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AIG’s property unit reports underwriting loss

Posted by: Admin | Posted on: October 31st, 2013 | 0 Comments

Thu Oct 31, 2013 5:05pm EDT

(Reuters) – American International Group Inc reported an underwriting loss in its property and casualty business in the third quarter, sending its shares down 3 percent in extended trading.

The U.S. insurer, which was almost wiped out by its derivative bets in the housing crash five years ago, reported a better-than-expected operating profit.

Insurers have had trouble raising prices in their property and casualty businesses for some time, and losses from weather events and other natural disasters have also hurt the business.

Net premiums earned in the company’s property casualty unit fell 4 percent to $8.43 billion in the quarter ended September 30, while combined ratio improved 3.4 points to 101.6, indicating the business still not booking an underwriting profit.

A combined ratio below 100 indicates an underwriting profit, meaning an insurer is receiving more in premiums than it is paying out in claims.

AIG declared a 10 cent quarterly dividend. It restarted paying dividends earlier this year for the first time since receiving a $180 billion taxpayer bailout in 2008. It finished paying back those funds early this year.

The company’s net income rose 17 percent to $2.17 billion, or $1.46 per share, from a year earlier.

On an operating basis, the company earned $1.4 billion, or 96 cents per share.

Analysts on average had expected earnings of 94 cents per share, according to Thomson Reuters I/B/E/S.

AIG shares were at $50.35 in trading after the bell after closing at $51.65 on the New York Stock Exchange on Thursday.

(Reporting by Aman Shah in Bangalore and Luciana Lopez in New York; Editing by Maju Samuel)

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