(Reuters) - American International Group (NYSE:AIG) exceeded first-quarter profit expectations on Wednesday, driven by growth in its general insurance as well as life and retirement divisions, and lower catastrophe losses.
AIG, one of the world's biggest commercial insurers, said underwriting income in its general insurance arm rose 19% to $596 million for the quarter ended March and included $106 million of total catastrophe-related charges.
"General Insurance had another quarter of impressive Commercial Lines profitability benefiting from continued strong underwriting performance and low levels of catastrophe losses as we continue to manage volatility in our results," AIG Chairman and CEO Peter Zaffino said.
Insurers have reaped the benefits of growing hopes of a soft landing and a still-tight labor market that has revived spending on insurance policies.
AIG's adjusted after-tax income attributable to common shareholders climbed to $1.77 per share from $1.63 a year ago. Analysts on average had expected $1.65, according to LSEG data.
AIG's life and retirement unit saw a 7% jump in premiums, helped by higher sales in fixed index annuities and institutional markets.
The New York-based company's total consolidated net investment income rose 11%, helped by higher income from fixed maturity securities and loan portfolios due to higher reinvestment rates.
Last month, peer insurer Travelers Companies (NYSE:TRV) missed estimates for first-quarter profit as severe storms in the United States drove up its catastrophe losses.
AIG's general insurance accident year combined ratio was 88.4%, compared with 88.7%, a year earlier. The metric excludes catastrophe losses and a ratio below 100 signifies that the insurer earns more from premiums than it pays out in claims.