No thanks to the high level of natural catastrophes in 2017, as well as adverse prior year development, AIG Europe has some disappointing news to share.
For the year ended November 30, AIG’s European unit reported suffering a pre-tax loss of £431.5 million – that compares to a £171.1 million loss in 2016. Much of the impact was on the property business, which was hit by last year’s natural catastrophes in the Caribbean and North America.
Part of the blame also fell on what AIG Europe said was a larger than expected number of severe losses. In addition, its loss ratio was affected by several large-loss developments from prior underwriting years across a number of lines such as casualty and financial.
Lower levels of investment performance due to the low interest rate environment contributed as well.
“2017 was a challenging year,” commented AIG Europe Limited chief executive Anthony Baldwin. “Alongside our peers, our performance was impacted by a combination of natural catastrophes, continued competitive pressure, and low investment returns.
“These challenges validate our strategy to focus on underwriting discipline and on more profitable business lines, and I’m pleased to report that we continued to improve our business mix towards these lines.”
Baldwin said various steps have been taken to improve performance, as well as lessen future volatility. He cited added reinsurance and a group-wide catastrophe programme.
“We have reduced our exposures by lowering net limits on certain lines and have continued to improve risk selection through our focus on profitable business,” added the CEO. “Although the trading environment remains challenging, we view 2018 with confidence.”
