Nov 3 (Reuters) - Insurance giant AIG swept past analysts' estimates for third-quarter profit on Tuesday, as higher investment income and premium growth helped offset a jump in catastrophe losses.
Demand for insurance has held up as households and businesses continue to prioritize coverage against financial losses from accidents, natural disasters and other unexpected events.
CEO Eric Andersen said underwriting remained strong despite a more challenging market environment, adding the company remains
on track to meet financial objectives outlined at its investor day on broad-based growth in premiums.
The New York-based insurer's general insurance net premiums written rose 7% to $6.65 billion in the third quarter, driven by growth across its commercial and personal insurance businesses.
However, general insurance underwriting income slumped 29% to $564 million.
Total catastrophe-related charges were $283 million in the quarter, compared with $100 million a year earlier, driven by severe convective storms, which bring heavy rain, hail and strong winds, in North America.
Catastrophe losses drive up claims and hurt profits for property and casualty insurers such as AIG, as claims from natural disasters can significantly affect underwriting results, making unpredictable weather-related losses a persistent risk for the industry.
The general insurance combined ratio — a measure of underwriting performance — came in at 91.3% in the quarter, compared with 86.8% in the year-ago quarter, reflecting higher catastrophe losses and lower favorable prior-year development.
A ratio below 100 signifies the insurer earned more from premiums than it paid out in claims.
AIG's adjusted after-tax income per diluted share was $2.06 in the three months ended September 30, beating Wall Street expectations of $1.89, according to estimates compiled by LSEG.
Net investment income jumped 42.5% to $1.1 billion, driven by changes in the value of AIG's investments and higher income from fixed-maturity securities.
(Reporting by Prakhar Srivastava and Arasu Kannagi Basil in Bengaluru; Editing by Sriraj Kalluvila)
