(Bloomberg) -- American International Group Inc. says it’s making progress on a turnaround, but investors aren’t seeing the payoff yet.
Profit in the first quarter declined from a year earlier and fell short of analyst estimates, the New York-based insurer said Wednesday in a statement. Insurance results were dragged down by catastrophe costs and a decline in net premiums written. Net investment income fell 9 percent to $3.3 billion.
AIG Chief Executive Officer Brian Duperreault, who’s been in charge about a year, has reorganized the company, hiring new senior executives and announcing a $5.56 billion deal to buy Bermuda-based reinsurer Validus Holdings Ltd. to expand abroad and enter new businesses.
“We made progress towards delivering consistent results with net favorable reserve development, a stable general insurance accident year loss ratio, and solid life and retirement results,” Duperreault said. “Our emphasis on fundamental underwriting practices, increasing accountability across our businesses, and disciplined decision making is taking hold.”
AIG reported $376 million of catastrophe losses, including those tied to California mudslides and an earthquake in Papua New Guinea. The combined ratio for general insurance was 103.8, meaning AIG lost 3.8 cents for every premium dollar after claims and expenses.
- Net income fell to $938 million, or $1.01 a share, from $1.19 billion, or $1.18, a year earlier.
- Adjusted after-tax income per share was $1.04, missing the $1.25 average estimate of 14 analysts surveyed by Bloomberg.
- Book value was $69.95 at March 31, down from $72.49 as of Dec. 31.
- The underwriting loss was $251 million.
- The company posted a $108 million gain on an adjustment to reserves.
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