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A month has gone by since the last earnings report for American International Group (AIG). Shares have lost about 0.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is American International Group due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
AIG Q3 Earnings and Revenues Beat Estimates
American International Group Inc. posted third-quarter 2019 operating income of 56 cents per share, missing the Zacks Consensus Estimate for earnings by 43.43%. In the year ago-quarter, the company reported loss of 34 cents per share.
Total revenues of $12 billion remained flat year over year.
Total net investment income of $3.4 billion remained unchanged year over year, reflecting higher interest and dividends and other investment income partially offset by lower alternative investment returns.
Total benefit expenses of $11.6 was down 10.4% year over year, due to lower policy holder benefit and losses.
The company incurred catastrophe loss of $511 million, down 68.6% year over year.
Adjusted return on equity was 4.4%, up 800 basis points year over year.
As of Sep 30, 2019, the insurer’s adjusted book value per share (excluding AOCI) was $57.6, up 3.6% year over year.
Strong Segment Results
General Insurance
Net premium written of $6.6 billion was down 3% year over year, due to a decline in premium international business, partly offset by higher premium written in the North America business.
The segment sustained underwriting loss of $249 million, which was narrower than the underwriting loss of $1.7 billion incurred in the year-ago quarter. Combined ratio of 103.7% improved 2070 basis points, due to lower catastrophe losses, continued underwriting actions, reinsurance and expense discipline.
Life and Retirement
The segment reported adjusted pre-tax income of $646 million, down 9.4% year over year, due to lower contribution from group, Life, and Individual Retirement subsegments.
Total revenues of $3.8 billion were up 22% year over year, primarily due to higher contribution from Institutional Markets, Life Insurance, and Individual Retirement business.
Financial Position
As of Sep 30, 2019, the company had long-term debt of $35.3 billion, up 2.3% from year-end 2018 level.
Total assets of $525 billion, as of Sep 30, 2019, were up 6.7% year over year.