(Bloomberg) -- American International Group Inc. reported a higher third-quarter profit that beat Wall Street predictions, driven by higher net investment income.
Adjusted income climbed 7% from a year earlier to $798 million, or $1.23 a share, the New York-based insurer said Monday in a statement. That topped the $1.10 average estimate of analysts in a Bloomberg survey.
Net investment income jumped 14% to $973 million, boosted by alternative investments, equity and fixed maturity securities, as well as dividends from Corebridge Financial Inc., the life and retirement business that AIG spun off in 2022.
Adjusted pretax earnings at the General Insurance unit slid 5% to $1.2 billion, partly because of weaker underwriting performance. Underwriting income dropped 21% from last year’s third quarter to $437 million.
The unit’s combined ratio stood at 92.6%, meaning it pays out 92.6 cents on each dollar of premium it receives. That’s 2.4 percentage points more than a year earlier.
Underwriting performance deteriorated at AIG’s commercial lines business in North America, with the unit’s combined ratio jumping 7.5 percentage points to 95.5%.
Catastrophes charges stood at $417 million in the three months through September, 78% of which stemmed form the firm’s North America business.
Hurricane Milton, which made a landfall in Florida in October, is expected to result in losses ranging from $175 million to $275 million in the fourth quarter, Chief Financial Officer Sabra Purtill said on a call with analysts Tuesday.
Shares of AIG have climbed 13% this year, trailing the 23% gain for the 72-company S&P 500 Financials Index. Shares declined by 1.6%, to $75.12, at 10:18 a.m. in New York.
(Updates with share movements in last paragraph.)
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