NEW YORK CITY (dpa-AFX) - American International Group Inc (AIG) Monday reported a 27 percent decline in first-quarter profit, hurt by higher catastrophe losses at its property and casualty unit as well as lower earned premiums. However, excluding items, operating earnings for the quarter came in above Wall Street estimates.
The results come as AIG, under CEO Robert Benmosche, focuses on increasing operational efficiency and slashing costs to boost profit. Benmosche said that the company's core insurance operations were fundamentally strong.
The New York-based insurer posted first-quarter net income of $1.6 billion or $1.09 per share, compared with $2.2 billion or $1.49 per share last year.
Excluding items, operating earnings for the quarter were $1.8 billion or $1.21 per share, compared with $2 billion or $1.34 per share a year ago.
On average, 25 analysts polled by Thomson Reuters expected earnings of $1.07 per share for the quarter. Analysts' estimates typically exclude special items.
Net premiums earned at the property and casualty unit declined about 4 percent to $8.23 billion, from $8.56 billion in the prior year.
Nine analysts had a consensus revenue estimate of $9.35 billion for the quarter.
AIG said its first-quarter pre-tax operating earnings at the property and casualty unit slid 25.6 percent from last year to $1.16 billion.
The property and casualty unit ran an underwriting loss of $97 million, compared with an income of $232 million a year ago. Combined ratio at the property and casualty unit worsened to 1.01 percent from 97.3 percent a year ago.
Results were also impacted as net investment income at the property and casualty unit declined 5 percent to $1.26 billion.
Meanwhile pre-tax operating earnings at the company's life and retirement unit was up about 2 percent to $1.42 billion.
At the end of the quarter, AIG had a bookvalue of $71.77 per share, up 6 percent from last year.
AIG repurchased 17.4 million of its shares for about $867 million during the quarter.
Among others in the industry, MetLife Inc (MET) last Wednesday reported a higher first-quarter profit, due mainly on derivative gains and marginal revenue growth, but still short of Street estimates.
AIG stock closed Monday at $52.72, up $0.37 or 0.71%, on a volume of over 9 million shares on the NSYE. In after hours, the stock gained $1.02 or 1.93% at $51.70. In the past year, the stock trended in the range of $41.53 - $53.33.
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