Printer Friendly

AIG REPORTS THIRD QUARTER 1992 NET INCOME OF $344.6 MILLION

 AIG REPORTS THIRD QUARTER 1992 NET INCOME OF $344.6 MILLION
 NEW YORK, Nov. 5, /PRNewswire/ -- American International Group, Inc. (NYSE: AIG) today reported that its net income for the third quarter of 1992 was $344.6 million, compared to $376.8 million in the third quarter of 1991. For the first nine months of 1992, net income totalled $1.18 billion, compared to $1.15 billion in the same period of 1991.
 Following is a comparative table of third quarter and nine months information (in millions, except per share amounts):
 AMERICAN INTERNATIONAL GROUP, INC.
 Third quarter Nine months
 1992 1991 1992 1991
 Net income, as reported $344.6 $376.8 $1,184.1 $1,153.2
 Realized capital
 gains, net of taxes 17.1 14.6 51.1 50.4
 "Fresh start" 7.0 7.0 21.0 21.0
 Income, as adjusted $320.5 $355.2 $1,112.0 $1,081.8
 Average shares outstanding 211.5 212.3 211.8 212.2
 PER SHARE RESULTS:
 Net income, as reported $ 1.62 $ 1.77 $ 5.57 $ 5.41
 Realized capital
 gains, net of taxes 0.08 0.07 0.24 0.24
 "Fresh start" 0.03 0.03 0.10 0.10
 Income, as adjusted $ 1.51 $ 1.67 $ 5.23 $ 5.07
 Income before income taxes for the third quarter amounted to $440.7 million compared to $487.0 million reported in 1991. For the first nine months of 1992, income before income taxes increased 3.1 percent to $1.55 billion from $1.50 billion reported last year. Included in these results were pretax realized capital gains of $26.8 million and $81.4 million for the third quarter and nine months of 1992, respectively, compared to $21.8 million and $76.4 million for the same periods in 1991.
 The following table shows these results for the quarter and nine months, including and excluding catastrophe losses (in millions):
 THIRD QUARTER NINE MONTHS
 Percent Percent
 1992 1991 Change 1992 1991 Change
 Income before
 income taxes,
 as reported $440.7 $487.0 (9.5) $1,550.3 $1,503.7 3.1
 Catastrophe
 losses 153.3 8.0 -- 175.5 21.0 --
 Income before
 income taxes,
 excluding
 catastrophes $594.0 $495.0 20.0 $1,725.8 $1,524.7 13.2
 Combined ratio:
 As reported 106.43 101.27 102.44 99.96
 Excluding
 catastrophes 99.75 100.91 99.89 99.65
 Third quarter revenues rose 10.6 percent to $4.64 billion from $4.19 billion in the year-earlier quarter. For the first nine months of 1992, revenues totalled $13.53 billion, an increase of 9.2 percent over $12.39 billion in 1991.
 At Sept. 30, 1992, AIG's consolidated assets and shareholders' equity reached all-time highs, approximating $81 billion and $12.5 billion, respectively.
 Commenting on the third quarter's results, AIG Chairman M.R. Greenberg said, "Given the unprecedented catastrophic events that occurred this quarter, AIG's results were relatively strong. In spite of incurring more than $150 million in catastrophe losses from the three r? storms, Andrew in the Bahamas, Florida and Louisiana, Omar in Guam and Iniki in Hawaii, our earnings for the first nine months of this year are ahead of 1991's record level. Our general insurance underwriting results, excluding the effects of these catastrophes, were profitable.
 "The resilience of AIG's earnings in spite of this quarter's extraordinary disasters clearly demonstrates the underlying strength of our worldwide business and the wisdom of our global strategy. These results are the successful product of carefully thought-out plans implemented over many years. Once again this quarter, approximately half of our pretax income was generated overseas. In addition, our life insurance and financial services businesses performed extremely well. These factors distinguish AIG from other companies in the worldwide property-casualty industry.
