AIG says its general insurance arm performed strongly in the fourth quarter, lifting overall net income for the three months to December and last year to $US3.74 billion ($5.5 billion) and $US9.36 billion ($13 billion).

The results represent a significant turnaround from 2020 when the insurer reported December quarter net loss of $US60 million ($83.44 million) and full-year loss of $US5.97 billion ($8.3 billion).

“In the fourth quarter and full year 2021, AIG delivered outstanding financial results with General Insurance continuing to produce improved underwriting profitability through excellent top line growth and vastly reduced volatility due to gross limit reductions and the strategic use of reinsurance,” Chairman and CEO Peter Zaffino said.

“The business reported an underwriting profit for full year 2021 and for every quarter of the year, due to disciplined execution and volatility reduction in an environment of ever-increasing natural catastrophe risk.”

The general insurance arm made an underwriting profit of $US499 million ($694 million) in the December quarter, reversing the $US171 million ($237.8 million) loss from a year earlier.

The underwriting income included $US189 million ($262 million) of catastrophe losses, predominantly from tornadoes in the southern US and wildfires, compared to $US545 million ($758 million) in the prior year quarter, which included $US178 million ($247 million) of estimated covid losses.

Combined ratio strengthened 10.4 percentage points to 92.4% during the quarter, reflecting lower catastrophe losses.

General insurance net premiums written rose 7% to $US5.96 billion ($8.28 billion) in the fourth quarter last year, driven by a 13% growth in global commercial lines.