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AIG income soars on improved underwriting

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Adjusted pre-tax income from AIG’s general insurance arm jumped 149% to $US1.27 billion ($1.81billion) in the first quarter, as underwriting and cost discipline improved.

But the insurance giant recorded a drop in overall net income to $US654 million ($935.79 million) from $US938 million ($1.34 billion) in the corresponding period last year.

Net investment income grew 11.1% to $US3.7 billion ($5.29 billion).

“We achieved an underwriting profit on a calendar-year and accident-year basis in the first quarter and we expect that to continue for the full year,” CEO Brian Duperreault said.

The general insurance arm recorded a 2% decline in net written premium to $US6.03 billion ($8.63 billion) in the three months to March 31, while the combined operating ratio improved to 97.4% from 103.8%, driven by underwriting fundamentals, reinsurance action and continued expense discipline.

General insurance gross written premium was up 11% at $US10.2 billion ($14.6 billion).

In North America, the general insurance business posted a 192% rise in adjusted pre-tax income to $US934 million ($1.34 billion). The combined operating ratio was 100.3%, improved from 112.2%.

The international business’ net written premium fell 16% to $US3.46 billion ($4.95 billion) and adjusted pre-tax income gained 76% to $US334 million ($477.91 million). The combined operating ratio improved to 94.6% from 98%.