AIG’s Hancock: 2014 ‘a Year of Transition’ as Net Income Falls 17%
February 13, 2015 by Michael Buck, senior associate editor, BestWeek: Michael.Buck@ambest.com
NEW YORK – American International Group Inc. saw its fourth-quarter net income fall to $655 million, from $2 billion in the prior-year period, and its full-year net income fall 17.5% to $7.5 billion, the company said in a statement.
Reported net income included an after-tax loss on extinguishment of debt of $824 million associated with liability management activities during the fourth quarter of 2014, according to a statement. The company’s fourth-quarter after-tax operating income was $1.4 billion, compared with $1.7 billion, and the 2014 figure was $6.6 billion, compared with $6.7 billion.
Fourth-quarter property/casualty net premiums written in the company’s commercial segment fell 3% to $4.7 billion, while the segment saw its underwriting loss narrow to $173 million, from $460 million. The segment produced a combined ratio of 103.4, a 5.3-point improvement. In personal insurance, fourth-quarter net premiums written fell 3% to $2.9 billion and the unit reported an underwriting income of $39 million, compared to an underwriting loss of $132 million. The segment produced a combined ratio of 98.7, a 5.6-point improvement.
“Looking back on 2014, it was a year of transition and transformation, as we took important steps toward our goal of becoming the world’s most-valued insurer,” said President and Chief Executive Officer Peter Hancock said in a statement. “Our focus on value benefits our customers and our shareholders, and leverages our global scale to achieve the right balance between growth, profitability, and risk.”
This year will be the first full year of AIG under Hancock’s leadership. During the third-quarter earnings report — Hancock’s first as head of the company — he stressed a culture of collaboration and the use of technology to harness the full potential of the company’s scale (Best’s News Service, Nov. 4, 2014).
AIG Property Casualty U.S. Insurance Group companies currently have a Best’s Financial Strength Rating of A (Excellent). Shares of American International Group (NYSE: AIG) closed trading Feb. 12 at $52.45, up 0.38% from the previous close.
