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A man exits the American International Building, world headquarters of American International Group (AIG).
American International Group reported a smaller quarterly loss on Thursday as reinsurance pacts helped offset catastrophe losses in Japan and North America.
The insurer posted a net loss of $1.26 billion, or $1.41 per share, for the third quarter ended Sept. 30, compared with a loss of $1.74 billion, or $1.91 per share, a year earlier.
AIG recorded net pre-tax catastrophe losses of $1.6 billion in the quarter that were largely in line with its forecast.
Insured losses from Hurricane Florence will range from $2.8 billion to $5 billion, said RMS, a risk modeling and analytics firm, in September.
AIG estimated it has exhausted about $700 million of the $750 million retention under its North America aggregate catastrophe reinsurance program following the mudslides, Hurricane Florence and loss estimate from Hurricane Michael, which crashed into Florida earlier this month.
The adjusted pre-tax loss from the general insurance business dropped 72 percent to $825 million, while underwriting income fell to $1.73 billion from $3.8 billion a year ago.
Adjusted pre-tax income from the life and retirement business fell 38 percent to $713 million in the quarter.
The company’s combined ratio fell to 124.4 percent from 157.1 percent. A ratio below 100 percent means the insurer earns more in premiums than it pays out in claims.
Loss ratio fell to 88.6 percent from 124.1 percent, when it recorded pre-tax catastrophe losses of $3 billion related to hurricanes Harvey, Irma and Maria.
On an adjusted basis, it lost 34 cents per share. Analysts on average were expecting earnings of 12 cents, according to Refinitiv data. It was not immediately clear if the numbers were comparable.