International recovery against North American headwinds
AIG's International Commercial net premiums written rose 13% to US$2.4 billion in the third quarter on both a reported and constant-dollar basis, supported by broad geographic growth. The segment recorded a combined ratio of 88.3%, improving from 91.3% in the second quarter, while its accident-year combined ratio excluding catastrophes moved to 85.8% from 86.0% a year earlier. By contrast, North America Commercial faced heavier catastrophe charges and reserve revisions, pushing its combined ratio up to 92.9% from 82.6% and reducing underwriting income by 57% to US$167 million.
Why it matters
The divergence between AIG's international growth and North American property retrenchment highlights the benefit of reading segment-level results rather than group figures alone when placing commercial risk.
Jargon, explained
combined ratio
An insurer's claims and relevant expenses as a percentage of earned premiums. Below 100% generally means an underwriting profit.
underwriting
Assessing a risk and deciding whether to provide insurance, at what price and on which terms.
Original source
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