Higher investment returns, lower costs drive AIG's profit
- Donald Trump Sworn in as 45th U.S. President
- Wall Street ends higher as Trump becomes president
- Walgreens Boots Alliance (WBA) Said to Face Antitrust Concern for Rite Aid (RAD) Fix - Bloomberg
- Bristol-Myers Squibb (BMY) Says It Won't Pursue Accelerated U.S. Regulatory Pathway for Opdivo Plus Yervoy in Lung Cancer
- Apple (AAPL) Sues Qualcomm (QCOM) Over Patent Royalties in Antitrust Case - Bloomberg
The ticker information for insurance company American International Group Inc., (AIG) is displayed on a screen above the post where it is traded on the floor of the New York Stock Exchange November 4, 2015. REUTERS/Brendan McDermid - RTX1UQON
Get the Pulse of the Market with StreetInsider.com's Pulse Picks. Get your Free Trial here.
(Reuters) - American International Group Inc (NYSE: AIG), the largest commercial insurer in the United States and Canada, reported a net income versus a loss last year, when tumultuous markets gutted returns from its investments.
AIG, which reported higher profits at all but one of its businesses, also said on Wednesday that its board had authorized an additional share buyback program of $3 billion.
The company, which has been under pressure from shareholders, including billionaire Carl Icahn, to cut expenses and divest businesses, slashed total adjusted costs by 8.6 percent to $2.44 billion.
AIG reported net income of $462 million, or 42 cents per share, for the third quarter ended Sept. 30, compared with a net loss of $231 million, or 18 cents per share, a year earlier.
Net investment income rose across AIG's units.
Net income in the latest quarter included losses of $526 million, or 48 cents per share, mainly due to the weakening of the British pound following the Brexit vote in June.
On an operating basis, AIG's earnings jumped 58.8 percent to $1.1 billion, or $1 per share.
The company's operating income included a $622 million loss expense as it padded reserves at a non-core legacy business.
Analysts on average had estimated AIG would earn $1.21 per share, according to Thomson Reuters I/B/E/S. It was not immediately clear if the figures reported were comparable.
Catastrophe-related losses in AIG's commercial business more than doubled during the quarter to $253 million from $88 million. The combined ratio at the business inched up to 105.3 percent from 102.3 percent as a result, indicating the insurer paid out more in claims than it earned in premiums.
Catastrophe modeling firm Kinetic Analysis estimated last month that the insurance industry would sustain about $4 billion in losses from Hurricane Matthew. AIG did not disclose any exposure to Hurricane Matthew in its release.
(Reporting by Richa Naidu in Bengaluru; Editing by Saumyadeb Chakrabarty)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- AIG (AIG) Enters Reinsurance Agreement with Berkshire Hathaway (BRK-A) Unit
- Kansas City Southern (KSU) Misses Q4 EPS by 5c
- Citizens Financial Group (CFG) Tops Q4 EPS by 3c
Create E-mail Alert Related CategoriesEarnings, Reuters
Related EntitiesCarl Icahn, Stock Buyback, Earnings
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!