Insurance giant American International Group reported a significant drop in profitability in the second quarter of the year, a development that the company attributed to a decrease in investment income and the delay of the initial public offering of the life and retirement unit as a result of market volatility.
Specifically, the company reported total consolidated net investment income of $2.6 billion for the second quarter of the year, down 29%, partly due to weaker alternative investments.
Adjusted income after taxes attributable to the company’s shareholders fell to $979 million, or $1.19 per share, from $1.3 billion, or $1.52, in the year-ago period.
The company’s net written premiums in the general insurance division rose 5% on a constant currency basis to $6.9 billion, while underwriting income rose 73%.
The company attributed the decline in profitability in part to the delay in the initial public offering of the life and pension unit, due to volatility caused by high inflation, rising interest rates and Russia’s war in Ukraine, which have led and other companies to review their plans to list on the board.
AIG’s life and retirement unit – to be renamed Corebridge Financial Inc when it goes public – had filed for its initial public offering in March and planned to complete its listing by the end of June.
“Completing the IPO is an important priority for us and we remain ready to execute it,” CEO Peter Zaffino said without giving a new deadline for the offering.
AIG – one of the world’s largest insurers – first announced the move in 2020 and sold a 9.9% stake in the unit to Blackstone Group Inc for $2.2 billion last year.
Source: Capital
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