American insurer AIG has revealed it has returned to profit in Q2, posting net incomes of $91m (£65.4m) for the three months to 30 June.
It comes after the insurer suffered a “significant” $7.9bn (£5.6bn) loss during the same period in 2020 from the sale and deconsolidation of Fortitude.
The increase was also attributed to lower net realised losses; higher net investment income; significantly lower catastrophe losses; net of reinsurance (CATs); and overall “strong” General Insurance underwriting results.
Underwriting income was $463m (£332.8m) compared with an underwriting loss of $343m (£246m) in the prior year quarter, and net investment income increased 41% to $731m (£525m) from the prior year quarter driven by alternative investments.
AIG president and CEO Peter Zaffino said: “We had another outstanding quarter with our businesses performing extremely well while we continue to make significant progress on strategic priorities and position AIG for sustainable profitable growth over the long-term. General Insurance delivered excellent results, Life and Retirement was once again a meaningful contributor, and we accelerated work on AIG 200 and the separation of Life and Retirement from AIG.
“This exceptional performance is the direct result of the hard work and dedication of AIG colleagues around the world who pursue excellence in everything we do and strive to create value for clients, distribution partners, shareholders, and our other stakeholders.”
In July, AIG announced a strategic partnership with Blackstone whereby Blackstone will purchase a 9.9% equity stake in Life and Retirement for $2.2bn (£1.5bn). In addition, AIG has revealed a long-term perpetual vehicle affiliated with Blackstone will purchase certain of its Affordable Housing assets for $5.1bn (£3.66bn) in cash.
Zaffino added: “These transactions, together with our strong liquidity position at June 30 of $7.2 billion, will generate significant additional capital for AIG to deploy towards our near term capital management priorities, which are de-levering, returning capital to shareholders, and investing in organic growth.
“We have incredible momentum as we head into the second half of the year and I am confident that we will continue to execute on our transformation and growth strategy. I am immensely proud of what our team has achieved and the progress we are making on our journey to become a top performing company.”