 "In our domestic property-casualty business, we continued our strategy of non-renewing business in classes where we are unable to achieve satisfactory underwriting results. We also made further progress in integrating the New Hampshire Insurance Company into our domestic brokerage group, which began earlier this year and is proceeding on schedule. Workers' compensation remains a very troubled line of business in the United States, and AIG further reduced its writings in this area in the quarter. The net impact of these moves has reduced net premiums written for the first nine months of 1992 by approximately $535 million, compared to 1991.
 "Our broad-based foreign property-casualty business did very well and again achieved a combined ratio well below 100, in spite of a relatively high level of catastrophe losses, primarily from Typhoon Omar. Results were particularly strong in Asia, our largest overseas market.
 "United Guaranty Corporation, our mortgage guaranty insurance subsidiary, continued to post very strong results, achieving another quarter of record operating income with a combined ratio of approximately 65.
 "AIG's worldwide life insurance business also had an excellent quarter, with pretax operating income increasing 15.7 percent to a record level of $156.0 million. This business segment continues to provide earnings stability and consistent growth for AIG. Results in Asia were again particularly strong, while in the United States, our life business is on the right track and making good progress toward achieving its objectives.
 "In financial services, each principal company, International Lease Finance Corporation, AIG Financial Products Corp. and AIG Trading Corporation, posted record results. All three businesses are well positioned in their markets and growing profitably with outstanding management teams.
 "AIG's financial condition and cash flow are strong. During the quarter, we added $387 million to our general insurance loss and loss adjustment reserves, bringing the total of such reserves to $16.6 billion at September 30. AIG's shareholders' equity totalled $12.5 billion at the quarter's end, the largest of any U.S.-based insurance organization, and represented an increase of 8.7 percent from year-end 1991. We hold the highest ratings from the principal rating services. In addition, the market value of our bond portfolio exceeds the balance sheet carrying value by nearly $1 billion.
 "A major event for AIG was our return to China after many years. In late September, AIG was granted a license by the Chinese government to operate a wholly owned life and non-life branch insurance business in Shanghai. This is the first license granted by the Chinese to a foreign insurance organization, and represents an opportunity for AIG to grow and prosper with China as we have done over the years with many other countries in Asia.
 "We also recently received a license to conduct insurance operations in the Czech Republic, becoming the first American insurance organization to be licensed in that country, and opened a representative office in Moscow.
 "Finally, just last week, AIG and three Western partners announced that the Russian Federation had granted a license to the four companies to establish a joint venture investment bank with a group of major Russian institutions and entities of territories within the Russian Federation. The new venture provides AIG with a unique business opportunity as Russia moves forward with its transition to a market economy. The investment bank will assist Russian enterprises in restructuring Russian industry, initially concentrating on financial advisory and corporate and project finance work.
 "All of these recent developments underscore AIG's leadership role in entering new markets overseas and developing the insurance and financial services sectors in those countries moving toward establishing more market-oriented economies."
 General Insurance
 General insurance pretax income before realized capital gains for the third quarter of 1992 was $161.8 million, compared to $253.3 million last year. For the first nine months of 1992, general insurance pretax income before realized capital gains was $761.7 million, compared to $862.1 million in 1991. Excluding the effects of the catastrophe losses noted above, income before realized capital gains for the third quarter and nine months was 20.6 percent and 6.1 percent, respectively, ahead of 1991.
 Worldwide general insurance net premiums written for the quarter amounted to $2.35 billion, compared to $2.41 billion in 1991. AIG's continued strategy of exiting unprofitable lines of business reduced net premiums written in the quarter by $205 million. For the first nine months of 1992, general insurance net premiums written were $6.97 billion, compared to $7.03 billion last year.
 The general insurance combined ratio was 106.43 in the third quarter of 1992, compared to 101.27 in 1991. Excluding catastrophe losses, the combined ratio was 99.75 versus 100.91 last year. For the nine months of 1992 and 1991, the combined ratios were 102.44 and 99.96, respectively. Excluding the effects of catastrophes, the nine months' combined ratio was 99.89 in 1992, compared to 99.65 in 1991.
