AIG’s third-quarter profit grew 17% to $US2.17 billion ($2.29 billion) as the property and casualty (P&C) division improved its performance.

The P&C loss ratio dropped to 67.3% from 71.4%, and the combined ratio improved to 101.6% from 105%.

“AIG’s solid performance this quarter underscores the strong fundamentals of our businesses,” President and CEO Robert Benmosche said.

An improved US housing market and risk selection modelling led to improved results from the mortgage guaranty business.

Net premium written in personal lines fell 5%, while the division’s combined ratio increased by 1.1 points to 99.9% following higher retail warranty losses.

AIG says life and retirement earnings benefitted from strong sales, raising the division’s total pre-tax operating income by 38% to $US1.14 billion ($1.2 billion).

Earnings for the nine-months to September 30 were $US7.11 billion ($7.8 billion), down 3.9% on the corresponding period last year.