(Reuters) -American International Group reported a higher second-quarter profit on Wednesday, powered by strong underwriting gains and higher returns on investments.
Insurers like AIG and Travelers Cos are benefiting as businesses and individuals have maintained spending on insurance against the backdrop of economic uncertainty.
“We continued to make significant progress on our long-term strategic, operational and financial objectives while navigating a dynamic macroeconomic environment,” CEO Peter Zaffino said in a statement.
General insurance net premiums written, on a comparable basis, rose to $6.88 billion in the three months ended June 30. General insurance underwriting income soared 46% to $626 million.
AIG's general insurance combined ratio came in at 89.3% on an adjusted basis, compared with 92.5% a year earlier. A ratio below 100 signifies that the insurer earned more from premiums than it paid out in claims.
A rebound in the stock markets following tariffs-related volatility has also helped insurers boost their investment income.
Net investment income jumped 48% to $1.47 billion in the second quarter, driven by a change in the fair value of AIG's equity in Corebridge and higher income on available for sale fixed maturity securities.
The company retains a stake in Corebridge, the life and retirement insurer it spun off in 2022.
AIG posted catastrophe-related charges of $170 million in the quarter, down from $330 million in the year-ago period.
The company – one of the world's largest commercial insurers – reported adjusted after-tax income attributable to common shareholders of $1.04 billion, or $1.81 per share, compared with $771 million, or $1.16 per share, a year earlier.
Shares of the company have gained nearly 8% in 2025, outperforming the broader Dow Jones U.S. Select Insurance Index.
(Reporting by Pritam Biswas in Bengaluru; Editing by Sriraj Kalluvila)