 General insurance net investment income rose 8.2 percent to $311.3 million in the third quarter and 8.5 percent to $927.0 million in the nine months of 1992.
 Life Insurance
 AIG's worldwide life insurance operations reported third quarter 1992 pretax income before realized capital gains of $156.0 million, an increase of 15.7 percent, compared to $134.8 million in 1991. For the first nine months of 1992, life insurance pretax income before realized capital gains increased 15.9 percent to $451.2 million, compared to $389.3 million last year.
 Life insurance premium income increased 24.3 percent in the third quarter to $1.23 billion from $988.9 million in 1991. For the first nine months, premium income amounted to $3.49 billion, an increase of 20.2 percent, compared to $2.90 billion in 1991.
 Life insurance net investment income rose 16.8 percent to $336.1 million for the third quarter of 1992, compared to $287.8 million for the same period last year. For the first nine months net investment income amounted to $959.4 million, an increase of 14.9 percent compared to $835.1 million in 1991.
 Financial Services
 Financial services pretax operating income increased 39.4 percent to a record $99.6 million in the third quarter of 1992, compared to $71.5 million in the same period last year. Each principal component of the group reported record earnings as well. For the nine months of 1992, financial services operating income rose 45.4 percent to $245.1 million, compared to $168.6 million in 1991.
 Other Operations
 Agency and service fee pretax income before realized capital gains for the third quarter was $13.3 million, 8.3 percent above last year. For the first nine months, agency and service fee income before realized capital gains increased 14.3 percent to $39.8 million from $34.8 million in 1991.
 AIG's equity in the net income of Transatlantic Holdings, Inc., a reinsurance holding company in which AIG owns a minority interest, amounted to $3.0 million compared to $7.7 million in the third quarter last year. Equity in third quarter 1992 net income was adversely impacted by approximately $6 million due to catastrophic losses. Equity in income of Transatlantic Holdings for the first nine months of 1992 was $19.2 million, compared to $21.2 million in 1991.
 AIG is the leading U.S.-based international insurance organization and the nation's largest underwriter of commercial and industrial coverages. Its member companies write property, casualty, marine, life and financial services insurance in approximately 130 countries and jurisdictions, and are engaged in a range of financial services businesses. American International Group, Inc.'s common stock is listed on the New York Stock Exchange as well as the stock exchanges in London, Paris, Switzerland and Tokyo.
 American International Group, Inc.
 (in thousands, except per share amounts)
 Nine months ended Sept. 30 1992 1991 Percent
 General Insurance Operations: Change
 Net Premiums Written $ 6,973,095 $ 7,027,098 (0.8)
 Net Premiums Earned 6,878,038 6,734,149 2.1
 Adjusted Underwriting Profit(Loss) (165,386) 7,359 -
 Net Investment Income 927,037 854,757 8.5
 Operating Income $ 761,651 $ 862,116 (11.7)
 Loss Ratio 82.18 78.92
 Expense Ratio 20.26 21.04
 Combined Ratio 102.44 99.96
 Life Insurance Operations:
 Premium Income $ 3,488,056 $ 2,901,815 20.2
 Net Investment Income 959,362 835,121 14.9
 Operating Income 451,169 389,333 15.9
 Financial Services Operating Income 245,071 168,603 45.4
 Agency and Service Fee Oper. Income 39,823 34,830 14.3
 Equity in Income of Minority-Owned
 Reinsurance Operations 19,203 21,180 (9.3)
 Other Income (Deductions) - net (51,026) (42,092) -
 Foreign Exchange Gains (Losses) 3,018 (6,646) -
 Income bef. Realized Capital Gains 1,468,909 1,427,324 2.9
 Realized Capital Gains 81,374 76,386 6.5
 Income before Income Taxes 1,550,283 1,503,710 3.1
 Net Income 1,184,050 1,153,215 2.7
 Per Common Share (A) $ 5.57 $ 5.41 3.0
 Average Common Shares Outstanding 211,805 212,250
 American International Group, Inc.
