American International Group Inc. says its life and retirement unit had problems with stock market turmoil and widening credit spreads in the first quarter, but the sales of individual variable annuities were strong.
The New York-based multi-line insurance giant gave its view of the COVID-19 situation when it released its latest earnings.
Brian Duperreault, AIG’s chief executive officer, said Monday, in comments included in the company’s earnings announcement for the first quarter, that COVID-19 may be the single largest catastrophic loss that the insurance industry has ever seen.
But AIG was in a strong financial position before the crisis began, and it continues to be in a strong position, Duperreault said.
“Our core businesses delivered strong results, building on the momentum we had coming into the year,” Duperreault said. “Life and Retirement delivered solid results despite unfavorable capital markets and continued low interest rates.”
- Links to AIG earnings resources are available here.
- An article about AIG’s earnings for the fourth quarter of 2019 is available here.
AIG has withdrawn its previously issued earnings guidance.
“In Life and Retirement, we do not believe that the impact of COVID-19 will result in a material reduction of our long-term return profile,” Duperreault said.
AIG mentioned variable annuity results only in passing in its earnings release.
In a conference call presentation slidedeck, it said variable annuity product risk management and the variable annuity hedging program performed as expected.
Variable annuity premiums and deposits increased to $900 million, from $600 million, even as overall annuity premiums and deposits fell to $2.8 billion, from $3.8 billion.
Premiums and deposits fell to $600 million, from $1.8 billion, for fixed annuities, and to $1.3 billion, from $1.4 billion, for indexed annuities.