AIG Profit Rises 17% to $2.17 Billion on Underwriting Margins

By Zachary Tracer & Noah Buhayar - Oct 31, 2013 1:05 PM PT

American International Group Inc. (AIG), the insurer that repaid a U.S. rescue last year, said third-quarter profit climbed 17 percent as underwriting margins improved at the property-casualty business.
Net income rose to $2.17 billion, or $1.46 a share, from $1.86 billion, or $1.13 a year earlier, New York-based AIG said today in a statement. Operating profit, which excludes some investing results, was 96 cents per share, matching the average estimate of 21 analysts surveyed by Bloomberg.

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The American International Group Inc. (AIG) offices stand in New York. Photographer: Craig Warga/Bloomberg

AIG, led by Chief Executive Officer Robert Benmosche, is benefiting from rising stock markets and higher bond yields than a year ago. The company ended the $182.3 billion U.S. rescue in December, in part by repurchasing shares. Benmosche, 69, is working to improve margins at the property-casualty unit and expand sales to consumers.
“The company is actually pursuing a logical transformation agenda that’s going to drive major improvements” in underwriting, Josh Stirling, an analyst at Sanford C. Bernstein & Co., said by phone before results were announced. “People who are buying it now look to the company as a cheap option on a recovering global franchise.”
AIG restored a dividend to the company’s stock in August, the first since the insurer nearly collapsed in 2008 as housing bets soured. The quarterly payout was set at 10 cents a share, and AIG also authorized $1 billion in buybacks.
Benmosche’s company has rallied 46 percent this year to $51.65, beating the 23 percent advance of the Standard & Poor’s 500 Index.
U.S. Repaid

The U.S. Treasury owned as much as 92 percent of AIG after the insurer’s bailout, and was still the biggest holder when the company reported results a year ago. AIG repurchased shares from the U.S. to help end the rescue.
In August, AIG hired Kevin Hogan from Zurich Insurance Group AG to run global consumer insurance. He reports to property-casualty CEO Peter Hancock and oversees home and auto coverage, as well as life insurance offerings outside the U.S.
AIG reached deals this year to expand sales in Turkey, France and China. The insurer said this month that it hired Seraina Maag from XL Group Plc as CEO of the Europe, Middle East and Africa region.
AIG is a global insurer of commercial property, corporate boards, airplanes and hospitals. The company offers personal coverage in lines from golfing insurance to life, car and home policies.

http://www.bloomberg.com/news/2013-1...g-margins.html