AIG announced a cash dividend of $0.36 per share. Credit: Credit Scott Graham on Unsplash

Insurance giant AIG has posted net income attributable shareholders of $23m fir the first quarter of 2023 as against $4.2bn a year ago.

The slump in profit, according to the company, was primarily due to net realised losses on Fortitude Re funds withheld embedded derivative.

For the quarter ended 31 March 2023, total consolidated net investment income was $3.5bn, up 9% from $3.2bn in the prior year quarter.

The insurer’s pre-tax loss from continuing operations was $231m versus pre-tax income of $5.7bn in the first quarter of 2022.

AIG’s total invested assets, excluding Fortitude Re funds withheld assets, was $285.2bn.

The general Insurance business delivered underwriting income of $502m during the quarter, an increase of 13% compared to the year ago period.

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General Insurance net premiums written (NPW) increased 5% year-over-year.

Commercial Lines NPW grew 6% year-over-year for the International lag elimination.

AIG chairman and CEO Peter Zaffino said: “AIG successfully navigated a complex environment to produce excellent first quarter results that demonstrate our ability to deliver highquality outcomes for stakeholders, grow our business, manage volatility, and improve profitability. We also continue to execute on achieving underwriting and operational excellence, and capital and investment management strategies.

“Improvement in our combined ratios and underwriting profitability continued. The combined ratio was 91.9% and the accident year combined ratio, ex-CAT, was 88.7%, a 100-basis point and 80- basis point improvement, respectively, from the prior year quarter. In Global Commercial, the combined ratio was 89.2%, a 180-basis point improvement from the prior year quarter and the accident year combined ratio, ex-CAT, was 84.9%, a 110-basis point improvement from the prior year quarter.

The insurer’s premiums grew 159% to $2.2bn. Premiums and deposits grew 44% to $10.4bn driven by strong sales in Fixed Annuity and Fixed Index Annuity products.

Zaffino added: “We continued to execute on our capital management strategy, maintaining strong insurance subsidiary capital and parent liquidity.”

During the first quarter, the company repurchased stocks worth $603m and paid $241m in dividends. Furthermore, the company announced a cash dividend of $0.36 per share, up 12.5% from prior quarterly dividends.