AIG reported overall strong  general insurance  underwriting results and improved top line earnings in the second quarter, helped by significantly lower catastrophe losses.

Gross written premium (GWP) rose 12% to $US9.5 billion ($12.92 billion), with North America commercial lines seeing a 47% jump in net premiums written.

AIG’s general insurance pre-tax income rose to $US1.19 billion ($1.62 billion) while life and retirement income rose 26% to $US1.12 billion ($1.52 billion).

General insurance  achieved a combined ratio of 92.5% in the second quarter, from 106% a year earlier.

“We had another outstanding quarter,” CEO Peter Zaffino said. “We have incredible momentum as we head into the second half of the year and I am confident that we will continue to execute on our transformation and growth strategy.”

AIG reported overall Global Commercial rate increases of 13% as financial lines rose 21%, property 18% and energy 16%.

The largest rate increases were in cyber, where rates were up almost 40% and the strongest rate increases in North America.

“We continue to carefully reduce cyber limits and are obtaining tighter terms and conditions to address increasing cyber loss trends, the rising threat associated with ransomware and the systemic nature of the cyber risk,” Mr Zaffino said.

Net premiums written increased 24% year over year to $US6.9 billion ($9.38 billion) as rate improvements across all US property business sectors ranged from the mid-single digits to upwards of 25%.

Mr Zaffino says AIG evolved its general insurance reinsurance program to reflect a significantly improved underlying portfolio.

“In the second quarter, we were very active in the market with 25 specific layers on a variety of treaties placed. Notably, in nearly every instance, we were able to enhance our terms and the conditions of our placements were at equivalent or improved pricing in a reinsurance market that is experiencing tighter terms and conditions and rate increases,” Mr Zaffino said.

AIG expects net premiums written for the next six months in North America Personal Insurance between $US450-500 million ($612-680 million) per quarter as premiums in travel pick up.

“We continue to anticipate earned margin expansion throughout 2021 and into 2022, resulting from AIG's favourable underwriting actions we've taken in global market conditions involving the strong rate increases well above loss trend, improved terms and conditions and a more profitable, less volatile mix,” it said.