AIG Breaks Six-Quarter Losing Streak
(Bloomberg) -- American International Group Inc. Chief Executive Officer Brian Duperreault notched a long-awaited victory in his efforts to turn around the company's biggest unit, sending the insurer's shares to their highest price in almost seven months.
“This quarter's underwriting profit represents a significant milestone for AIG and reflects the tremendous work undertaken by Peter and his leadership team over the last 18 months,” Duperreault said Tuesday on a conference call with analysts, referring to Peter Zaffino, who leads the property-casualty business.
Since taking over about two years ago, Duperreault has sought to fix the insurer's property-casualty business, an operation that's been bedeviled by charges in recent years. Duperreault and Zaffino have worked to improve its underwriting and tweaked its reinsurance program. That fueled the best underwriting margin for the general insurance business since Duperreault took the helm, helping the company's overall earnings top analysts' estimates and break a six-quarter streak of misses.
“Underlying trends in property-casualty insurance improved materially, which will lend credence to the turnaround strategy under Brian Duperreault,” Buckingham Research Group analyst Amit Kumar said in a note to clients late Monday after AIG announced its earnings.
AIG's shares climbed 7.3 percent to $50.54 at 9:48 a.m. in New York, the highest since October, extending this year's gain to 28 percent.
During Tuesday's earnings call, analysts questioned management about its outlook given past issues. Some analysts, including Evercore ISI's Tom Gallagher, expressed some hesitancy about depending on AIG's ability to repeat the first quarter's results.
Inserting a bit of conservatism into the valuation of the property-casualty business “is still appropriate at this point given that we have only had one quarter of solid results and it will be important to see some sustained success,” Gallagher said in a note to clients Tuesday before the earnings call.
Other highlights from the results:
- Earnings per share of $1.58 beat the $1.05 average estimate from 18 analysts surveyed by Bloomberg.
- AIG's general insurance division is also getting a bigger share of its business from commercial clients. Net premiums written for commercial lines climbed 16 percent while personal insurance dropped 22 percent from a year earlier.
- Rising stock markets also gave AIG a boost, with investment income jumping to $3.7 billion.
- The first-quarter results reflected “significant foundational work throughout 2018 to position AIG for sustainable, profitable growth,'' Duperreault said in a statement Monday.
©2019 Bloomberg L.P.
-
Talking Points This Week: Tech Nerves, FII Buying, And A Faraway Banking Shock
The global markets are not shining this Diwali. The exception in the large markets is, India.
-
Midterm Rally Lasted A Day. The Hard Reality Of A Divided US May Last Two Years | Opinion
Between a contested AI boom, a debt ceiling that arrives in 2027 and a president with every incentive to act alone, the next two years may prove more volatile than the first day's rally suggests.
-
Blue Wave Will Derail the AI Trade but Won't Dismantle the AI Era | Unhedged Position
The Democrats' sweep of the US Congress will see politics collide with economic forces both over the long and short term.
-
It's Time To Take The GST Council's Bet On Trust Global
Payment records can prove India's services exports, and clear, proportionate rules can bring foreign digital sellers into the tax net.
-
Opinion | India at 38: From Innovation Overperformer to Innovation Powerhouse
India now has 453 VC-backed deep science startups, 18 of them late-stage, after 117 percent growth since 2020. Laurus Labs, at USD 9.3 billion, is the most valuable deep science company in any middle-income economy outside China.
-
Navigating Energy Crossroads: S Jaishankar's Call For Diversified Supply Chains At G20 Ministerial Meeting
As geopolitical fault lines continue to test maritime trade routes and commodity flows, Jaishankar's message remains pertinent: true economic resilience requires open markets, protected transit lines, and a genuine commitment to multilateral cooperation rather than coercion.
-
Indians Are Travelling, But Not Every Journey Is A Holiday | The Week In Whys
Pilgrims, patients and working women are the real travellers, and the system hasn't quite caught up with them.
-
Getting To Work Costs Women More | The Reason Why
It is not just about women paying more than men. It is about women paying much more in cities than in villages.
-
AI Bias In Investing Cannot Be Eliminated, But It Can Be Governed
Framing is a particularly important example as identical financial information presented in terms of gains rather than losses can lead an LLM to reach a different assessment.
