August 2, 2018 / 9:02 PM / 4 months ago

UPDATE 1-AIG quarterly profit falls 17 pct as general insurance business weighs

(Adds share price, context about Duperreault's strategy, hires, and details about combined ratio.)

By Diptendu Lahiri and Suzanne Barlyn

Aug 2 (Reuters) - American International Group Inc on Thursday reported a 17 percent fall in quarterly profit due to ongoing issues in its general insurance business, missing analysts' expectations.

Chief Executive Officer Brian Duperreault, who took charge more than a year ago, has been trying to turn around the company and its commercial insurance business, including by sharpening underwriting practices.

Shares were down more than two percent in after market trading.

The company's second-quarter results included a $200 million restructuring charge related to "efficiency initiatives," including compensation.

AIG has been on a hiring spree to bring on new executives to boost profits. On Wednesday, AIG said it hired veteran industry executive David McElroy to head its Lexington Insurance Co unit.

McElroy had previously been executive chairman of Arch Insurance Group Inc and vice chairman of Arch Worldwide Insurance Group.

Other hires by Duperreault include Peter Zaffino, formerly CEO of Marsh & McLennan Cos Inc's insurance brokerage unit, who now heads AIG's general insurance business, and former Berkshire Hathaway executive Tom Bolt as chief underwriting officer of general insurance.

Adjusted pre-tax income from AIG's general insurance business dropped 46 percent to $568 million, while underwriting income swung to a loss of $89 million compared with a profit of $149 million a year ago.

Duperreaut has launched an underwriting review of AIG's general insurance business and increased focus on technology in an effort to jumpstart the company's shares.

In May, Duperreault said he expected an underwriting profit by year-end.

Adjusted pre-tax income from the company's life and retirement business fell 3 percent to $962 million in the quarter.

The insurer posted $937 million, or $1.02 per share, in net income for the second quarter, down from $1.13 billion, or $1.19 per share, a year ago.

On an adjusted basis, it earned $1.05 per share. Analysts on average were expecting earnings of $1.21, according to Thomson Reuters I/B/E/S. It was not immediately clear if the numbers were comparable. (Reporting by Suzanne Barlyn in New York and Diptendu Lahiri in Bengaluru; Editing by Arun Koyyur and Phil Berlowitz)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below