insurer closed the year “with the strongest underwriting results the business has ever achieved and with the second consecutive year of underwriting profitability improving by $US1 billion ($1.45 billion)”.

For the year to December AIG achieved overall net income of $US10.247 billion ($14.9 billion), up from $US9.359 billion ($13.63 billion) in 2021.

Its general insurance division posted a fall in adjusted pre-tax income to $US5.14 billion ($7.48 billion) from US5.92 billion ($8.62 billion) and life and retirement also declined, to $US2.657 billion ($3.87 billion) from $US3.911 billion ($5.69 billion).