New York, NY, United States (4E) – American International Group Inc. (AIG) reported a 27 percent drop in profit during the first quarter due to higher costs of claims at the insurer’s property-casualty business.
Earnings were at $1.6bn, or $1.09 per share, from a profit of $2.2bn, or $1.49 per share, a year ago, according to the largest commercial insurer in the U.S. and Canada.
Operating profit was $1.21 per share, surpassing the average estimate of 24 analysts polled Bloomberg News, which called for per-share earnings of $1.07.
AIG Chief Executive Officer Robert Benmosche is trying to change the company’s business mix as well as reduce the workforce to improve results at the property-casualty unit. Mr. Benmosche has used dividends and stock repurchases to reward shareholders following the company’s emergence from the U.S. federal government bailout it repaid at the end of 2012.
The company’s property casualty segment posted a $1.16bn profit, lower by 26 percent year-over-year. Catastrophe losses stood at $262mn, from $41mn a year earlier.
The life and retirement division recorded higher earnings at $1.42bn, compared with $1.39bn, and distributed $1.7bn in cash dividends to the parent company.
Half of the company’s profits last year came from its life and retirement unit, which offers insurance, mutual funds and annuities in the U.S.