AIG has reported a significant drop in its underwriting income for the first quarter of 2025, falling by 59% compared to the same period last year, totaling $243 million. This decline comes amid a challenging environment marked by rising catastrophe-related costs. The General Insurance segment, which includes North America commercial, International commercial, and global personal lines, faced $525 million in catastrophe charges, a sharp increase from $106 million in the first quarter of 2024. Notably, around $460 million of these losses stemmed from devastating wildfires in California.
In the personal lines sector, AIG experienced a loss of $126 million, contrasting sharply with a gain of $30 million from the previous year. The combined ratio for global personal lines climbed to 107.9, up from 98.3 a year ago, primarily due to the impact of the wildfires. Despite these challenges, the company reported a 3% growth in net premiums written, largely driven by an increase in personal auto insurance.
AIG’s CEO, Peter Zaffino, expressed optimism about the company’s performance, stating that they had a strong start to the year. He highlighted that the overall combined ratio for General Insurance was 95.8, with an accident-year combined ratio of 87.8, marking the best first quarter results since the financial crisis.
The underwriting income for North America commercial and International commercial also saw declines of 45% and 27%, respectively. However, North American commercial net premiums written grew by 14%, mainly due to the success of the Lexington Insurance division. International commercial also experienced an 8% increase in net premiums written on a comparable basis.
In terms of net income, AIG reported $698 million attributable to shareholders, down 41.5% from the same quarter last year. This decrease was partly due to the previous inclusion of Corebridge Financial in last year’s results before its deconsolidation. Adjusted after-tax income for the quarter was $702 million, compared to $862 million in the same quarter of 2024.
Overall, while AIG faced substantial losses from natural disasters, the company remains focused on its strengths, including a diversified portfolio and disciplined underwriting practices.