AIG reports profit as liability stays firm, property rates fall

Insurance market conditions varied significantly by line, with double-digit rate increases in major liability business and equivalent decreases for large property accounts, executives at American International Group  said Thursday as the insurer reported a profitable second quarter.

Net premiums written for AIG’s property book fell 8%, Chairman and CEO Peter Zaffino said on a call with analysts.

Large-account property rates declined 11% on average during the quarter, he said. Middle-market property pricing in its surplus lines unit was flat.

Prices continued to rise, though, in North American liability business, said Chief Financial Officer Keith Walsh.

Excess liability rates were up 17% and primary liability rates increased 12%, he said.

Financial lines rates fell 2% during the quarter, but that was the smallest decrease in three years, Mr. Walsh said.

AIG reported $1.14 billion in net income for the quarter, compared with a $4 billion loss in the same period last year, which was affected by the deconsolidation of its life and retirement business.

The company reported $10.06 billion in gross premiums written, a 1.7% increase over the same period last year, and $6.88 billion in net premiums written, a 0.8% decrease.

The insurer posted an 89.3% combined ratio for the quarter, improving from 92.5% in the 2024 period. AIG reported $170 million in catastrophe losses, compared with $330 million in the prior-year period.

In North America general insurance, net premiums written rose 4.1% to $2.86 billion. Underwriting income for the division increased 57.6% to $301 million and its combined ratio improved 85.9% from 90.2%.

Net written premiums rose 1.8% to $2.33 billion in international general insurance. The division reported $300 million in underwriting income, up 30.4%, and a combined ratio of 85.9%, improving from 88.6%.

AIG saw $128 million in favorable reserve development in the quarter, largely due to favorable workers compensation trends, Mr. Walsh said. The company strengthened its U.S. liability reserves by $106 million in the quarter, primarily related to pre-2015 business, he said.