(Bloomberg) — American International Group Inc., the largest commercial insurer in the U.S. and Canada, said profit rose 1 percent in the first report under Chief Executive Officer Peter Hancock.
Net income climbed to $2.19 billion, or $1.52 a share, in the third quarter, from $2.17 billion, or $1.46, a year earlier, New York-based AIG said today in a statement. Operating profit, which excludes some investing results, was $1.21 a share, beating the $1.09 average estimate of 24 analysts surveyed by Bloomberg.
Hancock, 56, took over from Robert Benmosche at the start of September. He’s reshaped management after the departure of life-unit CEO Jay Wintrob, and is also working to improve margins at the property-casualty operation by expanding the use of science in underwriting.
“Peter is bringing a hard-nosed view of data,” Josh Shanker, an analyst at Deutsche Bank AG, said in an interview before results were announced. “Historically, AIG has been criticized, I think correctly, that they’ve been really soft on data.”
AIG rose 0.7 percent to $54.20 in extended trading at 4:48 p.m. in New York, after results were announced. The stock had gained 5.4 percent this year in regular trading, compared with the 9.2 percent advance of the Standard & Poor’s 500 Index.
Book value, a measure of assets minus liabilities, climbed to $77.35 per share as of Sept. 30, from $75.71 three months earlier. AIG said the board authorized a fresh $1.5 billion buyback program on Oct. 31 and that the company repurchased $3.4 billion of stock this year.
Net investment income increased 13 percent to $4.03 billion, as returns jumped from private-equity and hedge funds. Income from alternative holdings more than doubled to a total of $484 million at the insurer’s main units.
Pretax operating profit rose 1.6 percent to $1.1 billion at the property-casualty business, which insures commercial property, corporate boards and airplanes. Sales increased 3.4 percent to $8.95 billion.
AIG paid out 102 cents in claims and expenses for every premium dollar it took in, about the same as a year earlier. Catastrophe costs increased to $284 million in the period from $222 million, and the insurer reported $227 million of costs tied to prior-year claims, worse than the $70 million figure in the third quarter of 2013.