AIG posts lower profit, blames volatility for unit IPO delay
2022.08.08 23:25
FILE PHOTO: The AIG logo is seen at its building in New York’s financial district March 19, 2015. REUTERS/Brendan McDermid
(Reuters) – Insurer American International Group Inc (NYSE:AIG) on Monday reported a 26% fall in quarterly profit on lower investment income and blamed market volatility for a delay in the initial public offering of its life and retirement unit.
The move underscores how the wild market gyrations sparked by runaway inflation, rising interest rates and the Russia-Ukraine war are forcing companies to rethink their IPO plans.
AIG’s unit – set to be renamed Corebridge Financial Inc when it goes public – had filed for its offering in March and planned to complete its listing by the end of June.
“Completing the IPO is a significant priority for us and we remain ready to execute,” Chief Executive Officer Peter Zaffino said without giving a new deadline for the offering.
AIG – one of the world’s biggest commercial insurers – had first announced the move in 2020 and it sold a 9.9% stake in the unit to private equity firm Blackstone Group (NYSE:BX) Inc for $2.2 billion last year.
The uncertain economic outlook has also put an end to the boom in investment income insurers enjoyed last year when the rapid recovery from the COVID-19 crisis boosted market returns.
AIG’s total consolidated net investment income fell 29% in the second quarter ended June to $2.6 billion, hurt in part by weakness in alternative investments such as private equity.
Adjusted after-tax income attributable to the company’s common shareholders fell to $979 million, or $1.19 per share, from $1.3 billion, or $1.52 a year earlier.
AIG said net premiums written in its general insurance business rose 5% on a constant currency basis to $6.9 billion, while underwriting income climbed 73%.
General insurance adjusted pre-tax income jumped 5% to $1.26 billion, boosted by a $336 million increase in underwriting income.
