AIG operating profit exceeds expectations, Allstate earnings fall sharply
Operating profit at the largest insurer in North America has exceeded market expectations. American Insurance Group posted net income of $1.9 billion for the three months to the end of June. This was down from the $3.07 billion posted in the same quarter in 2014. However earnings increased with a dividend of 0.28 cents compared to 12.5 cents as operating profit increased by 13 per cent to $1.29 per diluted share, exceeding analysts’ forecasts of $1.22. Reuters reports that AIG paid out $88 million more for catastrophic losses in the quarter and that underwriting income fell across all of the business units except retirement insurance.
Meanwhile Allstate reported that its operating profit was down 41 per cent on weakened auto insurance margins and catastrophic loss payments. Higher rates for auto premiums (1.5 per cent increase) have been accepted in 34 states and the firm says it will pursue increases elsewhere. Catastrophic losses cost Allstate $797 million in the second quarter. Operating profit was 63 cents per share, down from $1.01 a year earlier. Overall profits were 79 cents per share or $355 million.
Marsh & McLennan acquires Kansas firm
Marsh & McLennan has acquired Kansas City-based independent specialty insurer Cline Wood Agency for an undisclosed sum. The agency has been in business since 1984 and provides property/casualty insurance and risk management and safety services to commercial transportation and agribusiness clients. Its revenue is $15 million in annual premiums.
Nigerian insurance sector grows 24 per cent
Gross income for the Nigerian insurance sector has grown by 24 per cent in a year and is now worth $1.6 billion. The oil, gas and aviation sectors are driving the increases. The country represents huge opportunity for expansion in the private insurance sector as just 3 million Nigerians have insurance currently according to the Commissioner for Insurance. That is out of a population of 175 million.
