American International Group (AIG) has reported a net loss of $1.3bn, or $1.41 per share, for the third quarter of 2018, compared to $1.7bn, or $1.91 per share, in the prior-year quarter.
AIG said that its losses show the unique severity and frequency of one of the worst catastrophe seasons in Japan in 25 years.
The company revealed that Japan catastrophe losses are net of $264m of reinsurance recoveries under its Japanese reinsurance program.
In North America, the global insurer said that catastrophe losses constituted for just under 50% of the overall catastrophe losses in the third quarter and were mainly because of Hurricane Florence along with revisions to the loss estimates on the California mudslides.
Its Bermuda-based subsidiary Validus had net catastrophe losses in the third quarter at around $200m, which were mainly related to Japan.
In its general insurance business, AIG reported $8.66bn gross premiums written in Q3 2018, which is a 3% increase to the figure of $8.42bn reported in Q3 2017. The company said that the focus of its general insurance business continues on key strategic priorities such as underwriting, reinsurance and expense reduction.
AIG’s life and retirement business reported third quarter adjusted pre-tax income of $713m. It further said that adjusted return on equity (ROE) was 11.2% including the actuarial assumption update or nearly 13% after removing the post-tax impact of the item.
AIG president and CEO Brian Duperreault said: “In the third quarter we continued to execute against our strategic priorities for delivering long-term, profitable growth. While managing a significant number of global catastrophic events, General Insurance continued to make progress against key initiatives, including improving underwriting capabilities, repositioning reinsurance structures, adding world class talent and driving efficiencies.
“We remain on track to produce an underwriting profit. Life and Retirement achieved increased sales and solid double digit returns, reflecting the strength of our product expertise and distribution networks.”
Last week, AIG secured the final approval it needed in the UK to execute the restructuring of its European operations in preparation for Brexit.
The insurance major is set to split its European business into two subsidiary insurance companies – American International Group UK (AIG UK) and AIG Europe SA (AESA).