 (in thousands, except per share amounts)
 Three months ended Sept. 30 1992 1991 Percent
 Change
 General Insurance Operations:
 Net Premiums Written $ 2,345,675 $ 2,408,280 (2.6)
 Net Premiums Earned 2,295,370 2,249,035 2.1
 Adjusted Underwriting Profit(Loss)(149,526) (34,472) -
 Net Investment Income 311,339 287,796 8.2
 Operating Income $ 161,813 $ 253,324 (36.1)
 Loss Ratio 85.78 80.32
 Expense Ratio 20.65 20.95
 Combined Ratio 106.43 101.27
 Life Insurance Operations:
 Premium Income $ 1,229,648 $ 988,891 24.3
 Net Investment Income 336,086 287,823 16.8
 Operating Income 155,974 134,784 15.7
 Financial Services Oper. Income 99,611 71,451 39.4
 Agency and Service Fee Oper. Income 13,296 12,273 8.3
 Equity in Income of Minority-Owned
 Reinsurance Operations 3,038 7,665 (60.4)
 Other Income (Deductions) - net (19,111) (14,013) -
 Foreign Exchange Gains (Losses) (781) (225) -
 Income bef. Realized Capital Gains 413,840 465,259 (11.1)
 Realized Capital Gains 26,822 21,774 23.2
 Income before Income Taxes 440,662 487,033 (9.5)
 Net Income 344,568 376,796 (8.6)
 Per Common Share (A) $ 1.62 $ 1.77 (8.5)
 Average Common Shares Outstanding 211,526 212,315
 (A) -- After deduction in 1992 and 1991 of preferred stock dividends of $1.1 million and $1.8 million for the third quarter and $3.5 million and $5.6 million for the nine months, respectively.
 -0- 11/5/92
 /CONTACT: Joe Norton, 212-770-3144, or (investors) Charlene M. Hamrah 212-770-7074, both of American International Group, Inc. /
 (AIG) CO: American International Group, Inc. / ST: New York IN: INS SU: ERN


TS -- NY014 -- 2882 11/05/92 09:06 EST
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Nov 5, 1992
Words:2460
Previous Article:TRANSATLANTIC HOLDINGS, INC. ANNOUNCES THIRD QUARTER EARNINGS
Next Article:PRIMUS INSTALLS VMX VOICE PROCESSING SYSTEMS ACROSS THE COUNTRY TO IMPROVE CUSTOMER SERVICE
Topics:


Related Articles
AIG REPORTS RECORD 1991 NET INCOME OF $1.55 BILLION
AIG REPORTS SECOND QUARTER 1992 NET INCOME OF $425.6 MILLION
AIG REPORTS FIRST QUARTER 1993 NET INCOME ROSE 12.8 PERCENT
AIG REPORTS SECOND QUARTER 1993 NET INCOME ROSE 14.8 PERCENT
AIG REPORTS THIRD QUARTER 1993 NET INCOME OF $451 MILLION
AIG REPORTS 1993 NET INCOME ROSE 17.0 PERCENT TO RECORD $1.94 BILLION
AIG REPORTS FIRST QUARTER 1994 NET INCOME ROSE TO $505.6 MILLION; PRETAX INCOME EXCLUDING CATASTROPHE LOSSES INCREASED 13.2 PERCENT
AIG REPORTS THIRD QUARTER 1994 NET INCOME ROSE 20.3 PERCENT
AIG REPORTS 1994 NET INCOME ROSE TO RECORD $2.18 BILLION
AIG REPORTS THIRD QUARTER 1995 NET INCOME ROSE 16.2 PERCENT TO $630.7 MILLION

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters